London 2012 Olympics Stadium Project Management - Report Example

Executive summary

The London 2012 Olympics Stadium project was necessitated to cater for the sporting needs of the 2012 Olympics. Given a multi-million project, there was the need for the project to be managed in a manner that conforms to universally accepted project management standards. In this evaluation report, the project has been assessed for its management to establish whether or not it was managed well. A desk research method was adopted in the evaluation. This required gaining access to secondary sources on the project. The evaluation touched on four major areas. The first was analyse how the stadium was built, with the second task being on how the building was managed. The third task focused on an analysis of the building and management of the stadium, whereas the last task highlighted on things that could be done better. The evaluation has generally showed that there were some project management lapses that were faced during the construction. Key among these was the issue of overspending, as the project is reported to have been overspent by £200 million. Another weakness is that the relocation of people who were within the range of the land cleared for the project were not resettled in time. These weaknesses notwithstanding, the current estimated price of the stadium and the benefits it has brought to the UK economy and society as a whole justifies the necessity of the project. Coupled with the fact that the project was delivered on time to serve the purpose it was intended for without any significant architectural or construction lapses, it can be concluded that the management of the project was a success.

List of Tables

Table 1: Initial and completion cost of selected Olympic Stadia7

Table 2: SWOT Analysis on the London 2012 Olympic Stadium Project Management10

1.0 Introduction to the London Olympic Stadium building project

National development is a multifaceted concept requiring input of several stakeholders who undertake projects in different sectors of the economy, aimed at bringing growth (Phillips, 2003). Sports is one of the sectors or areas of the national economy that has a lot of potential for developmental growth. It is not surprising that when there are opportunities for countries and cities to host major sporting activities, several interested parties show up to bid (Harrison & Lock, 2004). London placed a bid for the 2012 Summer Olympics and successfully won the nod to host the event. As a result, it was necessary that arrangements will be put in place to bring about the required levels of infrastructure, needed to host the event successfully. One of the major projects that was part of the infrastructural development for the games was the construction of the London 2012 Olympic Stadium. In project management, all project are initiated with specific goals and objectives in mind, based on which an evaluation can be done at the end to know how well the project was executed to meet desired expectations (Dinsmore et al., 2005).This report is a project evaluation designed to determine if the London 2012 Olympic Stadium was managed effectively. By the project evaluation, it should be possible to identify any project management predicaments, successes and lessons that can be acquired for future projects (Cattani, Ferriani, Frederiksen & Florian, 2011).

2.0 London Olympics Stadium project management

Major projects such as the London 2012 Olympic Stadium are mostly managed in phases, including project conception and initiation, project definition and planning, project launch or execution, project performance and control, and project closure (Serra & Kunc, 2014). At the project definition and planning phase, the scope and objectives of the project are clearly defined (Stellman & Greene, 2005). With these objectives, it becomes easier to evaluate the project, using a scheme of how well the objectives were met (Wysocki, 2013). As far as the London 2012 Olympic Stadium is concerned, the following are key objectives that were set by the project team.

• To construct a stadium within walking distance of the Olympic village.
• To construct a stadium with 80,000 seats.
• To construct a stadium that will serve the purpose of a community stadium for athletics, rugby and lower-league football, and having a permanent athletics track.
• To construct an edifice with a training, science and medicine centre

Apart from the initiation and planning stages which constituted the objectives as outlined above, the other stages including execution, monitoring and control, and closure were all managed by following basic project management principles. For example, various project management knowledge were applied in all of these areas including integration, scope, time, cost, quality, procurement, human resources, communications, risk management, and stakeholder management (Kerzner, 2003).In terms of integration, efforts were made to integrate the engineering and architectural services of different firms, which resulted in tenants for the project, including 2012 Summer Olympics, 2012 Summer Paralympics, 2015 Rugby World Cup, British Athletics since 2015, West Ham United since 2016, and 2017 World Championship in Athletics. In the area of scope, the objectives outlined above served as the scope of the project, with a time duration of three years, spanning from 2008 to 2011. It is important to note that the time was not exceeded. The cost for the project was initially calculated to be £280m but the project ended at a cost of £486m (ITV Report, 2013). A lot of factors were put in place to ensure the quality of the project. For example, the base tier is known to have been made of low-carbon-dioxide concrete, which contains 40% less embodied carbon than conventional concrete(HOK Sports & Cook, 2012). What is more, the stadium was constructed with less than a quarter of the steel used in constructing the previous Olympic Stadium in Beijing (Alejandra,2012).

3.0 Methodology

In order to critically evaluate the project, a desk research involving qualitative secondary method was used. As a secondary research, the collection of data was done from existing works of literature and market reports on the project in question. Secondary data collection was used because it offered access to a wide range of data on the project that could not be easily accessible to the writer if they were collected through primary sources (Snyder&Parth, 2006). Another advantage with the secondary data collection is that it offered the writer the opportunity of gathering data from different perspectives as presented by various authors, commentators and other people with authority in project management. The desk research involved a search strategy, requiring the writer to identify the very best of materials that contained information necessary for the research. Qualitative method was used because of its exploratory nature (Hamilton, 2004). That is, with the qualitative approach, the writer did not have to use any complicated statistical and numerical indices in evaluating the project. Rather, the findings gathered on the project performance were presented in a narrative manner, making it easier to compare and contrast them with project outcomes from other sources

4.0 Analysis of the London Olympics Stadium building project management

In this section of the report, the outcome of the evaluation that was done is presented. Based on a project evaluation guideline provided by Lock (2007), there are two major areas that the analysis are presented. These are economic, and socialanalysis.

4.1 Economic analysis

Economically, the project can be analysed for its management by the use of cost benefit analysis. Through a cost benefit analysis, the value of the project would be compared to its economic value to determine if the London 2012 Olympic Stadium represents value for money (Cleland & Gareis, 2006). In terms of cost, there have been different stages of valuing the cost of the London 2012 Olympic Stadium. Initial pricing that characterised the bidding of the project was given as £280m (ITV Report, 2013). After bidding, the actual construction of the Stadium was valued at £486 million (Young, 2012). By 2016, this value of the construction was said to have shot up to £534 million with adjustment to inflation (Alejandra, 2012). Comparing the initial estimate of £280m to the completion cost of £486m, it would be noted that there was a price increase of 93.4%. This increase from initial cost quotation to completion cost quotation has rather been criticised as being on the high side (William,2013). Such criticisms may be supported on the backdrop that the initial deliverables of the project did not change during the time of construction from 2008 to 2011 (Clark, 2016). The only factor that could possibly cause increase in the cost of the project was inflation. However, the change in inflation in the UK within the period of construction from 2008 to 2011 there was actually a decline in inflation as captured by consumer price index (CPI) from 3.61% to 2.83% (Agyeman, 2012).

Young-Hoon (2005) blamed the situation of increased costing associated with most mega projects on lack of accuracy in price estimation. That is, in project management, failure to get the estimate of projects right by factoring unseen cost is a reason the cost of projects shoot up after their eventual completion. Even though the increase in cost from £280 million to £486 million can well be criticised for the rate of percentage change, there are other analysts who have refused to condemn project managers in charge of the costing of the project. Such defence for the completion cost of the project has been done with comparison to other major international construction of stadia. In the table below, the initial estimated cost of other sports stadia and their completion cost are presented.

Table 1: Initial and completion cost of selected Olympic Stadia

Stadium

Date of completion

Initial cost

Cost at completion

Beijing National Stadium

2008

£215 million

£318million

Stadium Australia

1999

£223 million

£382 million

Athens Olympic Stadium

1982

£157 million

£219million

Centennial Olympic Stadium

1996

£126 million

£154 million

Adopted from: William (2013)

From the table, it would be appreciated that the practice of going overboard with the cost of multimillion projects such as stadiums is not a new phenomenon. Kousholt (2007) has indicated that this situation often arise largely because of the difficulty involved in estimating price changes as well as the prediction of new expenses that are borne in the course of construction.

Even though the inflation in cost of the construction is generally a source of worry, valuators have estimated the current price of the stadium in excess of £701 million (Thorpe,2012). Given that it is barely five years since the completion of the London 2012 Olympic Stadium, this new value could be considered as value for money. This is because the price difference of £215 million in five years is seen by some experts as one of the best value addition for a sports facility of its nature (Young, 2012). From table 1, it would be argued that the current price difference on the London 2012 Olympic equals the initial cost of the Beijing National Stadium. It is important to note however that the current value of the edifice includes renovation works that took place from 2013 to 2016. The renovation that took place changed most aspects of the project as compared to its initial deliverables as presented in the objectives of the project in 2.0 above. For example, the stadium which was originally made with 80,000 seats had as many as 55,000 of these dismantled after the London Olympic Games as a way of making more space for it to serve as a community stadium for athletics, rugby and lower-league football, and having a permanent athletics track (HOK Sports & Cook, 2012). The current value of the project therefore factors the number of events that have successfully been hosted at the site and the resulting proceeds from them.

4.2 Social analysis

The construction of the London 2012 Olympic Stadium, and the purpose that the project served, have their own social impacts, which make it possible to undertake a social analysis. As Khazanchi (2005) suggested, a typical social analysis has to identify any significant social issues and opportunities that can be linked with the project. The social analysis also ought to outline on the extent to which the social issues and opportunities impacted on the project. As far as social opportunities are concerned, it would be noted that the execution of the project was characterised with benefits in terms of employment, trade and private sector advancement (Thorpe, 2012). In an interview with Rushanara Ali who is the MP for Bethnal Green and Bow, she admitted that the construction of the stadium came with the opportunity of job creation. She was however quick to lament that the number of jobs created were fewer than expected as the local people in the Olympic borough of Tower Hamlets continue to face high levels of unemployment (Dugan, 2013). There were also trade opportunities created especially as most aspects of the construction was characterised by the outsourcing of construction materials. The high point of trade opportunities was achieved “through a combination of infrastructure, housing and sporting facilities” (Dugan, 2013).

In just 12 months after the Olympics in 2012 “British government announced that the UK economy has already seen a GBP 9.9 billion trade and investment boost from hosting the Games” (IOC News, 2013). Even though figures may capture the totality of the event, it cannot be denied that such levels of economic growth has direct impact on the social wellbeing of citizens (Niron, 2009). Also, even though not all the figures are directly attributed to the construction of the stadium, it cannot be denied that its construction was an integral part of the whole Games. For example, the 46,000 people who worked on the project are said to represent 10% of people who were previously unemployed (IOC News, 2013). The IOC News further notes that the construction of the stadium enhanced the levels of private sector growth for businesses in different industries. On the other hand, there were some social concerns in terms of the disproportionate disadvantage that the construction brought to residents whose buildings were demolished to make way for the construction. Even though these people were compensated, a study by Clark (2016) claims the social discomfort that was initially caused was irreplaceable. Also as part of the project, there had to be change in government spending policy, which was criticised by sections of the political divide.

5.0 Key project management lessons learnt

There are several lessons learnt from the management of the London 2012 Olympics Stadium project. These lessons could serve as a guide for future projects on what to repeat and what to avoid. The lessons learnt are presented in a form of SWOT analysis, exposing the core strengths, weaknesses, opportunities and threats of the project.

Table 2: SWOT Analysis on the London 2012 Olympic Stadium Project Management

Strengths

Weaknesses

• The project was finished on time
• The project opened London up to the international business community
• Minimal risk as there were fewer litigations and agitations associated with the management of the project

• Exceeding the budget in excess of £200 million
• Late resettlement package for affected houses that were demolished
• Lesser procurement opportunities given to local artisans and contractors

Opportunities

Threats

• Continued expansion to serve future sporting purposes
• Future renovation projects could be sources of employment
• Successes of the project could serve as conceptual framework for future projects

• Lack of continuity with monitoring and support agenda
• Much pressure from hosting West Ham United for a whole season’s games
• Abandoned renovation due to new project start ups

Adopted from Agyeman (2012)

From table 2, it would be noted that there are lessons to be learnt from the management of the project in terms of its strengths, weaknesses, opportunities and threats. The strengths as given in the table represent things that future projects can repeat and improve upon if they want their projects to succeed. The weaknesses are things that future project managers should be seeking to avoid entirely. This is because doing these would cause their projects to fail. The opportunities are lessons as to areas future project managers could be focusing as elements to add to their projects as a way of improving its success. Finally, the threats are risks that ought to be managed ahead of future projects. These should be managed as a way of totally avoiding them in any planned future projects.

6.0 Conclusion

Based on all the analysis of the project given above, it can be concluded that the London Olympics Stadium project was a success. Even though most of the analysis has been done in a qualitative rather than a quantitative manner, there is still sufficient evidence to suggest that the benefits from the project outweighed its cost or demerits. For example, the project became a means by which individuals, businesses and the nation at large could point to specific economic and social changes that represented an improvement in their state of being. Individuals benefited through the direct employment opportunities created. Businesses that were involved in the project also benefited with the numerous construction and procurement opportunities they had. As a country, the edifice that was put up has undoubtedly become a national asset that will continue to be used for various sporting activities. For example, it has been slated that the stadium will be used by West Ham United in its Premier League matches from 2016. The venue is also expected to host the 2017 World Athletics and IPC Athletics World Championships. From a technical perspective too, it would be noted that project management procedures including staff training, instructions communication, regular inspection, quality standards, and quality assurance were all followed and implemented to the later.