Q1 A group of companies specialising in project management in various industrial sectors has recently acquired two more similar companies. These companies are small but very profitable. The Board of Directors of the Group now wish to implement Benchmarking, but none of the Directors are familiar with the concepts or processes, and so they have engaged you to advise them. Draft your report to the Board outlining the principles of Benchmarking, and including your recommendations as to how the process should be initiated and might progressively be developed over time.
It is a management technique that focuses on comparing existing business operations and processes with the baseline measurements or criteria defined for best practices. Benchmarking is primarily used to ensure efficiency in business processes and to achieve a competitive edge and High organizational performance in terms of implementing best practices and achieving critical success factors. It allows the organization to refine their current ways of operating while introducing techniques for continuous improvement to achieve excellence in their business environment. The primary aim is to analyze the existing processes, products or services with established best metrics or Key performance indicators to further improve process performance, customer satisfaction and employee productivity (Steven, 2004).
There are particularly three types of benchmarking, internal, competitive and generic. Internal benchmarking is focused at analyzing and comparing business processes and products within the organization to introduce refinements. This is usually done to achieve objectives such as cost reduction, process optimization, enhancing product mix and cultural or workforce development. Competitive benchmarking entails comparing the existing product mix or process flow of another company in the same business or industry to achieve a competitive edge. Generic Benchmarking involves comparison of generalized functional flows with a company from any industry. This is usually done to enhance generic functions like procurement, finance, human resource management and operations.
There are typically three levels of benchmarking, strategic, operational and statistical. The strategic bench marking is aimed at assessment and development of core business entities such as workforce, culture, strategic plans and technical know-how. The operational bench marking also known as process benchmarking includes a comparison of the company's procedures, operations and process flows to focus on critical success factors. The statistical benchmarking level aims at measuring and defining organizational performance in terms of quantitative metrics and statistical measures. Since the Project Management firm has acquired two small but profitable firms it is recommended that the bench marking process consider all three levels of comparison to ensure best practices within the industrial sector (Wait and Nolte, 2005).
Process Initiation and Development
With the acquisition of the two new firms, it is first recommended that there be an established bench marking procedure for ensuring compliance to best practices for the new firms and setting success metrics for further improvements. The three levels of bench marking will help provide a clear understanding and insight of the procedural flows of the new firms that enable them to achieve profitability. These practices can then be further developed / optimized in the existing firm and success factors can be analyzed in comparison with the new firms. Although a competitive bench marking procedure is recommended, however an internal and generic benchmarking would however, provide additional leverage to enhance organizational performance post the acquisition.
Figure1: Benchmarking Process. (processed/extracted by the Author)
The benchmarking process should involve the following steps for further development of acquisition processes:
Table 1; Bench Mark principles
Figure2: Process Mapping. (processed/extracted by the Author)
For a project management firm operating in the construction or industrial sector, typical success factors would include project delivery on time, within defined costs and with increased customer satisfaction. Hence the benchmarking procedure should take this into consideration including best practices relevant to the new firms in terms of culture, people, skills and operations (Wait and Nolte, 2005)
, you intend to acquire state-of-the-art Information Management Technology (e.g. project extranet) for a construction project. However, you need to present a business case to your project manager to convince him about the benefits which the project will achieve from such investment in such an Information Management solution. Discuss the main factors which you need to consider in the successful deployment and adoption of this new technology. Also discuss the main benefits such an information management system will bring to the project.
Information Management System / Technology; Presenting a Business Case
Before proceeding to present the business case of deploying Information Management System for the ABC Design Consultants Construction Project, it is important to address the question as to why do an organization such as ABC would need such as system?
The nature of complex construction projects has made it necessary for project managers to make use of collaborative technologies for successful project delivery and for managing the diverse communication and collaboration demands of the project teams, customers, contractors and other project stakeholders. These collaborative systems are now a necessity for organizations to effectively organize and manage all the information and data relevant to the projects being executed.
The purpose of this business case is to highlight the need and potential benefits of an information management system, such as the project extranet to successfully deliver defined targets for the ABC Design Consultants Construction Project.
The Need and Factors for Successful deployment
The complex nature of the construction projects which the ABC Design Consultants Construction Project undertakes involves multiple disciplines at various phases throughout the project life-cycle, for which the application of tools that can facilitate the productive collaboration and knowledge and information transfer between the project stakeholders like civil engineers, sponsors, architects, contractors, suppliers and other project team members is absolutely essential. For a design firm, it is necessary that there be an a information management systems such as extranet or similar to effectively collaborate, communicate, deliver and address the complex and diverse design or architectural needs of the construction project. An extranet is an extended version of an organization's internal communication system or intranet that allows and extends collaboration related to external stakeholders like vendors, suppliers and customers. An extra net allows effective communication with external entities in a secure and controlled environment (Sullivan, 2004). For the ABC team, this systems can effectively enhance the productivity of their projects as one information center will be developed through which all the critical information regarding the project such as the designs, schedules, responsibilities, risk assessments, safety parameters etc. could then be shared with all the stakeholders of the same project
However, the deployment of an Information Management System would requires the careful assessment of factors operating within and outside the company's business environment. Therefore, for successful deployment of this systems, the ABC company must consider the following:
Table 2; Factors for consideration for successful deployment
Benefits of the Investment for the ABC Design Consultants
The adoption of this information management system would facilitate the flow of effective communication with the project stakeholders and would enable efficient organization, distribution and management of the construction project's information in a timely manner. The system would enable the organization to reduce operational expenditures by providing a centralized system for communication with the external stakeholders. The adoption of this particular collaborative system by other organizations has shown to provide considerable benefits in terms of reduced costs, increased productivity, faster transactions, cultural growth, workforce development, streamlined processes and increased customer satisfaction. The deployment would help the firm achieve further business growth and a competitive edge in terms of implementing a cutting-edge technological system that would facilitate information management and process efficiency (Lingham, 2006). Such systems have also known to reduce the errors in construction projects which is major risk in terms of the lost time and finances, as it allows for accessibility of updatable information in real time for each activity, as all the teams are connected through a single parent information management system
Hence, the use of the extranet can be justified as it would help increase productivity of the project team through flexible interaction and communication with customers and external stakeholders by providing a competitive technological means for collaborating towards mutual project goals, sharing their skills, knowledge and understanding of project values and lastly, for maintaining a repository of project data, processes, information and related knowledge. Therefore, the extranet would certainly help deliver a value-added construction project to the customer that specifically meets the objectives of cost, time and quality conformance.
have been asked to organise a new Rock Concert/Festival on a disused airfield site using Value Management techniques. Outline what should be done giving examples as appropriate. Your answer should consider all stages of the project development and implementation. Explain briefly the benefits of using these techniques on such a project.
Value Management Techniques (VM) are systematic approaches aimed at enhancing the business efficiency and organizational performance of business enterprises. The value management concept involves the application of value management techniques to achieve the most optimal balance between needs satisfaction and use of resources. Organizations make use of the value management or value engineering techniques to eliminate waste such as cost overruns, inappropriate processes, delays, defects and overproduction. VM or value management thus can be represented as:
Value = satisfaction of needs / use of resources
The entire value management process is based on three core stages and particularly aims at identifying the most feasible solution or option to a problem that involves minimum waste and high performance. Hence in this scenario, the different stages of the value management can be used to find the most appropriate solution to organizing this festival.
When applied to the case of the managing the Rock Concert/Festival, the VM has been categorized to the following three stages;
Stage 1- Pre-Study Phase
This is one of the most important phases of Function Analysis, and this is the first stage where the process of VM are initiated. In this particular stage the group or project team will analyze the future project or endeavor ensuring that all related stakeholders are on board and harboring a mutual understanding of the need to undertake value engineering process. For this rock concert the pre-study phase would require a basic understanding of the objectives of the festival, stakeholder needs while ensuring expertise and coordinated collaboration of all members such as the airfield site management, sponsor, performers, contractors, suppliers and organizers. Under this phase of the VM, the particular objectives for the festivals are outlined as below;
Once the key objectives are clear, the most important derivative is then to ensure that there are no conflicts between parties or stakeholders before moving on to the next stage, and that all the stages can be successfully completed by the assigned teams
Stage 2- Study stage
The second stage or study stage of the VM process involves a comprehensive study of the project objectives through a series of workshops and group studies aimed at further refining objectives, weighing them according to priorities, brainstorming ideas to evaluate the most feasible option, identifying critical issues and developing the most preferred option to create the most valuable solution. The group study entails information gathering, functional analysis and development of the proposed solution to be implemented. In this scenario, functional analysis would further re-establish objectives based on weights or priorities eliminating those that are not adding to the value.
The first objective can be eliminated as it is already being addressed by further defined attributes. Further brainstorming leads to a new core objective related to audience turnout. The refined objectives ranked out of 5 according to priority typically represented through a functional would then be:
Once the core objectives have been revised, the proposed solution or option should be agreed upon by all group members. Then further evaluation on pros, cons and risks associated with the proposed option should be highlighted to further develop it in order to decrease costs, risks and eliminate waste. Further development of the above objectives would include considerations for backup performers, airfield site management, timely logistics and concert arrangements, marketing plan refinement and timely financial and airfield management approvals through use of SMART methodology and identification of value drivers. Time limits and specific dates including procedural flows should be further agreed and defined for each objective by the group.
Value drivers would be:
Stage 3- Post study phase
This stage entails the review of bench marked targets and the solution to be implemented. The findings and decisions made by the group are recorded. Any further refinements in terms of issue identifications or risks are analyzed and the proposed solution is finalized for implementation. The above solution for the rock concert can hence be implemented. The complete process VM can also be successful if it is executed precisely as per the learning/outcome of the process, hence it vital for the festival stakeholders that all the related logistics are management in accordance with the final plan
These techniques provide organizations with a platform to reduce costs (see Figure 1), make efficient use of resources through a streamlined value engineering approach that facilitates the development of feasible solutions that address potential threats and exploit inherent opportunities and benefits. The following chart / graph present the financial benefits of the value management technique for this concert / festivals;
Figure 3; Value Management Technique Application (source: author)
Q4 Continuous Improvement to business processes may be undertaken using the principles of Kaizen (as, for example, outlined in Spear’s paper Learning to Lead at Toyota) or the logical decision making process (such as FADER as adopted in a TQM Improvement Cycle investigation). Outline, compare and contrast these very different approaches giving examples as appropriate.
The construction Industry's key elements revolve around the Technical aspects, specific roles and responsibilities for the project teams and process management. The need for continuous improvement stems from the application of key techniques and concepts like the systems thinking approach that facilitates the identification of key change drivers that direct continuous improvement initiatives (Demetrius, 1996). The construction industry is looking for techniques that can address various inefficiencies in business processes and drive improvements in areas like technical aspects related to tendering, statuary, compliance, productivity, procedural flows and informed decision making.
The two basic techniques used by organizations to implement continuous improvements include Kaizen principles and FADER, the logical decision making process. Kaizen is a Japanese management technique adopted by organizations to refine business processes that is primarily based on the belief that there should be some form of improvement each day in any particular part of the organization. The Japanese perspective of management is focused on two key elements or management functions being maintenance and improvements. Thus, Kaizen technique focuses on both the aspects providing an effective substitute for Total quality Management or TQM. Organizations require the use of efficient models for productive decision making when implementing business process re-engineering to introduce improvements in the current business processing. In the construction industry, continuous improvement techniques like Kaizen focus on refining areas like the client's particular input, contracting system optimization, project performance feedback system, introduction of new systems for learning from similar industries and business process improvement to increase productivity and reduce costs.
Figure 4: Kaizen Technique (processed/extracted by the author)
The key drivers of change that facilitate continuous improvement include customer focus, committed leadership, integrated business processes and teams, people focus and commitment to established objectives or agenda. The case study in Spears Paper, Learning to lead at Toyota, specifically highlights the use of Kaizen principles in enhancing the efficiency of the Toyota Production System. Typical techniques like Active Observation of processes on a regular basis, frequent experimentation and managers functioning as coaches have led to continuous improvements in their business operations (Harvard Business Review, 2004). Kaizen thus focuses on making small yet effective improvements to the operations throughout to ensure continuous refinement.
Business process reengineering or process optimization requires analysis of existing processes in an organization and an informed decision making model to introduce productive results. The concept of Total Quality management ensures enhanced customer satisfaction and productivity by focusing on people. The logical decision making process or FADER as used under the TQM continuous improvement cycle is a high level continuous improvement concept widely used by organisations to refine business processes and solve complex problems. The logical decision making process focuses on key aspects like:
FADER methodology is used to facilitate the decision making process by applying the following principles:
The technique allows organisations to develop and refine their processes through a systematic approach that is organized and flexible. Organizations can use the approach to identify potential limitations in their business processes and identify productive solutions hence facilitating continuous improvement.
Although, the logical decision making process and FADER techniques are effective in solving complex problems following a logical step by step approach making use of tools at each phase of the procedure and relatively new thinking or planning to address the five questions highlighted above often requiring transformational or transition related change as a result, the Kaizen technique however, projects the importance of principles application rather than tools to effectively bring minor improvements on a continual basis to the business operations leading to developmental changes within existing cultures. Organizations that have made use of the Kaizen principle have experienced success in terms of quality conformance and management.
Q5 , the management of construction projects is about managing project information flow” (Winch (2002). Discuss the role of communication, in enabling project success. Students will find it helpful to discuss both the organisational structures required and the skills that the project manager needs in order to achieve successful communication between the project parties. Students will also find it helpful to illustrate the points made with reference to case studies and/or their own experience.
The essence to Successful Project delivery is marked by lucid and clear Communications channels that facilitate efficient project execution. Clear communication lines in a project environment will enable productive human interaction and thriving work relationships. Communication in the business environment is critical to ensure successful day-to-day operations and activities. It has been proven through various researches and case studies relative to business enterprises that projects that are delivered successfully, owe it primarily to well-established and clearly defined communication lines throughout the project life-cycle.
Organization Structure and the Essence of Stakeholder Mapping
In business organizations, effective communications across various stakeholders is dependent on various factors such as organizational structures, job roles, reporting lines and procedural structures. A well-defined organizational structure that clearly depicts authority, decision-making power and reporting channels will provide for an effective communication platform for all for project stakeholders. Management of project information thus play a pivotal role in the success of the project flow and stakeholder mapping. For instance, in large scale projects, especially those in the construction engineering domain, it is vital that all interaction between relevant project stakeholders and teams be planned meticulously in order to facilitate seamless information exchange and project related data transfer, which is accomplished through stakeholder mapping. Organizational structures, culture and structuring/mapping hence determines the quality and efficiency of project information thus leading to enhanced organisational performance.
There are various organization structures like traditional hierarchies, project based structuring and matrix based organizations. Typically, organizations in the construction industry tend to make use of the most appropriate structuring and stakeholder mapping that is synchronized with their business processes and strategic plans of the project. The focus is however on implementation of an optimized structure that allows successful interaction between project team members and all stakeholders. An organizational hierarchy that has clearly laid out roles and reporting lines for the project team is vital to project success. The matrix based organizational structure is more flexible in this regards as it involves a balanced fusion of both resources from generalized functions and core technical project departments with responsibilities clearly laid out enabling better communication lines as each resource is typically reporting to two managers.
Leadership role such as that projected by the Project Manager is highly significant in facilitating successful project interaction between team members to minimize the risk of project failure and issues like cost and schedule overruns, customer dissatisfaction and low team productivity. The project manager should ensure clear communications through defining a well-planned communications strategy for the project including the stakeholder management plan. He should adopt an adaptive leadership style reflecting strong negotiation skills, influencing and motivational abilities for project stakeholders to ensure effective two-way communications between the customer and team members. He should clearly define the what, when and how of each communication element for the project including how it is to be planned and executed. Lastly, the leadership role should enable the facilitation of an organizational culture that allows flexible and interactive project communications.
Organisations that do not consider the significance of hierarchical structures, cultures and leadership roles in successful project communications often face project risks and /or failures. This is evident by the case study such as: The design and construction of the New Scottish Parliament in Edinburgh, 1997-2004 (Andrew Dainty, 2006), that analyzes the distinctive elements in the failure of this high profile large scale public sector project. As per the Fraser Report, (Fraser, 2004) the primary issues for this project underperforming were poor communication lines relative to roles and responsibilities, procurement channels, client's requirements, gate-keeping and missing or incomplete information. In retrospect of the lessons learned from this construction project case study, and the other literature reviewed, it has been observed that it is highly necessary to devise a productive communication strategy keeping in consideration the above discussed elements to ensure project success.
Figure 5: Communications Plan (extracted/processed by the author)
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