New Project Planning Approach At The Bright Company

Case Study

The Bright Company deals with management of various construction projects for clients. However, since there is no specific project management approach and system, the company faces certain problems related to scheduling and cost planning. Hence, the company wants to implement a new project management process with much more systematic approach without the errors and issues that are caused due to manual planning processes. As a part of the plan, the company has expressed desire to use certain project management software for the scheduling and cost planning process along with a suitable plan for risk management approach. For the implementation of this plan, the company has also allocated a certain time period and a budget using which, the new project management process is to be implemented.

In any project, planning is one of the most important phases as in this phase, the entire roadmap and parameters of the project are developed. Hence, significant amount of emphasis is to be given to this particular phase that it is a decisive factor for the success of the project. There are numerous examples where the projects have failed completely due to the lack of suitable project planning. The project planning process includes the following main sub-processes:

Project Scope: Project scope is used to define the overall limit or boundary of the project.  In this process, the project opportunities and limitations are identified to determine the exact boundary within which the project has to be kept.

Project Objectives and Deliverables: Project objectives are determined to identify the reasons behind the execution of the project. Deliverables are those, which must be completed and delivered during the course of the entire project.

Project Schedule: Project schedule is developed in order to estimate the overall time period required to complete the project.

Project Budget: Project budget is the estimation of the total expenses required for the project.

It is hereby seen that there are a number of processes done within the project planning process. These processes require considerable amount of time and hence, resources are also spent. Now, considering costs associated with the project planning process, there are two major categories:

Human Resource Cost: Generally, during a project planning process, there are a number of stakeholders involved in addition to the project manager. Some of the involved stakeholders include finance manager, technical expert, IT supervisor and others. During the project planning process, their wages are to be paid along with accommodations for the external stakeholders.

Other Resource Cost: In addition to human resource cost, there are also various resource related costs. If the project planning is done using project planning software, the costs include the price for purchasing software license, maintenance cost of the computer, price of other essential software like antivirus and others. However, if the planning is done manually, these costs are not required but since manual planning takes more time, more payments are to be made for the wages of the stakeholders.

There are several different approaches to costing that benefit the project planning approaches. The two most common such costing approaches are explained as follows.

Project Overview

Top Down Estimation Technique: This costing technique includes the determination of the total budget at once and then assigning parts of the budget to various different activities and work packages. This estimation technique is effective in a way that the project team knows the total budget that is available for the project and they have to complete the project within that particular budget only. However, one major problem is that the budget is limited and cannot be increased at any time. The problem arises when there are significant changes in the market in the prices of the resources and unforeseen incidents that cost a lot of money. Since, the budget cannot be further extended, the next work packages in the project face financial problems as a significant amount of the budget allocated to them has already been spent.

Bottom Up Estimation Technique: This is a much more efficient and effective costing technique that can be used for project planning. In this technique, the costs in each work package is estimated and summed up to determine an overall estimated budget. This costing technique utilizes the work breakdown structure and all the work packages are considered for estimation of the costs. The problem with this technique that although it is almost accurate in nature, there is no true total budget and the determined total amount can vary if changes are made to the estimated costs of each work package.

Both project costing and time scheduling are important parts of project planning. Any project plan is incomplete without costing and time scheduling. The project costing is done in order to determine the overall budget required for the project. As discussed under the previous header, project costing has a number of different techniques that can be used for the project. Project time scheduling may be done manually but it consumes more time and contains a lot of errors and problems. There are project management software available like Microsoft Project using which, error free and effective project schedule can be developed. Project schedule can also be utilized for the development of project costing if bottom up estimation technique is being utilized.

Another major aspect in project planning is the identification and management of the risks that are associated with the project. While identification of the risks is mainly straightforward, there are various approaches to the risk management process that are to be applied mainly based on the nature and type of the risks. Some of the approaches are as follows.

Accept: A risk is accepted when the organization sees that the mitigation of the risk can be done internally without hampering the overall progress of the project. Generally, there are some risks that may have some significant impact on the project but can only arise due to internal problems and also can be solved internally without actually affecting the project schedule. These types of risks are to be accepted by the organization and suitable measures are to be taken to solve these risks with the use of minimal resources.

Assignment Questions

Avoid: There are some risks that have massive impact on the project and once it occurs, the impacts cannot be undone. For example, let there be a construction project in which, there is a risk of lives of the construction workers working high up the building structure. If proper measures are not taken, there may be a situation when there is an accident and one or more workers lose their lives. Thus, once the accident occurs, the impact on the lives of the workers cannot be undone. Thus it is required to identify these types of risks early and precautionary measures are taken so that these types of risk events do not occur at any point of time.

Mitigate: This is another risk management approach that mainly involves mitigate the risk once it occurs. This technique is mainly applicable on the risks that cannot be managed earlier and is inevitable to occur at any point of time. However, these risks are not like the ones mentioned in the previous header and can be mitigated once they occur. Again, if these risks are allowed to cause impact on the major, there might significant negative impact on the project. Hence, these risks must be identified and anticipated and once these risks occur, suitable mitigation plan can be utilized to prevent the negative impacts of the risks.

Transfer: This risk management approach is mainly applicable for external risks or those risks that cannot be mitigated by the organization due to lack of scope or expertise. Hence, in these cases, these risks are transferred to some other party to solve. However, these risks may not always be external but can be transferred from one department to another within the project. For instance, if the finance department in a project faces a technical risk, the risk can be transferred to the technical department who will be able to solve the risk appropriately.

These are some of the common risk management approaches that are commonly utilized in the projects. However, for applying the risk management approach, it is also important to identify the risks at the right time during the course of the project. For this purpose, a risk register can be developed in which, the risks are identified including their impact on project and their chances of occurrence in the project. Accordingly, the risk management approach is determined and suitable mitigation plan is developed.

The proposed timeline within the provided time limits is provided in the following table.

Task Name	Duration	Start	Finish	Predecessors
Implementation of the New Project Planning Approach	80 days	Mon 04-02-19	Fri 24-05-19
Analysis of Cost Planning	20 days	Mon 04-02-19	Fri 01-03-19
Detailed analysis of the effectiveness of project planning	5 days	Mon 04-03-19	Fri 08-03-19	1
Improvement of project planning processes	15 days	Mon 11-03-19	Fri 29-03-19	2
Detailed description of the project planning metrics	5 days	Mon 01-04-19	Fri 05-04-19	3
Selection of project planning software solution	20 days	Mon 08-04-19	Fri 03-05-19	4
Proposal of project planning changes	10 days	Mon 06-05-19	Fri 17-05-19	5
Meetings with suppliers	1 day	Mon 20-05-19	Mon 20-05-19	6
Discussion of report with Managing Director	1 day	Tue 21-05-19	Tue 21-05-19	7
Writing-up of final report	2 days	Wed 22-05-19	Thu 23-05-19	8
Presentation of final report	1 day	Fri 24-05-19	Fri 24-05-19	9
Presentation Completion	0 days	Fri 24-05-19	Fri 24-05-19	10

In the above table, the duration has been created with the help of a work breakdown structure of the project. In this structure, the work packages have been arranged sequentially with predecessor links among them. Finally, after setting the start date of the project and the duration of each work package, the final dates are automatically set by the project management software.

In order to create the budget, the following usage values have been developed. These usage values mainly denote the salaries of the involved personnel in the project. These personnel (human resources) are added to the work breakdown structure so that the project management software can automatically calculate the total expenses for the human resources involved in the project.

Resource Name	Type	Material Label	Initials	Group	Max. Units	Std. Rate	Ovt. Rate
SPO	Work		S		100%	£5,250.00/mon	£0.00/hr
C1	Work		C		100%	£1,600.00/day	£0.00/hr
C2	Work		C		100%	£1,600.00/day	£0.00/hr
S1	Work		S		100%	£3,250.00/mon	£0.00/hr
S2	Work		S		100%	£3,250.00/mon	£0.00/hr
Accommodation Cost	Work		A		400%	£150.00/day	£0.00/hr

Accordingly, the budget is estimated as follows.

Task Name	Resource Names	Cost
Implementation of the New Project Planning Approach		£299,137.50
Analysis of Cost Planning	C1, C2, S1, SPO, Accommodation Cost[300%]	£75,500.00
Detailed analysis of the effectiveness of project planning	Accommodation Cost, C1, C2, SPO[200%]	£18,062.50
Improvement of project planning processes	Accommodation Cost, C1, C2, SPO[200%]	£58,125.00
Detailed description of the project planning metrics	Accommodation Cost[400%], C1, C2, S1, S2, SPO	£19,687.50
Selection of project planning software solution	Accommodation Cost[200%], C1, C2, SPO	£72,250.00
Proposal of project planning changes	Accommodation Cost[400%], C1, C2, S1, S2, SPO	£39,375.00
Meetings with suppliers	Accommodation Cost[400%], C1, C2, S1, S2, SPO	£4,387.50
Discussion of report with Managing Director	Accommodation Cost[200%], C1, C2, SPO	£3,612.50
Writing-up of final report	Accommodation Cost[400%], C1, C2, S1, S2, SPO	£7,875.00
Presentation of final report	SPO	£262.50
Presentation Completion		£0.00

In addition to these costs, there are some additional fixed costs:

PC Hardware: £35,000

Project Planning Software: £27,000

Miscellaneous Fixed Costs: £25,000

Travel and Meeting Costs: £25,000 [Estimated]

Hence, the total estimated budget is £ (299,150+27,000+25,000+25,000) i.e. £306,850.

However, the total budget provided was £850,000. Hence, the remaining budget can be implemented for rolling out new project management teams that will cost £ (200*1000) i.e. £200,000.

Finally, considering all the expenses, the total estimated budget for the project is £506,850.

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