Delivering more value for the program dollar when infrastructure challenges loom large
Owner agencies are required, more than ever before, to complete mega capital programs in an environment of complexity, public accountability and abbreviated resources. Professional program management adds seasoned expertise culled from a broad perspective of lessons learned in multiple project locations to help an owner realize success.
Need for program managers growingGrowing numbers of owners in the United States and abroad are turning to firms that specialize in managing infrastructure programs. In 2012, revenue for construction management/program management firms reached $19.21 billion, according to data from ENR’s Top 100 Construction Management-for-Fee and Program Management Lists. Although growth in the group was driven last year by international versus domestic U.S. contracts, revenues from program management/construction management services have more than doubled from their level of $8.71 billion in 2006.
Owners are relying on program management experts to help deliver complex capital programs under extreme schedules, often with the goal of saving millions in investment through aggressive, comprehensive risk reduction strategies. Other reasons for the rise in demand:
• High stakeholder expectations
• The need to do more with less
• New technology
• Alternative delivery methods
• Budget pressures
Recent projects that have been successfully delivered with program management include:
• Texas Disaster Recovery Program
• I-15, Utah
• Denver International Airport hotel and transit center
• Illinois Tollway Congestion-Relief Program
• MBTA Green Line, Boston
• 11th Street Bridges, Washington, D.C.
• Sound Transit University Link, Seattle
A program manager ensures the owner’s success in managing large, complex capital programs in ways that improve efficiency, reduce risk, save time and productively resolve issues.
Focuses on management, outcomes
More than an efficient program, owners also want success as they define it and as stakeholders demand it. Thus, even if a team is highly disciplined in the mechanics of management, there must be an equally intense focus on achieving the owner’s desired outcomes. Program managers who can achieve the owner’s vision of success are rare and in high demand.
Program managers have established their credentials as key partners in other important areas:
• Finance. A program manager may be able to provide a preview of what’s behind the financial curtain, helping to save time and money by uncovering the most promising policy scenarios for owners to pursue with their financial advisers. Program managers may introduce owners to innovative financing options, such as Build America Bonds, Transportation Infrastructure Finance and Innovation Act loans, creative partnerships and Grant Anticipation Revenue Vehicles.
• Project delivery. Those delivering programs increasingly are called upon to help sort through a number of innovative project delivery methods. By starting with the owner’s desired outcomes, one can identify the most promising project delivery method and funding alternatives and then tailor them for the greatest effectiveness.
• Risk management. Respondents to an FMI/CMAA survey listed risk management among the top five “very” or “quite important” practice standards in 2014. Program managers can help owners proactively address project and contractual risks to reduce contingencies and redistribute risk fairly between owner and contractor.
• Government relations. A program manager can engage the government relations experts to educate owners about the appropriations and authorization process, for example, equipping them with the knowledge to modify existing statutes and create new, more flexible laws for delivery methods.
Program managers bring more to the table than meets the eye:
Benefits owners in multiple ways
• Discrete focus. Operates a large capital program in a way that doesn’t detract from the owner agency’s momentum or disrupt personnel from their core missions.
• Gaining from technology. Helps the agency frame the options, process and benefits to gain stakeholder support.
• Network of experts. Has access to an internal network of experienced planners and engineers who can provide quick, proven solutions to various problems.
• Acceleration. Able to ramp up quickly.
• Integration. Assembles a special talent pool that fits into the existing organization and its culture.
• Filling gaps. Acts as a bridge between the people on staff who are highly experienced and those who are developing in their roles.
• Right skills, right time. Puts the right skills to work at the appropriate time, then releases those specialists when their roles are completed.
• Zero learning curve. Yields high performance immediately.
• Control. Allows the agency to delegate which tasks it wants the program manager to handle.
• Better early decisions. Helps choose the delivery method(s) that may render the best results for the specific program.
• Best practices. Brings lessons learned from projects across the country.
• Complexity. Does the hard work – organizing the elements of multiple projects, such as files, documentation, invoices, meeting notes, updates for commissioners and board members and reports for bondholders.
Selecting a team or individual to manage a program requires great care and attention. Here are some qualities owners should seek:
Possess special qualities
• Considers program management experience a core competency.
• Possesses local knowledge of the unique political, economic and cultural dynamics.
• Communicates expertly with stakeholders to promote understanding and gain buy in.
• Has the means and methods to proactively ensure the project stays on the surest course to success.
• Offers innovative, proven solutions for project delivery.
• Collaborates to increase the competency and effectiveness of the owner organization.