Assignment 2

Ramani, Pratik Ghanshyambhai

Project Management, Conestoga College

MGMT8400: Advanced Project Planning and Control

Richard Wood
July 14, 2024
Introduction:
 Acquisition of Vandalay Enterprises (medium-sized software development company) by
Numan Inc., which is a larger firm specialized in large enterprise solutions.
 Goal: Cost reduction to the tune of $5 million in eight months by the removal of
duplications and driving better management.
 Strong theme of project governance, making savings, and creating synergies
operationally.

Background Information:
 Virginia: Director, Project Management Office at Vandalay Enterprises.
 Track record: Delivered successfully many projects and led project in a projectized
organizational hierarchy.
 Managed many small-scale applications as well as some large enterprise systems.
 Post-merger: Not clear of her role; had an interview with Gerald Howald, Vice President,
Integration at Numan Inc.
 Gerald said that the project costs should come down; Virginia vowed to save $5 million
in eight months by using professional project governance and effective management.

Cost Reduction Strategies:

1. Project Portfolio Management:
As mentioned above, in order to try to achieve cost reduction, Virginia will present an approach
for the evaluation and selection of projects according to strategic values and opportunities to
save on costs. The following techniques will be used:
 Strategic Value Assessment: Projects will be ranked based on their alignment with the
merged company's strategic objectives, such as increasing customer satisfaction, market
share, and operational efficiency. For example, the projects that receive high strategic
value ranking would be considered.
 Cost-Saving Potential: The cost saving potential of the projects will be analyzed. For
instance, the projects which can eliminate duplication or the ones which can simplify
business operation will be given the highest priority.
 Termination and Scaling Down: Those projects that do not meet the strategic goal and
those that have minimum cost-saving potentials will be terminated or downscaled. For
example, non-essential projects, which are occupying a lot of resources, will be
terminated.
2. Resource Optimization:
Appropriate utilisation of the resource is directly proportional to saving costs. The following
methods will be used by Virginia:
 Resource Levelling: The resources will be distributed to work in all projects to be free
from over-allocating and under-utilizing in a project. For example, a complete resource
scheduling plan of allocation will ensure the utilization of developers, designers, testers,
and project managers in optimal fashion.
 Cross-Training: Employees will undergo training on the ability to do many tasks. This
means employees are trained to achieve a given task so that they will be able to replace
each other in the case of need. It is a way of making the workforce more flexible, and,
therefore, new staff will not be recruited. Developers, for instance, will be tested to
develop the ability to multi-task in different phases of a project process.
3. Process Improvement:
Virginia will identify places that need process improvement by using methodologies such as
Lean, Six Sigma, and Agile.
 Lean: Eliminating waste from the process of doing projects through identifying and
eliminating anything that does not add value to the project. For example, automating
approval workflows to speed up projects.
 Six Sigma: Using data-driven practices to enable quality and efficiency in the project. For
instance, using tools to reduce errors in software development projects.
 Agile: To let the projects be more flexible and agile in nature, Agile practices need to be
embraced. For example, going the way of Agile frameworks such as Scrum to increase
collaboration and reduce project delivery timelines.
4. Technology and Automation:
Virginia will leverage technology and automation tools for cost savings:
 Adoption of New Technologies Implement advanced software tools in project
management, including project tracking and collaboration platforms. An example is the
use of a centralized project management tool to ease coordination and reduce manual
efforts.
 Automation: By automating repetitive tasks, the organization can become more efficient
in reducing the cost of labor. For example, tools for automated testing might be utilized
to speed up the process of software testing.
5. Vendor and Contract Management:
Virginia will explore possibilities on how it can negotiate better terms with vendors and
performance-based incentives:
 Vendor Negotiations: Renegotiate contracts with vendors for better pricing and terms.
Illustration: Volume discounts for bulk software purchase.
 Performance-Based Incentives: Performance-based contracts from vendors to provide
quality products at lower costs. For instance, vendor payments could be linked to project
milestones and performance metrics.

Monitoring and Controlling Cost Reduction:

1. Key Performance Indicators (KPIs):
Virginia would come up with key relevant KPIs that would monitor and measure the progress
towards cost reduction:
 Cost Variance: measures the difference between budgeted and actual project costs. For
instance, an effective cost management would be indicated by a target cost variance of
less than 5%.
 Project Completion Rates: Keep a record of the number of projects completed on-time
and within budget. For instance, have a goal that at least 80% of the projects will be
completed on time and on budget.
2. Regular Reporting and Review:
Virginia will implement a program of periodic reporting and review of cost-saving measures:
 Monthly Reports: Generate detailed monthly reports on savings, status of the various
projects, and KPIs, including performance reports showcasing achieved cost savings and
project status to senior management.
 Review Meetings: Conducting regular review meetings with the key stakeholders for
assessing the forward movement of the project, discussing issues, and making necessary
changes to the strategy. For instance, conducting bi-weekly review meetings to keep up
with the progress of meeting the objectives of cost reduction.
3. Risk Management:
Proactive risk management will ward off probable obstacles
 Risk Assessment Tools: Implement risk assessment tools to identify and evaluate
possible risks. For example, scheduling risk assessments for high-impact projects to pre-
empt and mitigate issues.
  Contingency Plans: Develop contingency plans that would counter the expected risks.
For instance, creating resource shortfall backup or project timeline slippage backup
plans.
4. Continuous Improvement:
Virginia would emphasize constant improvement and post-mortem analysis:
 Post-Mortem Analyses: Scheduling closed-project post mortem analysis to identify
lessons learned and room for improvement. For instance, looking back at project
successes and failures to improve future procedure.
 Feedback Loops: Create feedback loops that bring in information from projects teams
and stakeholders. For example, introducing a feedback mechanism to capture proposed
process improvements.

Project Ideas Evaluation

Qualitative Methods:
Project Time Frame:
 Review length of time and phasing of projects.
 Focus on more short-term projects that provide quick wins and immediate savings.
Project Priority:
 The projects should be evaluated on the basis of their strategic priority. It is important
that a project is in line with company's goals and objectives.
 High priority projects which will bring down costs to be taken up.

Quantitative Methods:
Net Present Value (NPV):
 NPV of each project is to be calculated that indicates the profitability and value added by
each project.
 Projects are to be undertaken in order of the net present value being highest.
Internal Rate of Return (IRR):
 Determine the IRR of projects to explore their capability of return.
 Select the Project that has High IRR to ensure that resources are efficiently utilized.
Project Execution Milestone:
Target
Cumulative
Month Milestone Date Details Cost
Savings
Savings
Planning and
1 Initial $0 $0
Assessment
Conduct a kick-
1.1: Kick-off off meeting
Week 1 $0 $0
Meeting with key
stakeholders.
1.2: Project Evaluate the
Portfolio Week 2 current project $0 $0
Review portfolio.
Develop a
1.3: Resource comprehensive
Week 3 $0 $0
Allocation Plan resource
allocation plan.
1.4: Technology Assess current
and Process Week 4 technologies $0 $0
Assessment and processes.
Implementation
2 $0 $0
Phase
Begin
2.1: Project
terminating or
Termination
Week 5 scaling down $0 $0
and Scaling
non-essential
Down
projects.
Implement
2.2: Resource
resource
Optimization Week 6 $0 $0
optimization
Initiatives
strategies.
Start
2.3: Process implementing
Improvement Week 7 process $0 $0
Initiatives improvement
initiatives.
Introduce new
technologies
2.4: Technology
Week 8 and $0 $0
Upgrades
automation
tools.
 Monitoring and
3-4
Adjustments
Generate the
3.1: Initial Cost End of $500,000
first cost $500,000
Savings Report Month 3 (10%)
savings report.
Conduct bi-
3.2: Review Bi-weekly weekly review $250,000
$750,000
Meetings Months 3-4 meetings with (5%)
stakeholders.
Renegotiate
3.3: Vendor $500,000
Month 4 contracts with $1,250,000
Negotiations (10%)
vendors.
Conduct a
3.4: Risk comprehensive
$250,000
Management Month 4 risk $1,500,000
(5%)
Review management
review.
Scaling and
5-6
Optimization
Conduct a mid-
4.1: Mid-Point End of $500,000
point $2,000,000
Evaluation Month 5 (10%)
evaluation.
Further
4.2: Enhanced
enhance $500,000
Resource Month 5 $2,500,000
resource (10%)
Utilization
utilization.
Continue
4.3: Technology
optimizing $500,000
and Process Month 6 $3,000,000
technologies (10%)
Optimization
and processes.
Implement
4.4: Continuous
continuous $500,000
Improvement Month 6 $3,500,000
improvement (10%)
Initiatives
initiatives.
Final
7-8 Adjustments
and Reporting
Generate a
5.1: Final Cost End of detailed final $500,000
$4,000,000
Savings Report Month 7 cost savings (10%)
report.
5.2: Final Bi-weekly Conduct bi- $250,000 $4,250,000
Review Months 7-8 weekly final (5%)
 review
Meetings
meetings.
Communicate
5.3:
the final results $250,000
Stakeholder Month 8 $4,500,000
to all (5%)
Communication
stakeholders.
Formally close
5.4: Project
End of the project and $500,000
Closure and $5,000,000
Month 8 hand over (10%)
Handover
responsibilities.

Conclusion
In conclusion, the high-charging cost-cutting initiative of Vandalay Enterprises post-acquisition
by Numan Inc. exemplifies the strategic interest in the effective governance of projects and the
streamlined practices of management. With Virginia, Director of the Project Management
Office, at the helm of the project, it will achieve savings of $5 million within a span of eight
months through the stringent management of project portfolios, optimization of resources,
improvement of processes, adoption of technology, and effective vendor management.
Structured monitoring, continuous improvement efforts, and attention to key performance
indicators are put in place not only with the idea of immediate financial savings but also for
establishing and maintaining future growth.

Reference:
Project Management Institute. (2017). A guide to the project management body of knowledge
(PMBOK guide) (6th ed.). Project Management Institute.
Kerzner, H. (2017). Project management: A systems approach to planning, scheduling, and
controlling (12th ed.). Wiley.
PMI Standards Committee. (2004). PMI Practice Standard for Earned Value Management.
Project Management Institute. https://www.pmi.org/learning/library/earned-value-
management-standard-6037