Change Management Plan for Shapoorji Company LLC - Case Study Example

PROJECT MANAGEMENT Introduction A project is a planned enterprise that is formulated towards achieving a certain goal by anindividual or an organization. Project management is however the use of a process or method knowledge and skills as well as experience in order to achieve the aim often project. Projects are usually a part of a strategy towards achieving the objectives of n organization. Therefore, a project is a temporary action undertaken in order to create a unique product or service in an organization. Every organization requires a project in order to outshine its competitors and improve the quality of the products and services that it is offering to its customer. This also ensures that the company stays up to date as a project involves research into the market and the references of the stakeholders. However, a project cannot imply exist on its own without any particular order. It is for this reason that every project has its own unique management. The management leads the organization towards the direction of achieving the objectives of the project. This is done through decision making the analysis of the progress of each project. It is also important for the project managers to balance the finances while handling their projects. This is in terms of the cost time and quality. Although the organizations are looking for a way to boost their profits through the use of projects, it would not be wise to utilize all the funds of the organization to fund projects. It would be harmful in that the organization may end up suffering in other areas. These areas may include the lack of money for salaries or expansion. The project management is put in place so as to make sure that the costs involved in running the projects are valid and reasonable. Project management also involves the managers being time conscious and making sure that they eat the deadlines of their projects on time. This will also ensure that no unreasonable costs are incurred in extra time spent working on a project. Due to the importance of the project in boosting the economic status of the company, the project management is also responsible for ensuring that there is quality in the outputs of every project. Quality leads to more sales and demand from the customers. They have to look into all the aspects of the project and in their planning of the project make sure that they are all leading to achieving the goal and objective of quality output. They also ensure that the four life cycles of a project fall in place; the project initiation, project planning, project execution and project closure. One such company is Oman Shapoorji Company LLC (OSCO) which is a construction company in Oman. The Shapoorji Company LLC (OSCO) has various projects, project managements and project plans that have enabled it become he success that it is. 2. Shapoorji Company LLC (OSCO) The Shapoorji Company LLC (OSCO) was founded in July the year 1975. By then, its main objective was to participate in the renaissance of building the nation’s economy through high participation in the burgeoning construction activity. The company is responsible for the construction of some of the most significant landmarks on Muscat such as the Municipal Building and the Cabinet Building. However, every company has to perform some calculations to evaluate the accuracy and benefits that may arise from their projects. The company can therefore calculate different aspects f its company’s progress and income and also predict the returns that the project may earn the Shapoorji Company LLC (OSCO) company. These calculations include Net Present Value (NPV) Method, the Internal Rate of Returns (IRR) Method and the Payback Period (PBP) Calculation (Verheof 2005 330). a) Calculation of NVP, IRR and PBP Net Present Value takes into account the time value of money. This calculation is NPV = ∑ {Net Period Cash Flow/(1+R)^T} - Initial Investment where R is the rate of return and T is the number of time periods. Internal rate of returns involves the cost of capital continuous to increase while the Net Present Value becomes zero and then becomes negative. Calculation of the International Rate of Return is: 0 = P0 + P1/(1+IRR) + P2/(1+IRR)2 + P3/(1+IRR)3 + . . . +Pn/(1+IRR)n Where P0, P1, . . . Pn equals the cash flows in periods 1, 2, . . . n, respectively; and IRR equals the projects internal rate of return. Here, the cost of capital continues to increase while the Net Present Value falls to zero and then becomes negative (Shenhar, Dvier 2007 1). The Payback Period (PBP) is calculated as follows: Payback Period =Initial Investment Cash Inflow per Period b) Advantages and disadvantages of NVP, IRR and PBP Advantages The advantages of the Net present value include the fact that it takes into account the time value of money. Therefore, on is able to calculate whether the time being used in the project matches the value of the money it should get in return this will also promote the establishment of a relevant method of the use of time. Another advantage is that the NPV method uses cash flow rather than the accounting profit which promotes accuracy. The Net Present Profit formula takes account of the amount and timing of the project cash flows as well as all the relevant cash flows over the life of an investment project. This goes to prove that this formula takes into account all aspects of the life cycle of the project and therefore the calculations arrived at will be relevant. The advantages of the IRR method are that this method gives the value in terms of percentage, a familiar measure of return. This can then be compared to the existing return on capital employed of a company. The primary ratio that is used by financial analysts in assessing the company performance is also advantageous. It is a very simple method to apply and it can be used to give a comparison of mutually exclusive projects. It also takes into account all the cash flows arising during the life of an investment project. The advantages of e Payback Period calculation is that it enables the project managers have an estimate of when to expect returns for a particular period or after how long. They can then plan their project having sufficient information about the value of the time and money spent on the project. It is a simple sum to calculate. This method can also be used to calculate the risk that may involved in a particular project. This is because the cash flows that occur later in the life cycle of a project are rather uncertain while the payback period calculations indicate how return the cash inflows are (Larson, Gray 2011 2). Another advantage is that when a company is facing problems with liquidity, the payback period calculation provides proper project rankings of would promote the early return of money. Disadvantages The disadvantage of the Net Present Value Method is that it is challenging to give an estimate of the value of cash inflows and outflows over the life of a particular project. It is possible to accept all projects that have a positive NVP in a perfect capital market. Another disadvantage of the Net Present Value Method is that it may be challenging to estimate the cost of capital of a company. Hence, the calculations mad may not be very accurate. The discount rate is also no straight forward. Lastly, the cost of capital changes over the life of the project and hence it is not a very stable means of evaluation. The disadvantages of the IRR method include; it is not based on cash but instead uses accounting profit which is at times open to manipulation and is also not linked to the fundamental objective of maximizing the shareholder wealth. It also does not take into account the time value of money and therefore gives equal weight to profits whenever they occur. The method uses average profits and also ignores the timing of profits. Lastly, this method also fails to take into account the length of the project life. The IRR method therefore ignores many crucial aspects of the project and is no therefore every reliable method of calculation. The payback period a calculation has the disadvantage of not taking into account the time value f money. This is a major setback of this method because it may lead to the project managers making the wrong decisions. This method also does not take into account the cash flows that take place after the period of payback has passed. The method is hence not sufficiently accurate. c) Work Breakdown Structure When an individual is employed in the OSCO, they are given a welcoming letter and also offered a handbook to guide them on how matters are run and what is expected of them by this company. They are then put on a probation period while they work under supervision. After this period, their performance at the job is reviewed by their superior and should their work be pleasing, they are issued a confirmation letter. From here their work is reviewed annually whereby an annual performance appraisal is conducted. This enables the identification of those who may need more training and those who may be awarded and increase in salary (Pinto 2007 3). There is also the subcontract management that is employed by Shapoorji Company LLC (OSCO). Some of these subcontractors are domestic while others are nominated by the clients during the life cycle of a particular project. The works that are selected to be subcontracted are usually based on the project delivery requirements and the in-house capabilities of Shapoorji Company LLC (OSCO). There is a lot of keenness given when it comes to selecting the subcontractors as the people handling any project are required to be of high quality skills. This may make it challenging to find the best individuals as it may not be people working within the company and hence their performance has not been closely analyzed by the organization. However, they give special attention to this area for giving contracts and thoroughly look into the person to be given the particular subcontract to ensure that there will be high quality work being done. d) Change Management Plan Shapoorji Company LLC (OSCO) has a core design and a very committed subcontract management team. This team in then headed by project coordinators whose main role is to act as the interface that comes between all the subcontractors regardless of whether they are domestic or nominated and to coordinate the overall MEP and the finishing works These coordinators do not work alone. They are supported by an effective team of architects and finishes inspectors as well as the MEP engineers and the draftsmen. When the project is addressed by all these individuals, then it is keenly addressed and each aspect will be handles to just about perfection. All the individuals who are involved in this process are professionals who have mastered the art of what they do and ha egret credentials to verify their expertise (Kerzner 2013 4). e) Risk Management Plan. The above team is responsible for keenly assessing every aspect of a project. They look into any risks that may occur during the carrying out of this project and come up with ways and methods of managing the risk. He team reviews and coordinated the drawings that are produced by the designers in the carrying out of the project. They also review the drawings provided not only by all the designers but also by all the contractors working drawings. They inspect the validity of each drawing step by step looking for any risks that may arise in the carrying out of these construction projects. This way, all the individuals involved in the team will feel that they are participating in an active role in the project. The critical analysis of these drawings avoids any disasters occurring during the construction process which may lead to many losses in terms of capital and human life (Burke 2013 5). This company is very keen on the management of risk and hi plan ensures that any major calamities or losses are spotted and amicably dealt with. 3. Conclusion In conclusion, the Shapoorji Company LLC (OSCO) is a very successful company as a result of utilizing the projects at their disposal wisely. This company has managed to make high profits and continue being held at a high perspective due to their high quality work and services when it comes to constructing. The project managers pay attention to detail in order to ensure that the end product is of high quality. The involvement of so many individual experts in every team for any project ensures that every detail is well addressed. On the other hand, it is also through the cooperation of all the team members that success has been achieved in the Shapoorji Company LLC (OSCO). The coordination of all members puts the focus of each member of the project at hand rather than fighting with each other. They bring together different ideas that will promote the success of the project and analyze it from every angle eliminating any risk factors that may present themselves. Despite the inevitable inconveniences that may occur among one another or even during the calculations of the project, the Shapoorji Company LLC (OSCO) has been able to manage their projects very well. Work Cited Burke, R. (2013). Project management: planning and control techniques. New Jersey, USA. Pp 5 Kerzner, H. R. (2013). Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons. Pp4 Larson, E. W., & Gray, C. F. (2011). Project management: The managerial process. Pp 2 Pinto, J. K. (2007). Project management: achieving competitive advantage. Pearson/Prentice Hall. Pp 3 Shenhar, A. J., & Dvir, D. (2007). Reinventing project management: the diamond approach to successful growth and innovation. Harvard Business Review Press. pp 1 Verhoef, C. (2005). Quantifying the value of IT-investments. Science of Computer Programming, 56(3), 315-342. Read More