Engineering Inc. - July/August 2008 - (Page 38)

BusINEss INsIGhts fRom aCEC’s INstItutE foR BusINEss maNaGEmENt EffEctivE Program managEmEnt; Limiting LiabiLity in fLood ZonEs Effective Program management Most engineers cringe at the first hint of a project delay. But says Stephen Mulva, associate director for benchmarking and metrics at the University of Texas Construction Industry Institute, planned delays can sometimes lead to increased revenues and smarter, more efficient allocation of resources across a firm’s portfolio of projects. Mulva, who presented an ACEC seminar in June titled Advanced Project and Program Management, says that unlike project managers, who typically are concerned with the technical deliverables of a single operation, program managers are expected “to maximize the benefits emanating from an entire portfolio of projects.” What it comes down to is the concept of return on capital employed, says Mulva. Firms formerly relied on return on investment to gauge the relative success of a project. Now firms tend to evaluate their business as a whole. “Each project has to be managed in concert with the larger portfolio,” says Mulva. Years ago, such calculations were difficult to make. But with the advent of more robust modeling and simulation software, firms actually can predict what will happen if they delay a project in favor of reallocating limited resources to other jobs; the results are encouraging. “The really interesting finding is that you actually can delay projects and save money and make more revenue,” says Mulva, who has worked on projects where similar tactics have helped firms boost revenues by as much as 40 percent, sometimes billions of dollars. bim: Promise vs. reality While Building Information Modeling (BIM) is being touted as “the next big thing” in mechanical engineering. Kirk Pesta, of Harley Ellis Devereaux, cautions that firms won’t win with just any out-of-the-box solution. It has to be “the right fit,” says Pesta, who along with executives at two leading software manufacturers, sketched out the promises and realities of BIM during a day-long seminar sponsored by ACEC and the Council of American Mechanical and Electrical Engineers (CAMEE) in June. Given the ever-expanding variety of products in the marketplace, how can firms confidently choose a product that will meet their needs? Pesta offers this advice: n Confine your search to software providers who specialize in engineering, who know the business, not just graphics. n The software should be customizable to your firm’s and your customer’s needs. Make sure you have access to expert technicians whose job it is to help modify the software. n Senior engineers should be involved in the process from the 38 ENGINEERING INC. july / auGust 2008 start. They should be included in product evaluation, selection and training. n Once you choose a system, make sure your employees receive basic and advanced training. Make the most of your investment by ensuring the technology is used appropriately and to its full advantage. n Assign a core team to pilot the software and test its capabilities before launching a full-scale integration. Limiting Liability in flood Hazard Locations Across the nation, a rise in flood-related losses has opened the door for lawsuits against design and engineering firms, prompting concerned executives to ask: How do we limit our liability? “The amount of care that the architect or engineer needs to display is dependent, in part, on the degree of risk,” says Jon Kusler, associate director of the Association of State Wetlands Managers. Kusler joined Ed Thomas, Esq., of ACEC Member Firm Michael Baker Jr., Inc., in leading a recent ACEC-sponsored web seminar on the topic. So what can firms do to limit their liability? The advent of flood maps and other predictors make it imperative that firms engage in due diligence when entering into any project in a flood-risk area. Engineers should carefully study local and state regulations. If there is a flood, they must be able to demonstrate to a judge and jury that they acted reasonably in planning, designing and building a structure. Because the standard of care continuously is moving, Kusler and Thomas recommend design professionals do the following: n Carry insurance consistent with the type of risk they are dealing with; n Follow a “No Adverse Impact Approach” and avoid increasing flood hazards on anybody, or anything; n Be able to prove to a jury that the project was designed to a reasonable, and defensible standard of care; and n Be prepared to be sued. The bottom line: “careful, careful, careful,” says Kusler. For more on this topic, visit: n The ACEC Institute for Business Management provides comprehensive and accessible business management education for engineering company principals and their staffs. Visit for a complete listing of ACEC programs.

Table of Contents for the Digital Edition of Engineering Inc. - July/August 2008

Engineering Inc. - July/August 2008
2009 EEA Call for Entries
Table of Contents
From ACEC to You
News & Notes
Market Watch
Legislative Action
Congressman Kendrick Meek
Going Global
2008 Professional Liability Insurance Survey
Institute for Business Management 2008 Fall Course Catalog
Bridging the Gap
2008 Convention Wrap Up
2008-2009 Executive Committee
2008 Fall Conference Primer
Business Insights
Members in the News
One on One

Engineering Inc. - July/August 2008