Project Management

University Degree Business and Administrative studies

TABLE OF CONTENTS

THEORY

References

INTRODUCTION

Purpose of Plan

Background Information

GOALS AND OBJECTIVES

Business Goals

Business Objectives

Project Goals

Project Objectives

SCOPE

Scope Definition

Change Process Control

Milestones

Risks

Project Deliverables

ASSUMPTIONS

Project Assumptions

CONSTRAINTS

Project Constraints

Critical Dependencies

QUALITY MANAGEMENT APPROACH

Activity Reviews/Walkthroughs

Performance/Quality Standards

Quality Management Roles

PROJECT MANAGEMENT APPROACH

Work Breakdown Structure (WBS) Gantt Chart

Basis of Estimates

Project Roles and Responsibilities

Communications and Control Approach

APPENDICES

Appendix : Project Schedule

Appendix : Work Breakdown Structure

Appendix : Cost Estimation

Appendix : Responsibility Chart

Appendix : Communication Plan

Appendix : Change Control Request 1

Appendix : Change Control Request 2

Appendix : Risk Assessment

Appendix : Project Team Directory

Theory

1. Project Integration Management

Project Integration Management is comprised of three processes: Project Plan Development, Project Plan Execution, and Integrated Change Control.

(Heldman, 2002)

The Project Integration knowledge area is concerned with coordinating all aspects of the project plan and is highly interactive. Project planning, project execution, and change control occur throughout the project and are repeated continuously while working on the project. Project planning and execution involve weighing the objectives of the project against alternatives to bring the project to a successful completion. Change control impacts the project plan, which in turn impacts execution, so you can see that these three processes are very tightly linked. The processes in this area also interact with other processes in the remaining knowledge areas. (Heldman, 2002)

Middle- and lower-level managers spend most of their time on implementation activities. Effective implementation results in stated objectives, action plans, timetables, policies and procedures, and results in the organization moving efficiently toward fulfillment of its mission. (Kerzner, 2001)

2. Project Scope Management

Project Scope Management includes the processes required to ensure that the project includes all the work required, and only the work required, to complete the project successfully (PMI 2004). In Project scope management the primary concern is to define and control the scope of work that should or should not be included within the constraints of Cost, Time and Quality.

This phase can be break down into 5 basic steps:

Scope Planning
Scope Definition,
Create Work Breakdown (WBS),
Scope Verification and
Scope Control.

This phase in the knowledge area if determined and formalized properly will be the referral point during any course of time in the project for all stakeholders and project members to refer upon as the baseline. During many projects, scope change is inevitable and the properly scoped document will include a Scope Change procedure to help maintain the project to be within the confine of the pre-agreed Scope, while managing the risks, costs, time and other factors that may otherwise caused Scope Creep or Lag as the project is being carried out. The ultimate goal is to complete and achieve Project Success. The document should focus on the delivery of only work required and how to achieve the outcome for best results.

If the project manager eliminates any of the above steps or areas, he may compromise the success of the project. (Renee Mepyans-Robinson Nashville State Community College – AMA Handbook of Project Management)

In each of these steps, the interlinking and dependency is high to maintain a good control of what is in the scope and also with the rest of the knowledge area. There is and will be a high level of overlap across the other knowledge area and once properly scoped will serve as the guide in each of the knowledge area in the performance of the project, this will then ensure a high chance of Project Success

3. Project Time Management

In projects, time management includes the processes required to accomplish timely completion of the project (PMI, 2004). Verzuh (2005) defines a project by being on time, on budget and of high quality to be successful. Time management in a project includes the following processes (PMI, 2004):

Activity definition
Activity sequencing
Activity resource estimating
Activity duration estimating
Schedule development
Schedule control

(Heldman, 2002)

Individually, each of these processes encompasses Plan-Organise-Control step. These processes might be tightly linked that some would be viewed as one, especially for smaller project. Each of these processes interacts with each other as well as processes in other knowledge areas. For example activity resource and duration estimating is interdependent to the cost estimation of the project, whereby the cost is dependent on the resource allocated and duration estimated.

Tools employed in time management include Gantt chart and network diagram (critical path). Gantt charts, named after Henry Gantt, are intuitively easier to interpret than network and are therefore more popularly used for team members and senior management (Gardiner, 2003). It is also a common way to report progress of the project.

4. Project Cost Management

Heerkens (2006, pp 75) states that “Cost is probably the single most important (and concept) in the entire field of business”. This illustrates the importance of cost management in projects.

PMI (2004) states that project cost management include the processes involved in planning, estimating, budgeting and controlling cost. This is to ensure that the project can be completed within the approved budget. It is therefore involved in the various phases of the project life cycle.

From the early stages of project planning, cost management involves cost estimating. A detail cost estimate will give an organization ...

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4. Project Cost Management

Heerkens (2006, pp 75) states that “Cost is probably the single most important (and concept) in the entire field of business”. This illustrates the importance of cost management in projects.

From the early stages of project planning, cost management involves cost estimating. A detail cost estimate will give an organization a more accurate portrayal of the actual and expected project cost, which forms the baseline budget from which all actual expenditure will be measured (Cleland / Ireland, 2007). Accurate estimates are preferred, but it is inbuilt with uncertainty. Accuracy is improved with greater effort and it will cost money (Gray / Larson, 2002).

When time phased, cost estimates will become a budget, it is then possible to control the project (Gray / Larson, 2002). It forms the base against which the project will be controlled (Frigenti & Comninos, 2002). This would enable the project to be measured and monitored for any variance from the planned value and actual cost. These measurements will result in two variance values: cost variance and schedule variance (Wysocki & McGary, 2003). These two values can be converted to efficiency indicators to relate cost and schedule performance of the project (PMI, 2004).

5. Project Quality Management

Quality is defined as “meeting customer requirement” by ISO9000. In order to meet the project requirement, it is therefore necessary to understand ways of which quality is viewed. James (1996) considers there are 3 separate ways in which quality can be viewed:

Psychological view
Process view
Product view

To ensure the delivery of a quality project, it is required to address the stakeholder expectation with regards to the different views from different stakeholder. However, quality is often mixed with grade. PMI (2004) note that quality and grade are not the same. While low quality is always a problem, low grade may not be. The PM and project team are responsible for determining and delivering the required levels of both quality and grade.

The use of recognized international standards for some stakeholders which view quality from the process perspective would be required. It allows the stakeholder greater confident in the transaction. One such example would be the emission standard of the car that conforms to international standards.

The benefit of attainment of the required quality through the implementation of a quality approach, the organization can gain from various benefits. It includes reduced cost, increased sales, increased customer loyalty, increased competitiveness, increase profitability and improved employee morale (Munroe-Faure, 1992). From these benefits, reduced cost and employee morale can be regarded as the core benefits (Reid, 1999). These core benefits highlight the importance of internal factors with regards to quality.

In summary, in order to meet the project (customer) requirement, the project manager must incorporate sound quality management practices (Wysoki & McGary, 2003).

6. Project Human Resource Management

(Heldman, 2002)

Human resource management is in place and managed.

7. Project Communication Management

Communications management involves managing the process of information flow to and from stakeholders. As discussed previously, there are many different stakeholders, each with differing roles, interests, priorities, and agendas. In addition there are many types of information some of which needs to go between different stakeholders at different times and frequencies, possibly using different mechanisms. The project manager’s role is not to try to control all these differing flows, but to influence project communications to the benefit of the project.

The PMI communication management processes are (PMI, 2000):

Communications planning
Information distribution
Performance reporting
Administrative closure

(Heldman, 2002)

The direct purpose of all the PM communication is to keep all the stakeholders informed to the degree necessary as specified in the stakeholder analysis. However, the indirect purpose is to “take the pulse” of the stakeholders in regard to their opinion and concern over project direction, progress, risks, and other issues.

8. Project Procurement Management

The Project Management Institute defines procurement as the processes required to acquire goods and services from outside the performing organization; it breaks procurement down into the following procurement management processes (PMI, 2000):

Procurement planning
Solicitation planning
Solicitation
Source selection
Contract administration
Contract closeout

(Heldman, 2002)

Using a reference from the public sector, we see that the Australian Government’s Procurement Policy Framework also similarly states that “Procurement encompasses the whole process of acquiring property and/or services…. Ethics and probity are a consideration throughout the entire process of procurement”

(http://www.finance.gov.au/procurement/ep_background.html Accessed: 2007, October 10)

9. Project Risk Management

A project is unique, introducing change, complex and finite (PMBOK 2004), being so it there will be uncertainties and therefore being subjected to risk. Risks may threaten the success of the project and must be dealt wit proper risk management forming an integral part of Project Management. After forming the Project Team, the team will need to conduct risk management planning, identify risk – causes, events and effects, evaluate and analyze, make the necessary responses to mitigate or control the known risk. Even by doing so, there will always be residual risk and these must be continually monitored. Under risk management, it is necessary to apply corrective actions after analyzing the risk. These actions are:

Risk avoidance: where a deem risk is a high probability and high consequence

Risk reduction: for a high probability situation and reducing the damages should it happen; such as placing flammables in a storage away from the main work site, should there be a fire at least it is contained and damage can be reduced

Risk transfer: to transfer risk by contracting our a certain part of the work or buying insurance

Risk Retention: apply when low cost and low probability of it happening, or when the risk have been reduced. Sometimes risk is retain due to alternative methods may be too costly

References

PMI (2004), A Guide to the Project Management Body of Knowledge (PMBOK Guide), third edition, PMI, Newton Square, Pennsylvania USA.

David I. Cleland, Ph.D. and Lewis R. Ireland, Ph.D. (2007), Project Management – Strategic Design and Implementation, Fifth Edition, McGraw-Hill, Two Penn Plaza, New York, USA.

Clifford Gray, D.B.A. and Erik Larson, Ph.D. (2002), Project Management – The Complete Guide for Every Manager, McGraw-Hill, Two Penn Plaza, New York, USA.

Enzo Frigenti and Dennis Comninos (2002), The Practice of Project Management, a guide to the business-focused approach, Kogan Page, Philadelphia, PA, USA.

Robert K. Wysocki, Ph.D and Rudd McGary, Ph.D (2003), Effective Project Management, Third Edition, Wiley Publishing, Inc., Indianapolis, Indiana, USA.

Gary R. Heerkens (2006), The Business-Savvy Project Manager, McGraw-Hill, Two Penn Plaza, New York, USA

Heldman, K. (2002) PMP: Project Management Professional Study Guide ,San Francisco:SYBEX

James, P. (1996), Total quality Management: An Introductory Text, Prentice Hall, Hempstead

Kerzner, H. (2001) Strategic Planning For Project Management Using A Project Management Maturity Model ,New York:Wiley

Munroe-Faure, L. M. (1992), Implementing Total Quality Management, Pitman, London.

Reid, A. (1999), Quality Management: An Essential Tool for the Survival of the Quality Surveying Profession, in Quality Surveying in the New Millennium – Challenges and Opportunities: 3rd Pacific Association of Quality Surveyors Congress, The Institution of Surveyors, Malaysia and the Board of Quality Surveyors, Malaysia, Petaling Jaya, Malaysia.

(Paula Martin, Karen Tate, Getting Started in Project management, 2001 John Wiley)

(Renee Mepyans-Robinson Nashville State Community College, Project Scope Management in Practice – AMA Handbook of Project Management 2nd ed 2005 AMACOM)

(Geoff Reiss –Project Management Demystified 2001 Spon Press)

(Jack Merdith, Samuel J Mantel Jr, Project Management 3rd Ed 1995, John Wiley)

Introduction

Purpose of Plan

The purpose of the “BMW 2007 X5 Asia Launch” Project Plan is to provide a mechanism to communicate the project objectives, scope, assumptions, constraints, project issues, risks, as well as other pertinent project information between the Project Sponsor (BMW Group), and the Project Manager and Project Team (Performance Motors Limited). Project details relating to work at the task level is in the Work Breakdown Structure (Appendix : Work Breakdown Structure)

This Project Plan will also be used to manage tasks, milestones, the project schedule, project issues, risks, and resource assignments for the “BMW 2007 X5 Asia Launch” Project.

Background Information

In 1999, BMW launched its first generation of X5, paving the way for a new luxury vehicle market – the Sports Utility Vehicle (SUV). Since then, BMW has seen increasing competition from rivals as diverse as Porsche and Land Rover.

As popular as SUVs have become, growing concerns about climate change have made them occasional targets of environmental vigilantes around the world.

Unlike traditional petrol-guzzling SUVs, BMW has performed a major redesign on its new 2007 X5, adding power yet achieving greater fuel efficiency, and enhancing its unmistakable sophistication with an elegantly sporting nature.

The BMW Group is committed to the provision of support for BMW importers in functions such as purchasing, corporate audit, financial services, corporate security, corporate sales, direct sales and special vehicles, merchandising and lifestyle sales, as well as promotional events such as new model launches.

Since 1979, Performance Motors Limited (PML), as the sole distributor of BMW cars and motorcycles, has been thoroughly dedicated to its responsibility in managing the BMW marque. Having managed all previous BMW model launches with resounding success, PML is given the opportunity to manage the “BMW 2007 X5 Asia Launch”.

The “BMW 2007 X5 Asia Launch” is a 3-day event (5-7 May 2008) that will bring together key directors from the BMW Group, regional heads of BMW subsidiaries, journalists, privileged customers and guests, and members of the public.

Goals and Objectives

Business Goals

Presence & Innovation - The BMW Group recognises the importance of being present in markets around the world in order to recognise trends early on and harness them to create innovations for tomorrow
Research & Development - The BMW Group continues to invest heavily in future technologies with a view to developing entirely new individual mobility solutions, independent of fossil fuels
Sales & Marketing - The BMW Group is committed to maintaining and enhancing its presence in key markets worldwide through its continuous sales and marketing support of its importers and subsidiaries

Business Objectives

Strengthen market leadership, and reinforce positioning of BMW vehicles in premium segment [marketing, brand positioning]
Improve average fuel economy by 15% per year and reduce CO2 emission rates by 20% per year in all new models from 2007 [sustainable development]
Achieve a Return on Capital Employed (RoCE) of 26% and a return on sales between 8% to 10% by 2008 [sales]

Project Goals

Strengthen BMW’s market leadership, and reinforce positioning of BMW X5 has the No.1 environmentalist choice in the luxury off-road market segment [marketing, brand positioning]

Project Objectives

Communicate and build awareness of key environmental attributes of the X5 to the target audience [marketing, brand positioning, sustainable development]
Achieve pre-launch sales bookings of 500 BMW X5 units [sales]

Scope

Scope Definition

The scope of the new car launch has been determined and verified with the stakeholders and sponsor for the project.

This is in the attached appendix of Work Breakdown Structure: WBS Scope. Overall project has been split into 4 main sections: Development; Preparation; Launch; & Completion/Handover

The launch centers on the event of a unit of the “New Model” breaking through a paper barrier on a pontoon situated 20m from the shoreline of UOB Centre Atrium on the Singapore River. The “New Model” will be driven onto a “pontoon-riverbank connecting floating bridge” onto the steps of the riverbank onwards to the platform on the Atrium.

The WBS scope breaks down the project into sections indicated by an item number. Each section is a deliverable and shall be tracked and monitored till the end of each schedule of the scoped activity.

Change Process Control

A change process control process has been reviewed and set in place. All stakeholders have been briefed to follow any request to change via the process described on attached Change Control Request 2 - Change control process course of events.

The Project Manager shall be responsible to fill the attached Change Control Request 1 Form whether verbal of formal to the best of the information received and follow up with the respective stakeholders as accorded in the Change Control Request 2 process.

After evaluation, the Project Manager shall communicate and inform the request for change to initiator and all stake holders of the decision for the request, whether approved or rejected. If there is a change, these are to be documented as describe in the Change Control Request 2 process.

Milestones

To ensure the project will be successful and to maximise the leverage on the launch to achieve the BMW Group’s Business Goals and Objectives, the Project Team has looked at the critical activities that must be fulfilled according to the deadlines.

The following are designated as important milestones that need to be closely monitored:

Project Plan Approval by Sponsor
Approval of Demo Cars for import into Singapore
Approval from the authorities for use of Singapore River Launch Point
Approval from Venue owner for rental and use of space for launch event
Start of advertising campaign

Please refer to the WBS-Scope and Project Schedule in appendixes attached

Risks

The Risks attributed to the launch have been evaluated and structured into a table. Mitigation and contingencies have been allocated to the important high consequences event. The rating for Risk Score of

Maximum 5

Medium 2.5 – 4.9

Low 0 – 2.5

No Risk 0

The risks evaluated to be “Low” do not have contingency plans. The “Medium” and “High” risks are looked at and mitigation and contingency plans are in place to manage the risks.

A worst-case scenario of plan B is in place and approved by Sponsor should any major blockage be faced at the critical points evaluated. These are presented in the risk or Threat Register. Please refer to attached appendix for full description of the plan of action.

Project Deliverables

The project deliverables have been allocated and assigned to the various stakeholders on a Responsibilities Chart attached in the appendix. (Appendix – Responsibility Chart) The deliverable deadlines are as scheduled on the Project Schedule for each deliverable.

The Project Manager shall monitor each activity to ensure that the deliverables are on time and that the important milestones are not missed. These events shall affect the actual launch event directly.

Assumptions

Project Assumptions

The following assumptions were made for the project:-

Foreign currency exchange rates are assumed to be constant throughout the project.
In principle approval have been granted by the BMW Group, the principal and project sponsor on the overall concept of the launch event.

Constraints

Project Constraints

This project is part of the global simultaneous launch of X5 and the launch date is fixed as 5th May 2008, no change of date will be allowed.
In line with the global brand image, the advertising material will be referenced to the official version provided by the BMW Group.
Safety will be the paramount factor for the execution of the launch event.

Critical Dependencies

The launch hinges on the final approval by the authorities and property owner, who have granted in-principle approval during the feasibility study of the project.
In the event of non-approval by the authorities, the launch will only comprise the static display. No dynamic display will be staged.
In the event of non-approval by the property owner, the event will be staged at an alternative location to be determined. No dynamic display will be staged.

Quality Management Approach

Activity Reviews/Walkthroughs

Weekly Review

The Project Team will conduct weekly review meeting to review the progress of the project. The meeting minutes will be circulated to the project critical stakeholders including project sponsor, principal, event organizer and internal supporting department. This review shall include update on schedule, costing and critical event status.

Post Project Review

Upon the completion of the project, a review meeting will be convened to review the results of the launch. This post project review shall include lesson learnt on areas which was not satisfactory.

Performance/Quality Standards

Launch Event

Quality (psychological view) of the launch event shall be considered against review and comment from the participants of the event. In particular, the media’s portrayal of the car and launch event upon the launch.

The car – X5

Quality (product quality) of the car shall be measured against the review and comment from the automotive magazine.

Quality Management Roles

The Project Manager

The Project Manager is responsible for the overall performance and quality of the project. He is to review the project progress and take corrective action as required to arrive at a desired outcome.

The Marketing Executive

In essence, he / she is responsible for the customer interface with the project and therefore responsible for the psychological quality (view) of the customers and stakeholders.

The Public Relations Executive

The Public Relations Executive would be the key interface with the mass media and therefore responsible of the psychological quality (view) of the media.

The Engineer

The engineer is responsible for the product quality aspect of the launch. He needs to ensure that the car is ready for the dynamic display as well as the static display. He is also responsible for the updating of all staff on the product information.

The Logistics Officer

She is responsible for the smooth logistics operation connected with the movement of the car from Germany to the venue plus the relevant logistics chain documentation.

The Cost Manager

The cost manager is responsible for the cost performance of the project.

The Venue Organiser

The venue organiser is responsible for the overall quality of the launch event under his scope.

Project Management Approach

Work Breakdown Structure (WBS) Gantt Chart

The WBS is created with participation from the Project Team with due consideration to the past event of different nature but with relevant component. From the WBS, the Gantt Chart was created to phase in the schedule for a graphical representation. (Appendix – Work Breakdown Structure)

Basis of Estimates

The estimate is based on the WBS, building the cost from the component item/event using parametric estimating. It is base on the space and time required for the project as a basis of estimating.

An allowance of approximately 10% was incorporated into the “Preparation” and “Launch” to cater for any remedial work required.

In additional, a 10% contingency was also incorporated into the final cost for any unforeseen and undefined items. (Appendix –Cost Estimation)

Project Roles and Responsibilities

(Appendix – Responsibilities Chart)

Communications and Control Approach

Communication is a critical aspect of the “BMW 2007 X5 Asia Launch” Project Plan. The Communication Plan identifies the major stakeholders affected by the launch, outlines the communication and change management approach and plan, and articulates a range of strategies and events to meet the objectives of this launch event.

The Project Team aims to ensure that communication about the launch is relevant, accurate, consistent and just-in-time. As communication is a two-way mechanism the plan is to actively solicit and where possible respond to feedback from the stakeholder groups. In this way the planning is both dynamic and ongoing. (Appendix – Communication Plan)

Appendices

Appendix : Project Schedule

Appendix : Work Breakdown Structure

Appendix : Cost Estimation

Appendix : Responsibility Chart

Appendix : Communication Plan

Appendix : Change Control Request 1

Appendix : Change Control Request 2

Appendix : Risk Assessment

Appendix : Project Team Directory

The Project Management Institute (PMI) is the largest organization in the world devoted to project management.

The term property is used to refer to every type of right, interest or thing which is legally capable of being owned. This includes, but is not restricted to, physical goods and real property as well as intangibles such as intellectual property, contract options and goodwill.