Project Overview
The new Royal Adelaide Hospital is the project which is based on the method of the public-private partnership. In the healthcare sector of Australia, this is the largest infrastructure project which has been initiated by the local government. As this is a public-private partnership project, a private company is working with the state government which is the SA Health Partnership Pty Ltd (FASO, 2016). It has been expected that after successful completion of the project this will accommodate 800 beds in the hospital. Also, with additional new beds standardization of the single inpatient rooms will be done. Further 40 technical suits will be installed, and the new emerging technologies will ensure supply chain efficiency. The project of the new Royal Adelaide hospital is important in the aspect of sustainable improvement in the Sothern Australia healthcare system (Griggs et al., 2013). The state government has initiated the lifecycle of the project. As per the project lifecycle, the stages are risk management, contract management, financial management, assurance process, project governance, procurement stage and the organizational structure of the project. As per the report timing, the project is in a critical stage of development. This is mentioned as a critical stage because the aim of this stage is to bring the project in the operational stage.
The project has become very much complex to handle as the project is running 76 days behind from its actual completion date. There are also some other issues which have made the project more critical, and that includes the industrial product dispute, incomplete development of the health enterprise system and the inexperienced workers of the project (Qureshi & Kang, 2015). The SA heath Partnership Pty Ltd has assessed the project risks, and the risks are the inadequate delivery, pressure of the cost, inadequate management and dispute in sustainable model development.
The organizational aspects of the projects are the project resources, a budget for the procurement, assessed risks and the mitigation strategy, timeline of the project, a value of the contract, establish of the contract and management of the contract (Pitblado & Nelson, 2013).
As per the concern of the project environment, the project is facing a critical phase. The project environment is critical because it is late from the actual schedule and for this delay the project cost goes up to the $2.1bn dollars.
The project governance is currently reflecting the positive impact on the project. By modification, in several stages, the project governance clarified the accountability and the responsibility of a team (Muller, 2017). This governance framework is also capable of interrelating the important side projects which are required for successful completion of the main project of new Royal Adelaide Hospital.
Project Challenges
The project leadership is important as it can help the Operation Board of the hospital. With a seamless strategy of leadership, the new Royal Adelaide Hospital can be turned into the operational commissioning. The operational commissioning will be conducted by the state government during facility transition period.
For any type of project, risk management is an essential part for completion of the project successfully (Cooper et al., 2014). In this case, the main risks of the projects are the resource allocation, project complexity, project cost and the project scale. The project faced this type of risk due to the PPP model which has been used for this project. The basic risks which are associated with almost every PPP project are the design risk and the construction risk for a building related project (Valipour et al., 2015). In this selected project another risk is the delay in the project. As delay is occurring in the project, it is normal that cost related risk will occur in the project. In this project of the new Royal Adelaide Hospital, another risk is the amateur workers as experienced workers are needed for the PPP projects. This project also consists a relocation which will take place from the old Royal Adelaide Hospital to new Royal Adelaide Hospital, and if the relocation goes wrong, then this will be another risk for the project.
Mitigation of the assessed risks is very much important to ensure normal project execution. To mitigate any type of risks, proper risk mitigation strategies are required. The impartment process is one of the risk mitigation strategies which helps to implement the other mitigation strategies properly by introducing changes in the information about the assessed risks (Talluri et al., 2013). So, by this process, the data consistency in the information about risk is achieved. More accurate and comprehensive data about the risks can help to mitigate all of the risks in a proper way. To mitigate the project delay related risks, additional project related works can be done parallel with the main project which will save the time for the project. For financial risk, first of all, project delay issue must be mitigated then a brief analysis of the project must be done to avoid any type of extra spending on the project (Wu & Olson, 2015). Defining the maximum budget limit previously will help in this case. Relocation related risk can be mitigated easily by pre-assessment of the new location and by using a reliable transportation process.
Organizational Aspects of the Project
The mitigation strategies have provided some possible learnings. It has been learned why the risk mitigation strategies are important for a successful project. It is also learned that the delegation process can help in the project by determining the desired outcome from the project (Mueller & Vogelsmeier, 2013). The project of the new Royal Adelaide Hospital also implies that the effective team management and the negotiation can add more value to the project which has been learned from the project.
It is learned that the risk management strategies are important for successful completion of the project and to implement these risk management strategies it is required to make some changes in the steering committee of the new Royal Adelaide Hospital (McAleer, Jimenez-Martin & Perez-Amaral, 2013). Also, changes need to be done in the strategic advisory team. For implementing the delegation changes needed in the operation board of the new RAH. For the effective negotiation process, a great relationship is required with the clients and the vendors. Resource modification can help in the effective process of team management.
The common theme for this project is to finish the project within the deadline. This has become the common theme for both the public and the private end because the project is running behind the schedule which has been assessed previously. Also, this common theme includes minimal contractual dispute and excellent effectiveness of the project which are absolute necessities for the project.
Evaluation of the article gives the idea about the public-private partnership project and the importance of this type of method in the execution of a successful project. Though the PPP projects become successful in most of the times for this case the project was not successful (Osei-Kyei & Chan, 2015). The project was not successful in the aspect of project deadline as it missed the deadline. Because of missing the deadline for the project, the cost of the project increased gradually. The increment in the cost led the Australian government to financial problem. It has been assured that the project governance structure which implemented by the SA Health Pty Ltd was effective in the execution of the project but not effective enough. Also, some of the risks were also assessed by the SA Health Pty Ltd, and proper recommendations were also given.
The practices of contract management are very much helpful in the process of effective project management. For effective contract management the cloud repository can be used for the storing the contracts (Meri?ková & Nemec, 2013). By storing the contracts in the cloud repository, it will be safe against the external threats. Implementation of the automation system is another practice of the contract management which will effectively manage the project. Also, according to the practices of the contract management a performance monitoring system can assess the project performance. Hence it can help to execute the project in a proper way.
Risk Management for the Project
In this project, various practices of procurement management are assessed. The procurement management includes the practices of staff and supply chain alignment and the establishment of the governing supply chain (Ferri et al., 2016). The other practices of the procurement management are the establishment of the alliance with the key suppliers, implementation of more technical options in the project and collaborative sourcing engagement. To get the maximum efficiency, the project of the new Royal Adelaide Hospital must give a focus on the total ownership cost. This is considered another good practice for procurement management.
Project manager role is the most important role in the successful delivery of every project. The project manager must have some ability to successfully deliver a project. Every project manager must implement the project management standards for their own assigned projects and for this case it is the new RAH project (Kerzner & Kerzner, 2017). The productivity of the project must be maintained by the project manager to meet the deliverables of the project. Also, a vital role of the project manager is mitigation of the assessed project risks and configuring the process management. With that, the project manager must be capable in technical services adoption, maintenance of the project interdependencies cases and in the creation of the active recommendation plan which will help the project to mitigate various type of issues.
A procurement manager is also a vital person in the project management cases. The procurement manager directs the buying process for the project which has assigned to them (Roberta Pereira, Christopher & Lago Da Silva, 2014). The procurement manager directs this process by interviewing the vendors, evaluation of the suppliers, agreement negotiation with the supplier and by vendor’s contract management. The procurement manager assesses the performance of a particular type of product by the determination of the spend report, purchase report and the delivery report.
From the assessment of the selected case study of the new Royal Adelaide Hospital, I understood the importance of the public-private partnership projects in the aspect of the project management. The case study of the new Royal Adelaide Hospital has briefly elaborated some of the key aspects of a public-private partnership project which includes the contract between State Government and the SA Health Pty Ltd and the influence of the ICT. According to me some of the contractual obligations are established successfully in this case study and due to this state government is able to several types of tasks for the project. In the case of the contractual arrangements, I assessed that this is able to contaminate the project risks. The case study shows various reasons for the increment in the project budget, but as per my concern, the main reason behind the increment of the project budget was the delay of the project. Thus it was obvious that the financial risk will occur in the project. According to me, delay in the project has various type of negative impact on the project which is clearly visible in this case. Many external factors started pressurizing the project more and more which made the project of the new Royal Hospital more critical. As the project was becoming more critical, it was going in the path of failure.
Mitigation Strategies for the Project
I think in this type of critical phase of the project only the project manager and the procurement manager are able to rescue the project from a total failure. The project manager must be able to take some decisions to solve a various type of issues related to the project. As the project was running late, I think the determination of the critical path for the project is the most important task for the project manager as this helps to determine the shortest way to complete the project. The decision of the procurement manager is also vital for the project in this type of project situation. The procurement manager must be capable to manage the risks of the project. I also believe that the role of the contract manager was also very much important for the project of the new Royal Adelaide Hospital. This is because the contract manager is able to convince the suppliers and the vendors of the project in a reasonable amount of payment which can help to save a big amount of money for the project. Thus the net value of the project increases. Though the project completed successfully later from the actual deadline, I think for that reason the State Government faced a huge loss in their financial assets which created the financial risk for the government.
References:
Cooper, D., Bosnich, P., Grey, S., Purdy, G., Raymond, G., Walker, P., & Wood, M. (2014). Project Risk Management Guidelines: Managing Risk with ISO 31000 and IEC 62198. Wiley Global Education.
FASO, I. B. (2016). Public Private Partnership.
Ferri, L. M., Oelze, N., Habisch, A., & Molteni, M. (2016). Implementation of responsible procurement management: an institutional perspective. Business Strategy and the Environment, 25(4), 261-276.
Griggs, D., Stafford-Smith, M., Gaffney, O., Rockström, J., Öhman, M. C., Shyamsundar, P., … & Noble, I. (2013). Policy: Sustainable development goals for people and planet. Nature, 495(7441), 305.
Kerzner, H., & Kerzner, H. R. (2017). Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.
McAleer, M., Jimenez-Martin, J. A., & Perez-Amaral, T. (2013). GFC-robust risk management strategies under the Basel Accord. International Review of Economics & Finance, 27, 97-111.
Meri?ková, B. M., & Nemec, J. (2013). Contract Management and its Impact on Contracting Public Services: Slovak Republic. Ekonomicky casopis, (07), 690-699.
Mueller, C., & Vogelsmeier, A. (2013). Effective delegation: Understanding responsibility, authority, and accountability. Journal of Nursing Regulation, 4(3), 20-27.
Muller, R. (2017). Project governance. Routledge.
Osei-Kyei, R., & Chan, A. P. (2015). Review of studies on the Critical Success Factors for Public–Private Partnership (PPP) projects from 1990 to 2013. International Journal of Project Management, 33(6), 1335-1346.
Pitblado, R., & Nelson, W. R. (2013). Advanced safety barrier management with inclusion of human and organizational aspects. Chemical engineering transactions, 31.
Qureshi, S. M., & Kang, C. (2015). Analysing the organizational factors of project complexity using structural equation modelling. International Journal of Project Management, 33(1), 165-176.
Roberta Pereira, C., Christopher, M., & Lago Da Silva, A. (2014). Achieving supply chain resilience: the role of procurement. Supply Chain Management: an international journal, 19(5/6), 626-642.
Talluri, S., Kull, T. J., Yildiz, H., & Yoon, J. (2013). Assessing the efficiency of risk mitigation strategies in supply chains. Journal of Business Logistics, 34(4), 253-269.
Valipour, A., Yahaya, N., Md Noor, N., Kildien?, S., Sarvari, H., & Mardani, A. (2015). A fuzzy analytic network process method for risk prioritization in freeway PPP projects: an Iranian case study. Journal of Civil Engineering and Management, 21(7), 933-947.
Wu, D. D., & Olson, D. L. (2015). Financial risk management. In Enterprise Risk Management in Finance (pp. 15-22). Palgrave Macmillan, London.
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