The Failure of FiReControl Project - Case Study Example

The Failure of FiReControl Project Executive Summary The failure of the FiReControl Project was a critical problemthat alarmed the Department for Communities and Local Government to carry out future projects seriously. This government IT project commenced in 2004 and was bound to be completed by 2009. However, FiReControl was terminated in December 2010 when it was found that the project would not have been delivered in the acceptable timeframe. Additionally, the project was delayed and lead to cost overruns. The essay discusses the various issues in which the Department failed in project governance and coordination of the stakeholders from start until the termination of the project (NAO 2011 par. 3). In the initiation stage, the Department for Communities and Local Government underestimated the complexity of the IT project and thus paid little attention to the project activities. Other flaws made by the department include unrealistic estimate of costs, ineffective governance of employees, inconsistent leadership and management, and more. The FiReControl Project was not supported by the Fire and Rescue Services, which was the most essential stakeholder to approve the project (NAO 2011 par. 3). The Department also entered into a poorly designed contract that delayed the resolution of key issues that emanated during project termination. Using the project management fields of knowledge, one can recommend the Department to use tools and techniques such as PERT, CPM and PMIS in ensuring project milestones are delivered on the scheduled time. Additionally, the Department can manage the stakeholders such as the financiers, consultants, contractors and consumers using the project management tools and techniques that focus on the technical and managerial aspects of executing IT projects (Little 2011, p. 37). Introduction The Department for Communities and Local Government should learn lessons from the particular mistakes they made on the FiReControl Project. Based on the theories of project and management, one can critically evaluate the particular errors made by the Department in governance and management of stakeholders, which eventually led to project termination (NAO 2011 par. 4). The theory of project requires the breakdown of the project into tasks, which are then then executed to achieve the project objectives. The Department underestimated the complexity of designing an IT system and thought that the project would have involved the integration of the customised components that were already in place. However, in order to achieve the project objectives the components required substantial integration. Consequently, the Department paid little attention to the management and coordination of the project activities. Recommendations for the future projects would involve consideration of the project management theory and application of particular techniques such as the CPM, PERT, WBS and PMIS in governance of operations and human resources (Kwak and Anbari 2009, p. 440). Background of FiReControl Project The FiReControl project involved the replacement of 46 local control rooms with a complete network of nine regional control centres across England. These regional control centres were to be controlled by a national computer system to mobilise the fire fighting equipment, handle calls and manage incidents. This project was aimed at improving the efficiency, technology and resilience of the English Fire and Rescue Service. The FiReControl project started in 2004 and was planned to be completed in 2009. The Department for Communities and Local Government contracted the Cassidian, originally known as European Air and Defence Systems (EADS) to design, develop and install effective computer systems that allows communications from the regions to the national headquarters. However, the FiReControl project was delayed and consumed much time and costs that escalated over its lifetime (NAO 2011 par. 3). In December 2010, the Department terminated the contract and cancelled the project since it could not have delivered the expected project deliverable within the expected time frame. The Department approximated that it had spent £245 million when the project was cancelled. If the project was completed it would have spent £635 million, which is more than five times the originally estimated cost of £ 120 million. Therefore, they key aim of establishing purpose-built regional control centres for business change failed. These control centres are empty even today and are costly to maintain. Currently, the Department is trying to minimise the costs of the buildings in the future for the remaining 24 years before the 35 years lease expires. Project Governance As stated earlier, the Department underestimated the complexity of the IT systems built to satisfy the needs of Fire and Rescue Services. As a result, the paid little attention to the integration of the customised local control rooms because they thought that it would be straight forward. Based on the theory of project, the Department seemed to have assumed the project lifecycle. In order to capture each and every activity of a project, it is advisable that you breakdown the project lifecycle into phases, then into activities and then into tasks. In this way, as a project manager, you can easily evaluate the complexity, time and money consumed by the entire project starting from the fundamental tasks of the project (Meredith and Mantel 2012, p. 56). The Department paid little or no attention to the actual activities and tasks involved in integrating the local control rooms and change them into purpose-built regional control centres. Another aspect of governance of the FiReControl is the failure of planning the project costs and expected savings. The theory of project management requires the establishment of four phases of the project lifecycle, which include the initiation, planning, execution and closure. The Department seems to have failed in developing the financial plan and cost plans in the project planning phase since they made unrealistic estimates of project costs and the expected savings from the local control rooms. The broad-brush approach to the total project costs led to estimates of £120 million and expected local savings of £86million. However, in 2007, the comprehensive assessment revealed that the project cost and savings was £340 million. There is a huge disparity between the two estimates because the Department’s cost plans were not accurate or didn’t account for all the project expenses incurred during execution. The Department had flaws in management and organization of human resources. Most organizations today end up losing control of the project since they do not follow the project plans. This results from poor project management skills particularly in decision making and forecasting the future. The Department for Communities and Local Government seem to have inadequate skills to manage projects since if failed to solve the employees’ demand in the first five years. The management of the human resources in the first five years was complex and ineffective in that it resulted to creation of unclear lines of duties, which slowed down the decision-making process. In 2007, the Department created additional forms of governance in response to the emerging issues without clear lines of accountability, assurance and responsibility. As a result, the achievement of the key project deliverables was undermined significantly (Schwindt and Zimmermann 2014, p. 78). The high turnover of employees in the Department resulted from the inconsistent leadership and management during the life of the projects. It seems that the Department had an ineffective human resource management team that perpetrated the high rate of employee turnover. The theory and principles of project management requires the managers to develop viable human resource plan that includes the recruitment, placement and compensation of employees during the project lifecycle (Burke 2010, p. 233). However, the Department frequently changed the managers and poorly managed the consultants that were involved in the execution of the project. Many organizations today are experiencing problems in linking the project to specific organization goals and the FiReControl project is also a victim of such problems (Rad 2003, p. 67). Management of Stakeholders It is essential in project management to have detailed brief of the client’s requirements. Additionally, the client should settle the issues arising from the stakeholders before commencing a project. FiReControl was not supported by many local Fire and Rescue Authorities. In addition, the Fire and Rescue Services criticized the project because it lacked clarity on how the nine purpose-built regional control centres would have increased efficiency. As a result, there was mistrust and misunderstanding between the Department and the consumers. The FiReControl, therefore, registered a failure in the sense that the implementers were not in consent with the most essential supporters of the project. Usually, the project managers contract the suppliers immediately after completing the project plan. The manager should identify the role of the supplier prior to the execution phase. Then, he/she should enter a formal contract with the contractor. The contract should contain the terms and conditions that govern the relationship between the two contracting parties (Nicholas and Steyn 2008, p. 123). The Department for Communities and Local Government seems to have adopted a poor contract design that eventually brought problems during termination. The Department had many problems in resolving the issues that accompanied the project termination in December 2010. In a project management perspective, this seems that the relationship between the Department (client) and EADS (contractor) was poor and led to financial losses. As indicated earlier, the Department poorly managed the project managers that were involved in the execution of the FiReControl Project. The case study shows that only two project managers worked throughout the project duration. The Department had obtained one of the project managers from a consultancy on a contract. This illustrates that the relationship between them and the consultants was terminated after some period. During the project period, the team members were insufficient in the top and low management positions. Also, the Department had not established a framework through which the consultants’ performance was assessed. Thus, the organization had inadequate plans for human resources assessments; instead they focused on the local savings from the project (Morris and Pinto 2010, p.111). Conclusions Based on the discussions, it can be concluded that the Department for Communities and Local Government did not apply most of the project management theories and principles in executing the FiReControl project. The failure of the project, therefore, emanates from the ineffective governance methods and management of the key stakeholders (Turner 2010, p. 4). The fundamental aspect in project management involves breaking down the project lifecycle into four phases, which include the initiation, planning, execution and closure. Then, in each project phase, you should identify the various activities involved. These activities should further be broken into tasks for which time, cost and human resources are assigned. Using this approach, project managers can capture the specific tasks that are critical and requires substantial finances (Callahan, Stetz and Brooks 2011, p. 45). In the FiReControl project, for example, the Department’s project managers failed in analysing the project initiation stage appropriately. They failed to negotiate with Fire and Rescue Service and the local Fire and Rescue Authorities concerning the viability of the establishment of purpose-built regional control centres rather than having the local control rooms spread across Europe. In the planning stage, they also failed in estimating the actual project costs and instead underestimated the costs that led to cost overruns. If the management had critically analysed the tasks and activities to be executed by the contractor, then, they would have predicted more accurate costs in the future (Murch 2004, p. 369). The Department also had unrealistic project duration that misled the project manager leading to cost overruns. On another different note, the Department also agreed a poor and inadequate contract with European Air and Defence Systems (EADS) that was its IT supplier. The terms and conditions stipulated in the contract impeded the harmonization of issues that accompanied the termination of the contract in 2010 (NAO 2011 par. 4). The project management field of knowledge provides clear guidelines on how to carry out the tendering process and selecting contractors. Recommendations The Department for Communities should apply the project management tools and techniques to execute its projects and avoid the mistakes made in the FiReControl project. As indicated earlier, the Work Breakdown Structure (WBS) is very important in breaking the entire project into activities and tasks. The creation of smaller units would enable the project managers to assign costs, prepare time schedules and plan the type of resources to be used in a project. The WBS can as aid in budget planning whereby you identify the number of hours required to execute a certain task, the cost of equipment needed and the possible overhead costs. Using this approach, the project managers can avoid underestimating and overestimating the project costs (Harrison 2004, p. 23). Another effective way of managing projects is by use of the critical path method (CPM). The CPM is adopted because the Gantt charts are ineffective in time management especially when the projects are complex and lengthy. The CPM is an effective time management tool because it accounts for the interdependency of tasks and activities. The network analysis provides more logical sequence and timings of the activities. Most organisations prefer the CPM because it provides visual communication on how the activities are carried out and thus enabling time management. Additionally, the CPM helps the identification of the critical events and activities and the critical path that shows the shortest time that a project can take (Kerzner 2013, p. 45). Another method of estimating the time taken to complete a project is by using the Project Evaluation and Review Technique (PERT). PERT considers the uncertainties in predicting the durations of activities and tasks. Using this technique, the project manager can estimate the best, the worst and most probable duration of each activity of the project. The Department can use this technique in ensuring the identification of the most probable time at which the project activities will take (Kerzner 2013, p. 46). The Department can also use the Project Management Information System (PMIS) that centralises the project data for the team members. The PMIS is a software program that integrates the project information in a centralized database and contains rules of access for the project team. PMIS is essential in governance because it defines the project cost, scope, time and quality. Then, it defines the team members, the organizational structure and the roles of each member. Organizations can manage agreements such as contracts and approvals and thus preventing conflicts among the stakeholders (Williams 2008, p. 67). References List Burke R 2010, Introduction to project management, Ringwood, Burke. Callahan K R, Stetz G S & Brooks L M 2011, Project Management Accounting Budgeting, Tracking, and Reporting Costs and Profitability, Hoboken, John Wiley & Sons. Harrison F L & Lock D 2004, Advanced project management: a structured approach, Aldershot, England, Gower. Kerzner H 2013, Project management: a systems approach to planning, scheduling, and controlling, Hoboken, New Jersey, John Wiley & Sons, Inc. Kwak Y H and Anbari F T 2009, Analyzing project management research: perspectives from top management journals. International Journal of Project Management, 27 (1), 435-446. Little B 2011, The Principles of successful project management, Human Resource Management International Digest, 19 (7), 36-39. Meredith J R & Mantel S J 2012, Project management: a managerial approach, Hoboken, NJ, Wiley. Morris P & Pinto J K 2010, The Wiley Guide to Project Organization and Project Management Competencies, New York, NY, John Wiley & Sons. Murch R 2004, Project management: best practices for IT professionals, Upper Saddle River, NJ, Prentice Hall PTR. National Audit Office (NAO) 2011, The failure of the FiReControl project, London, National Audit Office. Nicholas J M & Steyn H 2008, Project management for business, engineering, and technology: principles and practice, Amsterdam, Elsevier Butterworth Heinemann. Rad P F & Levin G 2003, Achieving project management success using virtual teams, Boca Raton, Flor, J. Ross. Schwindt C & Zimmermann J 2014, Handbook on project management and scheduling, Oxford: Oxford University Press. Turner J R 2010, Evolution of Project Management Research as Evidenced by Papers published in the International Journal of Project Management, International Journal of Project management, 28(1), 1-6. Williams M 2008, The principles of project management. Collingwood, Vic, Sitepoint. Read More