This Guest paper is copyright to Dr. Paul D. Giammalvo.
Published here February 2021.

Introduction | Just the Facts, Ma'am
Asset Life Span Development | What Is an Asset and How Do We Manage Them?
Do Projects Generate Benefits or Do Assets? | Conclusion (Part 1) | PART 2

Asset Life Span Development

As shown in Figure 2, the development of an asset in this approach is based around the asset life span, and not the project life span. In this methodology, (often known by our IT colleagues as Waterfall) the project is nothing more than a delivery system. It is simply designed to "create, acquire, update, expand, repair, maintain and eventually dispose"' of organizational assets.

Figure 2: Integrated Asset, Portfolio, Program (Operations) and Project Life Spans[7] [click to enlarge]

Note that in this model, neither project management nor the project manager is the "star" of the show but is an important supporting actor, and even then, only during a relatively short period of time compared to the overall "Economic", "Ownership" "Physical" or "Useful" life of the asset.

In this tested and proven approach, there are four "actors", defined by their strategic decision-making authority, responsibilities and time horizons. Three play a "starring" role and one is a supporting actor.

Figure 3: Asset, Operations and Project Management in an owners Organization[8] [click to enlarge]

The three starring actors are the C‑level Corporate managers who make the long term strategic decisions. Then there is the Asset Manager, responsible primarily for capex-funded projects in the role as the project sponsor and the Operations Manager, responsible primarily for OPEX funded projects, also in the role as the project sponsor. In this role, as we can see from Figure 3, it is the project sponsors who are responsible for the business case. It is they who make the strategic decisions in support of the Grand Strategy elicited by the C‑Level decision makers. The Asset manager is measured or assessed based on the Return on Assets (ROA) while the Operations Manager is measured or assessed against Return on Investments (ROI).

The project manager's role is purely tactical, responsible for delivering the project on time, within budget and in substantial compliance with the technical specifications. But further, without getting anyone hurt or killed on the project and without destroying the environment in the process.

In this model, the business case is the responsibility of the Asset/Operations managers and not the project manager. The project manager is assessed or measured primarily by SPI and CPI, along with any safety, health or environmental violations or infractions and is rewarded individually or as a team based on achieving those objectives.

In this tested and proven approach, one of the first recommendations is to recognize and accept the wisdom of this approach. To do that, start by holding the project sponsors accountable for what they control and have the authority to decide. Then hold the project manager/project controllers accountable for what they have reasonable control over and have formal authority to act. This latter means both civil and criminal accountability and professional liability for any misfeasance, malfeasance, or nonfeasance on their part.

Just the Facts, Ma'am    Just the Facts, Ma'am 

7. Guild of Project Controls (n.d.) Module 1, Figure 1 last accessed 02/10/2019
8. Source Giammalvo, Paul D (2015)
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