PROJ6003 Project Execution & Control

PROJ6003 Venture Execution & Management Evaluation Case Research 2021 * The contents of this Case Research had been tailored from the references to go well with the necessities of the PROJ6003 topic’s assessments. 1 myki Venture Trendy public transport ticketing programs are rather more than merely fare assortment instruments. They present the important thing interface with prospects and, with smartcard know-how, can help strategic planning for the general public transport system, via the gathering of worthwhile utilization information. A nicely designed and carried out system needs to be straightforward for commuters to make use of, and profit transport operators by streamlining fare assortment and offering entry to necessary information on journey behaviour. Smartcard programs are the brand new normal in transport ticketing internationally on account of their comfort and effectivity. Tickets may be bought and ‘topped up’ utilizing automated processes, they permit fast motion via stations and simple interchange between totally different journey modes. Nevertheless, worldwide expertise has additionally proven that creating dependable and efficient public transport ticketing programs is each tough and costly. Background of the venture The Victorian Authorities’s 2002 Linking Victoria Coverage dedicated to creating a brand new smartcard46 ticketing system to interchange the prevailing Metcard ticketing system when the Metcard contract (former system) expired in 2007. The Transport Ticketing Authority (TTA) was established in April 2003 to handle the substitute of Metcard system and implement the brand new ticketing system. TTA can be answerable for the procurement and rollout of the brand new ticketing system. It accomplished a enterprise case on 27 April 2004, which forecast complete expenditure of $800 million over the lifetime of the venture (2004-17). In July 2005, a vendor was appointed to develop the brand new ticketing system, which turned recognized as ‘myki’. Below the phrases of the unique contract, myki was to be absolutely operational by July 2007. The preliminary whole-of-project funds was $1 billion and included $180 million for delivering myki and $350 million for working it for 10 years. The remaining funds included funds for working the Metcard system in parallel with myki throughout the transition, and associated working prices for the Transport Ticketing Authority (TTA). TTA was abolished in 2013, following the institution of Public Transport Victoria (PTV) which has since assumed duty for all of TTA’s features. For the remaining of this case research, TTA might be used to think about the company managing the venture. In April 2008, the funds was elevated to $1.four billion. The philosophy of the myki venture was to make use of confirmed software program but it pursued an ‘open structure’1 answer which had not been undertaken within the ticketing atmosphere prior to now. myki includes over 20,000 bodily units together with merchandising machines, readers, driver consoles 1 ‘Open structure’ permits every component of the system (for instance the cardboard or merchandising machines) to get replaced by a distinct model of product which can function in and combine with the opposite components of the system. That means it permits the pliability of including, upgrading and swapping parts over time with out limiting the state to utilizing a single vendor. PROJ6003 Venture Execution & Management Evaluation Case Research 2021 * The contents of this Case Research had been tailored from the references to go well with the necessities of the PROJ6003 topic’s assessments. 2 and back-office deployed over a large space and overlaying totally different modes of transport – metropolitan and regional bus traces, regional and metropolitan rail traces and metropolitan trams. The seller included 17 sub-contractors in its consortium. By any measure, the system is a complicated one. myki System The myki system consists of the next parts: ▪ myki smartcard—used to pay for journey on public transport. The myki smartcard know-how permits a cash worth—myki cash—and/or a journey cross—myki cross—to be saved on the cardboard. Public transport customers that ‘high up’ with myki cash want to the touch on and off for every journey in order that the myki system can routinely calculate and deduct the bottom fare for the journey taken. ▪ Units—the system presently has round 23 500 operational units. These embody card merchandising and top-up machines, fare fee units, bus and tram driver consoles, station gates and hand-held units. These units learn and translate info saved on smartcards and transmit info to and from the again workplace. ▪ The again workplace and associated programs—these help the operation of the myki system. It was anticipated that myki would ship a spread of advantages for customers, transport operators and the state together with: ▪ ease of use ▪ handy buy and fee choices ▪ environment friendly operations by way of boarding ▪ high-quality info for transport planning ▪ elevated flexibility to alter and drive person patterns via differential pricing and fare constructions. Regardless of their clear advantages for commuters and transport system operators, smartcard ticketing programs are difficult to design and implement on account of: the complexity concerned in designing and delivering an answer that meets the wants of a novel transport system, similar to Victoria’s, with a number of modes and zones of journey; and, the necessity to correctly inform and help commuters as they adapt to the brand new system. The myki system covers: ▪ 15 prepare traces with 208 stations in metropolitan Melbourne ▪ 24 tram routes with 500 trams in metropolitan Melbourne ▪ 346 bus routes with 1 753 buses in metropolitan Melbourne ▪ 5 regional prepare traces with 51 stations PROJ6003 Venture Execution & Management Evaluation Case Research 2021 * The contents of this Case Research had been tailored from the references to go well with the necessities of the PROJ6003 topic’s assessments. three ▪ 127 regional bus routes. The myki system additionally provides a posh vary of ticketing fares, with each zoned and time-based charging and quite a lot of concessions and reductions. The system executes 150 enterprise guidelines every time a card is scanned, which constitutes round 1.07 million fare transaction‑sort permutations, making it probably the most complicated smartcard ticketing options on the earth. The optimistic bias and timeframe The myki enterprise case indicated the venture can be delivered inside two years – this was when the contract for the prevailing ticketing system expired. No different venture of this kind and comparable complexity had been accomplished efficiently in lower than 4 or 5 years. But the enterprise case for myki was adamant two-year supply was achievable. Unsurprisingly, the two-year timeline was not achieved and a rise within the supply time for the venture had a big influence upon venture prices. Optimism bias has additionally had a human influence. It affected the morale of workers engaged on the tasks, who needed to cope with the notion that that they had failed – though some expectations had been clearly unrealistic. It resulted in a necessity for venture managers and sponsors to boost extra funding for the venture and to cope with media ’fires’ brought on by the political considerations of the venture going over funds or being delayed – as an alternative of specializing in delivering or driving the venture. In the case of myki, optimism bias in relation to supply timelines contributed to the general public’s poor notion of the venture and its persevering with unwillingness to make use of the brand new ticketing system, creating extra pressures to the supply of the venture. The myki system was on account of be operational by July 2007. Nevertheless, there have been a number of delays, scope modifications and price will increase. PROJ6003 Venture Execution & Management Evaluation Case Research 2021 * The contents of this Case Research had been tailored from the references to go well with the necessities of the PROJ6003 topic’s assessments. four The entire time of the design and supply part has greater than quadrupled from the unique expectation of two years, to in extra of 9 years. That is extra per smartcard tasks in different cities, the place it often takes 5 or extra years. The view of 1 witness from the seller was that ‘had a sensible timeframe for the venture been set [no other project of this type been produced in less than five years], had the TTA not change into so operationally centered and had the unique scope not been so altered with subsequent specs from the TTA, then we'd not be sitting right here discussing value and supply overruns’. The procurement course of and battle of pursuits The strategy used for tendering the venture was the “interactive tendering strategy” or “aggressive dialogue”. In essence, this strategy requires the company and tendering distributors to work intently collectively throughout the tender interval for each events to achieve a greater understanding and appreciation of what's required and what the seller can supply. This entails ongoing dialogue and change of views and knowledge between the events so that after the tender course of is full there's a very clear understanding of what's required and what might be supplied. Typically, contractors beforehand engaged by an company (the place they might have had some perception into the tender processes and/or procurement technique) shouldn't be allowed to bid for the venture. Nevertheless, on events such contractors do bid for the related tasks. In such instances, it is necessary for probity practitioners and businesses to think about the influence on the venture of the notion of a battle of curiosity. In myki, the profitable bidder had been engaged by the Transport Ticketing Authority previous to the tender course of to help with the design philosophy for the venture. There have been quite a few examples of TTA people having had a working relationship with people in a number of of the tendering entities. The good card ticketing improvement business is a small one worldwide and former working relationships between people had been reported as being inevitable. These points raised considerations (perceived or actual) concerning the probity of the venture. The Transport and Ticketing Authority engaged a probity auditor on the time, however he nonetheless supplied probity recommendation, which may nonetheless be thought-about a battle in itself as this will result in conditions the place the probity auditor is auditing his personal recommendation. These points had been dealt with to the probity auditor’s satisfaction and, nonetheless, the seller’s eligibility to be accepted as a tenderer was the topic of some appreciable debate throughout the TTA which had not foreseen that they might be a bidder, remaining a notion that they might have had a bonus within the tender course of. Moreover, the myki strategy of tendering of “interactive vendor engagement” proved profitable in establishing a consortium of most popular distributors however in addition to the probity considerations, specification points weren't nicely understood. Within the preliminary analysis of the six tenderers, solely PROJ6003 Venture Execution & Management Evaluation Case Research 2021 * The contents of this Case Research had been tailored from the references to go well with the necessities of the PROJ6003 topic’s assessments. 5 the profitable bidder was unable to proof a confirmed answer: all others nominated websites the place their options had been in place. The ‘open structure’ answer required by the TTA was new to the ticketing atmosphere. Typically, different good card ticketing programs on the earth had been proprietary programs. The open structure answer, which was being thought-about inside DOT previous to the institution of the TTA, was to make sure that authorities was not dedicated to anybody vendor and was in a position to profit from technical advances in any side of the system. Whereas there are apparent advantages for authorities on this strategy, it was regarding that TTA elected to spend appreciable public funds contracting an unproven vendor to ship a big product in an unproven working atmosphere. This choice entailed a better stage of threat and was a contributing issue to the delays. On this regard, a witness said that the seller was ‘studying as they had been going, which was problematic’. Complicated necessities The request for tender (RFT) documentation was in depth, comprising 4 volumes of info. The tender course of was an interactive and sophisticated one involving vital ongoing negotiations the place tenderers had been inspired and requested to work with totally different subcontractors (generally from rival bids) to attain what was regarded the very best consequence for authorities by way of value, supply and deliverables. The settlement (contract) and related contractual paperwork included: ▪ over 13,000 pages ▪ over 40 schedules ▪ 4 reveals made up of greater than 370 separate paperwork ▪ over three,000 outcomes. As well as, the seller said that the TTA required in extra of 350 specification modifications throughout the event course of. In December 2010, the seller said that ‘the TTA has continued to develop new necessities which have added complexity, value and time to the venture’. In response to my draft report, the Chief Govt Officer, TTA said ‘the Necessities Specification part supplied further readability round many necessities, as had been foreshadowed within the contract award course of, but it surely didn't change necessities (with the exception of some issues which had been handled as contract variations)’. Moreover, the outcomes-based contract2 which included all documentation exchanged between the TTA and the seller throughout the tender course of was problematic. Its lack of specificity 2 An ‘outcomes-based’ settlement solely defines the general targets of the venture: it doesn't embody detailed specs. For instance, one consequence was ‘a broken or faulty Smartcard could also be changed’. It doesn't outline what is flawed or broken, or how it's to get replaced. PROJ6003 Venture Execution & Management Evaluation Case Research 2021 * The contents of this Case Research had been tailored from the references to go well with the necessities of the PROJ6003 topic’s assessments. 6 and misunderstandings of what doc took priority over others within the contractual documentation led to uncertainties and ambiguities whether or not some practical necessities had been inside or outdoors contractual preparations, resulting in disputes about prices and priorities. This demonstrated a reluctance of the company to profit from the industrial off-the-shelf system answer. As an alternative, the requirement of the venture was to suit and embrace all of the enterprise guidelines related to the metcard system, for instance – a number of zones and fares. This precipitated myki to be delayed throughout each the specification and improvement phases because the contractor tried to come back to grips with the complexities that the enterprise guidelines created and the surplus of complexities added to the venture. This strategy inevitably led to elevated venture prices and may nonetheless fail to capitalise on the developments in know-how for the reason that previous system was developed. An over-emphasis on replication of current processes can lead to misplaced alternatives by way of making modifications to enhance processes, taking advantage of what the system itself has to supply, which may influence on the anticipated advantages from the brand new system. Venture’s Relationships and Governance The TTA board is accountable and immediately accountable to the Minister and Treasurer for delivering myki. There was, nonetheless, no proof that the board was held accountable for the failure of the TTA to satisfy the system deliverables. There was additionally the priority that the board had sufficient members with the requisite abilities and expertise over the course of the venture. The preliminary board didn't embody an appointee who had beforehand managed the event and implementation of such a big ICT-enabled system or had an in depth information of the transport ticketing atmosphere. It was not till the venture failed to satisfy its two-year supply deadline member with sturdy ICT expertise was investigation into ICT-enabled tasks was appointed. Till then, all of the obtainable information and abilities would seem to reside with the CEO and his workers. In these circumstances, it will be tough for a board member with none related expertise to query particulars of the venture. The myki board had regulated duty to ship the myki system but it didn't have the authority to conform to or expedite coverage modifications. This impacted on venture supply. The steering committee should not solely have related expertise, it should problem the venture supervisor about failure to satisfy milestones and ask the onerous questions with the intention to drive the venture to success. In this regard, the preliminary myki board lacked the expertise to problem the Transport Ticketing Authority (TTA) concerning the venture. The Division of Transport (DOT) had coverage duty for ticketing points and as such the TTA was reliant on DOT responding shortly and successfully to requests for coverage modifications. A PROJ6003 Venture Execution & Management Evaluation Case Research 2021 * The contents of this Case Research had been tailored from the references to go well with the necessities of the PROJ6003 topic’s assessments. 7 consultant of Division of Treasury and Finance (DTF) had observer standing at board conferences however had no duty for the venture or to report again to DTF. The connection between the TTA and the seller was a fractured one, primarily based on distrust and misgivings. In its December 2010 evaluate of myki, DOT said that ‘the venture continues to be affected by ongoing technical difficulties, altering specs and administration/relationship points between [the vendor], its sub-contractors and the TTA’. The seller commented that ‘within the early levels of the Venture, the TTA’s strategy was proactive and assured… When public notion of the Venture waned, the TTA withdrew from enough engagement’. This was additionally the results of the first contractor being abroad primarily based with native illustration in Australia and Victoria. Whereas this venture was giant by Victorian phrases, it was not essentially so for the seller. In these circumstances, the dimensions of the venture and entry to the seller’s government have restricted the affect the federal government can exert to expedite venture deliverables. Within the myki case, the TTA spoke on quite a few events to the seller’s government in the US with restricted success: this was exacerbated by the sale of the US mum or dad firm twice throughout the contract interval and liquidity issues for the native firm. One other side of vendor administration that the company has recognized as problematic within the myki venture was in ensuring that distributors retain adequately expert workers. The venture skilled issues with the standard of the venture workers supplied by the US-based vendor. Nonetheless, throughout the venture, the company’s secretary and chief government officer frequently engaged with the vendor to intervene and attempt to resolve these points. At one stage, the TTA had requested the seller to show its ongoing dedication to the venture on multiple event and the senior government of the seller was changed to answer these calls for. The TTA board assembly minutes recorded the board’s concern and frustration that deliverables and milestones had not been met. On not less than one event it thought-about the ramifications of embarking on authorized motion for what it noticed because the failure by the seller to satisfy its contractual obligations. From one other perspective, a witness from the seller expressed the view that the TTA ‘saved altering the goalposts’ and likewise said that the TTA was adversarial relatively than conciliatory in its dealings with them, being very operationally centered and intruding into their dealings with its sub-contractors. In a briefing paper to the Secretary, DOT in 2010, the seller said that ‘the State’s and TTA’s key personnel have modified a number of instances, three Ministers for transport and 5 CEOs’. The TTA was additionally extremely important of the standard of the venture managers employed by the seller. With out excessive high quality venture administration workers and their continuity of employment, the dangers of venture overruns considerably elevated. PROJ6003 Venture Execution & Management Evaluation Case Research 2021 * The contents of this Case Research had been tailored from the references to go well with the necessities of the PROJ6003 topic’s assessments. eight Prices and Contingency funding By November 2011, prices have elevated by not less than 40 per cent for the reason that award of the contract – from $1 billion to $1.four billion – and it's doubtless that further prices will ensue previous to venture completion and complete substitute of Metcard. The TTA enterprise case dated 27 April 2004 had forecast complete expenditure of $800 million over the lifetime of the venture (2004-17). Following the award of the contract in 2005, the funds was revised to $1 billion, consisting of: ▪ venture value (together with 10 years operation) – $752 million ▪ value to retain Metcard – $41 million ▪ TTA operations – $207 million. In April 2008, the funds was elevated to $1.four billion, consisting of: ▪ venture value (together with 10 years operation to 2019) – $930 million ▪ value to retain Metcard – $210 million ▪ TTA operations – $260 million. Because the above figures present, by 2011, some $169 million or 42 per cent of the rise may be attributed to retaining the Metcard association in place over the prolonged implementation interval. The funds may nonetheless want to extend to cowl anticipated further expenditure ensuing from present negotiations between the seller and the TTA to revise the contract to account for additional scope variations; and from the prolonged reliance on Metcard for parallel companies. At 30 June 2014, the revised capital and working funds for myki till 2016 was $1.6 billion, an enhance of 60 per cent on the preliminary funds of $1 billion. Vital further prices of roughly $200 million, over the budgeted quantity of $106.eight million, had been incurred for working the Metcard system in parallel with myki past its contracted termination date in 2007. The price of consultants engaged by the TTA to help with the venture additionally totaled greater than $37 million. This can be a appreciable sum that could possibly be checked out with hindsight to scale back prices. For instance, greater than $eight million was expended on authorized recommendation and companies. Contingency funding is one other merchandise throughout the venture funds the place there was no constant understanding or use of funds. Typically talking, an quantity is included within the venture funds to cater for sudden, future occasions that are more likely to influence on the price of the venture – contingency quantity. The contingency ought to present a buffer for the venture and likewise act as an early warning sign to the company government, DTF and the Cupboard funds committee that the venture is doubtlessly going off-track. A DTF official thought-about that entry to contingency funding needs to be intently monitored as utilizing it signifies that the venture is shifting outdoors its funds. Within the myki venture, a witness said that PROJ6003 Venture Execution & Management Evaluation Case Research 2021 * The contents of this Case Research had been tailored from the references to go well with the necessities of the PROJ6003 topic’s assessments. 9 obtainable contingency funding was misused to pay for gear to be put in on the general public transport system, together with new rolling inventory and at stations/stops, depleting the contingency fund on objects outdoors of the Transport Ticketing Authority’s management. The venture administration methodology In its Enterprise Plan (April 2004), the TTA said it believed ‘that the timeframes as set out are aggressive however achievable as they're primarily based on quite a few deliberate methods’. Considered one of these methods was to recruit skilled workers to the TTA. One other technique was to make use of the ‘agile’ software program improvement methodology to expedite the event course of. This strategy can shorten supply instances and cut back threat by breaking giant complicated tasks into smaller discrete tasks that may be developed in parallel. This strategy was chosen for myki to assist meet the short-planned timeframes, however this strategy was not applicable for such a posh venture with such a big variety of inter-related programs and a lot of subcontractors. This technique was unsuccessful in lowering venture timeframes and as one witness said: ‘The agile methodology was by no means going to work in an atmosphere the place improvement was being undertaken throughout many nations by quite a few builders. By way of assembly the deliberate milestones and delivering the system effectively and successfully this strategy failed, indicating that a greater information of and understanding of varied approaches to managing tasks and creating software program was required by the administration workforce to decide on the suitable methodology primarily based on its deserves. Given the numerous delay, further prices and challenges in delivering myki, the previous authorities commissioned a evaluate of the system in late 2010 to find out its future in a modified kind. PROJ6003 Venture Execution & Management Evaluation Case Research 2021 * The contents of this Case Research had been tailored from the references to go well with the necessities of the PROJ6003 topic’s assessments. 10 References: Brouwer, G. E. (November, 2011). Personal movement investigation into ICT-enabled tasks – In session with the Victorian Auditor-Normal. OMBUDSMAN. Victorian Auditor-Normal Workplace (June, 2015). Victorian Auditor-Normal’s Report – Operational Effectiveness of the myki Ticketing System. Victorian Authorities. Retrieved from * Learn how to cite this: Torrens College Australia (2021). myki Venture Case Research. PROJ6003 Venture Execution & Management: Evaluation Case Research. AssignmentTutorOnline
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