Project Portfolio Management for the Building Owner

Authors - Alexia Nalewaik, CCE MRICS
Jeffrey Witt, CPA CIA MCSE CFE

Web-based project management systems have been available for at least 13 years. Over that time, there has been a great deal of differentiation across the different platforms available, so much so that facility owner/operators managing large capital programs now have the option of taking a more proactive approach in selecting systems that focus on their unique and specific needs in terms of project controls, process automation, information management, and reporting.

One of the drivers for owners implementing these solutions is the availability of systems that are easier to deploy, and require lower up-front investments than traditional systems. In the past, it didn't make sense for an owner to go through the pain of rolling out a complicated system that required hardware installation and configuration, third-party software licenses, maintenance, support, and constant development efforts to ensure the maintain the system and configure it to meet their business needs, assuming the system did what it was supposed to once installed. Under these circumstances, the contractor usually provided an adequate project information management system, with the owner taking a more reactive approach in tracking (vs. managing) this data. However, once the project was complete, the owner was left with a compilation of raw data that was difficult to use for planning future projects, or for analyzing performance improvements.

The recent Software-as-a-Service (SaaS) success of companies like Salesforce.com has allayed fears that a thin-client system could not provide enterprise features. This success has perhaps signaled a change in the Capital Program Management space as more and more owner-organizations are deploying software. These systems offer capabilities that enable the owner to have greater control over their program's cost, schedule, and scope. This wave has been building momentum for some time.

For instance, The Washington Suburban Sanitary Commission (WSSC)
went live with the first online project management and collaboration site
back in 1996, but widespread owner adoption is a more recent development.

Also, because these systems are available on a subscription basis, if the
owner does not get value they can stop subscribing. The result is vendors have to "earn their keep daily" forcing them to focus on the owner's success, decreasing the risk for the owner.

Looking at Data Strategically for Continuous Process Improvement
There are many benefits for the owner associated with implementing an
owner-centric solution vs. using a contractor's tool. Having their own
system in place allows Owners to track and measure historical vendor
performance, budget data, actual results, schedule information, changes
and change management, design information, claim information, and many other sets of information that can be used to continuously improve how future projects are managed, while minimizing risk for the owner. Today web-based systems provide owners the opportunity to strategically manage their own project data and offer just the right combination of "out of the box" functionality with customizable tools to quickly tailor the system to fit their organization's information management needs (KPI tracking, reporting). These systems are designed to take the lessons learned on current and past projects and apply them to future projects.

Risk from the Owner's Point of View
Regardless of how responsibility is shared in a project, owners argue that they bear the ultimate risk for the execution of new projects. Their reasons are varied: they write the checks for overruns; they feel the pain of delays in the form of lost revenue opportunity; and they pay the additional costs of a facility built for project profitability rather than long-term operating efficiency. Everyone but the lawyers will agree that litigation won't recover these costs.

From this point of view, mitigating capital project risks requires a project management approach that mandates the building owner's priorities. Easier said than done: any major project includes contractors, architects, engineers and subs with competing interests and plenty of opportunity for miscommunication. How then, can building owners assert control and ensure all of these constituents are working in the best interest of the owner?

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