Centre for Computer and Information Technology, Business Plan Example

Introduction

This paper explores the article  produced by Joseph Phillips[1] on Project Cost Management.  This article takes a light hearted look at Project Cost Management through the eyes of a seasoned Project Manager.  Joseph Phillips is the author of five books on project management and is a PMI Project Management Professional, a CompTIA certified Project Professional, and a Certified Technical Trainer.  The article particularly focuses upon the skills of estimating, IT and project cost controls.

Article Synopsis

The author, [Philips] develops rather a humorous tone to the serious subject matter of project cost management.  Philips makes the serious point of that we do not really know what the  project will cost  until it  has actually been completed.  The important point being that projects require funds and money in order to complete them.  This at least requires a rudimentary knowledge of budget controls and  financing.  One of the project managers worst nightmares is to run out of funds before the project is completed.  This can mean either reducing scope of the deliverables or  pleading to the project board to  have more money in order to complete the project.  The scenarios put the project manager in a bad light with  the sponsors, stakeholders and project board.

This leads to the author demonstrated the need to have a proper system of estimating in place.  A key point made in that ” estimates evolve as more product information becomes available” (Phillips).  An accurate estimate will define precisely what the project should accomplish.  It must state the assumptions of the estimate, the period of validity and everything that the stakeholders will need to know about the project.  He states that the project manager should really know about three main estimating techniques:

1. Ballpark estimating.
2. Budget estimating.
3. Definitive estimating.

Ballpark Estimating:  Or the rough order of magnitude estimate.  This provides the helicopter view of the project and has lots of witty room for manoeuvring.  i.e.  +/- 25 to 75% estimates.

Budget estimating: these are generally more accurate and have some scientific basis for the estimating.  One approach is to look at similar projects and use the latest estimates, based upon the historical information.  Examination of previous metrics can be used as a basis to refine the latest estimates.

Definitive estimating :   This is the most accurate basis of estimating and relies  upon the production of a work breakdown structure.  [WBS].  This is essentially based upon those activities that are specific to the production of deliverables.  This is often termed as a bottom-up estimate and may require the project manager to obtain a structured decomposition overview of the entire project .  Although a lot of effort can be expended in getting this right, it is well rewarded in terms of getting better overall financial control over the project.

Phillips concludes the article with a key point ” Project managers and their stakeholders need to go into any project with a common goal: Identify an affordable scope and a plan of how to achieve it.”  (Phillips).  

Conclusion

Phillips is  clearly a seasoned project manager and understands the difficult position.  The project manager finds himself in between that of the project team and the stakeholders.  It is good to see that Phillips has not lost his sense of humour and is able to treat a serious subject with a degree of levity.  He provides a good account of the different techniques and approaches to project cost estimating.  This is later discussed in more detail, looking at the composition of the information technology projects in the various complexities that are faced in building software projects, infrastructure projects and communications networking.  Phillips as a PMP demonstrates a good alignment to the Project management body of knowledge.  [PMBOK].  Overall, I agreed with most of the points that the author made.  Most of the projects that I’ve been involved with require detailed cost estimates.  This concept has been made much easier today with software applications that help and support.  The metrics behind building a work breakdown structure.  A number of these applications allow direct export to Microsoft Project where more sophisticated planning options are made available.

Project Quality Management

Introduction

This paper explores the article produced by Mimi Ho[2] Managing Project Quality: Cost control and justification.  Ho takes a serious look at the importance of quality management in the context of Project Management. ” project management, inadequate investment in quality management results in excessive additional costs due to poor project quality”  (Ho).  The article examines the project management skills of  the importance of business imperatives, the nature of quality management,  how to locate quality issues, recognizing customer dissatisfaction, missed project expectations and the cost of rework.  Mimi Ho is a Research Analyst at the Robert Francis Group.

Article synopsis

Ho points out that the lack of attention to proper project quality management roles can have serious ramifications for a business.  Ho  states that it is not only additional costs, involving more money to fix the projects  once delivered, but it leads to poor customer relationship [loss of satisfaction] and the perception of poor IT services.

There is a need to examine the business imperatives.  It can be a costly business to establish proper quality management controls.  Many companies fail to do this on the grounds of expense.  However, those that take the initiative are better able to demonstrate cost savings over time.  Management of customer and stakeholder relationships is important to develop the satisfaction of confidence in the business, thereby  obtaining  repeat business and new orders.  Customers are not likely to return, where they have been provided with poor service, low-quality goods.  For those that require extensive maintenance after delivery.

Ho outlines how the concept of outsourcing has increased the need for vigilance over such projects.  As such, IT executives need to invest more time in the establishment of good quality management practices and control over projects to improve enhanced processes, production time and staff efficiency. ” IT and senior executives should evaluate opportunities to increase product quality by reducing the cost derived as a result of poor quality. Most companies already know that in the long run, costs incurred from poor quality are significantly higher than the cost of establishing good quality upfront. Yet, this approach is not a common practice for many organizations”  (Ho).

Ho states that there are big  problems with IT projects, and the inability for  project managers to set clear quality expectations for the  project . There  seems to be a lack of customer involvement in the quality check of deliverables.  Oddly enough, the UK PRINCE2 project management method  has removed  project assurance teams as part of the product quality management.  This was seen to eliminate an independent check in favour of building TQM directly into the project deliverables.  Prince2  looked at three dimension of quality :  the user, technical representative and business perspective. ” Quality expectations are set and restated through the life of a project and initially within the

• Project Mandate
• Project brief
• Project Initiation Documentation (PID) ” (Verax Consulting)

Ho  points out that many corporations are still paying out money for inefficiency through a loss of market share.  The main causes being attributable to poor quality, product delays and the need for either rework or additional work.  IT managers need to examine this in greater detail focusing  on providing quality control measures that will bring about increased success as a return value.  [ROV].

The lack of quality controls courses projects to fail in meeting implementation targets, resulting bad customer or client relationships.  There is a need to introduce quality checkpoints into the project lifecycle.  The UK government has attempted to do this, by what has became known  as Stage Gate Reviews.  This allows a temporary cessation  of the project whilst the  quality criteria are  assessed for adequacy.  You’re not allowed to progress to the next stage of development until this  stage has been approved and  signed off by the project board.  The illustration to the right shows a typical Stage Gate review process, checking quality processes on an incremental basis throughout the lifecycle development of the project management method being utilized.

Conclusions

Ho  presents a useful article on project quality management.  It is a little focused on the IT business applications side and would benefit from some additional comparative analysis.  Nevertheless it is complete in terms of describing the main issues or points in this particular area.  The point about IT executives examining the total quality issues on projects is somewhat laboured.  This is well trodden  ground in most IT executives are fully aware of the importance TQM plays in the development projects.  The fact that there are still a number of organizations  that fail  to carry out proper project quality management is somewhat indicative of times that we live in, and the short-term thinking with regards to financial investment.

Works Cited

Ho, Mimi. Managing Project Quality: Cost, Control and Justification. 10 2005. 27 7 2010 <http://www.information-management.com/specialreports/20051025/1040055-1.html>.

Phillips, Joseph. Project Cost Management. 26 7 2010. 26 7 2010 <http://www.projectsmart.co.uk/project-cost-management.html>.

Verax Consulting. PRINCE2 Themes – Quality. 22 7 2009. 26 7 2010 <http://www.verax-consulting.com/2009/07/22/prince2-themes-quality/>.

[1] Project Cost Management by Joseph Phillips, Project Smart.co.uk, 26th July 2010, http://www.projectsmart.co.uk/project-cost-management.html

[2] Managing Project Quality: Cost Control and Justification, Mimi Ho, October 2005,  26th July 2010 http://www.information-management.com/specialreports/20051025/1040055-1.html