Owner's Role in Project Success

RT-204 Topic Summary
RT 204

Overview

The successful execution of capital projects depends on the effectiveness of project teams team members with diverse backgrounds, conflicting goals, and who answer to different employers. Just as the process of design and construction calls for the input of different disciplines and trades at various points, many owners within owner organizations participate at various times over the life cycle of a capital project. With all these players and variables, determining the “right” level of owner involvement is the key to success, which is why it has become the focus of this research.

This situation has led to questions during project planning and execution not being answered in a timely manner. These unresolved issues not only lead to schedule delays and cost additions to a project, but can negatively impact the working relationships among project participants. Owners often fail to establish a system for performing the proper owner’s management of the construction function, which can lead to a void in owner leadership and a lack of mission focus for the project team.

To address this problem, CII established the Owner’s Role in Project Success Research Team to identify management approaches used for different types of projects, delivery systems, and team structures to determine how the owner contributed to project success. The research team also developed the Project Priority Calculator (IR204-2) to assess the value being added by the owner based on recommended roles and responsibilities. Using this software tool will help to determine the key owner functions that will contribute to project success and define the level to which the owner organization can or should be involved in managing the project.

This research recognized that the level of involvement exercised by the owner will vary throughout a project’s life cycle. On the whole, owners must continually evaluate their level of involvement to ensure that it is appropriate for each particular project phase. The owner can accomplish this by soliciting feedback directly from the project team through the use of the tool developed by this research effort. Other CII resources exist for the owner to improve the probability of having a successful project. The best place to start is with CII Best Practices Guide: Improving Project Performance (IR166-3) and CII Implementation Model + Knowledge Structure Guide (IR166-2).

Key Findings and Implementation Tools

1 : Drivers of System Performance

Those metrics that lead to a successful outcome are defined by these 4 drivers of system performance.

  • Pre-Planning Index (PPI) measures the ability to adhere to the following description of pre-project planning. It involves the process of developing sufficient strategic information that owners can address risk and decide to commit resources to maximize the chance for a successful project. Pre-project planning includes putting together the project team, selecting technology, selecting project site, developing project scope, and developing project alternatives.
  • Owner’s Involvement Index (OII) measures the level and quality of owner involvement in the project process. The owner’s influence is better understood by analyzing the categories of oversight, participation, and decision making.
  • Leadership Performance Index (LPI) measures the adherence to basic leadership principles that allow the elimination of adversarial environments as well as fill the team with emotional intelligence.
  • Project Management Index (PMI) measures how effective the project management system was on the project as far as controlling the safety, quality, cost, and schedule.

Each driver of system performance is made up of a collection of actions the owner either does or does not perform. Each driver was analyzed to determine those actions having the most significant impact on the reported outcome. Those critical actions for each of the 4 drivers are detailed in the research.

Reference: (RS204-1)

2 : Performance Ratings

The research team identified key performance ratings that affect various aspects of projects. These metrics and examples of what an owner can do to positively affect the ratings are listed below. The complete list can be found in the reseach materials: (RS204-1, p. 15)
 
Duration Performance Rating
  • Limit owner initiated scope changes that increase the project duration
  • Focus on the owner’s expectations and motivate the team to achieve those expectations
 
Cost Performance Rating
  • Focus on scope adherence
  • Limit the impact of unforeseen site conditions
 
Business Performance Rating
  • Thoroughly plan the capital expenditures prior to project selection
  • Continually update the business plan
 
Quality Performance Rating
  • Monitor labor market conditions that could impact project duration
  • Use qualified professionals to review both construction methods and procedures
 
Project Success Rating
  • Foster communications among team members
  • Be prepared to handle unforeseen market conditions that may impact material prices or availability increase the original contract amount
Reference: (RS204-1)

3 : Implementation Tool #1

IR204-2, The Project Priority Calculator (PPC)

Is an owner’s involvement implementation tool where each project outcome can be monitored and evaluated throughout the project life cycle. The owner and the project manager can continually monitor each specific success criterion (duration, cost, quality, and business goals) and concentrate the project team’s efforts in achieving the stated project objectives.
Reference: (IR204-2)
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Key Performance Indicators

Improved cost, Improved schedule, Improved quality (reduced errors & omissions), Improved performance/achieved success, Reduced change, Improved safety, Improved customer satisfaction

Research Publications

The Owner's Role in Project Success - RR204-11

Publication Date: 10/2006 Type: Research Report Pages: 328 Status: Reference

The Owner's Role in Project Success - RS204-1

Publication Date: 10/2006 Type: Research Summary Pages: 24 Status: Supporting Product

Project Priority Calculator - IR204-2

Publication Date: 10/2006 Type: Implementation Resource Pages: 0 Status: Tool


Presentations from CII Events

Session - What is the Owner's Role in Project Success?

Publication Date: 06/2005 Presenter: Debra Nauta-Rodriguez Number of Slides: 20 Event Code: AC05


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