Project Management Areas: Managing Business Projects Essay

Question:

Discuss about the Project Management Areas for Managing Business Projects.

Answer:

Part 1

Introduction

In this report, the statement, “With respect to managing projects, the Project Manager is constantly required to monitor progress, gather information and problem-solve to make decisions” is being evaluated with respect to two key disciplines of project management including Human Resource Management and Risk Management. An argument would be made on whether the activities of project manager must be based on the creation of value for the project.

Project Management Definition

As per PMBOK guide, project management process is carried out in five process groups including initiation, planning, execution, monitoring and control, and closing (Duncan, 1996). Each of these process groups has defined core as well as facilitating processes as shown in the table below:

Process Group

Core Processes

Facilitating Processes

Initiation

Initiation

Planning

Scope planning, scope defining, Activity definition, resource planning, activity sequencing, activity duration and cost estimation, schedule development, cost budgeting and plan development

Quality plan, communication plan, risk management plan, human resource management plan, procurement plan, solicitation plan

Executing

Scope plan execution, scope verification

Quality assurance, team development, information distribution, solicitation, source selection

Monitoring and Control

Change control, performance reporting

Quality control, risk response control, scope control, schedule control, cost control (Boudreau, 1996)

Project Closure

Administrative closure, Contract closure

Explanation

Each of the key process groups of PMBOK guide has defined core as well as facilitating processes as shown in the table below:

Process Group

Core Processes

Facilitating Processes

Initiation

Initiation

Planning

Scope planning, scope defining, Activity definition, resource planning, activity sequencing, activity duration and cost estimation, schedule development, cost budgeting and plan development

Quality plan, communication plan, risk management plan, human resource management plan, procurement plan, solicitation plan

Executing

Scope plan execution, scope verification

Quality assurance, team development, information distribution, solicitation, source selection

Monitoring and Control

Change control, performance reporting

Quality control, risk response control, scope control, schedule control, cost control (NCKU, 2008)

Project Closure

Administrative closure, Contract closure

Framework

The project management framework defined in the PMBOK divides project activities into processes that are grouped into five categories based on the stage of the project including initiation, planning, execution, monitoring and control and project closure. All the processes involved in the project management are listed into 10 knowledge areas of project management including project integration, scope management, time management, quality management, HR management, communication management, risk management and procurement management. As this report would be created considering two of these knowledge areas, this section would cover framework details of only those two areas that include Human Resource Management and Risk Management (Atkinson, 1999).

Human Resource Management: This area involves development of a human resource plan which is done in the planning stage and execution of the same by acquiring project team, developing the team, and managing the same (Belout & Gauvreau, 2004).

Risk management: This area involves development of a Risk Management plan which is done in the planning stage and execution of the same which involves identification of risks, qualitative risk analysis, quantitative risk analysis, and risk response planning. Risk monitoring and control activities are also carried out in this discipline in the fourth stage of project management (U.S. Department of the Interior , 2012).

Part 2

In this part, a few cases of large projects are taken as a base for understanding the importance and value creation in terms of human resource management and risk management.

Human Resource Management

Human resource management is essential on a project as the project performance largely depends on the people working for it. Projects can survive only when they have clarity of vision, strong work culture, and skilled workforce. Thus, reaching project goals require focus on human factors (Boudreau, 1996).

It is an important part of any project management and it involves determination of competency and skill requirements of projects, assessment of potential candidates based on the same, selection and recruitment of right resources and their management. For any organization to be able to do that, the first step is to hire an efficient project manager who would the take care of the plan for the acquisition and use of other resources (Mishra, 2007).

Inefficient HRM in Sydney Opera House

Sydney opera house was the first construction project that used Computer Aided Design. The project was in major limelight for its unique design but from project management point of view, it is largely considered as a failure due to two main reasons. First, the project exceeded its original budget by a large amount. While the initial budget allocated was only AUS $1 million, the actual project cost $102 million. The construction work was also much delayed as the final design of the project was completed 4 years after the construction had already started.

In the Sydney Opera House Project, there was no project manager involved but the designer Utzon himself was expected to take coordinate all activities. However, Utzon did not have any practical experience of such large construction projects because of which designs and implementation methods kept on changing and many a times, already build structures were demolished and rebuilt. The original design of roof which had made Utzon won the competition was under major controversy as it was later found not feasible and thus, Utzon revised its design. If the project had an experienced project manager handling coordination and execution activities, Utzon did not have to divert from his design work (Sanchez, et al., 2015).

Moreover, there was no human resource management plan made but management of the construction project team was left to Utzon who was a good at aesthetics of designs but was not an adept manager. He would not listen to the concerns and suggestions of engineers but was only concerned about the aesthetics of the roof. This resulted into conflicts and delays. Because of the delays, people started to leave the project which resulted into high turnover (Ballesty, 2005).

Effective HRM in DLC

In the infrastructure construction project of Dubai Logistics City (DLC), management knew well in advance that capacity would be a constraint for such a large project to handle as contractors, skilled engineers, logistics and project management professionals were not available sufficiently with the government. However, with proper human resource planning, the management of the project took a different approach to human resource and took some professionals from the private sector. While taking people from private sector, they also realized that they had to do some modifications in contract arrangements to attract them as well as keep the workforce satisfied and motivated. Thus, strategies were adopted to curb quality issues and overcome constraints of supply chain. Some of these strategies included advanced payment structure and the promise of largest price that were adopted over the traditional mode of payment after work and fixed contract pricing (Sen, et al., 2007).

Risk Management

The process of risk management begins at the time of project planning such that probable risks are identified and response plan is created to manage them at the time of occurrence. If risks are not evaluated in advance then it becomes difficult to respond to them fast when they actually occur. Moreover, certain risks are likely to affect project to a major extent. Such was the case with the opera house. The risk of using a design that was made out of lack of practical experiences of construction project could have risked instability and lack of construction feasibility which was not evaluated before the project was planned. This resulted into selection of a design that was good as per looks but was not feasible for construction.

Lack of Risk Management in Opera House

The Opera House project had many risks and uncertainties that affected its performance but the same were not forecasted at the time of planning. From the starting of the project itself when a design competition was conducted to call designs for the construction of opera house, no clear evaluation was done on the past experience of the designers with construction projects.

Various risks and uncertainties that were not accounted for in planning but cause major impacts on the project included:

Impractical design: The design made by Utzon, the chosen designer was not practical for construction because of which he had to make major changes in the design and the final design was only completed after 4 years of the start of the construction work.

Conflict due to change in Stakeholder expectations: The expectation of Australian government from the project was not made clear at the start nor was any consideration made for risk of inability to meet the expectations. The original design was created considering two theatres but later government officials demanded 4 theatres.

Cost Conflicts: Initially, the government gave a go ahead for no limits on funding but at the later stages of the project, when the expenses exceed beyond expectations, limits were put on funding which lead to frustration and discouragement in the project team. The initial estimates of project cost were highly superficial that did not work with the project activities and thus, there was a need of more funding. By the time, government realized this and increased the funding in 1966; Utzon had already left the project.

Loss of Human Resource: Utzon left the project in the middle of construction because of discouragement from lack of funding. New designer was to be hired and as Utzon took away his ideas as well, a new design was to be developed by the new designer. This rework escalated the cost to a large extent and the project ended up spending AUS $102 million by the end of the project.

Risk Management in Sydney Cross City Tunnel Project

Sydney Cross City Tunnel Project was an outcome of a Public Private Partnership which needed division of responsibilities as well as risks between the two entities . However, all the risks were offloaded to the private player while government agency only provided initial funds required for project. Private organization was unable to manage the risks well. It faltered specifically in the management of financial risks (GAMUT, 2014).

The project reflects the importance of not only recognizing the risks but also in recognizing appropriate people or entities who should take the responsibility of managing the risks. Moreover, the project lacked a systematic risk management methodology that could have been agreed upon mutually such risk response plans could have been identified and appropriate risk policies could have been set. It was only after all the funds were exhausted and the project was making losses that the lacuna was realized and the government came up with a new arrangement in which risks were properly planned and shared between the two entities (Chan, et al., 2008).

Part 3

Human Resource Management

Use of human resource management strategies and tools defined in the project management methodology can add value to the project in following ways:

Responsibility assignment matrix ensures that every work package is properly assigned to qualified team member which avoids role related conflicts(NCKU, 2008).

RACI matrix can be used to identify if a person is given responsibility but lack accountability which can cause conflicts of interest. If this was used in the Opera House project, a realization could have made that Utzon who was given responsibility of managing project was actually not accountable for it and thus, could decide to leave the project exercising his freedom. On the other side engineers were given responsibility to take care of technicalities of the project but were not given authority to take decisions such that only Utzon decided what was to be done which again resulted into people conflicts and loss of interest in engineers.

Human resource plan also takes care of the competencies of people such that they are hired on the job only when they have the right skills for managing a part of the project. In case of the Opera house project, Utzon was expected to manage people which required project management skills that were not present in him.

A human resource plan helps management clearly identify staff requirements, cost estimations for resources, when resources are needed, required skills, training requirements and equipments required by staff. This clear identification of resource requirements can help resolve resource conflicts as well as ensure that they posses right skills’ and competencies to be able to complete the project with proficiency(Mishra, 2007).

Risk Management

A risk management planning can add value to the project as it is a proactive process for managing risks such that risks that have not occurred but can be expected are analyzed in advance and a plan is developed for responding to them as they occur. Risk management process also help managers identify the likelihood of each risk and the impacts they can cause on the project such that appropriate control strategy or response strategy can be developed.

For instance, if there are risks found that can create major impacts on the project performance but if identified earlier, they can actually be avoided from happening; an appropriate measure would be taken to already eliminate the risk even before the same occurs. For instance, in the case of opera house project, if a risk of presenting a design which was not practical was realized at the start of the project, a requirement of having an experience with large scale construction project could have been added in the competition which could have resulted into applications of only those designers who also know the practical challenges of construction such that the design presented was sustainable.

In the same way, if the risk of Utzon leaving the project in between was identified earlier, company would have already taken the designs and other work done by Utzon in their custody such that even if he left the project, the same designs could have been used by the new designer and new design would not have to be created. This way, a huge loss to the organization could have been prevented that was causes because of redesigning and reconstruction of the project.

Conclusions & Recommendations

This report was prepared to understand how project management practices can add value to projects. For this, a case of Sydney Opera house project was taken which was explored against the practiced of human resource management and risk management used. The base of Project Management Body of Knowledge was taken for analysing the case.

The report presented the arguments on the statement, “With respect to managing projects, the Project Manager is constantly required to monitor progress, gather information and problem-solve to make decisions”

The report identified ways human resource management and risk management added value to projects. Based on this study certain recommendations can be made:

Human resource management should include clear identification of roles, responsibilities, skills, competencies, and training requirements.

A person made responsible for an activity must also be given required authority to be able to take decisions

A person made responsible for something must also have an accountability for the same to be able to expect sincerity from the person

All possible risks on the project must be identified and those that can be avoided must be avoided.

A contingency and risk response plan is required if the project has to run smooth and losses are to be avoided.

References

Changefirst Limited, 2009. Change and project management , s.l.: ChangeFirst.

Atkinson, R., 1999. Project management: cost, time and quality, two best guesses and a phenomenon, its time to accept other success criteria. International Journal of Project Management, pp. 337-342.

Ballesty, S., 2005. Sydney Opera ouse - FM Exemplar Project : Procurement Case Study and decision Making Strateges, s.l.: CRC Construction.

Barkley, B. T., 2008. Project management in New Product Development, s.l.: Mc-Graw Hill Companies.

Belassi, W. & Tukel, O. I., 1996. A new framework for determining critical success/failure factors in projects. International Journal of Project Management , 14(3), pp. 141-151.

Belout, A. & Gauvreau, C., 2004. Factors influencing project success: the impact of human resource management. International Journal of Project Management, Volume 22, pp. 1-11.

Boudreau, J. W., 1996. Human Resources and Organization Success, s.l.: Cornell University.

Bright Hub Media, 2015. Constructing Powerful Scope Statements. [Online]
Available at:

California CIO, 1997. Project Management Planning, s.l.: California CIO.

Caltrans, 2007. Project Communication Handbook. s.l.:Caltrans.

Chan, A., Lam, P., Chan, D. & Cheung, E., 2008. Risk-Sharing Mechanism for PPP Projects – the Case Study of the Sydney Cross City Tunnel. Surveying and Built Environment, 19(1), pp. 67-80.

Duncan, W. R., 1996. A guide to the Project Managment Body of Knowledge, s.l.: PMI.

GAMUT, 2014. Sydney Cross City Tunnel, s.l.: Omega Centre.

GDE, n.d. Project Management Methodology Guidelines. [Online]
Available at:
[Accessed 21 October 2016].

Helm, J. C., 2000. Teaching Continuous Risk Management Using A Requirements Management Tool, Houston, TX: University of Houston-Clear Lake.

Henshaw, J. & Osborne, B., 2004. Managing CRM Risk, s.l.: eLoyalty Corporation.

Lacaster University, 2006. Case Study of Successful Complex IT Projects, s.l.: THE BRITISH COMPUTER SOCIETY .

Mishra, S., 2007. Human Resource Management in a Project. PM World Today, 9(7), pp. 1-18.

NCKU, 2008. The Importance of Human Resource Management, s.l.: NCKU.

Project Management Institute , 2000. A guide to the Project Management Book of Knowledge , s.l.: Project Management Institute .

Sanchez, A. X., Hampson, K. D. & Mohamed, S., 2015. Sydney Opera House Case Study Report, s.l.: NRC.

Sen, S., Mir, A. H. & Durani, A. Z., 2007. International Case studies - The UAE, CHina and Malaysia, s.l.: PIICA.

SLAC, 2009. RESEARCH SUPPORT BUILDING AND INFRASTRUCTURE MODERNIZATION: RISK MANAGEMENT PLAN, s.l.: SLAC.

Team FME, 2014. Human Resource Management: Project Skill, s.l.: FME.

The Saylor Foundation , 2014. Project Management from Simple to Complex, s.l.: The Saylor Foundation .

Time is Ltd, 2015. Evaluating a Project. [Online]
Available at:

U.S. Department of the Interior , 2012. Project Management Framework, s.l.: U.S. Department of the Interior .

How to cite this essay: