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17 min read

SBA 220: How to Manage Building Automation Projects

By Phil Zito on Sep 28, 2020 6:00:00 AM

Topics: Podcasts

Managing building automation projects is tough. There are so many nested tasks and expectations that you need to oversee!

In this week's episode, we discuss how to effectively manage Building Automation projects.

In this episode you will learn:

  • How to manage multiple projects at once
  • The key action you must take to ensure a successful project
  • How to balance time, quality, and cost on projects
  • How to ensure your projects are cash-flow positive as early as possible

Click here to download or listen to this episode now.

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Show notes

Phil Zito 00:00

This is the smart buildings Academy podcast with Phil Zito Episode 220. Hey folks, Phil Zito here and welcome to Episode 220 of the smart buildings Academy podcast. And in this episode, we're going to be talking about how to manage building automation projects. Everything I discussed today can be found at podcast dot smart buildings academy.com Ford slash 221. Once again that's podcast, that smart buildings academy.com Ford slash 220.


Phil Zito 00:33

Alright, so I decided to do this topic based on a lot of questions I've been receiving lately around project management. It was receiving questions around how do you manage multiple projects? How do you approach project management? What does a building automation project manager even need to know? And so that got me thinking we've already got a project management course. And I said, you know, we've covered this in our course, but we have not talked about it a whole lot in our podcast. So first things I want you to think about are a couple questions related to project management. If you're able to answer these questions, then you're going to find yourself better able to just project manage your projects. So the first thing you need to ask yourself is, you know, what kind of project manager are you? Or if you're looking at stepping into a project management role, you need to ask, what are the expectations of this project manager from project management perspective, at least when it comes to building automation, there tends to be three types of project managers there are purely financial project managers, these are folks who are primarily focused on billing, scheduling, labor, making sure material orders are coming in, they're primarily focused on delivering cash flow and profitability back to the business through the act of executing projects. Then there's another type which is very closely related to the financial PM, and that is a project manager who is still focused on the financial delivery as their primary goal, but they are also acting as an operations manager at the same time, in my opinion, this is the least effective form or method of using a project manager. Because if you're going to be having someone doing Ops, management, and managing all of the financials, as soon as you get a couple projects go in at the same time, one of those is going to kind of have to fall through the cracks. And then you have what a lot of newer companies have. And when I say newer meaning companies that are recently formed and do not have a lot of volume in their business, you have the technical pm. So this is the project manager who is also out executing work. Once again, this is also an effective way of project management. Now when I say ineffective, that's not meant to be a dig in saying you know, that project manager is not good, they may be an amazing person, that project manager may be amazing at executing their role and their responsibilities. That being said, if you're looking to scale a business, having a project manager that is also doing another role, in my opinion and experience is ineffective. So next thing you have to ask yourself, once you do become a project managers, what is the project delivery model, the role of a project manager in a plan and spec project where you're a third tier contractor is going to be completely different than in a retrofit project where you are acting directly under the contract of the owner. So you're acting as an owner's rep, you're acting directly in response to the owners requests that is completely different project delivery model. As such, it has different expectations around billing, around percentage of completion around when you deliver different or when you execute different deliverables. So you've got to understand that. Next you have to know if you manage many projects, or just a few. Now the nice thing is, is that the project management methodology that we're going to teach in this episode will apply for many projects. I mean, we're talking dozens of projects or just a few large projects. The thing is, is that if you are managing many, many projects, you just have to approach things a little different and put emphasis on different areas. And then finally understanding how your teams setup. If you are using a more kind of conveyor belt approach where you have installers or electricians, you have technicians, you have designers, you have programmers, and they all have their little slice of the pie that they execute. That's going to be a completely different project management approach. Then if you have kind of jack of all trades, which you'll see in a lot of retrofit work, a lot of service work. Alright, so let's dive into this project management. So the first thing you need to understand about project management is your project management is only as effective as your project kickoff. What I mean by that is the worst thing in the world that can happen is a project manager comes in Monday morning. And there's new projects that they're expected to execute and project manage. And they have no clue about what the project entails, they've never reviewed the project, they haven't reviewed the financials, they haven't got a handoff from the salesperson, they're literally told, hey, the project is at this address, here's the email address to the mechanical that you're under, reach out to them to get the documents. I know it seems a little ridiculous, you may be like, surely that doesn't happen. But that actually happens much more in the field than people want to admit. So you need to have a structured kickoff process that you as a project manager oversee this process should include you should include the technical team that is executing the project


Phil Zito 06:35

at a reasonable level, you don't have to bring all your texts in and everything and honestly at decide depends on the scale. And you may bring different people in at different times of project execution. But it should have the project manager, the operations manager and the salesperson, your goal here is to understand the scope of the work to understand any nuances to the projects, or project to understand kind of, Hey, is there anything like timewise, because the the trade off always is with project management that you've got quality, right? cost and time. So if you decrease time, you are either going to have to increase cost or decrease quality. And if you're willing to decrease quality, you can decrease time, or you can decrease cost. So it's that project management triangle. And it's a concept that those three core values of cost, quality, and time are interrelated. So as a project manager, when you're meeting with the salesperson and the ops manager, you're understanding exactly what was committed to both on paper and verbally. You're understanding where the project is currently at as far as execution, is it in the CD phase, the DD phase, the SD phase hasn't even been hasn't even been engineered yet, in the case of some, like IPD projects, etc. So you got to realize where things are at and what your expectations of deliverables are, as far as timeline when you're expected to be engaged, like is it a couple months from now? Is that right? Now? What is it because once you've done this, once you've gathered all the deliverable or expectations, you've gathered, the documentation must the contract the scope of work, the scope letter proposal, the design documents, if they exist, both the mechanical MEP set as well as the specification set. Once you have all that information, then you're able to work with operations manager to secure assets. And when I say assets, I'm talking about people. And so you're able to say, Hey, I'm gonna project that I'm going to need a programmer, technician, etc. And I'm going to need them at this point. You do that by performing a scope review, right, you're going to get all of this information from the salesperson, you're going to perform the scope review using what I typically like to say, as a scope matrix. That scope matrix is going to identify scope, you're going to identify when that scope ideally is going to be due based on talking to the contract team. And then from there, you're going to be able to manage that team through the execution process. You're going to submit any rfis and RFCs as needed. And you're going to work with the operations team to go and say alright, these are our benchmarks. This is what we need to hit like. Actually, I'll say not benchmarks benchmarks, the wrong word. What's the word I'm looking for here? Not. I want to say milestones but there's another word We'll just go with milestones. These are milestones, typically based on percentage of completion or those milestones just fine a percentage of completion. And we're going to say, Hey, we're going to execute the project. And we're going to hit these milestones at this time. It's at this point typically that we will start the project submittal development submittal development is extremely important, it's usually the first thing you can build for. And it's usually a phase gate or milestone, that's the word I was looking for phase gate, it is usually a phase gate or milestone at which the project execution really kicks off. Because if you get approved submittals, you can then usually order material, you can then usually start executing work, a lot of specifications will require submittal approval prior to material ordering, as well as prior to execution of any work and billing of work. So getting the submittals out the door, as reasonably fast as possible is going to be your first kind of project management task, you're going to be overseeing this. Now the little nuance is that


Phil Zito 11:11

everything you learn in this process I describe can be used to execute multiple projects. So the thing is what I want you to think about and I think, I think once you understand this concept, it will make managing multiple projects much easier. I want you to think of project management not as a single 40 hour a week task, but rather as like a timeshare. And what I mean by that is you have 40 hours a week, let's just say that, yeah, some of you work more, some of you work less whatever, but you have 40 hours a week of time, and you slice you partition portions of that time off to different projects. So you may have one project that is in the Closeout phase. And as such, you're portioning a time of your management efforts to the Closeout documentation as belts, training, etc. You have another project that may be in the scope review phase, and so you're portioning out a time to do that you may have another project that is within the installation phase. And so you're portioning out a period of time to do that. This is why I personally think the executing the technical PM, the pm that's out doing install, doing wiring doing programming is so ineffective. Because project management effectively done is really the delegation and oversight of task execution. So you are ensuring that tasks are being executed by staff. And you're delegating delegating that execution to specific staff when you start to be the executer of staff, or of tasks that then limits your ability to time slice. And it really restricts the amount of projects you can effectively project manage. So it's really important to make a decision early on, am I going to be an executing project manager or am I going to be you know, purely oversight project manager. So as I mentioned, you will first oversee project submittals. After that scope review. From there, we're going to go into the consistent, repeatable phase of project labor material and subcontractor management. Now there are some tasks, some milestones that are one shot milestones, and what I mean by one shot milestones that's reference to a programming block in graphical programming that happens once right, you pass it a true value. And for one cycle of code, it'll output a true value, but then it doesn't happen again. Project submittals scope reviews, going and closing out projects, those are all one shot events, or at least they should be one shot events. You don't iterate through them. So you have what are called these, these task based milestone based events. Project submittals installation of controls, point to point check out as built development, closeout documentation, customer training, and as an overlay of all of these tasks.


Phil Zito 14:42

You have project labor, and material and subcontractor management and financial management, and change order management and project communication management. These are tasks these are repeatable processes. I don't want to happen These are repeatable processes that allow for the execution of tasks. So for example, submittal documentation, you're going to have to manage the labor, you're gonna have to manage labor scheduling, you're going to have to manage billing. And you're going to do that for the project submittal task, you're going to work with the operations manager and say, Hey, I need a designer, and I need them to execute this submittals. This says submittals, they're due by x date, so I'm going to need so many hours, and you're going to oversee the scheduling of that labor, and you're going to ensure that it gets scheduled and executed. And then you're going to Bill based on the execution of that labor, once the submittals are done and approved, typically, in the specification, you can build for 20 30%. And so you do that you build for a certain percentage, based on the accomplishment of that task. And this, in general tends to be the area where new project managers struggle, they really don't understand how a building automation project typically is executed. And because of that, they don't understand the typical milestones. So they will struggle to oversee labor scheduling and labor execution and to balance that labor scheduling and labor execution if you know that we're doing a commercial office building, and you need to develop submittals for a 10 storey commercial office building with just air handlers and VA V's this middle development time for that's going to be significantly less than if you're doing maybe a hospital or a data center. Understanding that and appropriately scheduling and forecasting labor is an incredibly important skill. I say skill, because it's something that is developed, it's not a task, it's a skill. There is a task associated with forecasting labor, right, you go and you map out your labor using whatever tool it is you use, and you map out that resource for a certain amount of time. And you say, okay, in months, 123, we're going to have this role or this person, doing this many hours, we're going to bill for XYZ, that is a task, that's pretty easy to teach the nuance, the skill of it is starting to learn, oh, this commercial real estate building with a very compressed timeline is an Amazon warehouse with a very compressed timeline. This is a hospital with a lot of complexities, this is an integration project, etc. So you start to understand project types, you start to understand how does that project type relate to that project management triangle of quality, cost and time. And then you're able to effectively schedule resources. So all of these things, scope management, kickoff, project, submittals, installation, and execution and closeout. They're all going to be dependent on that project management triangle. And they are going to be dependent on project type. And that is just something that in reality is experiential. You can be taught processes, we're really effective at teaching processes, we're really effective at teaching core concepts. But it's only as you execute. And as you learn your team and learn your market, that you will become proficient in executing these tasks. Anyone who tells you otherwise is full of crap, somebody tells you that you're going to attend their course or you are going to be able to understand how to do these tasks, and do them well in your market


Phil Zito 18:49

without experience is just at their fullest crap. And the reason I say that is because a Texas market is going to be completely different than a Seattle market or a Europe market or an Asia market. And the market how the contractors are held by regulation, what is expected in a in Chicago, where it's highly unionized, versus maybe out in the suburbs, or rural area where there is no union influence is going to impact how you manage these tasks. I know it sounds like I'm rambling here, but you really need to understand this because if you don't, if you are a project manager in New York City and you move to Oklahoma, and you try to bring the exact same approach and processes and mentality it's not going to work. And that's where I see a lot of project managers fail, especially as they move into more of a major projects or regional projects management role. And they try to apply a generic project management mindset and approach to multiple different geographies, they find that they can't do that, because the geographies have different expectations of what submittals may mean or of what specific tasks may mean. And just the differences in Project type a project with an owner's rep as a commissioning agent, versus a project with a commissioning agent, as a GC, or under the GC is completely different, you're going to get completely different expectations around functional testing. Alright, so back to the project management tasks. So you have project labor, material subcontractor management, you also have project financials, the primary goal of Project Manager is to ensure that projects are as close to cashflow positive as possible. In an ideal world, you're going to have a very solid cash management strategy of your projects so that the projects are producing more cash than they're consuming. the lifecycle of a project from a financial perspective typically is that projects initially are negative in their cash flow. What I mean by this is, when you go to execute your first project, or rather, your first task on your project, you're going to be executing that with no cash flow into the project. So what I mean by that is, typically you will be doing submittals. And you will be going and having labor hit the job, you're going to be having labor costs hit the job from your designer labor, but you're going to have no billing. So you're going to have no cash flow coming in to replace that labor. So you're going to have negative capital on that project, that project is actually going to be being negative and is not going to be producing cash flow into the business. Now granted, that's at the macro level, at the micro level, getting very specific with how projects are run, you true up the financials at the end of the project. And that's when you take your true executed profit or loss. And that's when you determine if the project was profitable, and ultimately generated cash for the business. But the goal of a project is to generate profit and generate at least at the booked profit amount if not higher, for the business. And one of the most important things, though, is a lot of folks will consider that


Phil Zito 22:45

at the end of the project, but they don't consider it during the project. Ideally, you would like cash flow coming into the project to the point that that cash flow pays for all of the costs rather than you having to tap on the business for the cost. Because that capital has to come from somewhere to pay labor to pay for material to pay your subs. And you would ideally like to keep your project positive on the cashflow side. All right. That being said, sometimes that can't happen. And you just have to be aware of that. One of the things that you need to be aware of specific to that is change orders and scope drifts as you move through all of the tests. All right. Here's the picture. Now, we are managing to milestones or project managing the milestones. And we have some iterative tasks repeating tasks that are cyclical, are not cyclical. What's the word I'm looking for here are just repeating they are constant tasks that are repeating like project management, labor, and materials, subcontractor cost management, financial management, etc. As you go and approach these milestones, you're going to hit areas where scope differentials occur, maybe the timeline gets compressed, maybe the timeline gets extended, maybe scope gets added maybe scope gets subtracted, and you're going to have to deal with what's called scope drift. And you're going to have to execute change orders typically in order to rectify the scope drift. And that is a process that increasingly, is becoming important as we are seeing. Project timeframes are now starting to be compressed because all this backlog is starting to open up right now in our market or has opened up over the past couple months after being compressed for a long time. And now people want to catch up with these project execution timelines. And so We're seeing people trying to execute more, which here's the problem with that. If you do not push back on a compression of timelines, and you simply go with it, that is going to impact all of your projects being executed across your portfolio. And a portfolio is simply a collection of projects, you hear portfolio management, that is a collection of projects that you're managing. So what's going on here is you have a group of projects, and the timeline compresses on them. Now, your limited labor resources or your limited subcontractor material resources, you have to figure out how to balance those. And one of the ways to balance those is by using change orders. Because if timeline is compressed, and they are not willing to compromise on quality, then cost has to increase because you're gonna have to do after hours work. And so, because of that, you're going to have to issue a change order. So that's kind of an example of that in her relationship, if you start to really master that project management, triangle, and understanding where you can push based on increases in timeline decreases in cost decreases or increases of quality, then you are going to really understand how to best project manage as well as how to manage your resources. All of this requires effective project communication, realizing that certain forms of communication are considered legal communication. I'm not a lawyer. So I'm not going to tell you what is considered legal communication and what is not in your area, but some examples, email, verbal in some cases, documentation written format. So understanding what communication is legally binding, understanding the appropriate forms of communication, so that you can be clear in expectations, as well as contractual delivery requirements. And then finally, right through all of this, you move to project closeout. And project closeout is a overall process that consists of many sub processes, point to point checkout test and balance functional test, project document closeout, owner training and warranty and project handoff all of these actions come together to kind of compromise project closeout. This is usually PRC 60 70% or greater, where you start to churn through


Phil Zito 27:45

these specific sub tasks. So I hope coming out of this episode that you got an idea of project management, you got some questions, you can ask yourself to make sure you're appropriately positioning yourself in that role. You got some concepts like the project management triangle that you can use to judge what actions you should take. And you also are considering how do I approach project management based on the area in which I'm working. If you would like a formal education in project management, you'd like some formalized training, like to really get up to speed and understand how to effectively execute projects, I'd encourage you to check out our VA s project management Bootcamp, which will be available at podcast dot smart buildings, academy.com Ford slash 220. This course will teach you how to manage building automation projects. it'll teach you how to take a building automation project from start to finish. It's filled with dozens of exercises and checklists that will guide you in learning your company's processes, and how to effectively implement those processes during a building automation project. So if you're a newer project manager, if you're looking to get into VA s project management, or you are a project manager, but you've never been formally trained on project management, I would encourage you to check out our building automation project manager bootcamp. Hey, Thanks a ton for listening again. Next week's episode, what is next week's episode? Because it'll be it's gonna be maximizing utilization during down periods, I believe. I think that's what we're going to do. We may talk about something else. As you know, I kind of change these episodes based on what's going on in the world, and what questions I get. So feel free to ask any questions you have, feel free to reach out in the comment section wherever you're listening to this podcast. And I look forward to talking to you again next week. Thanks a ton and take care

Phil Zito

Written by Phil Zito

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