Project Management for General Motors - Essay Example

of the Project The chosen project is developing a huge office complex with a full floor dedicated to corporate entertainment. There is anew area for General Motors, and it will give the company an entry into the profitable corporate entertainment area. The floor dedicated to corporate entertainment includes indoor sporting facilities like bowling, pool, gymnasium and more. The initial investment is estimated as $18 million, time to break-even is 7 years. The revenue is estimated to be high: $30 million in year 2012. Problem/Result Statement There are a lot of successful companies that look for appropriate lodgment to rent. So building of new huge office complex with modern design, complete technological filling, spacious conference halls and comfortable underground parking is safe strategy. Contemporary business produces great stress, so facilities to reduce this stress are required. It would be very functional for leasers to have indoor sporting facilities in the same building they work. This saves their time and provides great opportunity to increase quality of their work. It also provides good choice for the place of various corporate parties. It is estimated that investment in the project are $18 million. They are distributed in the following way: Construction - $8 million Design and decoration - $5 million Furniture and equipment - $3.5 million Advertisement - $1.5 million The time to break-even is 7 years. The revenue is estimated to be $30 million in 8th year of the project. Mission Justification Developing a huge modern office complex with entertainment facilities allows General Motors to enter new market. General Motors is new in the office leasing market, but the originality of the idea may give company profit. One portion of the revenue is supposed to receive from office rooms leasing. It is supposed that small offices will give 35% of the revenue, medium offices will give 40%, and big offices will give 25% of the revenue from the office rooms leasing. The sporting and entertainment complex is supposed to be a source of another portion of the revenue. It is assumed that disco halls will give 10% of the revenue, bars will give 20%, playing machines will give 15%, billiard will give 10%, bowling will give 10%, pool will give 15%, gymnasium will give 20%, shooting gallery will give 5%, and ping-pong hall will give 5% of the revenue. High-Level Scope The project is planned to build 40-floors office complex with various office rooms and 10-floors underground parking. Offices for small companies will be situated at the lower floors: there should be from 1 to 3 rooms per office. Offices for medium companies will be situated at the medium floors and have from 4 to 6 rooms per office. Offices for big companies will be situated at the higher floors and have more than 7 rooms per office. Some great companies may rent the entire floor. A conference hall and a rest room should be also situated at every floor. There should be dining hall, supermarket, hairdressing saloon, dentist and other services at the ground floor. They should work to 10 pm, so that people could use them after work. Corporate entertainment floor is situated at the 40th floor of the office complex. It includes various indoor sporting and entertainment facilities such as disco halls, bars, playing machines, billiard, bowling, pool, gymnasium, shooting gallery and ping-pong hall. Measuring Success of the Project Useful project success measures are often hard to define. Many of the potential measures such as revenue and cost savings are beyond the direct control of the project team and will not be measurable until long after the project is finished. When this is the case, the project manager must determine what it can influence. (Duncan, 2004) Duncan suggests using the following checklist to help ensure that project measures are good measures. They should be: Complete-anything unmeasured is likely to be compromised. Relevant-variances clearly indicate a need for corrective action. Valid-measuring what you intended to measure. Easy to understand-so that people will accept them. Economical to obtain-know the value of the information. Timely-in comparison to the result measured. (Duncan, 2004) Naughton (2004) states that project metrics have to address the needs of three audiences: Executives charged with project benefits realization Executives charged with project portfolio oversight Project managers responsible for the successful completion of the project Historically the measure of the success of a project has focused on the project outputs of time, cost and quality, referred to as the 'iron triangle'. (Gray and Larson, 2000) So the most obvious measures of success of the project are: If the office complex is built in time If the project fits budget If the office and entertainment complex provides believed quality However, whereas the project may be measured as being a success if its outputs meet these three criteria, it still may not be a true success if the planned business outcomes from the project are not obtained or measured. As the project moves through its natural lifecycle, the project manager needs to have established and deploy performance-reporting metrics to monitor and control the project's outcome. To determine the original baseline project plan, the project manager will need to measure and monitor the project's scope, time, cost, quality, risks and procurement plans. Frequently used performance measurement metrics are: variance analysis; trend analysis and earned value analysis. (Naughton, 2004) Variance analysis involves comparing actual project results to planned or expected results. Cost and schedule variances are the most frequently analyzed, but variances from plan in the areas of scope, resource, quality, and risk are often equal or greater importance. Trend analysis involves examining project results over time to determine if performance is improving or deteriorating. Earned value analysis in its various forms is the most powerful method of performance measurement. It integrates scope, cost (or resource) and schedule measures to help the project management team assess project performance. Earned value (EV) involves calculating three key values for each activity. Two Best Practices in Project Management Project managers must focus on three dimensions of project success: completing project deliverables on time, within budget, and to a level of quality that is acceptable to sponsors and stakeholders. The project manager must keep the team's attention focused on achieving these broad goals. (Greer, 1999) The chosen two best practices in project management are Planning and analysis and Setting up milestones. Planning and Analysis The single most important activity that project managers engage in is planning -- detailed, systematic, team-involved plans are the only foundation for project success. And when real-world events conspire to change the plan, project managers must make a new one to reflect the changes. So planning must be a way of life for project managers. Project success is correlated with thorough analyses of the need for project deliverables. Our research has shown that when a project results in deliverables that are designed to meet a thoroughly documented need, then there is a greater likelihood of project success. So managers should insist that there is a documented business need for the project before they agree to consume organizational resources in completing it. Setting up Milestones Because projects are finite endeavors with limited time, money, and other resources available, they must be kept moving toward completion. Since most team members have lots of other priorities, it's up to the project manager to keep their attention on project deliverables and deadlines. Regular status checks, meetings, and reminders are essential. Successful projects use a time-tested, proven project life cycle. We know what works. Models such as the standard ISD model and others described in this text can help ensure that professional standards and best practices are built into our project plans. Not only do these models typically support quality, they help to minimize rework. So when time or budget pressures seem to encourage taking short cuts, it's up to the project manager to identify and defend the best project life cycle for the job. Three Key Learning Points Planning is important The primary purpose of planning is to establish a set of directions in sufficient detail to tell the project team exactly what must be done, when it must be done, and what resources to use in order to successfully produce the deliverables of the project. The plan is an estimate and so its outcomes are uncertain. So the plan must allow for risk and be flexible. The plan describes how the project will be monitored and controlled. It is a kind of map through the project, but it is not 'etched in stone.' (Gray and Larson, 2000) It is an iterative process, with revisions throughout the plan as necessary. It is constructed with inputs from all project stakeholders. Duties of the Project Manager The project manager is given responsibility for planning, implementing and completing the project, but little authority for marshaling the necessary resources. The project manager: Prepares a preliminary budget and schedule Helps select people to serve on the project team Becomes familiar with client Secures project facilities Secures project resources Begins work on administrative and other project details Process for Project Selecting There must be a process for selecting the most promising project. Various models can be used to aid the decision-maker in selecting projects. The model used to select among project alternatives should be able to: reflect the manager's and organizations objectives and constraints of risk; deal with multiple time frames; simulate various expected and unexpected situations, both internal and external; optimize the decision; provide valid results within range of conditions the organization might experience; adapt to changes in the organization or environment; work conveniently with low execution time; be easy to use and understand; use readily available data and personnel; easily simulate expected outcomes; have a low cost for data gathering and modeling relative to the project cost; gather and store information in a computerized database; manipulate the data in the model as easily as a spreadsheet. (Gray and Larson, 2000) References Duncan, W. R. (2004). Defining and Measuring Project Success. Retrieved November 20, 2005, from Project Management Partners Web site: http://www.pmpartners.com/resources/defmeas_success.html Gray, C. and Larson, E.W. (2000). Project Management. Boston: McGraw Hill, 2000 Greer, M. (1999). Handbook of Human Performance Technology. San Francisco: Jossey-Bass Naughton, E. (2004). Measuring for project success. Retrieved November 20, 2005, from Mediateam Web site: http://www.techcentral.ie/articles/xml_techcentral_april01/corporate_itx/systems_management/measuring_for_project_success/view Read More