A discussion of the management principles adopted in the relocation of Xenus University

INTRODUCTION

Programme management, according to CCTA( 1999), is ‘the co-ordinated management of a portfolio of projects that change organisations to achieve benefits that are of strategic importance’.

Due to its complex nature, the corporate relocation of Xenus University was managed in line with programme management principles. This report critically evaluates the strategy, plan and organisational approach used by Team 2. It discusses the decisions taken as well as recommendations of other strategies that could have been implemented. A brief comparison of the management approach of four other teams is included, giving their strengths and weaknesses.

STRATEGIC MANAGEMENT

Strategic management refers to the process of specifying an organisation’s objectives, developing its policy and implementing the policy through allocation of resources. Strategy is the route or process that needs to be taken in order to reach the goal. It can also be defined as the high-level requirements of the project and the means to achieve it (Maylor, 2003).

Team 2 made use of key strategic performance standards to help in the strategic planning and strategic management of the project but strategic implementation was not considered. Figure 1 shows the key strategic performance standards.

The vision of the project needs to be well understood and expressed as a statement that can be identified as the mission statement, thus enabling an accurate representation of the strategic objectives. In addition, a well-analysed client value system helps to prioritise the objectives. This allowed Team 2 to identify the relative importance of each objective. Goals can be defined as milestones in meeting organisational objectives (Cleland, 1998). It is beneficial to have set goals as, for the strategic management of a project, the attainment of goals is an effective criterion to measure progress, and when goals are not met, the strategy can easily be reviewed.

Figure 1: Key strategic performance standards (Cleland, 1998)

The team’s business strategy adopted critical resources as well as various tools and techniques in order to accomplish the mission. The main tools and techniques used included:

• SWOT analysis
• Risk Management
• Stakeholder Management
• Value management

SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses refer to internal factors while opportunities and threats refer to external factors ⁽Project Management issues and considerations. Retrieved from http://www.maxwideman.com/issacons4/iac1440/sld002.htm).

A SWOT analysis summarises the key issues in the business environment and the strategic capability of an organisation that are most likely to impact on strategy development. It is mostly instrumental in strategy formulation and selection (Johnson and Scholes, 2002).

The analysis conducted does not represent a complete consideration of the SWOT analysis in this project. Although the choice of scenario can be considered to be the best, a SWOT analysis should have been carried out for each scenario, as was done by Team 5. This would have revealed more opportunities and strengths that could have been implemented or achieved in scenario 4. However, the SWOT analysis was instrumental in choosing appropriate parameters for evaluation and arriving at a scenario that would allow the university to achieve its vision.

Risk Management refers to how risk is managed during the life cycle of a project. It is important to note that the risk is highest in the early stages of the project when there is much uncertainty (Smith, 1999). Other factors, such as size and complexity, also have an impact on project risks. Therefore, the strategy for risk management must take these issues into consideration. Risk management is carried out through a systematic means of identification, analysis, response and mitigation. This ensures that there is an overall reduction in risk exposure. Good risk analysis makes it possible to consider contingencies across portfolios of projects in a meaningful way (Raftery, 1999).

The risks identified summarised the major risks faced in the project. However, an in-depth risks analysis should have been carried out for each scenario as this could have helped to make an informed decision on what scenario to adopt, the level of risks associated with alternative scenarios as well as the attitude of the programme manager towards risks. It is important to note that everyone has a different attitude towards taking risks. Team 2 seems to have had a more aggressive approach to risk taking.

Stakeholder management is important for running a successful project. A stakeholder is anyone who has an interest in the project or who will be affected by its deliverables or output. It is important to understand the values and issues that stakeholders have in order to address them and keep everyone on board for the duration of the project²⁰. Stakeholder management is part of project strategy but in no way drives the strategy. However, stakeholders can have a significant impact on the outcome of the project (12 management. Retrieved from http://www.12management.com).^. Stakeholder management is shown in Figure 2.

Figure 2: Stakeholder management (Turner and Simister, 2000)

All the stakeholders in this project were correctly identified. Their various behaviours, interests and comments were taken into consideration in the programme strategy and scheduling.

Value management is concerned with ensuring that the best value is delivered. The timescales involved and the complexity of the project required careful management. A value analysis assesses a product’s function and performance and, if necessary, establishes whether an alternative way of performing this function could be achieved rather than finding an alternative product.

Value management helps to identify the stakeholders’ needs, objectives and priorities. It is important throughout the lifecycle of the project as it helps the client to identify the best way of meeting business needs and provides a structured approach to the assessment and development of a programme. Even though this tool was not actively used, its relevance was acknowledged in meeting business objectives (Walker and Greenwood, 2002).

Other useful management tools include:

Benefit Management is concerned with ‘the activity of identifying, optimizing and tracking the expected benefits from business change to ensure that they are achieved’ (CCTA, 1999). Successful programme management requires delivering beneficial change. However, this is not always the case as a lot of projects do not fully realise their benefits even when their objectives are met. See Figure 3 for good benefit management principles that should be applied to ensure delivery of expected benefits.

Figure 3: Benefit Management (CCTA, 1999

Quality management is a systematic approach to ensuring that the activities necessary to design, develop and deliver a project are carried out efficiently and effectively, that the plan is followed and that it is fit for its intended purpose. Quality is viewed as a continuously improving process used to enhance project outcomes (Kerzner, 2003). Figure 4 gives the Guide to Quality Management. This process should be used in the delivery of the individual projects as well as the entire programme.

Figure 4: Deming cycle for improvement (Kerzner, 2003)

Portfolio management

The portfolio management of a programme requires organising the series of projects into a single portfolio that captures the project’s objectives, costs, timelines, deliverables and the sequence in which the projects are to be performed (Kerzner, 2003). This involves a systematic scheduling of projects so that the programme plan is delivered with all its benefits.

The scheduling was based on a consideration of the cash flow of scenarios 2 and 3. Attention was given to particular factors that were instrumental in the process of decision making.

The organisational structure proposed by Team 2 employed two programme managers. This could have been a potential source of conflict in the step-by-step implementation of the project especially in the areas of change management and communication. One programme manager would have been more appropriate. Teamwork is crucial to the success of the programme and should be encouraged by the programme and project managers.

Procurement strategy identifies the best way to achieve the objectives of the project and obtain the best value for money. It takes into account the risks and constraints that need to be taken into account when making decisions about the funding mechanism and asset ownership for the project (OGC Procurement. Retrieved from http://www.ogc.gov.uk/introduction_to_procurement_procurement_strategy_2853.asp).

The strategy illustrates the scope for potential cost saving through more efficient procurement practices and well-established partnerships, allowing resources to be released to the frontline. The procurement strategy should cover the following:

• Business case
• Procurement route
• Contract strategy

Output based specifications and criteria for case selection and award. (OGC Procurement and contract strategy. Retrieved from http://www.ogc.gov.uk/documents/CP0066AEGuide6.pdf).

The procurement route refers to the integration of design, construction and ongoing maintenance for a given project to support the overall project objective in terms of risk allocation, delivery and incentivisation, etc.

Procurement routes used included the following:

A private finance initiative (PFI) was proposed for the research park development. This should have been used for the conference hall building because of its sensitivity, the importance of generating funds early enough and the transfer and management of the risks.

In a PFI, the public sector uses private capital for its construction in order to purchase quality services with defined outputs from the private sector on long-term basis. The agreement usually includes maintenance or construction of the necessary infrastructure to take advantage of private sector management skills. An incentive is that it is private finance that is at risk (OGC Procurement and contract strategy. Retrieved from http://www.ogc.gov.uk/documents/CP0066AEGuide6.pdf).

Design and build (D&B) involves using one contractor as the point of contact with the public sector client. This contractor, using reasonable skill and care, is fully responsible for the design, management and prompt delivery of a construction project within its budget and in accordance with pre-defined output specifications. The integrated team is responsible for the design and construction of the facility. The supply team is able to deliver the best performance benefits to the client through innovation, standardisation and integrated supply chains (OCG Successful Delivery toolkit 2005. Retrieved from http://www.orc.gov.uk/documents/strategy.pdf).

D&B would be suitable for the construction of accommodation, the library and sports complex as well as the administration building, roads and landscaping.

Prime contracting (PC) involves using one contractor who is responsible to a public sector client for the management and delivery of a construction project on time, within budget and fit for the purpose for which it was intended. Also, the contractor must demonstrate during the initial period of operation that operating costs and performance parameters can be met in accordance with pre-agreed cost model (National procurement strategy for local government. Retrieved from http://www.communities.gov.uk/index.asp?id=1136697).

PC would be suitable for the proposed projects as it would ensure delivering the required standards efficiently. This is especially important for those faculties moving last and that have to be completed within ten years. Any delay would result in the city-center campuses having to close down before completion of the new facilities, putting a strain on the new campus facilities.

Management contracting permits increased involvement of construction knowledge required from the client. In this case, because the client did not know much about the project, management contracting as suggested by team 2 would not have been suitable for this project.

Contract Strategy is about choosing the right contract and allocating risks to the party best able to deal with them in a way that is consistent with a department’s objectives for the commission or project. Contract strategy determines the approach to the pricing mechanism: the basis on which the supplier will be paid, the method of payment and any links to performance. This was not properly considered by Team 2

Comparison of the relocation strategy options of all five teams

Considering that a vision is important for any project, all the groups started on a solid note by having a vision although some were not clearly stated in a defined mission statement. A clear statement of the vision and objectives is an important step in the strategy development of a project.

Teams 1 and 3 did not define their objectives clearly which was a negative in their strategy formulation. However, all the teams had a client value system with most teams acknowledging that time was the most important factor. Other than this, all the teams more-or-less followed similar strategies as follows:

• Having a vision
• Setting down objectives
• Developing a strategy
• Selecting a scenerio
• Scheduling
• Establishing the organisational structure
• Establishing procurement options

Scenario 2 was the choice for most teams (1, 2, 4 and 5); however teams 2 and 5 modified scenario 2. These choices were made using a SWOT analysis, risk analysis, and TQC.

Team 2 used a method of weighting to select various strategic criteria; this would definitely reveal the relative importance of the objectives and the possibilities inherent in the different scenarios for achieving the vision. The team’s choice of scenario incorporated high risks and would have required careful management of resources.

In scheduling relocation, stakeholder analysis would play a major role as well as the cash flow and funding requirements. Stakeholder analysis was performed by most teams but a more detailed analysis was performed by Team 3.

Team 4 performed function- and issue analyses which revealed some latent points that needed attention; detailed value management was recommended to address these points.

The strategy used by Team 5 was systematic and incorporated a business strategy that captured the vision in full. A detailed SWOT analysis informed this team’s choice of scenario.

Once a specific scenario had been selected by each team and each team had effectively combined different tools, the Universit’s relocation project could be delivered in time. However, the approach adopted by Team 5 would use fewer resources to achieve the same goal.

Conclusion

The relocation strategy adopted by Team 2 considered the key issues in the project. There is a clearly defined relationship between the portfolios, programme manager and the client. This structure would ensure strategic management of the programme in order to realise the project objectives which were that maintenance, IT and construction portfolios would be separated. However, the choice of two programme managers was flawed due to problems that may arise in the case of changes in management and communication.

Procurement choices should be reconsidered as management contracting might not be adequate to meet strategic objectives considering the negative cash flow. Other analyses, such as stakeholder, SWOT analysis and risk were considered but may have required more detailed analysis.

In view of the time constraints, Team 2 was unable to utilise other beneficial tools and techniques mentioned in this work.

Overall, the choice of scenario selected may lead to the successful delivery of the project but would require several adjustments, thorough programme management and huge resource commitment.

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