Thirty years ago the role of project manager was almost unheard of in the development industry across the world yet now virtually all significant projects in places like the United Kingdom, United States, Europe and the UAE wouldn’t consider a development without one. Client side project managers provide a de-risked pathway through the complexities of delivery for new developers and a cost efficient outcome for the experienced. Increasingly project managers also provide an auditable process for governments and a sound approach to corporate governance for multinationals in the business of investing in developments.
Why is a profession so widely utilised elsewhere, yet so infrequently adopted across Asia?
This is not to suggest project management is languishing in Asia. In places like Hong Kong and Singapore, where international corporations have established regional headquarters, the practice thrives. But in other parts of Asia it seems local developers are choosing not to use professional services for project management. This is odd really as they use professional services such as stockbrokers, investment analysts and lawyers to safeguard other investments.
What role can project managers play, what value do they add and who is presently fulfilling this role in Asia?
At its core project management has the role of representing the client to all other parties to ensure they achieve their development objectives in the most efficient fashion. More often than not this means delivering projects on time, within budget and to an agreed quality. In more recent years the role extends beyond this basic remit to include ensuring health and safety targets are met, financiers are comfortable and corporate principles are adhered with.
Using sophisticated project management tools a client should be provided with detailed upfront planning to ensure a deliverable and buildable design which meets their objectives. This should extend to sequenced planning for all elements of a project throughout delivery, well thought out material procurement, safe and efficient work process and quality outcomes. All these leave one indelible stamp on a construction project, they add value. This value should be across the whole lifecycle of the development.
Typically client side project managers’ fees will be between 0.5 and 1.5% of the construction cost. Right up front, by establishing clear design parameters the project manager should be able to save the developer the cost of their fees. Contractors, knowing they will be administered and directed by professional firms will in most cases significantly reduce their risk allowance which they would otherwise build into their overall cost; again saving the client considerably more than the cost of the project manager’s fees.
At present it seems that many developments across Asia, particularly in the developing regions, are utilising the services of non-specialist companies or internal employees to ‘project manage’ their investments. In more concerning circumstances it seems many developers proceed on a trust basis with their contractors assuming their long term interests are aligned. All these options have one key flaw; they are often conflicted in their roles. Designer firms will, quite correctly, put a focus on the design outcome without necessarily the client’s level of concern for cost and programme. Conversely cost planning professionals often seek to drive all outcomes to a rigid budget without the requisite consideration to the importance of design. The ideal team is formed when each party plays to their professional strengths. Retaining internal project managers can work for developers provided the project manager has the autonomy to run the project; this can often be politically very difficult for the hierarchical-type business structures common throughout Asia.
It is the independence of the professional project managers’ role, unburdened by conflicts, operating solely in the client interest where value is maximized. Where the client / project management relationship develops over a number of projects, the value derived increases further with client objectives implicitly understood and translated to projects with increasing efficiency. Of course it is critical with this profession, as with all professional services, that a project manager is selected based on their experience and qualifications for the role in question. The project management business is not without its share of cowboys who can as quickly erode value and importantly, client reputation.
Happily it seems that with the continued growth of the Asian Tigers the broader Asia market is beginning to form a maturity and a realisation of the understanding of the benefits of project management. In more and more cases it seems astute developers are relying on project managers to look after their construction investments allowing them to focus their time on the next opportunity.
James Sherrard is a senior director of Savills and head of project management for the Asia Pacific region. He has 25 years’ experience delivering projects across the world. James is currently based in Hong Kong.