3. Flexibility in different project phasesHighLow100 %10 %Degreeof freedom<strong>to</strong> manoeuvre.Percent of <strong>to</strong>talbudget100,0 %90,0 %80,0 %70,0 %60,0 %50,0 %40,0 %30,0 %20,0 %10,0 %Project0,0 %time0 10 20 30 40 50 60 70 80 90 100Decision100 %<strong>to</strong> financeFigure 3. The relative size of the reduction lists as a percentage of the <strong>to</strong>talbudget at different phases of the projects. N=19Another way of quantifying the remaining flexibility options at the time of finalapproval of projects is <strong>to</strong> look at the reduction lists and allocated reserves incombination. On average, the reduction lists amounted <strong>to</strong> 6% of the <strong>to</strong>tal projectbudget. At the same time, an average of 8% of the project budgets was allocated asreserves, <strong>to</strong> cover unexpected expenses. Adding these two types of flexibility gives anapproximate <strong>to</strong>tal remaining flexibility of 14% of the <strong>to</strong>tal budget at the time ofparliamentary approval. The remaining flexibility options ranging between 10% and15% of the <strong>to</strong>tal budget appeared <strong>to</strong> be manageable at the time of final projectapproval, measured by the relative size of reduction lists and allocated reserves.The Norwegian building and civil engineering contract, NS 8405 (Norsk bygge- oganleggskontrakt NS 8405 2004), states that a project owner cannot demand changesexceeding 15% of the <strong>to</strong>tal contract value. This value corresponds fairly well with theresults presented above.3.3 Flexibility visualisationsAccording <strong>to</strong> Eikeland (2001), a decision is within the room for manoeuvring if itdoes not violate the consequences of previous decisions. As shown in Figure 4, theneed for room for manoeuvring is within the actual room for manoeuvring in the earlyphase of projects (area A), but not during later parts of projects (area B). Eikeland(2001) also points out that a major challenge in project management is that the needfor room for manoeuvring is typically at its highest when the actual freedom formanoeuvring has already decreased significantly. Area B represents situations whensome stakeholders (for example, users or project owners) have a desired room formanoeuvring that is larger than the actual room. To satisfy the desire for adjustments,changes have <strong>to</strong> be made, because the adjustments violate previous decisions.14
3. Flexibility in different project phasesHighDegreeof freedom<strong>to</strong> manoeuvreAccumulated cost/Available information/Amendment costABDesiredroom formanoeuvringLowProject time, tt 1Figure 4. Consequences of different values of the uncertainty, significance ofdecisions and the degree of freedom <strong>to</strong> manoeuvre compared <strong>to</strong> the desired roomfor manoeuvring in different project phases. (Paper 7, fig. 6. Based on Eikeland2001: 40)With regard <strong>to</strong> Figure 4, this <strong>thesis</strong> has addressed two aspects. First, an attempt wasmade <strong>to</strong> quantify curves in the figure, as described earlier. Second, the work on the<strong>thesis</strong> has been a search for project management strategies that utilise the area shownas A. It should be noted that the critical measure is not necessarily the size of area Aand B, but the time t 1, when the curves for actual and desired freedom <strong>to</strong> manoeuvrecross. Area A actually represents a ‘flexibility surplus’ and area B a ‘flexibilityundersupply’.Based on product development projects, Midler (1995), Verganti (1999) and Bahrami& Evans (2005) identify strategies <strong>to</strong> increase area A and <strong>to</strong> reduce area B shown inFigure 4. The purpose is <strong>to</strong> avoid changes but <strong>to</strong> keep options open <strong>to</strong> satisfy as muchas possible of the anticipated need for manoeuvring. Midler (1995) describes amanagement strategy for concurrent engineering projects. First, early commitment isprevented while as much information as possible is gathered on the project. In thesecond phase, the project is locked as precisely as possible. Finally, at the end of theproject, speed is given maximum priority in order <strong>to</strong> solve the remaining technicalobstacles.Paper 1 and Paper 8 study observed flexibility in 18 projects. Most of these projectswere subject <strong>to</strong> changes, extensions and iterations, i.e. they were in area B in Figure 4.When analysing project flexibility over time, there was also need <strong>to</strong> make adistinction between planned and actual approaches <strong>to</strong> flexibility. Approaches <strong>to</strong>flexibility changed during the projects and the actual approaches were not necessarilythe same as the planned ones.Earlier in this chapter, it was noted that different stakeholders have differentperspectives on projects flexibility in different project phases. This leads <strong>to</strong> the next<strong>to</strong>pic: project stakeholders.15
- Page 1 and 2: ISBN 82-471-8121-5 (printed ver.)IS
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- Page 61 and 62: ReferencesAbbot, A. & Banerji, K. 2
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Projects trapped in their freedom:
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project phases: preparation, freezi
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establish realistic cost and time f
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Percent ofproject onSize of remaini
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flexibility is introduced by the us
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100 %First official estimateApprova
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ReferencesAndersen, B., Fagerhaug,
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Paper 4.Olsson, N.O.E. 2004. ‘Fle
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Paper 5.Olsson, N.O.E. 2006. ‘Imp
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558 N. O. E. Olsson et al.ex-post s
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560 N. O. E. Olsson et al.Table 1.O
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562 N. O. E. Olsson et al.and actua
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In this paper we use the process an
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PROCESS ANALYSIS IN THE PLANNING OF
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final framework for expected patien
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Degree of redundancySlackPrecisionC