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?
Daniel has already written an excellent post on this, which aptly sums up the role of the two within an organisation. You can read it here. Following from his post I will add my thoughts from the academic side.
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 whereas 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.
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).
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)
- 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.
Five process groups
- Monitoring & Controlling
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.
This is a brief summary of some of the key points of the two frameworks, obviously there is a great deal more, which I will be exploring in the future. But I hope this is a starting point for anyone wondering about PMBOK and TCM and their role in an EPC organisation.
See you soon!
Latest posts by Abrachan Pudussery (see all)
- The art of managing project stakeholders: Part 1 - March 20, 2019
- AACEI’s TCM vs PMI’s PMBOK - March 14, 2019
- Why traditional project success criteria are still relevant today? - March 13, 2019