In Planning and Programming - Assignment Example

?Executive summary The implementation of any project consists of numerous elements broken down in stages. The process of project management entails several stages aiming at ensuring successful project completion. This paper presents a critical analysis of the planning element for construction projects. A clear analysis of the factors affecting planning process for a project falls within the scope of the paper. The paper also analyses the various stages necessitating planning as a crucial element of project success. The paper comprehensively discusses different planning elements including financial and strategic. Planning continues to play an essential role towards the success of many projects. Kerzner, (2003) states that failure to plan, marks the beginning of total failure. Project planning A project plan can be define as the guide towards the execution and control of a project. Project plan forms a fundamental base towards the success or failure of a given project. According to Kerzner (2009) a project plan defines the appropriate methods to be employed during the project. The defined methods ensure successful completion of projects. Project plan ensures optimisation of the resources towards achieving the objectives of the project. The plan, therefore, acts as a guideline in maintaining a balance between resource utilisation and project schedule compliance. The plan ensures proper utilisation of project resources and timely completion of projects. The project planning process in the construction industry forms a fundamental activity for the entire project. The planning process consists of numerous stages. The stages include. Choosing of correct technology and construction method to be employed in the project. Establishing the work tasks. Defining the existing relationships between various activities. Estimating the activity durations. Estimating the resource requirements for the work activities involved. Numerous factors within the construction sector affect the planning process. The factors affecting the project planning process lie within the financial and time functions of the project. The factors can, therefore, be defined as cost factors and schedule factors. The chart below shows the factors affecting the planning process. Fig1. Factors affecting construction planning Within project execution process, numerous constraint and uncertainties exist. These uncertainties form what project managers consider project risks. Risk management becomes an essential part of projects execution in ensuring the success of a project. Ireland (2006) defines the element of risk assessment as the critical analysis of the expected constraints and uncertainties before embarking on a project. Comprehensive analysis of the risks becomes essential in minimising the probabilities of project failure. Ireland continues to discuss that failure to analyse these factors efficiently and critically, poses surmountable problem of project failure. The process of risk assessment involves, identifying the uncertainties, analysing them, and prioritising the risks as analysed. The last phase, of prioritising, ensures the arrangement of the risks in relation to the impacts they may posses on the project. This phase allows project managers to eliminate the substantial risks perfectly while managing the other risks throughout the project duration. Financial planning Project management process includes financial planning as an element within the execution process. A financial plan defines and identifies the financial needs of the entire project. All expenses expected within the project execution, need to be indicated within the scope of financial plan. Kerzner (2009) defines financial planning as the element of drawing the budgetary needs for the different phases of a project. Financial planning provides a breakdown of all expenses to be incurred at different stages during the project execution duration. The importance of financial planning lies in ensuring controlled utilisation of financial resources available for projects. Financial planning principles should always be adhered to in ensuring and securing project financing. Financial planning offers an opportunity for possible project financiers to estimate the expected project cost. This ensures financing organisations make informed decisions before financing projects. Though the planning needs accuracy, the figures offer an estimated value for the project. It becomes extremely difficult to establish factors like future change of commodity prices. Financial planning, therefore, only offers a guideline assuming that prices fail to change during the project duration. In the event, of small changes not budgeted in a project, need may arise, for the project manager, to alter the initial budget should the financiers allow. Performing a project with budgeted finances can be disastrous towards projectcompletion. In the event of changes, a different financial plan would be drawn and financed separately from the initial project. The planed change would be implemented as a supporting project to the major project. This would ensure treatment of the changes a different project, and minimise the possibility for creating financial shortages for the major project. Mittra et al (2007) identifies that each project needs to be allocated its own finances. This would inadvertently minimise borrowing finances from a project to perform another project. In the event, a project falls short in capital, seeking financing from within other projects becomes catastrophic. Inter-project borrowing continues to be defined as a major cause of project stalling and eventual failure. Transfer of finances from a project creates a shortage within the allocated activity. The need arises to, therefore, ensure all projects and support projects contain independent financial plans. Each project, therefore, acquires independent financing. The problem of inter-project borrowing becomes eliminated in such a scenario. Cost reimbursement contracts can be define as contracts allowing contractors to be paid an agreed-upon amount regardless of the incurred project expenses. These contracts continue to be extensively utilised in situations where the essential outcome of the project does not consider cost function. The items to be purchased, lack explicit definition in the majority of these situations. The aim of such projects normally lies in achieving a goal regardless of the expenses incurred. The formula for calculating the final payout appears as indicated below Final payout = Target cost + Fixed fee + Buyer share ratio * (Actual Cost - Target Cost) Final payout= 120,000+10,000+0.9*(130,000-120,000) =120,000+10,000+9,000 = 139,000 In a project with an estimated cost of $120,000 and an actual cost of $130,000 and a profit margin of 10%, total reimbursement to the seller would be $139,000. The buyer would be expected to cater for the actual cost of the project. In addition, the buyer also pays the agreed percentage of the difference received subtracting the estimated cost from actual cost. The difference in this case is $10,000, and seller/buyer cost sharing is 10/90%. The profits for the buyer increase, when the actual costs become lower than the estimated cost. The advantage of these contracts lies in the ability for contractors to work without worrying about escalating costs of resources. The project planning phase can be defined as the backbone on any project. It becomes essential for the project managers to ensure involvement of the management team in the planning process for the project. The importance of active participation by management at this stage lies in ensuring, the managers become aware of the expectations for the project before initiation. Knowledge of the project becomes crucial for the project management team during project execution period. The planning process should include all interested individuals or groups for the project. The planning process should also include the services of expatriates to offer professional advice to the various personalities involved. The functional attributes of the existing system would be analysed before the meeting. Compatibility of the systems becomes critical at this stage. The importance of analysing compatibility would be establishing the possibility of the systems interfacing. This would essentially enable both parties to make an informed decision regarding the system to adopt. If compatibility can be established, a change in the project plan becomes inherent in creating a compatible project. The fatality of abandoning the project necessitates the project team to create a compatible project. The team working on the project needs to assess all possibilities of compatibility before the meeting takes place. This would inadvertently provide a relaxed meeting environment as a possible solution would almost have been achieved. In a formal meeting, seeking to discuss project design, the essential features of the project would be extensively discussed. An analysis of the initial project plan would be availed in order to establish the initially ignored aspects. The elements of the existing system failing to interface efficiently with the intended project would have to be analysed critically. This analysis would entail establishing the necessity of the problematic elements. The elements creating interfacing difficulties could be dealt away with if they pose little threat to the project. A comparison between the existing system and the current project would be essential in the decision-making process regarding the way forward. Since the project aims at upgrading existing systems, a total overhaul of the system may be proposed. Replacement of the existing system with a modern system would become inherent should an agreement be reached. The critical path can be defined as the sequence of activities necessary for the timely completion of a project. According to Lewis, (2007) the critical path entails the scheduling of activities for a project. A projects critical path shows details of activities necessary for the completion of a project. This includes a breakdown of all the activities undertaken during the project duration. The path also includes the timeframe upon which the described activities should be completed. Lastly, the path indicates the interdependencies between the highlighted activities. During the project implementation process, the path acts as a guideline towards timely completion of the various activities. The critical path analysis provides a comparison of different timeframes for completing projects. The inclusion of dependency between activities enables planers to identify the activities to be performed first. The independent activities become the priority, for planners, as other activities depend on them. The planning process becomes immensely simplified through prioritisation of activities within the project implementation process. The critical path continues to define key elements valuable to the timely project completion. These elements assist planning and implementing teams for the project. Changes to a project need to be budgeted for to avoid financial shortages at later stages in the project. The total budge for a project always includes all expenses including those not initially within the budget scope. All expenses incurred must appear on the final budget of the whole project. In a project with a budget estimation of $100,000, and approved changes valued at $17,000 with investigating expanses set at $2,500, all the values should be added together. Current budge t= initial budget + approved changes cost + other costs incurred. Current budget = 100,000 + 17,000 + 2,500 Current budget = $119,500 Mission and vision statements Mission statement can be defined as a representation of an organisation’s existence purpose. Hill and Jones (2008) define a mission statement as the guide towards an organisation’s actions, overall goal and decision-making. A mission statement provides guideline regarding the formulation of operational strategies for an organisation. Organisations often reach their potential customers through mission statements. Hill and Jones continue to describe mission statements as crucial marketing elements for new organisations. Decision-making, by clients regarding unfamiliar organisations, relies heavily upon the mission statement for the organisation. An appropriate mission statement should provide clear information regarding the products of the organisation. A mission statement needs to be clear with a succinct explanation of an organisation’s purpose. This makes the statement easily comprehensible by clients. The statement should include measurable and meaningful information regarding the industry within which the organisation lies. Long cluttered mission statements normally fail in creating appeal with possible clients for the organisation. The statement should display a desirable public image of an organisation. This would immensely increase the appeal for an organisation’s products within the public. Increased appeal becomes essential in creating business opportunities for new market entrants. The mission statement also needs to impose strategic influence upon the business. A vision statement can be defined as the future picture of an organisation. Hill and Jones (2008) define a vision statement as an outline of desired future state of an organisation. The goals and objectives for a company in times become summarised as the vision statement. Vision statements sometime rely on presumed, ideal situations expected in the future. The vision statements for organisations become the basis upon which long term strategic plans lie. The establishment of strategic plans seeks to achieve the specifications of the organisations’ vision statements. The approach defines the futuristic purpose of vision statements. Though people normally interchange mission and vision statements, there exist diverse discrepancies between the two identity statements. While the mission statement identifies the current purpose for an organisation, the vision statement defines a desired future state of the same organisation. The organisation’s mission statement can be identified as falling within the short-term goals and objectives. The vision statement, on the contrary, falls within the strategic plan or long-term objectives. The mission statement for a company or organisation always strives to be realistic as it presents measurable objectives. The mission statement needs to be seen by clients at attainable for people to gain confidence in an organisation. The vision statement, on the other hand, always comes presenting an ideal situation which may not be achievable but desirable in the future. The common feature about the two identity statement is that they serve to inform the public about the same organisation. These two statements should, however, not be confused, and interchanged in usage. A software manufacturing company’s mission statement may be ‘providing IT solutions to all’. The same company’s vision may be ‘problem-free IT industry’. The mission statement defines the purpose of the company and target client for the company’s products. The vision on the contrary supports the idea stated in the mission but an ideal manner. The ideal situation stated in the vision cannot be achieved. The vision, however, supports the course of the mission. Strategic planning Bradford and Duncan (2000) define strategic planning as the process through which organisations develop operational procedures aimed at achieving a desirable future. The process involves various stages specifically undertaken to ensure effective, strategic plans. Strategic plans normally vary depending on the nature and needs of an organisation. Traditionally, organisations made strategic plans running up to fifty years. That trend continues to change tremendously in the 21st century where organisations started making strategic plans running a maximum of five years. According to Bradford and Duncan (2000) the strategic planning process involves the various stages discussed below. Situational analysis The first stage of the process seeks to present a detailed analysis of the prevailing situation within the organisation. Consideration of various elements making-up the organisation becomes essential at this stage. The situational analysis considers internal and external factors affecting the organisation’s operation. In essence, situational analysis continually gets defined as an analysis of the company environment. It seeks to identify the aspects of the existing strategies requiring change. Environmental analysis establishes the best possible solutions offering the company chance to achieve its mission in the future. Development of proper strategic plan relies heavily on the information gathered from situational analysis. Plan development Upon collecting information regarding the company environment, the next stage becomes plan development. The development should be based on the gained information regarding the organisation’s situation. The developed plan seeks to correct any wrong situations identified. The correction becomes essential in maintaining competitiveness of the organisation within the industry. The plan always aims at providing solutions to challenges that may be encountered. A vision for the future becomes necessary at this stage as the plan becomes the guideline for future organisational operations. Testing The testing phase brings in the element of internal analysis of the efficacy of the developed plan. A critical analysis using laid formulas becomes essential in establishing the suitability and sustainability of the developed plan within the organisation. The testing allows for any weaknesses within the plan to be rectified as the development moves towards perfecting the plan. Implementation Upon performing the essential tests for the plan, implementation phase begins. The implementation entails execution of the developed plan. This can also refer to the actualisation of the plan. The planned strategies become part of the operational culture of the organisation. Plan maintenance The last stage of the strategic planning process can be identified as maintenance. Though not exactly part of the plan, this phase ensures following of the developed strategic plan. This can be termed as an operational stage of the strategic planning process. This stage acts in ensuring proper implementation of the process. It also ensures the achievement of the desired objectives by the strategic plan. The strategic planning process for the software manufacturing company identified may follow these stages. In the first stage, the planners would consider the general trend within the software manufacturing industry. They would collect and analyse the emerging trends, posing surmountable challenges to the companies, within the industry. The planners would further seek to establish the position of the company within the market share, compared to competitors. This would form the situational analysis for the company. The second phase would entail development of a plan seeking to cope with the identified situations. The plan would probably require the company to expand its operations or distribution channels. These strategies would ensure the products reach greater markets than before the development of the plan. The developed strategy should also ensure the company maintains a competitive position among the leading companies within the industry. The third phase would include trying out the laid strategies. The company could embark on new distribution channels aiming at reaching the masses. The alternative method to distribution would be developing manufacturing plants in different places to avail the company products widely. During the testing, both plans could be utilised before establishing the better method for the company to use. Recording the outcomes achieved through each plan can create a platform for comparing the performance against the organisation’s objectives. The fourth stage would involve selection of the better mode established from testing. The chosen method can then be adopted, and fully integrated within the company operations. Achievement of desirable results following the implementation of the strategic plan should inherently follow. The last stage would ensure the strategic plans continue working throughout the estimated period. Maintenance would also entail the ability to alter the plan when changes occur. Prevalence of flexibility within the plan becomes essential at this stage. Where failures become notable, necessary amendments ought to follow allowing proper execution of the strategy. conclusion The planning aspect of management forms an essential phase towards any managerial process. Project management involves numerous planning aspects for different reasons. Each phase or stage within the project implementation process requires planning to ensure successful completion. Bradford and Duncan (2000) concur with the notion that ignoring the planning aspect becomes the beginning of project failure. The importance of planning becomes an essential and critical matter towards successful project completion. References Bradford, W. and Duncan, P. (2000). Simplified Strategic Planning. Worcester: Chandler House Press. Hill, Ch. and Jones, G. (2008) Strategic Management. New York: Houghton Mifflin Company Ireland, Lewis R. (2006) Project Management: Strategic design and Implementation (5th ed). New York: McGraw-Hill . Kerzner, H. (2009). Project Management: A Systems Approach to Planning, Scheduling, and Controlling (10th Ed. ed.). New Jersey: Wiley. Lewis, J. (2007). Fundamentals of Project Management (3rd ed.). New York: American Management Association. Mittra, S., Anandi P. Sahu, Robert A Crane. (2007)"Practicing Financial Planning for Professionals" (10th Edition). Michigan: Rochester Hills Publishing, Inc Read More