Case Study: Project Life Cycle, Scope, and Risk Management Analysis

This case study analyzes the project life cycle, encompassing initiation, planning, execution, and termination stages, emphasizing their significance in project success. It explores project scope, illustrating its importance through the AMEC marine construction task, defining project objectives, and outlining essential deliverables. The analysis extends to AON project networks, depicting critical paths and project durations across multiple project scenarios. Furthermore, the case study delves into cost appraisal methods, comparing Net Present Value (NPV), payback period, and Internal Rate of Return (IRR) to assess project viability. Risk management is examined, including the identification, analysis, prioritization, treatment, and monitoring of potential risks. Quality audits, project evaluation, and the purpose of project monitoring and control are also discussed, providing a comprehensive overview of project management principles and practices. The case study utilizes relevant literature and real-world examples to illustrate key concepts, providing valuable insights for effective project management.

Case Study
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Table of Contents
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................3
1. Stages of project life cycle.................................................................................................3
2. Scope of the project............................................................................................................4
3. AON project network.........................................................................................................4
4. Cost appraisal method........................................................................................................6
5. Risk Management...............................................................................................................7
6.1. Quality audit....................................................................................................................8
6.2 Project evaluation.............................................................................................................8
6.3 Purpose of monitoring a project.......................................................................................8
6.4 Project control..................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10
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Introduction
A project has a life cycle beginning from its inception to its conclusion. A project life
cycle begins from initiation phase and proceed further with planning phase and then execution
phase. It finally concludes with termination phase. Project management refers to the process of
managing the resources and operations of the project during its life cycle (Dykstra, 2018). This
report is divided in two parts. First part aims at exploring concepts of various approaches and
terminologies that are encountered during the project life cycle. Second part aims at exploring
applications of those concepts in the phases observed during project life cycle.
Task 1
1. Stages of project life cycle
Project life cycle refers to a framework which is designed to assist project managers to
complete their project from beginning to end in an orderly manner. It includes four stages which
are below mentioned:
 Initiation stage – This stage includes identification of project need and objectives. It is
important as it includes evaluation of all the possible options to satisfy those needs and
objectives by conducing feasibility study, to identify final solution.
 Planning stage – This stage includes developing plans for the final project solution in as
much detail as possible to meet the project objectives. It is important as this stage
includes scope management and develops processes that are required to be followed by
project management team.
 Execution stage – In this stage, plan prepared is put to action under project manager. It is
important stage as it includes actual work happening to meet the desired need and
objectives with which project was initiated. Therefore, it includes strict vigilance and
control measures (Larsson, Eriksson and Pesämaa, 2018).
 Termination stage – This is the final stage of the project in which projected product or
service is rendered to the customer. It is important as it includes handing over project
documentation and deliverables to the customers. This step also includes examination of
success and failures observed during the process of project to help project team further in
the future.
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2. Scope of the project
I. Essential of scope of a project
Project scope refers to the objectives of the work that is need to be delivered in the
project. It is mentioned in a scope statement (Schaufelberger and Holm, 2017). It is essential for
a project to develop scope statement as it defines functions and characteristics of the aim of the
work required in a project. Everything else is out of scope and need not to be concerned about.
II. Scope of AMEC marine construction task
Project scope includes clearly defining the work required out of project in a scope
statement. Scope of AMEC marine construction task includes construction of two four-leg
jackets – one for production platform and other for accommodation (deck) platform and their
installation on an offshore oil rig platform to the North Sea at a budget cost of $550 million.
Platforms needs to be completed before 30th August, 2024 and to be delivered for operations no
later than the end of September, 2024.
3. AON project network
I. Identification of critical path
Project 1
Below mentioned is AON Project network for Project 1:
Below mentioned is identified critical path for Project 1:
Project 2
Below mentioned is AON Project network for Project 2:
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Below mentioned is identified critical path for Project 2:
Project 3
Below mentioned is AON Project network for Project 3:
Below mentioned is identified critical path for Project 3:
II. Project duration
Project 1
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Project 2
Project 3
4. Cost appraisal method
I. Net Present Value (NPV)
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It is a capital budgeting technique which includes determining present value of future
cash inflows of the project net of current cash outflows to assess viability of the project. Its prime
benefit is that it considers time value of money which helps in taking better informed decision.
However, it ignores hidden cost in future and is not good while comparing different sized
projects (Suwal and Singh, 2018).
II. Payback period
This cost appraisal method is used to determine the amount of time that is required for the
future cash inflows of the project to pay back its initial investment. Its prime benefit is that it is
easy to calculate and is preferred by businesses while undertaking smaller investment which does
not need to engage in complex calculations. However, it drawback is that it ignores time value of
money as well as cash inflows generated by project post payback period.
III. Internal rate of return
It is that rate at which NPV equals to zero i.e. present value of future cash inflows equals
the current cash outflow. Primary benefit of this rate is that it provides a quick snapshot of which
project would provide the greatest return and potential cash flow. It considers time value of
money on the basis of cost of capital but ignores the size of project size when comparing the
projects. This makes it difficult to choose out of project size which have different initial outlay.
5. Risk Management
I. Risk and Risk Management
Risk refers to any unexpected event or happening which is capable of disrupting or
affecting the project being undertaken. It is a case for possibility of likely to happen but the
magnitude and occurrence is unknown. Risk management refers to the process that is undertaken
to manage the risk and mitigate its impact (Ha, T.P.T. and Tran, M.D., 2018).
II. Five stages of risk management process
Risk management process involves identification and analysis of likely risk that is
possible of arising at any stage of project life cycle and then developing appropriate response
with the aim to complete the project successfully on time with meeting all objectives. This
process is divided into five stages in which project risk register is prepared, which are below
mentioned:
 Identification – This stage involves identifying all likely cases of risks that are capable of
impacting the desired project outcome.
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 Analysis – This stage involves determination of possibility or likelihood of occurring of
all the risks identified in the earlier stage and their consequences. This helps the project
management team to understand the nature and potential impacts of the risk over the
project.
 Prioritisation – This stage involves ranking the risk according to their magnitude which
includes assessment of both their likelihood of occurrence and consequence.
 Treatment – This is the risk response stage. Risk mitigation strategies, preventive
measure and contingency plans are developed for risks in the order of their ranking
determined in the last stage (Zhong and Hu, 2018).
 Monitoring – This is the last stage in which prepared risk register is monitored and
reviewed to ensure that everything is going as per the planning.
6.1. Quality audit
Quality audit refers to systematic assessment of observance of quality of the resources
and processes in the project management system as per some defined quality standards such ISO
9001. It is conducted by independent auditors in a rigorous process to produce conclusions as to
whether quality standards are being conformed or not.
6.2 Project evaluation
It is a systematic assessment of an on-going or completed project to ascertain the level of
effectiveness, efficiency, impact and sustainability of the project objectives. AMEC project is
being evaluated to determine the level of completion of project objectives in terms of its
efficiency and effectiveness in the project management phase (Pande and Sabihuddin, 2015).
6.3 Purpose of monitoring a project
Monitoring refers to observing and assessing whether project tasks and processes are
being properly executed or not. Its purpose is to make sure that project is completed within
planned time and budget with least occurrence of possible risks and in case of variance,
necessary corrective measures can be timely adopted.
6.4 Project control
Project control refers to all the processes that gather and analyse project data to keep
project operations as per planned cost and estimated time. It includes communication of
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information with management to assist in informed decision-making process to ensure timely
and successful completion of project operations.
Conclusion
Above report is based on the project management and the various concepts related to it. It
can be observed above that project life cycle is divided into four stages and all the processes such
as scope management, monitor and control, risks management, etc. are part of it. All the
processes are keenly performed by project management team to successfully complete the
project.
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References
Books and Journal
Dykstra, A., 2018. Construction project management: A complete introduction. Kirshner
Publishing Company.
Ha, T.P.T. and Tran, M.D., 2018. Review of impacts of leadership competence of project
managers on construction project success. International Journal of Emerging Trends in
Social Sciences. 4(1). pp.15-25.
Larsson, J., Eriksson, P.E. and Pesämaa, O., 2018. The importance of hard project management
and team motivation for construction project performance. International Journal of
Managing Projects in Business.
Pande, A.A. and Sabihuddin, S., 2015. Study of material management techniques on
construction project. Journal of Construction Engineering, Technology & Management.
5(2). pp.22-27.
Schaufelberger, J.E. and Holm, L., 2017. Management of construction projects: a constructor's
perspective. Taylor & Francis.
Suwal, S. and Singh, V., 2018. Assessing students’ sentiments towards the use of a Building
Information Modelling (BIM) learning platform in a construction project management
course. European Journal of Engineering Education. 43(4). pp.492-506.
Zhong, Y. and Hu, H., 2018. Uncertainty analysis and resource allocation in construction project
management. Engineering Management Journal. 30(4). pp.293-305.
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