AACEI’s TCM vs PMI’s PMBOK

One of the things that drew me to WRENCH was its insistence on standardization. As someone who has long been immersed in PMI and AACE (the top two industry-wide standards of our time), I was delighted to meet someone who shared my view, namely, that standardization is perhaps the most overlooked yet most critical success factor in modern project management.

Daniel and I have had many long and impassioned conversations about why this is the case, whether it stems from a genuine lack of awareness on the industry’s part, or just its failure to prioritise. But now, I have hope that every EPC company will wake up and standardize its processes (in order to meet quality requirements), its departments (in order to ensure accuracy in every deliverable) and its stakeholders (in order to make sure everybody is on the same page). But how would they go about it?

Let’s say a company somehow gets convinced that it would be a good thing to ‘standardize’. What’s the next step? Most companies are likely to look into PMI, which is well-known (even if not fully understood), and some might even look into AACE, out of curiousity if nothing else. And that’s where the confusion starts. “Should we go for PMI’s PMBOK or AACE’s TCM?” How are they different? Do they complement/supplement each other?

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Architectural comparison of TCM and PMBOK

Architecture refers ‘carefully designed structure of something’, and here it is about the Total Cost Management (TCM) framework. As the name suggests, the focus of TCM framework is cost management of projects and the deliverable of projects (assets). There lies the fundamental difference between the Project Management Body of Knowledge (PMBOK) by PMI, USA and the TCM framework.  PMBOK focuses on the entire gamut of project management where as the focus of TCM is on total cost management of the project, and the product of the project which is known as the ‘asset’ in TCM jargon.

tcm-framework_final

The PDCA cycle (Plan, Do, Check, Act) by Deming is the underlying theme of management. Whatever we intend to do must be planned first. Then the plan is executed. The progress is checked periodically. Actions are taken if there is a variance. The underlying theme of TCM is also PDCA (recursive PDCA cycles).

Plan-Do-Check-Act

Strategic asset management process group 

  • Asset planning (Plan)
  • Project implementation (Do)
  • Performance measurement (Check)
  • Performance assessment (Act)

Project control process group – Planning 

  • Project control planning (Plan)
  • Project control plan implementation (Do)
  • Project control measurement (Check)
  • Project control performance assessment (Act)

Enabling process 

  • The enterprise in society
  • People and performance management
  • Information management
  • Quality management
  • Value management
  • Environment, health and safety

All these processes ‘refers to’ and ‘add to’ the organizational knowledge repository and tool base.

The PMBOK (Project management body of knowledge)

The PMBOK comprises of 49 processes grouped into a two dimensional array of five process groups and 10 knowledge areas.

PMBOK Architecture

Five process groups

  • Initiation
  • Planning
  • Execution
  • Monitoring & Controlling
  • Closing

Ten knowledge areas

  • Integration management
  • Scope management
  • Time management
  • Cost management
  • Quality management
  • Communications management
  • Resource management
  • Risk management
  • Procurement management
  • Stakeholder management

Each process comprises of a set of inputs, tools and techniques and outputs.

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The project management certification guide – 2019

It is cut throat competition out there in the certification arena. Every certification body wants to get a pie of the project management certification market. There are the established certification bodies which faces stiff competition from the new comers.   It is a red-ocean out there. The leaders of predictive project management want a share of the adaptive (agile) project management window. The PMI and the PRINCE2 owners are trying their luck in the agile segment and are struggling in the agile space which is dominated by the likes of Scaled Agile,  Scrum alliance, Scrum.org.

The sole objective of this post is to bring clarity to the cluttered certification options, to make it easier for the reader to  choose the right certification or guide others towards the right direction.

Project Management can be broadly classified into two main categories;

  1. Predictive project management – A plan is created for the project from start to finish, and we execute the project as per  the plan. This is well suited for projects where the scope is very clear, and the engineering discipline does not allow for much change (EPC projects).  Most of the engineering, procurement and construction projects demand predictive project management styles because their engineering domain are not suitable for frequent scope changes. The leading players in this segment are;
  2. Adaptive / Agile project management  – Adaptive or agile project management is well suited for projects where the scope is evolving and the technology is very new. These are iterative in nature. The product of the project is developed through small iterations. These are well suited for projects whose engineering domain allows for easy scope changes (I.T projects). The leading players in this segment are;

The following chart depicts the certification streams under two main categories; Predictive and Adaptive or Agile.

PM Career Guide 2019 - high

 

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Total Cost Management Framework (TCM) by AACE and the Project Management Body of Knowledge (PMBOK) by PMI, a comparison #1

Past one month I was busy researching the Total Cost Management (TCM) framework by AACE. What differentiates TCM from PMBOK are the depth of the recommended practices (RPs) of TCM. These are the real project management practitioner’s voice.  The recommended practices addresses the real life project management challenges from a practitioner’s perspective, helping them to improve further.

Right now I am conducting a project management training based on the project management body of knowledge (PMBOK) by PMI, USA for a very large product based multi national company. My research effort in TCM framework helps me to explain the PMBOK in much more detail.

For example, PMBOK just touches upon the concept of Code of Accounts (COA), where as TCM framework emphasize the importance of well defined COA for effective cost control. The linkages between CoA, Project MAnagement Information System (PMIS) and the Earned value management system (EVMS).  Another example is the hammock. PMBOK just explains it as summary activities. TCM framework addresses it as LoE (level of effort) activities which does not deliver any tangible output (project management, testing, tracking, documentation etc) and goes on to explain how to handle LoE activities on the critical path. These are very valuable insights provided by TCM framework.

To be continued.

Courtesy :  Wrench Solutions