The complexities associated with building or relocating to a new facility can
leave a company vulnerable to myriad financial risks, but planning and foresight
can make all the difference between a successful and unsuccessful transition. Understanding your business’s needs and creating a clear project strategy can help your
company mitigate risk, control costs and
manage schedules.
“Avoiding risk early in the process means
defining the factors that lead to cost
increases and schedule delays,” says
Amanda Stratton, director of project management at CB Richard Ellis in Atlanta.
“There are three aspects of a project that
drive its risk level. The budget should be
developed early in a project, the scope of
work should be clearly defined for use in
the request for proposal (RFP) in order to
obtain the most competent project team,
and the project schedule needs to be
aligned with the owner’s critical business
drivers.”
Smart Business spoke with Stratton
about the steps that business owners can
take to make the relocation process as
smooth as possible.
How are project budgets developed?
Budgets have traditionally been created
according to historical data, but that’s not
sufficient due to the escalating costs of
construction. The project manager needs
to use historical data as well as current
market data and trends to create a comprehensive project plan. The budget must
address the full scope of the project, while
also anticipating cost increases in the
future of the project.
Expand on what you mean by the project’s
‘scope of work.’
The more defined a scope of work, the
fewer unanticipated cost. By clearly defining the scope of the project, the team will
have a firm understanding of each member’s responsibilities and whether each can
effectively execute his or her commitments under the time constraints.
Risk to the owner increases when gaps
exist in the documentation or interests
conflict on how to manage or execute a
project. For example, an architect needs to
have a clear understanding of the client’s
intentions for the facility in order to design
a workplace that is functional and cost-effective. Once the scope of the project has
been defined, it should be documented in
the RFP.
What is the RFP process?
The RFP outlines each team member’s
responsibilities along with the risks
assigned to each task. RFPs are generally
used to procure architectural, engineering,
general contracting, IT, furniture, relocation and other consulting services. The
RFP should include a detailed scope of
work for the project, the schedule, as well
as any occupancy requirements, contract
and insurance requirements, payment procedures and project budget. Once the proposals are received, the client should evaluate:
- Qualifications of the proposing teams
based on their team structure and each
member’s experience - Proposed project strategy and schedule
- Client’s decision-making milestones as
part of the process (in other words, can the
client make decisions as fast as are needed
to meet the schedule?) - References
What else should be considered during the
planning process?
Managing the schedule is critical to mitigating risk on a project. The schedule
should track team deliverables and project
milestones, such as design presentations
and completion of construction documents, ordering of long lead items,
design/installation of IT infrastructure, furniture and equipment deliveries and relocation. The schedule should then be referenced to maximize the efficiency of the
project delivery and balance the quality
and cost factors. The role of the project
manager is to drive the schedule to meet
project due dates, understanding that
pushing back the scheduled delivery can
affect costs and quality.
AMANDA STRATTON is the director of project management
at CB Richard Ellis in Atlanta. Reach her at (404) 504-7869 or
[email protected].
