To remain competitive, companies today face many differing priorities. Challenges such as” leading company staff in thinking bigger, operating in direct relationship to customers and stockholders’ needs, while staying flexible and adaptable to economic and market shifts ( Gaddy, p.171)” are all examples of priorities faced by companies that want to be competitive .
Friar Tucker International (FTI) is a hospitality service chain that has annual revenues in excess of $300 million and employs 1,200 people. The company currently manages 35 entertainment and cuisine establishments .FTI is seeking to expand operations through diversifying its portfolio, while maintaining the company’s strategic objectives (Apollo, 2008). This paper will discuss the issues and opportunities in relationship to the existing projects.
Project selection, funding, resource allocation and prioritization are important issues which must be addressed, while maintaining focus on the company’s strategic objectives. FTI has been accepting investment projects on a seemingly random nature (Apollo, 2008).
CEO, Ricardo Bellini has established a Project Selection Committee (PSC) to identify the types of projects for consideration. However, the PSC has not demonstrated the necessary skills in development and implementation of program management. Each of the PSC’s have his or her pet projects that they support, yet they all want to please the CEO and have chosen to follow his lead on the latest project, the Galleria. The PSC does not have metrics in place to weigh all factors against strategic goals. The committee also lacks the effective use of data in to achieve optimal performance. Furthermore, no performance management metrics are in place to monitor the project, once chosen (Apollo, 2008). The stakeholders of FTI include the CEO, the hired consultant and various senior managers who make up the PSC. The Project Selection Committee members have not had any leadership training and are incapable of making decisions based on clear facts. Most of the decisions made are based on political alignment or personal gain.
Program Management Plan (Process)Purdue states that , “Successful project management requires that all knowledge areas (scope, time, cost, quality, human resource, communications, risk, procurement, project integration) be managed effectively. (Purdue, 2008, pg 90).”
Planning the scope will be necessary before the project can proceed. This requires identifying success factors, timelines, and preparing a scope matrix. Once the scope is completed and agreed upon by all, the next step is to obtain approval. The CEO, Ricardo Bellini will need to approve the project to move forward. Part of this approval process will be budget approval, identifying constraints and assigning authority to the project manager (Scribd, 2008).
Successful program and project management requires diligent management and monitoring of not only the schedule, but of the entire team. FTI can use project management software, similar to that which was successfully used by Boeing to track various portions of the project (Bennett, et al, 2008).
The stakeholders will need to be kept informed of the progress of the projects in order to allow for decisions to be made in a timely fashion. This can be done with an effective communication plan similar to the satellite real time communications developed by FedEx (Bennett, et al 2008). This will also allow for reporting of the project status to all stakeholders, which is crucial. Stakeholders must be informed of the high priority risk items and costs status to allow for any changes to be made and to avoid delays.
The plan will need to have a diagram for monitoring control progress, such as a contingency plan, detailed milestones, confirmed deadlines, and checklists. These will be crucial to the project (Scribd, 2008). Another significant part of the plan is the closing. After the project is completed, an assessment of the project will need to be conducted. This will allow for a review of the results which will be compared to the objectives. A closing audit will also be completed, with a review of the challenges which were faced and opportunities for continuous improvement on the next project (Scribd, 2008).
The Galleria project is expected to generate about $10 million over the first two years, and the project is expected to break even in five years. The projected annual revenue from the restaurant and gaming is $1 million in year 1 and will grow to $35 million in year 10. Another $4 million expected annually from other sources. Because this is a new business, the initial investment can be $18 million or higher. If the estimates are a bit high, it may take a bit longer. It could take up to seven years to break even. This still allows for a fairly quick break-even point and an even greater return on investment when considering long-term financial goals.
The Galleria project is the most suitable for FTI, and it will fit in well with the strategic plans for the company and will provide a strong financial return on investment. Building new competencies is important to FTI to help achieve their vision of being among the top 10 hospitality service providers and the corresponding mission statement of attracting more visitors and customers.
FTI will need to shift resources to manage this program. Sprint was faced with a similar problem in their Enterprise Property Services project. They devoted 25% of their executive team to manage the new program management. Sprint was able to do this by outsourcing many non-core functions. The collaborative approach allowed better management of the performance of the program because of the shift from individual goals to focusing on organizational goals (Bennett, et al, 2008).
Another method of managing resources is the “triple constraint,” which involves making tradeoffs between scope, time and cost for a project. A project life cycle will have inevitable changes to the scope, time or cost of the project. However, where most projects fail is that when one of the areas changes and appropriate adjustments are not made to the other areas. For example, if a deadline is moved up, FTI will have to decide what actions are needed with regard to cost or scope to ensure the deadline is met without compromising the quality of the product (Purdue, 2008)
A well-formulated strategy helps to marshal and allocate an organization’s resources into a viable posture based on its relative internal competencies and shortcomings. A well formulated strategy also helps individuals anticipate changes in the environment, and contingent moves by intelligent opponents.” (Purdue, 2008). Many businesses require some type of strategy in order to be successful; otherwise their efforts and resources will be spent haphazardly and wasted.
Friar Tucker International has the opportunity to realize its financial goals while maintaining focus on its vision and mission by successfully implementing the strategic program management proposed in this paper. FTI will need to follow the details of the strategic program which have been provided to ensure successful programs and future projects. With the strategic program plan proposed and implemented, the future is an optimistic one for Friar Tucker International.