Project Management - BE3S81

Assignment 1: Project Failure

By

Brendan Hills - 07175272

Brendan Hills

07175272

Project Failure

Introduction Project failure is all too common, however it can often be attributed to one or more of the following factors, or lack thereof. In this report I will address the issues of: Pg III V VII IX XI Scope Management Stakeholder Management Risk Management Project Management Control Communication Management

Appendices XIII Bibliography

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Scope Management, is the controlling of the scope of a project, scope can be broadly defined as the work to be done (BSI 6079-1: 2002) or as the oxford English dictionary puts it the extent of the area or subject matter that something deals with or to which it is relevant. 2 the opportunity or possibility for doing something. Defining the scope of a project at conception stage is key to determining a budget and timescale, if the scope is not clear enough the project team or the stakeholder may have misconceived ideas as to what is or is not included within the realms of the project. Therefore the Management of scope becomes an important factor throughout the lifecycle of a project. At the inception of a project the key processes are 1. Scope Planning - creating a project scope management plan that documents how the project scope will be defined, verified, controlled, and how the work breakdown structure (WBS) will be created and defined, 2. Scope Definition - developing a detailed project scope statement as the basis for future project decisions and 3. Create WBS - subdividing the major project deliverables and project work into smaller, more manageable components. Prior to the start of the project 4. Scope Verification is the process of obtaining the stakeholders formal acceptance of the completed project scope and associated deliverables. Verifying the project scope includes reviewing deliverables to ensure that each is completed satisfactorily. If the project is terminated early, the project scope verification process should establish and document the level and extent of completion. 5. Scope Control - controlling the inevitable changes to the project scope.

From my own experience I have found scope management to be a valuable tool, when changes take place and the stakeholders have a clearly defined scope to begin with it is clear as to whether the project budget and programme had allowed for the said work element. The Project Manager is then able to advise the stakeholders as to the effect the change in scope may have on the project and
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the stakeholders then have the ability to make an informed decision as to whether the deviation is necessary. On the flipside having worked on a project with a scope which had not been planned and defined in enough detail there was confusion between the stakeholder and the project team as to whether the cost for a certain element, in this case the sprinkler installation to a factory was included, as it turned out the installation was not included and the project budget was exceeded as a result. The budget overrun could have been avoided if the scope had followed the aforementioned steps, at the scope verification process the stakeholder would have had the opportunity to highlight to the project manager of the missing sprinklers and the scope could then have been revised to include them, both the project team and project stakeholders would then be fully aware of the sprinkler installation forming part of the scope, the design team could have potentially engineered the scheme to a lesser budget and found savings elsewhere or the budget could have been increased in order to deliver the project within budget.

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Stakeholder Management, refers to one of the monitoring and controlling processes of the project. A stakeholder is anyone who has an interest in your project or will be affected by its deliverables or output or a person or group of people who have a vested interest in the success of an organization and the environment in which the organization operates (BSI 6079-2: 2002). The stakeholders need to be aware of progress, in relation to actual work done, cost control, programme and quality, this should be reported back to them during the lifecycle of the project and their expectations need to be managed in order to achieve a result which they are satisfied with. The project manager needs to implement a reporting procedure so that at regular intervals the stakeholders are made aware of the progress. It is important to get stakeholders involved at the inception of a project in creating a set of realistic goals and objectives. Stakeholders are not always keen to participate but engaging them at this early stage of the project will help ensure success. Stakeholders are most likely to be actively engaged by a set of goals and objectives aimed at improving business performance and thereby take an interest in the project. (ProjectSmart.co.uk). This also ties back to the scope verification process of scope management, making the stakeholders aware of the deliverables of a project as well as the boundaries. In my experience poor stakeholder management can lead to project failure, not necessarily through exceeding the budget or time constraints but failing to manage the expectations of the stakeholders and reporting back to them regularly. The project concerned was large, and the lack of a suitable financial reporting mechanism meant that the project sponsors felt the budget was at risk, even though the project was actually on target financially. Eventually a mechanism for monthly reporting was initiated and this enabled the project sponsors to relax in the knowledge that the project was likely to be a success, if this system was implemented from the outset and the stakeholders were aware of

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how they would be informed of the progress this tension between the project manager and stakeholders could have been avoided. According to the BSI 6079-1 framework this reporting would be occurring in the controlling process at each phase of the project and at any other agreed milestones of the project or simply at monthly intervals throughout, this would avoid any uncertainty and enable the stakeholders to budget for any extra expenditure or manage any delays.

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Risk Management while commonly thought of as managing negative factors is actually the process of exploiting potential opportunities as much as preventing potential problems, risk management is an essential tool in good project management and should be undertaken at all stages of the project and continually updated in order to effectively manage the risks and identify any new or previously unrecognised risks. Risk management should be used during the project selection stage in order to determine which project to run with, and from then on until the project termination phase. In order to effectively manage risk it is prudent to implement a risk management framework such as the BS 3110:2008 framework. This framework clearly defines how and by whom the risk is to be managed and can be scaled down for use on a project of any size. If the project risks are not managed appropriately the negative effects to a project are unlimited, the project could run over budget, exceed time constraints and fall short of the desired quality. The basic processes involved in risk management are to identify the risks, in a construction context this is best done as early on in the project life cycle as possible and with as many participants as possible, both client (stakeholder) and contractor inputting into the risk register, the risks then need to be owned and each participant then manages their own set of risks. Once a set of individual risks have been identified it is necessary to analyse these and evaluate and prioritise them. It is then time to respond to the risks in order to control them, this could include measures to avoid risk, seek risk (take opportunity), modify risk, transfer risk or retain the risk, reporting the outcomes to the stakeholders and keeping the stakeholders informed of the causes, likelihood, timescale and significance of the risks to name a few, then during the ensuing phases of the project reviewing the risks in order to control and update the risk register and close any out of date risks. In a recent example where the risks were not managed appropriately a dispute arose between the contractor and client over who owned a particular risk as the risk register was not specific and somewhat ambiguous, it highlighted the

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importance of identifying all risks in finite detail and allocating a risk owner in express terms at the beginning of a contract so that it is clear who will be liable for the exposure in terms of cost, time/delay and quality.

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Inadequate project management control The controlling function or process in all commonly recognised project management framework. The Oxford English dictionary defines control as the power to influence peoples behaviour or the course of events. 2 the restriction of an activity or phenomenon. 3 a means of limiting or regulating something and this is exactly as it applies in a Project Management context, to steer the Project, influence the Stakeholders, Project Team and Project Support Staff. Restrict and manage changes and limit and regulate budgetary expenditure. In the BS6079-2 framework the controlling process occurs at every phase of the project life cycle, for instance a budgetary control may be the provision for monthly cost reporting, and this allows the Stakeholders, Project Team and Project Support Staff to plan for any changes and adjust the path of the project accordingly. Inadequate project management control is one of the main factors for project failure, project success or failure is usually determined by the ability of the project manager to deliver the project on time, on budget and with an acceptable level of quality, a successful project may sacrifice one or even two of these factors but still be considered a success. In some cases one of the three factors can be considered to be a priority and if that factory is successful then the project will be a success. If the project is not controlled effectively it is likely that the participants will loose sight of the priorities, the scope may become unclear, the communication will breakdown between stakeholders and project team and eventually all parties concerned will loose out. In order to control the project the project manager should breakdown the project and more specifically the controlling process into manageable steps or process groups, this may consist of control schedule, control quality, control costs, control risk, control change and control scope. Within each of these process groups there may be a number of processes that must take place in order to manage the group each with a different frequency and priority.

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An example of a poorly controlled project would be the construction of the new Wembley stadium. The problems on this site were many but some of which could have been avoided had sound project management principles been adhered to. The project was deemed to be a failure due to the budget overrun and the late handover of the project. The late handover was in part due to problems with change control and quality control, major changes were made to the design at a late stage in the construction, had these changes and the likely impact been reported the changes may have been circumvented and other solutions found. There were also issues with sewers collapsing beneath the stadium which is a two fold problem, it was initially caused by a lack of quality control but then it was poorly controlled through a lack of programme control. If the lines of communication were clearer throughout the project the deliverables may have been achieved and the risks mitigated.

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There is a significant quantity of communication that must occur in any project, Communication management is act of managing the quantity, quality and flow of communication during the project life cycle. A Project Managers role is to ensure information is generated in a timely manner. It must also be collected, disseminated, stored, and destroyed at the appropriate time, a project manager needs to be able to communicate and facilitate communication between all members of the project team, project support team and stakeholders and ensure that everyone has the correct information at the right time. Communication management is therefore fundamental to ensure a successful project outcome. A project should have an effective communication network implemented to enable all the relevant parties to report progress, express concerns and discuss how to achieve their project objectives (BS6079 1). A structure should be determined for the frequency of meetings, including attendees, agendas and their own terms of reference. A point of contact should be established at each organisation so as to minimise the different communication flows, a suitable flow may be that all written or emailed communications pass through the hands of the project manager, thus avoiding information being issued to the wrong parties. There is also a certain need for some documents or communications to be withheld from parties to the project, for instance a financial report to the client commenting on the surplus budget may not be prudent to issue to the contractor. The project manager then needs to coordinate the issue of information so it reaches the correct recipients and only those recipients. In an example which dates back a few years a large hospital project became an unsuccessful project after the lines of communication were broken. The architects involved circumvented the prescribed drawing issue procedure and would hand drawings to contractors and subcontractors on site or email drawings directly to them as opposed to raising an architects instruction highlighting the drawing issue, then issued to all parties by the project manager. This occurred

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due to an under resourced department who could not keep up with the work flow, the ultimate effect was that the client, quantity surveyor and other members of the project team were unaware of much of the changes occurring on site. The client then received a large shock when the final account was submitted by the contractor at a significant amount more than had been reported. Whilst this project may have been destined for failure due to other contributing factors such as poor scope control, the project manager certainly could have mitigated the damage caused if the stakeholders were made aware of the likely escalation in costs and this could have been planned for and the risks assessed.

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Bibliography
British Standards Institute (2002). BS 6079 - 1: 2002 Project management - Part 1: Guide to project management. London: BSI Publications. 14 - 30. British Standards Institute (2000). BS 6079 - 2: 2000 Project management - Part 2: Vocabulary. London: BSI Publications. 3 13. British Standards Institute (2006). BS 3110: 2008 Risk management. London: BSI Publications. 4 30. Oxford University Press. (1990). -Scope. Available: http://www.askoxford.com/concise_oed/scope?view=uk. Last accessed 13 Nov 2008. Project Management Institute (31 Jan 2005). A Guide to the Project Management Body of Knowledge. 3rd ed. USA: Project Management Institute. 21 - 56. Project Smart. (13 Nov 2008). Stakeholder Management. Available: http://www.projectsmart.co.uk/stakeholder-management.html. Last accessed 2000. Richard Yancy. (2004). Communications Management. Available: http://www.yancy.org/research/project_management/communications.html. Last accessed 12 Nov 2008. TenStep, Inc.. (2007). 5.0 Project Scope Management. Available: http://www.tensteppb.com/5.0ProjectScopeManagement.htm. Last accessed 12 Nov 2008.

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