محتويات الموضوعContents • Project success/failure in relation to initial project definition. • The Three Parameters of Project Success/Failure. – Cost Objective. – Quality/performance/specifications Objective. – Time Objective. – Triangle of objectives and trade-off between Cost, Performance, and time. • Quality, Cost relationship. • Time, Cost Relationship. • Perceptions of Project Success Failure beyond the Primary Objectives. Project success/failure in relation to initial project definition • Initial project definition leads to the business case on which the decision to authorize or disallow the project start. This initial definition takes during Phases 1 to 6 in the Gantt chart of Figure 2.1. This is clearly too early for anyone to measure the success or failure of the project but it is the time in the project’s life history when the foundations for success or failure are laid. • Any of the following shortcomings during this early period can condemn a project to almost certain failure: – The project scope (the extent of work required) is not clearly stated and understood. – The technical requirements are vague. – Estimates of cost, timescale or benefits are too optimistic. – Risk assessment is incomplete or flawed. – The intended project strategy is inappropriate. – Insufficient regard is paid to cash flows and the provision of funds. – The interests and concerns of stakeholders are not taken into account. Project success/failure in relation to execution phase The Three Parameters of Project Success/Failure.
• Manager of project would consider the task
well done if the project finished: 1. on time. 2. according to its specified performance. 3. within its budgeted cost. – These three objectives (time, performance and cost) are traditionally the basic parameters for measuring project success or failure The Three Parameters of Project Success/Failure. • The primary objectives of cost, performance and time are clear benchmarks against which to judge success or failure when (or soon after) a project is finished and handed over to the customer. • The project manager needs to understand what each of these objectives implies and how the three can interrelate with each other. The Three Parameters of Project Success/Failure. 1. Cost Objective: • Every project should be controlled against detailed cost budgets to ensure that the expenditure authorized in its contract is not exceeded. • Failure to complete work within the authorized budget will reduce profits and the return on the capital invested. • Most projects are undertaken with the expectation of benefits, either on completion or later in their life history. • There are many projects where there is no initial profit motive such as pure scientific research programs, some national projects, and projects undertaken by the charitable organizations. However, even with no profit motive, strict attention to cost budgets and financial management is usually vital. The Three Parameters of Project Success/Failure.
• Quality has often been used as an alternative name for the performance project objective. • Quality Means: – performance at least equal to the specification; – reliability and freedom from malfunction; – long useful and economic life. – low operating and maintenance costs; – comfort and a pleasant impact on the human senses (sight, smell, taste, touch, hearing). – environmentally friendly. The Three Parameters of Project Success/Failure. • Time Objective: • Actual progress has to match or beat planned progress. • All significant stages of the project must take place no later than their specified dates, to result in total completion on or before the planned finish date. • Late completion of a project will not please the project purchaser or sponsor, to say the least. • If the contractor continuously failed to keep delivery promises, he shall lose his market reputation; .
• A common risk to projects is failure to start work on time. Very long
delays can be caused by procrastination, legal or planning difficulties, shortage of information, lack of funds or other resources. Triangle of objectives and trade- between cost, performance/quality and specifications and time. • In the mid 1980s Dr Martin Barnes introduced the first version of his triangle of objectives • The purpose of this triangle was to illustrate that the three primary objectives of cost, time and quality are interrelated. • Shortly after his triangle’s initial introduction Dr Barnes changed ‘quality’ to ‘performance’ because Quality must not be compromised where as the project performance after delivered is measured based to the level of specifications that already provided by the client. (why) A management decision to place greater emphasis on achieving one or two of these objectives must sometimes be made at the expense of the remaining objectives. Thus project sponsors or managers sometimes have to decide on giving priority to one or more of the three objectives in a trade-off decision. Triangle of objectives and trade- between cost, performance and time. Triangle of objectives and trade- between cost, performance and time. • The outcome of a trade-off decision can be indicated by placing a spot within the triangle boundaries. • For example, if cost is the greatest consideration, the blob will be placed in the cost corner. If all the objectives are regarded as equal (balanced), the blob will be put in the middle of the triangle. • A project for a charitable organization with very limited funds would have to be controlled very much with budgets in mind, so that costs must be the project manager’s chief concern. • Industries such as aerospace and nuclear power generation have to place high emphasis on safety and reliability, so performance becomes their most important objective. • A project to set up a stand at a trade exhibition, for which the date has been announced and the venue booked, is so dependent on meeting the time objective that it might be necessary to accept overspent budgets if that is the only way to avoid missing the date. Triangle of objectives and trade- between cost, performance and time. Quality Cost relationship: • It is a mistake to believe that there can be a simple and acceptable trade-off between quality and cost. • Quality must not be compromised or downgraded because it means “fit for purpose” and “can be achieved without extra cost”. Therefore, No contractor or project manager should contemplate a result that is not ‘fit for purpose’. So, quality is not negotiable. • For this purpose ‘performance’ or ‘level of specification’ are more appropriate names for this objective because, in many cases, they are negotiable. Triangle of objectives and trade- between cost, performance and time. Time/Cost relationship: • There is usually a direct and very important relationship between time and money. If the planned timescale is exceeded, the original cost estimates are almost certain to be overspent. Therefore project delay will result in: 1. Direct cost: Direct labour, and material cost will increase as a result of wages, and prices increase through the time. 2. Overhead cost: The fixed or overhead costs of management, administration, accommodation, services and general facilities will be incurred day by day, every day, regardless of work done, until the project is finished. If the project runs late, these costs will have to be borne for a longer period than planned. They will then exceed their budget. 3. Cost of Financing: if the contractor have taken a bank loan, then he has to pay the interest of this loan. And if he fund the project from his internal resources he will the opportunity of having an interest if alternatively invested this money as a bank deposit. 4. Cost Penalties: Some contracts contain a penalty clause which provides the customer with the sanction of a cost penalty against the contractor for each day or week by which the contractor fails to meet the contracted delivery obligation. Perceptions of Project Success/Failure beyond the Primary Objectives • Project stake holders are all those have stake in the project and the project success or failure shall have impact on them. • Project success or failure depends on how the project outcome is perceived by all the stakeholders. • Stakeholders can be indentified into two categories: – Primary stakeholders are the Project Owner (Client/Customer), and the Contractor who executes the Project. – Secondary stake holders such as (banks, employees, local residents, government authorities, suppliers, environment groups). • Fulfilling of the Project Primary Objectives of cost, performance, and time will lead satisfaction of the Primary stake holders which means: satisfying the customer (Client), while creating a commercial success of the contractor. Perceptions of Project Success/Failure beyond the Primary Objectives • The other categories of Project stakeholders need to be identified and ranked based on: 1. Their Power and influence on the project (some stakeholders may have a direct power on the projects, while others will able only to voice their opinions. 2. The impact of the Project on them. • Once all the stakeholders have been identified, the means of communicating and dealing with them will have to be considered. Consultation will always be better than confrontation. Perceptions of Project Success/Failure beyond the Primary Objectives • When the preliminary investigation of stakeholders’ interests is finished, the triangle of objectives could, in theory at least, be supplemented by a more complex matrix of stakeholders’ perceptions. Figure 2.3 below shows a theoretical format. This allows the perceived priorities of all project stakeholders to be considered. Perceptions of Project Success/Failure beyond the Primary Objectives Project success/failure regarding benefit realization • In most industrial and manufacturing projects the project owner should start to realize the expected benefits immediately or shortly after the project is successfully finished and handed over. Shown as Phase 13 Example, A chemical plant, once successfully commissioned, will be capable of producing saleable product. • However, business change and IT projects can be quite different because their most significant benefits tend to be realized later in the project life history, during the first months (or even years) of the period shown as Phase 14. This because in IT and management change projects the implementation may take longer time due to some reasons such as: Change resistance by employees, employees need long training in the new IT systems. • It is now recognized that the benefits realization process should start during early project definition by establishing benchmarks that can be put in place in the business plan.