The Purpose of Network Diagrams - Research Paper Example

This paper contains the answers to case and case 2, Managing Projects of The Network Diagram, Timing of Activities and the total float: Project duration and critical path: A more detailed chart: If the project starts on 7 July 2008, the earliest date it can be completed using a 7 day working day and totally 66 days needed for work, as you can see in the table above, would be on 10/09/2008. In case of a 5 days working day in a week and considering that project needs 66 working days, it will be completed on 06/10/2008 as you can see in the table below: 2 days delay during H would not be a problem if H starts on the first or second day but later, it may cause delays if G and I are finished in time because J must wait till H becomes ready. If Q completes 1 day earlier, it does not make any difference since it needs 9 days time and P which needs 10 days does not allow the R to be started since in order to R be started, both Q and P are necessary to be completed. 4 days delay during Q causes at least 3 days delay considering that both P and Q are started on time and P is completed exactly after 10 days. The purpose of Network Diagrams It is often difficult to keep track of all the interdependencies between various tasks in a project. The Network diagram gives the graphical view of the precedence of tasks in a project. Every task in the project is represented by a rectangle. Any dependency within the tasks is represented by an arrow line joining the two tasks. For example If task "b" cannot be started until task "a" has been completed, then task "b" is said to be dependent on task "a" Or task "a" is a predecessor to the task "b". This relation is shown in the Network diagram by two rectangles "a" and "b" joined by a directed line going from "a" to "b". This helps the user in tracing all tasks on which a particular task is dependent and in tracing all the tasks which depend on a particular task. It also helps the user in estimating the criticality of a task. To keep a competitive position, it is better for companies continuously monitor the elements driving location change - and examine the feasibility of changing the location of a company. Business location is still a primary issue in keeping up a company's competitive position -- whether corporate headquarters are looking forward to recruit and keep top talent or a back office looking forward to reduce the amount of operating costs. As today's business situation alters at an ever-increasing rate, businesses, most of the time, find that their current location is no longer providing the competitive vantage it had once upon a time. (Burke, 1999) Consequently, all the companies should evaluate the chances and hazards of moving to a better location for their company. In this paper we will analyse the key issues that cause a business to change its location as well as the different aspects of a feasibility analysis a manager needs to evaluate the chances and hazards of changing the location of a business. There are six main issues that are influencing company strategies and location: 1. Changes occurred in the Global Marketplace Elaboration and globalization of the world economy causes both new opportunities and new competitors on the other hand. (Boddy, 2002) Companies are finding the location of their business operations not only to purchase global opportunities but also to find a more defensible market position. 2. Alterations in the Need for Labour The global contest for labour especially for knowledge workers, has caused companies to change the position of their businesses and repackage their businesses as an "employer of choice" (Maylor, 2003) to gain a competitive vantage for drawing in and retaining talented labour resources. 3. Internal changes in a Company Businesses are experiencing significant change taken by mergers and acquisitions as well as the want to reduce overall cost for operating, caring knowledge as an asset, sustaining internal business growth, and favourably impact business culture. 4. The Changes in Industry The act of freeing many industries from regulation has caused new opportunities which results in companies decision to change their location in order to expand into new markets while defending their traditional market turf. 5. Community Alterations Alteration also affects communities and their power to attract and hold business. (Burke, 1999) Demographics displacement and impact the supply of labour; the introduction of new labour competitors causes pressure on labour costs. Also, the loss of critical backup services for instance an air carrier or the passage of new legislation possibly results in a modification in business situation with the potential to impact a location's viability in a negative way. (Maylor, 2003) 6. Alterations in Technology The fast alteration in information, telecommunications, and Internet technology will have a fundamental impact not only on the way the business is carried on but also on the flexibility of how and where special variations of work are executed. Each of these alteration causes increases the instability of today's business locations, causes the demand for continuous location appraisal and feasibility analysis for changing the location of a company of where businesses operate. Feasibility Analysis Finding the feasibility of changing the location of a company or business opportunity has facets that are quantitative and also qualitative. (Nicholas, 2004) The quantitative facet centres on achieving a financial payback by reducing costs or increasing operational efficiencies. This facet applies mainly to back-office operations where labour and facilities costs are main drivers that can vary importantly from location to location. The qualitative facet measures nonfinancial hazards and opportunities, such as the impact of impacting a group culture change, being closer to an emerging market, or directing a critical signal to the financial community. (Burke, 1999) Qualitative analysis is usually applied to changing the location of a central office specially since such location changes usually do not cause a short-term quantitative rate or period of return. In addition, since most of headquarters staff are consisted of executives or senior professionals with national compensation packages, a headquarters location change will have less impact on directly reducing labour costs. Quantitative facets: Wall Street outlook and global contest have progressively caused today's businesses to concentrate on improving financial performance. Consequently there is a great emphasis on the ability for quick payback periods on corporate investments in any relocation. The majority of companies look for a payback of less than three years in relocating a back office. Relocation Investment: When analyzing investment costs of changing the location of a business, it is needed to think about relocating of employees, separation; recruiting and training them; and the changing the location of equipments, and the contents of office. (Maylor, 2003) Far and away the most important cost would be related to changing the location for employee and separating them. A typical employee relocation expenses are $45,000 and above for each employee, while separation expenses are usually run between 26-35 percent of an employee's income. Finally the overall investment would depend on the quantity of employees that a company wants to relocate. In case of a back -office location change, experience shows that 11 to 25 percent of employees are able and have the opportunity to change their location. For the sake of the higher salaries, greater dedication, etc., found in a headquarters in comparison to a back office, employee retention in a headquarters location change increases considerably to 66 to 75 percent of employees. The above employee retention numbers are a variant of the origin and destination cities as well as the mixture of the location change policy. Therefore, total investment for each 100 employees for a back office would simply reach to $1.7 million; the overall investment for each group of 100 headquarter employees would simply reach to $4.5 million. Current Savings Occasions: For investigating a possible payback on the location change investment amount, potential savings in variable current expenses are needed to be analysed. (Boddy, 2002) Usually the biggest occasion for current cost savings is through a reducing the labour costs. Labour expenses usually constitute 70 to 90 percent of all current expenses for an office operation. Our office can achieve labour cost savings first by changing the location to an area with lower labour expenses or reducing staff quantity by operating efficiencies of merging one or more facilities. Headquarters that change their location usually miss out on the chance for significant labour expense reductions because most employees are willing to relocate and keep their salaries, and many of them are paid based on a national scale. Facilities expenses provide another area of potential current cost savings. These expenses usually make up 15 to 20 percent of all current costs. Improving space utilization or changing the location to lower cost locations are known as effective ways in which a business impact facilities expenses. State and local taxes are one other usual area of attention when investigating the feasibility of location change for office. However, taxes only consist about 3 to 6 percent of current costs, and the impact of location on taxes is most of the time insignificant relative to the much greater impacts of labour and facilities expenses. Nonetheless, the capability to negotiate suspensions, credits, discounts, and different methods of payments can cause an increase in the impact of taxes in the feasibility analysis. As stated, there is an important opportunity to reach a rapid, direct financial payback based on achievable current cost savings for an office. Often the "payback" of location change for headquarters is hidden in the qualitative benefits of a location change. (Nicholas, 2004) Accordingly, to fully analyse the feasibility of location change we need to also look at the qualitative hazards and chances. Qualitative Risks: By far the most important hazard to the location change of any operation is the hazard of business disruption. Business disruption can be a result from a important loss of employees, distraction from business during the planning and implementation phases, and/or operational dysfunction. While all these hazards are very real, careful planning and implementation can reduce them. A special group-move location change policy can increase the amount of employee retention, a communications plan would be able to reduce employee beguilement and short-term redundancy and phasing vital operations can reduce operational break. Significantly, expenses incurred to reduce such hazards must be considered in developing location change investment expenses. Qualitative Benefits: The main qualitative advantages include the ability to boost rapid change, amended operational performance, and heighten business environment. (Maylor, 2003) Changing the location of headquarters or a back office may cause a quicker change in organizations seeking to use new technologies, establishes a new culture, or downsize. Accordingly, location change can be considered as a tool that can maintain organizational flexibility and rapidly accommodate to today's fast-paced business world. Changing the location may impact operational performance by boosting communications in a way of consolidating two or more opportunities and changing the location in an area that has a boosted local or national labour draw. Many business headquarters confirm a location change by moving to an area that lets the business to absorb and retain a larger amount of talented employees. In analyzing qualitative benefits, we should consider that the ability to boost the business environment such as gaining access to markets, business operations, company resources, or other key issues. Businesses sometimes also include the qualitative advantages of being in a high-profile location, which is able to generate a bigger attention from the press. While changing the location of an office can be frequently warranted on a quantitative financial basis by itself, in order to study all the potentials of headquarters location change, the impact of qualitative benefits needs to be addressed. As a result, changing the location of office has the potential to suddenly reduce product evolution time or add the amount of sales by only a small border could result in a payback for a headquarter location change in a relatively short period of time. References: Burke, R. (1999) Project Management; Planning and Control Techniques (3rd Ed.), Wiley, Chichester Nicholas J.M. (2004) Project Management for Business and Engineering - Principles & Practice (2nd Ed.) Elsevier Maylor, H. (2003) Project Management (3rd. Ed.) Prentice Hall Financial Times Boddy D. (2002) Managing Projects - Building and Leading the Team, Prentice Hall Financial Times Read More