PROJECT MANAGEMENT

IB3820

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University ID 9817773

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REGENCY PLAZA CASE STUDY

(HBS)

UNIVERSITY ID 9817773

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University ID 9817773

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ROLE OF PROJECT MANAGER

The role of a project manager can be described as [to] take responsibility for planning, implementing and completing the project (Meredith & Mantel, 2000: 85) and is entirely dependent on the project identity, requirements and deliverables. The Regency Plaza case is no exception. Due to the nature of the project there is a large amount of sales and marketing involved, as well as the traditional project management skills such as managing design and construction as well as maintenance of cost, time and quality levels. Summary of Responsibilities Manage Design Manage Construction Manage Marketing

Managing Design The Regency Plaza project involves both condominium and hotel sub-contracts 1. Hodgkins was hired to manage the condominium project and so was hired after the conceptual design of the building was completed. This means that the scope of the design component of the project was limited by the design of each of the floor plates with which she was provided. The Regency Hotel Group (RHG) provided Hodgkins with strict targets that had to be achieved if the project were to be successful. A specialist in Condominium design and marketing, Russel Farley, was a member of the project team specifically hired to provide expert assistance and advice that would help Hodgkins achieve those targets. The Boston Redevelopment Authority also provided stringent guidelines with regards to the quantity of condominiums that could be constructed. The combination of these different requirements meant that Hodgkins was forced to disregard the advice proposed by Farley in favour of a design that would allow for more condominiums and therefore a higher probability of achieving the financial targets set by the RHG. This action on the part of Kris Hodgkins is open to criticism. A fundamental part of the design process is designing the base modules that will constitute each individual condominium. Farley made is opinion quite clear with his recommendation that larger condominiums be built because there was more of a market for that particular type of condominium. Disregarding this advice will naturally change the marketing required for the condominiums because the market will have been shifted, albeit in a minor way, to focus on a slightly different group of potential customers. It could be assumed that this is either a harder market to penetrate, or is less likely to provide the quantity of customers required 2 or Farley would have made different recommendations. Even though each customer is entitled to modify their condominium as long as they cover any extra costs, there is no possibility of changing the dimensions of the condominiums. Hodgkins may therefore find it difficult to achieve the level of sales that is required due to a lack of demand for the type of condominiums she has designed. Another problem with the design process is the length of time required to make alterations to the condominiums. This would have been an acceptable problem had the issue been addressed at the time of sale. Instead Hodgkins took the option of hoping that customers would not modify their condominiums much and would settle for the original designs. This was a curious choice for Hodgkins to have made because the target market for the condominiums was that of relatively wealthy couples who would either be looking for a second home, or to move back to the city and live in relative comfort. This segment of the market is traditionally extremely particular about details and so would be expected to make changes to the condominium in order that it is exactly as desired. This was an oversight on Hodgkins behalf that put the general contractor in a difficult position with regards to schedules and budgets. Each time major changes were required the process of designing these changes would take several weeks3 so that quotes could be gathered and the price of the changes could be agreed upon. If the issue had been addressed earlier then a proper framework could have been set up with adequate and fixed deadlines that would cause little or no problems to the general contractor and allow the changes to be made before critical areas of the condominiums were constructed. This difference would also have prevented the majority of complaints from customers regarding delays and slow service.

The extra facilities such as garage and public areas are not assigned to a particular project within the case, and so are assumed to be components of the hotel project. 2 Case Study (Page 5): Hodgkins knew that the target market for this type of product was very thin 3 According to the Case Study

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Managing Construction Managing the construction phase of the project is tightly integrated with the design processes involved in this particular project. Due to the customisation option available on the condominiums, Hodgkins is required to ensure that if such alterations are possible and the price is acceptable to the customers, they are carried out. This can have serious consequences for the overall construction of the project such as delaying completion of floors or having to move various fixings to complete the alterations in a satisfactory manner. This can then have a knock-on effect and cause delays to other aspects of the project, which will incur extra costs to the general contractor. While the customers would pay for the extra cost of any alterations they made to their own condominium, the extra costs associated with delaying the entire project would not be their responsibility. As the contact between the RHG and the general contractor was a fixed sum contract, the general contractor would be extremely wary of committing to anything that may extend beyond their budgets. Again this could have been set up more effectively if the scope of change had been correctly defined and agreed at an earlier date, allowing for a more efficient use of resources and better planning causing fewer complaints and less extra cost. Managing Marketing The management of the marketing aspect of the project has not been particularly successful either. This is mainly due to the reasons outlined above to do with the design of the condominiums. As an extra incentive and personal touch, Hodgkins allowed various fittings and fixtures to be customised by the owners. This would allow the customers to feel more comfortable with the purchase of their condominium because it would feel like they had had more input into the design of the unit. Unfortunately it was also made possible for customers to redesign their condominiums to a greater extent if they so desired and were willing to pay any extra costs. This resulted in the problems outlined above with design and construction. Due to the nature of the target market, Hodgkins states that she expects a lot of good advertising to be via word of mouth. While this may well be a feature of the target market, it can only work well if the content is positive and unfortunately because of the problems mentioned above, some of the customers have started to complain. This means that any information they provide to friends and family is likely not to be as positive as Hodgkins would like. This is an extra consideration that she appears not to have realised because there is no evidence that she has attempted to appease or compensate any of the customers who have complained. Conclusion From the evidence stated above, it is possible to conclude that while Kris Hodgkins has had to manage a large and multi-faceted project, she appears to have made a number of decisions that have adversely affected the success of the project. As project manager success of the project should be the first and main priority however even though possible solutions to the problems have been given, Hodgkins did not appear to have used, or be likely to use any of them in order to resolve the current issues associated with the project.

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THE MILLERS DILEMMA

Hodgkins states that there are effectively five different options available that could be taken. The table below summarises these options and their advantages and disadvantages.

Decision
Inform the Millers that it was too late to make the required changes

Advantages
No extra costs for the general contractor Schedule for construction of the units would not be delayed The Millers could deal with the changes and associated costs themselves Minimize the demolition work required If the cost was accepted, it would keep the Millers happy The changes would be made Work could continue in parallel on the other units Minimum discontent to current contractors Millers could finish the unit at their convenience No extra costs to the general contractor

Disadvantages
The Millers would be extremely dissatisfied If the changes were carried out after closing, the entire floor would have to be shut down Extra coordination involved Putting the unit on hold for quotes would be costly Unclear who would pay for the hold Quotes could be extremely expensive due to overheads Vandalism and violence could result from labour conflicts Managing two general contractors is difficult Kelly would give a small credit for work done and materials purchased Unclear whose responsibility punch list items would be Banks unlikely to lend money for the project Customer pool would be minimised Reduce the RHGs control over the project Impact of continuing construction in a building containing a luxury hotel could be negative No identical units available Randolph would have to redesign, costing the Millers more Higher units are more expensive

Push through the changes

Hire a small general contractor to finish the unit before closing

Stop work on the unit and hand it over empty

Move the Millers to a higher floor

Costs to Kelly would be minimal Time constraints would be looser General contractor would be happier Construction could continue on the other floors

As is shown in the table above, there is no obvious path that could be taken with no disadvantages. All options cause inconvenience to different parties involved with this particular problem. The best option that would cause the least inconvenience to all parties is to move the Millers to a higher floor.

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Advantages Moving the Millers to a floor on which the interior work had not yet begun would mean that there would be no need to demolish any completed work and there would be time to assess the cost of the changes and allow them to approved by the Millers. This means that the general contractor would be content because the original schedule can be maintained and the changes could be made without significantly higher than average costs. This is because there would be time enough to have the changes approved by all parties before it was time to construct the interior of the new unit. The interior could then be constructed as desired by the Millers with no materials or construction work wasted. It would also mean that construction could continue on the other condominiums on lower floors because work would not have to be stopped while the changes were assessed and quotes were delivered. These advantages are relatively important because it is necessary to keep the general contractor happy. While the Millers are potential buyers of one condominium, there still remain many other floors that need to be constructed. Dissatisfying the general contractor any further at this point could cause difficulties should there be any problems later on through the course of the project. Disadvantages Due to the floor plate changing on different floors of the building, there would be no identical condominium available. A direct consequence of this would be that Susan Randolphs architectural plans would need to be altered to fit in with the new floor plate of the new condominium. This would cost the Millers more in salary payments to Randolph. The differences between condominiums should however be minimal, allowing many of the current alterations to be kept, and less time to be spent redesigning the condominium. One of the main disadvantages to Hodgkins is that the higher apartments are more expensive. While this would not immediately seem a problem, the main issue is whether the Millers would pay extra for the inconvenience of having to move to a condominium higher up the building. In order to satisfy the Millers, it would be advisable for Hodgkins to offer the price difference between the condominiums as a form of compensation for the inconvenience. This is an extremely important gesture because, as has already been mentioned, Hodgkins is relying on word-of-mouth advertising to sell the condominiums. The Millers are described as being active in the social circles of Boston. Sam Miller is the president of a firm and therefore would appear to be the social class Hodgkins is trying to target. For this reason their satisfaction would be very important so that others in the same social circles gain a positive impression of the Regency Plaza condominiums. Conclusion The option to move the Millers to a different floor appears to be the best choice available to Hodgkins. This is because it appears to have the least negative impact on cost, time or quality. While the cost is higher to the RHG than some other options, it is extremely important to please the Millers. The time is kept on schedule because construction can continue on lower floors and the alterations should be approved by the time construction starts on the Millers new unit. Quality might be slightly adversely affected because the Millers would not be getting the apartment they wanted in the first place. They would however be getting a more expensive apartment for the same price which should satisfy them.

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NEW FLOOR LAYOUT

The new floor layout that has been designed was based upon the advice given by Russel Farley. Farley, an expert in the field of condominium marketing, recommended that the condominiums be larger, rather than plentiful. In accordance with this, the new floor layout consists of seven unique condominiums spread around the floor plan. This design also attempts to maximise the cost, time and quality aspects of the project so that the project can be successful. Cost In order to keep the cost of the project to a minimum, many aspects of design have been carefully considered. The rooms in each condominium that require plumbing (kitchen, utility room, bathrooms) have, as often as possible, tried to be placed together. Furthermore in as many situations as possible, a neighbouring condominium will try to have their rooms that require plumbing, adjacent to those in the other condominium. Both of these design elements will allow money to be saved on the plumbing of the floor. Pipes will not have to be carried too far and will be relatively grouped together. Time To maintain a schedule and save time in the construction of the condominiums a number of steps have been taken. The plumbing mentioned above will be quicker to construct than if the rooms were randomly distributed around the floor. Most condominiums feature straight walls in all rooms that are far simpler to build than curved walls and so should allow the project to be kept on target. Unfortunately one sacrifice in the timing had to be made. Each condominium on the floor is unique in order to maximise quality (described in more detail below). This means that the construction workers will not be able to work as fast as they could if all condominiums are identical, because the plans and dimensions continue to change around the floor. In order to further improve the quality, this was a necessary sacrifice. Quality This was one of the most important considerations because before the design was started, the target market was examined. The target market is for wealthy couples. This type of market is looking for luxury and somewhere they will be happy, and will be able to show to other people with pride. For this reason maximising quality was one of the main concerns when redesigning the floor plan. One of the first and most obvious points is that each condominium is unique. There is a range, from large luxury condominiums with an excellent view, to the cheaper, smaller condominiums on the other side of the building. This allows the customers to select the condominium closest to what they desire, hopefully meaning that additional customisation should be at a minimum. Each condominium has been designed so as to use natural light to its full extent. Where possible all social rooms and bedrooms have been given a window. Those condominiums with an excellent view have had the lounge and master bedroom placed alongside the windows so that the view can be used to its full advantage. The room layout was carefully considered as well. Although each condominium is unique, where possible rooms such as kitchen and dining room, or master bedroom and bathroom have been placed adjacent to each other. This minimises the inconvenience for the owners. Each condominium also has a walk in closet inside the master bedroom, designed to provide the kind of luxury the target market will be looking for. The comfort of the residents was an important consideration as well. Where possible no social rooms in one condominium have been placed next to bedrooms or quiet rooms in a neighbouring room. Similarly no bedrooms have been placed next to an external corridor, stairs or lifts, or a utility room. This is purely a consideration so that the noise levels are not too high if the residents are trying to sleep. Conclusion As can be seen, great effort has been made to maximise the quality of the condominiums while maintaining acceptable levels of time and cost. This is seen as important because it will be a large factor when customers contemplate buying one of the condominiums.

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BIBLIOGRAPHY
KERZNER, H., Project Management: A Systems Approach to Planning, Scheduling and Controlling, Fifth Edition. Van Nostrand Reinhold, 1995. MEREDITH, J.R. & MANTEL, S.J., Project Management: A Managerial Approach. John Wiley & Sons, Inc. USA, 2000.

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