Analysis Of Project Management Principles: Lessons Learned From The National Broadband Network

Defining Project Requirements and Deliverables

The national Broadband Network (NBN) Australia is the largest publicly funded project ever undertaken in Australia. Because of its scope and nature, it is worth understanding how the project has been managed, in the context of project management to learn and gain new insights. The project has been termed a ‘Failure’ in as far as project management goes; the objective of this paper is to critically analyze the NBN project in the context of project management principles. After this brief introduction, the paper will discuss the organizational context of the project that will provide the project details in order for the context of this analysis to be better understood. After discussing the organizational context, this paper delves in the project requirements and deliverables definition and a critical analysis is made of the tools and processes the project team used to define them. The persons involved in the definition of requirements are discussed as well as the tool utilized in ensuring all requirements had been captured. This is then followed by an analysis of the contract negotiation, administration, and dispute resolution mechanisms of the project before the project close out and handover is discussed.

The NBN is a wholesale, Australian open access network for data that allows almost all households to access fast broadband internet from wired and wireless networks. The project is owned and operated by the national Broadband Network Company and works by having RSPs (Retail Service Providers), mostly ISPs Internet Service Providers) provide connections to end users (households and organization) after signing contracts with the NBN Company. The NBN project was envisaged to guide Australia into the Information Age and replace the existing copper wire telephony network that was approaching its end of life. The project was envisaged by the Australian Authorities in appreciation of the fact that internet demand, especially fast speeds for multimedia internet access was rapidly growing and the existing copper network could not guarantee such speeds. The unique case of the project is the massive changes in scope after a different administration than the one that initiated it was elected into office. Originally, it was envisaged to provide speeds of at least 100 Mega bits per second that would be increased to 1 Gigabits per second; however, these were subsequently downgraded to at least 25 Mega bits per second. Initially, it was envisaged to be a fiber optic national network to serve 93% of the Australian population with 100 Mbit/s speeds while far flung areas would get access through fixed wireless telecoms satellite, which has since changed to a mixed media model incorporating copper and FTTN (fiber to the node) (Holznagel 2010), (Sorensen & median 2016). 

Acquiring Goods/Services

The initial scope of the project was to have a national Fiber Optic telecommunications network that would be the primary means for providing most of the Australian population with fast broadband speeds of at least 100 megabits per second, that would then be upgraded to the faster 1 Gigabits per second speed. 93% of the Australian population would be connected using this method of fiber to premises. The remaining 7% of the population not covered by the NBN would be connected to the NBN through radio communication. The components of the radio communication network included the use of 4^th generation LTE (Long term Evolution) fixed wireless connection as well as Sky Muster Geosynchronous telecommunication Satellites. The project was conceived and planned in 2007 when the labor party was in opposition; the project would cost A$ 15 billion wit the government providing A$ 4.7 billion it would partly raise by selling its (governments)stake in Telstra. After the labor government under Rudd was elected in 2007, the project was initiated with the aim of service delivery to premises using the FTTN model that would reach 98% of the nations’ population.  The NBN was incorporated in 2009 as company under the Australian Corporations Act of 2001establised as a Government Business Enterprise based on the 1997 Commonwealth Authorities and Companies Act. The Company was set up as a wholly owned by the Australian Commonwealth with shareholding represented by the Ministries of Finance and the Ministries of Broadband, Digital Economy, and Communication. This is in line with best practices of forming a project driven/ oriented company so that at its initiation, its culture and organization was project driven, consistent with the PMBOK guidelines for project driven organizations (Sorensen & Medina 2016).

Initially, the project was conceived by the Government (initially opposition members) and operationalized after being elected. The government became the project sponsor and a company was formed to run the project. The requirements definition was undertaken by technology experts that advised the government, therefore the process was done as per project management guidelines where user requirements are evaluated by professionals in the ICT industry, working with and advising policy makers, that in this case is the government, on behalf of the population (Sorensen & Medina 2016). . The project company was formed with a board headed by a CEO and a board chairman, working with various directors. Consistent with the principles of project management and the PMBOK guidelines, the project deliverables and requirements were set by the project sponsor, who in this case is the government on behalf of the citizens and represented by the CEO of the NBN Co. The project board is its executive committee, formed to give support and guidance and ensure that the project meets its set objectives. To develop the project deliverables and user requirements, the company has various technical people, including customer representatives, customer officers, architects, systems engineers, strategy advisors, all who collected the views of citizens and stakeholders involved in the massive project to establish the use requirements and set the tone for project deliverables. At its initiation, the project used sound methods as proposed by the PMBOK or setting up the organization and determining user requirements and deliverables (Holznagel 2010).

Closeout of Contracts and Project Handover

A project governance team and project board, along with tools for project governance were used in the initial phase. The project requirements were validated and verified by defining the life cycle deliverables of the project, plans for managing change and change control, user acceptance requirements, installation and testing plans, and a risk management plan. This was done well at the initial phase when the project was commenced. The user requirements would be validated through the network design and throughput speeds as stated in the user requirements. However, a change in government greatly affected the user requirements analyses and management, with massive changes to the project being politically instigated, without considering the requirements of the users. In a way, cost was the overriding factor in making the changes, but being a massive public infrastructure, politics played a major role in the massive scope, project requirements and deliverables changes. The author believes stakeholder management was not effectively done; all stakeholders (political groups representing Australians) should have been consulted and a united front developed before project initiation. Subsequent changes led to very poor decisions that did not reflect what users wanted, leading to several black spots where there is no broadband Internet yet the project was supposed to provide all Australians with fast broadband internet using fiber.  These changes were made without consultation and using project management frameworks, such as scope control and management. Crucially missing in the NBN organization structure (shown below), is an overall project manager, with technical persons and line manager reporting to the CEO instead of a project manager.

I getting the project rolling, the NBN Co through the Australian Government openly announced tenders for the building of the NBN network was floated by issuing an initial RFP (request for proposal). However, the RFP was not proceeded with because the because the organizations that wanted to participate in the project did not meet the set requirements to undertake the project. Further, the companies went ahead and lodged complaints because the RFP did not proceed, despite not being able to raise the requisite capital. In issuing an initial RFP, the NBN Co was engaging in best practices for such a kind of project that would involve the use of public funds. Because of the project quality requirements for the project, tendering was the best way, after the technical and financial teams of the NBN Co developed what would be required for the successful delivery of the project. Tendering gives every one an equal chance an opportunity to participate in the tender and after submitting their tender documents, they can be appraised based on the project performance, scope, quality, and financial requirements and the best person given the contract.

Findings from Critical Analysis

In the NBN case, none of the available organizations met the requirements given in the initial RFP, and eventually, the  largest telecommunications operator in Australia, partly government owned, submitted a a non-compliant proposal, which is the best they could manage under the circumstances. The project is so massive and complex, with an initial budget outlay of A $ 40 billion; most organizations would not meet the requirements as set out in the RFP to undertake the project, especially on capacity (technical) and financial (Holznagel 2010). As for the supplies, the NBN Co also issued tendering to purchase/ procure inputs and materials, works, and other services through open tendering system. The author believes this is in line with best practice principles in project management where projects seek to obtain the best possible supplies and materials, as well as contractors that will ensure the highest quality standards products at the most competitive/ lowest cost. The evaluation of service providers and suppliers was done best on the best practices method of evaluation and appraisal to ensure every possible provider and sub contractors met the requirements. Because of the long term nature of the project at the initial phase, it was decided that leasing for the major networks was not viable, given that it was a public infrastructure project. However, the eventual mode of operation would be that NBN Co would provide wholesale services and products and ISPs would then provide the end connection to customers as retailers of the products or services. In the pursuit of successful projects execution and to ensure a cost effective project is delivered. In the process of these pursuits, it is inevitable that goods and services will be procured during the execution of the project.

The objective of these pursuits can be achieved only using contracts that is oral or written (the latter is preferred); the contract must be binding legally and defines the duration, relationship, extent, and nature of the services to be provided as well as the nature of the works to be done. In developing the contract terms, the considerations as well as terms and conditions need to be clearly defined along with the process for the acquisition of the desired products and services, which should be procurement. To procure such items, tenders are issued publicly so that all interested parties have an opportunity to show what they can do. Because of resource scarcity and the complexities of projects of the NBN magnitude, along with long lead times, the only to manner that procurement procedures and parties can be bound legally and have obligations recognized by law is through contractual documents and agreements.  The NBN Co therefore acted in the best interests of the organization and the public through issuance of tenders and tender requirements as well as procurement management. Despite no company meeting the initial RFP requirements, the act of tendering for such works and setting high requirements set the standards for the required levels of quality and performance that future participants in the project would have to aspire to or to meet. Quality is among the crucial components of successful projects; the tendering documents and standards issued by the NBN Co set the required quality standards for the duration of the project. The methods and tools used in the NBN project, such as setting requirements during the initial RFP, evaluating bidders based on the tender documents, setting up a committee to manager risks, and inviting members of the general public to express their interest were highly suitable for the complexity, nature, and type of the contract as well as the environment, given the complexity and long lead times involving the use of tax payers money.

The Australian government first set up the NBN as a Company to form the NBN Co and this forms a basis for how NBN Co can manage and enter into contracts. Being a public body, the NBN Co is obliged to operate under the  Commonwealth Authorities and Companies Act of 1997 that stipulates how such organizations must formulate and manage contracts. The regulations are aimed at ensuring the best value for money is attained, as well as getting the right outcome. The NBN Co negotiated and signed contracts in adherence with the ANAO (Australian national Audit Office) standards for best practice as well as its conditions. The contracts entered into either for the provision of products or services must be done under the existing policy and legal frameworks, including the 1997 Australian FMA (Financial management and Accountability) Act and the 1997 CAC (Commonwealth Authorities and Companies) Act. The NBN Co was required under these legal frameworks to use the CPGs (Commonwealth Procurement Guidelines) as directed by the Minister of Finance. The CPGs have a whole life money value component that is at the core for public procurement. These are important for guiding procurement of bodies/ Commonwealth companies such as the NBN when procuring for services and products from the public. The NBN Co largely complied with these requirements throughout the project, starting with the initial RFP. In developing and negotiating contracts, the regulations and law require that the organization seeking products and services form the public does due diligence and then develops a framework for identifying and managing risks.

Further, it is essential that in the development and negotiation for contents, the involvement and commitment of the senior management within the organization is obtained. The resource needs need to be identified and documented, a well as the assigning of responsibilities. The input from stakeholders must also be sought before the contracts are drafted. The NBN largely complied with all these requirements and processes as stipulated by law and fulfilling the best practices and recommendations from the PMBOK, according to Cordoba-Pachon and Ochoa-Arias (2010). The NBN Co has three major committees, including one that deals specifically with risk management for the project. The NBN developed contracts that included mechanisms for performance management regimens and developed a plan for managing the contract; all these were undertaken ethically. Further, as stipulated by law and the PMBOK, the contracts must be documented, something the NBN Co has done well.  Before formalizing contracts, the risks must be identified and risk treatments undertaken. Negotiations can be done in several ways, and none is the absolute right one; however, in fulfilling the procurement requirements for the project and regulations, all contract negotiations must be undertaken formally and documented, after undertaking a thorough risk assessment. The relevant contract manager must be involved in all aspects of the contract negotiation; the NBN Co has a Chief legal Counsel within its organization, as well as a Head of Regulatory Affairs to effectively manage issues of contracts and ensure the NBN does not become exposed to legal issues at a later date due to acts of commission or commission.  Negotiations for various NBN Co contracts were done after defining and agreeing on contract conditions and terms that formed the negotiation focus. Necessary resources were committed to aid the negotiations and roles and responsibilities for the people negotiating the contracts established. Barriers and problems to the negotiations were identified, along with opportunities and mechanisms developed on how the issues of constraints and objectives and senior management/ government principals involvement were to be addressed.  Conflicts were resolved through a dispute resolution committee and the risk management team.

The NBN Co largely complied with the ANAO regulations and the best practices and guidelines stipulated by the PMBOK. Conflict resolution with various partners and stakeholders is absolutely essential in any project, including managing conflicts with employees (human resources). The NBN Co developed an elaborate document stipulating how conflicts will be resolved between the company and employees and their union, as well as how conflicts with other stakeholders, including the partners and contractors would be solved. Further, its risk management committee helped in resolving disputes and conflicts, even within the project team. Based on the PMBOK guidelines, there are five methods of resolving conflicts and they include avoidance/ withdrawal, accommodating/ smoothing, compromising/ reconciling, forcing/ directing, and collaboration/ problem solving. The risk management committee uses the method of conflict avoidance which is a neutral/ neutral position as it essentially involves letting others resolve the conflict or postponing issues. Further, collaboration and problem solving was used extensively in the project, which according to the PMBOK, results in a win/ win situation (Holznagel 2010). However, the biggest weakness of the project and why it has been described as a massive failure considering its initial objectives and scope, is that the initiators did not consult the public widely, especially other interest groups/ political entities. The project was initially opposed, ut the then government forced it, only to lose elections and have the new administration completely change its scope and objectives, as well as deliverables; this is a form of a win/ lose, lose/ win situation that has not helped the project much.

The project scope was changed drastically, courtesy of a new government coming into power, with the deliverables and objectives also radically changed. The project is not yet completed, and the initial deliverables and objectives were thrown out of the window, in favor of ‘basic deliverables’ such as lower internet speeds. While the project execution period was expected to be long, it has significantly overshot its time schedules and the budget, despite the project objectives and deliverables being changed because of budget concerns. Almost a decade to its inception, the project is incomplete and has not delivered even a third of its initial objectives and deliverables. Measuring the attainment of project objectives and deliverables for such a project is easy because metrics were being used; increase minimum broadband speeds to at least 12 Mbits per second although the initial desired objective was speeds of 100 Mbits / s to be upgraded to 1 Gbits per second for at least 93% of the Australian population, using fiber which would also future proof the project. Ares not covered under the fiber network would have a mixture of the 4 G LTE fixed wireless system and telecommunication satellites that are Geosynchronous. As of 2016/ 2017, just under 5 % of the 7,7 million Australian households (350000 premises) had been connected by the NBN to the new infrastructure, with just 260000 premises being serviceable. The uptake was also very much below the expectations at just 78000 fiber connections to the NBN. The new government changed the scope from fiber only and 4 G LTE and Geosynchronous satellites to mixed media methods  (multi technology mix) including FTTN using a mixture of copper and fiber technology, FTTP (Fiber to the Premises), and HCF (hybrid fiber-coaxial) (Holznagel 2010). This is despite A $ 7.3 billion being already spent, meaning the cost would increase significantly to cover 100% of the population, assuming the present budgets as shown in the table below;

Yet the initial budget was set at A $ 40 billion, which would have provided better value for money for taxpayers. As of 2017 February, the project cannot be fully handed over because it remains incomplete, and significantly behind schedule as well as being over the budget. The roll-out of the project has been painfully slow, especially with the new government coming into office in 2014. the NBN Co had the objective, at its inception, to connect 93% of the Australian households and 13 million business premises to wholesale FTTP (fiber to the premises) but there was a shift to the mixed media of FTTP, HFC, and FTTN, which has not been taken up enthusiastically by the people. The management of the project was fair, and its measurement (metrics) good; the NBN Co was set up with an exhaustive range of supervisory and legislative structures.  However, the program was several changes in its management and management structures, disrupting operations and leading its success likelihoods being severely diminished. The project was well aligned, with huge public support and political support at its inception, and with key stakeholders roped in to support its execution. The project objectives have not been met; the project is not complete when it was supposed to have already been complete or very close to completion based on the original deliverables. It has totally failed to deliver on its objectives of higher internet speeds fr 100% of Australians, to create more employment opportunities, increase small business performance, and enhance multimedia use in the country with speeds of up to 1 Gbits / s. yet as the measures/ metrics show, the project has achieved just 5% (slightly below) of its original objectives. Even when the scope and deliverables for the project were changed, the roll-out should have been faster and more households connected. This aspect of the scope and deliverable of connecting all Australian households did not change, it was just the infrastructure to be used to achieve this. The reasons for the failure are many, including lack of stakeholder engagement and support during the initial phase, political changes that led to drastic changes in scope, and constant changes of management and the management structure. Crucially, the NBN Co management structure lacks a dedicated project manager, with project managers being found in various technical teams.

Initially, the project was well envisaged and planned, with executive teams and project sponsor formed along with relevant stakeholders being brought aboard. Several aspects of the project were done well, according to the PMBOK guidelines and the relevant regulations for that type of project organization. However, failure to seek consensus and support across the political divide ended up  being the bane f the project, resulting in massive changes in scope and deliverables as well as management and management structures of the project. A change of government largely precipitated the present crisis, with decisions made without input from stakeholders, including the public. Several things were done right, including setting up the rules and regulations to guide its operations, the scope of the project, the project deliverables, quality control standards, a project management plan, as well as a risk management plan and audits/ metrics / reporting to show te progress of the report. Best practices were used in getting contractors and partners. The challenge was political support, which is akin to executive support that was not across board and highlights the value and importance of support for a project from the project sponsors (in this case the government) and stakeholder involvement and conflict resolution from the initial stage. The drastic change when a new government came into office and lack of support for the initial project scope and deliverables has severely affected the execution of the project. It is recommended that such large projects be done in phases, and project management methodologies not only be utilized, but practiced and implemented; further, all stakeholders must be involved and their support secured before commencing the project to forestall risks such as lack of support at a later stage when the project has commenced. 

References

Cordoba-Pacho?n, J. R., & Ochoa-Arias, A. E. (2010). Systems thinking and e-participation ICT in the governance of society. Hershey, PA, Information Science Reference.

Holznagel, B. (2010). Strategies for rural broadband: an economic and legal feasibility analysis. Strategies for Rural Broadband. Wiesbaden, Gabler.

Sorensen, L., & medina, A. (2016). The End of Australia’s National Broadband Network?. PDF. NY; Technology Policy Institute.

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