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 Scope Management
V Stakeholder Management
VII Risk Management
IX Project Management Control
XI 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
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the stakeholders as to the effect the change in scope may have on the project
and 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
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of 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
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risk register was not specific and somewhat ambiguous, it highlighted the
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 people’s
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, agenda’s 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
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highlighting the drawing issue, then issued to all parties by the project
manager. This occurred 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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