Challenges in Project Management PreProject Factors

01 JAN 2012
by arshadtk in Management, Social

Among the many challenges that a Project Manager encounters during the course of any project, the cause of about 50% can be attributed to the decisions taken during the PreProject Phase. The importance of taking right decisions and following the right procedures during the Pre-Project Phase will be more evident from the analysis reports of the growing number of Project failures in the public as well as private sector.

The Pre-Project Phase is generally the preparatory phase of the project during which all the necessary actions required for the launch of the project is carried out. In this phase the contractual documents are finalized and the decision to begin the project is formalized. Some of the most common issues of Pre-Project Phase which may lead to the failure of the project in long run or deteriorates the over all project performance is as given below:

Over Zealous Sales Closure:

In this competitive world, the sales team normally goes out-of-the-way to win the project by agreeing to many demands of the customer as add-ons to the project deliverables which may be in the form of additional services or additional features for the final product. These add-ons which are normally unbudgeted during the calculation of sales price, puts tremendous strain on the project budget leading to margin erosion even before the beginning of the project.

Untested Technical Solution:

For projects which are based on high-end technology one of the common mistakes committed during the sales is to commit to deliver the solutions which are still under research or on the test floor. If the solution proposed encounters problems on the test floor it becomes impossible to provide the solution as committed to the customer. This situation not only impacts the project commercially but also creates a big dent on the reputation and trust of the brand. The best way to avoid such a situation at the later stage of the project is to clearly specify the state of committed solution in the Contract and Scope of Supply documents developed during the Pre-Project Phase.

Mistakes in Tender Costing:

The process of calculating the sales price and tender costing is one of the most difficult exercises during the sales phase. This becomes more complex when the specifications of the desired product or solution are not well-defined in the Request for Quote. Adding to this complexity is the mistakes committed by the tendering team in the tender costing. While commitment in the contract is to deliver the solution, the cost of the solution is worked out by the Tendering Team based on the Technical or Engineering BoM received from the Engineering Team. Failure to include any key item in the BoM by the Engineering Team or preparing the BoM based on a wrong design or failure to cost for any item in the BoM will have severe impact on the Project Cost which affects the profit margin and may even take it to the negative zone.

Unrealistic Delivery Schedule:

Proper management of time and project schedule is one of the biggest challenges faced by the Project Manager. This becomes extremely challenging if the project has been taken by the sales team against unrealistic time commitments. The customer who is the key decision maker during the sales phase, on most of the occasions, would like to get the product or solution with in the shortest period of time possible. In the case of big turnkey projects, the prime contractor always demands very tight delivery schedule from the sub contractor in order to make good all the delays which has happened in the over all project till the date of awarding the subcontract. If the project is taken with very tight time schedule, the chances of failure to deliver the solution or product on time are very high. In such a situation, it would be best for the Project Manager to highlight this issue in the internal kick off meeting and work out an action plan to meet this challenge with the help of all the stakeholders.

Clarity in the Scope of Supply:

In the case of projects based on technical solutions and products, it is very important to specify the final deliverables in the beginning of the project. The research projects may be an exception to this criterion. In all other projects all the stake holders of the project must be provided a clear understanding of the deliverables. However this is easier said than done as the primary customer due to their lack of technical knowledge finds in unable to specify their technical requirements clearly and without any ambiguity in their Request for Quote. Moreover the availability of several alternate solutions using different technologies makes this situation more complex. It is therefore very important to ensure that the exact scope of supply is well-defined in the Contract and necessary costing is done prior to the signing of the Contract. These are few of the Pre-Project Phase activities which have very big impact on the success of the project. It is in the best interest of all the stake holders that these issues are addressed prior to finalization of contractual documents and the decision to begin the project is formalized. It is also necessary for the Project Manager to highlight these in the Kick-off meeting to ensure that there is clear understanding among all the stake holders regarding the final deliverables and the time schedules.