The Basics of Program Management
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- Barry Jennings
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1 Program Management David A. Daileda, FAIA Excerpt from The Architect s Handbook of Professional Practice, Update 2006 Program management involves managing multiple projects that share a common goal. When those projects involve building facilities, architects with exceptional management skills are in a position to provide program management services to building owners. What do a major metropolitan airport planning a $2 billion expansion, a school district in need of modernizing twenty-seven schools, and a retail chain planning to roll out new stores in multiple malls nationwide have in common? The airport authority, school district, and retail chain all need someone who can interpret the varied and often competing needs of those who use, plan, design, build, finance, regulate, and operate these facilities; mold these needs together into an integrated facility program; and develop implementation plans that meet project time frames in an affordable fashion. In short, they need a program manager. Understanding what program management is and what program managers do starts with defining a program. Although there is no standard definition, those that exist are conceptually similar. For example, one person defines a program as multiple projects with a shared or common goal. Another refines this, saying a program is an aggregation of projects that together achieve a higher, common, and more complex objective. For this piece, program management will be considered from an architectural perspective as the management of multiple projects related to the development of building facilities that share a common goal. Note: Although project management and program management are not synonymous terms, a firm may identify a program management commission as a project (e.g., in contractual agreements, in project lists, on timesheets, etc.). On a related note, the phrase program manager, Summary which normally refers to the individual leading the program management team, can also mean the firm providing the service. Over the years, the design and construction industry has evolved into a series of task-specific silos standing next to each other. Those involved in each silo often have little understanding of what others do in adjacent ones. As this has come about, specialized skill sets have emerged to address tasks that require cross-silo knowledge. Con- PROGRAM MANAGEMENT SERVICES Why a Client May Need These Services To manage multiple projects with a common focus To manage all phases of a single large/complex project To achieve a single point of leadership and control To take advantage of purchasing power and efficiencies of scale To augment internal resources Knowledge and Skills Required Knowledge of market being served Strong management skills Technical knowledge Ability to think strategically Ability to communicate with upper management Understanding of program interrelationships Strong leadership and negotiation skills Representative Process Tasks Analyze client needs Mobilize a program team Develop a program master plan Develop master budgets Develop master schedules Monitor and control work DAVID DAILEDA is principal and director of operations at DMJM Design. He has thirty years of experience in the management and design of major design and construction programs, particularly major renovations of airport facilities. Daileda served in numerous AIA chapter leadership roles in the Western Mountain Region, including serving on the national AIA board of directors. Supplemental Architectural Services 2006 AIA 1
2 struction managers have appeared to handle various aspects of the construction phases of building projects. Facility managers deal with facility operational and maintenance aspects. At the front of the facility life cycle, planners and programmers collect data and help set the direction and parameters for a project. Program management service offerings reverse this narrowing focus. Program managers determine which silos are needed, plan how they will work together, and forge an integrated delivery process. Program management provides the client with a single source of responsibility for completing sets of highly complex tasks, which are frequently carried out in complicated sequences. Program managers provide expertise to the client, helping them translate goals into tangible and doable tasks that can be planned, managed, and implemented. CLIENT NEEDS The development of new building facilities and the rehabilitation of existing ones increasingly involve complex functional needs, building construction factors, environmental regulations, and financial considerations. Clients often look to an experienced team of professionals to help them navigate these elements. Most companies, institutions, and agencies do not have staff members with the skills to direct a complex facility development program. When a client entity does have an internal engineering or facility management group, it may not be large enough to handle the size and scope of the envisioned program. In addition, companies equipped to operate their existing facilities often find they do not have staff with the skills or experience to manage a facility expansion program. Company or agency programs involving facilities spread over a large geographic area, across the nation, or even across the world may want program management services to provide staff close to the facilities being developed. Or, a company may decide the flexibility afforded by engaging an outside firm will bring on needed expertise at appropriate times and avoid issues such as additional employee hiring and retention. Sometimes lenders require the assembly of an experienced team to manage the program as a way of securing their investment. Retail clients often have cyclical needs, and outsourcing program management gives them the flexibility to increase or shrink staff as needed. In addition, retailers may be able to write off outsourced services as a business overhead expense rather than calculating its cost as part of the total facility cost. Needs by Market Sector The private, quasi-government, and government sectors all need and procure program management services. Potential client entities within these sectors include various businesses, institutions, and government agencies. Following are a few examples of the types of facility development programs such client entities might initiate. Private sector. Companies, corporations, and institutions may attempt to control the growth or redevelopment of some aspect of their real estate assets. For example, an automobile manufacturer may create a nationwide program to redevelop their corporate image, which requires infusing that image into all of their sales facilities. Fast-food corporations often develop expansion programs targeted at specific geographic regions. Retail chains introducing a new product or service want appropriate construction completed in most of their outlets simultaneously, whether they are in a particular region or across the nation. Quasi-government sector. Agencies such as airport authorities, transportation authorities, and hospitals, which operate specialized facilities that serve the public, often create capital development programs designed to fulfill their needs for growth and modernization. Publicly funded universities and colleges may establish initiatives to develop new branch campuses or to improve a particular aspect of their existing campuses (e.g., student housing, energy efficiency, or security improvements, etc.). Government sector. Local, state, and federal agencies may create programs to develop or redevelop the facilities they operate. Public agency programs may be specific to a number of facilities or a particular time frame or location, while other programs may be ongoing. The U.S. Department of State, for example, has an ongoing program to 2 Supplemental Architectural Services 2006 AIA
3 keep all U.S. embassies and other diplomatic facilities worldwide up-to-date with the latest security requirements. Many school districts in major metropolitan areas often implement programs to repair and upgrade facilities on a districtwide basis. Facility Program Examples Building facility development programs can take many forms. Some encompass multiple projects of a similar nature, while others may include a range of project types. Here are a few examples: Expansion and upgrade efforts for projects governed by numerous regulatory, operational, and financial considerations (e.g., airport renovation, rehabilitation, and expansion) Projects involving large numbers of facilities serving a similar function in nationwide or worldwide locations (e.g., retail chains, restaurant and fastfood companies, cinema chains, new car dealerships, car rental enterprises) Multiple different projects for the same client in a single location (e.g., corporate complexes, research campuses, university campuses, industrial plants, military bases, etc.) Redevelopment of utility systems and other infrastructure elements in a designated geographic area Planning, design, and construction of highly specialized or technologically complex facilities (e.g., research facilities, medical facilities, industrial plants, etc.) Standardized construction or refurbishment that must be accomplished on an accelerated schedule The 2003 AIA Business of Architecture survey reports that 16 percent of all architecture firms in the United States offer program management services. SKILLS The implementation of a program requires interpretation of the needs and goals of the client into a strategic plan, which is then refined into a master plan and finally lined out in a work plan, schedule, budget, and programming document. Achieving this level of development requires experienced professionals who have in-depth knowledge in multiple disciplines. Most design professionals have some knowledge and experience in project scheduling and budgeting. However, program management requires a depth of detail that can only be gained through experience, an understanding of both compatible and conflicting relationships, and the ability to connect facility development knowledge with related sectors of finance, public relations, accounting, and industry regulation. This level of knowledge and experience makes it possible for a program manager to create a workable implementation plan. Qualifying as a Program Manager As previously mentioned, effective program management requires knowledge and skills on several levels. The first level requires the ability to fully analyze and gain an in-depth understanding of the industry or market sector the program is geared to serve. Next, a diverse set of management skills is needed for defining and directing the work. Finally, technical skills are required for performing basic yet critical tasks such as scheduling and cost estimating. Analytical skills. Each market sector has particular needs and requirements and often its own hierarchy and specialists, and even its own language. A program manager must be able to grasp a basic understanding of the market sector or industry a particular program is designed to serve. Development of a workable program plan requires knowledge of how and when the pieces have to come together, which items are part of the critical path, and what rules and regulations will constrain the work. As the program unfolds, a related critical skill is the ability of the program manager to look ahead. This anticipatory ability enables the manager to deal with issues and prepare for decisions before they blossom into major problems that have a detrimental effect on the program. A program manager who does not understand how an industry functions will be hardpressed to understand which events are commonplace and which threaten the health of A faulty or incomplete program management plan will set the stage for problems during implementation. Supplemental Architectural Services 2006 AIA 3
4 Program Management Providers Program management services are provided by firms both inside and outside the design and construction industry. These firms generally fall into three broad groups, which include project and construction management firms, architecture/engineering (A/E) firms, and financial management firms. Project and Construction Management Firms These firms operate independently or as specialized divisions of larger companies (e.g., large construction firms). They may pursue many types of program management assignments, or they may specialize in program management for a particular industry or market sector (e.g., aviation or highway construction). PM/CM firms often employ a large cadre of experienced professionals who understand the nature and character of program management. This ready supply of staff members can sometimes lead to the assignment of individuals with specialized expertise in a slot not fully suited to their abilities merely because of their availability. Architecture/Engineering Firms Many A/E and E/A firms, usually larger ones, have developed program management expertise and market this service. These firms often assign their design professionals to the program team and to projects within the program. Design implementation and design management, however, are two different (albeit related) activities. Thus, design firms selecting staff for program management assignments must consider the ability of individuals to recognize the difference between the two when making assignments. An advantage design firms have is their knowledge of the overall facility design and construction process. When design expertise is at the core of the program management team rather than provided by outside sources it is likely that more integrated results will be achieved. Financial Management Firms In recent years, financial management firms have begun offering program management services. These firms are typically spin-offs from major accounting firms and thus have considerable financial expertise. Such a firm s professionals may not be up-to-date on current trends and complexities in the construction industry, so the firm will look elsewhere to bolster their resources in this area. This may be an opportunity for an architecture firm to gain program management experience by participating in the process as a consultant that provides this needed expertise. The size of these financial management firms gives them the ability to quickly assemble a team of the size and makeup needed for most program management assignments. Their size also allows them to readily reorganize the team when needs change as the work progresses. These firms frequently have offices in multiple locations and, if required, can provide teams over wide geographic areas. On some public-funded program initiatives, however, large financial management firms will need to associate with local firms to comply with the regulatory requirements for local and minority participation. Transactional Firms These real estate-based firms have approached offering program management services from a doing-the-deal point of view. Originally motivated by the real estate prospects of the processes they would be managing, many got into the program management side during the last downturn in the commercial real estate business. At that time transactions were few, but these firms found themselves well-positioned as managers of real estate assets for major building owners. the program. Basic to this knowledge is familiarity with regulatory and legal issues that may govern the program. For example, public funding often carries with it restrictions on the use of the funds. Knowing how and where these funds can be applied will prevent potential loss of funding or, worse, legal action if funds are not properly applied. Management skills. Program management requires a full range of management skills, encompassing activities such as planning, organizing, budgeting and allocating resources, monitoring actions, and controlling expenses. Beyond the technical ability to 4 Supplemental Architectural Services 2006 AIA
5 deal with information and data, the program manager must be able to manage both people and work flow. In other words, he or she must be able to keep the team focused, recognize if the work is off track, and develop and initiate corrective actions should problems arise. Consensus building, critical path analysis, process development, and motivational techniques are essential leadership skills for keeping a program on track. A team of the appropriate size, employing the latest management tools and techniques and informed of the applicable rules and regulations, still requires leadership to correctly apply its resources. Another key management skill is the ability to understand the difference between doing the work and having work done. Program managers are employed to oversee the actions of others, most often the work of project managers. The acceptance of this role by program management team members (including architects) is critical to the success of any program management effort. Technical skills. Many facility programs require interpretation of the client s needs and goals and subsequent development of strategic plans; master plans; and detailed schedules, budgets, and programming documents. Most design professionals have knowledge and experience in the technical aspects of planning and scheduling. However, program managers must have a deeper understanding of these issues. Without this level of experience, faulty or incomplete planning can result and set the stage for problems during implementation of the program. Using Tools and Resources New and updated digital software for various aspects of program management are continually being released. Although the tools appropriate for a specific assignment should be carefully researched, some general program types are typically suitable for this type of work. These include programs for developing detailed schedules and financial management programs for analyzing various financial aspects of a building program. Document control programs that can store and manage large quantities of documents from numerous sources are especially critical to program management initiatives. The ability of these programs to share information with other programs (interoperability) is an important feature to look for when selecting such systems. However, offthe-shelf programs typically fall short of meeting the specific needs of a program management effort and must be altered, supplemented, or rewritten. Other resources needed include office space and workstations, computer and communications systems, and other support equipment to accommodate the efforts of project staff members. In addition, meeting areas and document storage spaces must be available. For some program efforts, vehicles may be required to visit sites or consultants. In some instances, the client may provide many or most of these resources. Acquiring Program Management Skills Firms and professionals seeking to acquire program management expertise should focus on expanding all aspects of their management knowledge. On-the-job experience can be supplemented with management course offerings or continuing education courses geared toward general, project, and construction management. Though less numerous, program management courses, workshops, and seminars are available. Such courses should be carefully researched, however, to verify their primary emphasis. For instance, programs created to present in-depth training about financial aspects of program management may not be fully suited to the needs of a professional seeking training in market analysis or planning techniques. Some colleges and universities offer program management courses. These are frequently offered through management, engineering, or other departments. As demand for facility program management grows, it is likely that more formal courses will be available. Competing for Program Management Services Architecture firms contemplating entering the program management arena need to develop strategies for competing with leaders in this market segment. Firms with strong technical Supplemental Architectural Services 2006 AIA 5
6 and project management capabilities but without actual program management experience might consider gaining such experience in two ways. As a consultant to a program management team, a firm can begin to develop a portfolio of experience and a knowledgeable staff who can expand their roles and responsibilities in future assignments. Even when such work is performed in the program manager s facilities, the consulting firm typically maintains control of it. Alternatively, a firm can provide staff members with particular expertise to provide specific services, such as facility evaluation assessment or cost estimating, to a project management team. In this situation, however, personnel provided to the management team usually become part of the labor pool supervised by the prime contractor for the program. Either way, the architecture firm providing services to the program management team has an opportunity to gain experience in program management. Achieving Program Management Success Achieving success in program management requires properly understanding the role of the program manager and the program manager s relationship with the client. The program manager and the program management team are typically an extension of the owner s staff, and thus they must view and understand the effort from the client s perspective. Success also depends on how well the program management team understands the client s expectations. Depending on the client s priorities, in some instances success may hinge more on financial and service considerations and in others aesthetic excellence or technological advancement may be more important. Understanding and accepting how the client values and prioritizes program factors is critical to achieving the program goal. Researching the corporate culture of the client is a key element for success. The management team will want to know who makes decisions, how they are made, and what factors most influence them. With this knowledge, the team can develop an organizational structure and operational process that sets the stage for a harmonious relationship with the client. Similarly, familiarity with the standards and operational characteristics of the client s operational environment will enable the team to focus on the issues, agencies, and activities most critical to the program. For example, in a program to upgrade a university campus, it is important to know what authority the university president has in comparison to the director of facilities, as well as the standards most applicable to the facilities being developed. An ability to develop an in-depth understanding of the program requirements is essential to successful program management. The program scope will spell out or imply special needs or requirements, such as local or minority firm participation, minimum credentials for applicants, or the time frame for completing the services. The program management team must determine the particular tasks to be performed and the types of skills needed to accomplish the client s program. Process and procedural considerations for implementing the work are also important. Will the project team act as an extension of the client s staff or will its relationship be at arm s length as the client s agent? Will the management team carry out its work in the client s offices, in a project-specific office, or in the consulting firm s home office? Will the work be done locally or will travel be involved? How have the budget and schedule been developed, and who will be responsible for managing them? Program Management by Small Firms Beyond providing specific expertise in a consulting role, small firms can participate in large program initiatives by providing program management teams with previous experience with the client or team members who meet program diversity requirements (e.g., small, disadvantaged, or minority- or woman-owned businesses). Small firms also can provide local ties and knowledge in a specific location when programs require services in numerous locations. Smaller firms can successfully provide program management services directly for programs of moderate scope. This may work best when project locations fall within a firm s area of operations, such as a program to identify, prioritize, and implement capital improvements for facilities in a school district or local government jurisdiction. If additional resources are needed for the effort, a small firm might team with one or more other firms. 6 Supplemental Architectural Services 2006 AIA
7 Sample Program Manager Job Description The hypothetical program manager position described below is for managing facility development in the retail sector. The description can be used as a starting point for tailoring program manager job descriptions that suit specific program needs. Title Reports to Summary of Position Major Responsibilities Job Requirements Program Manager Director of Architecture or Project Principal-In-Charge Responsible for planning, directing, and controlling the delivery of multiple projects involving both existing and new retail facilities nationwide. Includes administering prime contracts and ensuring that all projects within the program collectively support the overall program goal. Travel is required. Analyzes business, strategic, functional, financial, and qualitative requirements of the program; the specific priorities of the client; and program interdependencies Assembles, organizes, and mobilizes program team, and identifies needed administrative and physical resources Develops master plan to define program goals, policies, strategies, and procedures Establishes program master schedule for major activities and monitors milestones for projects in the program Develops program budget and monitors its status Directs the work of project managers and other team personnel Reallocates or adjusts resources when needed Tracks issues and resolves conflicts when they arise Monitors progress of design and construction phases for projects within the program Keeps client informed of program status through written reports and verbal presentations A degree in architecture, engineering, or related discipline is required and a professional license is imperative. A minimum of 15 years experience in design and construction of retail facilities is required, with at least 10 years experience in project or construction management. The candidate must demonstrate sound judgment, high standards, and professionalism. The ability to lead and negotiate, and to communicate with upper management and project managers, is essential. Familiarity with database software for tracking multiple projects is highly desirable. Program management can be a commodity-based enterprise. Program management firms often compete with others that sell results-oriented processes and claim to have developed measurable parameters for success. These parameters often include managing the costs of vendors and designers downward in some definable way. They seldom focus on improving quality, instead emphasizing speed to market or cost savings. This emphasis is common because many of the large businesses that hire program managers are publicly held and answer to boards looking for improved quarterly results to encourage stock market shares. To be successful in this environment, program management teams must stay focused on critical issues. This requires effective management procedures, team members with the appropriate attitude, an understanding that leadership goes beyond providing instructions, effective techniques for controlling the team and adjusting aspects of the program to form a cohesive product, and the ability to motivate team members to perform at their highest levels. Supplemental Architectural Services 2006 AIA 7
8 The ability to distinguish between leading and monitoring and directing and doing is critical. The program manager s role is to instruct and lead; it is the role of others to implement. Licensed design professionals who have been hired to complete a project accept the associated liability for their work. Managers working to resolve design issues may inadvertently redirect that liability away from the professional and onto themselves. Program management teams are typically not indemnified or insured against such actions and must be vigilant in limiting their hands-on involvement. Keeping the program management team s efforts in line is a critical management issue as well as a legal and liability consideration. PROCESS Program management encompasses several major activities that include analysis of client needs, mobilization of a program team and other resources, master planning, master scheduling, budgeting, and monitoring of project delivery. Perform a Client Needs Analysis Creation of a team that can manage a particular program starts with analysis and evaluation of the client s needs as stated in the RFP. These needs may be defined in terms of tasks or in terms of results. When specific tasks are defined (e.g., strategic planning, scheduling, construction management, etc.), the types of skills needed to complete them must be determined and relevant professionals appointed to the team. In addition, associated professional and administrative components, such as records management, facility management, and payroll services, needed to support the program management team must be identified. Although the client may provide some of these functions, an analysis of actual available resources is important to verify that all the needs of the management team are met. At times, an RFP may define the services required in terms of performance or a desired result. The stated goal may be to provide appropriate personnel, materials, and equipment to manage and direct all activities of the program and complete the activities in a timely manner, within the overall budget established for the program. A team built in response to this type of request often has the same core skill sets as teams put together in response to a task-oriented program description. However, as the work evolves, performance-stated contracts allow for ready modification of the team size and structure to address current tasks at hand. Regardless of how the scope requirements are stated, evaluation of the organizational makeup of the client entity is important. Program management teams often work in tandem with or in support of client staff. Therefore, the team structure, lines of responsibility, and grouping of expertise of the program management team will often mirror the client s organization. This alignment improves communication and workflow. If a client has recently carried out a similar program, it may be advantageous to find out about the organizational structure and activities of that effort. This information may provide insight into which aspects of the program were successful and, more importantly, which were the most problematic. Some clients may expect that all project management efforts will be approached in the same way without realizing that improvements may require some modifications to the process. The program manager must assess what special requirements are involved in supporting the client s program. Some facility programs will have special or unique requirements that may affect the makeup and structure of the program management team. Are security clearances required for the team members? Will the team be asked to support the client by providing professionals who temporarily become members of the client s staff? Will the client need help dealing with the public through community involvement programs, presentations at public meetings, or public relations and publicity programs? The project scope may call for the program management team to provide services or information that is typically furnished by the owner. This may include surveys and geotechnical investigations, environmental and hazardous material analysis, historic and archaeological investigation and analysis, or value analysis. Such special requirements will directly affect selection of the professionals who will make up the team, as well as the liability and risk aspects of the work. 8 Supplemental Architectural Services 2006 AIA
9 Contractual Matters Most contractual considerations with respect to program management services are similar to those for other services provided by architects. However, several issues merit special mention. Compensation and Fees Because program management often involves activities and tasks that are difficult to quantify, compensation is often based on hourly fees. Actual compensation is calculated according to the hours each individual works in an assigned job classification. Compensation limits for the team (often annual or per individual) may be set to establish labor expense targets for the team to work toward. Fees for specialists who are brought on board on a temporary basis to address specific problems may be included in these targets or they may be compensated as a separate budget item, depending on the scope of the program management contract. Labor rates are typically adjusted annually. At predetermined intervals, the client and the program manager review the current and remaining level of effort required and may make staffing adjustments accordingly. Fee structures for program management often take into consideration the location of the work and the facilities the team is using. If, for example, the team is working in facilities provided and furnished by the client, the overhead rate is typically adjusted to reflect the lower cost per individual borne by the service provider. Because the staff may be contractually bound to the program management team for a lengthy period, the client may question inclusion of certain marketing or home office costs that are usually included in standard overhead charged to clients. When compensation for a program management team is not hourly, the client and the program management provider must arrive at a mutually acceptable method of compensation. This may be a set monthly fee for specific services, an annual fee for providing a specified number of professionals for the program management team, or a fee based on a percentage of the overall value of the program. These types of compensation arrangements are difficult to structure, however, due to the variable nature of program management work. Clients may also compensate the program management team with bonuses for timely completion of various program milestones or for cost savings on various aspects of the program. Program management contracts may base increases in compensation on meeting or exceeding program goals. If goals are met, base compensation could be enhanced through the use of bonuses or other contract incentives. Professional Liability Insurance On some large program management projects, professional liability insurers may be willing to provide project coverage for the program that would include all professional service firms involved. When such insurance is available, the premium is usually paid directly by the client or funded through the program itself. When coverage is provided, clients may request that firms eliminate from their fee the portion of their overhead related to insurance. This request is made because the insurance coverage for the program may be primary to each firm s professional liability policy or the individual firms policies may not cover the work. However, firms on the project management team may still need additional insurance, since the program management insurance may not extend as long as the risk exposure that each firm has for its work on the project. Firms working as part of a program management team should consult their insurance advisers to analyze the benefits and drawbacks of specific coverage provided for a program. The coverage exclusivity, length, and deductible obligation should be considered as part of contract negotiations. In addition, because the program management team may provide services such as surveys, geotechnical investigations, or environmental assessments services usually provided by the client the insurance coverage for the project team should be examined to make sure these services are covered. Supplemental Architectural Services 2006 AIA 9
10 Assemble and Mobilize a Program Team Once the client s needs have been determined, the program manager assembles a team that can respond to them. Potential team members are identified, facility needs for the team are determined, and operational standards are developed. Team development. Selecting team members starts with consideration of the various tasks within the program scope, and deciding which are appropriate for the individuals within the firm and which are appropriate to assign to team members from partner or subconsultant firms. Planning and design professionals may be assigned to handle planning and design management activities. Similarly, engineers can be assigned to handle the various tasks associated with the phases of the program involving engineering management and oversight. Specialty services such as cost estimating or financial analysis are skills that are not usually found within a design firm. If these types of services are required in the program scope, they are often provided by specialty consultants who are subconsultant members of the team. If the program is provided with public funding, the program management team may be required to meet small or disadvantaged business participation goals, which also must be considered when assembling the team. In building the program management team, a firm may be inclined to expand its internal staff, especially in the management and construction sectors, rather than utilizing outside consultants to supply this talent. Firms that choose to follow this route should be aware that many qualified professionals with appropriate experience come from the construction side of the industry, where salary structures are generally higher. Before hiring such individuals, a firm may want to consider how existing employees of the firm may react to this arrangement. Estimating the length of the time commitment for needed personnel and other resources is a factor to consider when building a team. Professionals on a program management team are often committed full-time to the assignment for long periods, from several years to a decade or more. Removing a key member of a firm s staff for a matter of years can have a detrimental effect on both the firm and the individual. Devoting specialized firm resources to a single client for extended periods can hinder or eliminate a firm s ability to provide that same service to other clients. When structuring a program management team, it is best to consider the potential long-term effects of a lengthy commitment on the firm, the team, and individual staff members. What is the right size for a program management team? The answer depends on a number of factors. The size and makeup of the program management team can vary widely, depending on the size and complexity of the program and the specific services requested. Staff size at any time depends on the number and type of tasks to be accomplished, the availability of client staff to provide administrative and support services, the team s physical work location and facilities, and the geographic location of the project sites. The size of the team may be specified contractually or limited by the annual construction value of the program and the related cost for services or even by the space available for the team to occupy. The size of the team typically varies over the life of the program, fluctuating with changes in program activities. An effort to establish a plan and coordinate the activities of several departments in the client s organization may require a program management staff of ten to twelve individuals, while an effort that requires provision of full services by program management team staff may require 100 to 150 staff members or more. Mobilizing the team. Once the program manager has assembled the team members, facility needs for the team are identified, operational standards are developed, and individuals are assigned to specific tasks in the program. Whether the program management team is housed in existing facilities within a client s offices or new space is developed for the program effort, the team will require workstations, equipment, tools, and systems compatible to their needs. An operational arrangement for the team is decided, and it is organized into a hierarchy with lines of authority and responsibility. However the team is structured, the program manager develops and refines policies and procedures to guide program activities and tasks. These include instructions for the program management team on internal 10 Supplemental Architectural Services 2006 AIA
11 operational matters, guidelines for consultants and contractors brought onto the team, and quality standards for the program itself. It should be noted that sometimes the program schedule will dictate that efforts to mobilize the team must be carried on simultaneously with the initial phases of the team s work. Finalizing the mobilization activities and fully staffing the team are activities that may continue long after work on the program has begun. Develop a Master Plan Master planning for a program management effort includes defining all program elements and setting a master schedule and program budget. Together these elements provide an initial baseline for the work and define the sequence of activities. The program master plan is usually the end product of a process in which overall program goals are compiled and evaluated; goals are refined into strategies (which in turn serve as the basis for a strategic plan); and the strategic plan is parsed into a series of defined projects. This master plan is further refined into a series of tasks that are sequenced and phased in an action plan. The cost associated with each program element is established, refined, and combined with the action plan to form the master program schedule and budget. Although master planning may be time-consuming, it is crucial for establishing the realistic base needed to succeed in carrying out the client s program. Adequate time must be allotted for proper research and planning tasks. The team must understand the full impact each activity or element will have on the program schedule and budget. This understanding will ensure that decisions affecting the program are based on complete data rather than assumptions. Reconstruction and changes cost both time and money and can be devastating to the progress and success of a program management effort. Preparing a master schedule. Program scheduling involves combining the required time frames for the various aspects of the program and tempering that information with potential effects on project schedules from weather conditions, seasonal adjustments, supply time tables, and availability of funds. The various tasks in the program must be linked to ensure that activities are completed in the proper sequence and in time to meet program milestones. While the master schedule is being developed, consideration should also be given to the delivery approach for each element in the program. Although some elements may be delivered through the traditional design-bid-build approach, timing, sequencing, or other considerations may require delivery of some projects using design-build, fast-track, or other approaches in order to bring the projects on line in the appropriate sequence. Preparing a budget. In addition to establishing an overall program budget, the team often assists the client in other financial aspects of program management. These may include developing and analyzing individual project budgets and monitoring expenditures on each project. It is critical for the program manager to establish a system for developing realistic budgets for the various program elements. These budgets should be based on actual conditions in the market both locally and nationally and include forecasts for changes over time. They also must address all approved scope issues and items. The budget should be updated on a regular basis to accommodate scope and cost changes, account for market fluctuations, and incorporate any new elements that have been approved. On the finance side, the program management team may be asked to provide market analysis, financing analysis, and implementation assistance. Expertise in this area is often very specialized and may be more appropriately provided by a consultant to the program management team. Monitor Delivery of Projects This increment of program management involves tracking the progress of work on all projects in the program. During this phase, the program manager may help the client choose design professionals for specific projects by creating a scope for individual projects, analyzing proposals, and offering advice on the selection. Once a design team is in place, the Supplemental Architectural Services 2006 AIA 11
12 program manager will be charged with monitoring the activities of the design team to control the scope and timing of their services. During the construction contractor procurement phase, the program manager will also help establish the selection process, analyze proposals, and advise the client on selection issues. The program manager will work with the client to negotiate fees for the work and review and offer advice on contractual issues as appropriate. During project construction phases, the program manager may provide construction management services to assist in monitoring and controlling the construction work. These activities may continue through project closeout and commissioning. If requested by the client, the program management team may provide or oversee other related services such as move management, postoccupancy analysis, system startup, and building commissioning. LEVERAGING MANAGEMENT CAPABILITIES As clients find it increasingly difficult to navigate the design and construction process required to develop multiple, complex facilities, the need for program management services will continue to grow. Moreover, ongoing pressures to compress project delivery schedules and control project budgets are likely to increase the demand for these services. Firms with strong management skills can leverage those skills, along with their design and technical knowledge, to serve the program management needs of clients. 12 Supplemental Architectural Services 2006 AIA
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