Understanding Due Diligence Processes For Central Library Renovation Project

Project Development and Optimization

Discuss about the Operation and Maintenance Cost and Availability.

The Central Library Renovation project has needed to undergo through project development and optimization. The project team has been finalizing results of their previous assignments and conducting the sensitivity analysis of the project. Here, various parameters are needed to be sued and the scenarios of sensitivity assessment must be defined. Further, for every scenario financial assessment is done and then the results are examined.

The following report demonstrates the understanding of due diligence processes. This also involves the information necessities of project supporters, sponsors and stakeholders.

The project has already undergone the analysis for decision making. The project on “Central Library” renovation has been on the basis to use construction and technology of project management principle. In this way, the library can be renovated in a more convenient way. Further, the renovation has been allowing the formation of various tasks. This activity has been able to list the changes of successive integration model. Here the deployment of activities has been aligned towards modifications of various developed functional analysis. In this way the decision making has been used to align operational developments of various tasks. The organizations have been highly helpful to consider the magnitude of development models. The inclusive and supportive development has been helpful to form the assimilation of operational developments. Hence various decisions are needed to be carries for project renovation of the library.

The initial condition, for which the decision has been needed to be made, has been the necessity to upgrade computers. It has been vital that if they need to develop communication, data storage management and stock management they need to update the computers. In the same way, they need undertake various decisions like new books that are needed to be introduced. This has also included new furniture for better infrastructures, application of children’s section and the activities of others appliances needed to be added. Here, the decisions have been taken to assure that proper amount of operations are in place. Here, the involvement of function has been aligned to list developments of effective and supportive deployment of operations. Here, the situation of decision making has been the possibility to introduce the children’s section.

To determine whether the inclusion of kid’s section with the library has to be incorporated or not, the team needs to decide the ways to undertake projects. This also includes project feasibility, employment of project management guidelines and considering the guidelines of cost-driven optimization of the project designing. They have also been using various principles of accounting for finding the value of project before the decision is made. The decision towards project has been motivated by the necessities and the available assessment alternatives. This is done before deciding the project life-cycle. As the initials of comparison and feasibility study are done with various other possible and competing projects, the decision gets reached and the project gets executed.  A proposal for the renovation of a central library has been already done and the employment of team decision making guidelines for determining suggested project has been the proper one. This issue is resolved in a collaborative way, employing various counting principles, team guidelines and principles of project management. This problem has been approached through examining various other alternative projects as they have been introducing children’s section at the library, updating furniture and updating the IT/computer system at the library. This has been investigated through financial and accounting concepts.

Due Diligence Processes

For Central Library, sensitivity analysis is undertaken to determine how distinct the values of independent variables has been. This has also indicated the effect of specific dependent variables within any particular set of assumptions. The technique has been utilized under particular boundaries depending on one and more input variables (Alakangas & Rasmussen 2016). The examples of this are the effect that has been changing the rate of interests on the bond prices. The analysis is helpful for Central Library to find out the sustainability of the project that must be changing within various conditions of financial situations, considering the internal parameters of the project. The primary reason of sensitivity analysis has been to deploy accounting and predicting the effect of input parameters of the projects over the resulting indicator (Thi & Mai, 2015).

Current economic downtimes in various projects have negatively and significantly affected material suppliers, subcontractors and different contractors. Various non-payment receivable has been a vital issue at a good time. However, this has been occurring at present periods of recovery and recession. Possessing the proper knowledge of alternatives of various legal remedies has been providing material, subcontractors and contractors with distinct advantages (Too & Weaver, 2014). This has been particularly as the market for material, subcontractors and local contractors have been rising to encompass the overall country. The first step towards the process of due diligence has been finding of the creditworthiness of users. Further, the review of credit due intelligence and creditworthiness of potential customers has not been a good practice (Verbist et al., 2015). However, this has been vital to being a part of a profitable and successful construction project. As the credit due diligence has been a vital factor, there has been no surety that the specific construction project has been successful. The suppliers have been selling to and work many qualified owners and contractors. However, they have been finding themselves in the mid of the troubled projects. This has been the outcome of lack of additional financing to finish. Further, it must be determined what material, subcontractor and contractor have been doing to protect themselves in such cases (Martin et al., 2016). Here, a vital option has been to undertake “legal” due diligence up front simultaneously when the credit decision is made. Further, in the case of non-payments from customers, the legal remedies and rights might be had in the event of above non-payment and beyond the breach of contract action against the customers.

Decision-Making

The availability of those rights has been varying by the nature of the project and has been on project’s type whether it has been private or public and owner’s nature like federal, local or state agency or private agency. Further, there has been the determination of where the contract has been in a tier of overall contractors (Pianosi, Sarrazin & Wagener, 2015). As the part of the analysis, it has been vital to getting various facts related to project as possible at the beginning. Further, it has been vital to consider the availability of third-party rights due to a dependence of circumstances for preserving one’s rights, affirmative action have the form of notice (Johnson, 2014). The filling has been needed at the starting, during and under a restricted period after the work gets completed or shipment of various materials is done. As the deadlines get missed, the rights get waived. The knowledge of the availability of third-party rights has been highly advantageous to make credit determination regarding customer and analysis of the project. To the extent of availability of rights of third-parties, the material and contractors have been deciding to do tasks and sell to otherwise questionable customers who are creditworthy (Sánchez, 2015). Different other kinds of protections are needed to be personal and corporate guarantees along with joint checking agreements and various requirements that are provided by questionable customers as the bond of surety regarding the benefit of Central Library. Here the third-party rights have been a costly tool for suppliers to secure payments on construction projects. Further, it must be reminded that without having done proper due diligence before accepting commencements and projects of the work, the right of third-parties has been waived or relinquished because of suppliers failing to undertake proper actions protecting those external rights (Santos, de Moraes & Nussio, 2017). At the current economically turbulent world, it has been vital to consider the availability of rights of third-parties on any project sooner or later.

In order to identify the stakeholders, a Central library must conduct a stakeholder analysis and determine whether the stakeholders have been engaged before. The library must create a profile of their targeted community by considering the political, economic, technical and social context. Then they must consider how they were going to reach every stakeholder both offline and online. The analysis must involve identification and be defining kinds of stakeholders, mapping the interest and finding the stakeholder engagement strategy to use (Erlacher et al., 2017). The stakeholder analysis helps in identifying the entire picture of who is involved and how. There have been various interests of stakeholders related to project objectives. Further, what stakeholders have been directly affecting outcomes of engagement is needed to be identified.  Next, there has been a need for target community and stakeholders and the context one has been engaged in and how to engage and reach the stakeholders (Lee et al., 2017). This has been particularly useful as to objective has been reaching the targeted network of stakeholders and invite them to participate in engagements.

Sensitivity Analysis

Here, the primary questions have been answered to every stakeholder. Then they must determine the interest how they get affected and how much. Next, the level of influence over project outcomes and view of stakeholders are to be found out. Then the likely level of support for the project objectives and what has been needed is to be determined. Next, the risk to engage and not engage them and the ways to lower the limitations of engagement are needed to be identified (Volk, Stengel & Schultmann, 2014). Then use of interest, effect, influence, benefits and risks of every stakeholder is to e determined to management year engagement.

In order to create the profile of the targeted community, the community profiling has been providing contexts of stakeholder’s analysis. This has been providing a demographic snapshot of the geographic area of the projects. This can profile the community through census data. Moreover, they must engage the stakeholders and it has been vital to consider political, economic, technical and social contexts (Joslin & Müller, 2015). Next, Central Library must consider the stakeholder needs and issues. They must be aware that every engagement has been through channels and are in control. The stakeholders must have their individual channels and that must engage in the case of the engagement activity independently. This has been paying to listen actively that is said, during and after the engagement project.

Configuration of specialist reporting and monitoring tools must be helpful to monitor and report on large amount of data at the online that is available. The usage of proper tools for monitoring and analyzing big data is helpful get greater appreciation of the regional and local needs and issues. The central library would gain more insight views regarding the tailoring of services, programs and communications for the specific stakeholder and community groups. Further, they must consider how they are going o reach stakeholders offline and online. Moreover, they must consider offline and online professional networks enabling to find others with common interests and can share information and ideas. Thus mapping the relationships and contents online is helpful to identify creative means to reach stakeholders and earn referral and trust. This is also helpful to understand political contexts, potential risks and social influences.

It must be reminded that one of the primary challenges of the sponsors has been to assure that the project manages well and project organization including project manager has been performing as needed. Central Library must focus predominantly on the questions of the sponsors to be directed at the project manager (Mai, 2016). Besides, as the part of the initiation phase, the questions identified must be directed to other stakeholders also, particularly at customers, members of senior management and those who have been putting the business case together. Across the subsequent stages of the project the sponsors must focus on showing support and assure things that are done right, through testing the performance thresholds and delivering insights assuring that the project is controlled, performed and planned in line along with expectations. As the project closes, the questions must focus on learning from various experiences to move forward. Further, there are extra things that the sponsors require to check with project managers and team members around the project with no particular association with the stage of project life cycle (Schwalbe, 2015).

Creditworthiness and Legal Remedies

Central Library must assure that the task level planning has been in place despite they are not reported on the project level. Moreover, they must confirm the planning process has been iterative and the plans have been progressively refined as the development is made. The estimates must be checked on the valid information and different verified assumptions. Here the resources are allocated to the tasks and at a realistic rate. The buffers must be identified, accounted for and managed. Here, the contingencies must be in place and the milestones must be spread strategically across the project with various measurable deliverables. Further, here proactive assumptions management and documentation must take place (Ochs et al., 2017). The requirements are streamlined and prioritized to project scopes. It must be determined that effective work relations have been in place for project managers, business analysts, resource managers and team members. The ownership and time must be allocated for reviews, walkthroughs, sign-offs and approvals. The organizational and cross-project factors must be checked that might affect the projects. Next the ideas and activities must be identified that can reduce the risks.

Here, the primary objective has been to support project teams and project managers in coordination, controlling and planning the projects. Here, they have been receiving minimal supervision from Project Managers assuring that agreed standards and methods of project management has been deployed across the projects. The activities and tasks they have been carrying out. Here, they must assure that agreed project management processes, standards and methods are maintained across the project life-cycle. They must create and maintain the project library, recording, reporting and filing of systems (Ashuri et al., 2015). Further, proper procedures of configuration management must be implemented and developed. There must be coordination of productions of every reports and production of project summary reports. The producers must be documented and defined according to agreed methodologies. The risks should be maintained and the logs must be issued and the control records must be changed. The effective communication processes must be supported and developed between various project teams and the administrative tasks must be undertaken as specified by project managers.

Furthermore, all the above activities and tasks are to be done at a project level and very often without of PMO function at the proper place. The roles have often been the first step towards more formal structure such as PMO (Binder, 2016). However, the organizations never have enough projects ensuring PMO performing the tasks that are used instead. The project support officers have had many experiences. This includes experiences and knowledge of formal project management methods. This includes a high degree of computer literacy involving advanced knowledge of tools and skills to adopt new programs very fast. Further, project planning ability, experiences to work in IT/IS program and projects are to be understood. Moreover, there should be the ability to present and assess data (Hornstein, 2015).

Third-Party Rights

It must be reminded that the roles of project support officers have been seen as the initial step to move towards project management roles. Since, Central Library has been getting into project management this has often been pursuing the roles after achieving guidelines like the qualification of PRINCE2. Since, one is able to see this from a range of listed activities and tasks, some of the experiences are needed. Further, it has been hard to get the first scope (Kerzner, 2018). Moreover, people have been previously working under the workplace environment of Central Library, in any type of supporting or administrative role. This has been making the initial candidates for positions of Project Support Officers.

Capitalized cost for Central Library can be defined in terms of present worth of costs. This must be over an infinite analysis period.

For instance, (P/A,5%, N = infinity) = 1 / 0.05 = 20

In the current case of central library the capitalized cost has been 15% interest of the structure. The initial cost has been $200,000.

The operating and maintenance cost per year = $40,000.

Therefore, P = $200,000 + $40,000* (P/A,15%,N = infinity)

= $200,000 + $40,000 (1 / 0.15 )

P = $200,000 + $266,667 = $466,667

Initial purchase cost for Central Library = $200000,

Operating and maintenance cost = $40000, Expected salvage value = $70000, Useful life = 5 years.

Central library has invested$200000.

They need to get back $70000 in next 5 years.

Here, Interest Rate of 10% to work out the NPV.

PV = $70000/ (1+0.10)1 = $70000 / 1.10

PV = $63636 (to nearest cent)

Net Present Value = $200000 − $70000 = $130000

So, at 10% interest, that investment has NPV = $13,000

On the basis of previous findings from economic perspective, the current calculations of financial analysis are more feasible. However, different other aspects such as effects like educational and social are also needed to be considered.

Conclusion:

The above study is helpful to carry out sensitivity analysis at Central Library. This quantitative risk analysis would determine how various changed in particular model variable has been affecting the output of the models. Here, for instance, the sensitivity analysis has been allowing recognizing the duration of tasks with uncertainties. This has the strongest correlation with the ending period of the project. The sponsors for Central Library must be tuned in regarding how the project has been done and to various events taking place with organization, stakeholders, performances and teams. The sponsors required to assure at the beginning the project charter has been selling and promoting projects realistically and sufficiently. As the implementation process goes on, the sponsors need to check the dynamicity of the team along with its performances. During completion, sponsors need to search for surprises and for scopes to learn from experiences of the projects.

Stakeholder Analysis

References:

Alakangas, L., & Rasmussen, T. M. (2016). Project: Development, Evaluation and Optimization of Measures to Reduce the Impact on the Environment from Mining Activities in Northern Regions.

Ashuri, B., Kingsley, G., Rogers, J., Gahrooei, M. R., Ilbeigi, M., Sung, E. J. Y., & Toroghi, S. S. H. (2015). Streamlining Project Delivery through Risk Analysis (No. FHWA-GA-15-1305).

Binder, J. (2016). Global project management: communication, collaboration and management across borders. Routledge.

Enemark, S., McLaren, R., Lemmen, C., Antonio, D., & Gitau, J. (2016, March). A guide for building fit-for-purpose land administration systems in less developed countries: capacity development, change management and project delivery. In Scaling up responsible land governance, proceedings of the annual World Bank conference on land and poverty, 14-18 March 2016, Washington DC, United States.

Erlacher, C., Jankowski, P., Blaschke, T., Paulus, G., & Anders, K. H. (2017). A GPU-based parallelization approach to conduct spatially-explicit uncertainty and sensitivity analysis in the application domain of landscape assessment. GI_Forum 2017,, 1, 44-58.

Fleming, Q. W., & Koppelman, J. M. (2016, December). Earned value project management. Project Management Institute.

Hornstein, H. A. (2015). The integration of project management and organizational change management is now a necessity. International Journal of Project Management, 33(2), 291-298.

Johnson, P. (2014). Fundamentals of collection development and management. American Library Association.

Joslin, R., & Müller, R. (2015). Relationships between a project management methodology and project success in different project governance contexts. International Journal of Project Management, 33(6), 1377-1392.

Kerzner, H. (2018). Project management best practices: Achieving global excellence. John Wiley & Sons.

Lee, H. R., Kim, H. Y., Kang, Y. J., Oh, C. S., & Ih, K. D. (2017, December). Optimizing the acoustic materials in vehicle components using SEA and global sensitivity analysis. In INTER-NOISE and NOISE-CON Congress and Conference Proceedings (Vol. 255, No. 7, pp. 554-562). Institute of Noise Control Engineering.

Mai, J. E. (2016). Looking for information: A survey of research on information seeking, needs, and behavior. Emerald Group Publishing.

Martin, R., Lazakis, I., Barbouchi, S., & Johanning, L. (2016). Sensitivity analysis of offshore wind farm operation and maintenance cost and availability. Renewable Energy, 85, 1226-1236.

Ochs, M., Andrews, C., Downs, A., Morris-Knower, J., & Young, S. (2017). Research Practices and Support Needs of Scholars in the Field of Agriculture at Cornell University. Journal of Agricultural & Food Information, 18(3-4), 200-219.

Pianosi, F., Sarrazin, F., & Wagener, T. (2015). A Matlab toolbox for global sensitivity analysis. Environmental Modelling & Software, 70, 80-85.

Sánchez, M. A. (2015). Integrating sustainability issues into project management. Journal of Cleaner Production, 96, 319-330.

Santos, G. D., de Moraes, J. M. M., & Nussio, L. G. (2017). Cost and sensitivity analysis in the production of silage. Revista iPecege, 3(1), 39-48.

Schwalbe, K. (2015). Information technology project management. Cengage Learning.

Thi, N., & Mai, V. (2015). Development and Optimization of a Two-View Model for Anamorphic Projections on Planar Surfaces.

Too, E. G., & Weaver, P. (2014). The management of project management: A conceptual framework for project governance. International Journal of Project Management, 32(8), 1382-1394.

Verbist, B., Klambauer, G., Vervoort, L., Talloen, W., Shkedy, Z., Thas, O., … & QSTAR Consortium. (2015). Using transcriptomics to guide lead optimization in drug discovery projects: Lessons learned from the QSTAR project. Drug discovery today, 20(5), 505-513.

Volk, R., Stengel, J., & Schultmann, F. (2014). Building Information Modeling (BIM) for existing buildings—Literature review and future needs. Automation in construction, 38, 109-127.