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Contents
Introduction...........................................................................................................................................2
Project Overview...................................................................................................................................2
Feasibility of the Objectives to be Achieved..........................................................................................2
Objective 1: To establish a multi-purpose health and well-being campus...................................3
Objective 2: To be fully operational within three years of commencing the project...................3
Objective 3: To have a positive impact on the local environment................................................4
Objective 4: Be delivered within the project budget......................................................................5
Proposed Budget, Procurement Strategy, and Timeframe....................................................................5
Business Case Budget.......................................................................................................................5
Procurement Strategy......................................................................................................................6
Timeframe........................................................................................................................................6
Project Governance Structure...............................................................................................................7
Stakeholder Management.....................................................................................................................7
Risk........................................................................................................................................................8
Recommendations and Key Findings.....................................................................................................8
References.............................................................................................................................................9

TablesY
Table 1 - Process Groups.......................................................................................................................4
Table 2 - Project Budgets.......................................................................................................................6
Table 3 - Timeframes.............................................................................................................................7

Figure
Figure 1 - Ground Plan...........................................................................................................................5
Figure 2 - Project Approval Gates..........................................................................................................7
Figure 3 - Project Governance Structure...............................................................................................8

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Introduction
The Sanctuary Health and Wellness Complex Project Business Case is an attempt to layout the
feasibility of a three year, $15 million project which is primarily construction based. The following
paper will put forwards a critique of the Business Case which looks at the feasibility of the objectives
to be achieved, proposed budget, procurement and timeframe, project governance structure,
stakeholder management, and project risk. Before this critique can be conducted it will be useful to
provide an overview of the project. A business case is the document which looks at the economic
feasibility of a project whilst also outlining the benefits (PMI, 2017). As the business case is referred
to throughout the life of a project it should list the project objectives and reasons for the project
(PMI, 2017). The primary framework upon which the critique will be conducted will be the PMBOK
(PMI, 2017) with particular reference to the knowledge areas that relate to strong project
management principles. A number of recommendations will be presented with a view to increasing
the likelihood of project success.

Project Overview
Divine Health Service (DHS) is planning a development of an entirely new site which will house a
healthcare facility designed to relocate their existing services. The project will deliver four primary
health focused buildings and an administrative centre with sundry services such as electricity, water
supply and recycling, carparking and service roads on a two hectare site. DHS already has title of the
land along with approval from the Minister for Health to provide healthcare services upon it. The
preliminary budget put forwards is $15 million with an expected delivery date within three years. A
program of works lays out eight interconnected projects for delivery of the health and wellness
complex.

Feasibility of the Objectives to be Achieved

Before any project should be approved ensuring that the project objectives can reasonably be
achieved is paramount (de Wit, 1988). Whilst there are any number of control techniques and
project control software to assist in the delivery of projects, if the fundamental assumptions around
the objectives is not sound then it is reasonable to expect either project failure or at the very least
cost and time blowouts (Olawale & Sun, 2010). When looking at how to define the quality of the
project objectives they can be grouped under four main aspects; project characteristics, contractual
arrangements, project participants, and interactive processes in the hierarchical model for project
success (Chua, Kog, & Loh, 1999). Clearly defining the project scope is an aspect of ensuring that
project objectives are met and that the deliverables align with these objectives whilst also
minimising uncertainties (Atkinson, Crawford, & Ward, 2006; Howell, Laufer, & Ballard, 1993).

The objectives of the program are:

1. To establish a multi-purpose health and well-being campus

2. To be fully operational within three years of commencing the project
3. To have a positive impact on the local environment
4. Be delivered within the project budget

The use of project management process groups is recommended as a mechanism with which to
achieve specific project objectives (PMI, 2017). When looking at the DHS Business Case there is some
evidence that these groups are considered (see Table 1).

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 Process Group Evidence of use
Initiating  Identify stakeholders
Planning  Mention of the development of a Project Management Plan
 Mention of Scope within the Business Case
 Timelines which have approval gates built in
 A budget is defined
 Mention of a procurement plan within the Business Case
 A stakeholder management plan
Executing  Laid out briefly in the eight projects
Closing  Project close requiring the completion of all construction
Table 1 - Process Groups

What is missing from the Business Case is a clear definition of the Monitoring and Controlling
Process Group. This Progress Group allows the Project Manager to know how each aspect of the
project was achieved and relates to establishing the project performance and reporting systems
(Wysocki, 2009). Without these project performance and reporting systems measurement of the
progress of the deliverables is difficult at best.

Additionally, there are a number of key aspects missing within the Planning and Process Group
which would go towards ensuring that the Project Objectives are met, examples include; the
Business Case does not touch on how the requirements are to be collected, there is no estimation of
activity duration, and there is no estimation of costs outside of a few pieces of equipment and high
level budget targets.

Objective 1: To establish a multi-purpose health and well-being campus

The Business Case lays out several aspects of the Sanctuary Health and Wellness Complex:
 Wellness Centre/Alternative Medical Centre
 Community Health Centre
 Serviced Residential Facility
 Sports Centre
A business case is an opportunity to lay out the need for action, through reference to a needs
assessment, or business problem (PMI, 2017). What is not spelt out in the DHS Business Case is why
this site is being developed. Other than already having title and one Government Minister’s
approval there is no evidence of a compelling case for change. For example, is this site more
economically viable compared to the existing sites, will this move DHS to an area where there is a
substantial existing customer base, will this complex link into wider health services like a new
hospital? So, whilst this Project Objective may deliver a number of buildings related to the services
DHS provides it does not link into any defined need.
Objective 2: To be fully operational within three years of commencing the project
The Business Case does define a number of timelines for the delivery of Objective 1 but does not
define what fully operational means. There is a KPI which defines that operational revenues will be
$50 million per annum, so there is an assumption within this that the complex will be working at
capacity soon after project completion. This Project Objective seems to relate to one aspect of the
‘iron triangle’ without reference to the other two aspects of cost and quality. Only looking at one
aspect of the ‘iron triangle’ is considered problematic due to not taking into consideration areas like
safety, efficient use of resources, effectiveness and satisfaction of stakeholders (Ebbesen & Hope,
2013; Toor & Ogunlana, 2010).

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Objective 3: To have a positive impact on the local environment
The Business Case has set up a number of contradictions and also extremely problematic solutions to
achieve this Project Objective. Whilst including environmental solutions within a project is laudable
theses outcomes should at least be governed by local, state and federal statutes whilst also
contributing towards economic realities with an in-depth feasibility studie a must (Shen, Tam, Tam,
& Ji, 2010).

A simple viewing of the proposed ground plan shows that the water recycling services are situated
within a few meters of the Serviced Residential Facility (see Fig. 1). The Business Plan does not state
if this water recycling will be grey or black water, if the levels of grey water exceed 3,000 litres per
day additional State Government approvals would be required (BCC, 2019). Under the Water Supply
(Safety and Reliability) Act 2008 there are stringent requirements regarding the use of recycled
water and the treatment of sewage (Government, 2017).

Figure 1 - Ground Plan

At the very least the approval process of this Project Objective should be mentioned within the
Project Risks. Any risk management should be tailored towards the organisation undertaking the risk
whilst also taking into account externalities such as government regulation (Baccarini & Archer,
2001; Raz, Shenhar, & Dvir, 2002). A decision support system for this Project Objective and a way to
maximise project value might be to look at a set of options in regards to utilities such as power and
water as a way to mitigate this risk (Mahdi & Alreshaid, 2005).

The major contradiction within this Project Objective is the stated aim to be energy and water
neutral. However, within two of the sub-projects, the pool and the administration building, gas is
listed as an energy source. A fundamental aspect of a project business case is to align all of the

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necessary assumptions, alternatives and constraints whilst avoiding internal inconsistencies
(Kerzner, 2017).

Objective 4: Be delivered within the project budget

Further within this critique there will be a detailed review of the project budget. This is the second
of the ‘iron triangle’ objectives listed in the DHS project, and whilst important to state could be
linked to other measures such as project efficiency, impact on customer, direct business success, and
preparing for the future (Shenhur, Levy, & Dvir, 1997). A project can be built around quality systems
such as Six Sigma and thereby remove the need for an explicit mention of cost due to the inherent
removal of variability (Banuelas Coronado & Antony, 2002). It has been shown that project
variability is an area where cost blowouts often occur (Montgomery & Woodall, 2008; Pyzdek, 2003).

The greatest risk of not achieving this set of projects lays in the overall compartmentalisation of each
project. By placing each building into a different project immediately the overheads of duplication
start to play into the bottom line of the budget. Whilst there is value in placing a number of
interrelated projects into a program (PMI, 2017), with the Sanctuary Health and Wellness Complex
Project Business Case there seems to be a lack of high-level planning which could track the
interdependencies and progress of individual projects. As an example, the Integrated Commissioning
and Operational Handover Works Project which could be a strong approach to bringing all the
projects together makes no mention of the energy and water generation and storage technology
project which is key to ensuring all buildings have basic utilities.

Proposed Budget, Procurement Strategy, and Timeframe

Business Case Budget
One of the ten Project Management Knowledges Areas specifically focuses on Project Costs
Management (PMI, 2017). This acknowledgement by the PMI indicates that correct budget
management is considered a cornerstone of strong project management principles. Whilst the
budget detail found in the Cost Management Plan comes after the Business Case, it is the Business
Case that is used to set the starting budget and as such sets a baseline expectation by the project
sponsor (Roberts, 2011).

Project Budget
Site Infrastructure and Enabling works $ 1,500,000
Wellness Centre / Alternative Medical Centre $ 2,500,000
Community Health Centre $ 2,500,000
Serviced Residential Facility $ 2,000,000
Sports Centre $ 3,000,000
Administration and Centralised Building Services $ 2,000,000
Community Engagement and Promotions $ 750,000
Integrated Commissioning and Operational Handover works $ 750,000
Total $ 15,000,000
Table 2 - Project Budgets

A quick review of the cost per square meter of commercial buildings in Australia shows that a cost
between $2,900 and $3,800 per square meter is not unreasonable (LMI-Group, 2019; Washington-
Brown, 2019). The DHS Business Case allows for $2,500 per square meter for the four largest
buildings (see Table 2), inclusive of specialist medical equipment.

Whilst the projected budget is not wildly off from market expectations there is little to no room for
any unexpected costs. Delivering on budget is the goal of most projects, but as the Business Case

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states that “there is no allowance for escalation”, if interpreted correctly this shows that there are
no contingency funds. As it is well documented that the majority of construction projects exceed
their original budget (Shane, Molenaar, Anderson, & Schexnayder, 2009), there is a major risk built
into the Business Case that could lead to either major cost blowouts or even project failure.

Procurement Strategy
How a project defines and implements its procurement strategy is one of the PMBOK Project
Management Knowledge Areas (PMI, 2017). A strong overarching procurement strategy should
deliver value creation whilst also providing strong relationships with supply chain alliances (Walker &
Rowlinson, 2008). With the structure of having eight different projects defined within the DHS
Business Case there may well be eight different procurement strategies. As each project has been
provided permission to decide on timeframes and approaches to procurement there is a risk that
this will lead to overall project delays. In a project which is to be tied tightly to community
stakeholders the procurement strategy can be influenced in a positive manner by these participants
in the project (Walker & Rowlinson, 2008).

Timeframe
As might be expected project timeframes are covered by the Project Schedule Management
Knowledge Area in the PMBOK (PMI, 2017). The Business Case timelines lay out the program of
works to be finished within two years and nine months, inside the three years mentioned in Project
Objective Two (see Table 3).

Approval Gate Duration

Approval Gate 1 (AG1)
Approval Gate 2 (AG2)
Approval Gate 3 (AG3)
Program Close
Within 6 months after business case approval
Within 9 months after AG1
Within 24 months after AG2
Within 6 months after AG3
Table 3 - Timeframes

The use of approval gates (see Fig. 2) is a well-regarded project management practice for ensuring
that a phased approach contributes towards improved project performance and success (Besner &
Hobbs, 2006). Attention should be paid to the execution phase, specifically as several of the
construction projects cannot commence until the completion of the Site Infrastructure and Enabling
Works sub-project. This sets up a critical path for the entire project.

Figure 2 - Project Approval Gates

The Critical Path method is a tool to develop and control Schedule Management which will allow
prediction of timeframes, evaluation of alternative plans, provide the ability to check progress, and
form the basis for decision making within the project (James E. Kelley & Walker, 1959). What is not
considered within the Business Plan is the timelines for delivering the additional project relating to
the water and power services. Missing out a dependency within the Critical Path method can

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contribute towards projects going overtime and often over budget and should be considered a
project risk (Kliem & Ludin, 2017).

Project Governance Structure

Linking Organizational Governance with Project Governance provides stakeholders with the
structure to ensure that project activities adhere to policies, standards and guidelines (PMI, 2017).
For this project DHS requires the aforementioned phase gates but excludes the Monitoring and
Controlling Process Group within its Governance Structure (see Fig. 2). This impact of this decision
has already been discussed above.

Figure 3 - Project Governance Structure

There are several issues with the hierarchical nature of the Project Governance Structure (see Fig. 3),
however the key one is the lack of link back into the parent organisation. Without providing a direct
link between the executive and the project there is a risk that projects may continue without
supporting the organisation’s strategy (Too & Weaver, 2014). Such a misalignment may also mean
that the PMO is unable to provide correct oversight and strategic reporting capabilities (Too &
Weaver, 2014).

Stakeholder Management
A special mention should be made of the Stakeholder Management Plan, seen as critical across four
of the five Process Groups (PMI, 2017). Several additional afterthoughts seem to have been brought
into the Business Case which present additional risk of project success, such as linking the sporting
facilities to a local school which is yet to be built. By bringing in this kind of community stakeholder
without due consideration to the overall organisational strategy of DHS, which is primarily a
healthcare provider, considerable stakeholder dissatisfaction could occur (Mallak, Kurstedt, &
Patzak, 1991). Properly managed this inclusion could add additional value to the overall project and
increase additional future clients.

What is not considers as part of the Stakeholder Management Plan is the existing clients and their
ability to access the health services in the new location, a possible hurdle in achieving the Project
Objective of realising an annual turnover of $50 million. Overall the list of stakeholders identified
may be too few as additional stakeholders such as a procurement company, contractors, DHS itself
are not considered. The decision to split Community Engagement and Promotions into a separate
project ignores that stakeholder management is a key component of each sub-project which could
lead to mixed messages being delivered.

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Risk
Throughout this critique a number of risks have been identified which are not covered in the
Business Case:

1. Project approval process

2. The sub-project delivering power and water
3. Overall compartmentalisation of each project
4. Lack of project options
5. A project budget without contingency
6. Separate procurement strategies for each project
7. Missing a critical path dependency for overall schedule delivery
8. A governance structure that does not consider organisational executives
9. A complex stakeholder management approach with unknowns outside of the project

Whilst many of these might not be considered normal construction project risks, by their very
exclusion in the Business Case they become project risks. Missing key risks at the initiation and
planning process groups can have a detrimental impact on project success (Kliem & Ludin, 2017).

Recommendations and Key Findings

Throughout this critique of the DHS Business Case it has been identified that there are significant
gaps which require addressing. These gaps could contribute to significant cost, time and regulatory
issues which may lead to project delay or failure. The following four recommendations are made
with a view to addressing the concerns raised throughout this document:

1. Better identification of the strategic need for the new complex, along with an alignment to
the parent organisation’s ongoing strategy.
2. A reconsideration of the approach to supplying water and power to the final site, the level of
risk this introduces may be too high and severely impact on overall project success. At the
very least provide additional project options.
3. Consider bundling the construction sub-projects together to remove the siloed nature of
several processes, such as schedule and procurement management.
4. Reconsider the budget required to deliver the project on time. A larger budget with built in
contingency is suggested.

Whilst not addressed specifically throughout the critique, by not addressing the four
recommendations the possibility of scope creep becomes a strong probability. As there is no
statement of project exclusions this risk becomes even more likely.

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