Project success and performance evaluation - SAIMM

1 Project success AND PERFORMACE EVALUATION229 IntroductionDespite the significant development of Project managementprinciples in recent years, there are still a large proportionof projects that fail, or stated differently, projects that arenot classed as being a success . Many projects have beenand will still be undertaken in the platinum industry, be itexpansion projects or process change projects. It makessense then, unless some form of intervention occurs, that alarge number of future projects could still be one involved with a Project wants it to be asuccess. Many cases can be cited from literature andanecdotal data of projects that fall short on expectations inone or more of the triple constraint items (time, cost andperformance), or in terms of client satisfaction, and yet theproject team officially pronounces the Project a success .

2 success can mean different things to different people. Aninteresting example of this is provided: An architect mayconsider success in terms of aesthetic appearance, anengineer in terms of technical competence, an accountant interms of dollars spent under budget, a human resourcesmanager in terms of employee satisfaction. Chief executiveofficers rate their success in the stock market. 2 Freeman and Beale1cite the fact that the motivation oftheir paper stems from the lack of consensus and objectivityas to what constitutes a successful raises the following questions: What constitutes a successful Project ? How does one measure Project success ? How can one work toward greater Project success ?The requirements of each stakeholder group will differand therefore their perception of what constitutes successwill vary.

3 This paper analyses the requirements of threeprimary stakeholders and how these are measured. Therequirements of some of these primary Project stakeholderswill initially be addressed, as well as Project requirements,the goals of a Project system, Project constraints and whatconstitutes a successful Project . KOELMANS, Project success and performance evaluation . International Platinum Conference Platinum Adding Value ,The South African Institute ofMining and Metallurgy, success and performance KOELMANSRead, Swatman & Voigt (Pty) LimitedIn 2001 Platinum overtook gold in foreign revenue earnings for South Africa. The export salesfrom platinum group metals amounted to billion as opposed to gold export sales of Organizations must undertake new ventures to replace old, worn-out and obsolete assets withnew ones.

4 These assets could be a building, a new product or process, a new mine, or anythingthat can help the organization to achieve its objective. These ventures are projects by their a Project is pronounced a success , the judgement is usually based on some factualevidence, although not every one uses the same data. From the literature, it is obvious that there isa lack of consensus and objectivity as to what constitutes a successful purpose of this paper is to address the following questions: What constitutes a successful Project ? How does one measure Project success ? How can one work toward Project success ?This paper addresses the requirements for Project success of three of the primary stakeholders ofa Project , namely the business or client, the employees as far as the Project team is concerned, andthe local are developed into a work breakdown structure (WBS)-like chart to demonstratesuccess indicators.

5 These indices take cognisance of all the constituents required for projectsuccess. The indicators are further developed to take cognisance of the requirements of the localcommunities. These indices are then weighted to arrive at a total score for the respectivestakeholders. Using these WBS models, the success and performance of a Project can be evaluated. This scoreis considered an objective measure of Project success . Projects are evaluated more consistentlyacross different projects and the Project manager is provided with a management tool that canassist him/her in ensuring greater Project shortcoming of this approach is that the weights of the different indices have beenestimated at this stage. Research will have to be conducted to more accurately reflect the weightsassigned to the ADDING VALUE230 Finally, this paper explores the development of a set ofindices that can be used to evaluate Project performanceand success to make explicit what is implicit in seeminglysubjective stakeholdersA stakeholder by definition is any one that has a stake inthe Project or its outcome.

6 Stated differently, it is anyinterested party in the Project or its outcome. Businessstakeholders can be divided into primary and secondary andfurther subdivided into social and non-social and Buchholtz3list the shareholders and investors(owners), employees and managers, customers, localcommunities, suppliers and other business partners asprimary social stakeholders. When a business embarks on a Project , a number ofstakeholders can be identified and the list is by no meansexhaustive: The Project sponsor and client Owners and shareholders Employees of the parent company undertaking theproject The community at large The Project team involved in the Project National and local governments Suppliers who could be supplying products required bythe Project The contractors who could benefit by working on theexecution of the Project Competitors who could have a keen interest in theproject as it may affect how they will operate in thefuture these stakeholders, the paper will address therequirements for Project success of some of the primarystakeholders, namely the business or client, the employeesas far as the Project team is concerned, and the localcommunity.

7 Project requirementsA Project is started to fulfil a need or requirement. Thisrequirement can be in the form of something tangible suchas a new shaft system to access and exploit ore reserves, animprovement to an existing product such as a developmentwaste loader, etc. or intangible such as developing a newmining method, a downsizing exercise, etc. A Project is a temporary endeavour to create a uniqueproduct or service, has a start and end and is characteristics differentiate projects fromoperations4. The basic purpose of a Project is to accomplish a specificgoal5. Goals and objectives of a Project systemThe goals of each of the stakeholder groups will differ andvary according to the nature of the Project . Generally, theclient wants the required Project with the requiredperformance (quality and utility) for the lowest cost andshortest time.

8 The scope of the Project spells out what is tobe done, by when and how much the costs will Project team goals will vary in urgency andsophistication. They could include to set industry standards,to integrate Project management into the organization, tomake a certain profit for the Project management office, orto simply finish the Project on time and within budget6. There could be an even greater difference and variation inthe goals of the community. In the South African context,the provision of additional jobs, social development andcommunity involvement will rank high on the agenda ofgoals. Other objectives could be low noise and pollutionlevels. Increases in traffic volumes and noise could also beproblematic to the community. Whether the scope of the Project is for a product orconstructed item, or a service, it will be translated intogoals and objectives.

9 These goals will be different for eachstakeholder group but can be split into tangible goals suchas time, cost, quality, and utility and intangible goals suchas stakeholder satisfaction. ConstraintsA Project can be viewed as an input-output model. Someform of input is transformed into output, under a set ofconstraints and utilizing a set of mechanisms to make theproject main constraints are time, cost and quality for thefollowing reasons: Time. Most if not all projects have a time constraint Cost. Money to fund the Project is a scarce want value for money Quality. This is the standard by which the product, theend result of the Project , and the process will be addition to the above main constraints, the followingconstraints can be limiting on the project4: Legal issues have to be complied with Ethical issues Environmental issues Logic the need for certain activities to be completedbefore a Project can start Indirect effects any change is most likely to have aripple effect, which has to be taken into are invariably required to balance theconstraints, especially the three main constraints.

10 Forexample, a task may be completed very quickly through theaddition of more resources, but unless one is prepared tocompromise on quality, one will have to pay more. Thesetrade-off decisions occur both during the planning andexecution phase of the of Project successProjects are becoming more complex with the passage oftime. There are a number of reasons why: The simpler ideas have been exploited first and theneed for innovation is vital The allowable time to market is reducing, whichimpacts on one of the important constraints of allprojects Businesses are becoming more complex Projects are also moving towards turnkey contracts,where the end user does not get involved with theinterface between the parts of a system, but only dealswith a single supplier in the provision of the entiresystem4.