Pre-Contract Planning of Sydney Water IT Project - Case Study Example

PLANNING AND MANAGING IT PROJECTS Name: Course: Tutor: Date: Task 1 Discuss the pre-contract planning, specifying of business requirements and functional requirements There is a quantifiable positive relationship between efforts consumed during the pre-contract planning phase of a project and the project’s ultimate success. The key objective of this phase is to ascertain accurate estimates with regards to the project costs. This then helps the board of directors or the management to decide on whether or not to implement the project. Pre-contract planning with regards to management can thus be summed up as the process of acquiring information prior to reaching the final decision on implementing the project. Pre-contract planning on a project is not only significant but also helps the board of directors and the management to have a grip on the entire process (Krahmer & Strausz, 2010, p 1). Based on the Auditor General report with regards to Sydney Water IT project, several issues come to the fore. The report reveals that not only were the various specifications to this particular project inadequate, but the project planning was also insufficient - this consequently led to several modification requests on the project and ultimately project failure. Notably Sydney Water believed that IT projects of this form and complexity would inevitably delay and go beyond budget, hence the apparent inferior mentality (Auditor General Report, 2003, p. 13). The extent of issues that came to the fore as well as the rate of scope changes during the project’s entire course culminated to constant emergence of new change requests. This the report emphasizes that was as a result of poor specifications of the necessary elements prior to implementing the project. It is also desirable to note that based on the report, business requirements were changing as the project progressed. This implies that problems were bound to surface during the course of the project. This is because even the business requirements specified prior to implementing the project would not have been effective and as such requirements did not project change with regards to business requirements (Auditor General Report, 2003, p 19). Key issues also surface with regards to functional requirements. The DMR report of February 2001 highlighted concerns with regards to the time spent on the analysis. The report revealed that insufficient time was spent on analysis prior to implementing the project. This according to the DMR report significantly contributed to the functional requirements being overlooked. Incidentally, in February 2002, the Customer Information Billing System project director indicated that elements of inadequacy were present with regards to the analysis phase. He stated that comprehensive decision making and functionality design was postponed to subsequent project stages as opposed to carrying this out prior to implementing the project. That is, the analysis phase ought to have been comprehensive. Essentially, this phase was supposed to have involved active user commitment and involvement prior to implementing the project or in the early phases of the project (Auditor General Report, 2003, p 20). Task 2 Discuss the tracking of the project against the business case, that is, whether the project was aligned with the project business case The Auditor General Report (2003, p. 21) indicated that the Customer Information and Billing System project appeared not to have been constantly supported by a strong business case. The report stated that Sydney Water failed to provide the business case version that was approved by the Board. Additionally, evidence supporting selection of the Customer Information and Billing System project over other project options was insufficient. For instance, the draft business case estimated the upgrading costs of the existing system at between 9 and 14 million dollars compared to the budgeted costs of the Customer Information and Billing System option estimated at 38.2 million dollars. Sydney Water was unable to show how much consideration was given to costs against potential benefits in selecting the Customer Information and Billing System option. The project’s contingency cost was initially set at 10 percent which the DMR noted was below the industry’s norm of 30 percent. Importantly, the DMR indicated that a significant proportion of this contingency was consumed in the early stages of the project. It was recommended by the DMR that a minimum of 30 percent contingency be incorporated into the budget, thus increasing it by 12 million dollars. Subsequently, the Board in considering the recommendation noted an amount of 8 million dollars depicting a 20 percent contingency. However, the business case was not formally reviewed to incorporate this in taking into consideration the choice of contingency options (Auditor General Report, 2003, p 21). It is desirable to note however that even though the business case was not formally reviewed in line with DMR recommendations, there were numerous attempts to do so. For instance, the General Manager of customer services in 2001 acknowledged the need to revise the business case in tandem with the DMR findings. The internal audit in 2002 recommended the formal review of the business case. Management of Sydney Water accepted recommendations by Internal Audit to review the business case and consented to address this before year end. It is worth noting however that these recommendations were not executed (Auditor General Report, 2003, p 22). The Board noted that benefits expected to accrue from the Customer Information and Billing System project were vague. Incidentally, the Board noted that due to the time consumed by the project, some of the original gains with regards to productivity, expected to accrue from the solution had already been delivered. There were some benefit areas distinct from the original business case; for instance, electronic commerce, closure of some offices, and ownership changes. There were Sydney Water people who were of the opinion that is was inevitable that IT projects of such complexity and magnitude would be delayed and go beyond the pre-determined budget. To this end, the Sydney Water people believed that this was a major contributing element to the business case not being updated (Auditor General Report, 2003, p 22). This and the highlighted paragraphs within this context strongly depict that even though the project was aligned with project business case, it was not incorporated in all areas, for instance the execution segment. Task 3 Discuss whether there was an adequate project plan, key milestones and if these were managed adequately According to Rad and Anantatmula (2005, p. 1) project planning is the science and art of applying historical data, personal expertise, archived information, organisational knowledge, institutional memory, and project scope statement to forecast the project’s total cost, resource expenditure, and schedule. The AG Report (2003, p. 19) revealed that the Sydney Water project plan was inadequate. This therefore implies that there are a lot of areas with regards to the project plan that were overlooked. For instance, a look at the project’s costs shows that little attention was paid to the same. The initial budget of the Customer Information and Billing System was set at a cost of 38.2 million dollars; the final project estimate however depicted a different amount, 135.1 million dollars - a significant difference from the original cost estimate. To arrive at an almost precise project estimate it is imperative that the project manager takes into account various factors including identification of the different constituent elements and related activities required to meet the project’s goals. Subsequently, the project manager will apply this information to arrive at an almost precise cost with regards to the resources to be applied in completion of the project (Rad & Anantatmula 2005, p. 1; Harris, 2010, p. 2: Haugan, 2002, p. 65; Carmichael, 2006, p. 63). The AG Report however revealed that there were some elements that were conspicuously missing in the original budget. This implies that there was insufficient information during budget preparation. The report revealed that there were important contingencies as well as some software and hardware costs that were missing from the original budget (AG Report, 2003, p.13). The necessary information for an accurate and comprehensive set of plans entails the objective details, quality, scope, and delivery date. When the project is envisioned, the initial cost estimates are more often than not inaccurate because information on the expected deliverables, the project team, and the project environment is very little (Rad & Anantatmula 2005, p. 2). With regards to management of the project plan prepared prior to embarking on the Sydney Water project, it can be adduced that the management was quite poor. The report reveals that communication between the customer services division and the project team was poor; a comprehensive project plan was not maintained during the project; testing was neither comprehensive nor timely; and the accountability and involvement of some internal service providers was wanting. This therefore depicts that management of the existing project plan was not only insufficient but poor (AG Report, 2003, p. 13). A successful project management pretty much relies on a properly defined and fully implemented resource and work breakdown structure. With possession of such comprehensive tools, a successful project can be attained through regular updating, accurate reporting, and clear planning. As details of the project become available, they will set off enhancements to the resource and work breakdown structure, schedule, estimates, and other planning documents of the project (Rad & Anantatmula 2005, p. 2; Tomczyk, 2005, p. 13). The AG Report however, as reflected above, highlighted lack of these elements. For instance, the report revealed that Sydney Water realised that it required a business improvement process; however, during the project it only embarked on implementing a computer based system - hence depicting lack of a properly defined work and resource breakdown structure (AG Report, 2003, p. 13). Task 4 The project management’s institute body of knowledge; knowledge areas Process Group Section Evident Not Evident Comments Initiating Develop Project Charter & Develop Preliminary Project Scope Statement X In 2000, Sydney Water contracted Price Waterhouse coopers to develop and implement the project. After four months of analysis, the project then shifted to the design and construction phases and split into discrete projects; release 1, 2, and 3. Release 1 and 2 were implemented however, release 2 did not achieve its functionality in full. It is desirable to note that according to the AG report, there is no evidence of scope statement. However, the report reveals that Sydney Water had expected the project to be operational by October 2002, a two-year scope (AG Report, 2003, p. 12) Planning Develop Project Plan/Execution Plan X Based on the report there was no execution plan. Scope Planning X Scope planning was evident despite the fact that the plan was not adhered to (AG Report, 2003, p. 19). Scope Definition X The DMR report recommended that all the individual project schedules ought to be consolidated into a single project schedule to facilitate identification of all inter-project dependencies (AG Report, 2003, p. 19). This implies therefore that the scope was not defined. Activity Definition X Evidence of activity definition is reflected by the Board’s statement where they state that: Significant critical activities linked to preparing the business for the project were well in hand (AG Report, 2003, p. 16). Activity Sequencing X Critical activities can only be ascertained after activity sequencing (Schwalbe, 2009, p. 228-230; Goodpasture, 2004, p. 189-190; Phillips, 2004, p. 203-209). It is desirable to note that the board had admitted the presence of critical activities. This thus depicts evidence of activity sequencing Activity Duration Estimating X A critical activity is determined by estimation of activity duration (Schwalbe, 2009, p. 228-230; Goodpasture, 2004, p. 189-190; Phillips, 2004, p. 203-209). Presence of critical activities therefore shows evidence of presence of estimating activity duration. Schedule Development X The aforementioned activities, that is definition, sequencing, and duration can only be possible with some form of schedule development (Schwalbe, 2009, p. 228-230; Goodpasture, 2004, p. 189-190; Phillips, 2004, p. 203-209). Hence the presence of these three depicts the presence of schedule development. Cost Estimating X The CIBS project had a cost estimate of 135.1 million dollars (AG Report, 2003, p. 13). Cost Budgeting X The AG report revealed that the project had a final budget cost of 60 million dollars (AG Report, 2003, p. 1). Quality Planning X The AG report reveals that project planning was inadequate, hence lack of quality planning (AG Report, 2003, p. 13). Human Resource Planning X Lack of human resource planning is reflected by the report as the report is deficient with regards to its composition and other relevant areas (AG Report, 2003, p. 22). Communication planning X Communication planning was absent. This is reflected by the report where it indicates that communication between the customer service division and the project team was poor (AG Report, 2003, p. 13). Risk Management Planning X The report reveals that risk management was not effective both at project and corporate levels (AG Report, 2003, p. 13). Risk Identification X The AG Report reveals that the Sydney Water annual report did not detail project risks (AG Report, 2003, 19). Qualitative/ Quantitative Analysis X Risk Response planning X The report reveals that there were no written plans in place to assist in reducing risks in the event of project failure (AG Report, 2003, p. 31). Purchases and Acquisitions planning X Contracting planning X Lack of contract plan is evidenced by the fact that Sydney Water was unable to provide a documented evidence of the same (AG Report, 2003, p. 27). Executing Direct and Manage Project Plan/Execution Plan Execution X Quality Assurance X The contractor, PwC, had a quality assurance system (AG Report, 2003, p. 18). Project Team development X Information Distribution X According to the AG Report, there were some inconsistencies with regards to information distribution (AG Report, 2003, p 23). Solicitation X Source Selection X Contract Administration X The AG Report revealed that contract administration was lacking (AG report, 2003, p.13). Controlling Integrated Change Control X There was no integrated change control. The AG Report states that change requests were being applied as a tracking tool and all change requests were not for technical changes (AG Report, 2003, p. 20). Scope Verification Scope Change Control X Based on the report, the scope changes rate culminated to new change requests. This implies that scope change control was absent (AG Report, 2003, p. 19). Cost Control X The initial project cost was estimated at 38.2 million dollars; and before the project was halted the budget had escalated to 60 million dollars, which means that there was no cost control (AG Report, 2003, p. 12). Quality Control X Quality control was evident with regards to the quality assurance system attributed to the PWC (AG Report, 2003, p. 36). Performance Reporting X Sydney management did not usually report significant issues to the board in a clear, comprehensive, and timely fashion (AG Report, 2003, p. 12). Risk monitoring & Control X Risk monitoring and control was being applied inconsistently all through the project’s lifecycle (AG Report, 2003, p. 31). Closing Administrative Closure X Contract Closeout X Reference List Auditor General Report, 2003, “Review of Sydney Water’s Customer Information and Billing System,” Auditor-General’s Report to Parliament, Vol. 1. Carmichael, D. 2006, Project planning, and control, Taylor & Francis, New York. Goodpasture, J. 2004, Quantitative methods in project management, J. Ross Publishing, Boca Raton, Florida. Harris, P. 2010, Project Planning and Control Using Primavera P6: For All Industries Including Versions 4 To 7, Page 6, Eastwood Harris Pty Ltd, Victoria, Australia Haugan, G. 2002, Project planning and scheduling, Kogan Page, London. Krahmer, D. & Strausz, R. 2010, “Optimal Procurement Contracts with Pre–Project Planning,” available from www.wiwi.uni-bonn.de/kraehmer/DK-RS-ppp.pdf (5 May 2011). Phillips, D. 2004, The software project manager's handbook: Principles that work at work, Wiley-IEEE, Hoboken, New Jersey. Rad, P. & Antatmula, V. 2005, Project Planning Techniques: Management Concepts, Kogan Page, London. Schwalbe, K, 2009, Information Technology Project Management, Cengage Learning, Boston, MA Tomczyk, C. 2005, Project Manager's Spotlight on Planning, John Wiley and Sons, Parkway, Alameda. Read More