Project Development and Control - Essay Example

Project Development and Control Table of Contents Part Earned value 3 Part 2 4 Introduction 4 Background 4 Project leadership and governance 5 Project Roles, Responsibilities and Stakeholder Management 6 Conclusion and Recommendations 7 Reference List 8 Bibliography 9 Part 1: Earned value As per the case, the project’s estimated cost was £2.3 billion in 2002, which was planned to be spent in 3years or by end of 2005. Even so, in 2006, the total project cost was revised to £12.4 billion due cost overrun and the project span was extended to another 10 years, up to 2016. Hence, total cost of the project from 2002 to 2016 was £14.7. When the total budgeted cost of work scheduled (BCWS) for 14years [10years (2006-2016) + 4years (2002-2006)] is £14.7 billion, the BCWS for 9years (2002-2006 and 2006-2011) should have been (£14.7 * 9)/14 = £9.45 billion However, by the end of 2011, the total expenditure was £6.46 + £2.3 = £8.76 billion £8.76 billion is the budgeted cost of work performed (BCWP) by NPfIT, which is about 8% less than the BCWS. Hence, according to earned value analysis, the project was way behind the schedule by the end of 2011. In addition, if analysis is done for the 10-year span, from 2006-2016, the BCWS was observed to be £12.4 billion and by 2011, the cost incurred was £6.46 billion. 2006-2011 is equivalent to 5 years, which is also half the total project period. It is naturally assumed at this stage that by end of the fifth year, the project should have progressed by at least 50%. As a result, the BCWP for 2006-20011 is 50% * £12.4 = £6.2 billion The actual cost of work performed was £6.46 billion, which is about £0.26 billion more. So, the project NPfIT had overrun the budgeted cost by end of 2011. Overall, it was assessed that NPfIT was over budget and behind its original schedule. The project condition suggests lack of appropriate project plan and deadline. Part 2 Report to the Project Board of NHS national programme for IT Executive Summary The report is a detailed analysis of the various causes behind failure of the biggest information technology project in the health sector of the United Kingdom (UK). The national programme for information technology at National Health Services (NHS) was one of the most expensive projects that suffered from project delay and cost overrun and was ultimately cancelled by the UK government. The causes of failure that are discussed in the report include lack of project role, responsibilities and leadership, project governance and inappropriate shareholder management. Introduction The national programme for information technology (NPfIT) in NHS is a project of national importance with a life span of ten years. The project allows NHS an unparalleled usage of information technology for improving quality of the services offered related to patient care. However, the project failed to achieve the expected outcome and involved heavy investment, especially the government fund that was procured from taxpayers for years. The failure attracted huge criticism from various stakeholders. The paper aims at discussing the problems related to NPfIT in the context of two important areas of project management, namely project governance and leadership and project roles, responsibilities and stakeholder management. Background Prior to development of NPfIT, the IT activities at NHS were extremely haphazard in nature as individual NHS organisations had separate IT systems with different configurations, which complicated procurement of information between two or more organisations. A large number of individual systems with incompatible configuration and silos of information posed threat to efficiency of NHS. To simplify the situation, provide holistic approach to patient care and minimise the settlement cost related to claims of negligence, the NPfIT was proposed (National Audit Office Report, 2006). The NPfIT is world’s first and largest IT system that has ever been developed in the field of health management. This unique system was developed with the intention to improve efficiency and accuracy of overall services of the NHS. Keeping in view the data size and systems that are required to be incorporated in the project, it is natural to expect complexity and risk present in the same. One of the generic risks identified in this project was addition projects as part of the original project (House of Commons, 2012; 2013). It was unavoidable, but the management decided to keep a control on various extensions in the project. It was further decided that the project will be delivered in a number of phases so as to upkeep transparency and accountability. Nonetheless, very little was achieved in the project and in 2010, the UK government proposed cancellation of the project. Presently, the project is at reconfiguration mode with little scope for revival (Hendy, 2005; National Audit Office Report, 2006). Project leadership and governance In project management, leadership is very important as only leaders are capable of transforming vision into reality. Leaders in a project are mainly responsible for mobilising resources and motivating individuals to contribute towards effectiveness and successful execution (McNulty and Ferlie, 2002). Success of any project in the competitive business environment is highly influenced by the approach adopted by its leader. There are mainly two kinds of approaches adopted by project managers: top-down approach and bottom-up approach (Meredith and Mantel, 2008; Burke, 2013). These two approaches are contrasting in nature. Top-down approach is very formal in nature with limited communication of plans, high deployment cost, elaborated activities and delayed return on investment. On the other hand, bottom-up approach integrates various components and has a positive impact on the organisation. In addition, the return on investment is realised in the earlier phases itself (Briner, Geddes and Hastings, 1990). In the case study, Alistair Maughan (2010) proposed that non-performance of NPfIT can be well-supported by the fact that it was a top-down project. Furthermore, the project was a recommendation from cabinet level and political involvement resulted in absence of sufficient leadership, unclear business plan and poor strategy. Apart from leadership, project governance framework is also very important for the success of a project. There are key principles that a project must comply with. These principles include: single point of accountability, focus on service delivery, separate project and organisational governance and separate stakeholder management and project decision making (Merchant and Stede, 2012). In NPfIT, the source of accountability was not one person, but multiple individuals such as, cabinet, NHS management and so on and so forth. Hence, decision making was extremely haphazard leading to unclear objectives and weakly defined vision and mission. In addition, the case study indicated that the outcome was not well-explained and its end users were also not defined. The size of the project was huge and mainly developed using the tax paid by general citizens. However, the citizens (tax payers, employees and patients) being natural stakeholders of the project had little knowledge of its functioning, fund allocation and activities. Thus, it can be said that the project governance of NPfIT was not appropriate (NHS, 2014). Project Roles, Responsibilities and Stakeholder Management A project comprises different groups of individuals such as, project team, project manager, executive sponsor, project sponsor/director, steering committee and stakeholders. The project manager or project leader is mainly responsible for delegating various activities related to the project and ensuring that the same is completed within a given timeframe. The project team members are individuals who deliver and contribute towards achievement of the project plan. The executive sponsor is the ultimate decision maker in a project, who provides necessary directions to the project director (Meredith and Mantel, 2008). In NHS, the project NPfIT was developed as per Cabinet recommendations. Hence, the government and cabinet can be considered as its executive sponsor. The project director, as observed in the case, was Richard Granger. The steering committee was the management of NHS, which primarily comprised the chief executive officer and other executives of strategic health authorities such as, primary care trusts and hospital trusts and general practitioners. For project development, NHS entered in a 10-year contract with the United States based IT company, CSC. The stakeholders are considered to be the most crucial aspect of an organisation and are greatly involved in organisational activities. The primary stakeholders of NPfIT were the general public (tax payers), employees and patients of NHS. Stakeholder involvement is necessary in a project as it is run on their investment, which is why they have every right to know about progress made. Even so, in case of NHS, the stakeholders were rarely informed about the progress in a detailed manner. Until project failure, the stakeholders were hardly aware of the project condition. According to the department of health, NHS is putting effort to win back the trust of its staff and general public in activities conducted (NHS, 2014; National Audit Office Report, 2006). Conclusion and Recommendations In the case study, it was observed that the NPfIT project was a disaster mainly due to mismanaged activities and wrong project approach. The project would have become one of the significant IT interventions in the global health sector, if it was successful. The failure also resulted in crushed hope and trust of the stakeholders and severe criticism for NHS and CSC. The critical analysis of the case study points out that sufficient leadership skills were absent in the management of NPfIT and the project roles and responsibilities were very ambiguously state with no specific point of accountability. It is important for NHS to realise that the project was completely unproductive and unprofitable. Hence, they should avoid further investment in the project. The organisation should maintain caution in future IT-related projects in terms of well-defined project team, project management and appropriate budget. Additionally, project governance of the organisation was observed to be disorganized and it is recommended that NHS must adopt and implement the various key principles of project governance, which has been discussed earlier. It is also recommended that NHS follows the guidelines of Major Projects Authority in its future projects. Reference List Briner, W., Geddes, M. and Hastings, C., 1990. Project leadership. Britain: Gower. Burke, R., 2013. Project management: planning and control techniques. Project Management, 5(1), pp. 81-99. Hendy, J., 2005. Challenges to implementing the national programme for information technology (NPfIT): a qualitative study. Bio-Medical Journal, 331(7512), pp. 331-336. House of Commons, 2012. Great Britain Parliament Select Committee on Public Accounts. Assurance for major projects fourteenth report of the Select Committee on Public Accounts. [online] Available at: [Accessed 22 July 2014]. House of Commons, 2013. The dismantled National Programme for IT in the NHS. [pdf] Committee of Public Accounts. Available at: [Accessed 22 July 2014]. Maughan, A., 2010. Six reasons why the NHS National Programme for IT failed. [online] Available at: [Accessed 22 July 2014]. McNulty, T. and Ferlie, E., 2002. Re-engineering health care: The complexities of organisational transformation. Oxford: Oxford University Press. Merchant, K. A. and Stede, V. D., 2012. Management Control Systems. London: Prentice Hall. Meredith, J. R. and Mantel, S. J. 2008. Project Management: A Managerial Approach. London: John Wiley & Sons. National Audit Office Report, 2006. The National Programme for IT in the NHS. [online] Available at: [Accessed 22 July 2014]. NHS, 2014. Top Reasons for Project Failure. [pdf] NHS. Available at: [Accessed 22 July 2014]. Bibliography Atkinson, R., 1999. Project management: cost, time and quality, two best guesses and a phenomenon, it’s time to accept other success criteria. International journal of project management, 17(6), pp. 337-342. Brandon, D. M., 1998. Implementing earned value easily and effectively. Project Management Journal, 29, pp. 11-18. Christensen, D. S., 1998. The costs and benefits of the earned value management process. Journal of Parametrics, 18(2), pp. 1-16. Cleland, D. I. and Ireland, L. R., 1999. Project management: strategic design and implementation (Vol. 4). New York: McGraw-Hill. Fleming, Q. W. and Koppelman, J. M., 2002. Earned value management. Cost Engineering, 44(9), pp. 32-36. Godfrey, P. C., Merrill, C. B. and Hansen, J. M., 2009. The relationship between corporate social responsibility and shareholder value: An empirical test of the risk management hypothesis. Strategic Management Journal, 30(4), pp. 425-445. Kim, E., Wells Jr, W. G. and Duffey, M. R., 2003. A model for effective implementation of Earned Value Management methodology. International Journal of Project Management, 21(5), pp. 375-382. Read More