MINIMIZE PROJECT RISK AND COSTS A New Approach to Project Management

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Review Session Learning Objectives How to go from managing to leading the project The credibility of metrics is crucial to ensure buy-in at all levels of the organization Alignment of resources, expertise, and company goals ensures success Case Study Results from both successful and failed projects

Introduction - Meet Our Presenter: DEAN KASHIWAGI   Emeritus Professor, Researcher, and International Consultant IFMA Fellow, Fulbright Scholar & Professional Engineer Created a robot and language of metrics to assist FMs 14 year service in USAF Total of 38 years industry experience Championed programs to advance the FM profession, and continues to prepare the next generation of FMs

How to Minimize Risk: Automate Identify and utilize expertise [own organization and in supply chain] Minimize need to speak, think and make decisions Minimize the use of relationships to resolve issues Minimize writing or verbal communications because it is not effective or efficient Minimize all management, direction and control functions

McKinsey and Company concluded that of the 2,000 work activities they examined, 45% “could be automated using already demonstrated technology”. http://www.mckinsey.com/business-functions/business-technology/our-insights/four-fundamentals-of-workplace-automation https://www.theguardian.com/sustainable-business/2016/sep/26/humans-are-going-to-have-the-edge-over-robots-where-work-demands-creativity?cmp=oth_b-aplnews_d-1

Mechanized Agriculture Changes Farming Industry

Large Company vs Automation

McDonalds Adjust to Wage Increases

Driverless Cars

Amazon’s New Shipping Facilities

London’s Digital Control Tower http://money.cnn.com/2017/05/19/technology/london-airport-digital-control-tower/index.html

Phillips Dutch Plant vs. Foxconn Plant in China “Thinking vs Phillips Dutch Plant vs. Foxconn Plant in China “Thinking vs. No Thinking”

Replace Inefficiency with Robots in China

Paradigm For Observant People: Increase in Quality of Life [“Win-Win”]

What is Important to Think About for CEO?

Difficulty in Change Requires change of paradigm but not changing people Relationship between professionals and associates Bureaucracy is in place to stop change Difficult to see into the future Proposal: either change or the environment will change and people will feel like they are being controlled

Reduce Risk Cut cost by 30% Identify and utilize expertise Use metrics and allow experts to utilize BV structure instead of relationship based traditional practices Use BV structure to increase level of expertise Simplification will reduce stress, be easily understood and increase the value of human life

Best Value Approach Structure Client’s representatives who use BV structure [BV expert] Structure automates the identification and utilization of expertise Structure mitigates risk Win-win [best value for lowest cost]

Best Value Approach (BVA) History 25 years [1992] $17.6M Research Funding 1,900 tests delivering $6.6B of services 98% customer satisfaction 9 countries, 33 states Minimized 5 - 30% project cost Increase quality, customer satisfaction and vendor profit 54 Licenses, Most licensed technology developed at ASU [most innovative university for two straight years].

Mission: Increase quality of environmental engineering services Timeline: 1 year Projects: Yuma: Air Quality ASRAC: Water Quality Brownfields: Waste Management Executive Team: Teena Ziegler Erik Massey

Process [creating a list of experts] Become Simpler and Less Expensive Criteria % Diff Traditional Best Value Required time to evaluate proposals - 95% 286 hrs. 13 hrs. Protests 0% Avg. Customer Satisfaction of process (1-10) 63% 5 9 ADEQ Administration Cost - 96% $ 98,520.00 $ 3,840.00 ADEQ Admin. Cost Savings $ 94,680.00

Case Study [Traditional vs. Best Value] ADEQ PM Criteria Pinal County (Traditional) Yuma (Best Value) Total Cost of Projects $400K  $138K Overall Client Satisfaction 6/10 10/10 Project Duration (days) 730 352 % Total Schedule Deviation 150%  23% % Schedule Deviation Due to ADEQ - 23% % Schedule Deviation Due to Vendor 0% % Cost deviation 300%  0.5%* % of Milestone Deliverables Requiring ADEQ Revisions 100% % of ADEQ Time Required to Complete Vendor Milestones 50%  15% *Deviation caused by unforeseen risk (EPA implementing new requirements)

Overall Supply Chain Performance . No. Criteria Traditional Best Value 1 Total # of projects 35 60 2 Total cost of projects $5.5M $5.8M 3 % of projects SOW completed in fiscal year 50% 99% 4 # of ADEQ PMs to manage projects 7 5 Customer satisfaction of vendor performance 6.9/10 8.3/10 *Data was adjusted due to project de-scoping (29 projects, $1.2M (22%), 479 days (4%) ADEQ PMs increased work capacity by 140%. Vendors performed 94% more work in 33% less time. ADEQ customer satisfaction of vendor work increased by up to 30%

Best Value PIPS Most Critical Aspects are PM and RM 3 2 1 Selection Clarification Execution Pre -Qualification Award Contract All Vendors One Vendor Differential in capability/expertise [using nontechnical performance metrics] Education of vendors Technical review of scope and vendor plan Weekly tracking of project deviation.

Project Management Procurement No thinking, no decision making, no changing others, no expecting others to change RFP / project requirement Quality based selection methodology Contracting Procurement Project Management Procurement Project Planning Performance measurements Performance reporting system Project/Risk Management

Which Roof Would You Select? Company System Cost $ SF Annual $ Age of Roofs # of References Warranty Contractor #1 BUR New Roof $761K $10.74 $31K Avg: 2 yrs. Max: 4 yrs. 3 25 years [QA] Reuse existing insulation $659K $9.30 $27K Contractor #2 PVC $630K $8.53 $32K 5 20 years [NDL] Contractor #3 SPF $528K $7.54 Avg: 4 yrs. Max: 5 yrs. Surveys: 94 Roof list: 47 High Performance PVC $504K $7.19 $26K Avg: 5 yrs. Max: 15 yrs. 30 Budget: $560K Selection committee identifies Contractor #3 HP PVC as the best value and the Contractor #2 PVC option as the two options that will move on to the interview stage due to site compatibility The BUR option and the SPF option were eliminated due to selection team consideration of site compatibility with the heavier aggregate BUR and the more expensive SPF roof system

State of Utah Search Engine Metrics Past Performance State of Utah RFP Requirements Project: Metrics Time it takes to find contract on website 1 min  Customer satisfaction (out of 10) 8.5  Cost to maintain $50K  Time it takes to maintain 1 FTE  % accuracy in search  50% Spend last fiscal year ‘16  $1.7B Vendors under contract 811 Vendor reports uploaded each quarter # of usage reports  850 # of unique hits on the contract search page/day  650 # of searchable files for state contracts [excel, word, PDF] 3  % of information that has to be found manually  LT 20% Project: Metrics Time it takes to find contract on website 5 min - usually call help desk Customer satisfaction (out of 10) 5 Cost to install $50K  Time it takes to maintain 1 FTE  % accuracy in search 50% # of searchable files for state contracts [excel, word, PDF] 1  % of information that has to be found manually  50% Time to install 6 months

Ratings and Information No Criteria Vendor 1 Vendor 5 Vendor 2 Vendor 4 Vendor 3 Best Score 1 Level of Expertise rating 9.0 6.0 5.0   2 Risk Management Plan rating 4.2 3 Value Added rating 7.0 8.0 4 Interview rating 10.0 5 Search Engine rating 6 Cost $95,000.00 $288,400.00 $195,000.00 $295,000.00 $130,125.00 -

Future of FM FM professional will use automated tools FM associate of the future is the expert who needs to get their expertise through technical training FM professional and FM associate of the future must be partners in the future Partnership based on observation and not thinking, decision making and influence

Conclusion: Change of Paradigm in the Information Age To Minimize Cost Best Value Approach (BVA) minimizes the cost of services from 5 to 30 percent Automation of the mind that will affect both the FM Professional and the FM Associate of the Future Help people to learn five times as fast and be more consistent and accountable Increases efficiency, accountability and profit BVA increases the worth of people Everyone who has a family can start utilizing the “FM of the Future” concepts

FM of Today vs. FM of the Future FM is a Cost FM Professional is the technical expert FM Associate is responds to the expert FM Professional needs technical certification FM is in C-Suite and Not a Cost FM Professional is a leader and CEO who identifies and utilizes expertise [BVA] FM Associate is the technical expert FM Associate needs technical certification FM professional and FM associate are partners Language of metrics

IFMA WWP: Oct 17 - 20 Paradigm shift in 5 different sessions. Date Time Session Title Room Oct 17 1pm-5pm Deep Dive 2: Step by Step to Implement the “FM of the Future” Approach Convention Center Oct 19 8am-9am Digital FM: How to Cut Costs by 30% While Increasing Quality 332A 4:15pm-5:15pm Who Wants to Be a Millennial-aire? – Nurturing in the Young Workforce 332C Oct 20 Minimize Project Risk and Costs: A New Approach to Project Management 340A 11:45am-12:45pm The FM Compass: Roadmap to Leadership

Q&A LinkedIn Dkashiwagi1@gmail.com YouTube KSM-inc.com Jan 15-19, 2018 (Tempe, AZ) 2018 Best Value Certification, Education and Training

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