The Benefits Management for the Perth Arena Project - Case Study Example

THE STRATEGIC PLANNING AND MANAGEMENT OF PERTH ARENA (1/3/2010) Name: Unit Title: Instructor: Date: The Benefits Management Plan for the Perth Arena Project/Program Project management is defined as the synchronized association, direction, and execution of projects or programs portfolio together with the activities and events that are involved in the outcome of the set benefits and strategic significance1. Some of the strategies used are the startups and closing of the program, portfolio management, program governance, and management of benefits. All these procedures are applied and implemented to ensure risk control and for stakeholder communication. Management benefits are normally the primary focus when implementing any program. Focusing on the benefits of the program helps in the management of the costs involved, time, and other resources used1. Focusing on the benefits and continually revisiting the set outcomes is an effective and vital strategy for implementation. The importance of the benefits management plan for the Perth Arena project is to ensure the right designers and constructors are selected. The plan is based on the tender agreement and the design of the building. The benefit management plan explains all the advantages of the new Perth Arena plan and what the community and the stakeholders should expect once the arena is complete2. This is achieved by the client agency and the delivery organization for being responsible for the service delivered by the constructors and the designers who have been awarded the contract. Additionally, the client and delivery agency is further responsible for the long-term proprietorship of the Perth Arena and the services that they will deliver. The following is the benefits management table showing the benefits of the plan to the community. BENEFITS REALISATON PLAN TEMPLATE (Rev B) Description of the Benefit to be Achieved Description of Current Situation/ Performance of the Business Process Target KPI Measure after the Planned Change Triggers or events that will cause the Benefit to be Realized Type of Contribution to the Business Strategic and Corporate Objectives and Outcomes Supported by this Benefit Project Name: The Planning and Management of Perth Arena Project (1/3/2011) A multipurpose indoor entertainment with a landmark that will attract both foreign and local tourists. The current situation does not offer a venue to host entertainment and sports events like the tennis tournament. The central plan of the Perth Arena development is to enable over 12000 individuals seats for sports events and approximately 14000 seats for the concerts events. Hosting of the upcoming Hopman Tennis Cup Tournament. Hosting of famous musicians and artist performance. Hosting of numerous events and sports tournament An operator for commercial benefits A world class sports stadium. The stadium will be able to host a large number of people during any given event. Currently, the stadium in use is subtle. It does not have enough space to host major events like entertainment and sports. The world class sports facility will have state of the art systems to be used to operate the Perth Arena. This will ensure excellent performance of the events on the floor for the audience. The Perth Arena will be able to host major events like the tennis tournament and live entertainment performances to the community. Development of a landmark building in Australia The landmark building will be beneficial to the society. The facility will be used by the public and the community. High-quality corporate seats of around 500 and a bay underground parking facility of over 650 vehicles. The seats available are few and of low quality thus cannot accommodate many audiences. There will be the availability of high standards support rooms for use together with extensive support facilities. There will be an increase in the amount of audience capacity. This will enable a large number of fans to attend any sports or music function. This will increase the revenue generated for the country leading to an improved economy. Teamwork and planning have enabled positive delivery of the services to the community. The Perth Arena will have an advanced retractable roof. The current roofing system is not of the recommended standards. The roof should durable. The roofing system will attract tourists as a landmark in Perth, Australia. The state of the art roofing system will be one of its kinds. This will put Australia in a position to attract more international investments and development. The effective strategic management of finances has ensured adequate budget use in the project plan. The above are the benefits management plan for the Perth Arena program after its completion. The Application of Program Management Process – Governance and Stakeholder Management Project management is the managing, the controlling, and planning of projects, which are usually complex in nature3. Therefore, for effective governance, strategic project management must be applied. Strategic project management involves the application of intuitive skills to be able to work well with the stakeholders. The project management committee in charge must be able to work together with the stakeholders involved and make them understand the benefits of the project. The stakeholders need to know the expectations and the influence of the project to the community4. This will give the stakeholders faith to believe in the project. Therefore, for the Perth Arena, the stakeholders need to be assured that what they are doing is for the good of everyone. Another governance solution is the service delivery. The project must be completed in time as agreed. This will give the stakeholders more trust to the delivery agency. Service delivery as originally agreed increases trust in the stakeholders and those involved in the Perth Arena construction project3. The advantage of good governance is to ensure that there is regular reporting of the arena construction progress. This includes all the details and steps that take place during the development. This reduces any form of risk that can occur during the construction process, thereby ensuring effective planning and management of the project while still under construction5. This includes piloting of the project to the right direction. Further ensuring the management and the experts involved are capable of delivering excellent results. In order to ensure good service delivery, the overseeing committee ought to have a well detailed and outlined plan negotiation with those being awarded the contract. This includes all the terms and conditions that are to be agreed on by all the parties involved. This is to be used for future reference for the evaluation process. This should be carried out during the negotiation process2. The planning and management team need to ensure that the responsibility of the contract is wholly given to the contractor. Thus, a ‘design and construct' contract will function effectively. This agreement will ensure that the contractor will be responsible for all the costs and the design of the Perth Arena project. This strategy will help in reducing the risks that could be faced by the state and the stakeholders. The risk and responsibilities of the project will remain to the contractor involved2. Moreover, this will reduce the cost of construction by a very significant amount. This strategy further removes the state from the risks involved in case the constructor and the designer involved decide to change the design of the project. This will mean that the contractor will be entirely responsible for any further costs that may occur when design changes are executed. The governance problems were also encountered, for instance, those in charge of service delivery during the construction6. There were problems with the stakeholders in charge of the Perth Arena construction. The management, the governance, and the administration are to be blamed. These problems caused many risks to the state and the stakeholders’ at large7. The team overseeing the project was inefficient and irresponsible. This is occurs when the planning and the management team neglect their duties. The team should know that they are responsible for the completion of the Perth Arena project. This includes the assignment of the accountability to the selected contractor. Not doing this will lead to an increase in the cost of construction and further postponement of the completion of the project2. Changing of the agreement later on after the project has already begun posing danger to the parties involved. For instance, if the initial agreement was to assign the constrictor full responsibility, then this should be followed until the Perth Arena project is completed. This is to avoid any further risks that can arise due to change in contract responsibility. For example if the cost of construction is assigned to the contractors, then this must be obeyed to the end. This is to ensure that the team in charge is entirely responsible for the costs and the building design. This can be achieved by signing a ‘construct only’ contract instead of a ‘design and build only' contract2. While carrying out planning and management strategy of the Perth Arena project, the client agency tends to underestimate the costs involved. The underestimation of the design cost is not a good idea. This is because of the potential additional costs that might occur during the progress of the Perth Arena construction project. Therefore, the client agency must be very careful when discussing the total approximate costs involved. This includes the risks involved, the design, the materials used, time, and the manpower. Thus, the client agency representing the Committee and the stakeholders must be realistic and considerate when analyzing the estimation costs offered by the potential contractor4. Identification of the most suitable stakeholders in a given project requires an effective strategic plan. This is usually done based on the needs and the requirements of the project. Strategic techniques and frameworks need to be put in place to ensure that the best stakeholders are on board3. This is to ensure full participation of stakeholders to ensure positive input and excellent results. Some of the stakeholders that played a part in the construction of the Perth Arena project are the Department of Housing and Works, DHW, the WA Sports Centre Trust, the Department of Sport and Recreation, WA Tourism Commission, and Department of Culture and the Arts. The two main ones are the Department of Housing and Works, DHW and the Department of Sport and Recreation, DSR. This is shown by their interest and influence on the construction of the Perth Arena. The two stakeholders’ full participation in the planning and the management of the project was significant3. The Department of Housing and Works was the principal stakeholder. The DHW was responsible for the governance management and planning of the project. The stakeholder was responsible for the overseeing of the construction of the Perth Arena. Unfortunately, the stakeholder was not able to provide an appropriate and recommended structure of governance to use. This led to a problem in the overseeing of the project and decision-making8. The stakeholder did not put in place any effective and strategic plan to follow during the overseeing of the construction project. The best strategy that the stakeholder should do is to assign different types of governance to various stakeholders. This will ensure effective management and implementation of the plan. This is because the stakeholders involved will focus on the assigned responsibility and deliver excellent output. This will ensure a clear accountability. Unfortunately, the DHW did not put this in place, leading to inappropriate governance management. The Department of Housing and Works instead took all the responsibility as both the client agency and the delivery organization. This was accomplished when the DHW assigned itself the responsibility of the client agency of the project. It was responsible for the budget and the planning of the project. This planning could have been made easier by assigning other stakeholders like the WA Sports Centre Trust, the Department of Sport and Recreation, WA Tourism Commission, or the Department of Culture and the Arts. Additionally, the Department of Housing and Works acted as the delivery agency. This means that their responsibilities were to advise the client agency – which is still the same DHW. The DHW task was to advise the client agency on the definition of the project, the contracting, the cost, and the tender requirements. At the same time, the delivery agency takes control of the project, the budget, and the overseeing of the project3. For an effective strategic management of the project, the DHW ought to have a project steering committee, for instance, the DSR. The committee is responsible for overseeing the project construction. The Committee is to provide strategic plans to ensure excellent delivery of the project. The committee mostly includes a group of individual representatives from the client agency and the delivery agency. The committee is required to meet often to ensure that the Perth Arena project is moving in the right direction9. Additionally, an independent review committee is also necessary just to ensure the project in on the right track10. For the stakeholders to be able to be effective, critical strategic elements need to be followed. The Department of Housing and Works was not able to develop these strategic plans, the Strategic Asset Management, SAM, during the arena planning and management project. If the DHW could have followed these requirements, then the Perth Arena project would have been completed on time and at the proposed budget11. The DHW together with the Department of Sports and Recreation did not follow the SAM framework which led to poor management and planning of this project. The two stakeholders did not perform the required project evaluation during the early stages of the project. Most of the critical early stages were neglected or done very fast. This made it hard for the stakeholders to review the project at these early key stages4. For example, some of the SAM strategies that were rushed are the announcement of the project, which was done before the business case was finished. This led to carrying out the early evaluation stages together with the business case building at the same time. This did not provide the best platform and time for adequate evaluation, thus leading to the inadequate delivery of the project services12. Moreover, both the stakeholders were not able to come up with the best definition plan for the project. This is as required by the SAM. The incompletion of the Perth Arena procurement program was also another problem that the two stakeholders did. It was done half way during the tendering project. Finally, all the agencies and the parties should take the Perth Arena project seriously. This is only possible by following the SAM framework in project planning and management. It will improve significantly in strategic planning and management. Furthermore, it will enable timely delivery and completion of projects on time and at an affordable cost. This will ensure that the budget is utilized well. The frameworks of the guidelines are further supported by the DHW, DTF, and the DSR. For the best performance, effective planning and early evaluation of the Perth Arena project or any other future project should be carried out prior to starting the construction of the project. Bibliography Bourne, Lynda, and Derek Walker. Visualising and Mapping Stakeholder Influence, Management Decision. Australia: RMIT University, 2005. Curtin. Building Competitive Advantage – External Focus. Program and Portfolio Management, 2013 Curtin. Building Competitive Advantage – Internal Focus. 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