Contemporary Project Management

Contemporary Project Management

Using the ideas in Exhibit 13.2, speculate on what activities, supplies, or services could be contracted out. Generally, an activity that can be contracted out is that for a project team to be assigned other activities that will cost less in the overall cost of production. The service provider in project procurement is normally referred to a seller due to the roles he or she performs therein. On the other hand, the service requester in the project procurement will be referred to as the purchaser or a buyer.

In the project procurement, a project team has a key role to perform. A project team has the responsibility of determining the best project activity can be met when a company decide to outsource. They also determine the set of activities which can be performed by the project team in the course of the project implementation. However these decisions that a project team makes herein is based on evaluation of the pros and cons of outsourcing the activity as far as cost is concerned, demand analysis, performance control and time. True to speak, an activity would only be outsourced by a firm only if the cost of production of the activity from the company is high above that if it was produced elsewhere.

Outsourcing would be carried out if it takes the entire focus of a project team such that other activities are left stagnant. (Kloppenburg, pg.467) An activity could also be outsourced if none in the project team have skills and knowledge to perform that activity.

Paper For Above instruction

Contemporary project management involves strategic decisions about which activities, supplies, or services should be contracted out to optimize efficiency and reduce costs. The decision to outsource hinges on several factors including cost analysis, skill availability, performance standards, and time constraints. Activities that significantly increase internal costs or require specialized skills not available within the project team are prime candidates for outsourcing. For instance, specialized construction tasks, technological development, or pest control services that demand expertise or equipment not possessed by the team should be considered for contracting out. Additionally, activities that are not core to the primary objectives of the project or are repetitive in nature, such as administrative support or routine maintenance, are often outsourced to focus internal resources on critical tasks (Kloppenburg, 2020).

The role of the project team is instrumental in identifying these activities. They must conduct thorough evaluations to balance the potential cost savings against risks such as quality control, vendor reliability, and schedule adherence. The core criterion is whether outsourcing these activities will result in overall project cost reduction and efficiency enhancement. Moreover, the team must consider demand fluctuations and capacity planning to determine if subcontracting is appropriate without jeopardizing project timelines or quality standards. For instance, during peak construction phases, outsourcing certain tasks like electrical or plumbing work to certified vendors can prevent delays and facilitate quality outcomes.

In the context of selecting vendors for outsourcing, especially for large-scale projects like building store extensions, creating detailed Requests for Information (RFIs) is essential. RFIs gather essential data that help evaluate potential vendors' capabilities, experience, financial stability, and compliance with safety and quality standards. For example, Comfort Media Inc. might issue an RFI seeking bids from construction firms with proven records in multi-story commercial building projects. The RFI should specify criteria such as prior project completion, financial strength, technical expertise, safety record, and compliance with relevant building codes (Kloppenburg, 2020).

Furthermore, vendor selection criteria should focus on relevant experience, reputation, infrastructure capacity, and competitive pricing. It is crucial to conduct interviews with potential vendors to gauge their sincerity and capability, ensuring a reliable partnership. The emphasis on design collaboration, supply flexibility, and quality assurance ensures that the selected vendor can deliver on time and within budget, aligning with project goals.

Regarding contractual arrangements, choosing the appropriate contract type is critical for project success. For the store extension project, a Cost Plus Incentive Fee (CPIF) contract might be most suitable (Kloppenburg, 2020). This type of contract provides the project owner with the flexibility to reimburse allowable costs and incentivizes vendors to control costs and meet performance standards. The contractor is compensated for their allowable costs and receives an additional incentive if they complete the project under budget or ahead of schedule. CPIF contracts encourage vendors to optimize resource use and maintain quality, which aligns well with the objectives of large-scale construction projects (Fay & Patterson, 2018).

The justification for selecting a CPIF contract lies in its ability to accommodate scope changes and unforeseen issues, which are common in complex projects. It fosters collaboration between the owner and contractor, focusing on shared goals of timely delivery and cost control. Moreover, it mitigates risks related to cost overruns and enhances accountability. However, it requires rigorous oversight and transparent cost tracking to prevent potential abuses and ensure that incentives are effectively aligned with project objectives.

In conclusion, strategic outsourcing in project management involves carefully assessing activities for potential benefits, selecting competent vendors through detailed RFIs and evaluations, and establishing contracts that promote collaboration and cost efficiency. When managed properly, outsourcing can be a powerful tool to increase project efficiency, ensure quality, and control costs, ultimately leading to successful project completion within specified timeframes and budgets (Kloppenburg, 2020; Fay & Patterson, 2018).

References

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