Managing Risk for Successful Capital Projects Thursday, August 10, - - PowerPoint PPT Presentation

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Managing Risk for Successful Capital Projects Thursday, August 10, - - PowerPoint PPT Presentation

Managing Risk for Successful Capital Projects Thursday, August 10, 2017 Agenda 1. Pre-Planning 2. Initiation & Planning How to add 3. Execution certainty o Design o Construction o Occupancy 4 . Project Closure 2 Colliers Project


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SLIDE 1

Managing Risk

for Successful Capital Projects

Thursday, August 10, 2017

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SLIDE 2

Colliers Project Leaders 2016

  • 1. Pre-Planning
  • 2. Initiation & Planning
  • 3. Execution
  • Design
  • Construction
  • Occupancy
  • 4. Project Closure

Agenda

2

How to add certainty

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SLIDE 3

Colliers Project Leaders 2016

Why Us?

Former Administrator and Director of LTC with Peel Region. The Region of Peel serves a population of 1.4 million residents in urban, suburban and small town environments. Peel operates 5 LTC Homes and on site CSS.

  • LTC and CSS operations experience
  • Facility design lead
  • Small projects Project Manager
  • Large projects sponsor
  • Governance council liaison
  • Renovation/redevelopment/new construction

3

Carolyn Clubine Carolyn is currently supporting a range of not for profit agencies that serve the aging population, offering management and project support. She holds a Fellowship with the Canadian College of Health Leaders and is on the faculty of the Administrator Leadership Program that AdvantAge Ontario hosts each year.

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SLIDE 4

Colliers Project Leaders 2016

Why Us?

  • Established in 1989 (as MHPM Project Managers)
  • 400 employees in 25 offices across Canada
  • Specialize in building projects and accommodation plans
  • Development Solutions (Business Cases, Feasibility Studies, Options

Analysis)

  • Planning & Programming
  • Project Management
  • Furniture & Equipment Planning and Procurement
  • Transition Planning, Move Management

4

Colliers Project Leaders

  • 10,000 capital projects to draw upon; best practices & lessons

learned

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SLIDE 5

Colliers Project Leaders 2016

Poll

5

What roles are represented in today's webinar?

  • a. Administration incl. Finance, QI, Risk
  • b. Architect
  • c. Project Manager
  • d. Building or Facility Manager
  • e. Clinical or Support Services Manager
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SLIDE 6

Colliers Project Leaders 2016

Definitions of Risk

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A project risk is a future event which may or may not occur. A project issue is being managed in the present.

  • The effect of uncertainty on objectives (ISO 31000)
  • Any event that may endanger achieving an objective partly or

completely

  • Uncertainty which is present in all projects
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SLIDE 7

PRE-PLANNING PHASE

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Colliers Project Leaders 2016

Risks in the Pre-Planning Phase

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Business Case Assumptions

Top 3 Shortcomings: 1. Lack of Risk Analysis (including contingencies) 2. Inadequate Long-Term Costs, eg. maintenance & renewal 3. Comprehensiveness of Costs, eg. approx. 20% for project ancillary costs

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Colliers Project Leaders 2016

Stories from the Trenches……

  • The LTC Home was 236 beds. It was decided to renovate the building and

reduce to 142 beds

  • This called for a phased approach to allow for concurrent operations and

extensive construction.

  • Phase 1 required that the Home reduce from 236 to 120 prior to

commencement of site work.

  • Admissions were ceased one year ahead of start date
  • Reduction was not achieved
  • Site work was delayed 4 weeks which incurred schedule delays

9

http://www.peelregion.ca/ltc/sheridan/index.htm

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SLIDE 10

Colliers Project Leaders 2016

Risks in the Pre-Planning Phase

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  • Retrofit vs. New Build
  • Site Selection Decisions
  • Due diligence – expert advice/consultants
  • Size
  • Site Services
  • Building Layout and Operational Implications
  • Construction Model
  • Phasing, revenue implications
  • Procurement & contracts
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SLIDE 11

Colliers Project Leaders 2016

Stories from the Trenches……

  • Building Condition Audit raised red flags
  • Invasive assessment of the current core building showed that remediation
  • f failing elements would not be money well spent
  • Internal decision reached that the building should not be renovated, but

replaced.

  • Council decision was required, and this raised the discussion of whether

to continue to operate

  • Sensitivity to misunderstandings (staff fear of job loss, and resident fear of

closing) had to be carefully mitigated through a Communications strategy

11

  • http://www.peelregion.ca/ltc/peel/index.htm
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Colliers Project Leaders 2016

Poll

12

In your regular operations what is your greatest vulnerability

  • a. HR
  • b. Supply chain
  • c. Utilities
  • d. Neighbours/Community
  • e. Press
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SLIDE 13

Colliers Project Leaders 2016

Risks in the Pre-Planning Phase

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Programming

  • Doing things the same way – not looking at processes and

LEAN opportunities

  • Achieving your goals and addressing your challenges –

defining solutions!

  • “Get your house in order”
  • IT as an enabler
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Colliers Project Leaders 2016

Stories from the Trenches…….

NEW LTC Home - Design of workflow from a clean slate

  • Supplies located throughout the building – create a cage in basement

to create a delivery system

  • Laundry pickup in utility rooms – create a chute system
  • Elevators shared by all – built a “back of house” service elevator
  • Wired all rooms for IT cable – but never used due to the rapid

development of wifi

14

http://www.peelregion.ca/ltc/malton/index.htm

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SLIDE 15

Colliers Project Leaders 2016

Risks in the Pre-Planning Phase

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  • Transition strategy required
  • Change management required
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SLIDE 16

Colliers Project Leaders 2016

Stories from the Trenches…….

Small 26 bed Nursing Home was being closed

  • Residents were in “D” like conditions with no private space and shared

toilet facilities

  • Staff unfamiliar with typical LTC buildings/resources/ workflow
  • With additional licenses it was replaced with a new 64 bed
  • Change management planning was exhaustive!
  • Work Routines were written and practiced
  • Resident relocation was staged to account for psychological impact of
  • pen space, available choices

16

http://www.peelregion.ca/ltc/davis/index.htm

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Colliers Project Leaders 2016

Poll

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In thinking about your redevelopment plan what is your greatest concern?

  • a. financing
  • b. managing the demands in addition to operations
  • c. stakeholders
  • d. procurement
  • e. contractor relations
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INITIATION & PLANNING PHASE

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SLIDE 19

Colliers Project Leaders 2016

Risk Management Plan – Roles & Responsibilities

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Who is the lead?

  • Internal (Project Sponsor, CFO, Risk Manager)
  • External (Colliers PM for Valley Manor)

Who is on the Risk Management Team?

  • Project Manager
  • Architect
  • Engineers
  • Contractor
  • CFO
  • Plant Operations/Home’s Engineer
  • Clinical Operations representative
  • IT
  • Procurement
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SLIDE 20

Colliers Project Leaders 2016

Risk Management Plan

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What are their responsibilities?

Project Manager Architect/ Engineers Comm. Agent General Con- tractor Plant Oper. Mger Exec. Clinical Rep IT Procure

  • ment

Planning X X Identify X X X X X X X X X Qualify X X As needed X X X X Quantify X X As needed X X X Plan Responses X X As needed X X X X X Monitor & Control X X As needed X

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Colliers Project Leaders 2016

Risk Management Plan – Analysis

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Probability! Impact!

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Colliers Project Leaders 2016

Risk Management

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Certain Rare Insignificant Catastrophic

Consequences Likelihood

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Colliers Project Leaders 2016

Risk Management Plan

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Risk Register

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Colliers Project Leaders 2016

Poll

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Is it easier for you to identify your risks or is it easier to plan the mitigation once you know what the risks are

  • a. identify risks
  • b. plan the mitigation
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SLIDE 25

Colliers Project Leaders 2016

  • Set up the Project Structure
  • Governance, management involvement

Staff Committees

  • Family, Resident & Community Involvement
  • Continuity & succession planning
  • Set up the Project Controls & Tools including……….
  • Baseline schedule
  • Baseline budget
  • Initial risk register & actions to mitigate, eliminate or avoid risks
  • Monthly updates & reporting……

Lack of Project Structure & Controls

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SLIDE 26

Colliers Project Leaders 2016

Poll

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How many staff in your senior management group will play a direct role in the project execution?

  • a. 1
  • b. 2 to 4
  • c. 5 or more
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Colliers Project Leaders 2016

Role Clarification for your Stakeholders

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Project Element: ______________ Activity : _____________________ Communication about commencing this work: _____________________

Name/Position Responsible Accountable Consulted Informed Notes Executive Director Management Staff Service staff Board Clients and caregivers Others External Partners

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Colliers Project Leaders 2016

Initiation & Planning

Project Charter – an Important Tool

  • Clear definitions – understood and agreed upon
  • What will success mean?
  • Project Sponsor/Authority
  • Organizational Structure
  • Project policies and procedures
  • Roles & Responsibilities

Budget

  • Schedule (Milestones)
  • Assumptions
  • How will Fixtures, Furniture & Equipment be handled?

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Scope

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SLIDE 29

Colliers Project Leaders 2016

Carolyn’s Project Charter Template

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Colliers Project Leaders 2016

Initiation & Planning

Scope Creep!

Strategies

  • Project Charter – clear definition of scope
  • Use a Change Request Form; Change Tracking Log
  • Define protocols & authority levels
  • Tracking and monitoring changes

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Scope

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SLIDE 31

EXECUTION PHASE - DESIGN

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Colliers Project Leaders 2016

Risk Management Plan - Timing

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  • Iterative
  • Monthly updates
  • Add time sensitive triggers to the

project schedule!

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Colliers Project Leaders 2016

Risk Management Plan – Response Strategies

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  • Avoidance – Hiring a PM! Putting controls and

checkpoints in place.

  • Mitigate – Design Coordination Meetings;

Communications with neighbours

  • Transfer – Contractor to purchase furniture and

equipment.

  • Accept – Archeological findings
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SLIDE 34

Colliers Project Leaders 2016

Design Stage

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User involvement & functionality.

Strategies:

  • Sign-offs at the following key

milestones:

  • Block/Sketch Plans
  • Room Data Sheets
  • 50% Working Drawings
  • 95% Working Drawings
  • Project phasing
  • Detailed minutes!!
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Colliers Project Leaders 2016

Stories from the Trenches

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Testing the design

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Colliers Project Leaders 2016

Design Stage

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User involvement & functionality.

Strategies:

  • Sign-offs at the following key

milestones:

  • Block/Sketch Plans
  • Room Data Sheets
  • 50% Working Drawings
  • 95% Working Drawings
  • Project phasing
  • Detailed minutes!!
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SLIDE 37

Colliers Project Leaders 2016

Design Stage

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Lack of coordination between consultants

  • Architect & Engineers – Design

Coordination Meetings

  • IT Consultant
  • Security Consultant (door hardware!)

Strategies:

  • Design Coordination Meetings &

Minutes

  • Constructability/Bid Document Review
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Colliers Project Leaders 2016

Stories from the Trenches……..

  • Inclusive Architect scope vs. independent sub-

consultants

  • Owner’s Project Manager vs. General Contractor

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Project Manager vs. General Contractor

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Colliers Project Leaders 2016

Design Stage

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Financial Risks Strategies:

  • Regular professional cost estimates
  • Capital vs. operating costs
  • Value engineering for overages
  • Updating baseline documents ie.

monthly tracking & reportin

  • Forecasting costs
  • Good set of coordinated tender

documents

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SLIDE 40

EXECUTION PHASE - CONSTRUCTION

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Colliers Project Leaders 2016

Poll

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In thinking about execution of the redevelopment what is your greatest concern?

  • a. contractors
  • b. labour force
  • c. land acquisition
  • d. operational changes
  • e. stakeholders
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Colliers Project Leaders 2016

Inexperienced Contractor & Management Team, Poor Contract

Construction

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Strategies:

  • Prequalification of General Contractors – want assurance of:
  • Contractors staff assigned to the project
  • Experience with healthcare or residential projects & experience
  • n operational sites
  • Proof of bonding, insurance capabilities
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Colliers Project Leaders 2016

Stories from the Trenches……

  • Phased approach flagged the poor performance of dishwashers

in satellite kitchens, poor ventilation specs

  • Decision regarding cost of change orders for additional phases

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Colliers Project Leaders 2016

Stories from the Trenches: Risk Plan Revisited

Changes and change orders must be managed well before they occur

  • Tender specs were very clear about product

substitution

  • Windows substitution request by constructor
  • Negotiation
  • Agreed on independent testing of the substitute, set

performance parameters

  • Product acceptance

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http://www.peelregion.ca/ltc/pines/index.htm

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Colliers Project Leaders 2016

Late/Not Meeting Schedule

Strategies

  • Quality of contractor’s schedule
  • Frequency of contractor’s

schedule updates

  • Cash flow projections
  • Long lead items
  • Study impact of change requests
  • n

schedule

  • Consider alternatives, substitutes
  • Phasing

Construction Stage

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Colliers Project Leaders 2016

Delay Claims

Strategies

  • Demand high quality contractor’s

schedule

  • Demand contractor’s schedule

updates, at least monthly

  • Keep thorough records, site

photographs

  • Make expeditious decisions
  • Provide approvals in a timely manner
  • Limit owner-requested changes

Construction Stage

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Colliers Project Leaders 2016

Stories from the Trenches……..

Change Order Management Effectiveness

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Colliers Project Leaders 2016

Construction Stage

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Stakeholders

Strategies

  • Thorough communication & stakeholder management plan
  • Website, number to call and leave messages
  • Email to write with messages
  • Regular meetings with the muncipality and regulatory agencies
  • Change management support for staff & residents & families
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EXECUTION PHASE - OCCUPANCY

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Colliers Project Leaders 2016

Risks – Operational, reputational, financial

  • Staff
  • Families
  • Residents

Occupancy Planning

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Colliers Project Leaders 2016

Stories from the Trenches……

Communications Plan Written and Maintained

  • Regular newsletters and updates
  • Video tours of the progress
  • Recognition of sense of entitlement – staff and

residents

  • Chronicle and Celebrate milestones
  • If you think it someone else has tweeted it – get

ahead of the issues.

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Colliers Project Leaders 2016

Transitioning

  • Policies, Procedures
  • Emergency preparedness

Occupancy Planning – Strategies

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  • Start at least one year in advance
  • Appoint an In-house Lead, backfill their time
  • Consider a Readiness Consultant
  • Communications!
  • “A Day in the Life”
  • Create training manuals
  • Create move packages
  • Work Flow
  • Orientation & training plan
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Colliers Project Leaders 2016

Numerous challenging requirements for occupancy

  • Building Department approval
  • Fire Department approval
  • TSSA approval
  • LEED testing and documentation
  • Furniture & Equipment & Information Technology delivery & installations
  • Ministry Pre-Occupancy Inspection

Strategies

  • Scheduling
  • Contingency for slippage
  • Daily or twice weekly coordination meetings
  • Strong municipal relationships

Occupancy Planning – Start Early!

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SLIDE 54

Colliers Project Leaders 2016

Ministry Pre-occupancy inspection vs. Compliance Branch

Stories from the Trenches…….

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CLOSURE

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Colliers Project Leaders 2016

Importance of Commissioning & Close-out

  • Testing and balancing systems
  • Testing equipment
  • Turnover of manuals
  • Training for Facilities &

Operations Staff Strategies

Closure Stage

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Colliers Project Leaders 2016

Fires can happen at the most unusual times and ways

Stories from the Trenches……….

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Municipal Fire Code Specifications that were not anticipated Warranties for product purchased well before opening

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Colliers Project Leaders 2016

Risk and Risk Management – Key Success Factors

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  • Be a systematic and structured process
  • Be dynamic, iterative and responsive to change
  • Be capable of continual improvement and enhancement
  • Be continually or periodically re-assessed
  • Be an integral part of project processes
  • Be part of decision making process
  • Explicitly address uncertainty and assumptions
  • Be based on the best available information
  • Be tailorable
  • Take human factors into account
  • Be transparent and inclusive
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SLIDE 59

Q and Eh!

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SLIDE 60

Colliers Project Leaders 2016

Poll

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In which areas do you have information gaps that keep you awake at night?

  • a. procurement
  • b. stakeholder management
  • c. cost monitoring
  • d. conflicts between the architect and the

constructor

  • e. scheduling
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SLIDE 61

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