The big picture

UK construction has had one job on its collective mind throughout 2006 – that of the Olympic delivery partner. The dream deal, awarded last week to the CLM consortium, is essentially a programme management role.

Suddenly the slightly hazy discipline of programme management is about to be thrust into the spotlight.

But what is it exactly? Simply project management with a fancy name or something quite different? The discipline is becoming a major business line for construction consultants, so now is the time to get to grips with it.

What is programme management?

The consensus among programme management gurus is that it boils down to running a portfolio of projects that are interconnected. Sounds simple enough. But the agreement ends there.

Some claim an old-fashioned roll-out of shop fits counts as programme management. Ian Gibson, managing director at Gleeds, for instance, says J Sainbury’s nationwide petrol-station building scheme required programme management.

But others say a job must be more complex to qualify as true programme management. John Lewis, partner at Davis Langdon, says: “The construction industry has been doing roll-outs for donkey’s years. They are just about repeating a process. But with something like the Olympics you have whole distinct streams of work coming together towards the same end.”

Stan Hornagold, senior partner at Hornagold & Hills, warns that the discipline should not be confused with project management. “Project management is just managing a project. Everybody’s a project manager these days whether they’re launching a magazine or installing a computer system. And that’s legitimate. It’s all work that has a beginning and an end.” He says programme management comes into play when a job is too big for one project manager to handle. A programme manager is brought in to supervise several project managers, while coordinating logistics, transport, security and building issues.

Hornagold adds that programme management lends itself to the new ways of working. It facilitates partnering, the use of the NEC contract and jobs that are broken into components, as practised by BAA, he says.

Paul Whatley, managing consultant at Hill International, adds that programme management is a live process. “Rather than produce a programme at the beginning of a project and leave it as a static document, the programme is regularly amended to reflect what is actually happening with a project. This means actual progress: the effect of variations and delay events are constantly added into the project programme and analysed.”

Where did it come from?

Again, disagreement. John White, director at Turner & Townsend, reckons programme management has been around for about 20 years in the UK. He says it developed as a response to more complex projects and a shift in focus among construction consultants. Their transformation into management consultant types has meant a move away from simply building towards “delivering business benefits” to clients, he says.

Gibson argues that programme management has existed in the UK since at least the 1940s. He says projects such as building sea defences throughout the country during the Second World War were not labelled as such, but they were programme management jobs.

Whatley argues that this is impossible because programme management as we know it requires computers. Attempting to maintain a hand-drawn live project document constantly updated with new information would have “severe limitations”, he says.

These days, programming is such a critical discipline, clients often want it as an independent service from project management or cost consulting
Andy Mitchell,
project director, Cyril Sweett

Who’s doing it?

Most major QS and project management firms are developing programme management divisions. At Davis Langdon, the business line represents around 8% of turnover. Lewis says he sees this percentage growing, possibly through the acquisition of a firm with considerable programme management expertise.

There’s a similar picture at Gleeds, where programme management makes up 10% of business. Turner & Townsend, which already offers programme management, is planning to launch a separate division dedicated to the service.

Construction consultants are up against new competitors in the programme management arena, such as the big accountancy firms. There are also niche players including P-Cubed, a small transatlantic firm specialising in programme management. P-Cubed is understood to have played a critical last-minute role in delivering the Athens Olympics.

What’s in it for them?

Gibson says that compared to QSing and project management, programme management is “potentially more lucrative”. He says more senior staff tend to do the work, so higher fees can be justified.

Fees tend to be fixed, which Hornagold says suits the nature of the work. “If you are a QS or an architect, the scale and complexity of the job determines how much work you do, so the cost of the work is related to the value of it. With programme management, you are administering design and having meetings with people. You’ll do the same work whether it’s a £100m job or a £500m job.”

How can you break into the market?

White at Turner & Townsend warns there is a “higher barrier to entry” in programme management and that you need a “more sophisticated skill set than for project management”.

Again, not everyone agrees, including Graham Williams, head of commercial at Osprey Mott MacDonald. He is currently seconded to London Rail to programme manage the East London Line project, which will extend rail links across London from Dalston to Crystal Palace by 2010. He says: “The skills for programme management are no different to project management. The only difference is managing a programme requires a higher level view of the impact of the project on an adjacent project – you need to have your hands on all the projects and how they interconnect.”

What’s the future of programme management?

Andy Mitchell, project director at Cyril Sweett, says programme management is emerging as a key business line in its own right. He says: “These days, programming is such a critical discipline, clients often want it as an independent service from project management or cost consulting.”

White adds that clients are becoming more demanding. “Clients are becoming more aware of the discipline and of what good programme management skills look like.”

Programme management is most commonly seen in the civils and energy sectors and this looks set to continue – partially. Key future programme management roles look likely in energy, especially as the government looks set to build a new generation of nuclear power stations. In civils, if Cross Rail goes ahead, it to will undoubtedly require a programme manager. But there are signs the discipline is branching out. For a start, the Olympic project entails not only civils work but also residential and commercial building. It will be a big moment for programme management, says Lewis at Davis Langdon. “The Olympic project will be the coming of age for programme management in UK construction.”