August 1999
PM217 : PROJECT MANAGEMENT

QUESTION 5

Total Marks: 20 Marks

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(a) Evaluation is important in determining the accountability of project organisations, the progress being made on projects, and the avoidance of problems on projects. Explain why this is the case. [6]
  • Effective evaluation procedures will result in employees taking responsibility for their own actions, since it will not be possible simply to ignore difficulties or problems in the hope that they will 'go away'.
  • Evaluation allows the progress of a project to be monitored against its specified objectives.
  • Evaluation often allows the identification of problems when they first occur and are manageable, so that actions can be taken to remedy the situation before it becomes worse.

 
(b) Explain carefully and in some detail why companies should not bid for every contract that comes their way. [3]
Bidding for contracts uses up resources in terms of the time of employees developing the bid, and also of any computational or IT resources required (prototypes may be developed, for instance). In some instances it will be immediately obvious that the company will have little chance of winning a contract (for example if they have no previous experience in the area, or they lack some crucial technical expertise), so companies should focus their effort on contracts that they feel are "winnable" .

 
(c) Should bid/no bid decisions be based on cost (profit/loss) evaluation alone? Explain your answer. [3]
No. In some instances it may be advantageous in the long term to undertake a project now on which a loss is made it may open up the possibility of large profitable contracts in the future, or it may allow the company to develop some crucial area of technical expertise that will give it a greater competitive advantage over business rivals.

 
(d) Explain why the business case evaluation plays a vital role in making bid/no bid decisions. [3]]
The business case evaluation is undertaken before deciding to bid for a project and involves analyzing all of the business aspects of a project such as the objectives, market strategy, strength of competitors, likely profitability etc before deciding whether or not to bid.

 
(e) Discuss three possible problems that might arise during project evaluation. In each case suggest how these problems might be overcome. [6]
Employees might feel negatively toward evaluation whether as a nuisance or a threat, since by their very nature evaluations are seeking to criticize current procedures. This could be overcome by educating staff in the process of evaluation as being valuable, and any criticisms that are made should be constructive and aimed at improving procedures.

Evaluation can be time-consuming and disruptive since they are usually carried out by external teams who must first ascertain what the project is all about before they can being to evaluate it. This problem might be overcome by ensuring that the evaluation team are well briefed before commencing the evaluation and that the employees and evaluation team cooperate as fully as possible --- again conflicts of interest between employees and evaluation team.