Project Portfolio Management: Developing Best Practices

Mark Petchey
In an organization with long-established practices, change can be disquieting, but we understand the challenge of change and the steps to ensure a smooth transition.

Port of Portland

When the Port of Portland hired us to assist with the evaluation and development of best practices, process development, implementation and training, we helped employees learn and embrace new processes that improved efficiencies and documentation. These positive changes are enhancing Port of Portland operations.

Assessment of Project Management Maturity

The scope of our evaluations included assessing project management maturity across the organization, identifying barriers that will impact the achievement of portfolio and project management objectives. We documented prerequisites and critical success factors related to project risk management and project financials including cost management, estimating, forecasting and contingencies, as well as portfolio strategy, portfolio governance and capital planning.

The scope of our evaluations included assessing project management maturity across the organization, identifying barriers that will impact the achievement of portfolio and project management objectives.

To determine project management maturity levels and processes, we interviewed Port of Portland staff, compiled questionnaires, and reviewed existing documentation. The result of the initial study identified, in the form of a Preliminary Finding Matrix, several areas or topics that would benefit from improvements in processes. These included estimating, cost management, risk assessment, knowledge management, value engineering and change order management. Each topic area was identified with an associated condition, criteria, effect, cause and recommendation.

Creation of the "Estimating Tiger Team"

The Port of Portland identified its estimating processes and practices as a priority area for further development, unity and maturity and subsequently created the "Estimating Tiger Team", which was divided into three subgroups; procedure, template and cost codes. The goal of the team was to develop a OnePort estimating process that would be utilized across all departments and projects. Existing process and procedures utilized by the Port of Portland’s engineering department formed the foundation of many of the tools and techniques that would be enhanced and unified.

The Port of Portland identified its estimating processes and practices as a priority area for further development, unity and maturity and subsequently created the "Estimating Tiger Team", which was divided into three subgroups; procedure, template and cost codes.

The "Estimating Tiger Team" reviewed and provided input on a format and framework we drafted. The purpose of the estimating procedure was to provide guidance on the classification and requirements of estimates throughout the Port of Portland’s unified project lifecycle. It integrated with the cost code requirements to provide direction on the level/hierarchy expected for each estimate classification and subsequent level of estimated cost granularity and effort. Sub-sections within the procedure included:

  • Estimate file retention, storage location and naming convention.

  • Estimate criteria and definitions: this includes project definition, intended accuracy, classification and methodology. Estimating roles and responsibilities are also summarized.

  • Estimate coding structure and format.

  • Estimating criteria matrix: this provides a summary of estimate requirements and expectations for each stage in the OnePort project lifecycle. The matrix is based on generally accepted industry standards for both private and public sector projects.

  • Contingency and risk evaluation worksheet: this section recommends that the estimator applies risk identification and collaboration techniques appropriate the project characteristics. For example, unfamiliar or unique project characteristics may require extensive consultation with both project team members and those in the organization who have had similar experience.

  • Estimate requirements at each stage gate in the Port of Portland’s project lifecycle.

  • Estimate QA checklist.

  • Estimate variance report: an estimate variance report demonstrates and analyzes the deltas between two or more estimates; each estimate completed at different points in time and often based upon differing levels of scope definition. Estimate variance reports are considered good practice that supports project cost and scope management.

  • Appendix of Frequently Asked Questions (FAQ)

The cost code subgroup adopted the Construction Specifications Institute (CSI) MasterFormat system. This system is currently used for management of construction specifications. The application of a consistent coding structure within cost estimates will facilitate cost reconciliation, unified data collection, benchmarking and estimate review and approval. Coding related to FAA specification sections were incorporated into the CSI listing.   

The template subgroup supplied input and requirements for the format we provided. This subgroup worked closely with the procedures group to ensure alignment and incorporated features from the existing template utilized by the Port’s Engineering department. The template was developed to allow estimates to be prepared at various levels of detail, including the facility to identify the labor hours, labor hourly rate, materials, equipment, and mark-up components of individual unit rates. The template also included a dashboard, from which estimate progression through the project lifecycle could be recorded and tracked.

Aligning with Industry Best Practices

Throughout the development of the estimating template and procedure, the Port of Portland and Faithful+Gould aligned to generally accepted industry best practice guidelines per the AACE (Association for Advancement of Cost Engineering, ASPE (American Society of Professional Estimators), and the Project Management Institute (PMI). 

At the conclusion of the development of the estimate template and procedure, we conducted training sessions to roll-out the new process and have provided on-going mentoring and one-on-one support. 

The resultant unified tool has provided the Port of Portland with a singular process and procedure for preparing cost estimates, which has enhanced internal project review and approval and set in motion the development of a library of documented estimated cost data.

The resultant unified tool has provided the Port of Portland with a singular process and procedure for preparing cost estimates, which has enhanced internal project review and approval and set in motion the development of a library of documented estimated cost data.

This initiative places the Port of Portland in an excellent position to develop a searchable cost database for both estimated and project actual costs, which will in turn further enhance the OnePort Estimating Process and cost benchmarking.

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