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Effective Change Management Process for Mega Program Projects

Effective Change Management Process for Mega Program Projects Mega program projects include several sub-projects, require extended periods of time, and incur heavy costs to finish. Because of their project scope, complexity, and size of construction durations and budgets, they may undergo extensive deviations and changes. Therefore, effective change management for a mega program project is critical for the successful completion of the project. Although there are some studies on the development of change management systems and processes, they are mostly limited to a single project and lack practical applicatory analysis. In contrast, this study strives to develop mega program project management systems and processes. Moreover, this study developed a change management process model, and applies the model to real case studies. In addition, this study affirms its validity through surveys about applicability of the developed model. Finally, this study suggests that the process model can cope with changes rapidly. This process model has not only systemized the change management process, but has also used it to improve the efficiency of business processes. Keywords: change management; mega program; management process; management system 1. Introduction analysis of alternative strategies to achieve the phased Recent construction projects have become mega goals in the adjusted plan. The reestablished plan that program projects that are more complicated and require addresses the change factors allows an estimation of heavy construction expenses for a single project. Each the following year's budget according to the level of mega program project is a combination of various changes. Securing the budget for the following year projects, including the necessary infrastructure. in advance is imperative in construction business Therefore, It is essential that a detailed change management. management plan, including the initial plan for the To avoid the risk of an increase in the costs of construction schedule and expenses, be established. If a mega program project and an extension of its a long-term construction project is executed without construction duration, it is necessary to establish establishing a plan that is sufficiently detailed, it a more systematic initial plan as well as a flexible will be difficult to analyze the plan and adjust it process to deal with various changes during the according to changes in the business environment. This execution of the construction project. Therefore, necessitates the reworking of the plan, the occurrence the purpose of this study is to develop the processes of interference, and an increase in expenses. and systems for efficient change management in the Because of the characteristics of a construction program management of the mega program project, project, several change factors such as the budget and which is executed over a long period of time and on a contract for the year, design changes, contract change, large budget. and plan changes affect the initial plan. To address In this study, the concept of change management, these change factors, the plan should be reestablished based on program management, and domestic and by adjusting the initial plan and through a review and international research trends concerning change management processes are examined and analyzed to manage changes in projects such as construction *Contact Author: Min-Jae Lee, Associate Professor, projects that are typically executed over a long period Chung Nam National University, 99 Daehak-ro, of time. Based on the findings of this study, change Yuseong-gu, Daejeon 305-764, Korea management standards are established, change factors Tel: +82-42-821-5677 Fax: +82-42-825-0318 are selected and the necessary management plan is E-mail: lmjcm@cnu.ac.kr devised, and a process model is developed for each ( Received April 8, 2014 ; accepted November 14, 2014 ) Journal of Asian Architecture and Building Engineering/January 2015/88 81 change factor. Finally, the developed process model is conducted to provide guidance for project management applied to a mega program project and verified through and systematic process as shown in Table 2. However, a survey. this study examines a method of performing change management on a program basis instead of a project basis. Research trends reveal that extensive research on change management factors and process proposal have been conducted since 2000. Further, studies on change factors have been conducted actively abroad, but there were limitations concerning the verification of validity through result analysis, for case application. Specifically, research regarding change factors and systems in complex urban development projects have been conducted actively in the country but the components of changes have not been quantified; therefore, there are difficulties in determining the effects of change factors on the whole project. This study examines the program management– based change management model for plan management in mega program projects. For this purpose, the management operation measure through the selection Fig.1. Research Methodology of change management factors is presented first; next, 2. Literature Review the measure for establishing the change management Change management is a generic term for a series data and plan is presented for efficient management of continuous tasks including the estimation of change operation. Finally, the process model to manage factors, analysis of change factors, establishment of project plans continuously is presented by reflecting countermeasures, support of decision making, and the components of change, based on the previously feedback after monitoring, to respond to change established project plan and reestablishing the project factors systematically and promptly and achieve the plan according to the updated conditions. project purpose effectively. According to a literature survey (Table 1.), change management in construction 3. Develop a Change Management Process Model industry is defined as follows. For the systematic management of the project plan, In research literatures, change management is treated change management factors are selected first; next, the as a project management process to minimize changes identification and operation plan for the selected change and execute the project successfully. Also, research factors and the database (DB) establishment method on change management in construction has been for change management are presented, to suggest Table 1. Definition of Change Management Study Definition of Change Management Kim et al. (2010) Managing change factors involves re-performance of business Total management to reflect demands for change and to overcome all forms of resistance in construction Shin (2011) environments. Systematic management technology to deal with changes in the construction environment, from the project Son et al. (2012) planning stage to goal achievement, including the identification of various change factors that could collectively occur in advance, to achieve the initial project goal or the changed goal and minimize risk. Management and adjustment procedure to achieve the goals in the early stages by predicting any change Cha (2013) that could occur or that has occurred already during the entire duration of the construction project and by analyzing the influence of change. Ibbs et al. (2001) Adding or deleting the project goal or range due to change of project cost, schedule, or quality. Forecasting any change that could occur, identifying any change that has already occurred, planning to EPSRC (2004) prevent its impact, and coordinating changes that have occurred during the project execution. It is a project management tool that can solve problems and minimize any changes that could occur or cause Zaho et al. (2009) problems during the project execution, when changes occur in the project. Oracle (2009) Understanding the differences between initial contract requirements and requirements arising after the conclusion of the contract. Hwang et al. (2012) Systematically handling and managing any hindrances during the execution of projects. Moghaddam (2012) A combination of procedures and tools to anticipate, recognize, and coordinate any changes that could occur. 82 JAABE vol.14 no.1 January 2015 Jin Young Cho Table 2. Research Achievement of Change Management Study Research Achievement Propose the process for change management to identify change factors and perform change management Kim et al. (2010) process efficiently. Produce a factor of main variable management based on the working process for systematic variable Shin (2011) management on the projects that inherent various possibilities of change as urban environment refurbishment projects. Define risk-based configuration factors and develop a process and MECA/3DAM/CII methodology to Son et al. (2012) measure and evaluate change factors in mega projects. Cha (2013) Propose a change factor breakdown structure for the change of management in Mixed-use Development. Identifying and managing changes that might occur on a construction project, and providing a process to Oracle (2012) effectively manage changes on construction projects. Hwang et al. (2012) Literature review and questionnaire survey to gain an in-depth understanding of change management. Propose an integrated change management system to represent the key decisions required to implement Motawa (2012) changes and to simulate the iterative cycles of concurrent design and construction resulting from unanticipated changes and their subsequent impacts. the method of establishing the plan according to the according to the initially prepared plan schedule, at changed effects in the mega program project. Further, this time, the program management business personnel this change management process is as shown in Fig.2. requests the contract information from the contractor and registers the preliminary data for the new contract. Changes are identified from the registered contract information through the review of schedules and cost expenses in comparison to the initial plan. Because of the characteristics of a mega program project, design changes and contract suspension occur frequently in most cases and, accordingly, any change in the initially prepared contract details should be identified. To identify any design change and changes associated with the contract suspension, the program management business personnel request the design change and contract suspension information from the contractor and identify changes when design change and contract suspension occur during the execution of the construction project, when the approval of the owner is available. Mega program projects are conducted mostly in national projects, and various changes such as the addition and deletion of new projects, adjustment of project schedules and cost expenses occur according to the changes in domes tic and international Fig.2. Change Management Process environments. Further, the mega program project is 3.1 Selection of Change Factors executed over a long period of time because of its In this study, new contract, contract suspension, characteristics; therefore, modifying the initial plan budget change, and performance management during the period of project execution is unavoidable including design change and plan change are selected because of budget and schedule changes. as the change factors that influence the schedule and Especially in the case of long-term continuous cost expenses of a project plan. A new contract is contracts among contract methods for domestic selected as a change factor since changes in schedule national projects, budget security remains uncertain. and cost expenses occur due to the contract progress Therefore, the project contract is concluded on the and bid-dropping rate. Further, changes in the schedule basis of the whole project expense, but the project is and cost expenses occur due to a change in the cost executed on an annual basis according to the amount expense for each year according to the contractual of budget secured and, therefore, changes in cost characteristics of domestic national projects. Therefore, expenses occur every year. At this time, the project the change in the budget for the relevant year is management business personnel receive information on selected as a change factor. annual budget and plan changes. In case these changes 3.2 Identification of Change Factors affect the whole project period and cost expenses, the Considering the program management for a mega project management business personnel consult with program project in which a new contract is ordered the owner and register these changes. JAABE vol.14 no.1 January 2015 Jin Young Cho 83 The plan change occurs and disappears due to result data to the plan and establishing the plan again. various reasons such as verification of the validity When establishing the plan, the previous project of the project, change of plans, and budget shortage results are applied for each project. The previous during the period of execution of the construction project results can be separated into the result of cost project. Various changes in the initial project plan expenses and the result of progress, which are then occur accordingly, and the flow of changes due to the applied to each project. addition and deletion of new projects, adjustment of When these two results for each project are applied project schedules, and business expenses is identified and collected, the program-level results can be as shown in Fig.3. arranged. (Fig.4.) Fig.4. Updating Historical Project Data 3.3.2 Establishment of Plan for the Year Fig.3. Flow of Changes Due to Plan Changes After the project results are applied, the budget for the relevant year is applied, and the budget plan For the identification of changes due to these plan is established separately according to the existence changes, cost expenses are modified in case of deletion, of contract. The budget application according to the and changes in the additional items of the schedule existence of a contract can be classified into four and cost expenses are identified in case of new project case types. Fig.5. below shows the cases of budget addition. For the plan changes, the schedule should application according to the existence of a contract. be reviewed through an analysis of the relations between projects and the entire cost expenses should be examined again through an analysis of variations in cost expenses. 3.3 Change Management Plan For the identified change factors attributed to changes in schedules and cost expenses during the execution of the program management business, the level of their influence should be aggregated and Fig.5. Cases of Contract Budget Application analyzed through the change management operation. Therefore, the data establishment measures for Cases 1 and 2 are the projects for which contracts identifying change factors and analyzing their effects, exist, and cases 3 and 4 are the projects for which and the management measures for each change factor contracts do not exist. The method of establishing are presented. the detailed budget plan according to the concluded For successful large-scale urban development contracts is as shown in Fig.6. projects, a detailed project management system should be established. The management standard progress schedule developed during the establishment of the system is used as the basic data for the plan establishment. There are two types of plans established in large-scale urban development program projects, which are: (1) the plan of cost expenses during the planned construction period for efficient budget allocation and (2) the plan of progress of facility work except for land cost among the total project expenses, and services including design and construction Fig.6. Relationship between Budget and Contract supervision on an annual basis. In this study, three steps are suggested as measures For a project for which a contract exists, the budget to establish the plans of project expenses and progress. plan for the relevant year is established based on the 3.3.1 Application of Project Progress to the Plan prearranged project progress schedule. At this time, It is possible to improve the reliability of the models the prearranged project progress schedule is prepared of plan establishment by applying the previous project based on the construction expenses (earned value) only; 84 JAABE vol.14 no.1 January 2015 Jin Young Cho therefore, the plan for government-furnished material schedule and cost expenses of projects managed by should be applied separately. For facility construction business entities. work of a project for which a contract does not exist, the The monthly and annual planning data for each standard progress curve (S-Curve) is applied to establish project aggregated through this may be used by each the budget plan for the relevant year; for field application, business entity. Further, it is possible to present the the linear graph is used to establish the budget plan. base date for securing the budget by predicting the In this way, to establish the budget plan, the budget budget to be secured for the next year in detail. information for the relevant year, prearranged project To establish the plan effectively based on the plan progress schedule, standard progress curve, and linear establishment measure in three steps including the graph should be utilized. Data collected for each project arrangement of business results, establishment of the and each month of the relevant year can be used for plan for the relevant year, and the establishment of program-level progress management in the relevant year. the future plan, as presented above, it is necessary to 3.3.3 Establishment of a Future Plan modify the plan every year, after the budget is finalized After the previous project results and the budget at the beginning of the year. for the relevant year are applied, the future plan is 3.4 Change Management Process and System Model established. The future plan is an important element for The change management process model for each the establishment of the budget for the next year and change factor is as shown in Fig.8. the medium and long-term plans; in the case of large- The change management process flow is established scale urban construction projects, these are long-term in three steps. Step 1 for the identification of change projects and, therefore, a more thorough examination is established to collect, check, and review the for the establishment of future plans is necessary. The information from new contracts, design changes, and established future plans can be classified into three plan changes. Step 2 for change management is the cases according to the existence of a contract. Fig.7. step to modify DB according to the change information below shows the cases of expense application in future for each detected change factor including schedule, according to the existence of a contract. project expenses, and progress table, to accumulate change data. Step 3 is concerned with re-establishing and storing the plan in a temporary plan DB through the change DB and plan establishment module, and deciding whether or not to revise the plan through an analysis and comparison of the re-established plan with the previous plan. Change management in a mega program project is more complicated than change management in an individual project, and is less efficient and difficult Fig.7. Case of Contract Funding Application to perform without Information Technology (IT) Case 1 is the project for which a contract exists, and involvement. Specifically, problems in the offline cases 2 and 3 are the projects for which contracts do not execution of change management are as follows. exist. The detailed future plans established according to the existence of contracts are as shown in Fig.9. For Case 1, the previous business result and the budget for the relevant year are applied and, then, the rest can be treated as future expenses. For the government- supplied material expense, it can also be treated as a future expense according to the business result and the budget for the relevant year. In case the contract exists, the plan is established based on the prearranged project progress table prepared in the actual construction field as mentioned in the budget plan for the relevant year. The projects with no contracts can be classified into two types according to the existence of a budget for the relevant year as shown in Cases 2 and 3. In case the budget exists but a contract does not, as in Case 2, the plan is established as future expenses, except for the budget for the relevant year. In case the budget does not exist as in Case 3, the plan is established with an S-Curve or linear graph for the whole amount of project expenses. To establish the plan at the program level, it is essential to provide accurate data regarding the Fig.8. Change Management Process Model JAABE vol.14 no.1 January 2015 Jin Young Cho 85 First, it is less efficient to manage the data volume management system; the re-established plan is offline due to the existence of numerous sub-projects compared and analyzed with the previous plan. The in the mega program project. cases are applied according to the system work flow as Second, the mega program project is executed over shown in Fig.10. a long period of time as well as by various business entities. A lot of information generated from each business entity should be managed systematically and confirmed frequently through summing up and analysis of accumulated information. Without database management through the system, it is difficult to maintain the credibility and timeliness of information. Finally, offline change management cannot provide the convenience and information regarding prompt detection and analysis of change factors to program Fig.10. System Process management control personnel. Therefore, the change management system model is The initial activity list and PBCOA list are arranged, developed to secure work efficiency and reliability. and the initial business plan is established in connection The change management system model is established with P-A. The contents of changes occurring until as shown in Fig.9. to improve the system efficiency the year "n-1" are arranged and applied to the P-A-C and perform the change management business in list, and the plan for year "n-1" is established based connection with the program management system. on the findings. The established plan for year "n- The same common code system established in 1" is compared with the initial plan to determine the the program management is applied and used for amount of change. The contents of change occurring the change management system model, and changes for each change factor and P-A-C changes during the precipitated every month by change factors are operation of program management are confirmed, registered and updated in the Project Budget Cost of and the plan for year "n" is established based on the Accounts (PBCOA) - Activity-Contract (P-A-C) table, findings. The amount of changes are confirmed through which constitutes the fundamental data for determining the comparison between the plan for year "n", initial the level of influence of the changes. The change data plan, and plan for year "n-1". Further, the causes for is also accumulated in the change management DB. the change are determined through the comprehensive Further, the plan establishment module is developed analysis at the time of establishment of the plan for from the programmed measure to establish the year "n", and the change management system is plan presented in this study, and the change data is applied in the flow of estimating the required budget in accumulated in the plan establishment DB. year "n+1" for each business entity for normal project promotion. It was confirmed from this case that many changes occurred in the initially established business plan along with changes in business environments. Further, it was confirmed that it was possible to determine the level of influence of changes on the whole project and predict the direction of project progress in the future by managing the contents of change for each change factor systematically. It was possible to manage the plan based on program management efficiently, and promptly detect and respond to changes that occur based on the program management through the change management process Fig.9. Change Management System Model model and change management system model 4. Case Study presented in this study. Therefore, it was confirmed, For case applications, common code extracted from through the application of change management process the Program Management Information System (PgMIS) model to the case, that the change management of the urban development project was registered in business could be performed effectively. the change management system to unify the code and initial data; the changed data extracted from PgMIS 5. Questionnaire and Model Validation were registered in the change management system to The survey was conducted to verify the change accumulate data in the change management DB. The management process presented in this study and the plan is re-established using the change management research result, to verify its usability in actual business DB and the plan establishment module in the change practice, and to affirm the validity of the research 86 JAABE vol.14 no.1 January 2015 Jin Young Cho result. Twenty-four out of 25 copies of the survey targeting ordering organizations and construction management (CM)/project management (PM) business personnel were collected through face-to-face interviews and e-mail inquiries for 19 days. The targets of the survey included CM/PM personnel who have participated in mega program projects and owner agencies. Seventy-five percent (18 respondents) of those Fig.11. Survey Result of Change Management System Model surveyed are in a CM/PM-related business, 13% are in comparison to the practical usability. Further, on the owner side (three respondents), 8% are in the those surveyed indicated that PgMIS would be an construction business (two respondents), and 4% are essential system for handling a large amount of data in the consulting business (one respondent). Further, and information in the case of mega program projects, 42% (10 respondents) of those surveyed have less than and operation of data in connection with the change 10 years of work experience and 58% (14 respondents) management system would be appropriate in terms of have more than 10 years of work experience. sharing and managing information. However, because Twenty-one out of 24 respondents answered that the PgMIS system should be implemented to optimize they have experienced change including change of the change management business process from the project plan or design in a mega program project that early stage of development, and the expenses required could affect the project, and the reasons include change for the system development also should be considered, of project plan (30%), change of project duration (39%), there were opinions that careful consideration was and change of cost expenses (32%). required to apply the PgMIS system to other projects. Seventy-three percent of those surveyed answered that five change factors (new contract, design 6. Conclusion change, contract suspension, budget change, and In this study, the contents of previous studies on the plan change) selected in this study that affected the management of change were analyzed and a change plan management were significant. However, those management process model for managing a plan based surveyed answered that a new contract was less on program management was proposed. significant among those change factors. In addition, Factors influencing the schedule and business there were opinions that even if various change factors expenses of a project plan based on the plan established might exist in mega program projects, the change to achieve goals were selected as the change factors for factors presented in this study were established too the change management; the contract, design change, broadly so that a consideration of detailed factors was contract suspension, budget change, plan change, relatively inadequate. and performance were drawn as the change factors in For the survey on the change management process preceding research literature on the characteristics of model, regarding three change factors including mega program projects. new contract, design change, and plan change (for A logical model was established to detect and the efficient operation of change factors selected accumulate change factor data automatically according in this study), positive answers were obtained for to the program management business performance. The both practical usability and applicability to other management plan for each change factor is established, projects. However, those surveyed indicated that and the systematic plan establishment measure was change management in the operations stage would presented by applying changes. The analysis measure be important, but the measures to deal with changes to determine the level of change easily by quantifying in a project that required various changes in its the effect of change on the plan through a comparison early stage, such as large-scale land development or with the previous plan and the analysis measure was urban environmental maintenance, were insufficient. presented. Further, there were opinions that actual preparations The change management DB was established to to internally deal with various changes in system and accumulate the components of change for each change logic would be necessary for applying it to similar factor in the P-A-C table and improve the reliability projects in future. of data. The plan establishment model was developed The result of the survey on the practical usability from the systematic plan establishment measure, and and applicability of the change management system the change management system was established to model linked with PgMIS presented in this study for reduce the plan establishment time; this required a other projects is as shown in Fig.11. significant amount of time and effort and improved the Positive answers were obtained from more than 70% efficiency of the change management business. of those surveyed for practical usability including 8% To verify the change management process, a for very high and 63% for high, but there were also domestic mega program project was selected and the negative answers on the applicability to other projects JAABE vol.14 no.1 January 2015 Jin Young Cho 87 13) Son, M. and Hyun, C. (2012), Development of Measurement and change management process model was applied. The Evaluation Process for Risk-based Configuration Factors in Mixed application result showed that there are changes in Used Development in Urban Regeneration Projects, Korean initial project plan, and it was possible to determine Journal of Construction Engineering and Management 13(6), the effect of the change on the whole project and pp.94-106. predict the direction of project progress in the future. 14) Shin, S. (2012), Deduction of Change Management Factors and Weight Estimation based on ANP in Urban Renewal Project, Therefore, it was confirmed through the application University of Seoul Master's Thesis, Korea. of the change management process model to the case 15) Zhao, Z. et al. (2010), Prediction System for Change Management that the change management business was performed in Construction Project, Journal of Construction Engineering and effectively. Further, the usability and validity of the Management Vol. 136 No. 6 , pp.659-669. process model developed in this study were verified through the survey targeting people who experienced the program management business. It is expected that it would be possible to play a significant role in the successful completion of the project by identifying the specific change factors that could affect the schedule and business expenses, and managing the system efficiently based on this study. Acknowledgements "This research was supported by a grant (13RDRP-B066173) from the Regional Development Research Program funded by the Ministry of Land, Infrastructure and Transport of the Korean Government." References 1) Cha, Y. (2013), Development of Change Factor Breakdown Structure for Change Management in Mixed-use Development, University of Seoul Master's Thesis, Korea. 2) Engineering and Physical Science Research Council (EPSRC), (2004), Managing Changes in Construction Projects. 3) Hwang B. and Lee K. (2012), Construction project change management in Singapore: Status, importance and impact, International Journal of Project Management 30, pp.817-826. 4) Ibbs, C. et al. (2001), Project Change Management System, Journal of Management in Engineering, Vol. 17 No. 3, pp.159-165. 5) Kim, J. et al. (2009), A Conceptual Model of Intelligent Program Management Information Systems (iPMIS) for Urban Renewal Mega Projects in Korea, Journal of Asian Architecture and Building Engineering, Vol. 8, No. 1, pp.57-64. 6) Kim, K. R and Yu, J. H. (2010). Suggest a Work Process of Change Management in a Urban Regeneration Project, Proceedings of KICEM Annual Conference, Korea Institute of Construction Engineering and Management 10 pp.245-246. 7) Lee, C. et al. (2013), A Syst e m Mode l for Ana l yz i ng a nd Accumulating Construction Work Crew's Productivity Data Using Image Processing Technologies, Journal of Asian Architecture and Building Engineering, Vol. 13, No. 3, pp.547-554. 8) Lee, M. and Choi, M. (2010), Attitudes of Engineers Relate to Prevention of Change Order Claims, Journal of Asian Architecture and Building Engineering, 9(1), pp.87-94. 9) Lee, M. and Lee, K. (2012), Performance and Cost Effectiveness Analysis of the Active External Post Tensioning System, Journal of Asian Architecture and Building Engineering, 11(1), pp.139- 10) Moghaddam, A. (2012), Change management and change process model for the Iranian construction industry, International Journal of Business Research and Management, Vol. 2 No. 2, pp.85-94. 11) Motawa, A. (2012), A Systematic Approach to Modelling Change Processes in Construction Projects, The Australian Journal of Construction Economics and Building, Vol. 5 No. 1, pp.23-31. 12) Oracle. (2012), Oracle White Paper-Change Management Best Practices for the Engineering and Construction Industry, United States of America. 88 JAABE vol.14 no.1 January 2015 Jin Young Cho http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Asian Architecture and Building Engineering Taylor & Francis

Effective Change Management Process for Mega Program Projects

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Taylor & Francis
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© 2018 Architectural Institute of Japan
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1347-2852
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Abstract

Mega program projects include several sub-projects, require extended periods of time, and incur heavy costs to finish. Because of their project scope, complexity, and size of construction durations and budgets, they may undergo extensive deviations and changes. Therefore, effective change management for a mega program project is critical for the successful completion of the project. Although there are some studies on the development of change management systems and processes, they are mostly limited to a single project and lack practical applicatory analysis. In contrast, this study strives to develop mega program project management systems and processes. Moreover, this study developed a change management process model, and applies the model to real case studies. In addition, this study affirms its validity through surveys about applicability of the developed model. Finally, this study suggests that the process model can cope with changes rapidly. This process model has not only systemized the change management process, but has also used it to improve the efficiency of business processes. Keywords: change management; mega program; management process; management system 1. Introduction analysis of alternative strategies to achieve the phased Recent construction projects have become mega goals in the adjusted plan. The reestablished plan that program projects that are more complicated and require addresses the change factors allows an estimation of heavy construction expenses for a single project. Each the following year's budget according to the level of mega program project is a combination of various changes. Securing the budget for the following year projects, including the necessary infrastructure. in advance is imperative in construction business Therefore, It is essential that a detailed change management. management plan, including the initial plan for the To avoid the risk of an increase in the costs of construction schedule and expenses, be established. If a mega program project and an extension of its a long-term construction project is executed without construction duration, it is necessary to establish establishing a plan that is sufficiently detailed, it a more systematic initial plan as well as a flexible will be difficult to analyze the plan and adjust it process to deal with various changes during the according to changes in the business environment. This execution of the construction project. Therefore, necessitates the reworking of the plan, the occurrence the purpose of this study is to develop the processes of interference, and an increase in expenses. and systems for efficient change management in the Because of the characteristics of a construction program management of the mega program project, project, several change factors such as the budget and which is executed over a long period of time and on a contract for the year, design changes, contract change, large budget. and plan changes affect the initial plan. To address In this study, the concept of change management, these change factors, the plan should be reestablished based on program management, and domestic and by adjusting the initial plan and through a review and international research trends concerning change management processes are examined and analyzed to manage changes in projects such as construction *Contact Author: Min-Jae Lee, Associate Professor, projects that are typically executed over a long period Chung Nam National University, 99 Daehak-ro, of time. Based on the findings of this study, change Yuseong-gu, Daejeon 305-764, Korea management standards are established, change factors Tel: +82-42-821-5677 Fax: +82-42-825-0318 are selected and the necessary management plan is E-mail: lmjcm@cnu.ac.kr devised, and a process model is developed for each ( Received April 8, 2014 ; accepted November 14, 2014 ) Journal of Asian Architecture and Building Engineering/January 2015/88 81 change factor. Finally, the developed process model is conducted to provide guidance for project management applied to a mega program project and verified through and systematic process as shown in Table 2. However, a survey. this study examines a method of performing change management on a program basis instead of a project basis. Research trends reveal that extensive research on change management factors and process proposal have been conducted since 2000. Further, studies on change factors have been conducted actively abroad, but there were limitations concerning the verification of validity through result analysis, for case application. Specifically, research regarding change factors and systems in complex urban development projects have been conducted actively in the country but the components of changes have not been quantified; therefore, there are difficulties in determining the effects of change factors on the whole project. This study examines the program management– based change management model for plan management in mega program projects. For this purpose, the management operation measure through the selection Fig.1. Research Methodology of change management factors is presented first; next, 2. Literature Review the measure for establishing the change management Change management is a generic term for a series data and plan is presented for efficient management of continuous tasks including the estimation of change operation. Finally, the process model to manage factors, analysis of change factors, establishment of project plans continuously is presented by reflecting countermeasures, support of decision making, and the components of change, based on the previously feedback after monitoring, to respond to change established project plan and reestablishing the project factors systematically and promptly and achieve the plan according to the updated conditions. project purpose effectively. According to a literature survey (Table 1.), change management in construction 3. Develop a Change Management Process Model industry is defined as follows. For the systematic management of the project plan, In research literatures, change management is treated change management factors are selected first; next, the as a project management process to minimize changes identification and operation plan for the selected change and execute the project successfully. Also, research factors and the database (DB) establishment method on change management in construction has been for change management are presented, to suggest Table 1. Definition of Change Management Study Definition of Change Management Kim et al. (2010) Managing change factors involves re-performance of business Total management to reflect demands for change and to overcome all forms of resistance in construction Shin (2011) environments. Systematic management technology to deal with changes in the construction environment, from the project Son et al. (2012) planning stage to goal achievement, including the identification of various change factors that could collectively occur in advance, to achieve the initial project goal or the changed goal and minimize risk. Management and adjustment procedure to achieve the goals in the early stages by predicting any change Cha (2013) that could occur or that has occurred already during the entire duration of the construction project and by analyzing the influence of change. Ibbs et al. (2001) Adding or deleting the project goal or range due to change of project cost, schedule, or quality. Forecasting any change that could occur, identifying any change that has already occurred, planning to EPSRC (2004) prevent its impact, and coordinating changes that have occurred during the project execution. It is a project management tool that can solve problems and minimize any changes that could occur or cause Zaho et al. (2009) problems during the project execution, when changes occur in the project. Oracle (2009) Understanding the differences between initial contract requirements and requirements arising after the conclusion of the contract. Hwang et al. (2012) Systematically handling and managing any hindrances during the execution of projects. Moghaddam (2012) A combination of procedures and tools to anticipate, recognize, and coordinate any changes that could occur. 82 JAABE vol.14 no.1 January 2015 Jin Young Cho Table 2. Research Achievement of Change Management Study Research Achievement Propose the process for change management to identify change factors and perform change management Kim et al. (2010) process efficiently. Produce a factor of main variable management based on the working process for systematic variable Shin (2011) management on the projects that inherent various possibilities of change as urban environment refurbishment projects. Define risk-based configuration factors and develop a process and MECA/3DAM/CII methodology to Son et al. (2012) measure and evaluate change factors in mega projects. Cha (2013) Propose a change factor breakdown structure for the change of management in Mixed-use Development. Identifying and managing changes that might occur on a construction project, and providing a process to Oracle (2012) effectively manage changes on construction projects. Hwang et al. (2012) Literature review and questionnaire survey to gain an in-depth understanding of change management. Propose an integrated change management system to represent the key decisions required to implement Motawa (2012) changes and to simulate the iterative cycles of concurrent design and construction resulting from unanticipated changes and their subsequent impacts. the method of establishing the plan according to the according to the initially prepared plan schedule, at changed effects in the mega program project. Further, this time, the program management business personnel this change management process is as shown in Fig.2. requests the contract information from the contractor and registers the preliminary data for the new contract. Changes are identified from the registered contract information through the review of schedules and cost expenses in comparison to the initial plan. Because of the characteristics of a mega program project, design changes and contract suspension occur frequently in most cases and, accordingly, any change in the initially prepared contract details should be identified. To identify any design change and changes associated with the contract suspension, the program management business personnel request the design change and contract suspension information from the contractor and identify changes when design change and contract suspension occur during the execution of the construction project, when the approval of the owner is available. Mega program projects are conducted mostly in national projects, and various changes such as the addition and deletion of new projects, adjustment of project schedules and cost expenses occur according to the changes in domes tic and international Fig.2. Change Management Process environments. Further, the mega program project is 3.1 Selection of Change Factors executed over a long period of time because of its In this study, new contract, contract suspension, characteristics; therefore, modifying the initial plan budget change, and performance management during the period of project execution is unavoidable including design change and plan change are selected because of budget and schedule changes. as the change factors that influence the schedule and Especially in the case of long-term continuous cost expenses of a project plan. A new contract is contracts among contract methods for domestic selected as a change factor since changes in schedule national projects, budget security remains uncertain. and cost expenses occur due to the contract progress Therefore, the project contract is concluded on the and bid-dropping rate. Further, changes in the schedule basis of the whole project expense, but the project is and cost expenses occur due to a change in the cost executed on an annual basis according to the amount expense for each year according to the contractual of budget secured and, therefore, changes in cost characteristics of domestic national projects. Therefore, expenses occur every year. At this time, the project the change in the budget for the relevant year is management business personnel receive information on selected as a change factor. annual budget and plan changes. In case these changes 3.2 Identification of Change Factors affect the whole project period and cost expenses, the Considering the program management for a mega project management business personnel consult with program project in which a new contract is ordered the owner and register these changes. JAABE vol.14 no.1 January 2015 Jin Young Cho 83 The plan change occurs and disappears due to result data to the plan and establishing the plan again. various reasons such as verification of the validity When establishing the plan, the previous project of the project, change of plans, and budget shortage results are applied for each project. The previous during the period of execution of the construction project results can be separated into the result of cost project. Various changes in the initial project plan expenses and the result of progress, which are then occur accordingly, and the flow of changes due to the applied to each project. addition and deletion of new projects, adjustment of When these two results for each project are applied project schedules, and business expenses is identified and collected, the program-level results can be as shown in Fig.3. arranged. (Fig.4.) Fig.4. Updating Historical Project Data 3.3.2 Establishment of Plan for the Year Fig.3. Flow of Changes Due to Plan Changes After the project results are applied, the budget for the relevant year is applied, and the budget plan For the identification of changes due to these plan is established separately according to the existence changes, cost expenses are modified in case of deletion, of contract. The budget application according to the and changes in the additional items of the schedule existence of a contract can be classified into four and cost expenses are identified in case of new project case types. Fig.5. below shows the cases of budget addition. For the plan changes, the schedule should application according to the existence of a contract. be reviewed through an analysis of the relations between projects and the entire cost expenses should be examined again through an analysis of variations in cost expenses. 3.3 Change Management Plan For the identified change factors attributed to changes in schedules and cost expenses during the execution of the program management business, the level of their influence should be aggregated and Fig.5. Cases of Contract Budget Application analyzed through the change management operation. Therefore, the data establishment measures for Cases 1 and 2 are the projects for which contracts identifying change factors and analyzing their effects, exist, and cases 3 and 4 are the projects for which and the management measures for each change factor contracts do not exist. The method of establishing are presented. the detailed budget plan according to the concluded For successful large-scale urban development contracts is as shown in Fig.6. projects, a detailed project management system should be established. The management standard progress schedule developed during the establishment of the system is used as the basic data for the plan establishment. There are two types of plans established in large-scale urban development program projects, which are: (1) the plan of cost expenses during the planned construction period for efficient budget allocation and (2) the plan of progress of facility work except for land cost among the total project expenses, and services including design and construction Fig.6. Relationship between Budget and Contract supervision on an annual basis. In this study, three steps are suggested as measures For a project for which a contract exists, the budget to establish the plans of project expenses and progress. plan for the relevant year is established based on the 3.3.1 Application of Project Progress to the Plan prearranged project progress schedule. At this time, It is possible to improve the reliability of the models the prearranged project progress schedule is prepared of plan establishment by applying the previous project based on the construction expenses (earned value) only; 84 JAABE vol.14 no.1 January 2015 Jin Young Cho therefore, the plan for government-furnished material schedule and cost expenses of projects managed by should be applied separately. For facility construction business entities. work of a project for which a contract does not exist, the The monthly and annual planning data for each standard progress curve (S-Curve) is applied to establish project aggregated through this may be used by each the budget plan for the relevant year; for field application, business entity. Further, it is possible to present the the linear graph is used to establish the budget plan. base date for securing the budget by predicting the In this way, to establish the budget plan, the budget budget to be secured for the next year in detail. information for the relevant year, prearranged project To establish the plan effectively based on the plan progress schedule, standard progress curve, and linear establishment measure in three steps including the graph should be utilized. Data collected for each project arrangement of business results, establishment of the and each month of the relevant year can be used for plan for the relevant year, and the establishment of program-level progress management in the relevant year. the future plan, as presented above, it is necessary to 3.3.3 Establishment of a Future Plan modify the plan every year, after the budget is finalized After the previous project results and the budget at the beginning of the year. for the relevant year are applied, the future plan is 3.4 Change Management Process and System Model established. The future plan is an important element for The change management process model for each the establishment of the budget for the next year and change factor is as shown in Fig.8. the medium and long-term plans; in the case of large- The change management process flow is established scale urban construction projects, these are long-term in three steps. Step 1 for the identification of change projects and, therefore, a more thorough examination is established to collect, check, and review the for the establishment of future plans is necessary. The information from new contracts, design changes, and established future plans can be classified into three plan changes. Step 2 for change management is the cases according to the existence of a contract. Fig.7. step to modify DB according to the change information below shows the cases of expense application in future for each detected change factor including schedule, according to the existence of a contract. project expenses, and progress table, to accumulate change data. Step 3 is concerned with re-establishing and storing the plan in a temporary plan DB through the change DB and plan establishment module, and deciding whether or not to revise the plan through an analysis and comparison of the re-established plan with the previous plan. Change management in a mega program project is more complicated than change management in an individual project, and is less efficient and difficult Fig.7. Case of Contract Funding Application to perform without Information Technology (IT) Case 1 is the project for which a contract exists, and involvement. Specifically, problems in the offline cases 2 and 3 are the projects for which contracts do not execution of change management are as follows. exist. The detailed future plans established according to the existence of contracts are as shown in Fig.9. For Case 1, the previous business result and the budget for the relevant year are applied and, then, the rest can be treated as future expenses. For the government- supplied material expense, it can also be treated as a future expense according to the business result and the budget for the relevant year. In case the contract exists, the plan is established based on the prearranged project progress table prepared in the actual construction field as mentioned in the budget plan for the relevant year. The projects with no contracts can be classified into two types according to the existence of a budget for the relevant year as shown in Cases 2 and 3. In case the budget exists but a contract does not, as in Case 2, the plan is established as future expenses, except for the budget for the relevant year. In case the budget does not exist as in Case 3, the plan is established with an S-Curve or linear graph for the whole amount of project expenses. To establish the plan at the program level, it is essential to provide accurate data regarding the Fig.8. Change Management Process Model JAABE vol.14 no.1 January 2015 Jin Young Cho 85 First, it is less efficient to manage the data volume management system; the re-established plan is offline due to the existence of numerous sub-projects compared and analyzed with the previous plan. The in the mega program project. cases are applied according to the system work flow as Second, the mega program project is executed over shown in Fig.10. a long period of time as well as by various business entities. A lot of information generated from each business entity should be managed systematically and confirmed frequently through summing up and analysis of accumulated information. Without database management through the system, it is difficult to maintain the credibility and timeliness of information. Finally, offline change management cannot provide the convenience and information regarding prompt detection and analysis of change factors to program Fig.10. System Process management control personnel. Therefore, the change management system model is The initial activity list and PBCOA list are arranged, developed to secure work efficiency and reliability. and the initial business plan is established in connection The change management system model is established with P-A. The contents of changes occurring until as shown in Fig.9. to improve the system efficiency the year "n-1" are arranged and applied to the P-A-C and perform the change management business in list, and the plan for year "n-1" is established based connection with the program management system. on the findings. The established plan for year "n- The same common code system established in 1" is compared with the initial plan to determine the the program management is applied and used for amount of change. The contents of change occurring the change management system model, and changes for each change factor and P-A-C changes during the precipitated every month by change factors are operation of program management are confirmed, registered and updated in the Project Budget Cost of and the plan for year "n" is established based on the Accounts (PBCOA) - Activity-Contract (P-A-C) table, findings. The amount of changes are confirmed through which constitutes the fundamental data for determining the comparison between the plan for year "n", initial the level of influence of the changes. The change data plan, and plan for year "n-1". Further, the causes for is also accumulated in the change management DB. the change are determined through the comprehensive Further, the plan establishment module is developed analysis at the time of establishment of the plan for from the programmed measure to establish the year "n", and the change management system is plan presented in this study, and the change data is applied in the flow of estimating the required budget in accumulated in the plan establishment DB. year "n+1" for each business entity for normal project promotion. It was confirmed from this case that many changes occurred in the initially established business plan along with changes in business environments. Further, it was confirmed that it was possible to determine the level of influence of changes on the whole project and predict the direction of project progress in the future by managing the contents of change for each change factor systematically. It was possible to manage the plan based on program management efficiently, and promptly detect and respond to changes that occur based on the program management through the change management process Fig.9. Change Management System Model model and change management system model 4. Case Study presented in this study. Therefore, it was confirmed, For case applications, common code extracted from through the application of change management process the Program Management Information System (PgMIS) model to the case, that the change management of the urban development project was registered in business could be performed effectively. the change management system to unify the code and initial data; the changed data extracted from PgMIS 5. Questionnaire and Model Validation were registered in the change management system to The survey was conducted to verify the change accumulate data in the change management DB. The management process presented in this study and the plan is re-established using the change management research result, to verify its usability in actual business DB and the plan establishment module in the change practice, and to affirm the validity of the research 86 JAABE vol.14 no.1 January 2015 Jin Young Cho result. Twenty-four out of 25 copies of the survey targeting ordering organizations and construction management (CM)/project management (PM) business personnel were collected through face-to-face interviews and e-mail inquiries for 19 days. The targets of the survey included CM/PM personnel who have participated in mega program projects and owner agencies. Seventy-five percent (18 respondents) of those Fig.11. Survey Result of Change Management System Model surveyed are in a CM/PM-related business, 13% are in comparison to the practical usability. Further, on the owner side (three respondents), 8% are in the those surveyed indicated that PgMIS would be an construction business (two respondents), and 4% are essential system for handling a large amount of data in the consulting business (one respondent). Further, and information in the case of mega program projects, 42% (10 respondents) of those surveyed have less than and operation of data in connection with the change 10 years of work experience and 58% (14 respondents) management system would be appropriate in terms of have more than 10 years of work experience. sharing and managing information. However, because Twenty-one out of 24 respondents answered that the PgMIS system should be implemented to optimize they have experienced change including change of the change management business process from the project plan or design in a mega program project that early stage of development, and the expenses required could affect the project, and the reasons include change for the system development also should be considered, of project plan (30%), change of project duration (39%), there were opinions that careful consideration was and change of cost expenses (32%). required to apply the PgMIS system to other projects. Seventy-three percent of those surveyed answered that five change factors (new contract, design 6. Conclusion change, contract suspension, budget change, and In this study, the contents of previous studies on the plan change) selected in this study that affected the management of change were analyzed and a change plan management were significant. However, those management process model for managing a plan based surveyed answered that a new contract was less on program management was proposed. significant among those change factors. In addition, Factors influencing the schedule and business there were opinions that even if various change factors expenses of a project plan based on the plan established might exist in mega program projects, the change to achieve goals were selected as the change factors for factors presented in this study were established too the change management; the contract, design change, broadly so that a consideration of detailed factors was contract suspension, budget change, plan change, relatively inadequate. and performance were drawn as the change factors in For the survey on the change management process preceding research literature on the characteristics of model, regarding three change factors including mega program projects. new contract, design change, and plan change (for A logical model was established to detect and the efficient operation of change factors selected accumulate change factor data automatically according in this study), positive answers were obtained for to the program management business performance. The both practical usability and applicability to other management plan for each change factor is established, projects. However, those surveyed indicated that and the systematic plan establishment measure was change management in the operations stage would presented by applying changes. The analysis measure be important, but the measures to deal with changes to determine the level of change easily by quantifying in a project that required various changes in its the effect of change on the plan through a comparison early stage, such as large-scale land development or with the previous plan and the analysis measure was urban environmental maintenance, were insufficient. presented. Further, there were opinions that actual preparations The change management DB was established to to internally deal with various changes in system and accumulate the components of change for each change logic would be necessary for applying it to similar factor in the P-A-C table and improve the reliability projects in future. of data. The plan establishment model was developed The result of the survey on the practical usability from the systematic plan establishment measure, and and applicability of the change management system the change management system was established to model linked with PgMIS presented in this study for reduce the plan establishment time; this required a other projects is as shown in Fig.11. significant amount of time and effort and improved the Positive answers were obtained from more than 70% efficiency of the change management business. of those surveyed for practical usability including 8% To verify the change management process, a for very high and 63% for high, but there were also domestic mega program project was selected and the negative answers on the applicability to other projects JAABE vol.14 no.1 January 2015 Jin Young Cho 87 13) Son, M. and Hyun, C. (2012), Development of Measurement and change management process model was applied. The Evaluation Process for Risk-based Configuration Factors in Mixed application result showed that there are changes in Used Development in Urban Regeneration Projects, Korean initial project plan, and it was possible to determine Journal of Construction Engineering and Management 13(6), the effect of the change on the whole project and pp.94-106. predict the direction of project progress in the future. 14) Shin, S. (2012), Deduction of Change Management Factors and Weight Estimation based on ANP in Urban Renewal Project, Therefore, it was confirmed through the application University of Seoul Master's Thesis, Korea. of the change management process model to the case 15) Zhao, Z. et al. (2010), Prediction System for Change Management that the change management business was performed in Construction Project, Journal of Construction Engineering and effectively. Further, the usability and validity of the Management Vol. 136 No. 6 , pp.659-669. process model developed in this study were verified through the survey targeting people who experienced the program management business. It is expected that it would be possible to play a significant role in the successful completion of the project by identifying the specific change factors that could affect the schedule and business expenses, and managing the system efficiently based on this study. Acknowledgements "This research was supported by a grant (13RDRP-B066173) from the Regional Development Research Program funded by the Ministry of Land, Infrastructure and Transport of the Korean Government." References 1) Cha, Y. (2013), Development of Change Factor Breakdown Structure for Change Management in Mixed-use Development, University of Seoul Master's Thesis, Korea. 2) Engineering and Physical Science Research Council (EPSRC), (2004), Managing Changes in Construction Projects. 3) Hwang B. and Lee K. (2012), Construction project change management in Singapore: Status, importance and impact, International Journal of Project Management 30, pp.817-826. 4) Ibbs, C. et al. (2001), Project Change Management System, Journal of Management in Engineering, Vol. 17 No. 3, pp.159-165. 5) Kim, J. et al. (2009), A Conceptual Model of Intelligent Program Management Information Systems (iPMIS) for Urban Renewal Mega Projects in Korea, Journal of Asian Architecture and Building Engineering, Vol. 8, No. 1, pp.57-64. 6) Kim, K. R and Yu, J. H. (2010). Suggest a Work Process of Change Management in a Urban Regeneration Project, Proceedings of KICEM Annual Conference, Korea Institute of Construction Engineering and Management 10 pp.245-246. 7) Lee, C. et al. (2013), A Syst e m Mode l for Ana l yz i ng a nd Accumulating Construction Work Crew's Productivity Data Using Image Processing Technologies, Journal of Asian Architecture and Building Engineering, Vol. 13, No. 3, pp.547-554. 8) Lee, M. and Choi, M. (2010), Attitudes of Engineers Relate to Prevention of Change Order Claims, Journal of Asian Architecture and Building Engineering, 9(1), pp.87-94. 9) Lee, M. and Lee, K. (2012), Performance and Cost Effectiveness Analysis of the Active External Post Tensioning System, Journal of Asian Architecture and Building Engineering, 11(1), pp.139- 10) Moghaddam, A. (2012), Change management and change process model for the Iranian construction industry, International Journal of Business Research and Management, Vol. 2 No. 2, pp.85-94. 11) Motawa, A. (2012), A Systematic Approach to Modelling Change Processes in Construction Projects, The Australian Journal of Construction Economics and Building, Vol. 5 No. 1, pp.23-31. 12) Oracle. (2012), Oracle White Paper-Change Management Best Practices for the Engineering and Construction Industry, United States of America. 88 JAABE vol.14 no.1 January 2015 Jin Young Cho

Journal

Journal of Asian Architecture and Building Engineering – Taylor & Francis

Published: Jan 1, 2015

Keywords: change management; mega program; management process; management system

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