Process Approach to Project Management - Essay Example

Page 0 Contents 2.0 Executive Summary 3 3.0 Introduction 4 4.0 Key Findings 7 4 Managing Stakeholders Expectations 7 4.2 Project Scheduling 8 4.3 Project Success Measuring 13 4.4 Summary of Findings 15 5.0 Recommendations 16 6.0 Conclusion 17 7.0 References 19 8.1 AppendixA. 22 8.2 Appendix B. 30 2.0 Executive Summary Nowadays project management (PM) is widely used not only in industrial context (e.g. in construction, telecommunications or software development), but also in the context of strategic change management within enterprises (Cleland & Ireland, 2007). More and more executives realise that project management provides significant benefits for their businesses, for example such as those mentioned by Kerzner (2006: p.47): (1) “accomplishment of more work in less time, with fewer people”; (2) providing “better control of scope changes”; (3) making the organisation “more efficient and effective through better organisational behaviour principles”; (4) allowing “to work more closely with customers”; (5) providing “a means for solving problems”, (6) making “good company decisions” and (7) “delivering right solutions”. One can say that today project management is increasingly becoming one of the major organisational approaches in the government of enterprises. Numerous methods and managerial concepts have been proposed by PM researchers and practitioners in order to ensure effective management of projects. This paper is aimed to give an overview of the process approach to project management, which represents one of the key methodologies of modern theory of project management. The remaining content of the paper is organised as follows. Section 3 introduces the main definitions and conceptions of project management theory and process approach in PM, among which the concepts of project life cycle, project stakeholders and project success are of a special importance. Section 4 discusses several issues related to the process approach in project management; the discussion is made on the basis of research of the state-of-the-art literature and real case studies analysis. The findings presented in section 4 are evaluated and the recommendations, made on the basis of evaluation, are offered in the section 5. The final section 6 provides a conclusion drawn from the study. 3.0 Introduction In 1959 Harvard Business Review published the article of Gaddis “The Project Manager”, in which a project was defined at the first time as “an organization unit dedicated to the attainment of a goal — generally the successful completion of a developmental product on time, within budget, and in conformance with predetermined performance specifications” (Gaddis 1959: p.89). Since that, a project has been defined many times by many other scholars and organisations, for example: “A project is a temporary endeavour undertaken to create a unique product or service. Temporary means that every project has a definite beginning and a definite end. Unique means that the product or service is different in some distinguishing way from all similar products or services” (PMI 1996: p.4). “A project is an organised endeavour aimed at accomplishing a specific, non-routine or low-volume task” (Salvendy 2001: p.1242). All definitions emphasise a project as a unique activity that has three distinctive characteristics: time (schedule, well-defined duration), cost (resources dedicated to achievement of goals) and quality (desired outcome) defined by specification – “the nature and scope of what has to be achieved” (Harrison & Lock 2004: p.5). Demeulemeester and Herroelen (2002) mention another common element – a goal or objective of a project. Schwalbe (2010) makes an important addition that a project is always temporary and it always involves uncertainty. Soderlund (2004) agrees that the universal elements of a project are “uniqueness, task complexity and time-limitedness” (p.185). In addition, Gido & Clements (2009: p.6) assert that any project has a customer, which is “the entity that provides the funds necessary to accomplish the project.” Project management (PM) also has many definitions, Richman (2002) defines it as “a set of principles, methods, and techniques that people use to effectively plan and control project work” (p.4), while PMI (1996) offers the following definition: “Project management is the application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project” (p.6). Existing definitions of a project and project management give a clear understanding that coordinating of all parts involved in a project under the known constraints in constantly changing environment is not an easy task. Evidently, a comprehensive project management methodology is required in order to ensure an integration of efforts of various project stakeholders and across various functional units of organisations (Kerzner & Saladis 2009). During last decades several bodies of knowledge for PM have been developed, the most famous of them are PMBOK of the Project Management Institute (PMI 1996), the ISO 10006 standard, and the PRINCE2 standard – all of these methodologies represent responses of PM academic community on how to manage projects effectively. In order to ensure better control over projects PMI (1996) suggests dividing each project into several project phases, all of which comprise the project life cycle (PLC) (Fig.1). Figure 1. The Generic Project Life Cycle. Source: PMI 1996: p.12. It is implied that PLC generally defines the beginning and the end of a project, as well as “what technical work should be done in each phase” and “who should be involved in each phase” (PMI 1996: p.12). Any PLC includes an initial and final phases, between which several intermediate phases may occur. Certain project management processes can be associated to each phase of PLC. A process is understood as “a group of activities designed to transform a set of inputs into required outputs” (Salvendy 2001: p.1243). In the PLC, project management processes are interrelated so that outputs of some of them serve as inputs of others. There are a number of different PLC models. Haugan (2011: p.9) offers the basic PLC consisting of the following phases and processes: Initiating: (1) Establish Project Objectives; Planning: (2) Define the Work; (3) Plan the Work; Executing: (4) Perform the Work; (5) Communicate and Coordinate; Controlling: (6) Track Actual Performance; (7) Analyse Project Progress; (8) Initiate Corrective Action; (9) Replan as Required; Closing: (10) Compete the Project. The traditional PM approach determines cost, time and quality requirements as the key success criteria (Dvir et al. 1998). Today stakeholder satisfaction is also acknowledged as an essential part of project success (PMI 1996). Aiming project management at the meeting or exceeding stakeholder needs and expectations, PMI (1996: p.6) emphasises that it “invariably involves balancing competing demands among: Scope, time, cost, and quality. Stakeholders with differing needs and expectations. Identified requirements (needs) and unidentified requirements (expectations).” Thus, the final project outcome should meet a number of requirements: it should contribute to an achievement of strategic objectives; it should satisfy expectations and needs of users of the project outcome, as well as needs of all stakeholders related to the project. 4.0 Key Findings 4.1 Managing Stakeholders Expectations PMI (1996) defines project stakeholders as “individuals and organizations who are actively involved in the project, or whose interests may be positively or negatively affected as a result of project execution or successful project completion” (p.15). Stakeholders of a project may be both internal (top managers, owners, functional managers, project team members) and external (customers, competitors, suppliers, authorities, local communities). Those stakeholders who have a power to influence on project execution and outcomes are referred as “key”, “primary” or “active” (Kerzner 2006). In any project there are the following key stakeholders, according to PMI (1996): project manager, customer, performing organisation and sponsor. Young (2000) asserts that “how each of the stakeholders can contribute to success or failure of the project is a key to management of the project” (p.8). Thus, among the important tasks of a project manager there are an identification of the stakeholders; determination of their needs and expectations, and managing those expectations to ensure a successful project (PMI 1996). Successful management of stakeholders’ expectations may be demonstrated on the example of the Eden Project (see Case Study 1 in App. A.) Table 1A (App.A) presents analysis of major stakeholders involved in the project, their main needs and expectations, a degree of influence (or power) on the project execution and outcomes, and a degree of interest in the project’s success. According to Davies (2007), stakeholders’ analysis helps to choose the appropriate strategy of communications with certain groups of stakeholders in order to manage them effectively. Figure 1A (App.A) demonstrates the result of analysis, mapping stakeholders in a Power / Interest Grid. Thus, the communication strategy for stakeholders, which are highly interested in the project and have the power to influence on its outcomes, implies their engagement in the project and making greatest efforts for their satisfaction (Davies 2007: p.36). In the Eden Project this group includes project managers and project team, investors (i.e. Millennium commission) and contractors (designers, constructors, service providers, etc.). Another group of the Eden Project’s stakeholders consists of people who have a certain interest in the project but are not able to influence considerably on the project: local authority and business, local people, researchers and visitors. The strategy of communication with this group implies to keep them adequately informed about the project's progress and to ensure that no big problems are arising during the project. It should be noted that project managers of the Eden Project have managed to develop an effective stakeholder management strategy, achieving the project results successfully (see Table 4A in App.A). From the perspective of organisational system, the organisation that carried out the Eden Project (the Eden Foundation) may be referred as a project-based organisation, which has adopted “management by projects” approach and has a projectised structure (PMI 1996). All organisational resources were allocated directly to provide the project outcomes; and all people, including top managers, worked full-time to achieve project objectives. However, it is useful to note that the success of the Eden Project has been ensured in a great extent thanks to a partnership approach, which has been developed during the first project period on the basis of mutual trust and common agendas between project team and major contractors. Currently this partnership resulted in the Post-Mining Alliance, aiming “to encourage and promote the regeneration of old mine sites for the sustainable benefit of their respective communities and natural environments [throughout the UK]” (Digby 2008: p.93). 4.2 Project Scheduling Many PM researchers consider accurate planning and scheduling of a project as one of the key factors of project success (Slevin & Pinto 1987). At the same time, Lock (2003) makes a clear distinction between these two concepts, suggesting to consider a plan as “the listing or visual display that results when all project activities have been subjected to estimating, logical sequencing, target timing and the determination of priorities” (p.162). Scheduling is mostly associated with the development of a timetable, i.e. “the establishment of dates during which the jobs required to complete the project will be executed” (Klein 2000: p.24). PMI (1996) also considers a planning as one of the Project Scope Management processes, while scheduling – one of the Project Time Management processes. Calculation of a schedule provides a set of detailed schedule data for every work task, every work package, and for the entire project (Verzuh 2005). Although project scheduling is important for estimation of tasks duration and allocation of resources, many PM practitioners agree that during the entire project it is difficult to adhere to the schedule made at the very first stage of the project due to uncertainties related to various project aspects (Intaver Institute (n.d.). Moreover there are projects in which scheduling of the entire project is not much important or even does not make sense. These are, first of all, projects where quality and specification requirements have a high priority, and such issues as safety, reliability and standards of performance are of a great importance, e.g. projects in nuclear energy, petrochemistry or aerospace (Harrison & Lock 2004). Another well-known example of such projects is the projects with a high level of uncertainty, for example, large-scale research projects or new product development projects. Activity in these projects can be sequenced, prioritised and even presented in stages, but often it is not possible to predict the results of this activity, and to say how they will impact the remaining stages of the projects. In the case of such projects, the so called decision-stage or stage-gate models are used. These models imply that project activity is divided into several stages separated by management decision gates (see Fig.2). Figure 2. The Stage-Gate process model. Source: Cooper 2001: p.129. Between the stages there are Go / Kill decisions and quality control checkpoints (Carsrud et al. 2007). A detailed list of activities and deliverables, as well as an allocation of resources related to a particular stage are scheduled at the beginning of each stage only after obtaining management approval of results of the previous stage. Trott (2008) emphasises that the process can be slow and unpredictable. Nevertheless, the stage-gate process model is considered to be an effective method of management of projects with the high degree of uncertainty. This may be illustrated by the case study of the Innocent Drink Company, which has managed to develop a business idea into a successful product and to launch the new product into the UK market with very limited funds. Analysis of the Innocent Drink Company's activities shows that the company in a great extent worked in accordance to the stage-gate process methodology (see Case Study 2 in App.B). Nevertheless, it is important to note that any project “consists of a number of events (milestones) and activities or tasks that have to be performed in accordance with a set of precedence constraints” (Demeulemeester and Herroelen 2002: p.13). Thus, understanding of the project scope, tasks and milestones is crucial for success of any project. Project tasks are better understood when they are presented in a hierarchical order – from high-level activities to more detailed ones. The work breakdown structure (WBS) is a PM technique that used for logically subdividing a whole project into its smaller components, which are easier to estimate and control (Morris 2008). PMI (1996: p.171) defines WBS as “a deliverable-oriented grouping of project elements which organizes and defines the total scope of the project.” WBS is considered to be one of the most powerful tools in PM, because it serves as a foundation for many other important PM processes such as budgeting, resource estimation, scheduling, cost control, and many others (Harrison & Lock 2004). Verzuh (2005) asserts that building a WBS helps to: (1) “provide a detailed illustration of project scope”; (2) “monitor progress [of a project]”; (3) “create accurate cost and schedule estimates”; (4) “build project teams” (p.114). In addition Morris (2008) emphasises that WBS should be performed collectively by the project team. In this case the project will gain such benefits as: (1) “team members understand the deliverables of the project”; (2) “team members see how their contribution benefits the project as a whole”; (3) “the risk of missing work or allowing tasks to slip through the cracks is mitigated through team discussion” (p.82). WBS can be presented graphically, for example, Figure 3 illustrates the WBS of a project aimed to upgrade a software package in a client’s computer system. Figure 3. WBS of the software upgrading project Source: Morris 2008: p. 83. WBS may be also presented in the table, where the precedence relationship between tasks is pointed out (see Table.2A in App.A). The sequence and precedence relationships of project tasks are also well illustrated in the form of the Gantt or bar charts. According to PMI (1996), the Gantt charts also shows schedule-related information (see Fig.4). Figure 4. The Gantt chart for home landscape poject. Source: Verzuh 2005: p.152. Gantt chart was developed by Henry Gantt in the early 1900s, however today it is still the most common method for displaying project tasks’ relationship and schedule. Modern software allows using the Gantt charts effectively, assigning needed resources, setting out milestones, and automatically defining the critical path of the project – the particular sequence of project activities, which have “the least amount of scheduling flexibility (the least amount of float)” (PMI 1996: p.162). Float can be defined as “the maximum amount of time you can delay an activity and still finish your project in the shortest possible time” (Portny 2010: p.102). Another form to demonstrate a sequence of project activities and logics of relationship between them is a project network diagram, in which a project is represented as a network of nodes connected by arrows. Figure 2A (App.A) represents a network diagram of the Eden Project, built in accordance with sequence of tasks in Table 2A (App.A.) Critical Path Method or Analysis (CPM/CPA) is the PM method that helps to identify critical path and to ensure the better allocation of resources throughout the project critical tasks (Shtub et al. 2005). Generally speaking, CPM determines the length of the project – if the project needs to be finished in less time, the project manager should decide how the critical path could be shortened (see Fig. 3A in App. A.) During a project, as some tasks may be completed earlier or later than it is stated in the project schedule, the critical path may also change. So, project manager should regularly apply CPM and monitor critical tasks to avoid any delay of the project. When task parameters are uncertain the PERT (Program Evaluation and Review Technique) is widely used. This method is based on a statistical approach, which helps to predict probability of completing the project to a certain date. The premise behind the PERT formula is that “one out of every six tasks will be completed early, one out of every six will finish late, and four out of every six will complete as planned” (Morris 2008: p.77). These planning and scheduling methods have a long history, yet all of them are still widely used, representing a solid foundation of the project management science. 4.3 Project Success Measuring One of the most difficult tasks in project management is prediction of the success of a project. The golden project triangle – time, cost and quality – has been long used as a standard for many managers to measure project success. But now many other factors such as strategic alignment, stakeholders’ satisfaction, impact on the future, become increasingly more important (Shenhar et al. 2001). Assumptions about whether a given project will be successful are formed at the early stage of a project, and decision about the project initiation is made in the most part as a result of project screening, economic analysis and risk analysis. Project screening is the process of gathering of information concerning the idea of future project; analysing of various factors; and presenting all collected information in a form of proposal for investment. Such proposal should describe the project idea from different perspectives, such as market demand, business needs, customer request, technological advances, legal requirements, etc. (PMI 1996: p.49). Good proposal reveals a proper understanding by a project team of how the project will be performed and what quality of outcomes is expected. One can say that the Eden Project (see Case Study 1 in App.A) was successful in project screening, as it was started from the first ?300.000 funding from the Millennium Commission (MC). During the project there were additional public investments, over ?100 million in total. Evidently, that the project managers well understood performance objectives and benefits of the project and successfully managed to present their ideas. Another important aspect in regard to prediction of project success is economic analysis. The most widely used method is Cost-Benefit Analysis (CBA); it as an effective method for measuring and comparing future project costs and benefits, estimated in equivalent money value, in an effort to make decision about a project. If the net benefits (i.e. difference between the discounted value of the benefits and the discounted value of the costs) are positive, the project is considered to be successful. The equivalent money value is based on current information about market (prices, taxes, inflation rate etc.), thus, CBA differs from project to project. EC (2008: p.17) also mentions other project evaluation approaches, which can be helpful in certain cases: Cost-Effectiveness Analysis - to compare projects with very similar outputs; Multi-criteria analysis - when some objectives are intractable in other ways; Economic impact analysis - to capture macroeconomic effects. Since economic analysis is based upon certain probabilities, there is always risk associated with the project outcomes. So, risk assessment is also of highly importance when project success is evaluated. “Risk is a measure of the probability and consequence of not achieving a defined project goal” (Kerzner 2009: p.743). EC (2008: p.16) offers five steps of qualitative risk assessment: sensitivity analysis (identification of critical variables, elimination of deterministically dependent variables, elasticity analysis, scenario analysis); assumption of a probability distribution for each critical variable; calculation of the distribution of the performance indicators; discussion of results and acceptable levels of risk; and discussion of ways to mitigate risks. In practice, project managers often identify and assess risks empirically, with some guesses. Sensitivity analysis takes a form when a range of risk estimates are presented; and appropriate weights regarding to the chances of risks occurring are attached to the various outcomes (Boadway 2006). It helps to determine which risks have the most potential impact on the project. Thus, each risk is considered as a function of two variables – probability and consequence (or impact). Based upon this estimation, project managers make decisions what measures should be undertaken in order to avoid, mitigate or accept the risks. Table 3A (App.A) demonstrates the results of risk assessment for the Eden Project. The overall success of the Eden Project (see Table 4A in App.A) shows that the project may well serve as a best practice case study for project managers. From the very beginning of the project its top managers and team used their knowledge and skills to make effective decisions and undertake right actions in order to achieve project objectives. 4.4 Summary of Findings In summary, I’d like to note that this research had a great impact on my perception about project management methods and current practices. As a project manager I was aware that project success is measured according to the golden (or iron) project triangle – cost, time and quality, but I never thought that quality can be understood more broadly than just meeting specification requirements. Now I understand project quality as accordance with needs and expectations of many people involved in the project. In the first place this is, of course, project clients or users – those people for whom the project is carried out. Next, my project should be aligned with business objectives of my company, in other words, it should be completed with benefits for my company. These benefits may be both financial and non-financial, for example, the project may help to improve image of my company, or provide new strategic partnership. In any case, I should think about how a project may influence upon future of my company. Third, any project should meet expectations of my project team members. In order to ensure this, at the beginning of each project I should identify which expectations my team has in regard to the project. It will help me to determine more effective strategy of communication, motivation and performance management within the project. Forth, I should think about additional possible stakeholders - they may be our local authority or people, or contractors - for each of them I should identify a set of expectations from my project. Some of these stakeholders will not have much impact on my project, but some others may be rather powerful to influence on project performance. Thus, managing relationships and communications with them will help me to avoid possible hazards for my project. Moreover, managing expectations of stakeholders during the project, I can likely manage to turn some hazardous risks into opportunities for the project and for my company as a whole. It was very useful to me to understand the concept of the project life cycle, especially its first stages - initiation and planning and the final stage - closing. As a rule, earlier I did not place high emphasis on processes of these stages, I believed that execution and control of work during a project is the most important tasks of PM. Now I see that some of my projects were completed with not-so-good results, because I did not spend enough time and efforts to identify and plan them properly. Improvement of closing processes in my projects is also important to me as it will help me to summarise experience and lessons learned and to use it in future projects. 5.0 Recommendations Base upon knowledge gained during this study and on my own experience I would recommend project managers, if they want to manage projects successfully, take into consideration the following factors: 1. To establish clear and achievable project objectives. Modern value management methods allow defining project objectives in terms of major benefits for different stakeholders, while risk management approach will ensure you minimisation of uncertainty, associated with your project outcomes. 2. To provide effective communications with all stakeholders involved in your project. Keep in mind needs and expectations of all of them and reconcile them. 3. To rely upon realistic budget and time duration of your project. Examine a critical path of your project regularly and adjust resources in time. 4. To improve performance of your project through optimisation of project processes, to maximise efficiency of your project processes in terms of cost, time and quality. 6.0 Conclusion In this study I was aimed to make an overview of process approach to project management. In order to understand better various concepts and techniques related to this approach, I’ve chosen a case study of the Eden Project and analysed it from different perspectives; all results of the analysis is presented in Appendix A. Moreover, on the basis of other case studies and literature (including PMBOK), I’ve discussed such issues, related to the process approach, as project life cycle, stakeholders and their impact on a project success, project planning and scheduling, project success evaluation. It is evidently that project management now is the art based upon significant scientific foundation. In order to be effective a modern project manager should be opened to new theories, methods, and practices, not always related to project management directly. Knowledge of methods of such disciplines as strategic management, human resource management, economics, business process optimisation and many others should be also in the arsenal of project managers. 7.0 References Ahmed, P.K. & Shepherd, C.D. (2010) Innovation Management: Context, Strategies, Systems and Processes. Harlow, Pearson. Boadway, R. (2006) Principles of Cost-Benefit Analysis. Public Policy Review, 2 (1), 1-44. Carsrud, A.L., Brannback, M.E. & Brannback. M. (2007) Entrepreneurship. Westport, Greenwood Press. Cleland, D.I. & Ireland, L. R. (2007) Project Management: Strategic Design and Implementation. 5th edition. New York, McGraw-Hill. Cooper, R. G. (2001) Winning at New Products: Accelerating the Process from Idea to Launch. 3rd edition. Cambridge, Perseus Publishing. Gaddis, P.O. (1959) The project manager. Harvard Business Review, May–June, 89–97. Gido, J. & Clements, J.P. (2009) Successful Project Management. 4th edition. Mason, South-Western Cengage Learning. Davies, E. (2007) The Training Manager's Desktop Guide. London, Thorogood Publishing. Demeulemeester, E.L. & Herroelen, W. (2002) Project Scheduling: a Research Handbook. Norwel, Kluwer Academic Publishers. Digby, C. (2008) Building partnership for post-mining regeneration: Post-Mining Alliance and the Eden Project. In: Berger, A. (ed.) Designing the reclaimed landscape. New York, Taylor & Francis, pp.87-97. 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(2005) A retrospective look at our evolving understanding of project success. Project Management Journal, 35 (4), 19-31. Kendle, A.D. (2003) The Eden Project and regional regeneration. Journal of the Royal Agricultural Society of England, 164. [Online] Available from: http://www.rase.org.uk/what-we-do/publications/journal/2003/18-10106289.pdf [Accessed 22 March 2011] Kerzner, H. (2006) Project Management: A Systems Approach to Planning, Scheduling, and Controlling. 9th edition. Chichester, John Wiley & Sons. Kerzner, H. & Saladis, F. (2009) What Functional Managers Need to Know about Project Management. Hoboken, John Wiley & Sons. Klein, R. (2000) Scheduling of Resource-Constrained Projects. Norwell, Kluwer Academic Publishers. Lock, D. (2003) Project Management. 8th edition. Aldershot, Gower Publishing Limited. Morris, R.A. (2008) Project Management that Works: Real-World Advice on Communicating, Problem Solving, and Everything Else You Need to Know to Get the Job Done. New York, AMACOM. Portes, F. (2005) How to Schedule Your Project to Dedicate the Most Amount if Time Management, and Prevent Project Tools from Managing You. Best Project Management web-site. [Online] Available from: http://www.bestpjm.com/docs/How%20to%20Schedule%20your%20Project%20to%20Dedicate%20the%20Most%20Amount%20of%20Time%20Managing%20.pdf [Accessed 22 March 2011]. Portny, S.E. (2010) Project Management for Dummies. 3rd edition. Hoboken, Wiley Publishing. Project Management Institute (PMI). (1996) A Guide to the Project Management Body of Knowledge (PMBOK Guide). Sylva, PMI Publishing Division. Richman, L. (2002) Project Management Step-by-Step. New York, AMACOM. Salvendy, G. (2001) Handbook of Industrial Engineering: Technology and Operations Management. 3rd edition. New York, John Wiley & Sons. Schwalbe, K. (2010) Information Technology Project Management. 6th edition. Boston, Course Technology. Shenhar, A.J., Dvir, D., Levy, O., & Maltz, A.C. (2001). Project Success: A Multidimensional Strategic Concept. Long Range Planning, 34, 699–725. Shtub, A., Bard, J.F. & Globerson, S. (2005) Project Management: Processes, Methodologies, and Economics. 2nd edition. Upper Saddle River, Pearson Prentice Hall. Slevin, D.P. & Pinto, J.K. (1987) Balancing Strategy and Tactics in Project Implementation. Sloan Management Review, 29 (1), 33-41. Soderlund, J. (2004) Building theories of project management: past research, questions for the future. International Journal of Project Management, 22, 183–191. Trott, P. (2008) Innovation Management and New Product Development. 4th edition. London, Prentice Hall. Verzuh, E. (2005) The Fast Forward MBA in Project Management. 2nd edition. Hoboken, John Wiley & Sons. Young, T.L. (2000) Successful Project Management. London, Kogan Page. 8.0 Appendicies 8.1 AppendixA. Case Study 1.The Eden Project, Cornwall, UK The Eden project in Cornwall is considered to be one of the most successful projects in the UK, funded by the Millennium Commission. According to Digby (2008: p.87-89): “Launched in March 2001, the Eden Project has had a transformational effect on the society and economy of Cornwall. Constructed in a 160-year-old, exhausted china-clay quarry at Bodelva, near St Austell, Eden is an educational charity and plant-based visitor attraction that aims to connect people, plants, and natural resources. Since opening in 2001, it has attracted more than eight million people and has drawn more than ?750 million into the local economy. In all its policies, projects, and programs, Eden attempts to maximize its economic, social, and environmental benefits; to this end, innovation permeates the organization’s civil engineering, construction, materials sourcing, waste management, employment policy, management structure, external relations, educational programs, public learning and interpretation, plant health, nutrition and soils, horticultural and exhibit design, and more. …Such a site poses many challenges; a few of those challenges are summarized here: the relocation of 1.5 million tons of fill material to create the basic landforms; the installation of a state-of-the-art drainage and pumping system; the stabilization of the slopes according to the competence of the granite bedrock, requiring hydroseeding, the use of one thousand five hundred rock bolts, and some nine thousand square meters of sprayed concrete; construction of the world’s biggest and most architecturally challenging greenhouses; provision for wheelchair accessibility throughout the whole site; and the creation of eighty-five thousand tons of artificial soil from recycled materials.” The project has been carried out within a county that experienced business recession in practically all local traditional industries, what caused a high level of deprivation and poverty in the region. According to Digby (2008), to the end of twentieth century the Cornwall region “experienced the protracted contraction of its traditional primary industries: fishing, agriculture, and mining” (2008, p.87). The project was intended to provide the regional regeneration, widening a tourism sector, and developing local products. The promotion of agriculture and horticulture is the main charitable aims of the project. One more important aim is educational one – the Eden focuses on giving people an understanding of the core issues of food supply and local resource management. This case study describes the first stage of the project from the Millennium funding amounting ?300,000 in 1998 till the official opening-day in March 2001. Digby (2008) emphasises that, “It was apparent from the start that delivering a project of the scale and ambition of Eden was going to be an expensive venture. The total cost, since 1998, has now reached ?133 million, paid for through the financial backing of the National Lottery/Millennium Commission (?56 million), the public sector (?25 million from the European Union (EU); ?21 million from the United Kingdom), commercial loans (?19 million), and self-financing (?12 million)” (p.92). Project was designed and built for a target of 750 000 visitors per year. But only during a preview period (from May 2000 till March 2001) the Eden attracted about half a million visitors, and about 1.8 million during the first year of work. Direct employment of local worker counted over 600 persons. The Eden generated indirect income for the region of over ?150 million per annum. The figure generated in November 2001 (in the 8 months of the project) suggested an economic impact of ?111 million in Cornwall (Kendle, 2003). Table 1A. The Eden Project stakeholders. Stakeholder Needs and expectations Degree of influence / power Degree of interest Millennium Commission Correct expenses of appropriated funds Positive impact on regional economy High influence – one of the main investors Highly interested Project managers Completion of the project in time and budget Achievement of other project objectives Proper performance of duties in the project Public acknowledgement of project success High influence – they make decisions having a major impact on the project Highly interested Project team Proper performance of duties in the project Expected bonuses resulting from the project Medium influence – the project success depends on their work, but they can not make decisions Highly interested Designers, constructors, other contractor companies Proper performance of duties in the project Revenue resulting from the project Positive corporate image Long-term partnership High influence – may influence positively working in accordance to contracts and plans or negatively when violating contract agreement Highly interested Cornwall county authority Regional business development Reduction of seasonal unemployment Environment improvement Restoration of abandoned mines Development of regional infrastructure Medium influence Highly interested Researchers New unique facilities for research Access to uncommon or scarce resources Low influence Interested Local businesses - supplier and caterers Regional business development Growth of customers Development of regional infrastructure Medium influence at the first stage of the project Highly interested Local people Reduction of seasonal unemployment Environment improvement Development of regional infrastructure Low influence, but can become a restraining force if the project will not meet their interests Interested Visitors Access to unusual entertainment Unique opportunities for education and New impressions and knowledge Low influence Interested Figure 1A. Power / Interest Grid for the Eden Project Stakeholders. Table 2A. The Eden Project WBS. WBS Task Task description Predecessor A Selection of designers and constructors for buildings and landscaping. None B Development of design of the Biomes and their construction plans. A C Stabilisation of slopes, preparing the basic building site. B D Building the Biomes steel structures. C E Installing and launching life support systems of the Biomes (drainage, pumping, lighting and heating). D F Design and planning of collections of plants B G Landscape design and clarification of requirements for planting F H Delivering plants and needed components, providing proper conditions for planting. G I Ground work and planting the Eden. E, H J Building entertainment and educational infrastructure for visitors. A K Building office and workshop infrastructure, providing safe work conditions A L Contracting with local supplier and caterers. J, K M Hiring the maintenance staff. K N Organisation of events for visitors. I, L,M O Opening the Eden to the public. N Figure 2A. The Eden Project network diagram. Figure 3A. The Eden Project critical path. Table 3A. Assessment of Major Risks for the Eden Project. Risk Impact on Time / Cost / Result Probability 1. Incompetent project managers Very high – effect on all aspects Low 2. Lack of required knowledge, skills and experience of the project team High – effect on all aspects Moderate 3. Failure to break down projects into manageable steps with clear milestones Moderate – effect mostly on time and cost High 4. Consideration of projects on the basis of initial cost rather than whole-life value High – effect on cost and outcome High 5. Ineffective stakeholders management Very high - effect on all aspects Moderate 6. Lack of understanding of customer needs and requirements Moderate - effect on outcome Low 7. Lack of resources (material, non-material, financial) Very high – effect on all aspects Moderate Table 4A. Analysis of the Eden Project Success. Factor Project result (5 years after launching)* Time Planned - 3 years since December 1998 Fact - the official opening day happened in March 2001, after only 2 years and 3 months. Cost Total cost -?133 million Generated indirect income - over ?150 million per annum Stakeholders Millennium Commission The Eden has become a spectacular and internationally acclaimed visitor destination and educational resource; as well as a symbol to the environment movement of a can-do attitude Project Team World-wide recognition of their work Contractors Successful partnership, establishment of the Post-Mining Alliance Local Cornwall authority The project injected more than ?750 million of value-added (that is, excluding direct spending at Eden) into the local economy; helped to change the perception of Cornwall as “the happening place in the United Kingdom” Local business Support of two thousand five hundred local suppliers (e.g. 83 percent of its catering supplies come from within the county) Local people The project directly created five hundred jobs, with particular emphasis on career development for locals Visitors The Eden attracted more than eight million visitors; hosted more than a hundred thousand schoolchildren for bespoke educational programs * According to Digby (2008: pp.92-93) 8.2 Appendix B. Case Study 2. New Product Development Project, Innocent Drinks, UK. Analysis is based on the Case Study represented by Trott (2008: pp. 412-418) and according to the Stage-Gate Model (Ahmed & Shepherd 2010: pp.179-181). Table 1B. Processes in the Innocent Drinks NPD Project Stages of the model Processes related to stages Stage 1. Opportunity identification and concept definition. Identification and confirmation of the new opportunity for production and selling healthy fruit drinks (smoothie) on the UK market. Development and approval of the new product concept targeted to specific market segment. Development of new recipes of smoothie to meet needs of consumers. Gate 2. Concept screen The new product was tested and successfully approved on a local jazz festival. Stage 2. Planning and design. Stage 3. Prototype development. Development and approval of business plan Providing the investment and the first production capacities. Hiring professionals for branding Development of the distinctive branding concept and design Gate 3. Design screen. Gate 4. Develop screen. Branding concept, packaging and promotional design and shape of bottles were successfully tested in focus groups. Stage 4. Manufacture evaluation and development. Development of new recipes and technologies. Establishment of quality control system. Expanding manufacturing capacities via contracting. Gate 5. Product screen New recipes of drinks were successfully tested and approved in focus groups. Stage 5. Distribution and marketing. Stage 6. Market testing and launch. Development of the distribution chain. Improvement of quality control and packaging technologies to ensure the longest possible shelf life of the product. Advertisement. Development relationships with retailers. Gate 6. Market screen Gate 7. Market launch screen In 2004 the Innocent generated revenue of ?35 million; in 2006 the figure was increased to ?80 million, while its major competitor had only ?13 million. Stage 7. Post-launch and product retirement. Market research and development new recipes. Read More