SBM3302 Report: ERP Implementation Project for Woolworths Limited

This report details a project aimed at implementing an Enterprise Resource Planning (ERP) solution for Woolworths Limited to address operational and functional challenges. The project charter outlines the scope, deliverables, and potential risks, including technical issues and skill gaps. The report evaluates project delivery methods (Design-Bid-Build, Design-Build, and Contract Manager at Risk), financial contract types (Lump Sum, Cost Plus Fixed Fee, and Guaranteed Maximum Price), and procurement methods (Competitive Bidding, Negotiated Contract, and Best Value) based on criteria like project delivery speed, cost control, seamless communication, quality work, and risk sharing. The analysis recommends the Contract Manager at Risk approach for project delivery and Guaranteed Maximum Price for financial contracts, emphasizing cost control and risk mitigation. A risk management plan is also developed, including risk quadrants and mitigation strategies, providing a comprehensive overview of the project's planning and execution.

Running head: PROJECT MANAGEMENT
Project Management: Implementation of an ERP solution for the operational success of
Woolworths Limited
Name of the student:
Name of the university:

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Table of Contents
Project charter..................................................................................................................................2
Introduction......................................................................................................................................4
1. Selection of the project topic.......................................................................................................4
2. Background of the case project....................................................................................................5
3. Project delivery method...............................................................................................................5
3.1 Project delivery speed............................................................................................................5
3.3 Cost control............................................................................................................................7
4. Evaluation and recommendation of Financial contract type.......................................................8
4.1 Project delivery speed............................................................................................................8
4.2 Cost control............................................................................................................................9
4.3 Quality work..........................................................................................................................9
4.4 Risk/Hazard sharing.............................................................................................................10
5. Best recommended procurement method..................................................................................11
5.1 Project delivery speed..........................................................................................................11
5.2 Quality work........................................................................................................................11
5.3 Selection flexibility..............................................................................................................12
6. Development of risk management plan.....................................................................................13
Conclusion.....................................................................................................................................15
References......................................................................................................................................17

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Project charter
Title of the project Implementation of an ERP solution for the
operational success of Woolworths Limited
Project details In order to resolve the functional and
operational challenges the company is focused
to design and implement an ERP system. The
ERP system will help the company to obtain
competitive advantages and commercial
revenue.
Scope The scope of the project is to identify the
possible risks that Woolworths Limited is
constantly facing due to operational and
functional lack.
Deliverables  Improved productivity
 Increased business efficiency
 Reduced streamline process
Risks and issues  Technical risks
 Lack of skills and knowledge of the
experts
 Improper usage of PM tools and
techniques
 Inaccurate resource, time and cost

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management
Assumptions  The project will take around 4 months to
design and implement the ERP solution
 The net time assumed for the successful
completion of the project is $80,000
 The scope of the project is to improve the
business efficiency, productivity by
decreasing the cost and streamlining
processes
Financial assumptions It is expected that the project will be
accomplished considering the functional and
non functional within the budget of $80,000
Milestones schedule Activities Target dates
Project initiation
phase
12/1/2019-20/1/2019
Project planning
period
18/1/2019-22/1/2019
Project design and
execution
20/1/2019-30/2/2019
Project monitoring
and control
2/3/2019-30/3/2019
Project closure 4/4/2019-24/4/2019

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Introduction
This project depicts the role of designing and implementing an ERP solution in
Woolworths Limited to resolved different functional and operational challenges that the
company is continuously facing. The ERP software will help the company to manage their
business functionalities in terms of CRM, SCM, financial management, business intelligence and
inventory management system (Franz, et al., 2016). A project charter is designed to identify the
project delivery method, importance of cost control and seamless communication. Apart from
this, based on the criteria listing lump sum contract, guaranteed maximum price contract and cost
plus fixed fee contract the financial contract types are elaborated in this report.
Various procurement methods are available among them the most suitable procurement
method based on the project criteria are elaborated in this report. It will help to evaluate the
competitiveness, negotiation and best values of the project. From the current operational
analysis it has been determined that Woolworths Limited is facing certain major operational and
functional challenges those are required to be resolved sooner (Chen et al., 2015). It is assumed
that with design and implementation of an ERP solution the possible risks can be completely
resolved. The designed risk register will contain risk quadrants and risk mitigation approaches
as well.
1. Selection of the project topic
Implementation of an ERP solution for the operational success of Woolworths Limited

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2. Background of the case project
In this new era of technology, the numbers of online users are increasing simultaneously
and managing huge numbers of users have become a major challenge from the business
perspectives. In order to resolve the challenges the target company Woolworths Limited is
focused on designing and implementing an ERP solution connected with a central database to
ensure that the operational and functional efficiency, ROI and productivity rate is increasing
(Suprapto et al., 2015). The expected outcomes from the project include simplified compliance,
risk management, happier consumers, and productivity improvement with improved
collaboration, better analytics opportunities. Apart from this, the production planning and
resource management plan will be improved along with an improved inventory monitoring.
3. Project delivery method
The project delivery method is referred to as a comprehensive process model which is
assigning the contractual responsibilities useful to design and construct any type of project.
3.1 Project delivery speed
This specific project is comprises of 3 different phases, first phase is project initiation
phase, second phase is project planning phase and the third phase of the project design and
development phase. It implies that the project will be successfully accomplished within 5
months.
Design bid build: This is one of the most widely used traditional project delivery models
uses in United Kingdom’s business organizations. This is mostly paired up with lower bid
procurement approaches. The services offered by the contractors include jobsite supervision,

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speciality trade work (Mesa, Molenaar & Alarcón, 2016). Some other project management
services are also available in the target market those are to be primarily provided to the assigned
project team members. The selection process emphasizes short price range. In order to play nice
with the project owners the general contractors own lower incentives rate. It also protects the
owners from temptation of the lower bidders.
Design build: The design build approach is characterized with single accountability point
that helps the owners from both the constriction and construction services. The design bid build
involves single contract among the design builder and owners. It gives opportunities to the
owners to fight against the difficulties and functional challenges.
Contract Manager at Risk: The contract manager at risk model involves many
preconstruction services (Chen et al., 2015). In this case the owners do not wait until the
contractor is hired to complete the design. The dynamics between the contractors and owners
changes drastically with the changing selection method.
3.2 Seamless communication
At the initiation phase, many contractors are found interested in their application field. In
order to operate the project seamless communication approaches are determined as very crucial
from the business perspectives.
Design bid build: The design bid build (DBB) configuration team provides opportunities
to build those groups that are not well associated. For any practical project implementation this
conveyance strategy is not at all beneficial.

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Design build: It is an individual contract build between design services, proprietors and
constructions that helps to reach one contractor to create positive impart speedier and to
assemble the specialist group including system designer, developer and tester.
Contract Manager at Risk: This is one of the greatest advantages because in this
approach all elements do not lose the project cash. In this approach the project contractor gets an
opportunity to choose worked beforehand team.
3.3 Cost control
The ERP system development project is paid by known 3 sponsor companies in United
Kingdom. The net cost assigned for the project is $80,000 and from this the cost used for the
design and development is $50,000.
Design bid build: This approach provides cost beforehand as soon as the project is
introduces to the project team members and sponsors (Yu, Shen & Shi, 2016). The way through
which numerous numbers of staffs can be undertaken and managed with increment expenses is
measured with the help of design bid build cost control approach.
Design build: The design build technique can be highlighted as a configuration which
assembles the proprietor elements that may control the value contracts and overall expenses as
well of the company.
Contract Manager at Risk: Each price danger is lies on supervisor’s supervision and it
may be highlighted as the motivation behind the workers. It gives reasons for which the project
supervisor needs to attempt join strategies are also highlighted.
Selection criteria for the project delivery method

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Factors Weight Project delivery method
Design build
Score weight
Design bid build
Score weight
CR@risk
Score weight
Project
delivery speed
50 4 250 6 300 8 420
Cost control 30 7 100 5 70 8 125
Seamless
communication
20 7 250 3 100 8 250
Net 100 - 600 - 470 - 795**
For this section the factor which has been selected is construction manager at risk that
scores 795. While constructing the ERP system this specific approach is much beneficial from
the business and operational perspectives. The CM@Risk approach helps to reduce the risks of
the project owners (Dougherty & Boyd, 2017). The net investment rate get reduces and gives
accessibility to all the pre construction services.
4. Evaluation and recommendation of Financial contract type
4.1 Project delivery speed
This is an association partner project among the project sponsors and UK government.
Lump sum: In order to resolve the issues of smaller payments and installment cost this
approach is used where single time payment is done by the project sponsor.

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Cost plus fixed fee: For the normal expense this specific approach of investment is
applied by the contractor. This approach allows obtaining commercial benefits and also
encourages the commercial production.
Guarantee maximum price: In this cost contract type the contractors are compensated for
the actual cost that has been acquired along with a fixed fee subject to a ceiling price range.
4.2 Cost control
In order to increase the commercial profit rate by reducing and identifying the business
expenses the practice of cost control is applied by the project sponsors and contractor.
Lump sum: This singular amount is useful for legislature because the company owners
require extra project implementation cost (Ogunsanmi, 2016). Though, the values will be
manipulated if a huge amount change occurs.
Cost plus fixed fee: This specific cost control type is not appropriate for the project as
the sponsors are not aware of the actual expense.
Guarantee maximum price: Under the most extreme value it ensures maximum rate of
cost.
4.3 Quality work
Project quality is referred to as one of the most crucial aspects for Woolworths Limited.
With this approach the speed and quality both will be adjusted accordingly.
Lump sum: If the investors invest expected cost for the project in once go then for the
mutual investment no such future issues will raise.

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Cost plus fixed fee: The cost plus fixed fee approach has ability to convert the final cost
lower than normal contract because the contractors will never inflate the price for covering the
risks.
Guarantee maximum price: This approach ensures that even if the ERP system designer
and developer hold the expenses under maximum value.
4.4 Risk/Hazard sharing
Lump sum: The ideas and view points of the contractors always changes with the
changing time and development phases it may cause major operational risks or hazards.
Cost plus fixed fee: Additional cost can be requested as in each phase of development the
sponsor may claim more features to the ERP solution.
Guarantee maximum price: If the initial contract sum gets exceed in the design and
development phase then financial risk may occur ad interrupt the regular and expected project
success.
Selection criteria for the project delivery method
Factors Weight Project financial contract type
Lump sum
Score weight
Cost plus fixed fee
Score weight
Guarantee maximum
price Score
weight
Project
delivery
speed
50 4 250 6 200 8 320

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Cost
control
20 7 100 5 70 8 200
Hazard
sharing
20 7 200 3 200 8 250
Quality
control
10 6 200 2 200 7 200
Total 100 - 750 - 670 - 975**
For financial contract type the best suited solution selected is guaranteed maximum price
as it avoids future risks and also allows the project team members to assume the net expected
investment at the very initiation phase.
5. Best recommended procurement method
5.1 Project delivery speed
Competitive bidding: This process is issued with an intention that companies put in their
final proposal (Perrenoud et al., 2017).
Negotiated contract: Negotiated contract is referred to as a contract type used to govern
services for selecting the performing entity.
Best value: This is referred to as one of the most valuable strategies which require much
financial support.