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Contents

1.0 Case Overview..................................................................................................................... 3 ................................................................................................................................................. 3 2.0 Organizational Strategy and Its Relationship with Projects..................................................4 3.0 Project Selection.................................................................................................................. 4 4.0 What Is Project Failure or Terminate?..................................................................................5 5.0 Project Management Knowledge Areas................................................................................6 Project Scope Management ................................................................................................... 6 5.2 Project Time Management................................................................................................7 5.3 Project Cost Management.................................................................................................8 5.4 Project Quality Management.............................................................................................8 5.5 Project Human Resource Management.............................................................................9 5.6 Project Communication Management...............................................................................9 5.7 Project Risk Management...............................................................................................10 5.8 Project Procurement Management..................................................................................11 5.9 Project Integration Management.....................................................................................11 6.0 Project Monitoring..............................................................................................................11 7.0 Project economics, initial budgets, comparison actual to budget, analysis of deviations, corrective actions..................................................................................................................... 12 8.0 Quality management, quality control, rationalizing of processes to optimize performance, change control, risk management, security.............................................................................12 9.0 Human resources management, knowledge management, change Management, leading project teams........................................................................................................................... 13 10.0 Project key success factors..............................................................................................14 11.0 Reasons for and avoidance of failure...............................................................................14 1 Charitha Kandage (UWIC/MBA/MT/01/07)

12.0 Crisis management and contingency planning...............................................................15 13.0 References.......................................................................................................................15

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1.0 Case Overview


This case reveal the classic example of project abundance or a failure and also the difficulties that project managers are facing when it comes to doubtful terminations or dilemma of coping to such situation. This case is all the about situation where Olaf, the project manager of the maximum megahertz project which was a product development related project in wireless telecom industry, had been facing great amount of difficulties when the particular project came to abundance. Having exceeded the cost budget as well as the allotted time, he was in a verge of demanding more on both constraints. Nevertheless he is still having doubt on the success of the project. But by killing the project, his six bright project associates future would be on a stake. As a sensible approach, he had two options left; consulting a few expert judgment to make a Yes, No answer and if the answer comes out as Yes; review to the total project scenario again or if the answer comes No, which indicate that something were wrong with the project portfolio selection, this has to put forward to the top management. Due to the fact that this has to be addressed as critical business importance, the following case review will be present in order to evaluate the underpinning issues of failing project and how to put up a mitigation plan to overcome such draw backs technically and how to safeguard the human assets from the public harassment resulting from the failures.

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2.0 Organizational Strategy and Its Relationship with Projects


Project management is a discipline or tool which has been playing a phenomenal role in modern management arena. To cope up to the rapid changing and volatile business environment is common visible fact in recent economic world. Corporate strategies are facing huge amount of hardship when it comes to the implementation process. In order to overcome such setbacks and as a prominent solution to the strategic drift , the project management principles have reshape the way of running the most modern organizations by being a corporate life saver. In simple terms strategies are being cascade down to the projecterized elements and project becomes the vehicle to drive those strategies. It can curtail expenses by providing a better defendable cost structure against allotted budget while maintaining the scope, time and quality parameters as expected which will lead to increasing competitive advantage towards maximization of shareholder wealth.

3.0 Project Selection


Project selection is being done from the PMO Project management Office or from the Top Management. It is the most critical point, since wrong selection can be lead to biggest disaster than not being even attending to the project in relation with impact placed upon after the failing the project is enormous. Project has to inline with its existing strategy and structure. The scope compatibility is very much essential. In the process of project selection it has to be examined whether project financial indicators are meeting the desired levels. For instance, by evaluating payback period, NPV, IRR or non financial scoring models has to be placed and reviewed. Followed by the feasibility study or pilot programs will leverage the further risk components and will enable to have a faith on the project success. In the process of the selection it has to be advised to document stakeholder analysis, scope statement, proper charter document in order to have a tab on the risk factors, uncertainties, assumption made by and constraints.
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It is very much essential that the corporate strategy and the project selections are in line and has be with incongruence. HIGH
BREAD&BUTTER PEARL

TECHNICAL FEASIBILITY

WHITE ELEPHANT

OYSTER

LOW

HIGH

COMMERCIAL POTENTIAL

Nature of the product development projects and its feasibility is briefly elaborated in above mentioned quadrant. With respect to this, Maximum Megahertz Project can be placed in an Oyster project due its low technical feasibility though it would deliver high profit for the organization.

4.0 What Is Project Failure or Terminate?


Though it is a proactive mechanism, it still has its own pitfalls or things which has to be careful about or would result in failing. Some complex business requirements always challenge the capabilities of contemporary organizational when the projects are being introduced. Projectorized environment always demands supporting structure, sophisticated management skills, better open systems, role and relationships.

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Maximum Megahertz Project is a product development project which has a high risk component due to it nature of the scope. Projects are being failed or terminate due to two main reasons. It can be due to the wrong selection of the project which has to be a liability of the top management or PMO. Or it can be due to the incompetence of the project handling which is due to the fact that missing the bit and pieces of the project management nine knowledge areas.

5.0 Project Management Knowledge Areas


Projects are handled through five managerial phrases. Each Knowledge management areas must be blend with managerial phases in order to derive the expected result. Project Phrases are as follows, 1.0 Initiation 2.0 Planning 3.0 Executing 4.0 Controlling 5.0 Closing All the nine project knowledge areas should process via all phrases and non conformities are leading to the discrepancies or cause of failures.

Project Scope Management


Project scope in the Maximum Magahertz Project means both a product scope and project scope; which concerns the characteristics, tools and techniques required by the product and work required for the project completion such as deployment of all kind of resources. The project got failed due to;
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1.0

Poor scope planning ; (no proper product description, Project Charter, Project Constraints, project assumptions, Alternative identification, expert judgment)

2.0

Not using proper Scope Planning tools and techniques , such as ROI calculations ,Cost benefit Analysis

3.0

Poor Scope Statement(Poor understanding of project justifications ,requirements, objectives and deliverables)

4.0

Poor Scope Management Process(decomposing the deliverables, creation of (WBS)Work Break Down Structure, defining work package)

5.0

Poor Communication Plan (The communication plan has to be developed and informed and Stakeholders , establishing of frequent meetings and documentation of roles and responsibilities)

5.2 Project Time Management


Time management is keeping the activities on track and managing the schedule tasks to ensure that the project is running smoothly. As per the case illustrates, the project was being held four months and would expect another six more month for the completion. This can be due to; 1.0 Poor activity definition due to lack of understanding or due to mistake taken from Scope Management 2.0 Weak activity sequence (dependencies are not being identified properly) 3.0 Poor Activity duration estimates 4.0 Lack of technical knowledge in Network Diagram, Critical Path and PERT Calculations)

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5.3 Project Cost Management

This all about how project budgets are being laid and the costs are being controlled in accordance. Value engineering techniques and project life cycle costing will be applied. Maximum Megahertz project budget was $ 600,000 though they asking another $ 800,000 on top of the budget line. This can be due to; 1.0 Poor Resource planning 2.0 Inaccuracy in cost estimating(not proper utilization of cost estimating tools, such as analogous estimating, parametric modeling, so on) 3.0 Inadequate cost management plan 4.0 Miscalculation of cost base line (poor usage of cost budgeting tools and techniques)

5.4 Project Quality Management


This concern with the identifying quality standards and devising plans to meet and satisfy those standards. This ensures the project meet the requirements eventually and there will not be any compromising with this constraints. 1.0 Not being laid out proper quality policy , standards or regulations 2.0 Poor utilization of quality planning tools such as cost benefit analysis, benchmarking, flowcharting, Check List
3.0 No Proper Periodic Reviews, Quality Audits

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5.5 Project Human Resource Management


This ensures that human resources which assigned to the project are utilized in effective and efficient manner. Simply it deals with all the aspects of people management issues including mentoring, leading, coaching, dealing with conflicts, performance appraisals, etc. In this Maximum Megahertz project, it is visible fact that there is no proper motivation towards the project success throughout the project team.
1.0 Inadequate team building activities (Poor team focus, poor reward and recognition system,

lack of sense of belongings)


2.0 Poor HR Plan(No proper Role and Responsibilities, Responsibility matrix, Staff management

Plan, Project structure and chart, HR pool description) 3.0 Conflict Resolution mechanism

5.6 Project Communication Management

This ensures the effective exchange of information among the project environment. All the channels of communication has to be managed in a way to encompass the desired massage while eliminating the other noises. Project managers are using 80% of their time and effort on this due its operational importance for effective running the projects. Communication plan has to be in line with stakeholder analysis. Project report, Project records and Project presentations has to properly implemented Project manager attention should be drawn to the communication skills, information retrieval, information distribution methods, Performance reviews and administration closures in order to govern best project management practice which would lead to the success of the project.

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5.7 Project Risk Management


This process include Risk planning, risk identification, quantitative and qualitative risk analysis, risk response planning and risk monitoring and control which concerned the identifying, analyzing and planning the potential risk while minimizing probabilities of risk occurrence in order to sustain or improve project outcome. Poor understanding of Risk Management areas would be lead to a disaster.

For instances,
1.0 Poor emphasis on risk parameters in Risk Planning(No proper risk tracking or historical

information, No proper risk management policies, undefined risk responsibilities, poor understanding of stakeholders risk tolerance)
2.0 Under utility of risk assessment tools such as brainstorming, Delphi technique, Nominal group

technique, checklist, assumption analysis, 3.0 Poor Understanding of the impact of Risk out puts or triggers 4.0 Poor qualitative Risk Analysis(Risk probability analysis, Probability Scale and matrix, Risk Impact Scale, Risk Ranking) 5.0 Poor Quantitative Risk Analysis (Sensitivity analysis, Decision Tree, Simulation) 6.0 Poor Risk Response Planning (Mitigation plans, contingency plans)

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5.8 Project Procurement Management


The process involved with purchasing goods and services from the outside suppliers, vendors, contractors. This process includes procurement planning, solicitation, source selection, contract administration and closure.

5.9 Project Integration Management

This ensures that project activities are coordinating and interacting to perform the all aspect of project plan. Project plan development, execution and integrated change control are the key element of this knowledge area.

6.0 Project Monitoring


Project monitoring is the one of the most important aspect in project management which enables to project activities to be in line with project plan by adjusting its deviation appropriately. Project monitoring and controlling processes out comes indicates whether to terminate project early or where it has been gone wrong; which ultimately put forward via corrective and preventive action plans to back on to the track again. This is the most important review area when it comes to project termination or project failure. If there is any significant deviation which not being managed, would result in failing the project as described in the maximum megahertz case. In order to do proper project monitoring plan, it has to be monitor and reviewed in regular basis and bench mark performance indicators , variance analysis, trend analysis, earned value analysis indicators to have comparisons to get necessary updates and change request should be made
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timely. Further this requires integrated change control; verification of scope via inspection, configuration management blending with project management information system to implement proper monitoring process and outcome of the process would lead to the corrective action plan. In the corrective action plan should answer to the question of changing need of all the knowledge areas for instance scope change control, schedule control, cost control, quality control, risk monitoring control, so on.

7.0 Project economics, initial budgets, comparison actual to budget, analysis of deviations, corrective actions
Understanding of project economics and financials are inevitable for the project success. Cost planning, cost estimating is one of the major cost accounting tasks which will facilitate to establish proper budget baseline for the project. By using the costing techniques like vendor bid analysis, value engineering, activity base costing, life cycle costing , Time value money concepts , the budget will be forecasted which will known as initial budget. When the activity moves on, deviations can be seen which has to address by looking to its cash flows and its reserves to cope up gap created. The budget optimization should practice as a corrective measure and failing to cope up the deficit would create funding need.

8.0 Quality management, quality control, rationalizing of processes to optimize performance, change control, risk management, security
This is basically describes how project will perform its quality policy by coping up to its deviations. This has to be implemented on the process of establishing quality base line, quality assurance and quality control mechanism. Quality has to define at the project charter, communication plan,
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and stakeholder analysis. The cost base line can be develop in accordance with total quality management(TQM),ISO 9000:2008, six sigma , DMAIC methodology. Quality assurance can be aligned to PDCA model (Plan-DO-Check-Act) by determining what to measure with Data collection, metrics and flow charts. Quality tools and quality audits are identified lessoned learned which allow project manager to learn from the mistakes which will further help to improve the quality. To optimize the project performances it can be aligned with project balance score card system. It will review holistic picture of the entire project in four different perspectives. Integrated change control mechanism ensures that healthy effectiveness, highly securing its objectives.

9.0 Human resources management, knowledge management, change Management, leading project teams
Acquiring the right project members are one of the versatile element of the project success. Having on board the desired team, it should be further develop to a high performing project team while negotiating the ground rules with them. In process of building team capacity demonstration of Project management leadership is very much essential. By using the project management tools roles and responsibilities should be assigned while enabling situational leadership as and when it requires. Creation of team identity, personal responsibility and the respect also very much needed and Learning Cycle has to be identifies as training and development tool. Since the project manager is totally depending on this team performance, it is a needing talent that various forms of power types and leadership styles should be applied in par with situational demand. Project manager should always keep an issue log. Lessoned learned from the mistakes done at the various stages can be elevated to the future problems via knowledge management framework. Documentation of the all the important captions and countermeasures taken will add rational foundation for the future projects.
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10.0 Project key success factors

Top management or senior executive support is one the main success factor. Project responsibility for funding, budgets, charter requirements, sign off on risk plans should be shoulder and deviation of the actual results from the planed status be knowledgeable.

Clients and Users also should have active ownership of the project, by providing resources, actively involve with project initiative, sign off the requirement and schedules and concurring with scope changes and risk management process

Know how in the business process; Project team has to be demonstrated knowledge in business process

Project should be chosen based on sound business decision which aligned to its corporate strategy and its risk tolerance level.

Project Scope should be clearly defined and identified in the charter itself. Effective Change Control process must be exist Project Drivers must be identified Limited experimentation with new technology

11.0 Reasons for and avoidance of failure

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As stipulated above project will fail or terminate on the basis of two premises. It is because of the mistake done at project selection or at the project managerial process. As elaborated above project selection failures has to be addressed to the PMO or top management and best thing is to prevent such situation rather ending as terminated abundance. On the other hand, Project fails due to malfunctioning of project management principles and its knowledge areas. This can be avoided from the implementing proper monitoring and controlling mechanism which lead to corrective action plan duly upon.

12.0 Crisis management and contingency planning


Crisis can be created due to high volatile nature of macro environment. Project managers should be ready to counter attack such setback in more concise manner by using crisis management applications. Contingency Plan is one of the tools of the crisis management. It plans out the activities in advance and are applied to crisis or risk events by reducing the cost of action plan and opportunity cost. For instance when the milestone is missed, additional resources that were identified and estimated in the contingency plan are added to a specific task to get back on track.

13.0 References
1.0 A Guide to the Project Management Body of Knowledge, PMI , 2004

2.0 Kim Heldman, Project Management Professional Study Guide, BPB Publication 2004 3.0 Terri Wagner, Project Management Street Smart, Wiley India,2009
4.0 Timmothy J. Kloppenborg, Contemporary Project Management

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