Program Management
Program Management is the process of managing a portfolio of multiple ongoing inter-dependent projects. An example would be that of designing, manufacturing and providing support infrastructure for an automobile manufacturer. This requires hundreds, or even thousands, of separate  tasks. In an organization or enterprise, Program Management also reflects the emphasis on coordinating and prioritizing resources across projects, departments, and entities to insure that resources are managed from a global focus.
Program Management is essentially an additional layer above project management, focusing on:

1. • Selecting the best group of programs 
2. • Defining them in terms of their constituent projects
3. •           Providing an infrastructure where projects can be run successfully but leaving project management to the project management community.

A key issue for owners in the consideration of a Program Management approach is one of governance: Programs need a more robust structure and control because of the larger impact their failure can have on an owner's overall capital budget.
Recognizing the complexities and risks involved in such an approach, the Construction Users Roundtable (CURT), a Cincinnati based owner's group, the Associated General Contractors, Arlington VA, and the American Association of Architects, Washington, DC, are attempting to answer questions about the development of new technologies, including those employing an integrated approach to program management.  The newly formed group named 3XPT will show, through practical examples, how to best use new technologies to maximize productivity through early planning and collaboration with all interested parties, including owners, engineering firms, construction firms and the trades.

Owner's Engineer
Many companies today do not maintain an extensive engineering staff. Owners increasingly turn to outside resources for assistance with both detailed design and construction. The Owner's Engineer serves as owner’s representative, performing early-stage project activities and monitoring detailed engineering and construction functions that are carried out by other contractors.
During early project stages, the Owner's Engineer:

1. • Defines the project scope aligned with business objectives
2. • Performs market forecasts and competitive assessments
3. • Prepares capital budgets
4. • Identifies and evaluates technological alternatives
5. • Scopes additional technology development as required
6. • Prepares owner's design criteria for use in detailed engineering
7. • Prepares project scheduling and cash flow projections
8. •           Identifies risks, judges importance, ranks and assigns mitigation responsibility within the Owner's organization
9. •           Prepares front end engineering design (FEED) allowing the contractor to provide firm costs and schedules while minimizing change orders

One advantage of implementing a FEED approach is that it allows and requires early value engineering, constructability reviews and O&M input before the contractor fixes cost and schedule. Collectively, these activities make it possible to "freeze" the project scope so that further changes are few. In later phases, the Owner's Engineer performs part, or all of the development and detailed engineering, overseeing the work of other engineers or contractors, and represents the owner's interests throughout project execution to keep the project true to business objectives, schedule, and budget.

Overall, the Owner's Engineer functions as the owner's personal engineering team on processdriven projects, and is integrated within the owner's organization. The consultant works with owners to identify, manage, and/or provide engineering and project management services at each stage of a capital project.

There are significant risks when owners fail to provide for the owner's engineering function. Without owner's engineering, companies lack the ability to define projects at the front end. During later stages, these companies become overly dependent on their detailed design and construction contractors, whom they are ill equipped to manage.  Failing to provide for the owner's engineering function can lead to compromised quality, exceeded capital costs and/or extended schedules.

According to a recent Business Roundtable study, companies successfully executing Owner's Engineering functions:

1. • Spend 28% less on projects
2. • Reduce cycle time to startup by 30%
3. • Increase plant capacity by 6%
4. • Transform average 15% ROI projects into 22+% return winners

The Owner's Engineering function can prove to be a viable solution for business profitability and success when internal resources are not available for your current  or future capital projects workload.

About Harris Group Inc.
During the past decade of its 30 year + history, Harris Group Inc. has built a highly qualified process engineering group experienced in performing owner's engineering functions, supported as-needed by Harris Group Inc. engineers specializing in architectural, civil, structural, mechanical, electrical, and instrumentation engineering. This engineering group functions as the owner's personal engineering team on process-driven projects and is integrated within the owner's organization. Harris Group Inc. works with owners to identify, manage, and/or provide engineering and project management services at each stage of a capital project.

Harris Group Inc. provides multi-discipline engineering for the following market sectors: industrial manufacturing, which includes biopharmaceuticals and pharmaceuticals engineering, energy (including petroleum and electric power generation), ethanol & biodiesel, and forest industries. Its specialty services include financial consulting, process solutions and systems integration.  Harris Group Inc. has twelve offices in the U.S. and a sister company, AO Harris Group International, in St. Petersburg, Russia. For more information, call 1-800-488-7410 or visit www.harrisgroup.com/.
*The Top Owners" is a list of 425 of the largest owners of publicly held companies from Chemicals and Allied Products (Johnson & Johnson, Du Pont, Genentech, Amgen) to Electric, Gas and Sanitary Products (Calpine Corp, El Paso Corp, American Electric Power), ranking in order, those with the largest capital budgets and construction projects in progress, based on Securities and Exchange Commission filings, and compiled by Standard and Poor's. 

The above article was written in part using excerpts and quotes from Engineering News Record's Senior Editor, Gary J. Tulacz in his November 2006 cover story:  "The Top Owners." 

Written and Compiled by: Ken Wenninger
ken.wenninger@harrisgroup.com