On Demand Webinars
August 3, 2023
Managing all of the processes, correspondence, models and documents generated across the entire lifecycle of a construction project can prove to be challenging and often times, overwhelming. Coupled with persistent risks and related operational challenges, architects are increasingly seeking ways to improve communication, collaboration, and control in their contract and project management activities.
Putting better processes in place can greatly curb operational, financial and reputational risks, while elevating a firms’ profile on projects, enhancing control, and improving relationships with clients and other project partners.
In this informative educational session where experts will examine key risks and areas of inefficiency that architectural firms face across project phases, as well as best practices for mitigating these challenges and the most effective ways to incorporate them into operational processes. Presenters will explore new solutions, technology and innovation to support these objectives.
Attendees will walk away with a firm understanding of the key areas for improvement in their operation processes as well as advanced project management solutions for document and form creation and collaboration.
AIA Contract Documents has provided this article for general informational purposes only. The information provided is not legal opinion or legal advice and does not create an attorney-client relationship of any kind. This article is also not intended to provide guidance as to how project parties should interpret their specific contracts or resolve contract disputes, as those decisions will need to be made in consultation with legal counsel, insurance counsel, and other professionals, and based upon a multitude of factors. Any language quoting from AIA Contract Documents that have not yet been released is subject to change before final publication.
Hasti: Hello there and welcome to Contract and Project Management for Architects: Best Practices and Holistic Solutions a webinar brought to you by AIA Contract Documents and Oracle. Before we get started there’ll be a few administrative items we’d like to get through before we hand it over to the presenters. For one you will receive a recording of today’s session including the PowerPoint and additional resources as a follow-up email by close of business tomorrow, so look forward to that. Also please enter any questions that you have as the presenters are presenting and time permitting at the end we will answer as many questions as we possibly can.
Hasti: So here’s a disclaimer that you’ll find in all AIA contract documents webinars and education. This presentation and the accompanying materials are provided for general informational purposes only. The information is never provided as legal advice so we do suggest that you seek appropriate legal counsel on particular facts and circumstances that pertain to you and your business. This presentation is also protected by U.S and international copyright laws therefore any type of reproduction distribution or display without written permission is prohibited.
Hasti: And this program is will be registered for one learning unit with the American Institute of Architects. When you registered for the program you entered your AIA member ID if applicable to you so we’re going to pull that information and use that information to report your credit directly to the AIA. Please give us at least two business weeks to do that, once we do do that it will appear directly on your online transcript.
Hasti: Here’s the course description you saw this on the registration page so in this session we’ll be talking about some of the key challenges that the architectural community experiences and key risks when it comes to project management and then we’ll look at holistic Innovative Technology Solutions that will help you to make your processes and your document and project management more efficient.
Hasti: And with that I’m going to go ahead and turn it over to our first presenter Michael Bomba Mike.
Michael: Thank you Hasti. Yes thank you for introducing us my name is Michael Bomba I’m a managing director and council with AIA contract documents. In terms of background I’ve been with the AIA Contract Documents program for what will be 17 years in a few weeks at the end of August. I came on I’m one of the attorneys that works with the contract documents program and you know I started my tenure the first set of documents I worked on were the updates to the b141 when it became the B101 owner architecture agreement in 2007 and I’ve worked on every iteration of the architect agreements since then. I’ve also worked on a number of other documents in our program including all of our ipd agreements most of our Bim agreements with the help of some of you in the audience and a whole other host of agreements in our in our library. Also as relevant to this program I have also had extensive involvement with the AIA’s risk management program and specifically the AIA’s risk management committee back in its existence so again a fair amount of experience with through their knowledge so I’m hoping to share some of that with you on today’s presentation. I have with me Jeremy Shulman and bear with me I’ll just do his introduction because you’ll hear from him later but after starting on site with muddy boots Jeremy has been advising on Leading Edge technology for some of the world’s largest Construction Products projects since 2006. He has spent significant time in the field around the world on groundbreaking projects with Innovative Architects such as Will Alsop, Saha Hadid, Renzo Piano. Within Oracle’s construction engineering business unit his role is currently to guide text technology strategy to align with industry needs.
Michael: So you’ll be hearing from Jeremy later on in the program and with that we’ll get into the into this program and again as Hasti mentioned the focus of today’s presentation is going to be risk management. We’re going to start with why it’s important well really we’re going to get into the details beyond just why it’s important and then we’ll go into the holistic approach for project management that Hasti mentioned and that’s when Jeremy will take over on the presentation.
Michael: Risk management why is it important.
Michael: I think the best way to look at risk management and you understand why it’s important it’s fundamental strategy of any successful firm and what we’re going to be focusing on in this session is to hopefully demonstrate the value and need for risk management when it comes to a successful firm. Now there’s lots of different types of risk management, certainly I think I hope everyone is familiar with their practice risk management, their project risk management and we’ll go into more detail on those as we go on in this program but there are other elements of risk management and that every firm has to pay attention to and that’s where we’re talking about Good Financial practices, making sure that your you know you’re staying within budget you’re doing all the thing that’s appropriate to make sure that you’re financially sound as an organization those are elements of risk management. Also legal compliance are you are you complying with all employment laws are you keeping up with all of your necessary licensure those are other types of risk management is this category of legal compliance and we’re not going to go into any of that today what we’re really going to be focusing on is practice and project risk management.
Michael: and why is it important well a simple it’s the simplest way to say it would be that claims have costs they have and when you really are evaluating a claim now not every element of risk results in a claim but obviously we don’t want any item that we identify as a risk issue on a project to become a claim. Cost of Claims can be extensive not only do you have you have direct and you have indirect costs associated with any claims. I think direct costs are easy for everyone to imagine what they are you’re whatever your deductible is on your insurance and if you have a SIR you’re going to have to dip into that as well on any so those are direct costs you’re going to pay anytime there’s a claim. And then hopefully this doesn’t happen but if you have any expenses above your policy limits then absolutely your direct costs are gonna Skyrocket. So definitely having strategies and tools to mitigate risk as it arises on a project is important to minimize those direct costs. Now I think that frequently when you’re talking about risk management and claims firms Overlook the soft costs or the indirect costs that you have. Your claims to say the least are time consuming and not enjoyable there’s only there’s no other way to put it. In private practice before I was with AIA Contract Documents you know I was involved I was a litigation attorney representing Architects and engineers and the only person that feels like they have won in a litigation is the attorneys. Everyone else has suffered through the process. not only is it time cons you know the effects of the time to deal with a claim result in excessive lost productivity you have lost opportunity cost if your time is being sucked up dealing with a claim you’re not out there finding other projects or at least limiting your ability to be out there finding other projects and obviously there’s a potential hit on your insurance premiums. And then I think that morale is another major hit of indirect costs anytime there’s a claim it’s exhausting to be deposed it’s exhausting to have to go through a trial if you have to get to that point. Mediation is exhausting and it the flat out isn’t fun, you’re being accused of having made a mistake that has cost your client significant money and they’re coming after you for it. So uh you can imagine it’s not an enjoyable process and it can have a major impact on morale especially if you get stuck in a series of these types of experiences so has you know. So we’re looking at things Beyond just direct costs and the impact it has on your farm so in my mind that’s why risk management and managing your risks in an appropriate way is important for any firm to be successful.
Michael: Now managing risk takes practice it’s not a simple answer it will take a lot of effort if you have not already done this and for those of you have already implemented a risk management structure at your firm you understand how much effort it takes just to come up with your risk management structure and process and to implement it takes time and it takes effort and it takes buy-in from everybody in your firm. So not only does it take time and effort to develop your system then you have to implement it and you have to do it on each and every project. A risk management system is worthless if it’s not being applied firm wide and then you know your first effort at it isn’t going to be perfect it’s not going to be flawless it’s going to take time to adapt it not only will you find things that you’re doing right and things that you’re doing wrong and want to adapt to that your industry is evolving constantly and the types of projects you’re involved in may evolve or maybe the delivery system will you might try new delivery systems and so you’re going to have to adapt your risk management structures based on not only your own experience but also in evolving industry.
Michael: so when I think of a risk management program again focusing on typical architectural practice type of risks I think of it in two categories sort of farm focused firm-wide risk management efforts and then project focused. Now generally I think that The Firm focused risk management efforts support the project Focus but you know not surprisingly as you’ll see as we go into some of the details on the next few slides really they do kind of bleed into each other but that’s not really that shouldn’t be too big of a surprise when you think about The Firm Focus risk management structure should be supporting and implemented on a project basis. So even though it’s not a perfect system I think it’s helpful to think about risk management in this way. I mean I’ve also heard of it talked about in terms of passive and active risk management but I think firm focused and project focus works just fine.
Michael: So when we’re talking about how does your firm overall protect itself what you know what are we doing on a from a firm wide basis regarding for risk management and these are five things that I think every firm needs to focus on when they’re talking about a firm wide effort for risk management and the first thing and the most important thing is really having a foster a foster a firm culture that values risk management. I think a lot of times for people coming up and at least I know this from a the legal side my legal practice as a young associate you’re terrified to make a mistake and the last thing you want to do is be is have a you know is to tell somebody you made a mistake but what you need to have in a firm to really address risk management is a firm culture that values risk management you know create a sense of shared Mission where you know everyone’s relative relevant experience can be shared it can be discussed and it can be used to implement a risk management culture where you’re not afraid to talk about challenges on a project. It’s naive to think that there won’t be a problem on a project what you want to have in your risk management culture is a sense that well there will be problems that will arise but we if we identify them early and we then we can deal with them and we can address them on the project and move forward so you want your teams to look at risk management as necessary but also an opportunity on a project. As I just said no project is going to go forward without any kind of a problem but if you can identify those problems and you can address them up front you don’t run from the problems you’re providing value on your project because these problems are going to be project problems and so if you look at risk management as an opportunity to help your project and help your client I think it’ll help to build that culture that you that you’re looking for.
Michael: So once you have that culture valuing risk management you want to have you’re going to need to develop your firm structure for risk management now this is not going to be a one-size-fits-all solution small a small local firm is not going to have the same risk management structure as a multinational you know large firm Roundtable member who has their own in-house counselor or something like that so what you want to have is a structure that supports what your firm does and what it can do now there might be the larger your firm is you may have a multi-layered approach to risk management you might have your you know each of your project leads you know maybe negotiating your contracts and dealing with the project on a day-to-day basis but there may be a layer above them well more of a risk management focused project evaluation that meets regularly with your with each of your project teams to not only identify risks in each project but also to identify risks firm wide you may even have like as I said if for larger firms you may even have an in-house Council in which case they would be another level up. So what I’m talking about really is building that structure in regular meetings with within that structure so that risk isn’t just addressed as it arises but you’re constantly evaluating projects not only individual projects but the opportunity to look firm wide at projects to see if there are areas of risk that need to be addressed and whatever process you set up whether it’s whatever qaqc process you set up whatever interviewing process you set up for your team to evaluate the projects that they’re working on. The process matters you have to it’s one thing to have a policy but it’s another thing to implement the policy and it’s really only through implementing the policy that you actually achieve your goal of actively managing the risk that you identify and when you identify those risks you want to make sure that the risk is being prioritized it’s being fully analyzed and so this is what needs to be built into your process. And then once you’ve fully once you’ve identified it and analyzed it you need to have a timely implementation of your response to the problem so this is the process that you need to work in any of your projects and that process is going to you know you’re going to have elements of risk avoidance risks minimization and then where you can’t avoid it or you can’t minimize it to the extent that it’s no longer a problem you’re going to have to accept the risk and you’re gonna have to assign someone the responsibility of dealing with that risk we’ll talk a little bit more about that later.
Michael: Next take advantage of your insurance experts and then I’m not talking again on the Project Specific Point yet I’m talking firm wide build your insurance program take advantage of the experts that are available to you to build the insurance program that fits your practice and the same would goes for talking to knowledgeable attorneys in the industry. Obviously you know my background I work for AIA contract documents so I highly recommend our documents as the basis but whatever documents you use whether you write them in-house or use ours I strongly suggest having firm templates that you can use on each of your projects whether you use it or not or it’s the guideline from which you work as you negotiate any contract. If you have firm templates and guidelines associated with those templates you’re giving your people the opportunity to to control the world within which they work. If you have consistency just imagine a team leader who has multiple projects and if you have General consistency between each of your contracts on those projects it’s a whole lot simpler to manage the risk on those projects because you have consistency of promised expectations to the client you have consistency on process promised processes and deliverables in in each of those agreements so consistency amongst the agreements is important. And then the Contracting guidelines would allow you then to adapt to requests made from Individual clients what’s the sort of standard deviation that is acceptable within our firm on particular Provisions. There will be some Provisions that no deviation is acceptable but there are certainly areas in which deviation is permitted and under certain circumstances can be accepted and so those Contracting guidelines can provide that assistance to those that are out there. This is our firm expects if you go outside that Norm then maybe it has to go up the chain and we have to talk about it and decide you know if you’re exception is appropriate here. And then you have another advantage of these firm templates is that you have can create common language amongst your office a common expectation as to what each term means in in a contract what’s in what is an RFI what is a submittal things like that and so and you know what your process is associated with rfids and submittals.
Michael: The other thing the last part of your overall firm focused risk management structures is to teach and educate your staff and engage with your people and this is not even a one-time thing this has to be over and over again. If you look at the list it’s almost a cycle you know in a sense you know you build the culture you develop the structure and the process and you talk to your Insurance Advisors and your legal advisors and then you teach and educate and quite frankly that re reinforces the culture so it is a cycle of teaching and learning and it’s not necessarily a one-way street. Either your staff are the ones who are out there implementing whatever process you’ve put in place and you need to learn from them what’s working and what isn’t working or what new uh risks they’re identifying in projects and you adapt your structure and your process accordingly. So having that feedback loop with your team not only reinforces with them the value the firm is placing on risk management but also keeps you if I’m assuming most of you have a risk management role in your firm informed about what’s happening out in the field and that’s the best way to adapt is to talk to your staff and make sure you know what’s happening and make sure they know what’s going on up at your level and what you’re seeing.
Michael: So that’s in terms of firm wide that’s where you know those are sort of the key elements I have identified for risk management but now I want to get into more of the project focused risk management and you can see some of these will bleed into the larger firm focused aspects of risk management but these are the four I’m going to go over the next few slides.
Michael: So the first thing I want to focus on is know your strengths know what your firm does you have expertise in a particular in a particular area or areas and with that expertise comes certain efficiencies increase your likelihood of success whatever processes you’ve developed whatever expertise you developed in certain types of buildings or certain types of projects are have been honed over your experience for Optimal Performance so if you’re sticking to what you’re good at you’re more likely to reduce the level of risk you have on each project and also it increases the profit potential on those projects. Now I’m not saying that good risk management doesn’t allow for your firm to grow or to broaden its horizons. Quite the opposite what I’m saying is that no when you are broadening your horizons or stepping out of your comfort zone and knowing what you’re good at so that you can implement those where applicable on new projects. When you’re working in something that hasn’t traditionally been your strength just be mindful that you’re stepping outside of that comfort zone and that may require your project process and your risk management structure and process for those projects to be a little bit different than they are for other projects or maybe a project where you worked with a particular owner a number of times if it’s a new owner and a new type of project a new type of project it may require you to address to provide additional effort to ensure success you know more time in design more contingency additional qaqc any number of things. But when you know your strengths and you know what you’re good at you know what you can port into a new type of project. And then where you have those fuzzy areas you know where you might need to provide additional resources to increase your likelihood of success and when you know your strengths and you know when you’re going outside of those it allows you to kind of maintain a balance you know you wouldn’t want to go too heavy towards areas that you’re not familiar with where you’re now you know overly burdened on those types of projects and you have fewer of the projects that were the likelihood of success is more consistent with how you practice and a stronger likelihood of success just based on past experience. So knowing your strengths can go a long way in helping you make strategic decisions as you navigate a project and get new projects.
Michael: The next thing I want to talk about is choosing your clients and your projects. Yu have to know going in that you don’t necessarily have to say yes to every to every client so you need to establish go no-go decision factors for your firm again you can see where we’re cycling back to some of the firm focused risk management policies. You’re going to need decision factors that your firm has agreed upon that these are the areas that we’re most concerned about and making a go no-go decision on whether to begin work for a client or perhaps it’s the same client but a new type of project so going into any potential relationship you need to be aware of what your go and no-go decisions are. And these are going to be different for every firm but I think there are some common selection factors of at least some points of information that you may want to get when you’re talking about choosing a client what’s their reputation are they local you know has anyone else worked for them so anything you can learn about the reputation is going to be valuable helping you to decide whether or not you want to work with that client. Do they have any experience in the project type in which they’re asking you to provide services? What evidence of their financial solvency can you find? Have they declared bankruptcy? It might be a good thing to check out you can’t just go into a project with a client and not know anything about them in their in their background. Quite frequently you’re going to be asked to do work for a single purpose entity LLC you might want to find out who the owners are and what their history is do any of the clients that you’re working for have significant litigation history? It would be nice to know before you go into a project that they have a tendency to end most projects in litigation against their design firm rather than find that out later on in the project when you join the long list of Architects they have brought a claim against you may not want to enter into a relationship with that type of client you may want to take that type of project on in which case I recommend reaching out to your attorney and becoming close friends with them because you might be seeing them. But you can make business decisions on whether or not you want to get into a relationship with a particular client but you need to do it with your eyes open and so you need to apply all these factors and do your research on choosing your client. I think it also goes for projects as well does the project align with your firm strengths as I said earlier you might want to go outside of your strengths but again knowing you’re firm knowing your no-go effect decision factors will help you make at least an informed decision when you are deciding whether or not to pursue a client or pursue a project. And I don’t think the go no-go decision is necessarily ever easy maybe it is at the times but if it’s a close call it’s never going to be an easy decision and every project has risk but if you know your firm and you know as much about the client that project as possible you can at least make an informative decision if you choose to proceed with a client or a project. Use what you know about the client to adapt your project implementation. Their litigation heavy you might want to make sure that you’re dotting every eye and crossing every t on your meeting minutes and all of your project correspondence and papering the project as much as you possibly can just as a risk mitigation measure if there were to be a claim later on in the future so I think you get the idea of the importance of evaluating your clients and your projects.
Michael: I think that goes equally true for Consultants but don’t forget your in-house team you want to make sure your staff with experience leadership and that your project team aligns with project goals that they can deliver on the project goals. I would also suggest if that when you’re structuring your teams you need to have a mind an eye towards mentorship and professional development because of the residual benefits of that has towards retention. I think anybody who’s attended any kind of insurance companies presentations on risk or claims history over the last few years has heard that many claims from the insurance companies standpoint against design professionals are a result of a lack of experience of on staff at design firms. So why is mentorship and professional development on here as a risk management is to get them the experience that they need to learn from an experienced team on what is required for our project so not only will you provide professional development which will make it more likely that they will stay with your firm and gain the experience in which then you get to benefit from their experience but it’ll also give them an opportunity to learn from people who have been there before. I’m sure most of you are aware of this that you need to provide mentorship and professional development but I just wanted to reiterate how I view it as a risk management strategy as well because it’s their future experience they’re the ones who are going to be your head leading your risk management charge in the future and so you want them to learn the process to be involved on these projects to stay with you so that you get the benefit of what you’ve taught them. Consultants are a major source of risk exposure on any project just as you would vet your client you need to vet your consultants. Make sure that you’re aware of what their insurance limits are I would try to find out if they’re subject to any large litigations at this point all of you know that your pli policies are practice based and if there are any other claims against those policies made it is going to reduce their overall coverage certainly make sure you have up-to-date Insurance certificates and be aware of when those certificates expire and when you need to get replacements all of this will impact fee distribution on the project. And so you want to be aware of who your Consultants are what they’re good at and what their history is. Hopefully you have an existing relationship with them and you understand all this already but just like selecting your client and selecting your project is key to risk management selecting your Consultants is probably even more important.
Michael: All right negotiating your contract and understanding its terms. Please don’t work without a contract. I know that at times it seems necessary to get started without one if it is truly absolutely necessary at least develop some kind of early work Arrangement perhaps you send a letter that you agree to start performing your services subject to the following terms until we execute a full agreement. You could even reference a B101 standard set of services if you would like but to the extent possible please do not start work without a contract. It’s the basis which it defines your obligations it also defines how you’re going to be compensated and those are probably the two most important things in doing business in the architectural profession. Knowing what you’re supposed to do and knowing what you’re going to get paid and having a ground for both of those to happen. So please negotiate a contract and get it signedas I said earlier I think there’s a lot of value in having customized templates to your practice. I obviously believe we provide a strong foundation a contract documents but whatever path you choose to create them please have customized templates available at your firm they are a wonderful resource for anyone out there on a project getting ready to negotiate a contract with a client. It is much better to start from a base that is acceptable to your firm for that project type than it is to accept something cold from your client if you can start from your templates. If you can’t start from your templates you can at least compare what you’re given to your templates so it’s a huge and valuable resource as you go into any negotiation process. Be willing to demand what you need the best time to ask for stuff is early in the relationship everyone is theoretically collaborative and looking to build a relationship to move a project forward and this is the time to ask for what you need. It may be a negotiation but please ask for what you need to feel empowered to do so. In your risk management structure and process should empower people to feel comfortable asking for what they need. Again this is going to go back to that go no-go decision what you know what provisions do we need in our contract for this to be a go and not a no-go so you need to be able to feel comfort in demanding what you need and because you may need to walk away. I also think the contract negotiations are often overlooked opportunity to educate your client on services. Now not all clients are equal some of them are very experienced in the construction industry many of them are not and when you’re building your relationship with your client early on you can use the contract negotiation process to educate them on the nature of your services and what value you are bringing to the project it also allows you to identify areas that are not necessarily part of your basic services but might be something that you could provide for let’s say an additional fee additional services, but I think it is an opportunity to set and help establish owners expectations clients expectations on projects. Many claims arise from not necessarily errors but unmet expectations and if you utilize the contract negotiation process to help set realistic expectations for your client and then you deliver on those expectations you’ll be in a much better position and better position to avoid claims. If for example someone were to come later on and say I thought you were going to do XYZ you can say no remember we discussed this oh I have an email about this about what we what we provide and how we provide and so they may not be happy but they at least will recall the conversation about what the reasonable expectations were for your fee.
Michael: Don’t ignore the contract after you’ve signed it. I hate to say it but in private practice I would often go to design firms I was representing and asked to see the contract and they knew I was coming but they still didn’t have the contract out for me to look at. I was happy to bill them the time to look through all of their files to find the contract but that’s not the best way to proceed and not because your attorney needs to see it. It’s because your team needs to know what’s in there again as I said it’s the contract that’s really the crystallization of what the parties have agreed to and what the expectations are for the client so you need to make sure you’re educated your team on the project as to what we agreed to do on this project so you can’t put it in a drawer and ignore it and just do what you’ve always done on every project. I suggest creating a contract playbook which is essentially a summary probably in less legal terms in a contract but a summary of what your obligations are. Does every person on your team need to know what your Indemnity obligation is? No, but they do need to know what exactly you said you were going to do when you were going to do it and how you were going to do it and it’s through this contract playbook that you can help to increase the likelihood that your project team is delivering on what they actually promised to the client and avoid those unmet expectations which are the frequent causes of claims.
Michael: So this is where we’ve been on project and risk management: know your strengths, choose your client and your project, strategically select your team, and negotiate your contracts. Program over right? If only that were the end. Unfortunately or fortunately, I don’t know how you look at it, but there’s a lot more to risk management. Those are really just setting the stage for the project and of course I think contracts are vital in the project but they are just a piece of the solution. There are numerous risk such points throughout a design and construction project and so in my mind effective project risk management is really a formula of strong risk management culture and process good contracts got to get that in there an active project management and I think it’s the active project management that we haven’t really touched on too much.
Michael: When I was on the risk or when I worked with the risk management committee one member actually said at one point that most of the claims that they deal with come from project management issues not the design errors and emissions. Certainly there are projects out there design errors and emissions occur it’s a real thing it does happen but in his opinion most of his claims or really most of his risk and problems occurred from project management issues.
Michael: When you think about it it’s not all that surprising if you think about the number of the numerous voluminous project management touch points that impact risk you know I have, what do I have like 10 ish 12 on this screen that I could that I rattled off just as I was putting the PowerPoint together. All of these touch points could impact risk you know project meetings, site visits, RFI processed, you know reviewing change orders and submittals, dealing with contingencies or uncovering work, ordering more tests and inspections, right rejections at work, you can see how any number of these could devolve into a potential claim and risk so you know it’s not surprising that project management if they could put air quotes around it results in so many risk-based problems on a project that can result in a claim down the road. There are so many of these touch points it’s hard to manage just on a pure volume standpoint and while it may be there may be times where in any of these instances you’re like Yep this could turn this could turn ugly we might be looking at a claim here. Oftentimes you don’t know what project meeting is going to be relevant down the road when a claim or a dispute arises on a project you know. You didn’t know exactly what elements of that project needing to take extra detailed notes about because you didn’t know it was going to become a claim and that’s where the risk management culture and the risk management process comes into play. Because each of these can be valuable in dealing with a problem on a project and so having a process to address all of these potential touch points is vital to actively managing the risk on your project, even when you don’t know that it’s a risk item at that point.
Michael: So, if you have a firm culture and structure and supporting risk that supports risk management you’ll be well positioned to identify the risk if possible at that time, assign responsibility for the resolution, develop a mitigation strategy and see it through. And I think the Mantra is risk is owned until it’s resolved and hopefully it gets resolved quickly. Now as I mentioned on the last slide all of this sounds great but how do you support this with all you know with all those touch points you don’t even know what risks you might be exposed to when you’re when you’re going through that, and again I think that’s why process matters. Because if you have the process by which you are creating a project record through all of those touch points you can become what I would call the source of truth. You would at least have a reference point of what the source of truth is on the project when the claim or the dispute arises.
Michael: So what is core to any risk management active project management process obviously you’ll have your qaqc for all of your design work but in the more mundane nature is developing and implementing a documentation and communication plan. And the purpose is to manage the process of the project and the client expectations. What you’ll want to do is establish responsibility for documentation of all these touch points, establish protocols for communicating them. I would strongly suggest to be done in electronic format through some sort of system and understand within your firm the value of project record authorship and owning the narrative. Who do you want writing the meeting minutes? Do you want one of your team or do you want one of the contractors team writing it? Who do you want to keep track of this middle log? And when submittals were received by the Architecture Firm and when they were due? Be the project source of truth. I think that cannot be overstated anytime a claim arises on a project, if it really does fall apart and the attorneys are brought, in the first thing they are going to do is ask for a timeline a project narrative around the thing that happened that affects the claim. They’re going to want all correspondence related to that issue they’re going to want all meetings records related to meetings, any drawings or agenda that were issued, you know they’ll they are going to want the whole narrative around that to determine exactly what happened. And the best way to provide that support is to own that narrative, to have that full authorship and be the source of truth. Now that gets me into the other issue here and that is who owns all of this information? As I said you know I suggest you do it in electronic format. Most projects there’s some sort of document management system implemented. In my experience rarely is the design team the one driving that process, usually it’s through the contractor. Oftentimes you’re accessing some platform that either the owner or the contractor is implementing and you might plug into that system but you essentially have limited access. You might have access throughout an entire project but you know it’s an Enterprise System that the contractor owns they can allow you access or kick you out at any minute and certainly they I don’t think they have any obligation to allow you access to that full project record in their system. you know after project completion, certainly not through the statute of limitations period which can be you know it’s typically five years in most jurisdictions. So while you might have created the source of truth you may no longer have access to it and so I think that’s a major risk point for the industry. It’s with that in mind that I’m going to pass the presentation over to Jeremy to talk about a more holistic approach to project management when it comes to all of these types of things. So thank you for your time I’ll be around obviously for the rest of the presentation but enjoy what Jeremy has to offer and I’ll be back on at the end if anybody has any questions.
Jeremy: Thank you, thanks mates. Yeah so thanks Mike for running us through a lot of that info and detail on the risk and the challenges that we can experience on some of the projects. I’m going to be talking about a holistic approach to project management something that I’m pretty personally passionate about. I’ve seen a lot of projects have these challenges and address them and there are solutions to some of these problems that that we’ve come across.
Jeremy: The first thing I want to talk about is a study that the AIA actually did a little while ago called the technology culture and fit the future of the architectural firm and you as members you can have access to this study, but there are a couple of key findings that popped out of here. And one of the interesting ones or the two of the interesting ones that popped out was that there is a desire from the architectural industry for increased profitability and efficient project management. Getting better at both of these things is going to make your project and your delivery better. And a recommendation that came out of that is that improving the adoption of applications of construction management software would actually help smooth this process and drive efficiency for the projects.
Jeremy: So we’re going to talk about that a little bit and what I want to talk about is one of the examples that Mike actually brought up moment ago which is where what often happens on the project, this is a reality we see all the time on the ground on some of these complex projects from design stage all the way through to execution, and what generally happens here is that one organization on the project will decide hey we’re going to create a system we’re going to roll out a system that’s a single source of the truth. And that is in this case that contractor has selected that system, you’ll see it there labeled as the portal, and that’s the system that everybody decides okay we’re going to use that as our system of record. But there’s a couple of challenges with that. As Mike mentioned you may not be able to access that system in the case of a dispute. You may need to keep your own record so in this case every organization actually keeps their own records of the project even though the central project record has been established and agreed, we have an organization that controls and manages that project data, in this case it’s the contractor, but they have absolute control over that and that includes control over your access.
Jeremy: Now I just want to talk through a couple of examples of what happens in reality here. So you might take a document from your system, you’ll upload that into the project system of record, you probably have to send an email to let them know that that’s now there and they can go and check in that folder’s there, they may actually take a copy of that and keep it down in their own system as well, so there’s now already multiple copies of that document flying around, and this is an example where we have decided as a project team to have that single source of the truth, that single point of record. We’ve already got multiple copies of that document, and on every step of that process somebody has to write down the status who’s got it, who’s received it, where it’s been sent, and all of those kinds of things, so we’re keeping another record in addition to all of these that happen. In this example here we might have the owner wanting to see some of those documentations but maybe they don’t have access to the system so, we send it to email emails are too big, we have to break it down and to four or five different emails, the owner then keeps their own record on their own server, their own application, and again updates their record for the status of who’s got it, where it came, from where it is, and maybe they’ve got a couple of questions. So they’re likely to send a couple of emails backwards and forwards between the architect, between the contractor, to all of these different organizations, with the conversation of that particular document. And again that email may not actually be linked back to that original document that was the first challenge, the first question that they had. So now at some point those records aren’t linked and as Mike mentioned if there is an issue somebody’s got to go back and find all of those records together and that that can be expensive, time consuming, and risky for the project. If we think about this from the project wide perspective every single organization on the project is having that exact challenge. They’re all agreeing to upload their documentation into that single system of record, that’s the contractor’s platform, but because of those concerns they’re actually keeping their own records, they’re sending things through an email, as well keeping duplicate records of everything, and the challenges with that is everybody is now duplicating this information and if something goes wrong how are we going to go back and resolve that issue? And this tends to be something that we see very often on these projects out in the field. So I just want to pause here and roll out a quick poll for everybody on this call. So based on that example, where you know you’ve seen a real world example of what tends to happen, so in that previous example who actually controls the project data and we have Hasti who’s actually going to roll out that that survey for us and we’d like to get the answers. We’ll pause for a moment let us know what your thought is on who controls the project record in that example.
Jeremy: Hasti I don’t know if you can see those results coming in but if you want to jump in and talk through that by all means.
Hasti: Certainly so it’s looking like the majority of respondents 57 percent believe that each party controls their own project data. 40 believe that the contractor controls the project data and access, and about 6 percent now believe that the owner does. So the winner is the respondents believe each party controls their own project data.
Jeremy: Okay um that’s really interesting. So if we go back to the slide just to talk through some of those results a little bit, that’s really interesting because the reality in this particular example is that the project record the system of record that you’ve all agreed to use as your single source of the truth in this example is the contractor’s platform. Now yes you all have your own record, but you’ve duplicated it and the only reason you have your own record is because you’ve duplicated it, and think about the additional effort that’s going on in that case. So by duplicating the record yes, you do keep control of it but how much extra effort are you going through even though you’ve all already agreed to standardize on a single source of the truth. So it kind of defeats the purpose of having that single source of the truth right? So let’s think about some examples of how we can address that challenge, reduce that duplication, reduce the extra effort involved in keeping one record in the project system and my own record, so that I can I can protect myself and manage my own risk. lLet’s talk about ways to streamline that.
Jeremy: Now the great news is that we’ve actually already solved that problem in a lot of different industries. So I’m going to talk about the banking industry for a moment how the banking industry solves that. So the banking industry has a couple of different platforms that are in there but basically underlying it all is a single system that allows every single person involved in a financial transaction to keep their own bank account. Now there aren’t two copies of your money, I wish there was in some cases, but there is only one copy of your money in your bank account and when you want to share that with somebody when you want to transact. For example, with your morning coffee you take a piece of money out of your bank account and you give it to the coffee shop and it goes into their bank account, the coffee shop then needs to deal with their wholesalers, so they also move a little bit of money from their account to the wholesaler, and the wholesaler has to deal with their suppliers the farmers, and the in this case the Dairy Farmer and the Coffee Bean farmer. Now in every single one of these cases I’ve got my own bank account, I’ve shared a little bit of money with the people that need that with the transaction that needs to happen, and I’ve issued that forward down the line and to subconsultants, subcontractors. In that example and you’ll notice here that other customers that are involved they still have a bank account they still use a bank but they don’t see anything to do with that transaction unless they’re specifically involved in it. Now the great thing about this model is like I said it means you don’t need to keep multiple records of everything that’s going on because at every step of that process the system, the banking system, keeps a record keeps an audit trail of every transaction that happened and that’s moving between your account, their account, the private accounts, between people, and only individuals that are involved in those transactions that needs to be involved in those transactions are actually seeing that that money in their account. But that eliminates the need for me to have a private kind of stored area, as well as a central record, because I trust that my bank account is secure, I recognize that, and I can transact and run my business and move my funds accordingly.
Jeremy: Now in the construction space one of the great things that we’ve brought to the market is a model that replicates that approach so this is an approach where every single organization has their own bank account, their own account for information, it’s a central system it is not owned and controlled by anybody on that project regardless, of who actually purchases and signs and pays for the application. In this example, nobody actually has any overarching control the ability to cut somebody from their data, to remove the architect from their own account, so you can put information into your account. In this example that may be AIA contract documents that you’re using and we’ve got some great Partnerships through using these documentation documents types together, you can put that into your account and it’s private to you, it’s secure for you no one can prevent you from accessing that even if there is a dispute, you will always have access to that piece of information. Now if you choose to distribute that through to the project teams you can issue that to the people that need to be involved, in this case we’ve got the owner and the contractor, and you can pass that forward and the contractor can issue that to their subcontractors. And this means again I don’t have to keep those duplicate records of the project system and a separate copy of my own information kind of back here in my back pocket so that I have to now keep record a spreadsheet of where this document, is who’s got it, what the status is ,the system does that automatically for you. You don’t need to do that duplication, you don’t need to keep track of the status of all of it because the system does it underneath automatically, and it keeps that transaction record for you. So if you do get into a dispute like Mike mentioned earlier you’re able to resolve that quickly because everybody’s record is the same. I don’t have that project record that central project record that is now actually different to the record that I’ve kept here it’s the same thing and that can streamline the process substantially.
Jeremy: Now if I’m bringing through new documentation a new revision, I can choose to issue that out, I can choose to send that, I can choose to keep it private in my bank account, or I can set up the system so that it will automatically update the people who need to know about this. The workflow automation process automation to automatically let everybody know hey there’s a new version, it’s documented, it’s tracked, it’s logged, it’s issued out to the right people and if I need to have a conversation like we talked about in that first example I don’t need to have that in a separate system in email where it can get lost and not linked to that document. I can actually have that conversation in the same platform and that’s always going to be linked to that original document because it’s on the same platform, and again if there is a dispute if that owner and that architect in this example do have an argument the project owner in this case cannot prevent the architect from accessing that system of record. So again you don’t need to keep that second copy, much like the banking system, the bank account is yours and nobody can take that away from you. And that’s a really powerful way to think about information and data on projects because it prevents that duplication the great thing about all of this is that because it’s online again that record is kept and you can access all of that through any of the mechanisms that you would normally use to access applications the cell phone, through mobile devices, you can access these platforms through your model, ot the project owner can use this as a tool to keep track of their finances as well and in this example the contractor can actually run some of their reports on statuses and actions. So every single organization has features and functions and benefits of using this platform that are great for them but at the underlying platform level everything is designed to be a Level Playing Field so everybody is happy and everybody trusts the system of record.
Jeremy: Now we talked a little bit about this in construction, and that’s obviously a lot of complex document flows that are happening in that but thinking about the AIA stages of early design, there’s a lot of stuff that actually happens before then. And unfortunately as Mike mentioned the system of record is usually only decided at the point of construction starting, but there’s a whole lot of stuff that happens before then. The pre-designed, schematic design development, construction documents where you’re working with your owner to establish these standards, and if you’re able to think about how do I actually define some of these processes and systems earlier on in the process with your project teams you’re able to eliminate a lot of those challenges in those design stages, but then also help the project deliver a better result by defining what it is your owner needs on completion, how does your owner want to manage the project, how do you want to manage the project to ensure your designs are followed, how do you run this project efficiently effectively, and you can specify these platforms and these requirements moving forward so that you’re not at the behest of somebody else on the project. And this allows you your owner in the early stage design team to really control and manage that.
Jeremy: So thinking about that and Hasti I know we’re running up against the clock here, but closing out this pretty quickly we do have another poll. Do we have time to run this one or should we move forward? Okay great.
Hasti: Give a few seconds
Jeremy: Great thanks! So yeah the question here is if you are to use a platform what are you more likely to embrace and use what system is going to be more acceptable to you one that is Central and owned and controlled by one particular party on the project or a system that is designed to be from the beginning a Level Playing Field for all. Which one are you more likely to use and therefore thinking about the rest of the project team what are they more likely to use. Hasti you go ahead sorry.
Hasti: So it looks like we’ve got about 82 percent prefer a Level Playing Field where about 19 percent prefer single party controlled system.
Jeremy: Perfect that’s a really great example there because look there are scenarios where some organizations do really want to just own and control their own data and that’s that fine. We are thinking about here the entire project outcome entire project deliveries and how would you feel if the single party control system was not your organization? If it was a different organization? And that’s where some of those nuances come into play. Yes if it was your system and you were owning and controlling it great that’s fantastic for you, but how about everybody else on that project would you use it if somebody else is controlling it.
Jeremy: And these are the challenges that we try to address with that Level Playing Field neutral model and the reason why ACD, AIA, and Oracle Aconex have partnered together to deliver a solution and deliver some answers to those problems. We’ve got a platform that links these two together and addressing the concerns that you raised earlier on to that AIA study that the architectural teams, Architects raised through that study, and the recommendation the greater adoption of construction management software would help smoothen the process and drive delivery. I think we could see there that one way to do that is by offering your entire project team a Level Playing Field and we are much more likely to get to accept and embrace and adopt those platforms for the project. And with that Hasti, thank you. I know we’re running close to the time, but I’ll hand over back to you to close out. Thank you everyone.
Hasti: Well thank you so much um there is just one additional slide that we can discuss here. So as Jeremy mentioned AIA contract documents has begun a partnership with Oracle’s Aconex.
Hasti: So in this slide as you can see and I know many of you are familiar with AIA contract documents. We’re the industry standard and provide over 200 templates for construction contracts and forms they can also be editable but partnering with Oracle Aconex, which is a design and construction project management system that manages end-to-end processes, allows AIA contract documents to be managed across all the core project processes where you can see in the gray box in the graphic. So these two products offer complementary capabilities and that together provide a comprehensive approach to managing project documents and information. So if you’d like to get more information about this exciting new partnership in the email that we’re going to send you as a follow-up to today’s webinar will give you instructions on how you can get more information and have one of our Representatives contact you to tell you more.
Hasti: In the meantime if you have any questions regarding the content that we provided today you can send those to [email protected] and we’d be happy to answer those. Because we are over time unfortunately I don’t think we’re going to be able to field any questions but again don’t hesitate to contact doc info if you’d like any additional information. And look out for the follow-up email that we’ll send you by close of business tomorrow that’ll have the recording as well as the PowerPoint and additional resources and instructions on how you can learn more about the AIA contract documents and Oracle Aconex partnership.
Hasti: So with that I’d like to thank our presenters for taking the time to present and for all of the attendees joining us today!
Jeremy: Thank you, thanks Mike. Thank you!
Michael: Thank you everyone!