Project Alliances - the way to effective major projects?

Date: 20 Jun 2017


Project alliances can provide significant performance benefits and has been found to be the most efficient and effective way to manage large and complex projects under uncertain conditions. Project alliances, however, pose increasing demand for development of new knowledge, skills, capabilities, integration, and attitudes from all parties for successful completion of the project. Recent study illustrates how integration between the organizations within the alliance project can be managed over different stages of the project development phase.
 
Statistics about success of complex projects are brutal – projects tend to be late for years and have significant cost overruns among other measures. One of the main managerial challenges in large and complex project deliveries is to ensure sharing of knowledge and development of common goals among participating organizations. Research and practice has developed different collaborative and relational approaches for managing such complex managerial tasks, including partnerships, integrated project deliveries, and project alliances. Project alliances are an extreme form of managing inter-organizational relationships; they are based on a multiparty contract between two or more entities working cooperatively on the basis of shared risks and rewards, relying on achieving “the best value” outcome for all parties and involves establishment of a formal alliance organization. 
 
In this study we analyzed Tampere light rail, which is a public transportation system megaproject being built in Finland by the Tram Line Alliance. It is an ongoing project and the largest alliance project in the context of Finland. The analysis focused on how integration is managed across organizational interfaces in the alliance project during its development phase. The results indicate that significant emphasis has been put on integration; during the early stage of the development phase, integration was managed especially with centralization of decision making power and authority to the alliance management team and to the alliance leadership team as well as various other practices (e.g., Last Planner scheduling tool, weekly meeting and informing procedures, development of written behavioral guidelines and rules, and establishment of a standardized databank) and co-location of the whole alliance organization in the project’s Big Room to facilitate innovating and designing different project options.
 
During the later stage of the development phase, integration was managed with increased emphasis on standards working processes, stricter rules and guidelines, including stricter job descriptions, highlighting the role of visual communication of the written policies, and more formalized and active use of the Last Planner. The rules were also constantly discussed in joint meetings to ensure mutual adjusting and joint commitment towards them and to get novel ideas on how they could be developed. A visualization tool to facilitate interaction and question making between the project working groups (so-called iteration board) was introduced as well as smaller groups to facilitate scoping the project through knowledge sharing and coordination. These examples illustrate practices used to manage integration in the development phase of the alliance project and how they vary from early development phase to later phase. 
 
This article is based on a project conducted by Dr. Virpi Turkulainen (UCD Smurfit Business School) and Dr. Kirsi Aaltonen (University of Oulu, Finland) and was presented at the IRNOP conference in Boston in June 2017.  
 


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