Planning & Budgeting with Risk

| October 22, 2018

Suppose the government awards your company a project to construct a 100-mile-long express highway for an upcoming mega sports event in the country, which must be completed within the next 12 months. The project involves the construction of 5 bridges, 8 tunnels, and 4 exits in each direction of the highway. Land has been acquired by the government and the relocation of citizens and villagers affected by the project is complete. Although all citizens have been relocated, there is resentment amongst citizens situated near the proposed exits. In addition to constructing the express highway, your organisation is responsible for obtaining environmental clearance from the Ministry of the Environment and the approval of design from the Public Works Department and Road Development Authority. A minister of state will personally monitor the progress of the project on a monthly basis, and will evaluate the attainment of intermediate milestones and quality and safety requirements. You are working on the creation of a communication plan for the project.Discuss the kind of information that you will share with each project stakeholder during the various phases of the project, as given in the table below. Assume required details as necessary, and justify the information needs that you identify for each stakeholder.StakeholdersPhaseClientSenior management/project sponsorProject managerRelocated villagersProject teamInitiationPlanningExecutionMonitoring and controlClosingPlanning and Budgeting with Risk

Week 6: Creation of communication plans and project acceptance planInformation requirements of project stakeholdersTextbook
reading (Sanghera: pp. 17–25) In
the previous weeks, you learnt about creating a WBS, schedule, budget and
staffing management plan, and risk register. You also learnt about monitoring a
project by tracking the actual progress in relation to the plan. To complete
each of these tasks, information must be communicated amongst project stakeholders.
Some argue that communicating is the most important aspect of project
management and is the most important skill for a project manager to have.
Project managers spend maximum time managing multidirectional communications to
ensure that all stakeholders have the right information at the right time. If
the number of stakeholders in a project is large, communication management
becomes even more complex for the project manager. If the number of
stakeholders in a project is N, the number of possible communication channels
is equal to N x (N – 1)/2. For example, the number of possible communication
channels for a project with three stakeholders A, B, and C is equal to (3 x
2)/2 = 3. In this example, A can communicate with B and C, and B can
communicate with C. There are only three communication channels in this case.
Consider what would happen when N = 20. In such a case, communication channels
will increase to 190.Communication
across all these channels is a complex process that needs to be managed
effectively for project success. Therefore, it is important to identify all
stakeholders, understand their information requirements, and accordingly, relay
only the required information to each stakeholder. Sending all information to
all stakeholders can be counterproductive for meeting project objectives as
stakeholders will have to search for the information they need.Stakeholder
analysis is the technique used to identify and describe the interests and
relationships of all the stakeholders in a given project. A project manager
needs to assess stakeholder information requirements based upon the role of
each project stakeholder. The amount of time a project manager needs to
identify these requirements varies. It depends upon the size and complexity of
the project, the time and budget available for communication, and the amount of
support the project manager needs to achieve the project objectives. This
stakeholder analysis provides details about the information to be sent to, and
received from, the stakeholders. It also impacts the frequency of information
sharing. Given below is an example of how a project manager would put together
a stakeholder analysis.As
a project manager, suppose you are part of a project to establish
infrastructure for a new service provider’s cellular network. The project is to
supply and erect transmission towers at designated locations. The project is to
be completed in 6 months. Other parts of the network, such as network
switches/antennas, power supply with backup, and electronic or physical
security, are being handled by different vendors directly appointed by the
client. To execute this project, you need weekly reports on the progress of
your team and of the other vendors. You also need reports on material
procurement, the structural steel manufacturing for towers, progress testing,
project budget status, and the constraints your team is facing. You must use
this information to share a periodic report with senior management. The purpose
of this report is to communicate the overall progress made, any deviations from
the plan, any associated risks along with necessary risk mitigation, and the
project budget. Another
important stakeholder whose information requirements you need to identify is
the client. You need to share project progress with the client through daily or
weekly reports. Because there are multiple vendors involved in this project,
the client may decide to convene a common meeting for all vendors. The basic
purpose of such a meeting would be to identify and discuss dependencies between
different vendors’ deliverables, raise alerts about delays (for example, a
delay in the erection of transmission towers will mean antennas, even if they
are delivered, cannot be installed), gather additional clarity about any change
in the client requirements, and track the overall project progress. Such a
meeting helps in the implementation of corrective or preventive actions as
required by the project team.Components of the communication planTextbook
reading (Sanghera: pp. 136–146)
Supplemental reading (Berman: pp. 121–126)After
identifying project stakeholders and their information requirements, the next
step is developing a communication plan. Stakeholder information requirements
and planning form the basis of the project communication plan. A useful tool
for a project manager to organise this is a communications matrix that
highlights the resource involved in each communication event and a clear
process for undertaking each communication event within the project.PMI
provides a basic communication model that defines the relationships and
interactions defined in the project communications plan (PMBOK, 2008, p. 255).
This model defines the cyclical relationship between the sender of a
communication, who encodes a message through a communications medium, to a
receiver, who decodes this message. Communication is reciprocated when the
sender receives feedback from the receiver. Communication can be interactive or
one-way. Interactive communication can be asynchronous, wherein the sender and
receiver do not have to be present during the communication exchange, or
synchronous, wherein the sender and receiver are present during the
communication exchange.The
purpose of the project communication plan is to integrate the what, when,
who needs, and who deliversin the communication process. The
plan includes details about the process to be followed, the types of
communication methods to be used, and the expectations to be met. A
communication plan has the following elements:

Stakeholders’ communication requirements.
For example, the senior manager-quality will require information on
quality metrics (the actual quality of deliverables against quality
standards), details of all quality issues to be resolved, and project
progress report.
What information needs to be
communicated—content, format, and level of detail.
Details on who will generate
the information (including appropriate protocol on confidentiality), to
whom it will be sent, and in what form it will be acceptable. Ensuring
that the information reaches the correct individuals is the key to
effectiveness.
Preferred methods of
communication for various stakeholders. Methods of communication can
include e-mail, video conferencing, face-to-face meetings, conference
calls, and online reports prepared through project management software
tools. For example, in cases where project teams are located across
several countries, having a video conference to discuss real-time common
project performance once a month might be more fruitful than sending out
monthly reports through e-mails or posting them at a common location.
The location for storing
project information and details on how it can be retrieved. For example,
project information might be stored on a Microsoft® SharePoint® portal.
Details on usernames, passwords, and how to access the SharePoint® portal
needs to be shared with the project team.
Communication
schedules—frequency and dates of various types of communication. For
example, a project manager can provide a monthly status report in a video conference
for the client and conduct a weekly status call meeting with each supplier
Escalation protocols for
raising issues that cannot be resolved at lower staff levels.
A glossary of the terminology
used in the communication plan.
Methods for updating the
communication management plan.
Communication constraints.
The
choice of an appropriate communication method to be used in a project depends
on the location of the project team—multi-located vs. co-located, the urgency
of information, and the project duration. Project budget also plays an
important role in determining the communication method. For example, most IT
services and products companies working on an onsite-offshore delivery model
having multi-located project teams use video conferencing and teleconferencing
on a periodic basis. For a project of 4 weeks duration, with a $50,000 budget,
and teams located at 10 different locations, video conferencing might not be
possible within the project budget, especially if the organisation has to
install expensive video conferencing equipment at all 10 locations. The project
team is more likely to use teleconferencing. Pages 142 and 143 of the Sanghera
textbook explain various methods of communication.Reference:

Project Management Institute. (2008) A guide to the project management body
of knowledge (PMBOK® guide). 4th ed. Newton Square (PA): Author.Components of the project acceptance plan Textbook
reading (Sanghera: pp. 375–387) In
project management, the term acceptance is defined as gaining agreement from
the customer that the deliverables produced by the project meet the criteria
defined by the customer. These criteria relate to the scope, quality, and cost
of deliverables, as well as the timeframes within which they are produced. The
acceptance plan is signed during the Close Project process. Closing the project
may involve two distinct sets of processes—project closure and procurement
closure.Project closure happens when the client accepts and validates that the
deliverables identified with the project manager at the beginning of the
project have been completed. The acceptance plan is created toward the end of
the project planning phase after other plans have been developed. The final
acceptance can be in the form of a receipt from the client stating that the
requirements of the project have been met. This
plan is referenced during the project execution and project closure phases. A
project acceptance plan includes the following elements:
A list of project deliverables,
along with the milestone for each deliverable
Criteria and standards for the
acceptance of each deliverable by the client
A plan outlining how the
project team will review each deliverable to determine whether it meets
the criteria and adheres to the standards set by the client
A process for gaining client
acceptance once the deliverables are produced
During
project closure, the project team also needs to conduct a
review/lessons-learned meeting to capture items such as ‘what went well’, ‘what
could have been done better’, and ‘what went wrong’. The outcome of the review
meeting along with the estimation, planning, and other project documents serve
as a reference for future projects. Project
closure also involves releasing the resources working on the project. During
the course of execution of a project, various tasks might have been contracted
out to different vendors. Procurement closure is when all contracts
associated with the project are closed. Procurement closure takes care of
clearing and closing all the project-related contracts with the different
vendors, as well as with the client, if any. During procurement closure, a
project manager has to issue a verification certification stating that all
deliverables from a vendor have been received and verified. Pages 382–385 of
your textbook explain in detail the elements of the procurement closure
process.Note
that not all projects are successful and run through their complete life cycle.
As per the 2008 Chaos Report published by the Standish Group
International, Inc., more than 60,000 projects were examined, of which about 20
percent failed and about 45 percent were challenged (that is, they did not meet
all objectives). As a project manager, you might be required to make a decision
to terminate a project on the basis of realities that emerge as the project
progresses. Such realities might include merger or acquisition of the company,
reduction of resources resulting from budget cuts, or introduction of a new
technology that replaces the existing technology. The acceptance plan would include
those conditions calling for project termination. These conditions should also
be clearly outlined in the project acceptance plan so that both the client and
the project team are clear about expectations. Reference:
The Standish Group International, Inc. (2008) Chaos report. Boston:
Author.

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