Project management and leadership
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Project management and leadership
Introduction
Project management includes the use of knowledge, tools, and skills in various activities so as to attain various project objectives. Currently, it is common to the organizations’ primary activities. Many businesses understand the importance of project management in handling projects. A project involves different things at different times (Larson, Gray & Gray, 2011). The Dundee City Council is planning to develop a tram system. However, it is concerned with the issues that came up during the construction of Edinburgh tram system. The project encountered various major issues among them cost Over-runs whereby they ended using a lot of money than expected. There was also delivery delays, the construction of the Trams system in 2008 and it was not opened until 2014 after several delays. The other main problems that were encountered included planning and scheduling issues. In this case, there were diversion works linked to utilities had begun before the awarding of primary contracts for infrastructure and trams. There was also optimism bias, whereby decisions were made based on false or overblown confidence. They overestimated the benefits while at the same time underestimating the time. In Dundee case, they need to deploy effective project management techniques so as to mitigate the problems that were met by Edinburgh Trams. For instance, the Dundee city council should ensure that they employee skilled individuals to oversee the process. Effective project management helps inefficient project delivery as well as preventing Cost Over-runs. It is important to set a project management office to minimize the cycle time and delivery cost. The PMO can establish and deploy a standard set of project management procedure and templates. This can assist in improving the management and monitoring process. It is also important for the project leaders to use project and risk management techniques.
Project objectives
The primary goal of the projective is identifying the significant risks that may affect the Dundee Trams system. Another objective is measuring the success of Dundee project. The aim of the Dundee project is to support the local economy. This will be achieved by improving accessibility (Larson, Gray & Gray, 2011). The project is also intended to promoting sustainability and minimizing environmental problems caused by traffic. Additionally, it will help in reducing the level of traffic congestion in the city.
Performance measurement
Performance measurement depends on the project. It includes stating what is required in the project. Mainly, the project measurement involves identifying the time that the entire project will take, its cost and specify quality. It is important to prioritize all the aspects before making any decision concerning the project (Perez et al., 2011). The Edinburgh project had various issues; hence, the Dundee project will rely on this to outline the type of measures that will be used in the particular project. The first type of measure that will be used is the conventional process measures. It will estimate the project cost, the completion time as well as the project specifications. Another measure that will be used is the short term outcome measures. They will be utilized to gauge the level of product performance based on the immediate post completion costs used for maintenance as well as other technical issues that may affect the Trams system. The Dundee project will also use the long-term outcome measures. The particular measurement will focus on the long-term issues of the Trams system. It will measure if the payback period met the stated objectives. Additionally, it will assess if the overall customer satisfaction was met, the jobs availability linked to the establishment of the Trams System. The project manager will be responsible for overseeing the entire project. The success or failure of the project is based on the perception of the different stakeholders. The performance measurement ought to focus on key areas of the project. In Dundee’s case, time, cost and quality are the main important factors of the entire project.
Stakeholder analysis
The stakeholders’ management is a vital factor in project management. The project involves the stakeholders coming together and creating something for a company. They include people who can contribute to the project. The Dundee project is rather challenging; hence, there will be many stakeholders involved so as to fulfill its objectives. A mapping of elements that will determine the stakeholder landscape for the project is needed so as to analyze stakeholders effectively. The initial step in any project is the implementation of the stakeholder analysis process.
Stakeholder identification
First, it is important to identify the different stakeholders that will be involved in the project. The city of Dundee Council is the first stakeholder in the project. The team that will be working on the project, as well as the employees of the company, are another group of stakeholders. There will also be the contractors, insurance companies, team involved in utility diversion as well as customers who will pay for services offered by the Trams system. The particular stakeholders include both external and internal stakeholders (Schibi, 2014). The project team will be involved in managing the entire project and ensuring that everyone is satisfied. The clients will take part in monitoring the entire project. Employees and the contractors will make sure that everyone is up-to-date with the progress of the project. The high influence stakeholders include the City of Dundee Council, the project team as well as the employees and contractors. On the other hand, low influence stakeholders include, the customers.
Initial planning of proposed Dundee Trams Project
The process of a big project can be challenging as there are many uncertainties during the early stages. This can affect the entire process, and it can fail to achieve its objective. The Dundee Trams project is a huge transport and infrastructure project. It is challenging, and there is a possibility that it can be affected by many uncertainties. Nevertheless, the Edinburgh Trams project has been studied, and it will act as a guide as we develop an outline for the Dundee project. Various steps have been considered so as to avoid the same mistakes made during the implementation of the Edinburgh Tram project. A lot of effort has been made so as to insert measures of change control and identify ways of identifying problems in the initial stages.
Identifying the constituent Activities
The city of Dundee Council implements its local transport strategy highlighting the need for the establishment of Tram system. The system is meant to improve the transportation policy. The initial step in the project plan is commissioning of a consultant who will be involved in carrying out the project feasibility studies (Vaidyanathan, 2013). The CDC will receive the Tram Project case so as to review it. They will then submit it to the government so as it can approve. The next step will be appointing the team that will be involved in managing the project. The project management team is important as it is involved in ensuring that the process goes on smoothly. It is vital for the CDC to make sure that the team has the skills required to implement the entire project. The teams’ skills are critical as they determine its success in achieving the set goals. After the appointment of the team, the CDC will meet all the stakeholders so as they can be briefed about the project. This is important as it would ensure that they understand its significance. The next step is acquiring the land where the Trams system will be developed. It is important for the CDC to make sure that the guidelines are followed in the process of land acquisition. If there are any businesses in the proposed land, the owners will be compensated. After the business owners are compensated, the next step will be Awarding contracts for utility diversion. The process will take place before the construction work begins. The Tram system design process will then take place as well as detail engineering. Different suppliers will be awarded contracts, they include, those dealing with vehicle supply as well as maintenance and other materials required for the project. After the contracts are awarded, the chosen companies or individuals will be briefed about what is required of them and other important elements of the entire project. Then, the construction process of the Dundee Tram system will start. All the primary stakeholders will be involved in the particular process and will be obliged to maintain constant communication. The testing and commissioning process will then follow. In this case, the stakeholders will check the quality of the Tram system so as to make sure that it is fit for the public use.
Project schedule
The first stage is the reviewing of the project by CDC; this will take two weeks so as to ensure nothing important is skipped during the implementation process. After this, the approval of the government is expected to take three weeks (Vaidyanathan, 2013). The appointment of the team will take four weeks as there are various aspects to consider. For example, each person will be assessed so as to measure their capability. It is important to ensure that the right team is appointed. The main project development activities will take a long time. The meeting between the CDC and the stakeholders will take two days. This will offer them enough time to share ideas and make the necessary changes. The Right of Way & Land Acquisition process will take four weeks. The compensation process will take one month so as to make sure that no one is left out. The process of contract Award for utility diversion will be held for one week. The Tram system design services process will take one month so as to give time for any corrections. Detail engineering is important; hence, it will take three weeks. The process of offering contract awards to the supplier will take three weeks. They will be given two weeks to reply. The construction process will take one year and a half. The testing and commissioning process will take one month. The entire Dundee project will take two years.
Cost and Benefit Analysis
The cost planning process will take time due to the uncertainties involved. The factors are expected to affect the final cost of implementation as well as the delivery process. Some of the factors include inflation, fluctuation in currency and the link between cost-price-time. Other factors include various uncertainties that are common in complex projects. The listed factors are linked to the issues encountered on the Edinburgh project. The Cost overrun was one of the major problems. Ground-up costing approach will be used for cost build up and estimation. Each level one, the work breakdown structure, will be gathered, consolidated and added (Milošević & Martinelli, 2016). There is a lot that has been learned from the Edinburgh Tram system project. Hence, the parametric estimating method will be used. The elements of cost of Dundee project include overheads such as legal fees and administration costs. Direct labor and materials are other features included in the cost of the project. They include the cost of vehicle supply and maintenance cost; Utility diversion works cost and those involved in the construction work.
Financial appraisal
The evaluation shall be based on assessing the size of the project and the timespan that the costs and benefit shall cover (Milošević & Martinelli, 2016). This will help in benchmarking the rewards of developing the project against the expected costs. It is expected that 2,500,000 clients will patronize the Dundee Tram project every year for eight years before it starts its official operations. It is estimated that the project will cost seven hundred million. The cost is based on the Edinburgh Tram project, the initial cost of the project was estimated at £375 million, and it increased to £521million. The price is also expected to rise to £1 billion following the addition of extra interest payment. Therefore, it is important to estimate the cost of the Dundee Tram system project at £700 million.
Payback
The initial budget for the project is £700 million. Hence, for the CDC to collect the investment in eight years with 70% profit, the expected yearly income will be more than £ 157500,000. The estimated number of clients is 2,500,000 per year; hence, each client will use £ 63.00 per year. This will work for the project; however, it is important to keep in mind that various factors have not been considered such as time value of money and other costs linked to the project after this period.
Discounted Cash flow assessment procedure
The payback evaluation technique does not provide the estimates of the time value of money. Hence, it can be argued that it is not realistic (Milošević & Martinelli, 2016). The current method will focus on the particular factor.
Investment of the entire project = £700 million
Profit in eight years = £ 1,260 million
10% discount rate PV of the benefits = £1, 260, 000,000/ (1+ 0.06)8
= £ 787,500,000
NPV = £787, 500,000 – 700,000,000
= £ 87, 500,000
The measure for project selection as well as is NPV≥0 at a particular discounting rate (Milošević & Martinelli, 2016). It is apparent that the Dundee Tram project is within the measure and it should continue.
Constraints and Risks
When starting a project a company or an individual should consider various risks that may affect its objective. It is important for an organization to employ skilled people analyze the risk (Hillson & Simon, 2012). The people should also make arrangement on how to allocate the weight brought about by the risks. The risks that are expected in the Dundee project are divided into two the internal and external risks. Some of the risks linked to the project are the failure to meet the needed specifications. Another risk is incorrect cost estimate, cost overrun and time overrun. The external risks include socio-political issues, economic and environmental risks. The financial risks include issues linked government funding policy and foreign exchange rates problems. On the other hand, the environmental challenges include pollution from the construction works and unfavorable climate.
Communication
Communication is a crucial element of any project that needs to be applied effectively in the project’s lifecycle. Communication management includes planning, supervising, implementing as well as revising all channels of communication in a company as well as between firms (Vaidyanathan, 2013). Excellent communication process in a project ensures that all the stakeholders are engaged and project teams are encouraged. In particular case, the communication that will be used is the project perspective. It is mainly internal and external communication. Internal communication primarily takes place between the project team members. In the particular process, the team members will have a face-to-face communication whereby, they will discuss the plans and issues that need to attended to. However, the external communication is mainly between the project team members and other stakeholders. Mainly, the particular type of communication will be either on a one-on-one basis or use of other communication media. It will be prepared before being sent or presented to the other party. One of the media that will be used is the electronic medium. There will be the use of emails which will be sent by the management. They can as well make a telephone call to the stakeholders. The communication will be formal. In the organization perspective, there will be vertical and horizontal communication. The vertical communication will include both downward and upward communication flow. In the downward communication, the CDC will share the goals of the project with the stakeholders. They will also ensure that all the members understand what is required of them throughout the project. However, in upward communication, the project team members will update the CDC about the progress of the project. In case there is an enigma, they will inform the CDC. The horizontal communication will be between the project team members.
Possible success factors for the project
Various factors determine the success of the Dundee Tram system project. One of the factors is the involvement of the primary stakeholders. They include the CDC, the project team, the engineer, employees as well the government. The CDC will be involved in heading the entire project. It will be the source of authority and funding for the project. The project team will be tasked with development and implementation of the project. The employees will work with the project team. Planning of the project is another factor that determines its success. The entire team should develop a project management plan where they will document how they will handle different changes that may arise, how to manage any issues that may threaten to affect the project and the method of communication that will be utilized (Kendrick, 2015). Another factor is the proper management of time. Every stakeholder should be assigned their different tasks. Each task will have a completion date. All the project team members should be trained so as to ensure that they are prepared. Setting realistic expectations is another factor determining the success of a project. The requirement has to be stated clearly so as to make sure that everyone understands.
Possible failures for the project
Lack of participation of the stakeholders as well as resources. Another factor that can contribute to the failure is altering requirements and specifications (Kendrick, 2015). The poor planning process and setting unrealistic expectations can affect the entire process. In most case, poor planning can lead to the lack of proper project management. The project can fail to achieve its objective.
In future operations, it is important for the team involved to set enough time to prepare the project. It is necessary to guarantee that the involved parties are skilled for the proper implementation process. Skilled team members will ensure that there is no cost overrun, and there is proper management of time. Another factor that should be considered is teamwork. Every member of the team should work together so as to prevent risks.
Conclusion
The Edinburgh Tram system project offers a clear case of a poorly managed project. Lack of proper planning caused cost overrun and delay in the implementation process. The current project is aimed at avoiding challenges that are linked to poor project management. The Dundee project will benefit various stakeholders; it will enhance the transportation system. To have a breakthrough of the project, there are various aspects that are covered, for example, the performance measurement. There is a clear guideline of the scheduling and the project budget. The entire project cost is approximately £700 million. The project targets 2500,000 clients per year for eight years. Although there are previous preparations, various factors may affect the success of the process. One of the aspects is poor planning, lack of coordination, and setting unrealistic expectations.
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