Systems Thinking - Assignment

1 5 3 36 S Y S T E M S T H I N K I N G F O R M A N A G E R S
Assignment 2018
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Executive Summary
Introduction: Soft system methodology allows detailed examination of challenges and issues
faced in a major project. The scope of project concerns case analysis pertaining to Indian metro
project.
Role of Systems Approach: It is a huge infrastructural project that involves various issues
arising from varied stakeholder group.
Types of Stakeholder Issue: Internal stakeholders have separate type of challenges compared to
external stakeholders. A stakeholder issue determination is conducted and then connection across
various stakeholders across challenges faced is entailed.
Application of system ideas: Building and developing the infrastructure mega metro railway
can be connected amongst varied stakeholder group through benefits and challenges entailed.
Conclusion: Resolving issues related to soft system methodological approach has led to arriving
at in-depth understanding related to the problem. This can be resolved according with
appropriate methods.
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Table of Contents
Executive Summary.........................................................................................................................2
1.0 Introduction...........................................................................................................................4
2.0 Role of systems approaches discussed......................................................................................4
2.0 Types of Stakeholder Issues.................................................................................................5
4.0 Application of systems ideas/concepts to bring the stakeholder...............................................7
5.0 Conclusion...............................................................................................................................11
6.0 References Lists.......................................................................................................................12
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1.0 Introduction
Indian metro rails are mega transit system developed in various urban areas developed either
underground or at elevated above street levels (Hardman & Paucar-Caceres, 2011). Systems of
India metro operates at a speed of 20-35 km/h with 50,000-75,000 passenger capacity every
hour. The cost of capital of construction is almost 20-30 times Bus Rapid Transit system. The
scope of this study evaluates stakeholder community analysis together at improving management
of the megaproject.
2.0 Role of systems approaches discussed
Indian metro rail’s mega project analysis has been undertaken for analysis using Soft System
methodologies. Metro railway project requires high amounts of investments to be made as
compared to other modes of transports. Policy makers, who comprises of the primary stakeholder
of the project have a growing interest in the project for addressing mobility issue for the growing
population (Mehregan, Hosseinzadeh & Kazemi, 2012). Metro railway projects have been
estimated to reduce congestion and user will stand to benefit from motorized road based
transport. Centre for Science and Environment (CSE) conducted a study on pollution in Delhi
revealed that respiratory suspended particulate matter (RSPM or PM10) is at higher than normal
levels at 210 microgram per cubic meter currently. Applying soft system methodology (SSM) as
proposed by Peter Checkland and John Poulter a system for analysis is developed to arrive at
business process modeling can help resolve challenges faced by the stakeholders for the project.
At first analysing the situation considered problematic reveals that budget constraint and lack of
space availability are the major concerns facing metro railway construction in India. Primary
stakeholder includes the government, who has to invest huge amounts of funds for building
infrastructure for metro rail project. Collecting taxes from individuals and businesses in India,
the government invests such funds for creating mega infrastructure projects. The government
also raises funds in form of infrastructure bonds, which provides investors with secured
investment option, tax breaks and rate of return on investments made. The infrastructure project
once built will generate constant sources of revenue for the government. It will reduce
environmental pollution and create sustainable form of transport. Below is David Smith’s most
effective form for SSM methodology application by CATWOE (Prasetyo & Surendro, 2015).
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Customers Commuters
Actors Government, Construction Team
Transformation Process Developing mega infrastructure project
Weltanschauung Set up projects fast
Owner Government
Environmental Constraints Construction impacts
2.0 Types of Stakeholder Issues
Stakeholder analysis can reveal issues related to the mega project. Stakeholders are internal and
external in nature (Belton & Stewart, 2010). Internal stakeholders include government, general
management, shareholders/sponsors, construction engineers, staffs and employees working on
the project. External stakeholders include contractors, commuters, competitors, suppliers,
distributers and investors. While matching stakeholder’s expectations to reality there might be a
gap which gives rise to issues.
Internal Stakeholders
Government of India is the primary stakeholder of the metro rail mega project taking place in
India along with State Governments. Government Equity shareholding accounts for almost 15%
to 20% stakes across major metro railways projects. In GNCTD, the Government had financed
28% of project costs through contribution in equity and subordinate loans. The major issue faced
by the Government mostly pertains to the slow rate of recovery of such equity and loans that are
given out to metro projects. Return on investments is particularly low in the projects.
General management of the mega infrastructure project of metro railways in India has various
roles to perform in the overall project. A management team is formed from various shareholders
and external people as well, they are responsible for coordinating and adhering to responsibilities
of the project. One of the major issues faced by the general management is in decision making
perspective. They are often unable to make inconclusive decision or arrive at a consensus. Due to
presence of varied types of people from varied groups, they generally seek to maximize their
own group’s benefits.
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Shareholders/sponsors comprise of major investors into the project. They are primary group with
immense interests of reaping benefits from the project. They invests usually huge sum of money
with the aim to reap benefits till a future period of time. The major issue of this stakeholder
group is profit motive. While they generally want to create benefits for all groups, their primary
concerns remain limited onto profit motives only. They only seek rapid completion and
execution of the project, without having much focus on other related aspects such as quality that
might need to be considered for the project.
Construction engineers are the stakeholder group, who will be concerned with construction and
delivering of the project. They are mostly concerned with resources of the project and ways in
which such should be implemented such that the project is completed within specified time
period and provided project budget. Major issue they face is to constraint themselves all the time
with given project budget and project schedules. They have to convince all the time all remaining
internal stakeholders of the project regarding their proceedings. They generally need to provide
updated status of the project at various meetings to be held, in order to get approval from the
management related to the same.
Staffs and employees constitute stakeholders who work day and night in order to deliver the
project on time. There will be various types of staffs and workers, who will be performing in the
project as per their role definition. Major challenges faced by staffs and employees in this mega
infrastructure project comprise of contractual type of engagement. While there are thousands of
staffs and employees working, they are all hired on contractual basis and sometimes they do not
get their salary on time. Due to absence of timely payments received from the project and lack of
job permanency there arises issue related to commitment and absence. Workers often are absent
which results in loss of productivity, leading to further project delays.
External Stakeholders
Contractors are present in multiple numbers across all locations in which metro construction
takes place. Contractors provide their individual quotations to the management, who then
approves an appropriate quotation depending upon price and time schedule. Once a contractor
gets allocated for performing a particular task on a project, they carry out such projects
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accordingly. The major issue faced by contractors while performing their roles on a particular
project pertains to mistrust existing amongst them and the management. The management
generally mistrusts contractor’s quality regarding their performance on a particular project. At
each and every instance, a bill has to be produced and permission needs to be sought prior to
progressing on a particular aspect. This process often deters the overall performance quality
leading to delays and budget overrun.
Commuters are the stakeholders who will be finally consuming the end result of the project.
Implying commuters will be boarding metro trains to easily get transported from one place to
another. Commuters will be availing the metro rail as it will have greater benefits over other
forms of transport facilities. The main issue faced by commuters will be travelling to the metro
station in order to avail its services.
Competitors of the metro rail include buses plying in the same route and Uber, Ola cabs. These
modes of transport will not be able to provide benefits over metro rail connectivity as metro
railway is cheap and fast in nature. They are bound to face tremendous competitive pressures due
to price, time and environmental impacts.
Suppliers constitutes primary stakeholder who will be providing various materials and other
resources for the completion of the metro rail project. The management of the project will be
making various types of supplier relationships such that it can get best possible rates for various
products needed for the project. Suppliers therefore threats from competitive pressures in order
to provide resources and materials at cost effective rates. In order to provide materials and
resources to project, there is often loss incurred to supplier. Moreover delays in recovering
payments are another major issue faced by suppliers. Suppliers need to repeatedly provide bills
across to the management, get it approved and then obtain funds after 3 months follow up, which
deters their possibilities of making profits for their business sustainability.
4.0 Application of systems ideas/concepts to bring the stakeholder
The mega project has multiple internal as well as external stakeholders. The benefits arising from
the project is aimed at catering to mostly external stakeholders comprising of customers or
commuters in metro railways (Checkland, 2013). With high amounts of investments into mega
infrastructure, it is capable of generating future and long term potential benefits to the entire
country. Development of infrastructure within a country has been seen to generate potential after
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effects triggering possibilities for other economic activities to take place. One of the major
potential impacts that are generated from this mega project across India is in reducing carbon
footprints and ease communication by reducing road congestions.
Connection of concepts to bring system ideas together within closed loop system as depicted in
the diagram reveals stakeholders connection in the project. A closed loop diagram using system
tools reveals, commuters facing challenges to reach their destination in time. This is causing loss
productivity or loss of businesses, which finally affects GDP of the economy (Klerkx, Van
Mierlo & Leeuwis, 2012). Individual commuters paying taxes not getting proper commute is
gradually but definitely affecting potential businesses that can be converted. Time loss is the
major factor along with carbon emission from road transport. Such carbon emissions are not only
causing greenhouse gas effect creating more carbon footprints, rather harming overall health of
the population. This in turn affects in rising health costs that are in turn borne by the government.
In case the Government collects the taxes and expends it on metro rail infrastructure projects it
can bring about better computational capabilities enhancing business prospects for the country.
Moreover, the investment that is made by the government from taxes will be returning to its
funds over a long period of time with interests. Hence, clearly there are two direct benefits for
the government. Metro rail infrastructure project apart from enhancing costs effectiveness in
transport and generating scope for business through externalities will have impacts on reduced
health costs. Carbon emissions will be gradually lowered, meaning less dependence on fossil
fuels and greater health benefits by reduction in carbon particulate matter suspended in the air.
Gradually the government can set aside expenditure done on health towards other infrastructure
projects that can further help boost the economy. Moreover, reduced carbon footprints will allow
catering to environmental standards and gradually moving away from importing fossil fuel,
which hampers its currency rates. Therefore, reduced imports of fossil fuel will be directly
reflected through rising Indian currency rates against the USD which will help the economy pay
off its loans towards the IMF in a faster manner.
General management of the metro rail project will be able to get more projects approved form
the Government of India due to boost in earnings of the Government. The general management
once gets more number of projects, will be able to provide contracts for management at
affordable rates, which will help save on budget. This will allow Government get return on its
investments made in a faster manner.
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Shareholders/sponsors of the projects once gets appropriate returns on the investments that they
have made, will be able to make more investments on other infrastructure projects. Shareholders/
sponsors will feel more interested in making infrastructure related investments due to its stable
rate of return. They are the primary owners of the business or processes. Within SSM
framework, challenges and issues that are faced by multiple stakeholders can be best assessed by
them and then recommendations be obtained from them. As they are controlling the project, their
role becomes incompressible to arrive at outcomes related to the project. Their role will
determine the solution that is arrived at. They are at all instances connected to all decisions that
are being made for a particular project. It implies that the sponsors or shareholders will be
affected at every time be it success or loss associated with the project. They have a major role to
play in ascertaining an appropriate solution for all challenges that are faced in the project.
Through this process more amounts of funds will be pumped into the economy, which will again
set a cycle for conspicuous consumptions, as per economics theories.
Construction engineers are able to obtain a large number of projects, once they are able to
complete their projects within specified time frames. They need to remain committed and
complete projects within project schedule and project budget. Once the project is completed
within budget and time frame, then there are possibilities that the contractors will get more
projects assigned to them. Meaning that investors will start getting steady rate of return from
their investments, hence they will be more interested in investing across other projects.
Contractors will be able to provide and instill in a spirit of confidence amongst investors and
other shareholders of the project. They are at one end of the product delivery without them the
entire cycle of investment cannot be started or projected further.
Staffs and employees are the stakeholder who is finally responsible for delivery of the project.
They are considered to the primary actors of the project as they are completely involved within
the situation and also in implementing solution. Any aspect related to business project can affect
their success within the business. While they perform their roles on the project, their earnings
from the project will help generate demand for other products within the economy, which they
will go on to purchase by travelling in metro railways. Meaning one source of income will have
potential to create multiple benefits on the economy on the whole. Moreover, their improved
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health with reduce cost spent on lungs diseases will help the government reduce expenditure on
the health within the economy.
Commuters are on one end of the project delivery. Commuters are the final customers of the
project; therefore their connection to the system methodology is a crucial aspect. Their
satisfaction or dissatisfaction levels will determine choice for making further investments into
other projects as well. They constitute beneficiaries to the highest levels of business practices
hence any issues pertaining to the business is bound to affect them. There are from various social
backgrounds, which also comprise of tax payers, who will be spending to avail fast and
environmental friendly transportation system. They will be benefiting the most from the effective
commute and reduced pollution, meaning that they can use the money spent on health on other
areas. Moreover, the time that is spent on travelling in metro will be significantly less which can
otherwise be used for generating more businesses which in turn will benefit the economy.
Competitors will be affected from commuters availing metro railways transport over road
transportation systems. Therefore, with their reduced business, there will be less amount of
congestion and less pollution.
Suppliers upon completion of this project will get tremendous benefits of recognition and
monetary benefits as well. They can get extended cooperation from the management for availing
other forms of contracts relate to their materials and resources. The suppliers might be able to get
maintenance contracts related to their materials from the management. This extended demand for
products will again add to economic benefits within the economy.
The entire project of metro railways is aimed at enhancing environmental sustainability within
transportation and communication systems of India. They are aimed towards providing greater
benefits on environmental impacts that have currently become grave with rising pollution in
India. Carbon footprints have been considerably increasing in the country with its inability to
transform into processes or products that can lead to its sustainability. Therefore it can be said
that evaluating SSM framework provides various challenges and issues faced amongst various
stakeholder group, however overcoming the same will lead finally to success of the project and
arriving at an appropriate solution. Once completed the mega infrastructure project will generate
enormous benefits for the society and overall economy of India.
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5.0 Conclusion
Applying soft system tools to arrive at potential outcome related to the project has been able to
connect all stakeholders across the project. The SSM methodology has helped arrive at in-depth
and detailed information pertaining to various issues existing amongst the stakeholder group. As
every project’s aim is to cater to its stakeholder group, challenges faced needs to be diagnosed
and then resolved accordingly using appropriate methods.
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6.0 References Lists
Belton, V. and Stewart, T., 2010. Problem structuring and multiple criteria decision analysis.
In Trends in multiple criteria decision analysis (pp. 209-239). Springer, Boston, MA.
Checkland, P., 2013. Soft systems methodology. In Encyclopedia of operations research and
management science (pp. 1430-1436). Springer, Boston, MA.
Hardman, J. and Paucar-Caceres, A., 2011. A soft systems methodology (SSM) based framework
for evaluating managed learning environments. Systemic Practice and Action Research, 24(2),
pp.165-185.
Klerkx, L., Van Mierlo, B. and Leeuwis, C., 2012. Evolution of systems approaches to
agricultural innovation: concepts, analysis and interventions. In Farming Systems Research into
the 21st century: The new dynamic (pp. 457-483). Springer, Dordrecht.
Mehregan, M.R., Hosseinzadeh, M. and Kazemi, A., 2012. An application of soft system
methodology. Procedia-Social and Behavioral Sciences, 41, pp.426-433.
Prasetyo, H.N. and Surendro, K., 2015. Designing a data governance model based on soft system
methodology (SSM) in organization. Journal of Theoretical and Applied Information
Technology, 78(1), p.46.
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