Tuesday 8 February 2022

How to optimize direct project management

Direct operation, as the name suggests, is directly operated and managed by the company, characterized by unified capital and centralized management. 


Direct operation mode, refers to the construction enterprise and the construction unit after signing the "construction project construction contract", with the responsibility target contracting as the main content, in accordance with the "company's overall control, operation authorization management" model to form a project department. 


By the company to the project involving the consumption of human resources and machines, capital allocation, dynamic cost, quality and safety and other aspects of the control, the company's functional departments on the completion of the project objectives, project managers and project team members of the work of the assessment indicators and organize assessment, project ownership and control centralized unified in the company, in fact, it is necessary to strengthen the company's control and decision-making of the project management department, especially the project funds, and require that it can be managed, managed well, and managed lively.

Administrative authority of the direct operation mode

no rules, no squares. project management is a complex system engineering, construction enterprises only according to their own actual situation and the requirements of project construction, scientific and reasonable division of the management authority of directly managed projects, strengthen the management and control of the project in the key links of fund management, labor subcontracting, material procurement, etc., in order to effectively control the cost of expenditure, so that the project accounting can truly reflect the actual situation of consumption, so as to ensure the smooth progress of enterprise production and business activities, and then do a good job in cost management and improve economic benefits.

first, the ownership of the project funds should undoubtedly belong to the company, and the company should establish an account for each project, which is managed by the company's financial department, and the project funds incurred in the project are recorded in this account.

second, the company is the main body of investment, and the external bidding is uniformly decided and implemented by the company. after winning the bid, the project manager is selected by the company's internal election or collective negotiation, and the project manager shall sign a letter of responsibility for project management goals with the company, and the company will check and control the implementation of the project cost accordingly.

third, the subcontracting of the project, the project management department shall not handle it without authorization, authorize or declare the subcontracting plan, after approval by the company, the company or the project department will organize bidding, the winning contract will be uniformly approved and managed by the company, and the subcontracted project payment will be paid by the company's finance.

fourth, the procurement of materials is divided into the company's unified procurement and the project management department's own procurement, where the company in the project management target responsibility or company documents stipulates that the company must be unified procurement of materials, the project management department must prepare a procurement plan in advance, after reporting to the company for approval, the company unified procurement; where the project management department organizes procurement, it must also be approved by the company.

fifth, the right to use the funds of the project management department should be clearly stipulated in the project management target responsibility letter, the financial accounting of the project management department should be appointed or designated by the company, entrusted by the company to manage the financial work in the project management department, and the accountant has the right to stop anyone who exceeds the provisions of the project management target responsibility letter.

Implement a coupling relationship between the enterprise and the project

as an authorized agent of the enterprise, the project department is engaged in activities such as project organization and implementation, personnel allocation management, and control of the three major goals, and is a one-time cost and profit center. according to the requirements of the project manager responsibility system, the enterprise should give the project manager sufficient authority to ensure the efficiency of project management, so that it can perform the responsibilities and obligations in the project contracting contract within the scope of authorization, and have full responsibility for the construction of the project, and "handle the external relations related to the project undertaken as the representative of the enterprise legal person, and be entrusted to sign the relevant contract". however, the sufficient conditions for the implementation of the project manager responsibility system cannot be ignored, that is, both the enterprise and the project manager must be completely information symmetrical.

however, in the construction practice of immature market conditions, this ideal assumption is difficult to guarantee. from the perspective of information economics, in the case of information asymmetry, the party with the information advantage should have the decision-making power to maximize the surplus, so the project manager should be fully authorized. at the same time, in order to ensure that power and resources are not abused or even used by project managers to seek personal interests, enterprises need to uphold the principle of efficiency and fairness, establish and improve the supervision mechanism of the contracted project and implement it in place: first, there must be a functional management team to supervise and manage the project contractor, and there must be a set of perfect management mechanism to guide and supervise the project to ensure the healthy operation of the contract; second, the functional supervision team should supervise the project according to the project contract signed with the project manager and in accordance with the requirements of the current construction management laws and regulations, and the focus should be on implementation. in the course of inspection and supervision, problems found should be corrected in a timely manner to eliminate hidden dangers.

in short, only by correctly understanding and grasping the project manager contracting system, creating conditions for the implementation of the responsibility system, and establishing a set of effective contract management system within the enterprise, strengthening the supervision and assessment of the contractor, can the contracting business model bring benefits to the enterprise and ensure the benign and standardized operation of the project manager's contract responsibility system.

Improve the employment mechanism for project managers

enterprises should formulate their own project manager qualification management system on the basis of strict national registered construction engineer system to ensure that it is scientific, reasonable and feasible; in the selection of project managers, fully consider the comprehensive quality of talents such as seniority and experience, educational background, performance reputation, risk attitude, etc., refer to the amount of shares they hold in the company, pay additional information such as the amount of collateral paid, and improve the breadth and transparency of selection.

establish a project manager credit profile, which is a hidden incentive mechanism. enterprises are required to attach importance to post-project evaluation and knowledge base management, and clearly record the work performance and speculative behavior of project managers in the credibility file. this is conducive to a reasonable assessment and summary of the behavior and ability of the project manager, a thorough analysis and grasp of the internal production capacity and development potential of the enterprise, which is conducive to the selection of the project manager and reduces the blindness of formulating the next production plan.

the introduction of relative performance appraisal indicators can alleviate the degree of information asymmetry. in the absence of adequate statistics to reflect the level of effort of project managers, one-sided use of individual project profits as an assessment indicator for project managers may undermine their enthusiasm. refer to the profits of other projects of the same type, the same scale, and the same complexity in a similar environment, or form alliances with equivalent qualifications to achieve effective information sharing.

a good internal and external environment guarantees the implementation of the direct operation model, today's construction market is a typical seller's market, excessive competition leads to party a strong, party b weak and third party unfair. this has become an external dominant factor affecting the profitability of construction companies, and also provides space for the game between project managers and enterprises. in order to break this dilemma, it is necessary to improve the external market environment so that the survival and development of enterprises can be guaranteed.

first, it is necessary to improve the relevant policies and regulations the competent government departments should step up the establishment and improvement of relevant laws and regulations and policies and regulations, strictly implement specific operation processes, clarify the functions of all parties involved, and seriously build market order; at the same time, attention should be paid to improving the supervision and reporting mechanism, strengthening the intensity of rewards and punishments, and reducing the violations of the main body of participation.

the second is to strengthen the constraints of industry departments. on the one hand, it is necessary to strengthen the qualification management of construction enterprises, strictly enforce the market access clearance mechanism, control the number of enterprises, improve industry concentration, and rationalize the industrial structure; on the other hand, we should improve the reputation assessment system of construction enterprises, attach importance to the assessment and recruitment of enterprises' past performance, and improve their enthusiasm for independent innovation and strict self-discipline.

the third is to change the ideal model of project management means compared with full authorization, and by recovering part of the operational autonomy of the project department, this preferential choice can effectively avoid the abuse of power by the project manager and reduce the cost of supervision and agency. at present, all kinds of new project management methods with strong operability and adaptability have been developed in construction enterprises, and "legal person management project" is one of them, which is a transition mode of perfect transformation from the current model of project manager contracting system to the ideal mode of project manager responsibility system.

The key to standardizing the behavior of project managers is to improve the incentive and constraint mechanism of the project, so that the project manager has the ability and enthusiasm to act in accordance with the interests of the enterprise and reduce agency costs.

The establishment of a construction enterprise direct management mode management system is a complex process, is a major change, but also involves the enterprise up and down the various departments, even everyone, and the need for the personnel involved to cooperate with the implementation and feedback information to put forward opinions, so that the system has been continuously optimized system engineering.

To ensure the efficiency of the implementation of direct-managed projects and improve the profitability of construction enterprises, it is necessary not only to base themselves on enterprises, but also on projects; not only should we attach importance to technological and management innovation, but also pay attention to governance and market optimization, create a suitable governance platform and market environment from the root, and achieve a win-win situation of project optimization management and long-term development of the company.

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