Failure of Financial Sector Risk Management as an
Analog for the Engineering & Construction Industry
By Robert Prieto Senior Vice President, Fluor Corporation
It was spring of 1827 and Robert Brown had just returned from collecting pollen in the Scottish countryside. A botanist, Brown placed some of the pollen in water under his microscope and observed the grains of pollen moving about completely randomly. That random motion, now called Brownian motion after its discoverer is a useful tool in studying truly random events. Many of today’s risk models are founded on the principles of Brownian motion, at least as Robert Brown understood them in the spring of 1827.
Financial models and their associated risk management tools, built on the randomness underlying Brownian motion, served the financial industries well, at least to the current financial crisis. But recent events have highlighted that many of these risks and financial markets were more tightly coupled than many recognized even if the coupling was not apparently obvious. In reality, it was a similar, complex coupling (constantly moving water molecules) that underpinned the apparently random motion that Robert Brown saw on that spring day in 1827.
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About the Author:
Roberto Prieto
Author
Robert Prieto is a Senior Vice President for Fluor, responsible for strategy in support of the firm’s Industrial & Infrastructure Group and its key clients. He focuses on the development and delivery of large, complex projects worldwide. Prior to joining Fluor, Bob served as chairman of Parsons Brinckerhoff Inc. He is a member of the executive committee of the National Center for Asia-Pacific Economic Cooperation, a member of the board of directors of the Business Council on International Understanding, a member of the board of the Civil Engineering Forum for Innovation, and co-founder and member of the board of the Disaster Resource Network. He currently serves on the National Research Council’s committee framing the challenges on Critical Infrastructure Systems. Until 2006 he served as one of three U.S. presidential appointees to the Asia Pacific Economic Cooperation (APEC) Business Advisory Council (ABAC) and served as chairman of the Engineering and Construction Governors of The World Economic Forum and co-chair of the infrastructure task force formed after September 11th by the New York City Chamber of Commerce. He is also a member of the board of trustees of Polytechnic University of New York.
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Contemporary Aspects of Critical-Path
Planning and Scheduling
By Earl Glenwright
P R E F A C E
We tend to see History as an evolution. However sometimes, and there are many examples in the Patent Office of today’s ‘new’ technology being actually developed even centuries ago [i.e. Facsimile-FAX technology], it is interesting to roll back time to earlier periods where we can see ‘Lessons Learned’ and sage advice which may not have been heeded.
Such is the case with the following.
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About the Author:
Earl Glenwright
Author
Earl Glenwright, PSP, has a career spanning 40+ years in construction project scheduling. Earl is certified as a Planning and Scheduling Professional [PSP] by the Association for the Advancement of Cost Engineering International [AACEi]. He is currently active with the PMI-College of Scheduling, and the AACEi Planning and Scheduling Committee. He frequently gives presentations at their annual conferences. Earl has both a BS in Civil Engineering and a MBA degree and is a Registered Professional Engineer. Earl’s career has included multi-year positions in several countries including Brasil and Saudi Arabia, and shorter tours in Sudan and Gabon.
He currently lives in Gabon and Colorado. Prior to 1988 he was employed by the [US] Bureau of Reclamation and the [US] Army Corps of Engineers. After retiring in 1988 he has been a free-lance consultant for both contractor’s construction scheduling and small business Enterprise Project Management.
Presently he is assisting the State Dept in their construction of a New Embassy Compound in Gabon. His experience includes large and very large [super-mega] construction projects, very small projects such as construction planning, and scheduling for home construction by his Habitat for Humanity affiliate. Through his extensive scheduling experience he has been recognized as a Subject Matter Expert [SME], a Master Scheduler, and an Expert Advisor. Earl has been active in the Project Management Institute for 30+years. He has presented “Time & Cost” training at PMI’s annual seminar-symposia, and was a member of the initial PMBoK Guide Project Team, the 2000 update team, and the project team that prepared the 3rd edition. Earl has recently presented ‘workshop/seminars’ for Bulgarian project scheduling and controls persons which covers the 3 phases of scheduling: framework preparation/planning, schedule development, and schedule management and control. The work books are dual language English and Bulgarian. Earl can be contacted at etg_cos@yahoo.com.
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Series Wrap up (2 of 2)
Churchill the Agile Project Manager - Part 26
By Mark Kozak-Holland
Most people are very familiar with Winston Churchill but may not be familiar with his “agile” approach to project management and his skills as a PM in the summer of 1940. Part 25 started to wrap up the series through the first 7 takeaways. This article completes the wrap up to the series, and reviews the key points, the transformation project and solution, and highlights key learning lessons for today’s projects, and what you can do.
Agile leadership is important in today’s world as projects face an increasing environment of continuous change. Through the series, the characteristics of agile leaders were introduced with a focus on Churchill’s characteristics and background.
Take away #8 – ensure adequate governance is in place to get groups working
Churchill as Minister for War Production in the First World War was responsible for scaling up tank manufacturing. He oversaw the production of 350 tanks and the importance of closely aligning industry (civilian) with military demand under government auspices.
Churchill, conscious of the mistakes of the Great War, realized that he needed full authority for success. Churchill broke down the barriers between vertical organizations through a revised governance framework. He deconstructed and reconstructed silos. He kept the war cabinet to a manageable eight and combined his job with that of the Minister of Defence.
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Read the previous paper in this series. Churchill the Project Manager (Part 25)
View the entire series at: http://www.pmforum.org/library/papers/index.htm
About the Author:
Mark Kozak-Holland
Author
  
Mark Kozak-Holland’s latest book in the Lessons-From-History series is titled “Project Lessons from the Great Escape (Luft III)” http://www.mmpubs.com/catalog/lessons-from-history-c-4.html. It draws parallels from this event in World War II to today's business challenges. His previous books include “Churchill’s Adaptive Enterprise: Lessons for Business Today”, “Titanic Lessons for IT Projects”, and “Avoiding Titanic Disasters: Project Lessons for IT Executives”. Mark is a Senior Business Architect with HP Services and regularly writes and speaks (presentations and workshops) on the subject of emerging technologies and lessons that can be learned from historical projects. He can be contacted via his Web site at www.lessons-from-history.com or via email to mark.kozak-holl@sympatico.ca.
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Articulating a Vision for Best Practice Project Management
in Drug Development
By Pete Harpum
Editor’s note: This paper was originally presented at the 2nd Annual UT Dallas Project Management Symposium in Richardson, Texas, USA (http://pmsymposium.utdallas.edu/) in August 2008. As a Media Partner for that event, PMForum agreed to republish selected papers in PM World Today. This paper is included here with the consent of the author and permission of the Graduate Program in Project Management at The University of Texas at Dallas School of Management, who is the copyright holder of the conference proceedings. All conditions and disclaimers of the copyright holder pertain.
Introduction
Until recently, the commercial and financial performance of drug development companies has been one to which many other sectors aspired. Pharmaceutical stocks during the 1990’s were considered a safe haven for investors, whatever else was happening in the market. This has changed dramatically over the last five years, as this sector has become one of the few that has seen contraction in real corporate value, in terms of market capitalization and stock returns. A key reason for this decline is the increasingly poor performance of the sector in getting new drugs to market.
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About the Authors:
Pete Harpum
Pete Harpum, Msc, MAPM, is Director of Harpum Consulting Ltd in the United Kingdom (UK). Pete has been consulting on Portfolio, Programme, and Project Management for nearly ten years. He has led many assignments supporting international blue chip clients as they develop capability in P3M. Pete works with people at all levels of organisations, from project and programme managers, through governance committees and associated advisory groups, to CEOs, CFOs, and the rest of the main Board. Pete also chairs and contributes (usually passionately) to many conferences and symposiums on P3M. Pete’s other activities include editing and contributing to reference texts on project management, post-graduate lecturing and research on P3M, and supporting the UK’s Association of Project Management in various ways. He has published on design management, project methodologies, capacity management, management control, project success factors, and best practice in life science project management. Pete created Harpum Consulting Ltd in 2005, premised on the belief that global product development organisations value long term, value-based, consulting support. Harpum Consulting provides international support in P3M to three key sectors of industry: Life Sciences; Engineering; and the Financial Services Industry. Pete has worked in Europe, the United States, the Middle East, and South East Asia. He can be contacted at pete.harpum@harpumconsulting.com.
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Project Management and the Stockholm Syndrome
By Eric D. Brown and Chad Jordan
Editor’s note: This paper was originally presented at the 2nd Annual UT Dallas Project Management Symposium in Richardson, Texas, USA (http://pmsymposium.utdallas.edu/) in August 2008. As a Media Partner for that event, PMForum agreed to republish selected papers in PM World Today. This paper is included here with the consent of the author and permission of the Graduate Program in Project Management at The University of Texas at Dallas School of Management, who is the copyright holder of the conference proceedings. All conditions and disclaimers of the copyright holder pertain.
Introduction
Project success in the world of client/vendor relationships hinges on two things: The ability of a project team to plan, manage and deliver results; and the ability to build and maintain relationships. Most project teams understand the pitfalls of delivery but many do not realize that another pitfall is associated with building relationships. For example, what happens when project managers or other team members begin to associate more closely with the client or vendor then with their own organization? This pitfall, which has the same characteristics as the Stockholm Syndrome, can be a significant risk for any project.
This paper addresses the topic of the Stockholm Syndrome as applied to project managers and project teams. This is not an in-depth research study into the psychological effects of managing stressful projects and how these stresses might cause a ‘Stockholm Syndrome’ effect. The purpose of this paper is to provide an overview on the syndrome and give some insights into a real-world project where symptoms similar to hostage/captor appeared and how these symptoms were recognized and overcome.
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About the Authors:
Eric D. Brown
Eric D. Brown is a consultant, entrepreneur and author living in the Dallas Fort Worth area. Eric has over 15 years experience in technology management, project management, information technology and leadership. Eric holds the Project Management Professional (PMP) certification and is currently working on a Doctor of Science in Information Systems degree from Dakota State University. Eric has previously earned a Master of Business Administration degree from the University of Texas at Dallas, a Master of Science in Electrical Engineering degree from Oklahoma State University and a Bachelor of Science degree in Physics from Southwestern Oklahoma State University. Other articles on project management, strategy, technology selection and leadership can be found on Eric’s website and blog at http://ericbrown.com. Feel free to contact Eric via email at eric@ericbrown.com.
Chad Jordan
Chad Jordan is the co-founder of Tridenta Solutions, 348Media and a technology consultant residing in the Dallas Ft Worth area of North Texas, USA. Chad has over 14 years experience in project management, information technology, leadership and business strategy.
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Changing the Software Outsourcing Game
Multi-sourcing:
The New Global Trend
By Ram Garg and Eric Harris
Editor’s note: This paper was originally presented at the 2nd Annual UT Dallas Project Management Symposium in Richardson, Texas, USA (http://pmsymposium.utdallas.edu/) in August 2008. As a Media Partner for that event, PMForum agreed to republish selected papers in PM World Today. This paper is included here with the consent of the author and permission of the Graduate Program in Project Management at The University of Texas at Dallas School of Management, who is the copyright holder of the conference proceedings. All conditions and disclaimers of the copyright holder pertain.
Introduction
Offshore outsourcing is nothing new to the software industry as it was one of the first areas to really embrace the offshore outsourcing model. The abundant workforce and lower labors costs overseas lulled buyers into thinking that dramatically reduced overall costs were guaranteed from outsource arrangements. Unfortunately, reality and perception are not always the same. Despite a maturing outsource industry and constant improvements in infrastructure, every year countless software projects either outright fail or experience massive cost and schedule overruns, costing companies millions if not billions of dollars. Why is this happening?
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About the Authors:
   
Ram Garg
Ram Garg is founder and CEO of Software Performance Assurance and a 20-plus year global software outsourcing expert. Prior to forming SPA, Mr. Garg was chair of architecture committee in MetaSolv and Director of Network Management in Kirana Networks. Over 20 years Mr. Garg has overseen several multi-site projects where he was responsible for both development and testing function, including defining test strategies and managing large testing teams for the prestigious IBM LAN Network Manager and Fujitsu’s Virtual View projects. Mr. Garg has served in a variety of management roles in various prestigious companies including IBM, Fujitsu, Oracle, and Alcatel-Lucent. Mr. Garg is founding member of Telecommunication Forum’s SID standard initiative which is used world-wide by most Telecommunication Solutions Providers. He is well-known expert in object-oriented technologies and Unified Modeling Language, and a published author and speaker on Globalization. He sits on PMI Service & Outsourcing SIG and SNS Management boards. As an outsourcing expert, Mr. Garg maintains a blog on outsourcing on his personal website www.ramgarg.com. Information about Software Performance Assurance can be found at www.softwareperformanceassurance.com
Eric Harris
Eric Harris is a co-founder of Software Performance Assurance and is responsible for leading SPA sales and business development, and for managing the engagement model to support the company’s revenue generation and growth objectives. He is responsible for driving SPA’s business acquisition process through the alignment of the company’s sales strategy, solutions portfolio and marketing campaigns. Prior to SPA, Mr. Harris was co-founder and VP of Business Development at Varros Telecom, a software and consulting company focused on next generation network management platforms. Eric can be contacted at eric.harris@softwareperformanceassurance.com.
Software Performance Assurance (SPA) is a provider of outsourcing and consulting services across all aspects of software quality management, testing, and verification. SPA integrates measurable and repeatable processes, patented technology, and highly capable specialists in the field of Software Performance Assurance to offer our clients an efficient and effective solution that reduces the time, cost, and overall risk associated with testing and verifying software products. Information about SPA can be found at www.softwareperformanceassurance.com.
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