BUSM2031 - Project Management

BUSM2031 - Project Management [Type the date]

BUSM2031 - Project Management 11000230

Project Background The North England Procurement Health Agency (NEHPA) is an organisation set up to handle the procurements of a range of health authorities, hospitals and other NHS trusts. In the 1980s Leeds General Supplies Authority set up a procurement agency to handle the procurement of three of its satellite hospitals, this was the roots of the NEHPA. A few years later, after the closure of the agency, the Leeds General Manager and the Head of Purchasing in Manchester met to reform the NEHPA, the objectives of the handling of procurements were to encourage a good public service ethos, an increase in purchasing power in order to obtain lower prices and better conditions for key suppliers. The NEHPA soon included hospital trusts in Liverpool and Hull too. In 1995 the formation of a separate procurement agency occurred to act independently from the participants, to serve in the interests of all of its clients, this was the origin of NEHPA. A specialised building was set up in Halifax, West Yorkshire as the headquarters, Edward Bunyan a civil servant from London was recruited to Head of Agency. Valid Strategic Contribution Norris-Benson & Partners (specialists in advising heath service organisations) were introduced as consultants in the Halifax operation. Shenhar et al. (2007: p.65) recommends strategic contribution is the definition of position; this is a form of guidelines of what to do and how these guidelines should be completed in order to obtain the best value for the project. Norris-Benson & Partners strategic recommendations to NEHPA were as follows; the procurement of an integrated purchasing system for use by all staff to streamline purchasing operations, improve workflow management and internal communications, control finance streams more effectively and deliver improved procurement management. The project took on the name PEPS. Norris-Benson & Partners expressed confidence in completing the PEPS project, however, after completing the tender process an American owned company Syntigration-XB Inc. were awarded the contract, retaining Norris-Benson as QA consultants. Project Objectives Norris-Benson & Partners suggested a total of sixteen months to complete the PEPS project; the project was divided into three phases in order to enable visibility, control, tracking and expedition. Phase one consisted of the creation of a blank database followed by the customisation and utilisation of the database in order to use as an informational system to generate management information; nine months was specifically assigned to this stage of the project. Phase two would use the MIS database created in phase one to develop a financial spend profile and an overall schedule of financial commitments for NEHPA. Finally, phase three would use a legal software package to help draft complex contracts. Each phase of the PEPS project would be measured by seniors by summarised weekly reports and written monthly progress reports submitted by the Project Manager, David Field. The PEPS project was desired by Norris-Benson & Partners to be accessible by all 172 NEHPA staff. In order for the objectives to accomplished and the project finished, Syntigration-XB Inc. had to be able to complete the PEPS system, which would be at the heart of the new business model electronically recording and tracking each purchasing project and generating a wealth of valuable management information at each stage of the process. These components of specific, measureable, achievable, realistic objectives in time constraint on a temporary basis the definition of project management (Maylor 2010: p. 7). ScopeNorris-Benson & Partners initial analysis of the objectives of the PEPS project was adopted by S-XB. Although this was articulated reasonably well by the Norris-Benson team, the specifics of the design were not set out in any detail. Malylor (2010: p.101) suggests the process scope needs managing right from the start in order to prevent subtle changes occurring on a number of occasions until the project no longer reflects the original concept. An assumption was made by S-XB that these would be finalised during the duration of the project, a possible sign for future failure as there is fundamental flaws in assumptions (Maylor 2010: p.107). Environment Internal Environment Despite American ownership of S-XB, the team consisted of British and European IT professionals, the nominated project manager at the time of contract award was from Yorkshire and both teams had a good working relationship. However, a shift in team took place a week before the start-up discussions were scheduled, with team members of young Americans being introduced to the project, including a change in Project Manager. The NHS is a British public sector organisation; the American culture may lack knowledge of the organisation, possibly not understanding the importance of the project success. According to the Healthcare Commission (2004/09: p.19) report there is an increase in the need for an investigation of serious service failures; these failures are being readdressed in 2012, as Health Secretary Jeremy Hunt warns a public inquiry has been looking at the failures (BBC 2013). The continuation of failures of NHS projects will influence the project as pressures to complete the project will be encouraged by NEHPA, media and the general public to be on time, on target and meet the objectives. Structures of projects affect the span of project control, S-XB have taken a top-heavy, tall hierarchical structural approach to the PEPS project. This structure shows a clear line of responsibility, better training as managers are working in smaller teams; however, management personnel are costly and could affect the division of the budget on personnel over project (Mullins 2010: p.555).External Environment The HM Government coalition programme for government (2010: p.25) states that the coalition government will strengthen the role of the Care Quality Commission so it becomes an effective quality inspectorate. We will develop Monitor into an economic regulator that will oversee aspects of access, competition and price setting in the NHS. The government believe the development of a procurement system is necessary to ensure quality, access, fair competition and price setting in order to gage local requirements more effectively, the same original objectives of the NEHPA. The use of an effective database distributing procurement in the participating hospital trusts emphasises local recourses, creating local jobs and less damaging vehicle transportation of treatments. The online database will also reduce paperwork helping the environment. The use of an online database will ensure quick response feedback, including tracking and updating of the technology, a development of new technology may also be encouraged if project is successful. The ability to source in bigger quantities will encourage best value for money. Socially, an influx of new jobs will occur at the Halifax headquarters, assisting in the distribution of resources more effectively and reducing overall resources. The NEHPA have a legal obligation to supply on time and gain at best values due to working for a public sector. The distribution of money will have to be closely monitored as the British recession continues. From the original concept of the NEHPA organisation to recent times of the PEPS project, unemployment continued rising in the three months to January to hit its highest rate since 1995, the government continue to encourage the cut of public sector jobs and wages due to the economical climate (Stewart 2012). Stakeholders The stakeholder theory according to Garvare & Johansson (2010) states organisations should satisfy its stakeholders, however stakeholders (clusters of people directly effected by the company choices) have different levels of influence and interest; primary, secondary stakeholders and interested parties. In accordance to the PEPS project, primary stakeholders are the NEHPA and S-XB as they are the decision makers; the outcome of the project will be a reflection of the input of NEHPA and S-XB. Whilst Norris-Benson & Partners are working as consultants who have some influence on the project development but are not directly affected by the outcome of the project, as are the NHS, the British government and the media. Finally the clients and suppliers of the hospital trusts will be affected by the project but do not have any influence on the way the project is delivered or run.

Resource Requirements Stuart Dickson, NEHPA IT Manager decided that an estimated 200k budget would be given for the PEPS project whereby S-XB were tasked only with the development of the system software, and the NEHPA team would procure, configure and deliver all the new hardware required. The reasoning for awarding the tender to S-XB were their previous experience in IT contracts compared to Norris-Benson & partners and their belief expressed for the 16month timescale. According to Ng et al. (2008: p.448-456) the use of specialists is to capitalise on the skills with the prior knowledge gained in previous experiences.

The providing of the S-XB team accommodation was argued as both NEHPA and S-XB suggested it was at the expense of the other, until Joey ODonnell the Commercial Manager of S-XB highlighted to NEHPA that the S-XB proposal stated explicitly that the man-hour rates quoted excluded all other expenses other than for personnel costs. After the office space was agreed, dcor, and computer access completed, Dickson expressed doubt about his gut feel estimate of 200,000. Due to a lack of planning the project, which was yet to start officially, started to suggest a higher budget, as terms were not finally agreed and detail of time scales and financial allocation were not set out; as suggested by Maylor (2010: p.176) the estimate is an attempt to predict the status of spend at some point in the future and as such is subject to that fundamental property of projects uncertainty. Control activitiesNEHPA expressed the need for the PEPS project to be completed within 16months; one of the reasons S-XB won the tender. An incentive was offered if the project would be handed-over within the time frame or no later than one calendar month late, lesser than, the priority of quality is also crucial factor to the enabling of the PEPS projects. The lack of priority of cost is suggested by the estimated budgets. In order to distinguish between the different possible priorities of a project, a TQC trade-off triangle is used as seen in Figure 1TQC trade-off triangle (Maylor 2010: p.84); A trade-off is, therefore, the prioritisation of the objectives of a project (Maylor 2010: p.84). A project can have two priorities like the example of the PEPS project triangle in Figure 1TQC trade-off triangle (Maylor 2010: p.84); however, when a priority is on one or two elements a comprise will be made on the other elements that hold less priority, therefore the PEPS project is more likely to go over budget than over schedule.

Figure 1: TQC Trade-off Triangle (Source Maylor 2010: p.84)

Plan of activates, end of project and success criteriaS-XB produced a Gantt chart of the overall project plan, which reflected the recommended project schedule, and three-phase structure developed by NEHPA and Norris-Benson as seen in Appendix A. The Gantt chart showed the tasks that would be completed in a basic format with start and finish dates followed by a view of the over lapping times and tasks. The use of a Gantt chart shows the organisational skills of S-XB, reinforcing the 16month timescale as feasible, and will take place on the 21st April. The identification of tasks have been stated, however S-XB have failed to state how the tasks will be performed and who will be completing and managing the tasks. In order to build in a commercial incentive and element of risk transfer, NEHPA decided to incorporate a 250,00 bonus to be paid to the contractor is all phase modules are delivered on time according to the project timeframe, and are acceptable as fully fit for purpose by representatives of the NEHPA user community, if delivered one calendar month over date a 100,000 bonus will be payable. Word Count: 1939Ensuring Project SuccessPriorities of ProjectAs discussed previously, NEHPAs priority of the project is time; emphasis on the 16month completion date is highlighted through an incentive. The focus on time prevents a focus on the budget and the quality of the project. As suggested by Maylor (2010: p.86) if a project is running up against time constraints it may be worth considering the sequence of activities to see whether their rearrangement will yield the necessary time saving, however the consideration of other aspects of the project may reduce time but incurring additional costs. A shift in priority of the project is necessary as the quality of the project is essential to the longevity of the PEPS project and will insure low future financial spend on software update. Projection of total costsAn assumed budget of 200k by NEHPA management, shows a lack of preparation and planning for the project; According to Dennis Lock (2007: p.16) the planning stages is too early for anyone to measure success or failure but it is when the foundations for success or failure are laid. A total of 88,700 was spent on 30 PCs for the PEPS teams, however 172 staff will need access to the software and computers, therefore totalling an estimated 508,000 for the total amount of PCs required to hold the software created by the S-XB staff. The consideration of a more detailed and realistic budget, will allow for tracking of budgeting by the contractors for each aspect of the task left to complete.Consequence of failure

Figure 2: Mind map of NEHPA and S-XB consequences of failure

As seen in Figure 2: Mind map of NEHPA and S-XB consequences of failure, both organisations will suffer not only present repercussions but long term impacts for the failure of the PEPS project. According to Williams and Kendrick (2011: p.7) A project is a failure when its product is unsuccessful in providing value to all the parties. NEHPA will suffer public embarrassment and acknowledgement of the PEPS project failure, due to the present NHS project failure percentage, however the contractor S-XB will also find a difficulty to secure future contracts as other organisations may be aware of the project failure. S-XB will suffer financially as the failure of the project may lead to the project not being delivered on time therefore cancellation of the incentive bonus and loss of profit. Finally, the NEHPAs original objectives may change in the chaos to finish the project due to external pressure from secondary stakeholders and interested parties. Courses of Remedial Action It is assumed that a lack of a sufficient contract between NEHPA and S-XB has lead to the confusion of budget distribution. Both NEHPA and S-XB disagreed on the provision of office accommodation; it became clear to both sides that this issue was somewhat ambiguous. After a discussion the cost of the accommodation would be at the expense of the NEHPA team. However, according to the British Government guide to contracts (no date), terms of contracts state employers must stick to a contract until it ends, therefore S-XB must complete the PEPS project despite the fact of possibly being over budget, late or not to an adequate quality unless dismissed by NEHPA. In order to insure quality of software and within a reasonable budget, S-XB and NEHPA should reposition the objective of the project to be more quality and cost focused. Figure 3: TQC trade-off triangle Quality and Cost priority

The NEHPA have put pressure on the time schedule, however, the pressure is unjustified as the project is a new concept with a previous system continuing to run before the project started and during the project being active. Focusing on the quality of the project will ensure longevity and a justification for an over spend on the project as it holds the possibility of saving money in the long-term (ordering treatments in bulk etc).

Appendix B demonstrates the present management structure. The tall hierarchical approach shows benefit for the complexity of the project, however, top heavy management costs more; risking the budget distribution on personnel as apposed to the project and quality of the software. The allocation of one Project Manager from NEHPA will also reduce risk and confusion as dealings will be more direct and chain of command will be clear (Maylor 2010: p. 244).

Williams and Kendrick (2011: p.15) suggest projects will remain untreated if people choose to ignore them, the beginning of the process is admitting there is a problem and committing to solving the problem. NEHPA have expressed concern about the budget and been unwilling to corporate with the time schedule set by S-XB. A mutual new set of objectives must be considered, the recovery plan is necessarily different from the original project plan (Williams and Kendrick 2011: p.8). In order to complete a recovery plan, a risk assessment must be carried out and S-XB and NEHPA must consider a contingence plan for the project to progress successfully. Word Count: 807Appropriate PlanClear ObjectivesIn order to ensure the PEPS project as a success a designated Project Manager from NEHPA will be assigned to ensure structure. A clear chain of command will reduce confusion, take responsibility for the success or failure of the project and be able to relay information to seniors of NEHPA. Williams and Kendrick (2011: p.232) propose, the assignment of people to the project should not be used simply as a resource, a strong project manager will foster and lead the time through success and sights of failures.

According to Dennis Lock (2007: p.17) estimates of cost, timescale or benefits are too optimistic in the early stages of a project can almost certainly guarantee failure. A new timescale for the PEPS project will reduce the pressure of time the project has placed on the completion and add new criteria of a quality driven software to reduce future funding into improving the software. A new budget will need to be allocated to the PEPS project in order to compliment the new quality driven project, also increasing accuracy of budget allocation to the project software as apposed to the budget allocation being placed on the wages of workers and accommodating the S-XB team. The new timescale will also incorporate a contingency plan, which will reduce project failure. Clear Management StructureFigure 4: Revised Project Management Structure

The introduction of a new Project Manager and quality of the budget allocation will result in a restructure. Appendix B demonstrates the current management structure; in order to reduce budget allocation on wages a reduction of workers is necessary. Figure 4, has reduced the management team that are not directly linked to the phase management teams, keeping the sectors but reduced to the necessary minimum. In order to employ the original work force for an 8-hour day an expense of a total amount 13,240, by reducing the top-heavy management structure suggested by S-XB up to 3,500 could be saved, leaving a larger margin of profit for S-XB. As suggested by Maylor (2010: p.251) paying project teams on time-rate encourages people to drag out jobs over a longer period of time because these people have no commitment to the project success, the only member of a team with an interest to achieve time, cost, quality is the project manager; introducing a NEHPA Project Manager will add foresight and increase pressure on S-XB employees as management team is visible and insightful of delays or issues. Appropriate Resource AllocationAn estimated budget of 200k was suggested by NEHPA; before the project had yet to begin on 4th January a total of 88,700 was spent on technological equipment for the S-XB team, with an additional 8,000 installation fee from BT. Accommodation was found for 950 per day totally an estimated 450,000 for the 16month contract without delays; an additional 25,000 was agreed for the office furnishings. A total of cost before the project start date totalled an estimated 570,000, almost triple the original estimated budget. The PEPS project failed to given an accurately calculated budget however as described by Williams and Kendrick (2011: p.173) once estimates are given, they are treated like quotes, and people are reprimanded anything they are late or early on a task or over- or under budget, the use of an estimate is not significant for ensuring accuracy of over expenditure. A new budget of 670,000 will be given for the PEPS project, over triple the total of the original estimate majority of the budget will be distributed to the start up costs, 100,000 will be contributed toward the software.Plan of Activities TimescalesFigure 5: Revised Gantt ChartFigure 6: Revised Phase 1 List of Activities

Due to the overwhelming pressure time constraint of 16months of the PEPS project, a new, realistic Gantt chart produced in Figure 5. The Gantt chart demonstrates a new time frame of 18months for the project completion because of the insufficient completion of phase one activities. A two-month extension is divided among the three phases; the issues raised in phase 1 template the issues that may occur in phase 2 and 3 hence the additional time taken for all three phases. By increasing the time schedule the quality of the project and the cost will be more realist and manageable.

Figure 6 shows the revised phase one list of activities; the original list of activities reported by David Field suggests a lack of structure of each of the phase activities as particular tasks such as the P1-1 and P1-2 design is 80% complete compared to the 100% feedback at time of report, 1st June. In order for the feedback of the design to be valid, activities must follow suit of one another, as displayed by the arrows is figure 6. Each activity needs a particular amount of time to complete, the completion of each task to the best quality and validity will be as a result of change in time schedule from 16month to 18months. The review of the project at this time will allow for a best understanding of the future of the project in conjunction with estimates, Williams and Kendrick agree (2011: p.121) the poorer understanding of the task, the more likely it is that time estimates will only be guesses. Control and Risk Factors NEHPA must take control of the project as the ability to assess the status of a particular activity or set of activities, are able to compare that with a desired position and are then able to make adjustments as necessary to change the state of that system to reduce the gap [of failure or success] (Maylor 2010: p.306). In order to ensure the success of the PEPS project with the introduction of a new NEHPA Project Manager, a new management structure, a new realistic project budget and a new schedule of time scale and activities; the risk assessment must take place, to prevent any other issues possibly occurring that could be prevented at present; as Lock (2007) states, project risks are taken seriously and people pay more attention to predicting risk events so that contingencies and risk mitigation strategies can be planned. The time priority incentive will need to be restructured to fit the new budget and time schedule, the new NEHPA project manager will encourage the incentive for S-XB and the new schedule will make it realistic to receive the incentive. Finally, figure 6 highlights in red a contingency plan to allow for a longer time schedule than the new one. The contingence plan, written in a new contract with all the above new objectives, will also encourage S-XB to allow Norris-Benson and Partners to step in and help ensure that each activity is delivered on time at the first sign of failure. Word Count: 1105

Total Word Count: 3860

References BBC (6th January 2013) Failing NHS bosses will go Jeremy Hunt. BBC News Health. [Online] Available from: http://www.bbc.co.uk/news/health-20924654 [Accessed 6th January 2013].

British Government (no date) Guide on contracts. [Online] Available from: https://www.gov.uk/employment-contracts-and-conditions/overview [Accessed 6th January 2013].

Garvare, Rickard & Johansson, Peter (2010) Management for sustainability A stakeholder theory. Total Quality Management & Business Excellence. [Online] 21 (7), 737-744. Available from: Business Source Premier [Accessed 6th January 2013].

Healthcare Commission (2009) The Healthcare Commission 2004-2009. [Online] Available from: http://www.nhshistory.net/Healthcare_Commission_legacy_report.pdf [Accessed 6th January 2013].

HM Government (May 2010) The Coalition: our programme for government. Cabinet Office. London, UK. Available from: http://www.cabinetoffice.gov.uk/sites/default/files/resources/coalition_programme_for_government.pdf [Accessed 6th January 2013].

Lock, D (2007) Project Management. 9th edition. Hampshire, Gower, Publishing Limited.

Maylor, H. (2010) Project Management. 4th edition. Harlow, Pearson.

Mullins, L. J (2010) Management & Organisational Behaviour. 9th edition. Harlow, Pearson.

Ng, S. T, Luu, C. D. T, Chu, A. W. K. (2008) Delineating criteria for subcontractors registration considering divergence in skill base and scales. International Journal of Project Management. [Online] 26 (4), 448-456. Available from: ScienceDirect [Accessed 6th January 2012].

Shenhar, A. J, Milosevic, D, Dvir, D and Thamhain, H (2007) Linking Project Management to Business Strategy. Newtown, PA, Project Management Institute.

Stewart, H (14th March 2012) Osbornes austerity drive cut 270,000 public sector jobs last year. The Guardian. [Online] Available from: http://www.guardian.co.uk/business/2012/mar/14/osborne-austerity-270000-public-sector-jobs [Accessed 6th January 2012].

Williams, T. C and Kendrick, T. (2011) Rescue the Problem Project. New York, AMACOM.

Appendix A: S-XB Gantt Chart

Appendix B: Current Management StructureCal RiggsProject ManagerPEPS ProjectOrganisation Chart for Phase 1John RybackDevelopment ManagerJack MurtaghSystem Test ManagerYul ThompsonTechnical ManagerDavid FieldPhase 1 ManagerCasey PhillipsPhase 3 ManagerCathryn PrewTechnical SpecialistBarry JamesSenior Test EngineerJoey ODonnellCommercial ManagerPhil PriceSecurity ManagerHenry RichardsonQuality ManagerDavid FieldPhase 1 ManagerChris Hunt *NEHPA Representative(Phase 1)

* NEHPA staff - not part of the PEPS contractTore KristensenSenior DeveloperPhase 1 development team(5 developers)PEPS ProjectPhase 1 Development TeamHermione JohnsonDeployment ManagerSue SmithPhase 2 ManagerRy HalewoodProject Support ManagerTim DillonSnr DeveloperSee belowJune PeelingTraining ManagerFreda RiversTraining SpecialistSam RiversQA SpecialistGary CostelloSecurity Specialist

13