Armed with a Cytonnaire’s mindset, you’ve managed to amass a pretty impressive investment portfolio but now as with any smart investor, you feel the necessity of diversifying this to a less risky but equally if not more profitable nest – Real Estate and more precisely the development aspect of it. With the real estate sector consistently outperforming other asset classes, giving a return of between 25% and 30% as shown by recent reports, it’s almost a no-brainer for any investor. Question is where do you begin? Anyone with the slightest insight on matters construction may attest to the multifaceted nature of the industry. As a client, you feel you’ve done your part with regards to providing finances and/or any other supplementary requirements necessary to kick-start a project, enough to not burden you with trying to figure out how to carry out a Schmidt hammer test. Who then is to be trusted with such huge and potentially risky projects?
Enter your Project Manager or the shorthand PM, think of him/her as the client’s representative or better still, the client’s eye (a trained one at that) on his/her project. Most PMs are career personalities in the built environment ranging from Architects, Engineers, Planners, Surveyors and the like. An example would be Cytonn Investments’ Real Estate arm; Cytonn Real Estate whose PM department is enriched by a pool of such professionals. With years of experience and an inculcated expertise in management, they are able to delve and settle into this position. More recent studies have shown the need of specializing this position with the introduction of course studies such as Construction Management in institutions of higher learning.
The project management role can be traced back to civil engineering projects in as early as 1st Century BC which were generally managed by creative architects, engineers, and master builders themselves. As a discipline, it has evolved from aspects such as civil construction, engineering, and even the military. Two pioneers of Project Management as we know it today are Henry Gantt famous for his use of the Gantt chart as a project management tool and Henri Fayol creator of the five management functions that form the foundation of the body of knowledge associated with project and program management.
Enough with the history lesson, what precisely does this project manager do to warrant him a standing in any project? To answer this, we first have to understand the intricacies of a development to appreciate his /her input. During any project’s lifecycle from its inception – predevelopment – development – exit, there are four general elements to it; Scope, cost, quality and schedule/time.
These four aspects are in a way interlinked and a change in one has an impact on another. The Project Management Triangle or Triple Constraint indicates the constraints of project management. It aids in choosing project biases or analyzing the goals of a project.
A look at each individual element.
This basically refers to the magnitude of a project in terms of size, nature or complexity. Depending on the scope of the project, comes to a spectrum of stakeholders ranging from project consultants, suppliers, statutory authorities, end users and the like. With such an array of efficient management systems more so a focal one is crucial. A clear structure and chain is key to effective communication between the said parties. For instance, in the case of an elevator installation in a building the structural engineer requires communication from the architect in the form of detailed drawings to form the basis of his reinforcement designs. This, in turn, has to be communicated to the main contractor undertaking the building works to allow for such and again in tandem liaise with the lift supplier to ensure these specifications are in line with the lift being installed. The project manager is tasked with facilitating such aspects of the project.
Time is money is one of the most common phrases known to man and in nowhere does it resonate more as it does in the construction industry. In any project there normally is a schedule within which a project is estimated to be completed, the essence being the need for the investor to begin recouping their investment and returns. Failing to stay on schedule results in diminishing returns. Time management in a project does not only call on the PM to ensure minimum time wastage but also how he/she chooses to utilize the resources at his/her disposal. Say a certain task on site requires x amount of resources to accomplish and the PM ends up over budgeting, although the task will be completed, the alternative of reallocating said resources to other tasks that would otherwise move the project forward is foregone, a concept known as opportunity cost.
You need money to bring a project to life. Simply put, how well this money is utilized determines the success or failure of the development. Tools such a Bill of Quantities guide a PM to ensure that the project is delivered within the set estimates. A huge variance north or south of this is a call for alarm. Falling way below the stipulated budget may be an indicator of sub-standard works while the reverse may be a sign of overpricing in the works. Notice I said maybe, because yes, an error in the estimate may as well be the root cause.
As illustrated in the Triple Constraint triangle, quality in terms of the final product is an end product of optimal utilization of the previous three elements of project management.
Where do you bring in a PM during the cycle of a project? The Beginning! You would want a planner, not a mess cleaner.
David Schmaltz in The Blind Men and the Elephant says;
“How are projects like trees? Trees are hierarchies branching both up and down from a central trunk. We see the trunk or the canopy and recognize a tree without seeing the part of the sustaining organism working silently below ground.”
So yes a PM’s role may not be as pronounced as that of other consultants on the project but it’s the understated glue that keeps everything together.
An efficient PM is akin to a good juggler - balance is key.