Agile perspectives in construction projects

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1 Department of Real Estate and Construction Management Thesis no. 299 Real Estate Development and Financial Services Master of Science, 30 credits Architectural Design and Construction Project Management Agile perspectives in construction projects How to improve efficiency in the design phase Author: Derya Bahceci Linnea Holmgren Stockholm 2014 Supervisor: Tina Karrbom Gustavsson

2 Master of Science thesis Title Agile perspectives in construction projects How to improve efficiency in the design phase Authors: Derya Bahceci & Linnea Holmgren Department: Real Estate and Construction Management Master Thesis number: 299 Supervisor: Tina Karrbom Gustavsson Keywords: Construction Project Management, Traditional Project Management, Agile Project Management, Design phase, Program-stage, System-stage, Efficiency II

3 Abstract The long project durations in construction projects usually includes changes. From the initial project idea to the end of the design phase, the requirements and expectations of the project tends to change. There could be many reasons for this, such as new or more thorough specifications from the client, or perhaps, changed factors in the surrounding. A problem is that changes might have consequences in terms of added costs, extended time and transformed scope. Hence, unwanted changes often mean that the resources are used in an inefficient way since re-work has to be done. This often affects the client satisfaction negatively since, as earlier mentioned, costs might increase, time might be extended or scope could have to be changed. The aim to work efficiently in the design phase of construction projects lays the foundation for this report. More specifically, this master thesis looks into how agile methodologies can make the program- and system-stages, of a construction project, more efficient and thereby increase the client satisfaction. Agile methodologies could be described as the ability to rapidly respond to change. The agile methodologies are about realizing that projects are prone to changes because of changing circumstances. It is about realizing that we develop our knowledge and understanding of a project as it proceeds, which means that we must adapt to new information as it is gained. In one single word, agility is all about flexibility. The agile methodologies are suited for projects with high complexity and uncertainty. It is also suitable to work in agile ways when a project has unclear specifications, changing situations, complex project goals and results needs to be achieved continually or early in the project process Conclusions that have emerged through this master thesis are that agile methodologies could improve efficiency in the program- and system-stages. This can be possible by dividing each stage into shorter cycles. In this way, the stages would become more manageable since it is easier to get an overview of the closest upcoming work. Shorter cycles can also make it easier to keep the goal focus through the whole project process since more frequent reconciliations are being held. Working in shorter cycles gives the opportunity to have more frequent reconciliations with the client as well as with the project team. Reconciliations are held in the beginning and in the end of each cycle. This means that the client gets the opportunity to express wishes and requirements during the reconciliations which results in possibilities to make eventual changes throughout the stage. This prevents major changes from occurring in the end of the stage which means that resources can be used more efficiently. Also, when changes are made continually instead of after-the-fact, the costs of making unwanted changes becomes decreased. The client involvement and the agile approach could for these reasons affect the client satisfaction positively. III

4 Sammanfattning De långa projekttiderna i byggprojekt innebär ofta att förändringar måste genomföras. Krav och förväntningar på projektet ändras ofta från den initiala projektidén till slutet av projekteringsskedet. Detta kan ha flera orsaker, såsom till exempel nya eller mer detaljerade specifikationer från beställaren, eller också förändringar i omgivningen. Ett problem med dessa oönskade förändringsarbeten är att de oftast resulterar i negativa konsekvenser såsom ökade kostnader, förseningar och förändrad omfattning av projektet. Förändringar innebär att omarbetningar måste göras, vilket i sin tur oftast innebär att resurser inte används på ett effektivt sätt. Ett ineffektivt resursanvändande påverkar ofta även kundnöjdheten negativt eftersom att projektet resulterar i högre kostnader, förlängd tidsplan eller en förändrad omfattning. Målet att arbeta effektivt i projekteringsskedet i byggprojekt ligger till grund för detta examensarbete. Denna studie handlar mer specifikt om hur agila projektmetoder kan göra program- och systemskedet i byggprojekt mer effektivt och därmed även öka kundnyttan. Agila projektmetoder kan beskrivas som förmågan att snabbt kunna anpassa sig till förändring och handlar om att inse att projekt ofta förändras på grund av förändrade omständigheter i omgivningen. Det handlar dessutom om att förstå att kunskapen och förståelsen för projekt ökar under tiden som ett projekt fortlöper, vilket innebär man måste anpassa sig till nya de nya omständigheterna och kunskaperna. Agila projektmetoder kan kortfattat beskrivas med ordet flexibilitet. Agila projektmetoder är lämpade för komplexa projekt med stor osäkerhet. Det är även passande att arbeta agilt i projekt som har vaga specifikationer, förändrande omständigheter, komplexa projektmål och när resultat måste uppnås kontinuerligt eller tidigt i projektprocessen. Slutsatser av examensarbetet är att agila projektmetoder kan öka effektiviteten i program- och systemskedet. Ökad effektivitet möjliggörs genom att dela in projektet i kortare cykler. Detta gör att man får en bättre överblick över det skedet man arbetar i, och därmed får man även en tydligare bild över det närmast kommande arbetet. Kortare cykler underlättar även att behålla målfokus genom hela projektprocessen i och med att tätare avstämningar hålls. Genom att arbeta i kortare cykler ges även möjligheten att ha tätare avstämningar med kund, men även tätare avstämningar inom projektgruppen möjliggörs. Detta eftersom att avstämningar hålls både i början och slutet av cyklerna. I sin tur innebär detta att beställaren har större möjlighet att uttrycka sina önskemål, vilket resulterar i möjligheten att göra eventuella förändringar under skedenas gång istället för att låta dessa utvecklas till större förändringar (omarbetningar) som måste genomföras i slutet av skedena. När förändringar utförs kontinuerligt minskar även kostnaden för att genomföra de oönskade förändringarna. Det ökade kundengagemanget och de agila arbetssätten i stort tycks därmed kunna öka kundnöjdheten i projekten. IV

5 Acknowledgements This master thesis of 30 ECTS is conducted at the department of Real Estate and Construction Management at the Royal Institute of Technology in Stockholm, Sweden. The work has been performed in collaboration with the global consultancy firm WSP, the department of Management. The work started in January 2014 and was finished in June The authors had the aim to investigate how construction projects could be managed more efficiently and the topic agile methodologies was suggested by the authors. The specific research question however, was formulated together with the supervisor at the consultancy firm WSP Management, because the authors wanted to write about something that was of importance for the company. The process during the thesis has been interesting because the authors only held little knowledge about agile methodologies in the beginning of the thesis. By going from a rather low level of knowledge to a deep understanding of the topic has resulted in an extensive process and development in the thesis. This is because the direction of the topic has changed as the authors have gained more knowledge. When looking back, this has resulted in both positive and negative aspects. However, since agile methodologies is a fairly new subject with little research within the construction industry, there was no other option. First and foremost, we would like to thank our supervisor at WSP Management, Lars Hansson, for being involved and engaged during the whole process. We are grateful that you have taken your time and have been committed during the process. We would also like to thank our supervisor at the Royal Institute of Technology, docent Tina Karrbom Gustvasson. You have been a source of inspiration and we highly value your input and ideas to this thesis. Last but not least, we would like to thank all the interviewees, who all are project managers and client design managers at WSP Management. Thank you for taking your time, the interviews have been of large importance for the results of the master thesis. Stockholm, June 2014 Derya Bahceci and Linnea Holmgren V

6 Table of contents 1. Introduction Background Theoretical framework Problem Why do major changes occur in the end of the program- and system-stages? Purpose Research question Delimitation Disposition Method Information collection Interview procedure Interview with experts Analysis of interviews and suggested efficiency improvements Validity, reliability and replicability Possible biases Comments on the chosen method Literature review Client Client satisfaction Client satisfaction in the construction industry Traditional project management What is traditional project management? Traditional processes Challenges with traditional project management Agile Project Management What is agile project management? The agile manifesto Agile characteristics Challenges with agile project management Empirical findings Facts about the case study Coordination challenge Train design unknown VI

7 4.1.3 Many parties involved Collected answers Communication Project planning Project success factors Documentation Time, cost and quality Analysis General findings The four chosen factors Planning in short cycles Reconciliations Welcome changes Project team collaboration Challenges with agile methodologies in construction projects Agile literature is beautified Time Documentation Conclusion Question Answers Shorter cycles Reconciliations Future research areas References Literature Internet Oral Figures Table of figures Figure 1: Construction project process overview, showing the design phase separately Figure 2: The possibility to influence the project is large early in the project, the cost of making changes increases with time VII

8 Figure 3: Cost-uncertainty curve showing that uncertainty in projects reduces with time, costs for making changes increases with time... 4 Figure 4: The construction project process in the project managers guidelines Figure 5: Practices of lean and agile usually differ even if they have shared principles/philosophy Figure 6: Time is fixed in agile methodologies; scope could vary within the given resources Figure 7: The organizational structure of case study project VIII

9 1. Introduction This chapter gives an introduction to the context of this master thesis by presenting background information, theoretical framework, problem and purpose. Thereafter, the research questions as well as delimitations follow. Finally, the disposition of the report is presented in order to give the reader an overview of the study. 1.1 Background Construction project managers need to lead and manage their projects throughout the whole project life-cycle. This is hence not an easy task because construction projects are large, involves many disciplines and includes high-risks. Also, construction projects are often unpredictable because of their one-time nature. For these reasons, among all, construction projects require flexible management and leadership to respond to changes that occurs along the way (Gould & Joyce, 2009). To enhance the challenging coordination, planning and control-work of construction projects, it is important to have efficient methodologies which take into consideration that the projects are often initiated under large uncertainties (Winch, 2010). The term uncertainty includes both complexity and predictability. Complexity means that information is available but too costly or time-consuming to collect and analyze. Predictability means that the past is not a reliable guide to the future because the future is by definition unknowable whilst past experience is a valuable guide to the future In the beginning of the 1990 s, software developers within the IT-industry were discontent with the current, traditional project management methodologies. They meant that traditional methodologies assume that the future is predictable because plans are made without taking into consideration that unwanted changes might occur. They meant that the assumption of predictability is problematic because it implies that resources, money, time and creativity are used according to old plans, this in turn leads to waste (Opelt, et al., 2013). Further, the software developers thought that it is hard for the clients and the project team to know exactly all requirements in the initiation of a project (Gustavsson, 2007). According to these software developers, the traditional processes are blocking the way for new requirements. This is clearly a problem in a changing environment such as construction projects (Opelt, et al., 2013). Due to these dissatisfactions, the project managers came up with a new, more flexible approach to project management, called agile methodologies. In contrast to the traditional methodologies, the agile methodologies take into consideration that the future is impossible to predict. Proponents of agile methodologies believe that it can be more suitable for managing projects because it includes approaches to managing changes (Gustavsson, 2010). The design phase of construction projects can be seen as a project on its own, consisting of three stages, those are the program-, system- and detailed design-stages. The main focus of this report lies in the first two steps of the design phase, namely the program- and system-stages, see Figure 1. 1

10 Figure 1: Construction project process overview, showing the design phase separately. The reason for focusing on the design phase is that the possibility to influence a project is largest in the beginning of the project, and the possibility decreases as the project proceeds, see Figure 2. Figure 2: The possibility to influence the project is large early in the project, the cost of making changes increases with time (Rocque, 2013). 1.2 Theoretical framework The aim to work efficiently in the planning stages of construction projects lays the foundation for this report. More specifically, this study looks into how project management in terms of resources (money, time and scope) can be more efficiently used within the often uncertain, program- and system-stages. This focus has been chosen in collaboration with Lars Hansson, team leader for project managers at WSP Management. The subject was chosen due to dissatisfaction about situations where resources 2

11 were used inefficiently. This was considered due to changes that occurred continuously, but old methodologies did not support continuously changing project settings. This lead to situations where major changes had to be made to the design work, further explained in section 1.3. Traditional and agile management methodologies are presented in this master thesis and have been investigated with regard to efficiency. By efficiency, the authors refer to fewer changes in the end of the program and system-stages. In other words, efficiency is the theoretical framework used while looking into the two project management methodologies. This framework has been chosen because traditional project management methodologies has been claimed to be inefficient (Gustavsson, 2007). Also, this subject was chosen because the discussion of more efficient management within construction projects has gotten a large focus within the industry during the last years. Finally, this framework was chosen because WSP Management sees potential for improvements in current methodologies. The consultancy firm is interested in finding and implementing new methodologies for improved efficiency which means that findings of this study could create value in the real business world. To further clarify the theoretical framework of this thesis, the definition of efficiency is presented as follows (Investopedia US, 2014): A level of performance that describes a process that uses the lowest amount of inputs to create the greatest amount of outputs. Efficiency relates to the use of all inputs in producing any given output, including personal time and energy. 1.3 Problem The long project durations in construction projects usually mean that changes are made to the initial plans. This is because the requirements and expectations for the project tend to change from the initial project idea to the end of the design phase. There could be many reasons for this, such as new or more thorough specifications from the client, or perhaps, changed factors in the surrounding. However, the changes often occur as a result of the non-predictable future. A problem is that changes also might have consequences in terms of added costs, extended time and transformed scope. Or it can also be seen that the problem is that the processes does not support making changes. Hence, unwanted changes could mean that the resources are used in an inefficient way since re-work has to be done. If this is the case, this often affects the client satisfaction negatively since costs might increase, time might be extended or scope might have to be changed. In general, the later changes occur in a project, the more costly will the changes be, and the more inefficient will the use of resources be spent (Project Management Institute, 2013). This is because the re-work required involves changing plans, trade-offs and to make sure that the different parties are agreed before proceeding with the project. This in turn implies higher costs and often also leads to extended project time. In order to minimize the inefficient resource-usage in the program- and systemstages of construction projects, new ways of working, such as agile methodologies, needs to be investigated in the search for improvements. 3

12 Figure 3: Cost-uncertainty curve showing that uncertainty in projects reduces with time, costs for making changes increases with time (Project Management Institute, 2013) Why do major changes occur in the end of the program- and system-stages? To be able to understand if the major changes that occurs in the end of the program- and system-stages could be avoided or decreased, it needs to be clarified why those changes occurs, to begin with. One reason for major changes to occur in the end of the program- and system-stages is that the project has been started when there were large uncertainties about requirements and future circumstances of the project. However, uncertainties decrease as the project proceeds and changes has to be made according to new requirements, wishes and circumstances. An interviewed project manager at WSP Management explains that major unwanted changes occurs because the teams are working towards a scope and goal that the project cannot afford and does not have time to deal with. This happens because the project is not specified enough when the project team starts working with it, which means that the project team works towards the wrong goals from the initiation of the project. It could also be due to the processes that do not support changes to be made during the project. The uncertainties in the initiation of the project imply that many parts of the project need to be reworked later on. Furthermore, this seems to happen because not all decisions can be taken in the beginning of a project, some decisions have to be taken when more knowledge about the project has been gained. A project manager at WSP gave an example of a project where an important decision was taken in the end of the system-stage. The decision was to decrease the project budget significantly, but to keep the same scope and the same time-plan. This implied that the project team had to rework the plans and see what could be cut down on, to make the project fit within the new, smaller, budget. However, when the major unwanted changes occur in the end of the program- or system-stages, they often cause delays. Several project managers have told that they expect major changes to occur in the end of the program- or system-stages, and therefore they include re-working time in their time-plans. When this buffer time is not included, the major changes causes time-pressure in the project and the deliveries sometimes even becomes less well-performed. The major changes that occur in the end of the program- and system-stages also costs money to adjust (Hansson, 2014). 1.4 Purpose The purpose of this master thesis is to investigate if increased efficiency can be attained by using agile methodologies in the program- and system-stages of construction projects. Efficiency is referred to in terms of less major changes in the end of these stages. 4

13 1.5 Research question The investigated research question in this report is the following: How could agile methodologies affect the amount of major unwanted changes in the end of the program- and system-stages in construction projects, in order to increase efficiency? Also, the following sub-question has been investigated: How could agile methodologies in construction project management affect the client satisfaction? 1.6 Delimitation Since the process in construction projects includes many phases and is very comprehensive, this report is limited to only focus on the program- and system-stages. The purpose with this limitation is to entail specific, rather than general, conclusions and recommendations for WSP Management as well as for other project managers within the industry. It also aims to contribute to project management theory. Furthermore, focusing on these stages gives the largest possibilities to influence and affect the project as a whole in the early phases, see Figure 2. In order to focus on a more general level of project methodologies, another delimitation is to focus on methodologies in general rather than on practical tools. Finally, the authors refers to efficiency only in terms of less changes in the end of the program -and system-stages and not any other aspects of efficiency. 1.7 Disposition Firstly, the chosen research method is described and presents how the work has been carried out. Secondly, the literature review describes the client s role in construction projects and also explains what is meant by the client satisfaction. Further, the literature review presents traditional- and agile project methodologies to provide an understanding of what characterizes these two methodologies. Thereafter, the empirical framework is presented. This includes the results of the interviews with regard to an efficient use of resources. In this part, a case study project is also presented to give the reader an example of a construction project and what complexities it includes, and also to understand where there are potential for efficiency improvements within construction projects. The analysis chapter follows after the empirical chapter. In the analysis, the literature and empirical findings are elaborated upon and suggestions of how efficiency can be increased are presented. Thereafter conclusions are presented. Those include the answers to the research question stated in section 1.5. Finally, recommendations are given to WSP as well as to other students or organizations who would like to do further research on this subject. 5

14 2. Method The working method, which has been a qualitative research, has followed three steps during the project work. The first step has been to carry out an information collection, i.e. a literature study. The traditional and agile methodologies are studied to develop an understanding of their characteristics and differences. Also it has been looked into how agile methodologies are applied within IT-projects today, since that is the industry where the methodologies developed from. The second step regards the interview process where interviews have been conducted with project managers and client design manager within the construction industry. The authors also made a case study in order to give an example of a construction project and its complexities. Interviews were held with managers of the case study as well as with managers from other construction projects. The third step comprises an analysis of the literature review and the interviews, thereafter follows recommendations regarding efficiency improvements for WSP. Working method: 1. Information collection 2. Interview process 3. Analysis of interviews and suggested efficiency improvements 2.1 Information collection An information collection in terms of a literature study has been carried out in order to deepen the knowledge within the topic of this master thesis. The authors presents the literature study by describing the current, traditional, project management methodologies and further by presenting the more modern, agile project management methodologies. Agile methodologies were studied because earlier research suggests that agility could handle uncertainty in projects, this report aims to investigate this further and has focused specifically on the program- and system-stages of the design phase. The literature study has been crucial for the thesis since a deeper knowledge of agile methodologies was created by embracing information through books, former master theses and scientific papers. Furthermore, material collected from WSP has also been studied in order to get an understanding for their current working methods and to get descriptions of concepts. Other areas that have been studied besides agile project management are traditional project management and client satisfaction. These areas also belongs to the core areas of this thesis, even though the main focus has been put on agile project management. The information in the literature study was mainly gathered through databases such as Google Scholar and KTH Primo, since these webpages only provides scientific reports and hence, accurate and reliable secondary data (Bhattacherjee 2012). The reliability of the collected sources has been investigated by taking into account if possible biases were identified. Unreliable or inaccurate sources have been eliminated. Keywords that were used during the searches in databases were among others agile project management, agile project management in construction, agile manifesto, lean construction 6

15 management, traditional project management and customer satisfaction. The literature study resulted in a well-developed and deepened knowledge about the concepts mentioned above. Keywords like agile project management in construction on the other hand only provided a limited number of scientific reports. This indicates that agile methods within construction still are a rather new topic with little research. Therefore, literature about agile project management in the software industry has been studied to a larger extent. 2.2 Interview procedure In order to be able to conduct as good results as possible from the interviews, the authors had some factors in mind before and during the execution of the interviews (Bhattacherjee 2012). For example, interview material was not sent to the interviewees in beforehand, since the authors advocates spontaneous answers. The risk of letting the interviewees see the questions in beforehand is that answers might be prepared by the interviewee which results in less honest answers. Hence, an incorrect picture might be the result. Due to the fact that the interviewees could not read the questions in beforehand, it was important to clearly explain what was being meant by each question during the interviews, so there would be no misunderstandings. In order to reduce the risk of information getting lost, the interviews was recorded (Ekholm & Fransson, 2013). The result of this was positive since both interviewers could focus on what the interviewee said, rather than taking notes. Recording the interviews also enhanced the process of analyzing the interviews. It also increased the possibility of transcribing the interviews correctly. What the authors have had in mind when reproducing the interviews is that face expressions are getting lost when listening to the records Interview with experts In order to know how project managers and client design managers work today, interviews have been carried out. The answers have been compared to the literature study of traditional and agile project methodologies in order to see the possible similarities and differences between literature and practice. Moreover, by studying their current ways of working, the authors tried to find possibilities for improvements by using agile methodologies in the program- and system-stages instead of working with traditional methodologies. Improvements were searched for in terms of possibilities to decrease the number of major changes that are unwanted and often appears in the end of those stages. The interviews were carried out when the literature study was completed and when more information about agile methodologies was gained (Ekholm & Fransson, 2013). The interviewees were chosen from recommendations from the supervisor at WSP. It was assumed that the best way of finding improvement-possibilities is to interview experienced professionals who are working in construction projects, and thereby finding possibilities of efficiency improvements. The interviewees varied in age and gender which have contributed to a more dynamic input to the thesis. There is however a risk that WSP chose interviewees that have the same opinions. This would in that case mean that the interviews are biased (Bryman, 2012). This has improved the process of analyzing, comparing and drawing conclusions from the interviews. The sampling strategy for the interviews was with a sampling frame of seven persons. Some spontaneous interviews with project managers were held for additional questions that arouse, but those were not counted as part of the planned interviews. All interviewees are professional employees and works as project- and client design managers in the program- and system-stage of different construction projects at WSP Management. 7

16 The sampling-technique used was a non-probability sampling since the interviewees not were chosen randomly (Bryman, 2012). The interviews were semi-structured which means that the questions do not have to be asked in a pre-decided order and follow-up questions are welcomed. This type of interviews is similar to regular discussions, rather than strict interviews, and is suitable when an open discussion wants to be achieved. Since this master thesis is qualitative study, an operationalization of the collected data had to be done in order to be able to measure and compare results from the interviews. This is because results were mainly of soft values which usually are hard to compare and draw general conclusion from. Therefore, in this study, the information and experience of the project managers has been regarded as a measure of how traditional methodologies work today and what possibilities for improvements there seems to be. 2.3 Analysis of interviews and suggested efficiency improvements The analysis of the interviews focused on investigating if agile methodologies could avoid or decrease the scope of the major changes that often occur in the end of the program- and system-stages in construction projects. Also, the interviews was conducted to understand how project managers works today so that possibilities for improvements could be identified. The authors have suggested efficiency improvements for project managers who work in the programand system-stages. These recommendations are based on the literature review, the interviews with project managers at WSP, and the frequent meetings with the supervisor from WSP. 2.4 Validity, reliability and replicability In order to conduct a reliable study, the authors have avoided being subjective and asking ambiguous questions (Bryman, 2012). The researchers aimed at conducting a study with a high level of reliability, which means that the study should be consistent. This was of high importance since a high level of reliability implicates a trustworthy result. Additionally, the level of validity has been controlled by ensuring that the literature was up to date and trustworthy. Finally, a high level of replicability results in a higher degree of trustworthiness which is desirable (Bryman, 2012). Replicability is connected to reliability and means that the study is consistent and that the same results would be generated if the same study was performed all over again. The researchers have accomplished this by using reliable resources (only academic and professional), interviewing respondents with sufficient knowledge, using proper referencing and by being objective throughout the whole process. 2.5 Possible biases The construction project managers and client design managers from WSP, who participated in the interviews, are working as consultants for different projects and for different clients. The various projects and clients they are working for has given a more heterogenic input to the research and helped the authors to understand different aspects of construction projects (Bryman, 2012). The construction industry is often considered to be conservative and the authors were aware of the risk for bias when gaining input from project managers. Some expressed clearly that they distrust new project methodologies. Also, input from project managers who have opposite ideas could have led to bias i.e. project managers who believes in using a new methodology within their projects (Bryman, 2012). To avoid these sorts of biases, it has been important that the authors kept these possibilities in mind and always thought of the input with the theoretical framework in mind. 8

17 Yet another possible bias was the strong will of the authors to come up with a result that the consultancy firm expects or desire (Bryman, 2012). This bias was important to consider thoroughly from the beginning of the project in order to not create any hypotheses about relations between variables that are not scientifically proven. An advantage has also been that the two authors have been able to warn each other if any type of biases seemed to occur. A limitation was that the amount of time for the research was not long enough to investigate the topic further and neither to interview more than a few project- and client design managers. Therefore, the generalizability of the study is discussable. The generalizability of this thesis might not be for the whole construction industry. However, the fact that all interviewees had fairly unanimous answers shows that the question is of interest and that there seems to be possibilities for improvements. Further, the fact that the question is of interest for the interviewees, gives an indication that other organizations than WSP also might have interest of this topic and hence this master thesis. The results have been depending on the project- and client design managers who participated in the interviews and how honest they were to the authors. 2.6 Comments on the chosen method The authors of this report chose to carry out the study in the described way because of several reasons. First of all, an understanding had to be gained of the characteristics for the traditional and the agile methodologies, and hence, what differentiates them. In the beginning of the thesis, the authors thought that traditional- and agile methodologies were two completely different ways of working. After the literature study and interviews, the authors came to the conclusion that the traditional- and agile methodologies have the same processes. However, the authors came to the conclusions that processes are worked with in different ways because of different characteristics for the two methodologies. Further, the purpose of conducting interview was to compare literature to practice, and to see in what way construction project managers currently are working. This was done to come up with eventual improvement suggestions. 9

18 3. Literature review The following literature review will present the main topics of this thesis. The chapter will present who the authors refers to as the client in construction projects. This is described because different words, such as customer, are used in other industries. The role of the client is presented because this study aims to provide an understanding of what client satisfaction is and how it can be obtained by increased efficiency in the design phase. Finally, traditional and agile project management methodologies will be presented to give the reader a larger understanding of the two methodologies and what differentiate them. 3.1 Client The client is the one who provides financial resources to carry out a construction project, therefore the clients wishes and needs are of great importance (Winch, 2010). The clients financial resources are used to create a construction which provides a net gain to the society and economy in which the physical asset is created. In other words, the client of a construction project is someone who is having construction work carried out (Boverket, 2014). It is however important to also include the requirements and wishes of other affected parties. One such party could be a donator who has donated the financial resources to the client who in turn uses it for the construction. Another party, with requirements, could be the end-user. The end-users will be using the physical asset (building, or other construction) or will be directly affected by it (Wikforss, 2012). The requirements and wishes of all important parties are for this reason important to include when planning for a construction. In section 4.1, the case study project of this report is presented. The client of the case study project is The Public Transport Division of Stockholm County. They have ordered new depots for storage of subway trains and are providing the financial resources that the PM of the project should use to carry out the construction project. The end-users of these subway-depots are the company who works with maintenance of the trains in the depots. Another example that points out the client could be the construction of a school-building. The client could be a real-estate company who owns the school-building, and the end-users would then be the professors and students who will actually use the building. This clarifies the client and the end-user(s) and gives an insight to the many requirements and needs that should to be taken into consideration when constructing a building. The clients often hires project managers (PMs ) and client design managers (CDMs ) from consultancy firms, for instance from WSP, to capture the whole picture of requirements and to carry out the construction project from initiation to a finished building (Hansson, 2014). When the client is mentioned in this report, it is referred to the party that has ordered a new construction that should be carried out within budget, on time and to the required final quality. 3.2 Client satisfaction Customer satisfaction is a more well-known concept than client satisfaction. However, in the construction industry, it is rarely referred to the customer but rather to the client. The expression client satisfaction will therefore be used instead of customer satisfaction in this report in order to make the information consistent with the terms used in the construction industry. 10

19 The term customer satisfaction, or as in this case client satisfaction, is a well-known measurement tool, for project managers in order to know the degree of satisfaction of their clients (Kärnä, 2004). Client satisfaction has shown to be the most essential factor when it comes to the perception of project success (Dov and Lechler, 2003). Clients seem to be satisfied when the quality of a product is better than the standard of that product. Further, Dov and Lechler (2003) argue that advantages of achieving a high level of client satisfaction are the following: Improving communication between parties Enabling mutual agreement Evaluating progress towards the goal Monitoring accomplished results and changes, etc. As earlier mentioned, to accomplish a high level of client satisfaction in a project, it is fundamental to understand the clients wishes and requirements (Kärnä, 2004). Moreover, the project manager must also understand what it is that creates value for the clients organization. To gain this understanding, it is crucial that the project manager and the client have good communication and collaboration throughout the whole project. According to Dov and Lechler (2003), another factor that contributes to client satisfaction is planning (Dov and Lechler, 2003). They express that plans are nothing, planning is everything and explain that planning is not a one-time task and that plans only are useful if they are continually updated. The reason for this is because surrounding factors constantly changes and that the plans therefore also need to be changed. They mean that if plans are continually updated and adjusted to surrounding factors, they can become success-factors for projects since this makes the plans more realistic and achievable Client satisfaction in the construction industry Client satisfaction in the construction industry is a rather under-researched topic (Kärna, 2004). The topic is though very important in the construction industry, since it is advantageous for a company to retain a client or improve the organizations reputation, which is crucial for future project success. Parties that have successfully worked together are often willing to work together again in the future; this can also be seen in partnering agreements which are becoming more and more common in the construction industry (Wikforss, 2012). For instance, if the PMs or CDMs from WSP make a client satisfied, it is a greater chance that the client will hire WSP for their upcoming projects as well. The opposite is also true, that means that who know that they are going to work together in the future have larger incentives to cooperate efficiently in their current projects. In order to enable as high client satisfaction as possible, it is important for the organization to work with continual reconciliations (Kärnä, 2004). Conversely, it has been shown that dissatisfactions about a project are often introduced late in the project. This is a clear disadvantage for PMs, because the later in the process, the more of the clients money has already been spent and also the more it costs to make changes, see Figure 2 and Figure 3. This in turn means that there are smaller possibilities to make changes if dissatisfactions occur late in construction projects since there budget might not be large enough to improve it at that point. The client is assessing the project process three levels, which all are implicating the client satisfaction. According to Kärnä (2004), these three levels are the following (Kärnä, 2004): Comparison between the quality of the process, the client s expectations and the adjusted goals for the project. 11

20 Comparison between the quality of the process and the experiences, which have emerged during the process. Comparison between the client s expectations and experiences. As earlier mentioned, client satisfaction might lead to retention of clients (Kärnä, 2004). However, in the construction industry, a high level of client satisfaction does not guarantee loyalty or retention since the procurement in construction often is determined by price or by the public procurement law (Wikforss, 2012). Client satisfaction is still though of big importance for companies in the construction industry since this most likely affects companies reputation which will make them more competitive in the market (Kärnä, 2004). 3.3 Traditional project management What identifies a project is its temporary and unique nature. In the construction industry, the projects usually have external clients (Tonnquist, 2007). The project is based on the clients requirements, wishes and needs. The clients construction project manager works to identify requirements and further to coordinate, plan, organize, control, lead and follow-up the construction project from idea to final product. According to PMI, the traditional project management methodologies are called predictive lifecycles because the planning for the project is made early on in the project. In other words, the project scope, time and costs to deliver the end-product are determined early in the project, i.e. when there is not enough knowledge about the project yet (Project Management Institute, 2013). To develop an understanding of how the traditional project process and methodologies look in literature, this section describes concepts and processes of traditional project management What is traditional project management? Traditional project methodologies arose in the middle of 19 th century during the cold war. The reason for the occurrence of traditional methodologies was due to the constant striving of being ahead of enemies. This means that one wanted to be first regarding everything, i.e. as short lead-time as possible was the key-factor. To achieve completing tasks on as short lead-time as possible, several activities were performed in parallel with each other (Gustavsson, 2013). However, by the time, project participants started to make counter reactions to this kind of project management. In reality, it was not possible to perform activities in parallel and tasks were instead performed sequentially. (Gustavsson, 2013) Traditional processes Tonnquist (2007) presents the plan-driven project processes and its different phases. It typically starts out with initiation, continues with a feasibility study and further on to planning and execution before closing the project and handing-over the outcome to the clients (Tonnquist, 2007). An overview of the project process is presented in Figure 4. Each phase in the project process is focusing on a subset of project activities and project management processes. The work required in each phase differs from the others and will therefore require different skill-sets from members of the team. The project team may therefore vary from phase to phase (Project Management Institute, 2013). In WSP s guidelines for project management, the different phases of a construction process are also described (Svensk Byggtjänst, 2009). These guidelines are produced by Svensk Byggtjänst (2009) and 12

21 are intended for project managers. Those guidelines include descriptions of the project process and checklists for each phase of a construction project. According to these guidelines, the project process starts out with a feasibility study and continues with a design phase, similarly to Tonnquist (2007). The design phase consists of three stages, the program stage, system stage and detailed design stage, as was also described in section 1.1. When the detail design is finished, the project moves on to production, testing, inspection and finally handing-over and closing. The process is presented in Figure 4: Figure 4: The construction project process in the project managers guidelines (Svensk Byggtjänst, 2009). Thi process is also called the waterfall model (Hughey, 2009) The following sections are giving brief explanations to each stage of the construction project process according to the guidelines from Svensk Byggtjänst (2009). The program- and system-stages are explained more thoroughly than the other stages because this report is focusing on the potentials to increase efficiency in those stages. The production phase and testing phase will only be briefly described since these phases are outside the scope for this report The feasibility study Tonnquist (2007) explains that the feasibility study intends to answer the question why and if a project should be started and carried out. In other words, this phase give an explanation to the reason for existence of the project (Tonnquist, 2007). The feasibility study defines the goal and purpose of the project. It states the project scope in terms of what is to be done and how it should be done (Tonnquist, 2007). The feasibility study investigates the current circumstances for the project and should be carried out carefully since it could save lots of time and effort in the later stages of a project. In the feasibility study, it is also of great importance to make a stakeholder-analysis, since many internal and external parties could have opinions and thereby affect the project (Tonnquist, 2007). As this is the preparation for the project, Tonnquist (2007) describes that it is crucial to plan for the communication to stakeholders who might be supporters or opponents to eventual projects. Further, the risks of the project can be identified, and planned for, through a SWOT-analysis. In such an analysis, the internal strengths and weaknesses as well as external opportunities and threats are 13

22 analysed and treated to minimize negative surprises later on. The planned organisational structure for the project should also be set up in the feasibility study. In the feasibility study, a project time-plan is made and roughly describes the way towards the project goal; it should include the most important tollgates and could be presented as a milestone plan where estimates for budget and time are also included (Tonnquist, 2007) The design phase The design phase of a project aims to answer the question how the project goals are going to be reached (Tonnquist, 2007). The goals were stated in the feasibility study and now it should be planned for how the project should be executed. The design phase is described as three different parts in construction projects according to the guidelines for project managers (Svensk Byggtjänst, 2009). These different parts are described in Figure 1 in section 1.1 and are: The program stage The system stage The detailed design stage The program stage The planning for the construction phase starts in the program-stage (Svensk Byggtjänst, 2009). The design manager of the client makes an analysis of project requirements and needs. Thereafter, a broad range of investigations are made and documentation for these should be prepared to describe the project and its scope. These are called program-documents and include technical requirements, spatial requirements, environmental requirements, plans and also aesthetic design plans. This means that the program-stage aims to give a final definition of the end-product, its goals, requirements and properties (Svensk Byggtjänst, 2009). Project-activities are planned for and structured in an orderly way, so that the results are easy to measure and follow up. The management team is created and each persons role in the organizational chart is described in written. The different options for project-execution are considered and evaluated and plans are made for how the external stakeholders are going to be managed. A kick-off meeting is held with the involved consultants and architects. The architects then start to create the first sketches and visualisations for the construction project and should create different versions so to give options to the client to choose between (Svensk Byggtjänst, 2010). The different alternatives are then considered and the best one is chosen for the project execution. These first drafts from the architects are important to confirm so that technical and functional requirements can be reached. The technical and architectural documents become the base for decision-making and are so called suggestion-documents. Routines for change management are decided upon and a time-plan is made (Svensk Byggtjänst, 2009). The time-dimension is thereafter supposed to be fix, which means that the decided deadlines should be held. Furthermore, systems for economical-management are determined and plans for allocating financial resources are made. The costs should then be controlled on a continual manner and finished costs should be followed up by comparisons to the budget for the program-stage. The budget for the upcoming system-stage should now also be determined and a communication plan should be made. 14

23 In the end of this stage, a program-document should be prepared (Svensk Byggtjänst, 2010). This document forms the basis for the upcoming design-work of the project. It includes the clients wishes and requirements. The program document include a project description, an organization description, technical description, sketches, drawings, environmental goals, plot investigations, quality policy, time plan and project cost calculations The system stage This is the stage where all technical solutions for the construction should be decided upon, in other words, the system of the construction should be planned for (Svensk Byggtjänst, 2010). The construction as well as installations and other technical components of the construction are defined in such a way that the requirements specified in the previous step are achieved. The documents produced in this stage should include descriptions, drawings and motivations for why these systems were chosen. The planned construction should be clearly defined and determined by the end of this stage (Svensk Byggtjänst, 2010). When the technical solutions are chosen and the future functions of the end-product are determined, the total execution costs of the project should be calculated. Based on this, a budget is prepared and presented to get financial resources to start working with the detailed design. The presented documents in the end of the system stage leads to a tollgate where the decision of proceeding or not proceeding is made. This is the point where presented documents and proposals are often rejected. If the presented system documents are rejected, they have to change in order to get approval. These changes are costly and the project group often considers their work until that point as wasted. In this situation, the design team and manager tries to negotiate in order to bargain on what should be included and what should not, this lead to major changes in the end of the system-stage (or program-stage). This constitutes a common problem for construction managers in different types of projects today. Recall the research-question of this master thesis: How could agile methodologies affect the amount of major unwanted changes in the end of the program- and system-stages in construction projects, in order to increase efficiency? The detailed design phase The detailed design stage is the final part of the design-work (Svensk Byggtjänst, 2009). In this phase, the technical documents and drawings are formed in detail, based on the documents from the system stage. The construction documents are being prepared, these form the documents according to which the construction is going to be built. In this stage, all preparations for the production is made in terms of time-planning, workplace-planning as well as planning for establishment, logistics and commissioning. Any changes that might occur to the decisions made in this stage have to be handled in accordance with routine-work and those changes must be documented to be able to be clearly communicated to all project members. But before any changes can be made, the consequences of those have to be evaluated and changes should only occur if accepted by the steering group The production phase In this stage, the construction should be performed in accordance with the documents prepared in the previous stages (Svensk Byggtjänst, 2009). Plans for production are made and economical, time as well as quality and environmental aspects are controlled during the whole production phase. As mentioned before, any changes that the project group wants to make needs to be approved from this stage on, and this procedure shall follow routine change-management work. The changes made might have consequences which require time or economy to be adjusted. 15

24 The testing phase The different functions in the construction should be tested when finished (Svensk Byggtjänst, 2009). When the contractors have made their own internal tests, the combined functions have to be tested, that is systems produced in cooperation with other parties. The documents produced from testing should be used when evaluating if the execution has been performed according to contracts The inspection phase The finished and self-tested product is now inspected by external parties to make sure they have followed all regulations and contracts (Svensk Byggtjänst, 2009). Eventual notifications are discussed in the finish meeting and needs to be adjusted to approve the construction for commissioning. Lastly, a final inspection is made and contractor-works are approved in documents which are sent to the Building Department of the local authorities The handing over phase When the construction is completed and everything is approved, the construction can be handed over to the client (Svensk Byggtjänst, 2009). When this is done, the project manager of the construction project should make a final report which presents the project results. The client then needs to sign these documents to approve that the project has been completed. Another important part of the final report is to consider the experiences and knowledge gained during the project (Tonnquist, 2009). It is important that the project manager takes time to reflect about this to create a knowledge-base for upcoming projects Challenges with traditional project management Traditional methodologies are, among all, used in construction projects where after-the-fact changes are hard or costly to make (Hass, 2007). However, these methodologies assume that once a project phase is completed, it should not be changed or revised. One problem with the traditional methodologies is that the clients requirements are expected to be formulated in advance. This implies that they are blocking the way for new requirements (Opelt, et al., 2013). Also, it implies an assumption of predictability i.e. that any events that could affect the project are foreseeable (Hass, 2007). Hass explains that the traditional methodologies expect the client to know in advance exactly what he or she requires from the project. Traditional methodologies are therefore seen as wasteful since it will probably deviate from early-made plans. However, Hass (2007) describes the traditional, plan-driven methodologies as disciplined and structured methods for planning and control of projects (Hass, 2007). Kerzner (2011) states that the project members should be committed to make efficient plans in the beginning of each project. He also states that the number of changes to the plans should be minimized by committing to realistic objectives from the beginning (Kerzner, 2011). 3.4 Agile Project Management The traditional project management methodologies were considered as slow and static by software developers (Gustavsson 2011). For this reason, they searched for more supportive methodologies in order to work more efficiently. They came up with some values that were more dynamic than the traditional methodologies; these values were used with different names before the name agile was agreed upon and are presented in section

25 3.4.1 What is agile project management? Agile methodologies could be described as the ability to rapidly respond to change (Oxford University Journals, 2013). The agile methodologies developed as a response to dissatisfactions about traditional methodologies, which are keeping time, cost and scope fixed in a project. This means that the traditional methodologies were seen as inflexible and therefore a group of software developers came up with the agile methodologies which are more flexible (Oxford University Journals, 2013). The reason for traditional methodologies to be considered as static and inflexible is that they advocate making plans in early stages, and to follow these early plans without welcoming changes to time, cost or scope (Gustavsson, 2011). Often, changes that occurred were seen as failures. The agile methodologies are about realizing that projects are prone to changes because of changing circumstances (Oxford University Journals, 2012). It is about realizing that we develop our knowledge and understanding of a project as it proceeds. Shortly, this means that we must adapt to new information as it is gained during the project. Not only the new information gained, but also the changing project environment is taken into account in an agile mindset. In one single word, agility is all about flexibility. The agile methodologies have their roots in the lean methodologies, but they are not the same (Opelt, et al., 2013). Shortly described, the lean philosofy is about eliminating waste and to eliminate all steps that do not generate value in a value stream (Lean Enterprise Institute, 2009). The difference between lean and agile goes back to the fact that shared principles are not always the same as shared practices, see Figure 5 (Rudd, 2012). Figure 5: The practices of lean and agile usually differ even if they have shared principles/philosophy (Rudd, 2012). Rudd (2012) explains that the agile and lean principles are similar but that there are differences in the way the principles are practiced. Both lean and agile aims to increase efficiency and are considering efficient management of resources, however, the practices of them are different depending on different work situations (Rudd, 2012). It is explained by Opelt, et al. (2013) that lean practices requires stable processes and seeks to reach automation of processes in stable environments. Agile methodologies on the other hand are mainly dealing with increasing efficiency in projects which are by definition unique, one-time and could not be set equal to an automatic process. Projects are often carried out in unpredictable and uncertain environments. The most used agile methodology today is called scrum (Cohn, 2012). It is mostly used in software development projects but could also be used in any other type of project. In this report, when the authors refer to agile methodologies, it is mostly referred to methodologies used in scrum. 17

26 3.4.2 The agile manifesto The agile manifesto states the four main principles that agile methods are built upon and those are presented below (Beck, et al., 2001): Individuals and interactions over processes and tools. Working software over comprehensive documentation. Customer collaboration over contract negotiation. Responding to change over following a plan. To avoid misunderstandings about these agile principles, many agilists (proponents of agile methods) are clarifying that they put value in the statements to the right but that they value the items to the left even more (Beck, et al., 2001). Each principle of the agile manifesto is shortly described by Gustavsson (2011) and is presented: Individuals and interactions over processes and tools: The first principle of the agile manifesto means that the project team and its members are responsible to apply the best working processes and methods for the specific project. This means that the team composition and the project-specific conditions needs to be considered for each project, this is because each project is unique. Working software over comprehensive documentation: The second statement in the agile manifesto is mainly considering software development projects. To make it more adapted to other kinds of projects, it could be changed into Useful project outcome over comprehensive documentation. This means that it is not the documentation but the continuously created project results that matters. Customer collaboration over contract negotiation: In the end of each cycle of an agile project the customer is involved to bring forward opinions and thoughts about the project. This means that the customer collaboration is core to bring the project towards success. The customer gets involved throughout the whole agile project process by reviewing, discussing and deciding in the end of each cycle. Again, in construction the word client is used rather than customer. Responding to change over following a plan. The agile manifesto states that changes are welcomed in agile projects. The reason for this is that agile projects does not believe in predicting the future by planning for every detail in advance. The plans should instead be dynamic and agile teams should realize that projects are prone to change Agile characteristics The project phases in agile project management are the same as those in the traditional project management. However, the agile methodologies have some different approaches to handling the project phases (Gustavsson, 2011). This section will present the most important agile methodologies that could be used in the program- and system-stages. Some critics perceives agility as chaotic ways of working with no planning, while in fact, agility is about frequently doing detailed planning instead of making detailed plans for a whole project at once (Gustavsson, 2011). Agile methodologies consider that we get things wrong before we get them 18

27 right (Miller, 2001). Also, agile methodologies regard time as fixed and processes are often run in parallel, as inspired by lean philosophy, in order to finish tasks on time (Gustavsson, 2014). In agile methodologies, the major difference is that the project phases are worked through in incremental steps and each phase is divided into short, iterative cycles (Miller, 2001). The agile process is adaptive to changes that occur during a project. Below are a number of agile characteristics presented: Characteristic 1 Levels of planning Characteristic 2 Planning in short cycles Characteristic 3 Reconciliations Characteristic 4 Welcome changes Characteristic 5 Project team collaboration Characteristic 6 Communication Characteristic 7 Documentation Characteristic 8 Time is fixed Characteristic 9 Uncertain and complex projects Characteristic 1 - Levels of planning The planning in agile methodologies is done in different levels. All planning activities are worked with in iterative ways where the plans will be repeated and adjusted continuously as circumstances changes (Opelt, et al., 2013). As always with agile methods, the parts that are being planned should be as short as possible in order to guarantee a delivery within the set time frames (Gustavsson, 2011). Plans should not be too detailed since it is seen as a waste of resources and time (Gustavsson, 2011). This is because it is known that too detailed planning have to be re-done later on anyway. Too little planning on the other hand is also risky since this might lead to mistakes due to lack of information. In order to ensure the right level of detail in the planning phase, the following five levels of planning should be completed. 1. Vision 2. Road map 3. Deliverance plan 4. Cycle plan 5. Daily plan Vision The first level of planning is the vision and shows the planned end-product for the whole project (Gustavsson, 2011). It explains what should be done and why, in a describing and simple way. It is important that the vision is being thoroughly produced in order for all actors involved to know where they are heading and what the goals for the project are. Roadmap This is the most long-term plan after the vision and should therefore not be too detailed by not guaranteeing specific dates (Gustavsson, 2011). The time perspective should rather show the entire project roughly, from start to the end of the project. Deliverance plan On the third level, dates and time limits are introduced (Gustavsson, 2011). The whole project should not be planned but the focus should rather be on specific parts of the project which the project team believes will generate some kind of value for the project at the moment. When comparing with traditional methods, these parts described above correspond to milestones. 19

28 Cycle plan The whole project is broken down to short cycles (Gustavsson, 2011). The team should deliver a project result in the end of each cycle. Since time is fixed, time cannot be extended if it does not go as planned. If more time is needed, the team has to delete some of the activities or perform then in the next cycle. The cycle plan is based on the deliverance plan and the length of the cycles should be one to four weeks depending on the project size. Daily plan In this plan, the upcoming days and who has the responsibility for each activity is being planned (Gustavsson, 2011). The daily plan, as well as the deliverance- and cycle plan, should be continually updated during the project. The vision and the roadmap on the other hand are created in the beginning of the project and are not being revised. All plans except the daily plan is being planned during the start-up phase of the project. Characteristic 2 - Planning in short cycles When working with agile methodologies, the projects process proceeds by a series of iterative workpackages, or short cycles, according to the cycle-plan. Each cycle are called sprints in the most used agile methodology, scrum (Scrum.org, 2014). The cycles begin with planning meetings where priorities of requirements are made for the upcoming cycle. The value of the activities decides in what order activities should be performed. The activity ranked with the highest value should be prioritized first and hence performed first. In the end of each cycle, a review-session is held to go through the deliverables of the completed cycle. This incremental way of working, step by step, makes it possible for the project team to respond to feedback and change so that they create only what is required (Scrum.org, 2014). The biggest benefit of agile is said to be the early deliveries of value (Oxford University Journals, 2013). Also, any hindrances or problems can be identified early in the project process which means that risks can be avoided when they are identified just-in-time. The risk for project failure is minimized by closely collaborating with the client and by incrementally bringing value early in the project. Characteristic 3 Reconciliations The client is involved in the beginning of each short cycle which means that agile methodologies require a larger demand on the client in comparison to traditional methodologies (Gustavsson, 2011). In agile methodologies, the short cycles ends with some kind of delivery of project result. This in turn follows by reconciliation-meetings where previous experience is discussed. These meetings are held in order to improve the coming cycles by analyzing how the previous cycle went. In this way, the project team can improve their work during the project instead of waiting until the next project to analyze and implement improvements. It is easier to finish projects when working agile compared to traditional project management because reconciliations have continually been carried out during the project process (Gustavsson, 2011). This means that the client is well aware of the result of the end-product before the actual handing-over which in turn means that there are few surprises in the end of a project. The continuous presentations of results and reconciliations often end up in a successfully followed time plan since the project team must deliver results in the end of each cycle. Characteristic 4 - Welcome changes The lists of requirements from the client should be flexible and possible to change (Gustavsson, 2011). The strength in agile methodologies is that prioritizations, requirements and goals are allowed to change in each new short cycle throughout the project. This further explains the focus on flexibility in agile methodologies. 20

29 Each cycle should be iterative and continually improved, since this is the most important thing with agile methodologies (Gustavsson, 2011). This procedure takes into account that the first iteration is not the best, and that it needs to be worked on further to get it 100% correct (Miller, 2001). The iterations are therefore a way of welcoming and handling changes. Characteristic 5 - Project team collaboration Agile teams are characterized by being small (five to nine people), empowered and multi-skilled (Gustavsson, 2011). The reason for working in small teams is to enable good communication and to facilitate efficiency. The agile methodologies do not provide complete, detailed descriptions of how all the work is going to proceed in a project. Instead, the team has to together take responsibility for the deliverables of each cycle (Scrum.org, 2014). Agile ways of working relies on cross-functional teams and self-organization which means that there is not one specific leader who decides which tasks each person in the team should perform (Cohn, 2012). Neither is there a leader who tells the team how a problem should be solved. All the responsibility is decentralized to the project team members so that they can share knowledge crossfunctionally. Each project member in an agile team should feel equally responsible for the project and the project team should take joint decisions (Gustavsson, 2011). As the project team have power to make decisions, the focus gets decentralized from the project manager who can instead work to make the project more efficient by paving the way for the project team (Gustavsson, 2011). The main responsibilities of the project manager in agile methodologies are to deal with conflicts and eliminate problems that occur within the team. This means that they do not have a traditional project manager but rather a supportive coach. This way of working can eliminate waste in terms of financial resources, time or results. Even though agile methodologies advocate that individuals should have cross-functional competence, it does not mean that they have equal shared responsibility for single activities. It is therefore important to allocate responsibility between members in the team for each activity. Otherwise the risks of uncompleted tasks are large because no one will take responsibility for the execution of the tasks. Agile methodologies include important factors such as the need for each project member to belong in the team, to learn from each other, to create something together and to be creative (Scrum.org, 2014). It is also about growing as a team, to together improve and interact with each other. Characteristic 6 Communication The communication plan is especially important in the agile processes (Gustavsson, 2011). This is because good communication is one of the core values in agile methodologies. Therefore, a communication plan should be made in the feasibility study in order to facilitate the creation of goals and benefits. The agile methodologies aim to enhance communication and create smoother work-flows (Oxford University Journals, 2013). The reason why agile ways of working focus so much on communication is to decrease the difference between the project result and the clients request. This means that good communication makes the end product in accordance with the clients wishes. Person-to-person communication is encouraged which is described in the agile manifesto that states individuals and interactions over processes and tools (Boehm, 2003). The different ways of communicating are trying to bring forward the tacit knowledge. Boehm (2003) also explains in his article, that this does not mean that the entire project communication relies on tacit knowledge since that would be risky when team-members drop off a project. 21

30 Characteristic 7 Documentation Recall the second principle of the agile manifesto which was restated into Useful project outcome over comprehensive documentation in order to make it more adaptable to other types of projects than in software development. This statement means that it is not the documentation but the project results that matters. Less expert and less confident clients and managers tends to see documentation as a sort of security blanket according to (Boehm, 2003). He writes that they produce documents even for less critical and less complex situations. He means that this is to not focus on the most appropriate parts of documents desired. Boehm (2003) also adds that these produced documents will probably never be read by non-experts, or even if it is read, it will be incorrectly understood. He points out that it is not necessary to try to provide the users with guidance for all, or most, foreseeable situations. Characteristic 8 - Time is fixed The project management triangle (cost, time and scope) in agile methodologies is different compared to in traditional (Owen, et al., 2006). The biggest difference is that in agile methods, time is fixed and is seen as holy, compared to scope which is fixed in traditional methods. In agile methodologies, if work does not go according to initial plans, the scope could be adjusted to fit within the time frame rather than extending the time. Furthermore, if it is not possible to complete an activity within the time frame, it has to be moved to the next sprint, which is a common name for cycle. As shown in Figure 6, the agile project management triangle is turned upside down compared to the traditional project triangle (Owen, et al., 2006). As the figure explains, this means that resources and time are the fixed elements within agile methodologies while scope is the fixed feature in traditional methodologies. Scope on the other hand is the element that varies in agile projects compared to resources and time in traditional. Figure 6: Time is fixed in agile methodologies; scope could vary within the given resources (Owen, et al., 2006) Characteristic 9 - Uncertain and complex projects The agile methodologies are suited for projects with high complexity and uncertainty where changes to initial plans are inevitable (Opelt, et al., 2013). It is suitable to work in agile ways when a project is performed under changing circumstances, has unclear specifications, complex project goals and results needs to be achieved continually. This is because the agile methodologies advocate that deliveries are produced continually in each short cycle. 22

31 3.4.4 Challenges with agile project management So far, agile methodologies have been discussed with mostly an optimistic mindset and positive outcomes. Below are a number of challenges discussed in the literature presented: Challenge 1 Flexibility restrictions Challenge 2 Opponents views Challenge 3 Contractual and regulatory issues Challenge 4 Development process conflicts Challenge 5 Business process conflicts Challenge 6 People conflicts It shall be kept in mind that the agile methodologies arouse in the software-development sector and the challenges presented here might not be the same as the challenges for working agile in construction. Challenge 1 - Flexibility restrictions Situations where working agile can be a challenge is when the project has a fixed deadline and a strict scope (Gustavsson, 2013). This is a challenge because it does not allow flexibility, which is one of the cornerstones in agile methodologies. If the project has a fixed deadline but not as strict scope on the other hand, it is possible to work agile since scope can be changed, revised or prioritized differently. Challenge 2 - Opponents views Opponents of agile methodologies have the common view that these are a bit fuzzy, not so strict and involve mainly soft values (Gustavsson, 2011). This perception can be due to projects that have failed to practice agile methodologies (Oxford University Journals, 2013). Challenge 3 - Contractual and regulatory issues In general, challenges of working agile regard contractual and regulatory issues (Gustavsson, 2013). This is because it does not entail flexibility or that it regards decisions which cannot be affected. Examples of the above described situations can be public procurements, which require detailed plans from the start to the end. Challenge 4 - Development process conflicts This points out the challenge of merging agile and traditional methodologies (Elliot, 2008). Since it is rare to work completely agile when implementing agile management, it must be combined with already existing methodologies. It is then important that there is a balance between the different methodologies, which is hard to achieve according to Elliott. Another challenge with this problem, which also was mentioned by Gustavsson (2011), is that the project group might have different mindsets when blending traditional and agile methodologies (Gustavsson, 2011). Challenge 5- Business process conflicts These conflicts can occur when business processes are not adapted to work in agile ways (Elliot, 2008). Individuals constituting the project team are required to have more skills than in traditional projects. The reason for this is because they should be multi-skilled rather than an expert within one area. Furthermore, the team should be able to make decisions since they together have the overall responsibility, compared to the project manager who carries the overall responsibility in traditional projects. This in turn requires that the organization is able to accommodate the human-resources needed. 23

32 Challenge 6- People conflicts There is a challenge for the organization to make the team work closely, which might require a different office set-up (Elliot, 2008). Since agile methods advocates close relations, it requires a shared work-place so that the project members can meet. 24

33 4. Empirical findings The following chapter will present the findings collected from interviews performed with project managers (PMs ) and client design managers (CDMs ) who are working in different types of construction projects. A case study is presented in order to give an example of a construction project and its complexities. Interviews have been performed with managers of the case study as well as with managers from other construction projects. The empirical findings gives examples from all conducted interviews. Five important areas have been investigated during the interviews and are presented in this chapter. 4.1 Facts about the case study The case study project is a re-construction of a depot for subway-trains in Stockholm. The depotbuilding is used for storage, service and maintenance of the subway-trains; therefore it has technical solutions that are important for the maintenance of the trains. The client of the project is The Public Transport Division of Stockholm County Council. The project goal is to make the depot large enough for new subway trains that will be delivered in Each new train-wagon unit will be longer than the current wagons. The new wagons will not fit in the small depot, which makes the reconstruction necessary. The project is currently in the system-stage within the design phase. A principal overview of the organizational structure in the case study project is presented in Figure 7. Figure 7: A principal organizational structure of the case study project Coordination challenge The complexity in this project lays in the coordination of the case study project and several other depots in Stockholm. Some new depots are being built and some are also under re-construction. In total, there are six ongoing re- and new-constructions of depots. There will always need to be depots available for storage and maintenance of the trains so that the commuters in Stockholm s public transport can be unaffected. It is crucial to make the overall coordination work smoothly to avoid complications. This is crucial to not disturb the traffic and everyday commuters Train design unknown The authors have interviewed the PM and CDM of the case study project. The interviewed PM mentions that the re-construction of the depot project is dependent on the design of the new subway- 25

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