Scottish Parliament Complex: Holyrood Project - Article Example

 Scottish Parliament Complex: Holyrood Project Introduction Holyrood was the selected location for constructing the new Scottish Parliament complex. The construction project itself came to be known by its location and has been called the Holyrood Project. Originally budgeted within £ 10m and £ 40m, the project was meant to finish by 2001. However, at the end of the project, which completed with an overrun of three years in 2004, the final estimated cost came out to be £ 414m. Regarded as a controversial project from several angles, it also faced several project management issues. At different stages of the project, there were questionable decisions and lapses and some of the essential processes in project management were poorly executed. These processes included lifecycle management, dependency planning, change management, and risk management. This report analyses some of the reasons why this project did not complete within its original plan and over ran its budget estimates. The focus will be on weaknesses in risk management, time management, and cost management. In order to set the stage for this analysis, basic project management principles will be discussed and a summary of the original plan will also be presented. The analysis will be based on figures from the Holyrood project and will include information from investigation conducted by the Scottish parliament. Theoretical basis Relation to Project Management Theory In this report, The Holyrood Project is being analysed in view of the four phase model of project management. According to Lockyer and Gordon (1996) project management activities can be clustered into four process groups which are Conception, Development, Realisation, and Termination. Activities within these groups have clear dependencies and must be performed in the same sequence for each project regardless of the industry in which it is applied or any particulars related to the project lifecycle. The four phases are shown in Figure 1. Figure 1: The four phase model of project management The Conception phase involves the specifications of broad outline of the project, its scope and the prime objectives that are meant to be achieved at the end of the project. Based on this initial framework, in the Development phase, the project manager is confirmed and a team is constituted to assist the project manager. Responsibilities are assigned and detailed design of the outline specified in the previous phase is created. All the resources which would be required in project execution are also identified. The Realisation phase includes all activities related to actual project rollout. Large proportion of the activities and the resources identified to carry out these activities must be already defined in the previous phase of Development. In this Realisation phase, the project management team performs the critical task of monitoring and controlling the progress of the project and ensures that it is on its way to the defined goals. As the activities begin to near completion the project enters the Termination phase. In this phase, the project team ties all the loose ends, ensures the project is running smoothly, and evaluates its success. The challenge for any project is to achieve all project goals within specified constraints. It is therefore necessary to understand, identify and keep track of all constraints related to the project. Similarly, the Holyrood project management was to identify and address project constraints and plan mitigation strategies for them. These constraints include those in the areas of project scope, time, cost and risk. The relationship of Holyrood constraints and the four phase model is shown in Figure 2. Figure 2: Project management process with constraints Project phases and lifecycle According to Lockyer and Gordon (1996), typically each of the phases do not completely run in isolation. A slight overlap in these phases is normal and is a sign of successful project management. This overlap allows some of the activities of following phase to get tied in with those in the previous phase and can result in a faster rollout of the project. It is necessary, however, that this overlapping is limited to the extent that it does not increase risks, and that it does not involve taking the same decisions on multiple occasions as a result of prematurely tying a succeeding activity with one preceding it. The relationship and overlap of the four phase model components is shown in Figure 3. Figure 3: Project Original four phase model by Lockyer and Gordon Analysing the Holyrood Plan As mentioned in the previous section, the four phases of project management can overlap and a small and manageable overlap is a good sign of project management. Sometimes, project managers extend this overlap wider to reduce the time of project completion. This method is called fast tracking. As it will be evident in sections below, the Conception phase of Holyrood seemed to follow a good track and was aligned with good project management practices. However, in the later phases, fast tracking was done with the result that the Development phase encroached heavily into the Conception phase and the Realisation phase started very early as well (Auditor General of Scotland, 2004). Plans were modified at late stages of rollout and priorities in objectives were muddled. The Auditor General also noted that this resulted in lack of coordination between key players such as the architect, project director and the cost consultants. By doing this, the project moved away from the established practice and four phase model and changed the dynamics of the project. The prime reason why this path for project execution was undertaken was that the risks and constraints were not fully considered. Had they been considered and the pitfalls of ignoring them kept in view, the project may have stayed on track. There were also changes mid way during the project that required during realisation phase which required A diagrammatic view of how the four phases merged with each other in the Holyrood project is shown in Figure 4. Subsequently, the phases are looked at in detail and problem areas identified. Figure 4: Holyrood Project’s overlapping of phases The Conception Phase In the conception phase, the Holyrood project team needed to focus on the project at the highest level. This meant that objectives were defined, controls incorporated and the environment in which the project was to be executed understood. The cohesive plan needed to cover the following areas. Project goals and objectives At the broadest level, the timeline, cost, project goals and objectives seemed initially to be defined clearly. The original plan envisaged the two year Holyrood construction project to start in June 1999 and end in 2001. The costs were meant to be controlled and kept below £ 40 million. This conformed to the basic definitions of projects. According to PMI (2004: p. 5), a project is “a temporary endeavour undertaken to create a unique product or service; Operations is work done to sustain the business. A project ends when its objectives have been reached, or the project has been terminated. Projects can be large or small and take a short or long time to complete.” And according to Lockyer and Gordon (1996), project is a unique process, consisting of a set of coordinated and controlled activities with start and finish dates, undertaken to achieve an objective conforming to specific requirements including constraints of time, cost and resources. Another requirement in the conception phase, stating a prime objective, was also present at the outset. The prime objective was to build the new Scottish Parliament buildings project including offices and administrative accommodations within stated constraints of time, cost and scope. The objective was according to the White Paper published by Scottish Parliament on 24 July 1997 which stated, “The building the Scottish Parliament occupies must be of such a quality, durability and civic importance as to reflect the Parliament's status and operational needs; it must be secure but also accessible to all, including people with special needs and it must promote modern and efficient ways of working and good environmental practice” (Scottish Parliament A, n.d.). Project design Design being the soul of construction, it was essential to include the salient features during the conception stage. The architect Enric Miralles explored “ideas and symbols associated with the Scottish Parliament” and considered the geography, history and archaeology at the Holyrood site (Scottish Parliament B, n.d.). From Table 1 below, it is clear that the Scottish Parliament had given enough time to professional experts to explore and come up with the design of Holyrood project. September 1998 Outline of design proposals October 1998 Sketch designs on public display March 1999 Detailed designs presented April 1999 Final designs on public display Table 1: Holyrood Design Plan timeline. Source: Scottish Parliament Report 2004 Planned project lifecycle The planned lifecycle of the project (Figure 5) showed a perfect slow-rapid-slow pattern. Figure 5: Planned lifecycle of Holyrood Project This graph was shown to the client, the Parliament, and in its simplest interpretation, the lifecycle was characterised by a Beginning → Middle → End pattern. The beginning of the lifecycle was the preparation of design display, the middle stage was the construction of the project and the end stage was about building fit out. Original cost and budget estimates The initial budget estimates for the project were planned in 1997. A report establishing a cost range between £ 10 million to £ 40 million was presented (White & Sidhu, 2005) as shown in Table 2. Subsequently costs were revised several times. Table 2: Initial estimates of Holyrood (White & Sidhu, 2005) Stakeholders and support personnel The hierarchy and structure of the Holyrood project management team is shown in Figure 6. It is evident that the structure delineated in the beginning had clarity. However, the responsibilities, dependencies and constraints such as absence of members of this structure were not evident. Figure 6: Structure of Holyrood project team Development and Realisation Phase As mentioned earlier, the four phase model of project management can be successful if adequate emphasis is placed on other dimensions of the project including the risks and constraints. With particular reference to the Holyrood project, they were defined as scope management, time management, cost management, and risk management. The project was marred by overruns in these areas and, in several cases, when a problem occurred, the team resorted to going back to the drawing board showing that appropriate identification of constraints were not made initially. Even in cases where these risks were identified, appropriate mitigation strategy was absent. In this section these management issues are discussed in detail. Scope Management According to Nokes and Kelly (2007), Project Scope management is the “process by which the project manager defines the boundaries to the project work and ensures that any changes to the original scope are carefully managed”. This entails that scoping must allow a clear delineation between what is included in the project and what is excluded. Scoping management should therefore be concerned with 1) clearly outlining the project objectives and scope in conception phase, 2) deliverables to be divided into smaller units of work in the development phase, and 3) changes in operations and requirements during realisation phase should not change the scope in such a way that major components of the project get affected. As discussed earlier, the original plan clearly laid out the objectives of the project. As a subsequent step, it was necessary that the team ensured that requirements were analysed carefully during the conception, and particularly the development phase, to avoid the risk of changing the scope in a major way at a later stage. According to the Auditor General of Scotland report (2000), however, the team did not launch any specific strategies, detailed analysis or project briefs in the initial stages. For example, expectations of change in the area of construction should have been a major scoping definition earlier on in the project but it was not done. The gross area was expected to be 20700 m2 according to the original brief drafted in 1998. However, within two years, by the time stage D in construction was reached, it was changed to 30,593 m2. This resulted in several related works to be delayed because of uncertainty. Such large changes forced the team to work backwards to change the breakdown structure and action plan resulting in a cycle of continuous change that was difficult to manage. Ideally the breakdown structure and action should have been reasonably water tight in the conception phase. Time Management Lapses in time management can occur for several reasons but one of the major reasons is bad scoping exercise done initially. An efficient project management process would take into account the objectives, available resources, dependencies, and a practical and desirable schedule to build a reasonable timeline. Flexibility in the timeline is allowed but to the extent that the project’s critical processes do not suffer. The project’s schedule must be built and tracked using Gantt charts which incorporate these components into the activities and milestones. The Gantt chart of planned and actual activities in the Holyrood project is shown in Figure 7. Figure 7: Holyrood project: planned and actual activities (Auditor General of Scotland, 2000) It is clear from this Gantt chart that the project was delayed for more than two years with most activities showing an over run in time of completion. The Auditor General of Scotland report (2000) attributed this lapse to 1) lack of proper usage of Gantt charts for planning and tracking where the manager used their own methods which were not easily understandable by the teams, 2) unclear milestones, and 3) estimations of duration of activities without considering their effect on the design. Ignoring the important aspect of accurately scoping of project details and defining of dependencies resulted in a circular and redundant effort from the realisation phase to the design phase and back. Cost Management A successful project plan not just an achievement of goals and objectives but also ensures their completion within the stipulated budgets. The project management team must be equipped to estimate, plan, monitor, and control costs. During execution of the project, a watchful eye must be kept on the planned versus real costs being incurred. In case of over runs, the plan should be inherently flexible enough to allow the project manager to bring the costs back within the budget. However, this was not done efficiently in the Holyrood project resulting in a cost increase that ran in multiples of the original estimates. Table 3 shows the cost relationship between what was planned and what was incurred in real terms. Originally in January 1998 (March 1998 prices) Current targeted (outturn prices) Construction Cost £50 million £108 million Other project costs £40 million £87 million Total Cost to the Corporate Body £90 million £195 million Landscape and ancillary road costs (for which the Scottish Executive are responsible) - £14 million Forecast completion (ready for occupation) July 2001 December 2002 Table 3: Changes in the forecast and completion of the Holyrood project Risk Management Risk management entails the process of identifying maximum possible risks to the project, assess the magnitude of their effects on the project, prioritisation of these risks according to their impact, and finally devising a mitigation strategy in case the risk becomes a reality. Documenting risks for a project also allows all stakeholders to be aware of any pitfalls and be ready for eventualities. According to PMBOK (2000), Risk management requires “systematic process of identifying, analyzing, and responding to project risk”. The objective of a risk management exercise is to increase the probability of positive events and outcomes for the project while reducing the effects of any negative events. The Holyrood project took on several risks with little or no mitigation strategy ready for them. For example, the death of architect Enric Miralles shook the project and “gave rise to a substantial period of disharmony” and “caused further delay” (Scottish Parliament, 2004). A project of this scale should have had the mitigation strategy built around the sudden departure of a key member of the team. Mr. Miralles’ work should have been documented and the information flow should have been very smooth. At another level, the project ran the risk of spiralling costs primarily because costs were open ended in many cases. Even though cost management has been dealt separately, running a project using public money with unknown or inaccurate cost estimates in itself is a major risk that any enterprise can take. The cost over runs can be demonstrated by Table 4 below from the Scottish Parliament Inquiry Report (Scottish Parliament C, 2004). Date Cost Reason 24 July 1997 c£10m-£40m The estimate takes no account of the location or design of any new building. 6 July 1998 £50-£55m] The figure does not include VAT or site acquisition costs. 17 June 1999 £109m The increased figure takes account of consultancy fees, site costs, demolition, VAT, archaeology work, risk and contingencies. 5 April 2000 £195m Cost projections increase by £86m. November 2001 £241m Rising costs are also blamed on construction problems ahead of an attempt to try to complete the building project by May 2003. Finance Committee of the Scottish Parliament that rescheduling work is increasing costs. December 2002 c£300m A cost increase to £295m in October 2002, is reported to be due to increased security needs, requiring that bombproof cladding be incorporated into designs for the external fabric of the building. September 2003 £400m The new figure comes in the light of reports that consultancy fees for the project top £50m. By September costs break the £400m barrier and are blamed on construction problems in the interior of the building. February 2004 £430m + Costs are revealed to have increased again due to further problems with construction. February 2007 £414.4m The final cost is announced by the Scottish Parliament Corporate Body, a reduction of £16.1m on the previous estimate. Table 4: Perceived reasons for cost increase in Holyrood (Scottish Parliament, 2004). It can be see that from the initial estimate projected to be within £ 10m and £ 40m, the estimated final cost was over £ 400m. Conclusion The Holyrood project was found lacking in project process, scope, cost, time and risk management. Comparison with the four phase model showed that the processes and activities were not grouped effectively and that phase overlaps were very wide resulting in cyclical delays between the phases of conception, development and realisation. This caused severe repercussions to the project cost and timeline. Even though the project was eventually finished, it did so with a delay of three years. There was lack of harmony between suppliers, project management team, and the client. This aspect became starkly clear when the architect passed away and the project was thrown into chaos. Holyrood project is a good example of what can go wrong in project management. Mistakes committed at this project must be avoided for successful projects. Some of the lessons learnt from Holyrood were that stakeholders must communicate frequently and work closely together, responsibilities and expectations must be clearly defined, over stretching of resources must not be done, costs must be closely monitored, the project phases must not overlap heavily, risks must be identified, prioritized and addressed, and planning control must be maintained. References Auditor General of Scotland (2000). The new Scottish Parliament building. [Online] Available from http://www.scottish.parliament.uk/vli/holyrood/projHistory/docs/AuditorGeneral2000Report.pdf [Accessed 15th April 2010]. Auditor General of Scotland (2004). Management of the Holyrood building project. [Online] Available from http://www.audit-scotland.gov.uk/docs/central/2004/nr_040629_holyrood_project.pdf [Accessed 15th April 2010]. Lockyer, K. & Gordon, J. (1996) Project Management and Project Network Techniques: 6th edition. Harlow, Essex: FT Prentice Hall. Nokes, S., & Kelly, S. (2007) The Definitive Guide to Project Management. 2nd edition. Harlow, Essex: Pearson Education. PMI (2000). A Guide to the Project Management Body of Knowledge. Project Management Institute. PMI (2004). A Guide to the Project Management Body of Knowledge (PMBOK Guide). Project Management Institute. Scottish Parliament A, n.d. What were the visions behind the design? [Online] Available from http://www.scottish.parliament.uk/vli/holyrood/faq/answers/ds004.htm [Accessed 15th April 2010] Scottish Parliament B, n.d. About Holyrood. [Online] Available from http://www.scottish.parliament.uk/vli/holyrood/projHistory/DesignsonDisplay.htm [Accessed 15th April 2010] Scottish Parliament C (2004) Scottish Parliament Inquiry Report. Edinburgh: Audit Scotland. White, I., & Sidhu, I. (2005) Building the Scottish Parliament, The Holyrood Project. [Online] Available from http://www.parliament.uk/documents/commons/lib/research/briefings/snpc-03357.pdf [Accessed 28th June 2010]. Read More