Every capital project is different, yet every capital project has similar components that are the fundamentals to excellent execution.
Every project should have a measurable return. Most of the time, this will be a return on capital. However, there are exceptions that focus on safety and quality. It is important that as a project manager you have a clear understanding as to why the company is making an investment in the first place. When you know why, you can make certain to align expectations and communications accordingly.
Developing an Executive Summary for the project saves time and becomes a reference point throughout the project. The executive summary is a roll-up of all the major aspects of the project including justification, timing, cycle times (if applicable), budget, stakeholder commitments, and other key aspects worth noting in one spot.
The Ideal Partner Summary defines the ideal partner for your company. The ideal partner should be clearly articulated ahead of the vendor selection process. Hiring the right partner is one of the most important components to ensuring project success. It is helpful to view this process in the same way you would view hiring a new team member. When we hire a new employee, we get clear on the person that would best fill that role and match them up through a hiring process. Selecting the right vendor is no different and deserves equal consideration. The IPS is a series of questions that allow you to get clear on the type of partner that best suits your company and fits this project. Remember that just because they have relevant experience does not mean they are a good organizational fit. If the culture or core values are not in alignment, there will be issues.
Request for Appropriations (RFA) is a financial justification provided to management for securing the capital needed for the project. Each company will generally have a format that is acceptable and defined. If your company does not have a standard format, contact me for a sample. It is helpful to also submit the executive summary and expected scorecard with the RFA. In my 24 years of experience, the RFA process for funding approval is the most frustrating aspect of the capital project process. This is due to the lack of urgency demonstrated by executives in approving the funds. The timeline is ticking but no one seems to care until it is about to explode and that is when they throw it back into your lap.
Checklists are a key to a successful project. There are several standard checklists that allow you and your organization to perform at a consistently high level when executing a project. Checklists are used in many different situations including operating rooms, construction projects, flying an airplane, and capital projects. The use of a checklist is underestimated and underutilized in the engineering community, but most steps in the work are repeated time and again. The checklist we recommend includes overall project steps, runoff, safety, quality, facilities, utilities, maintenance, controls, design, and financial.
Communication above all else can ensure a successful project. The lack of consistent and open communication is the number one cause for failure in the launch of capital projects. We recommend weekly calls with a set agenda to ensure consistent and open dialogue is taking place between you and your vendors. During the call it is important to review the open issues list, current schedule, part availability status, any major component delivery concerns, controls/programming percentage of completion, and update the status of all risk concerns. These meetings are all about communication but there should also be an element of accountability. If the tasks are not getting completed or progressing from meeting to meeting, it might be time to reevaluate.
Below is a snapshot of the fundamentals for all capital projects:
Capital projects are often dynamic because there are so many moving pieces. If you stick with the execution and implementation of the fundamentals outlined in this article, you will be a sought-after top performer. It does not matter how smart or educated you are, what matters is your use of the tools available and the lessons learned in this implementation.
If you want to become a top-performing Capital Project Manager, we have developed a course just for you. Capital Project Mastery is a 5-week online course built on 25 years of project management experience. We teach the fundamentals and then more advanced strategies for managing all aspects of capital projects. The trainer has been involved in over 500 capital projects and shares many real-world examples. Students receive access to a library of tools designed to ensure project success. Click here to reserve your spot.
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