The Building of a Holiday Inn - Case Study Example

NSTRUСTIОN РRОJЕСT МАNАGЕMЕNT Student’s Name Professor’s Name Course Title Date TERMS OF REFERENCE (1) The proposal is being done for the stakeholders of these project who include; Red rose development limited, project management consultant, contractors,subcontractors,suppliers,investorsHewlett Packard, Bristol city council, environmental agency, the local community, local planning authority, ministry of defense, university campus, Bristol rovers football club, archeology team users, and Bream agency. (2) The role of the proposal is to detail to the client how the project will be managed. (3) The proposal outlines the strategies that will be used so as to achieve the objective of the project. (4) The proposal indicates the people that will be involved in the evaluation of the project. (5) The proposal will indicate the milestone that is intended to b reached and when the evaluation of the project will be done. (6) The proposal outlines the resources that are available for the project Table of Contents TERMS OF REFERENCE 2 ABSTRACT 3 INTRODUCTION 4 FUNDING AND OPTIMUM VALUE 5 PROJECT TIMESCALE AND SEQUENCES 7 RISK MANAGEMENT 7 ORGANIZATIONAL AND COMMUNICATION STRATEGY 9 STAKEHOLDER MANAGEMENT 10 THE BENEFITS THAT THE PROPOSED HOLIDAY INN WILL BRING 12 RECOMMENDATIONS 14 REFERENCES 15 ABSTRACT The report is a proposal on the building of a Holiday Inn with 150 rooms in Bristol city in Britain. The hotel is developed by Red rose development limited and has been predicted that it will revamp the city Centre’s north eastern quarter plans and arrangements are currently being putting place to get the necessary permission so as to start construction within one year. The project also has a gymnasium, Conference/Banqueting facilities and a multi-story car park .The developer intends to achieve a BREEAM rating Excellent. As a client-side Project Management consultant for this scheme we are required to develop a strategy for presentation to the client that gives details on how they can realize this project and how we will manage the project. The proposals focuses on tasks that are involved at the strategy phase of the project cycle. The report discusses how to manage the key project issues and evaluates their interconnection with client objectives, stakeholders and theory. The report also discusses how to rationalize and justify the choices that the consultant has made, funding and optimum value, project timescale and sequences, risk management and organizational and communication strategy and stakeholder management. INTRODUCTION Red rose development limited has proposed to use the delict Hewlett Packard (HP) site near the Frenchay Campus of the University of the West of England (UWE) to build a new nine storey 150 room’s hotel, this has been revealed by the city of the council of Bristol. The proposed hotel has been predicted that it will revamp the city Centre’s north eastern quarter. Redrose development is the developers and they are marketing the hotel as a holiday inn. They are currently developing plans and arranging the necessary permission so as to start construction one year from now. Besides the construction of the 150-room hotel, the project also has a gymnasium (1,400m2), Conference/Banqueting facilities (1,200m2), and a multi-storey car park (250 spaces).the developer also intends to achieve a BREEAM rating Excellent. The site for the construction of the proposed hotel is a brownfield site which was an old HP factory part of which was previously a burial ground. FUNDING AND OPTIMUM VALUE Project funding or project finance is the provision of long-term financing to an organization to fund infrastructure projects based upon the cash flow of the project rather than the company’s balance sheet (Jackson, 2012). Project funding is a long-term loan that depends on the project cash flow for payment while the project assets, right, and interest are held as secondary collateral (Sundaresan & Zapatero, 1997). Project funding is attractive to the private sector since companies can finance their major projects using off balance sheet sources. A simple project funding structure for a business building, operating and transferring the project includes numerous key elements (Harrison & Sharpe, 1983). Off Balance sheet Project debt is mainly held in an enough minority subsidiary not consolidated on the balance sheet of the respective investors. This decreases the effect on the cost of equity investors existing debt and debt capacity (Jackson, 2012). In some cases, the public sector can use project funding to keep project debt and liabilities off balance sheet so that they can occupy less fiscal space. Fiscal space is the amount of money the government may spend over what it is spending on the public (Casu &Girardone, 2005). The discussion is that strong economic growth will give the government more revenue through extra tax revenue from more individuals working and paying more taxes. Non-recourse Financing When defaulting on a debt recourse financing gives lenders (Bank) full claim to equity investor’s cash flows or cash (Gardner & Wright, 2012). On the contrary, project funding gives the project company a limited liability SPV. As a result the lender's recourse is limited primarily including completion and performance guarantee and bonds. The main issue in non-recourse financing is if circumstances may come about where the lenders have recourse to some or all of the equity’s investors assets as an explicit breach on the part of the equity investors may give the lender (bank) recourse to the assets (Gardner & Wright, 2012). Optimal value in a project Value management is defined as the process of bringing benefits to the customer. Value management entails the payoff that are derived from the consumer from the successful implementation of a specific project (Czernigowska, 2008). Value management is an aggregation of planning tools and methods to find the optimal balance of project payoff in relation to the project cost and risk (Czernigowska, 2008). Value management is the process of planning, assessing and developing the project in order to make the right decision. Cost of the project The project is bound to cost around 502,311 of which 274,680 will be used for the hotel,115,080 will be used for Gymnasium,82,176 will be used for the conference facility and 30,375 will be used for the multistory carpark. The total building cost will amount to 14,152,400 of which 5,400,000 will be to construct the hotel,4,910,400 for the construction of the conferencing facilities,2,562,000 will be for the construction of the gymnasium and 1,280,000 for the multistory car park. PROJECT TIMESCALE AND SEQUENCES Project planning entails stating how to conclude a project within a certain time frame with defined stages and specified resources (Munns & Bjeirmi, 1996). Project planning can be divided into the setting of objectives, identifying deliverables, planning the schedule and making support plans. Project planning entails step by step procedures in project management where documentation is required and created to facilitate successful project conclusion (Munns & Bjeirmi, 1996). Documentations entails all actions that are required to define, prepare, integrate and coordinate action plans. Project scheduling A project schedule is a tool that conveys information on what needs to be done, which resources in the business entity will perform the weakest and in what timeframe that is planned for (Khodakarami, Fenton & Neil, 2007). The project schedule potrays all of the work that is associated with bringing the project on time, without a complete and schedule the project manager will be able to convey information for the whole effort in terms of course and resources that are a must for delivering the project. Work Breakdown structure (WBS) The work breakdown structure is a reflection of all the work in the project in terms of deliverables (Khodakarami, Fenton & Neil, 2007). A conventional approach to the development of WBS is to start at the highest level with the product of the project (Colenso, 2000). RISK MANAGEMENT According to the project management institute (PMBOK), risk management is one of the main knowledge areas in which a where project manager must be competent (Berg, 2010). Risk management is the process of identifying, analyzing and responding to risk factors throughout the life of a project and is in the best interest of the project’s objectives (Berg, 2010). Proper risk management will decrease the likelihood of an event happening but will also decrease the degree of its impact. Risk management strategies include comprehensive and detailed planning for each risk so as to ensure that preventive strategies are in place if issues arise (Coleman, 2011). For smaller projects, risk management may mean a simple, prioritized list of high medium and low priority risk. Project setbacks can be decreased effectively by taking up the correct risk methodology as an imperative part of project planning process (Coleman, 2011). Present occurrences have evidenced that planning and controlling risk is a significant way of achieving high quality project outcomes. A business entity can use the six risk management process which includes; planning risk management, identifying risk performing qualitative risk analysis, performing quantitative risk analysis, planning risk response and monitoring and controlling of risk. Risk management objectives So as to siginificantly identify risk, a business entity should define strategic, operational, reporting and compliance goals. A risk management strategy is also very crucial and fundamental to effective risk management as it puts in place barriers against the accumulation of operational risk inside continuing operations (Francis & Armstrong, 2003). Development of risk intelligence increases the return on the worthiness from informational risk management investment. Identifying risk It is imperative for a business entity to identify internal and external factors that may put the entity at risk. This can be attained by the carrying out of the analysis of Workflows and processes and listing risks and causes the degree of risk and the impact of risk (Francis & Armstrong, 2003). It is imperative that the external and internal events that could affect the achievement of the objective of the organization should be identified. Risk assessment A business entity should be the two first prioritize and asses risk on an internal basis and analyze and divided in into two main categories namely probability and consequence per event. Business entities must prioritize risk, limit, and asses, prioritize and address the risk based on the needs of the organization (Guideline, 2005). Risk assessment is the determination of the qualitative or quantitative value of risk associated with a specific event as it happens, these involve the process of analysis and evaluation. Risk control measures An entity should identify control choices and choose the appropriate risk control ascertain , determine risk priorities and make control decisions. Here the management upon identifying what risk to avoids, accepts, reduces or transfers and the development of a series of actions to setup the risk with the business entity’s risk tolerance level and appetite for risk (Saffady, 2005). Once the risk is stated the company must then proceed to prioritize such risk. ORGANIZATIONAL AND COMMUNICATION STRATEGY The business atmosphere today is characterized by unexpected changes in technology and globalization as well as complicated business relationships and an a lot of pressure to succeed. With all these factors it is imperative for a project managers to act in a strategic manner so as to achieve business success (Shupe & Behling, 2006). Straightening project management with organizational strategy gives an analysis of the process of leading from business strategy to portfolio development. By connecting the project to the business strategy and maintaining alignment of the project strategy the expectation and interest of the stakeholders are attained (Faerc& Kasper, 1984). Communication affects performance, as a result for a business organization to achieve high standards there is need to be an effective communicator. Without well-established communication modes the project is bound to fail. Successful project managers arguably have good communication skills which include being able to present issues effectively, listen and act on feedback and foster harmony among the team members (Faerc& Kasper, 1984).A communication plan in project management is a policy-driven document with the goal of providing stakeholders with data about a project. The plan simply defines who should be given specific information, when the information should be delivered and what communication mode should be used to rely the information. An effective communication plan predicts what information will be required to be communicated to specific audience. The communication plan should also cater for the person who has the authority to communicate sensitive information and how that information should be broken down. Finally, the plan should contain what communication channel stakeholders should use to provide feedback and how communication will be archived. An effective communication plan will; facilitate team development, used throughout the software development process, make it easier to update stakeholder’s save on creating additional project documentation. STAKEHOLDER MANAGEMENT Stakeholder’s management is imperative to the success of every project in every business organization. Stakeholder’s management is the systematic identification, analysis planning and implementation of actions that are made to engage with the stakeholders .Stakeholders are individuals with an interest in the in the project, programmer or portfolio as they are concerned in the work or affected by outcomes (Ackermann & Eden, 2011). The variety of stakeholders will vary and in other cases, they will have competing interests. Stakeholder management is a set of criteria’s that get the positive effects and decrease the negative impacts. It has of four major steps namely; identifying of the stakeholders, assessing the interest of the stakeholders developing communication management plans and engaging and influencing the stakeholders (Reed, 1999). Identifying of the stakeholders will be at through research, conducting interviews, carrying out brain storming sessions, filling checklists and lesson learned. The stakeholders and their areas of interest are mainly represented in a table known as a stakeholders map (Sutterfield et al, 2006). The most common types of stakeholders include; Individuals and groups performing the work, individuals and groups that are affected by the work, owners shareholders and customers, statutory and regulatory bodies (Ackermann & Eden, 2011). Each stakeholder is categorized according to the potential influence which is usually shown in the matrix which estimates the interest and the effects on a simple scale such as low/medium/high (Sutterfield et al,2006). Communicating with stakeholders who have high levels of interest and influence is managed differently from those who have low interest and influence (Reed, 1999). On the other hand communication with stakeholders who have a positive view point will be different from those who have a negative viewpoint. The communication management plan must connect to other plans, for example, the risk management plan. Stakeholder management becomes more complex when stakeholders see roles and allegiances changes throughout the lifecycle. Stakeholder management for the project is the duty of the project manager hence stakeholder management is important even for the smallest projects. Project managers who use simple procedures and invest humble efforts can be able to make a big difference to the final success of the project by understanding the stakeholders and what they want. Within a programme, stakeholder maps should be made at project and program level and are administered by the project manager and the program manager. Stakeholders should only appear on the map where they have an interest in the project and they should be on the project level map. Those that have an interest in many projects should appear on project programmer level map. Where stakeholders have interests in multiple projects the program level map should show the difference between their interest and their influence. This approach assure that stakeholders appear only in one communication management plan avoiding the threat of fixed messages. The program support function will maintain the stakeholder documentation and may include a communication officer. THE BENEFITS THAT THE PROPOSED HOLIDAY INN WILL BRING 1. Increase in the Gross State product Bristol will benefit economically during the construction of the holiday inn and once the holiday is operational which will lead to an increase of the gross state product of Bristol. 2. Employment opportunities in Bristol Bristol is one of the largest towns in the United Kingdom with a large population of people living and working in the city. The construction of the holiday inn will create thousands of jobs for the people of Bristol both directly and indirectly. 3. Business Investment The Holiday Inn will give businesses shot in the arm in terms of investments significantly and as a result boosting the economy of Bristol during the construction of the Inn and when the inn starts its operations. 4. Export income Expenditure on locally produced goods and services by tourists from abroad will bring in foreign income to the city of Bristol according to the British Bureau of statistics and various economists. The holiday inn will greatly boost exports income in the city of Bristol as a result of additional international visitors to the city of Bristol. 5. Tourism infrastructure The holiday inn will be an architectural landmark in Bristol that will attract millions of visitors. It will be a Bristol icon that will increase the tourist appeal of locally and internationally. The holiday inn will also help to eliminate the shortage of high class hotels in the city of Bristol. There is need to build new tourist infrastructure and high class accommodation. 6. Allowing Bristol to attract more business and sporting events A modern state of the art holiday inn in the city of Bristol will help the city to compete with the most modern cities in the world for major international business conferences and sporting events. The proposed holiday inn will be an important asset when the city of Bristol bids for international sporting and businesses events. The attractive accommodation and conference facilities that are offered by the city of Bristol will be a determining factor. 7. The proposed holiday inn will support charity events Just like other large players in the hospitality industry that support local charities and community events with sponsorships and financial supports, the proposed holiday inn will follow suit. The inn may offer meetings and function rooms at a subsidized rate for charitable events, sporting events, art and educational events. 8. Tax revenue The proposed holiday inn will generate VIP gaming revenue for Bristol that will be subject to a gaming tax levied by the state. The revenue that will be gained from gaming activities will provide a substantial contribution to the city of Bristol budget. Increased visitors spending The proposed holiday Inn will help in increasing Bristol’s overnight visitor’s expenditure as studies show that visitors to high class resorts have a higher per capita spending than other visitors. Employment and training Bristol will benefit from the proposed inn experience and industry leadership on training and employment. The inn is likely to invest heavily in staffing and training in its premises which will create a pool of experienced and skilled employees in Bristol. Given the high turnover in the hospitality industry, the proposed inn will benefit the sector and assist in bridging the shortfall in the hospitality industry in Britain. RECOMMENDATIONS (1) A cost benefit analysis should be conducted to ascertain if the project is worth investing in. (2) An environmental impact analysis should be conducted so as to ensure that the areas in which the hotel is being built is safe and also to ensure that the construction of the hotel does not interfere with the environment. (3) Upon commencement of the project variances should be calculated and corrective action carried out so as to ensure that the project does not deviate from the budgeted figure. (4) A stakeholder analysis should be done so as to ascertain that all the company’s stake holders are satisfied. (5) A communication plan should be developed to ensure that information is distributed effectively to the groups that it is intended to and also at the time it is intended to. (6) A risk assessment should be carried out so as to determine the risks that our project may face and proposal should be made so as to mitigate the aforementioned risk. REFERENCES Ackermann, F. and Eden, C., 2011. Strategic management of stakeholders: Theory and practice. Long range planning, 44(3), pp.179-196. Berg, H.P., 2010. Risk management: procedures, methods and experiences. Risk Management, 1(17), pp.79-95. Casu, B. and Girardone, C., 2005. An analysis of the relevance of off-balance sheet items in explaining productivity change in European banking. Applied Financial Economics, 15(15), pp.1053-1061. Coleman, T.S., 2011. A practical guide to risk management. Research Foundation Publications, 2011(3), pp.1-212. Colenso, K., 2000. Creating the work breakdown structure. Artemis Management Systems. Czernigowska, A., 2008. Earned value method as a tool for project control. Budownictwo i Architektura, 3, pp.15-32. Faerch, C. and Kasper, G., 1984. Two ways of defining communication strategies. Language learning, 34(1), pp.45-63. Francis, R. and Armstrong, A., 2003. Ethics as a risk management strategy: The Australian experience. Journal of Business Ethics, 45(4), pp.375-385. Gardner, D. and Wright, J., 2012. Project finance. Encyclopedia of debt finance. Guideline, I.H.T., 2005. Quality risk management. Q9, Current step, 4, p.408. Harrison, J.M. and Sharpe, W.F., 1983. Optimal funding and asset allocation rules for defined-benefit pension plans. In Financial aspects of the United States pension system (pp. 91-106). University of Chicago Press. Jackson, P., 2012. Value for money and international development: Deconstructing myths to promote a more constructive discussion. Khodakarami, V., Fenton, N. and Neil, M., 2007. Project Scheduling: Improved approach to incorporate uncertainty using Bayesian Networks. Project Management Journal, 38(2), p.39. Munns, A.K. and Bjeirmi, B.F., 1996. The role of project management in achieving project success. International journal of project management, 14(2), pp.81-87. Reed, D., 1999. Stakeholder management theory: A critical theory perspective. Business Ethics Quarterly, 9(03), pp.453-483. Saffady, W., 2005. Risk analysis and control: Vital to records protection. Information Management, 39(5), p.62. Shupe, C. and Behling, R., 2006. Developing and implementing a strategy for technology deployment. Information Management, 40(4), p.52. Sundaresan, S. and Zapatero, F., 1997. Valuation, optimal asset allocation and retirement incentives of pension plans. Review of Financial Studies, 10(3), pp.631-660. Sutterfield, J.S., Friday-Stroud, S.S. and Shivers-Blackwell, S.L., 2006. A case study of project and stakeholder management failures: lessons learned. Project Management Quarterly, 37(5), p.26.  Recommendations - usually in the form of a list.  Bibliography/References - references to any books, journals, etc. which were used either for background reading, or directly quoted in the report. The UWE Harvard style should be used. Read More