Benefit of Employing an Independent Project Manager - Coursework Example

Benefit of employing an  independent project manager By [Student’s Name] [Code + Course Name] [Name of Tutor] [Name of University] [City, State] [Date of Submission] Introduction Project management is both art and science. It is a complex task which requires balance in terms of resources. While not handled carefully, projects can backfire or fail to meet their objectives. The key factors, which determine the project's success include; the experience and skills of project managers, time management, human resource management and financial management. From simple projects to major and complex ones, key principles must be followed. According to Gallup (2012), large projects, especially those in the IT sectors, have a poor record. Managing projects is a stressful affair and project managers should be fully prepared psychologically. In UK, IT projects have become a common trend due to the need by organizations to automate their processes. Common projects are implementation of Enterprise Resource Planning (ERP) systems. Due to the complexity of such projects from the initiation stage to change over, there is a need to engage experienced professional project managers/ consultants to handle the projects. The basis of this report is to provide our clients with valid reasons why there is a need to engage an independent contractor to carry out project assignments. Benefits to hiring independent contractors According to Fishman (2011), working with a consultant can save a bundle. An independent contractor is a professional who is engaged by a firm for a particular period during the lifetime of a project. This is a person who has in depth knowledge of the industry for projects he is engaged in. Independent consultants come along with specialized knowledge. This is because independent consultants remain consistent in their professional life managing projects. When independent consultants are hired, a company saves a considerable amount of money, which regular employees could have incurred. These include social security, medical insurance and employee compensation. This is a flexible scheme since IC’s are only engaged during the life time of a project. In case of full time employees, this could be an expensive venture due to terminal dues and legal implications which might arise. Independent contractors are not partial to any decisions affecting the organization. They are independent minded in all general aspects of project management and are not easily swayed by decisions of policy makers in the organization since they are evaluated through agreed targets. Disadvantages of hiring independent consultants Hiring IC’s is at times tricky due to lack of continuity and control over the Consultants. This is only pegged on written agreements. If these agreements are flawed, the client ends up with un-fulfilled projects. Independent consultants may also have exclusive rights to copyrighted materials which deny client permission to make any adjustments in future. This is common in software projects where code details are retained by the developers. Procurement of Independent Consultants Project procurement management is a critical factor to the success of a project. Procurement entails identification of the resources required in any given project and their acquisition. IT projects in the UK are very critical in all economic sectors. Due diligence should be taken when procuring services of independent consultants. Procurement should be done in accordance with the law at all times. In conducting procurement, it's advisable to use the processes spelt out in the PMBOK Guide. The process of procuring an independent project manager should start by raising a Request For Proposal (RFP). The RFP response from interested bidders will act as a guide for pricing. This should be followed by short listing of the best bidders using a preset criteria which should be evaluated by a panel of experts in the domain. Once a suitable service provider is identified, there should be procurement negotiation. The best candidate is invited to resolve any differences or to address any differing thoughts. At this stage, a contract is drawn between the two parties when an agreement has been reached. . Guidelines on standard forms of contract A standard form contract is an agreement between two consenting parties. The parties spell out the terms and conditions in the contract. The essence of making contractual agreement is to hold accountable or absolve either party in any liability. In case of IT projects, a developer can include bugs in a program which can be catastrophic. In such a scenario, the project manager may commit to being fully liable of such incidence or absolve himself and lay the liability to the developer. Contracts should be drafted and agreed upon before the commencement of projects. They are the only binding factor between the client and the consultant. It is also advisable to include an attorney while drafting the contracts in order to understand the finer details. How to address Contractors causing project delays According to Elaine (2012), lack of proper project planning may cause scope creep in any project. A project manager must ensure that each phase in a project has a benchmark which is measurable. The set time frames and deadlines should not be exceeded. The milestones set, and timelines should always be detailed in Gantt charts and work plans. During contract drafting, the project manager should spell out the terms of terminating a contract with any contractor who cause delays in a project. This can be defined in terms of days or months whereby if the threshold is reached the contract is terminated. Budgetary and cost issues According to Kippenberger (2000), contends that people do not like to plan, they think only of the end results. The Harvard Business Review study analyzed 1,471 IT projects and found that on average projects overrun was 27%. PricewaterCoopers reviewed 10,640 projects for 200 companies and the findings were that only 2.5% of these companies had a 100 % project completion. Tracking project’s budget, is as complicated as tracking project time. If for instance the project is half way and 80% of the budget has been spent, there is a danger of cost overrun. Financial forecast for the project should be carried out during the project inception. The standard form of the contract should detail contingency plans in the project budget. This safeguards against realistic costs creep. Contractors should be made aware of such contingencies and the extent at which the budget cannot be strained further. Studies show that a number of projects suffer overruns or remain incomplete. Clearly defined contracts should indicate how the payments should be done when a client terminates the contract due to costs overrun. Managing quality Quality is the measure of how the project is close to meet the requirements and expectations of clients. Project managers should emulate the five tests for quality Alby (1998). The client is the determining factor as far as quality is concerned. The project manager should ensure that contractors meet or exceed customer’s expectation. Contracts should precisely define objectives, requirements and expectations in any given project. IT projects, for example, have major challenges during implementation phases. This is largely due to lack of understanding client requirements when carrying out process mapping. The project manager should take charge and responsibility in any flaws arising from such projects. The contract should detail the minimum tolerable deficiencies in a project. It should also define consequences to the contractor when quality demands are not fulfilled. This should be guided by the best practices in the industry in terms of systems input and output requirements.For example, in a computer application, response time, ease of use, absence of bugs can be termed as quality.Tangible characteristics defining quality must be documented. Any deviations from the quality plan should be addressed and necessary remedial action taken as per the contractual agreement. The contractors must be made aware that quality in any given project is of great importance and hence no compromise to standards will be allowed. Proposal and Justification of a contractual arrangement A contract serves as a legal tool which can be enforced by law when a dispute arises. The following are some of the reasons why a contractual agreement is important: Contractual agreement details the roles of all the parties involved in the contract, i.e. client IC and contractors. It absolves or lay blame to any party in the case of liabilities. It describes how much the client should pay the Independent consultant and other contractors and the frequency in which the payments should be done. Either daily, weekly, monthly, when a certain milestone has been achieved or at the end of the project. It explains who is responsible for any incurred losses or expenses outside the project The contract gives an explanation on how and who is responsible for the provision of materials, tools, equipment and working space Contains statements that contractors have required permits and licenses required by law to undertake the project Indicate how the parties involved in the contract will pay taxes as required by the law Acknowledgment by the contractors to the fact that he or she will not be entitled to any benefits provided to employees Details the period of the engagement i.e. days, weeks, months upto the completion of the project It spells out the circumstances under the contract can be terminated between either party and how compensation should be done in such circumstances A contract will define how the client, IC and contractors will resolve disputes which occur due to project delays, cost overruns and poor quality work delivery. This avoids unnecessary legal battles which might be costly and time consuming. It is also a control measure to avoid project failure. Comparison in standard form contracts for payment of the contractors Standard contract formats are generally the same the following are some of the common sections applicable to all contracts: I. General - contain defined terms and interpretation II. Responsibilities – Details who will perform what III. Time – The starting dates, completion dates and handing over IV. Testing of defects and non- conformities V. Payment – how payments will be carried out VI. Compensation events VII. Title – eg to materials VIII. Risks and insurance IX. Termination – what leads to termination, procedures and payments of dues on termination. Contrasts in standard form contracts for payment of the contractors The major contrast in standard form contracts and the payment contracts is the clauses in which the latter is more elaborate in terms of payments and compensation in case of contract termination. It also focuses more on financial risk control as far as project delivery is concerned. References Alby, Vittorio (1998) Cost Engineering, Vol. 40 Issue 3, p4. Fishman Stephen J.D. Working With Independent Contractors, 7th Edition. Gallup. 2012), http://businessjournal.gallup.com/home.aspx. Kippenberger, T, 2000. "Management’s role in project failure", Antidote, The, Vol. 5 Iss: 4, pp.30 – 33. Stattler, Elaine .2012. Managing People at Work, Issue 366, p6. Read More