Project Management - Project Analysis and Risk Management Plan - Essay Example

Table of Contents Table of Contents Introduction 2 Project 3 ECourier 3 Project 2. 4 Pharma, Inc. 4 Analysis of two projects 5 Project Management Approach 5 The Positive Features of both projects 6 Conducting a market research 6 Integration of Project Activities 6 Effective Communications management 7 Project Control in terms of cost, time, scope and also Change management 7 Managing Complexity 8 Stakeholder Management 8 Critical Success Factors for IT Projects­ –­ Summary 9 Risk Management 9 Risk Identification 10 Technical Risks 10 Management Risk 11 Organizational Risk 11 External Risk 11 Project Management Risk 11 Mapping the Risks on the Probability-Impact Matrix 12 Risk Management Strategies 14 Conclusion 16 Bibliography 17 Introduction Organizations use project management to achieve their strategic objectives. In earlier times, the project management was opted for external growth, while now its usage for internal growth is increased, for instance, new product developments, customer services initiatives etc. Managers conduct a strategic analysis for identifying the opportunities in the market, then if they find any gap between its actual and desired situation, some initiatives are suggested. So, they select those projects that are in line with the strategic objectives (Olson, 2004). But it is not always the case that these projects are successful and achieve the desired objectives, but usually most of them do fail, either in terms of cost, quality, deliverables or time (Meredith & Mantel, 2012). Any project’s success is inherited in the timely ending of the project, attainment of the required objectives or deliverables are delivered, and within the project limitations or constraints. In order to execute the project successfully, it is imperative for the project team or managers to consider some crucial elements of the project, which may be the project cost, time, or resources (Oisen, 1971; Lock, 1994; Atkinson, 1999). Among these aspects, there are three central issues, such as the time, cost and quality, which are the key intentions of any project and hardly be achieved and make the project a successful one (Iqbal, Azam, & Qureshi, 2011). However, the secret of success can be understood by analyzing the executed projects, where the success factors or failure factors can be identified by a careful analysis. The purpose of this paper is to analyze the two real-life projects related to the adoption of Information Technology in the organization by identifying the success factors of these projects, and also to identify the risk factors with the help of risk map as well as provide suggestions for mitigating or managing the risks. Project 1. ECourier ECourier is a well-known UK based organization, where it provides 24/7 and same day courier services to the customers throughout UK. It was started in 2003 and the main objective of the company was to deliver courier service with accurate delivery information or transparency in this information, along with the highest customer relationships through automation. It collects and delivers the packages from all the areas in London, as per customer’s instructions. In the beginning, it was involved in delivering the packages only in London, but now it has developed a huge customer base across the world, and have built many corporate customers at the global level (Attanasio, et al., 2007). The company undertook a project for the purpose of coordinating all the activities, which was the major concern in the start of the business, and this project deliverable was to build a fleet management system with IT based technology that can provide delivery transparency and more automated customer connections (project deliverables). They started the project to implement the Advanced Information Based Allocation (AIBA), which is an artificially intelligent post and fleet management system used to assign an appointment of delivery to the well-thought and suitable transport means, and also it provides a message alert to the vehicle area or courier service provider, with the help of the handheld station. The project was developed through different project teams existing in different countries, where there was an issue of coordinating the activities of the project teams and also to report and discuss any changes or alterations in the development process (TeamPage, 2005; Attanasio, et al., 2007). The project was expected to last for a year, but due to the coordinating issues, the delay was analyzed by the project manager. In order to control this issue, project manager took the help from a software team, where an enterprise weblog system was employed by the project manager to assist the company’s development activities in coordinating the teams and their communications. This new software was employed to control the time and cost aspects of the project, which then resulted in quickening the development of the organization’s whole internet tracking system as well as a company’s web site. This software protects the company’s time in the implementation of its new project regarding the Advanced Information Based Allocation fleet system, and saved a lot of costs involved in coordination of teams through costly travelling from one country to another, which would be incurred for progress meetings or reporting the alterations otherwise (TeamPage, 2005). The project was a success, where the AIBA System provides a high level of human, but artificial intelligence for connecting the whole process of courier service. Project 2. Pharma, Inc. Pharma, Inc. is a pharmaceutical company that also undergoes a project of new Information technology implementation and was a successful project. The company started a project of implementing the ERP (Enterprise Resource Planning) technologies, which successfully occurred between 2003 and 2004. It was the subsidiary of the company, where the ERP was implemented, and this subsidiary is a primary site for the company involved in producing the active elements of the products and then sending them to secondary sites of tableting and packaging the medicines. The project scope was to implement the ERP for producing, forecasting, purchase, sales and distribution, engineering, finance, and quality of the domestic production sites. The project was to implement the ERP in all the manufacturing sites of the company, where it was to occur in four waves of implementation and the time allocated was 5 years to implement in all subsidiaries, and 18 months in one. The project was managed by the domestic steering committee, domestic project team as well as the worldwide central execution team. This central team was belonged to the corporate headquarters, where they move one place to another for the implementation process. The project was completed within allocated time and budget with realizing a number of benefits of ERP implementation in the company (Carton, et al., 2008). Analysis of two projects Project Management Approach The project management approaches are basically the intents or purposes of conducting the project, where it is answered that how to plan the project. There can be two approaches, reactive and strategic approaches. In a reactive approach, the project is being carried out in response of any new demand or crises happened in the market, while in a strategic approach, the project is initiated with a strategic intent, where the main purpose of the project is to fulfill the strategic objectives of the organization for long term concerns (Levi, 2009). The two projects discussed above have used strategic approach, as the ECourier LTD has developed the new artificially intelligent and fleet management system to achieve the strategic objectives of the organization that are more strategic customer relationships and information transparency with regard to the whole delivery process. The case of Pharma, Inc. also shows the strategic approach by implementing the ERP in all of its subsidiaries, which can provide a number of benefits with regard to quality control, product distribution control, management transparency improvement, regulatory measures obedience, and also efficiency in several product lines. The Positive Features of both projects There are following positive features identified for ECourier project and Pharma, Inc. Project that resulted in project success. Conducting a market research The ECourier Ltd conducted a market survey for the initiation of the project, where it targets the online retailers as well, as the company found in a survey that there is a high demand for online delivery services with accurate delivery information for the online retailers (Maven, 2007). The market research before going for any project is of high significance, as it would impact on the project objectives and deliverables, where the project would target those objectives to be achieved and deliverables to be delivered that are important for the customers. This would result in knowing the prospective of the project, as (Ernst, 2002) has argued that for any incremental or development project, the market research can be a success factor for the project. Integration of Project Activities The project activities held by ECourier were quite fragmented at the start, as the project teams were located in different countries. The project manager realized this issue at the start of the project, so a new software was installed for the integration of the project activities performed by the project teams across different countries. This resulted in the better project integration management, where all the activities were integrated by the project manager. In Pharma, Inc. it is also considered a success factor, as the project activities were made standard by the regulatory framework and these were better integrated and monitored throughout the implementation process. It can be another key success factor for the project, as Kuang, et al., (2001) have suggested that the project integration management in IT projects is quite important for success, especially for implementation of ERP, as the integration can impact the timely completion and may affect the achievement of strategic objectives (Kuang, et al., 2001). Effective Communications management The communications management is another important issue in the implementation of the IT projects, which was successfully addressed in both of the projects. In ECourier Ltd the project was being held in different countries, but the project manager installed the software for better communication among all teams that resulted in on-time completion of the project. For the Pharma, Inc. the project manager hired a new PR consultant and an employees’ representative, who develop a smooth communication channel between the project team and managers in reporting of issues or sharing any information critical to the project. Thus, the communication management is another critical success factor that is necessary, but challenging for IT projects, as (Scott & Kaindl, 2000) have suggested that for IT projects, the effective communication is important to foster innovation through information sharing, where the bad communication can result in a number of unaddressed changes and reworks, or even starting a project from first stage as well. Project Control in terms of cost, time, scope and also Change management AT ECourier, the project control was quite impressive, as they control the cost, time and resources by effective communication and on-time assessment of issues, for instance the application of traction software resulted in completion of the project within time and cost limitations. The resistance to change was not an issue for the company. While for Pharma, Inc. the project was also completed at the scheduled time and cost, but the issue of change resistance was of high significance. The company provides proper training time and a long learning period for the project team in order to accept the benefits of implementing the ERP. The union representatives and PR consultant also affect this process, as they convey the importance of the project in a better way. It is another crucial aspect in IT projects that the new technologies poses different threats related to the change adoption of resistance, because the IT projects change the way of doing any business activity in a different manner (Cooper & Zmud, 2000; Agboola & Salawu, 2011). The lack of control of the scope may result in a lot of scope changes that can result in delayed projects and higher costs of reworks. The change management strategies should also be properly developed because they highly impact the morale of the employees in accepting the new technology that can result in disaster. Managing Complexity IT projects are highly complex in nature, as many IT projects fail due to the complex nature of these projects. The project manager needs to reduce the complexity by producing a well-articulated and detailed project plan. The ECourier Ltd has managed the complexity in their project through acquiring the complementary skill set of human resource that manage the project in the best manner. For Pharma Inc. the complexity was reduced by following the standards or regulatory frameworks of implementing the ERP in the organization. For IT projects, the management of complexity of the projects is of the most important factor that determines the success or failure of the project, as suggested by a number of studies in literature as well (Ribbers & Schoo, 2002; Carton, et al., 2008; Cooper & Zmud, 2000; Iqbal, et al., 2011; Kuang, et al., 2001; Meredith & Mantel, 2012). Stakeholder Management ECourier managed the internal and external stakeholders, such as customers, online retailers, carriers, managers, and investors, by including them in the planning process and communicating with them effectively through newsletters and emails. In this process, the investors and carriers get to know the benefits and execution process of the project, and the company also conducted a SWOT analysis and stakeholder analysis (internal and external) for the assessment of the stakeholders. The Pharma, Inc. has limited stakeholders that were the investors and managers of the company. These were managed by including them in the whole process of implementation of ERP. Thus, the stakeholders’ interests were also effectively taken into account while doing the project. The new trend in the project management has elevated the importance of the stakeholders’ management as a key success factor, as they are the main people who have vested their interests in the project so they have to be included in project execution and planning. Otherwise, the project may be a failure if the stakeholder’s requirements are not fulfilled, as the clients may have a different project requirements in later times that must be addressed within the time (PMBOK® Guide, 2004; Ika, 2009). Critical Success Factors for IT Projects­ –­ Summary The IT projects are quite technical and complex in nature, they require better management of complexity and integration of all the project activities. The IT projects’ technical issues require a lot of control and maintenance activities, where the project control in terms of scope, time, and cost is of greater importance. In Summary, there are three highly significant factors quite critical to IT projects that must be addressed in the project execution and also planning, such as Managing Complexity, Stakeholder Management, and Communication and Change Management. Risk Management This section of the report has identified different issues and constraints, or in other words, risks are identified for the above projects. As the risk management is the most critical element in the project management, where the risks are to be identified in planning the project before the project execution and a mitigating or managing strategy has to be developed for better risk management. In addition, the risk management plan is also developed for the future purposes as well (Cleden, 2009). The uncertainties and risks are of different kinds on the basis of internal or external factors, micro or macro impacts, or controllable or uncontrollable factors. Here, the risks are identified with the help of “brainstorming technique” and the literature sought for IT projects, then the risks are mapped on the Probability-impact Matrix, and then risk management strategies are suggested according to the risk map model as provided by (Nicholas & Steyn, 2012; Kerzner, 2011; Cooper, et al., 2004). Risk Identification Risks are identified by brainstorming for above two projects, and are categorized into five categories; technical, management, organizational, external, and project management. Technical Risks For both of the projects, the technical risk was very high, as both are based on IT projects. For ECourier, the innovative technology that requires the meaningful insights in the technical requirements of the project, but during the project implementation, the complexity was the main issue for the company. For Pharma, Inc. there was again the issue of complexity and performance, where the ERP implementation involve a complex array of activities with risk of good or bad performance after implementation that may occur due to the vendor’s lack of advanced ERP technology or expertise in ERP implementation. Management Risk With regard to the management risk, both of the projects face the risk of change management, where the managers have to face the issues of resistance from the employees to accept the new technological application. Another issue for ECourier was that they were first in the industry to perform the courier services through the internet and with high transparency, so the budget and cost estimations could vary, which requires management skills to perform this. Organizational Risk The organizational risks were of lower impact in case of ECourier, where the issue of budget can be the potential risk for the company, where the company has to maintain the new infrastructure that requires a higher fixed cost. For Pharma, Inc., the issue of relying over different kinds of expertise poses an organizational risk of greater impact, where the subcontractors have to be hired and much dependencies are there for the purpose of ERP implementation. External Risk For the ECourier, there was high risk involved in terms of external environment, as there were issues of finding vendors for the infrastructures due to lack of knowledge about the requirements, and also the issue that customers may or may not be satisfied with this new technology. For Pharma, Inc., the only issue was the selection of a vendor that needs to be selected on the basis of expertise and experience. Project Management Risk The risk associated with the estimations was high for ECourier, as the project was being performed for the first time, and there can be wrong estimations for budget and time. But for the Pharma, Inc. it was the lowest risk, as the ERP Implementation is not a new phenomenon and cost & time estimations can be done properly. Planning and controlling risks were also higher for the ECourier, as there was lack of project planning and controlling skills for the project team, and also some uncertainties involved in this new kind of project. But for Pharma, Inc. there was lower planning risk, as the processes and techniques were well settled and audited under the regulatory framework and also due to the high profile project leader employment. The communication risk was also high for the ECourier, as the project was being held through the project teams located in different countries, which provide the issues of communicating and coordinating the issues. While for Pharma, Inc., the communication risk was also higher, as the project involves the communication between all the functional units due to the ERP implementation across all the organizational units. Mapping the Risks on the Probability-Impact Matrix All these risks and issues, discussed above, can be assessed on the basis of two factors, the probability of the risks that measures the likelihood of occurrence or recurrence of the risk, and impact of the risks that measures the criticality of the risk, where it is assessed that either the risk has high impact over the project or not. The Probability is difficult to determine in terms of quantity, but for the easiness, it can be measured in terms of very high, high, medium, low, and very low probability. The impact can also be measured in terms of the existence, dangerous, ordinary, minor, very minor, and negligible, or to make it more easily, here, it can also be measured in terms of very high, high, medium, low, and very low impact (Cooper, et al., 2004). Following matrix is used for mapping. Here, in the matrix, the risks are identified generally for the IT projects, where the above project analysis is considered. This mapping is important for the purpose of choosing the strategies among the managing, mitigating, or accepting the risks. Figure 1. Risk Mapping on Probability-Impact Matrix. The above risks are mapped on the basis of their probability of occurrence and impact on the project execution. This risk map shows that the most critical risks in planning and executing the IT projects are the complexity, employees, technical requirements, and employees’ resistance to change, implementation, customer satisfaction, and changes in scope. These are the critical risks and constraints that must be considered while planning and implementing any information technology related project. While the moderate level of risks is project expertise and experience of the project manager and team, the estimations in terms of profit and return on investments, and quality and performance of the project outcomes. While the suppliers’ expertise is the lower level of risks, but it depends on the type of the project and industry where the project is being implemented, for instance, the supplier’s expertise can be a critical level risk if the project is being performed by the vendors or subcontractors. Risk Management Strategies The risk management strategies are those which are employed to manage the risk and are of five types, such as accept the risk, avoid the risk, mitigate the risk, respond to the risk, or sharing the risk. The probability-impact matrix can be used here as well, as the risk strategies are selected on the basis of their criticality (impact) and likelihood of occurrence (probability) (Cooper, et al., 2004). Following matrix suggested the strategies for each of the risks identified above in the risk map. Figure 2. Risk management strategies with the use of Probability-Impact Matrix So, the strategies can be easily identified through this matrix for each risk. There is a need to mitigate the risks of complexity, employees’ resistance to change, communication, and implementation risks, as they are most critical to the IT projects. The complexity can be mitigated through the well-developed integration management, the integration of the activities of the overall project and its alignment with the strategic objectives of the organization can reduce the complexity (Macheridis & Nilsson, 2004). The employees’ resistance to change can be mitigated through various strategies, by ensuring them about the benefits of new technology project to organization and to them, negotiation through proper representatives, and by employing an experienced PR consultant who can better practice the change management (Agboola & Salawu, 2011). The communication issues are of high importance that can be resolved by the proper implementation of communication channels, providing empowerment to the employees, fostering the information sharing culture, and also through the complaint boxes and frequent meetings with the project stakeholders, which is the most important (Cooper, et al., 2004). The implementation risk can be mitigated by developing a regulatory framework for the process implementation, as well as in case of a new project, the project manager skills must be valued for implementation (Macheridis & Nilsson, 2004). The risk of customer satisfaction can be controlled or mitigated by conducting a proper market or consumer survey to assess the demand of the service or product as well as the potential of the project (Kerzner, 2011). The risk sharing is another strategy, where the risks are shared with the vendors and subcontractors, as whole project planning and implementation can be carried out by hiring a subcontractors’ project management team. This can be done for the risks of technical requirements and project expertise and experiences. There is suggested a risk control strategy for the estimations and scope changes, where the project manager must have the analytical skills to assess the real time estimations, and also the scope of the project can be determined by including all the stakeholders in the planning of the project, where all the stakeholders’ interests are taken into account in order to set the project scope. Cost, budget, quality and performance are the medium level of risks, but they need to control as well, and are based on the right estimations, customer surveys and scope management (PMBOK® Guide, 2004). The suppliers’ expertise is in this case regarded as the low level of risk that is accepted. But the supplier’s expertise risk, highly depends on the type of the project. Conclusion This paper has analyzed two successful projects related to the Information Technology sector, where a number of critical success factors are outlined that contribute to the project success, such as Managing Complexity, Stakeholder Management, and Communication and Change Management. Then the risk management plan is prepared for these two projects, where after identification of risks by brainstorming, the risk management strategies are suggested on the basis of their criticality and likelihood of occurrence with the help of probability-impact matrix. Bibliography Agboola, A. A. & Salawu, R. O., 2011. 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