One of the growing requirements for capital construction project owners and investors is how to maintain an efficient and safe operations of their existing assets portfolio as well as newly acquired assets. This will be usually achieved by investing in recapitalization programs that will have the objective to extend the duration of those facilities life cycle while ensuring continuous and improved revenue generation from those assets. The recapitalization programs for those assets could be undertaken for different reasons including the need for refurbishment to comply with health and safety regulations, building systems compliances, CO2 emissions, asbestos removal, expanding facilities sizes, complying with access for disabled legislation among many others. In addition, the recapitalization programs could be to convert the usage of low-revenue historic buildings, like post office buildings, ports, palaces among others into high-revenue one-of-a-kind hotels and resorts. One of those examples is the post office building in Budapest, Hungary which became the super luxury Four Seasons hotel.
Recapitalization and Refurbishment Projects Requirements
The successful delivery of recapitalization programs requires implementing three phases. The first is create a repository of all assets that the organization has or could have access to. The repository needs to identify those assets including their location, components, current condition and occupants. This phase will help in identifying what are the assets that could be considered the capitalization program. The second phase is to assess those considered assets by formally scoring them to determine their attractiveness and priority in an objective manner. The second phase will also include determining the cost estimate for the refurbishment and expected revenue of the refurbished asset as well as a master schedule for delivering the refurbishment project. The third phase is to generate the recapitalization project for all shortlisted opportunities. Of course, this does not mean that those recapitalization projects have been given the approval to proceed. The formal approval would have its cycle and it is not part of this analysis.
Using a Project Management Information System (PMIS) that has the asset management and opportunities assessment functionalities like PMWeb, capital project owners as well as entities who invest in capital projects can have a single web-enabled platform to manage, monitor, evaluate and report on all of their recapitalization programs. To achieve this, four PMWeb modules will be used. Those are the asset location, initiatives, programs and projects modules.
PMWeb asset location module will be used to identify the details of all existing assets as well as possible assets that could be acquired by the entity. Each asset will be assigned a unique location identity for which all required details will be captured such as condition, type, spatial latitude, longitude and elevation values among many others. For each location, PMWeb allows to capture the details of all buildings, floors within each building and spaces (flats, rooms, lobby, shop, kitchen, etc.) at each floor level. In addition, the details of all equipment, furniture and other types of assets that are not permanents components of the building structure can be also captured. Those assets can be assigned to a building, floor or space. Further, the details of all occupants at each space, which could be the landlord or tenant, can be also captured. In summary, all details and components of the assets that could be considered in the different capitalization programs will be captured and documented.
In addition, the specification or user defined option in PMWeb allows the entity to create all additional fields that could be needed for the assessment of the existing assets. Those user defined fields can be configured to capture text, currency, numbers, dates, Boolean and data from predefined list of values.
Similar to all other PMWeb project management processes, pictures, drawings, videos and other documents that are associated with each location, building, floor level, space and equipment can be uploaded and attached directly to those records or uploaded and stored in PMWeb document management repository and then attached to their relevant records. In addition, links to relevant PMWeb records and imported MS Outlook emails can be added to each process transaction.
The next phase is to capture the details of all initiatives or opportunities that could become part of each recapitalization program. In addition, to the general details of each initiative such as type, category, scope of work, current owner among others, there will be three critical requirements for each initiative. The first will be the recapitalization cost estimate and anticipated revenue, if this is requirement. The second will be the master project delivery schedule or milestone schedule while the third will be a scoring checklist that will be help in enforcing an objective assessment of process for each possible initiative or opportunity.
There are different options for creating the initiative cost estimate which could include the use of the predefined cost database as detailed in the items module, using one the predefined cost assemblies for similar type of projects or just importing the cost estimate from a MS Excel template where the estimate was either created or exported from a dedicated cost estimating software. The entity can select any one of those options as well as the option to combine part or all of those options to come with the initiative cost estimate.
The project master or milestone schedule can be created using PMWeb scheduling module or imported from Primavera P6 or MS Project. The project schedule will usually the project life cycle phases including planning, tender and award design services, concept design, schematic design, detailed design, construction documents, tender for construction, construction and testing and commissioning. The schedule will also include key milestone dates.
Finally, each initiative will have a score checklist that could vary depending on the initiative type. For example, the score checklist for a school would differ from the one for hotel, park, restaurant, bank, commercial, residential, warehouse and logistics, retail, cinema, theatre, healthcare, universities, airports, sea ports, prisons among other types of assets. The score checklist will have specific questions to be answered with the option to attach supportive documents and add notes for each response. The items within a checklist could have its own weight factor to ensure having a weighted total average.
In addition to the formal scoring checklist, PMWeb also allows the entity stakeholders to provide their subjective rating on whether the initiative should be selected as a possible recapitalization project investment or not. The rating tab allows rating each initiative on a scale of five. For each rating should include a comment explaining why this rating was given. The summary of all those ratings will be provided at the average rating value.
To ensure that each reported initiative or opportunity is formally reviewed and approved or rejected in terms of status, a workflow will be assigned to the form. The workflow will be used to map the workflow tasks, their sequence, duration, responsibility, conditions for resubmit, possible actions among others. The workflow could also have conditions to map the approval authority levels usually associated with financial transactions.
When the status of an initiative becomes approved, PMWeb allows generating a project from the approved initiative. This will enable the project team to add the additional details that the project could require for making the decision to whether the project should be part of the recapitalization program or not. Those projects will be subjected to detailed analysis including the development of the work breakdown structure (WBS) and project execution plan, project baseline budget and planned budget spending and the risk register. In addition, the organization might have their own project management processes to further analyze the project opportunities and anticipated tangible and intangible benefits before making the decision to proceed with the project or puts it on-hold. PMWeb visual custom form builder will be used to create those additional processes in accordance with the organization own requirements.
It should be noted that all initiatives, whether approved, rejected or pending decision to approve or reject as well as all projects whether approved for execution, rejected or pending decision to proceed or shelve, will be displayed on their relative recapitalization program. PMWeb program module will be used to capture the details of all recapitalization programs that the organizations intends to invest in with all identified initiatives or opportunities regardless of their status and approved project investments or projects under consideration as well as those rejected.
All those identified initiatives and projects can be consolidated in a single report where for each recapitalization program, those initiatives and projects will be reported showing all needed details. Visuals can be added to summarize the information captured in those initiative and projects regardless of their status.
In addition, it might be necessary to show the projects of a specific program that are being considered, whether approved, rejected or still not decided on, on a map to identify their proximity to other projects of other programs as well as other operating assets. Using the real-time trust worthy data captured in PMWeb, the organization can consume this data to give them the insight for better and faster informed decisions on building their recapitalization programs.
About the Author
Bassam Samman, PMP, PSP, EVP, GPM is a Senior Project Management Consultant with 40-year service record providing project management, project controls services and project management information system to over than 200 projects with a total value in excess of US $100 Billion. Those projects included Commercial, Residential, Education and Healthcare Buildings and Infrastructure, Entertainment, Hospitality and Shopping Malls, Oil and Gas Plants and Refineries, Telecommunication and Information Technology projects. He is thoroughly experienced in complete project management including project management control systems, computerized project control software, claims analysis/prevention, risk analysis/management (contingency planning), design, supervision, training and business development.
Bassam is a frequent speaker in topics relating to Project Management, Strategic Project Management and Project Management Personal Skills. Over the past 40 years he has lectured at more than 350 events and courses at different locations in the Middle East, North Africa, Europe and South America. He has written more than 300 articles on project management and project management information systems that were featured in international and regional magazines and newspapers. He is a co-founder of the Project Management Institute- Arabian Gulf Chapter (PMI-AGC) and has served on its board of directors for more than 6 years. He is a certified Project Management Professional (PMP) from the Project Management Institute (PMI), a certified Planning and Scheduling Professional (PSP) and Earned Value Professional (EVP) from the American Association of Cost Engineers (AACE) and Green Project Management (GPM).
Bassam holds a Masters in Engineering Administration (Construction Management) with Faculty Commendation, George Washington University, Washington, D.C., USA, Bachelor in Civil Engineering – Kuwait University, Kuwait and has attended many executive management programs at Harvard Business School, Boston, USA and London Business School, London, UK.