A Portfolio Management Methodology - Assignment Example

Contents 1.Prince 2 Project Management Methodology 2 1.1Characteristics Of A PRINCE 2 Project 2 1.2Elements Of A PINCE 2 Project 3 1.2.1Prince 2 Processes 3 1.2.2PRINCE 2 Components 4 1.2.3Business Case 5 1.2.4PRINCE 2 And Portfolio Project Management 6 2.Project Management Body Of Knowledge (PMBOK) 6 2.1Project Integration Management 6 2.2Project scope management 7 2.3Project quality management 7 2.4Project Risk management 7 2.5Project cost management 8 3.Managing a Project: Burj Khalifa 8 3.1Introduction 8 Burj Khalifa (Burj Dubai) is the world’s renown tallest skyscraper. It is 828 meters, 164 stories accommodating residence, offices, resort and commercial activities on a global scale. As a very huge engineering undertaking, this project needed a thorough project management otherwise the challenges could easily overwhelm and lead to project termination due to unmanageable failure. The sections below give an overview of the Burj Khalifa project management and the related outcome. Each of the sections includes the success and the failures with regards to PMBOK guides as well as the PRINCE 2 aspects. 8 3.2Time Management 9 3.3Cost Management 9 3.4Human Resource Management 10 3.5Risk Management 10 3.6Overall successes and failures 11 3.7Lessons Learnt and Conclusion 11 References 12 1. Prince 2 Project Management Methodology Prince 2 is just a simplification of Prince that is an improved version of PINCE. Prince is just an acronym-meaning project in controlled environment. Definitively, it implies that a project is under control in accordance with the organization’s set goals. It is very important to note that PRINCE 2 does not recommend on the content of specialized activities during the project control. As such, any tool deemed more efficient by the involved team members will be used in task accomplishment. PRINCE 2 applies to both small and big projects where only applying aspects are used, but sticking to the principles. Based on the definition, a few conclusions can be made. According to PRINCE 2, a project: involves a controlled (managed) environment, created to deliver the business need, accords with the specified business case, has a predefined temporary organization, has predefined specific timeframe, has predefined result. This forms the basis of the characteristics of a PRINCE 2 project (Hinde, 2012). 1.1 Characteristics Of A PRINCE 2 Project It has a predefined lifecycle that has an ending and has corresponding activities to create the intended project result. The PRINCE 2 project has well defined and measurable products. The project has a clearly defined number when it comes to the tools and Human resources. A clearly defined organizational structure with defined responsibilities is one other characteristic feature of a PRINCE 2 project. With the understanding of the characteristics, it is important to understand the elements that drive the characteristics (Directing successful projects with PRINCE2tm, 2009) 1.2 Elements Of A PINCE 2 Project There are 3 main categories of a PRINCE 2 project. They include the processes, Components and techniques. According to Tuttle (2012), there are 8 processes, 7 components and 3 techniques applied in project management. Below is a detailed discussion of these elements and how the relate to project management. 1.2.1 Prince 2 Processes 1.2.1.1 Starting Up A Project (SU) This involves carrying out an assessment to see whether it is useful to start the project and creating a management team/environment or not. At this stage, the project management team is designed, project brief prepared, project approach defined and the initiation stage planned. 1.2.1.2 Initiating A Project (IP) If from the assessment the project is allowed to commence, the setting up of the project environment and planning and getting the commitment is next step. This is the initiating phase of a project. It includes quality planning, business case refining, setting up controls and assembling of PID. 1.2.1.3 Directing A Project (DP) This mainly appertains to the activities of the board with respect to making decisions. It comes after the project has been assessed and initiated. It includes authorising the initiation and project 1.2.1.4 Stage Controlling (CS) After project has been initiated and directed, it is in progress. The progress happens in stages and requires controlling. The control is done mainly by a project manager. 1.2.1.5 Managing Delivery Of A Project Product (MP) A project in progress requires coordination of the operational activities by the team managers. 1.2.1.6 Managing Stage Boundaries (SB) This involves coordination and preparation of the decisions of the board by the project managers. 1.2.1.7 Closing The Project (CP) This involves controlled finishing of the project. It is mainly done by the project manager. 1.2.1.8 Project Planning (Pl) In project management, creation of several plans during the project’s lifecycle helps in correcting possible sources of problems. This is referred to as project planning. The processes are related to management of the desire outcome (i.e. product ) and are necessary for the process as well as quality assurance. 1.2.2 PRINCE 2 Components The components of a PRINCE 2 project include the following components: 1.2.2.1 Business Case Business case simply means justification of the project 1.2.2.2 Organization Includes the roles, responsibilities, tasks and mandates of the project team. 1.2.2.3 Plans It includes the different kinds of plans necessary during the execution of the project. 1.2.2.4 Controls Include the mechanisms to measure, split and drive the project phases. 1.2.2.5 Risk Management This involves the analysing processes as well as the controlling of risks during the project management. 1.2.2.6 Project Quality In An Environment This process ensures that the project outcome has the disable quality measures. 1.2.2.7 Configuration Management This includes the registration and management of the project outcome 1.2.2.8 Changes And Disruptions Management This mainly deals with change control to maintain the desired goals. The three PRINCE 2 Techniques include the product based planning, quality review technique and change control technique. The most outstanding point that this literature focus on is the business case 1.2.3 Business Case According to Bradley (2010), business case is of greater concern because here is no Project without a business case. It forms the base of all decisions made and justifies the project i.e. it is the reason and backbone. A business case contains all the benefits, costs and the risks expected for the project. It also contains all the expected changes in business. Not to forget, a business case contains the timeline, judgement on investment, chosen option and evaluation. A business is only maintained if it is deemed in alignment with the company’s set goals. A viable business case then calls for a good organization towards its execution. As far as this paper is concerned, project management team is divided into relevant responsibility delegations. This therefore describes a PRINCE 2 project as a project managed alongside other projects that have a common organizational intended goal. A collection of man projects with the same objective is referred to as a portfolio. This brings about the concept of portfolio project management. 1.2.4 PRINCE 2 And Portfolio Project Management With due consideration of everything this paper has discussed about a PRNCE 2 project management, this paper concludes that Prince 2 simply talks about a project that aims to fulfil the set goals of the organization. The business case should achieve the organizations planned future. This therefore concludes it as a strategy of portfolio management. By definition, a portfolio management refers to management of several projects towards achievement of an organization’s planned future (Dalcher & Brodie, 2007). 2. Project Management Body Of Knowledge (PMBOK) 2.1 Project Integration Management It involves effective combination of the processes necessary for attainment of project objectives. It includes development of a plan and project charter which is essential in project execution. As Tracy,(n.d.) says, without this knowledge, leads to impaired activities and processes of necessary for identification, definition, combination, unification and coordination of the various processes and project management activities within the project management process groups. This knowledge, therefore, enables coordination of the project management process groups, which is necessary for enhanced project process/method. The integrative processes that enhance the project management method include directing and managing project execution, monitoring and controlling the project work, performing integrated change control as well as closing phase. Without these processes, the project execution would be chaotic thus project integration is necessary. 2.2 Project scope management This area helps in defining and controlling what is or otherwise not included in the project. It aids creation of a work breakdown structure which is essential in task implementation. This knowledge helps in identifying the project processes necessary to ensure that the project includes all the work required, and only the work required, for a successful completion of the project underway. Lack of this knowledge would easily permeate the impacts of scope creeps and thus a project would be said to be poorly managed and stands to collapse. The knowledge easily minimises the scope creeps and should they occur, using the knowledge, they are easily eliminated (Stackpole Snyder, 2013). 2.3 Project quality management This knowledge area helps in identifying the most applying quality standards for \a particular project towards attainment of its goals. The knowledge helps in good quality planning assurance and control. The project quality management knowledge helps in determining of the most applying quality policies, responsibilities and objectives which enable the project to satisfy the needs for which it was undertaken. Without this knowledge, therefore, a project method would not be stable enough in terms of quality and stands higher chances of deviating from the undertaking for which it was meant. 2.4 Project Risk management This knowledge helps in acquisition of skills and ability to carry out a qualitative and quantitative risk analysis. It helps in increasing of probability and the impact of positive events during the management process. It also helps in decreasing the negative events during the project process (Stackpole Snyder, 2013). Risks always do arise during project management and threaten to progress of the project. Knowledge of how to detect and manage the risks is essential in decreasing the negative events that would otherwise shoot down the project. 2.5 Project cost management It includes estimating, planning, budgeting and controlling of the project costs. It ensures that the project is completed within the approved budget or thereabout (Stackpole Snyder, 2013). Proper resource planning, cost estimation, budgeting and cost control are an essential part of project cost management knowledge. It helps a smooth ending of the project management process. Without this knowledge, therefore, lacking in the above would compromise the outcome due to unestimated costs or uncontrolled scope of project cost. 3. Managing a Project: Burj Khalifa 3.1 Introduction Burj Khalifa (Burj Dubai) is the world’s renown tallest skyscraper. It is 828 meters, 164 stories accommodating residence, offices, resort and commercial activities on a global scale. As a very huge engineering undertaking, this project needed a thorough project management otherwise the challenges could easily overwhelm and lead to project termination due to unmanageable failure. The sections below give an overview of the Burj Khalifa project management and the related outcome. Each of the sections includes the success and the failures with regards to PMBOK guides as well as the PRINCE 2 aspects. 3.2 Time Management This project was set to be completed in 2008. However, it was completed 9 months later. The reasons that led to this include a workers’ strike and increase in scope by additional 100M height. To recover the time lost, the management only increased work hours. By PMBOK guide by Snyder (2013), the management should have used service companies for labour to reduce strikes. Also it should have employed more people rather than just increase work hours. This was a failure in practice. However, the increase in work hours was a success in time management which would have otherwise taken longer. 3.3 Cost Management The initial planned costs of the project was $876 million. The final cost, however, was almost double ($ 1.5b). A number of factors contributed to this. First, there was change of scope to increase the height by an additional 100 metres. There was also change in the interior design which increased the cost not to forget that there was an economic crisis in Dubai during the construction process. Alongside the crisis was worker strike in demand for increased pay and fair working conditions. In order to manage the financial inconvenience that arose, the cost management team liaised in time with the stakeholders for an earlier funding. This was a success in terms cost management. However, the fact that an earlier budget was surpassed by almost double means there was no planned costs for expansion that would have otherwise led to a smaller margin increase. It can also be said that allowable undetected costs were very low. PMBOK guide, this was a failure on the management team because the estimation of such costs should be based on a proper analysis of all possible occurrences (Snyder, 2013). 3.4 Human Resource Management The project management team managed labour by distributing it amongst 78 companies, 14 contractors, 16 consultants 38 suppliers and organized management of the onsite workers. This division of labour was a success towards ensuring quality management of the project objective. It would also ensure improved human resource management by charging respective companies with the responsibility to manage own workers. However, there was a labour strike twice owing to unaddressed terms of work and salary. Dalcher & Brodie (2007) says PMBOK, this was a big failure on human resource management which resulted in extended time and related risks. 3.5 Risk Management From the start, the team ought to have understood the risks involved in the construction. The gravity deemed a project threat that rendered concrete pumping almost unattainable. The high temperatures resulted in reduced work hours and also reduced the times when certain material such as concrete could be applied. These were some of the unavoidable risks. The building load threatened to destabilise the project to a failure. In managing this, the structures were reengineered. Risk management was successful by increasing evening work schedules reinventing newer ways of pumping the concrete. However, according to good practice as given by Dalcher& Brodie (2007)PMBOK guide, a proper survey ought to have been done and everything put in place since these risks ought to have been expected and an advanced tackle implemented. It can therefore be said that the risk management team failed at the beginning only but to succeed later in risk management. 3.6 Overall successes and failures The management success, as mentioned in the sections above include an organized division of labour which made resource management and project tracking easier. However, the managers failed in human resource management that led to the two strikes. The biggest success by the management team was covering up budget deficit of over $600 million during the project. This was achieved by a prior financial planning to have 3 financial institutions on board otherwise it would have been hard to accommodate the expansion in scope. What can be considered as the biggest failure in management of this project is time management. Following PMBOK guide by (), there was everything in place that would reduce the extra time taken. 3.7 Lessons Learnt and Conclusion From the management of Burj Khalifa project, the most important factor a project manager can learn is an intensive research on the socio-economic dynamics that can arise in a given economy during the construction of a megaproject that takes longer to complete. Economic downturns result in inflated prices hence increased costs. One other important lesson is that one should always have financial institutions that are able to cover large increments in the project construction. Changes in economic stabilities should be followed by a rational response in labour management by responding to salaries. Working conditions should also reflect human considerations such as work hours. There should be enough pre-project research on the underlying risks likely to be faced by our specified project dimensions eg large buildings and likely load implications in the area. Also, the unaccounted for budget to take care of unseen factors should also be made bigger for big projects. This would lead to the error margin in estimated vs actual cost smaller. The biggest lesson learnt from the management of this project is that improper management of some sectors easily affect other sectors eg improper human resource management results in increased costs and time of the project (Tuttle, 2007). References Bradley, K. (1999). Passing the PRINCE 2 examinations. London: Stationery Office. Dalcher, D. & Brodie, L. (2007). Successful IT projects. London: Thomson Learning. Directing successful projects with PRINCE2tm. (2009). London. Hinde, D. (2012). PRINCE2 study guide. Chichester: Wiley. Snyder, C. (2013). A user's manual to the PMBOK guide--fifth edition. Hoboken, N.J.: Wiley. Stackpole Snyder, C. (2013). Project 2013 For Dummies. New York: Wiley. Tracy, J. PMBOK ® guide. Tuttle, S. (2012). Illustrating PRINCE2. Ely, Cambridgeshire, U.K.: IT Governance Pub. 4. 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