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In the earlier journal we have discussed about the integration issues, management and user behavior issues of the four emerging technologies. This journal focuses more on the project management issues and cost management issues.
A project is a specific task carried out by a group of people in order to full fill certain task and it has start date and end date. Every project has its purpose and life time.
Project Management Issues
A report released by The Standish Group (CHAOS summary 2009), shows the massive decrease in the success rate of projects, 24% of them were cancelled prior to completion or never used (The Standish Group International, 2009). According to the research carried out by CHAOS it is understood that project success rate of project can be achieved up to 65% if there is user involvement, a very good executive support, apparent business objectives and a qualified project manager (Hancock 1999). These factors are very crucial for any kinds of project; they must be taken seriously for the successful implementation and management of emerging technologies. MCC as a big organization they should be careful enough to address project management issues while adopting new emerging technology at an enterprise level. For the successful implementation those emerging technology MCC should hire a qualified and experienced project manager. Implementing new emerging technology is a specific task MCC should take it as a project and consider all the project management issues.
Potential business benefits of project management in implementing the emerging technologies
Emerging technologies can be implemented successfully by establishing the right aim and hiring the experienced and qualified project manager. There are some factors that leads project into risk, they are less commitment from top level management, less user participation, and confusion in goal (Schmidt et al. 2001). Project is a group effort; it has to get good support from all the responsible people. Lots of benefits of benefits of project management can be achieved during the implementation of new emerging technologies. MCC can directly get those benefits they are able to successful implementation of those projects. Here are some of the very good advantages of project management (given by Genus, Rigakis & Dickson, 2003):
- Project management practices promote improvement of achievable goals at the beginning of the project which definitely aid to review the cost and plan estimates.
- For big and complicated projects project management divides it into different small projects which reduces the complexity of project and also made possible for parallel development.
- It divides the project into different activities against time which helps projects to finish on time.
- It develops the collaboration within the organization which helps to maintain good information flow.
- A good project management makes the top level management to actively involve in the project.
- Work load is equally divided among the team members according to their qualification which reduces the chances of conflicts.
(Genus, Rigakis & Dickson 2003)
THE PROJECT MANAGEMENT PLAN IN EMERGING TECHNOLOGY
There are two main parts in project management plan which acts as input for planning process in implementation of emerging technologies they are the project charter and preliminary project scope statement.
Generally, sponsor of the project generate the special document called project charter which authorizes the continuation of the project, it also provides the project manager the power to use the available services.
Another part i.e. is Preliminary Project Scope Statement which is top management level evaluation of underlying project scope. Some of the most important things like scope of the project, its objectives, limitation and statement are included in this part. It can also be used as future reference for other projects.
Planning process group is established to create the project management plan, engagement in scope planning, definition of detailed scope and finally end up with the creation of WBS (work breakdown structure).
Lots of knowledge areas come into existence, and each of them has its own kinds of subsidiary plan. All of those subsidiary plans needed to be considered with regarding to the project management plan.
Some of the subsidiary plans are:
- Range Management Plan
- Value Management Plan
- Program Management Plan
- Economic Management Plan
- Risk Management Plan
- Procedure Improvement Plan
- Staff Management Plan
- Communication Management Plan
- Procurement Management Plan
All of the major tasks like verification, definition, and control of the project are mentioned in the Project Scope Management. It establishes the procedure which will be used to manage the demands for change in the project scope.
Scope of the project defines the development of project statement. The specific project scope report expands upon the main statement and limitations in the beginning project scope report. Sometimes even in the detail project scope may contain rough project information.
Another most important thing is work breakdown structure. Work breakdown structure defines the breaking down of work into several parts and giving responsibility to the right person. It helps the project manager to decompose the highly complex projects into smaller work packages. Work breakdown structure can be done in three steps, they are
- Identification of the main deliverable in project.
- Fragmenting all the deliverable into some activities.
- Decomposing those activities into several work packages.
We can create WBS process, which lays the groundwork for every other planning process that follows, including:
- Defining activities
- Estimation of activity resources
- Communication Planning
- Planning of Risk Management
- Cost Estimation
- Budget planning
- Staff management planning
- Feature Planning
Management of cost is a very challenging issue which is best addressed at strategic level (kpmg international, 2009). While managing the new technologies cost always plays a vital role. More complex and sophisticated kind of technology requires more cost. By using the cost managementbusiness organization generates report regarding the costs and accounts.
Cost management is very necessary because it mentions the role of the manager for present and future planning and this will praises consumers by reducing the cost of product and service. Every business organizations are using cost management to make their business more transparent. It helps to monitor and report all the expenses in ongoing project.
Cost management helps you to:
- Track all the expenses in the project
- Make sure that all the costs are approved while purchasing
- Maintains the central database of all the expenses
- Monitor and control all the expenses of the project
OBJECTIVES OF COST MANAGEMENT:
With its wide area of concentration cost management is very important in the organization. It continuously monitors the expenses and controls the cost. Both planning and controlling of the cost is related to planning. To increase revenue generation and maximize the profit management spend more money on advertisement and product alterations.
Cost management is not a separate process. It is a vital part of the strategic planning. It is integrated with the general management strategy and its implementation. Most of the cost management concepts are certainly tangled with manufacturing and production concepts, like lean accounting, value chain analysis, throughput accounting, theory of constraints, etc.
GENERAL PRINCIPLE OF COST MANAGEMENT
Some of the basic principles of cost management are as follows:
- Tangible cost: It can be easily measured in money value.
- Intangible cost: It difficult to measure in terms of money.
- Direct cost: It is directly related in producing the products and services of the project.
- Indirect Cost: It is not directly related to the products or services of the project but impacts indirectly in the performance of the project.
PHASES of COST MANAGEMENT
We can divide the Cost Management of implementing the Emerging Technologies into four phases:
Phase of preparation
- Identification and estimation of problem
- Discussion about the project
- Gather information regarding the cost estimation
- Choose or create an estimation process
Phase of estimation
- Calculate the Estimate possible cost
- Assess uncertainty of cost estimate
- Analyze the estimated process
Phase of Implementation
- Implement the estimation in bidding
- Implement the estimation planning and budgeting
- correspond estimation
- Monitor cost
Phase of learning
- Collect the feedback
The above mentioned phases are general phases; they are applicable in different types of organizations and very suitable for implementing those emerging technologies. According to the nature of process and estimation the meaning of each checklist may varies. All the phases of cost management come sequentially but sometimes depending upon the project it may occur iteratively. Monitoring and control of cost can be surprising in the phases of cost management but it is needed to get the accurate cost estimation. There are so many examples about the failure of the best estimation process without the presence of the control of cost. A perfect estimation process must be done by the person with enough executive skill and should concentrate on estimation accuracy and should be related on well-organized utilization of resources, cost controls, and able to manage the risk.
Financial analysis of projects:
Financial analysis of the project is needed in order to select the project. As we know that there are so many technologies available, to implement one of them we need to analyze each of the project carefully. Financial analysis proved to be a very effective in selecting right project to the organization.
There are three methods available for the financial analysis of the project. They are
- Net present value analysis: It is the method to calculate the approximate profit and loss in the project till the certain point of time. Good projects have higher NPV.
- Return on Investment: It is calculated by deducting the total project cost from benefit and dividing it by the cost. If the project has higher ROI it is believed to be better project.
- Payback analysis: It basically analyzes the time. So the payback time is the time that project will take to return the amount of money invested on it. Better projects return the investment very early.
Implementing new technologies into the organization is always a challenging task. It should be taken as a project. Project management is a very good way to implement any new technology in the organization. MCC should hire a team of people with an experienced team leader to implement new emerging technology. Finally, cost management is very important thing to be done. Every project must be transparent and records of all the expenses must be kept very safely.