Risk assessment for Paladin Inc.'s "Real Life-Real Faces" project

Pala Din inc.

Project Management Report

Project Work in Paladin Inc.

Current Situation of "Real Life-Real Faces"

Budget Required by Production Team

Risk Assessment of "Real Life-Real Faces"

Management Risks

Resource Risks

Timing Risks

Strategic Risks

Environmental Risks

Project Management

In today's world, the term project management is used globally, rather frequently in all types and sizes of organizations related to different industries. Studies have provided evidences that more and more companies are turning into project-oriented models as the time passes (Whittington, et al., 1999, Bahrami, 1992). Well-planned business endeavors are the work models that organizations seek for. The benefits provided by project management are the reasons why many companies are emphasizing on reaping benefits of this work model through better utilization of resources and increased productivity (Pinto & Kharbanda, 1996, 1).

The purpose of this report is to analyze the risks that Paladin Inc. may face while executing its current project "Real Life-Real Faces" which is expected to be launched on 23rd July, 2013 on the occasion of "Unilever Lifestyle Exhibition" where Paladin has made its reservations for the launch of this show. This report is intended to evaluate the risks that the project might face while its execution and also devise preventive and corrective measures to mitigate these risks.

Project Work in Paladin Inc.

Paladin Inc. has performed most of its ventures on the basis of project-model where every single business venture is new endeavors all together require different, unique and new business plans. Projects are separate business ventures which are require efforts focused on thorough planning, have a clear objective and a process defined to achieve it with complete understanding of the final product. This report has been drafted immediately after taking over the office of Project Manager and provides the analysis of the current situation of this project, along with the risks that may hamper the progress in the execution phase.

Current Situation of "Real Life-Real Faces"

At the current stage, the show is in its preliminary state where 75% planning has been performed. However, execution of the show is still in its infancy. The budget allotted for this particular project is USD 3.5 Million. Presently, the most pressing tasks in hand are:

a) Confirmation of dates required from all the guests expected to be the part of this show, owners and organizers of the locations and other participants

Budget Required by Production Team

The total amount allocated for this particular project is USD 3.5 Million. Considering the cost of the guests which has been estimated to be USD 1.2 Million as per the legal department of Paladin, the production cost is estimated to USD 0.9 Million. The breakup of this cost is given below:

a) Cost of Covering a single episode which covers all the expenses along with crew expenses, vehicle coverage etc.

USD 0.6 Million

b) Equipment Expenses estimated as per market rate

USD 0.1 Million

c) Fee charged by the visual effects team and editing team

USD 0.2 Million

Risk Assessment of "Real Life-Real Faces"

In order to understand what the risks that any project can face analysis of the current situation can act as a guiding factor. This analysis is performed in the light of traditional project management theories.

Project Management is a broad concept entailing the overall progress of a project from the very inception i.e. planning to the execution phase which will ultimately result in a final product or finished service. While evaluating the current situation of this particular project of Paladin, the Project Management theory has been used along with contemporary Lean theory. Project Management theory itself consists of following divisions (Erno-Kjolhede, 2000):

a) Project Theory- Transformation, Flow, Value Generation

b) Management Theory

1) Planning - Management-as-planning

Management-as-organizing

2) Execution - Classical communication theory

Language/action perspective

3) Control - Thermostat model

Furthermore, the very concept of project management entails that, "projects need to be performed and delivered under certain constraints" (Ruuska, 2001). As per the researchers, any project is impacted by three different factors: Scope, Time and Cost. In addition to that these three factors are interconnected and change in one has a tendency of affecting other two as well. Hence, the quality of the project is dependent on these three factors. (Atkins, 2001, 37-39).

In the light of above divisions, following risks have been identified which this project may face during its course.

Management Risks

Management Risks are related to the scope, nature of a project and also the strategy used to for its execution. While evaluating the current state of the project, we analyzed several risks which are to be analyzed in the light of management risks.

The primary constraint that this project is facing is lack of coherence in its departments. The basic foundation of the project has been laid but none of the departments are aware of their internal scheduling and budgeting. Furthermore, necessary legal obligations have not been met which have tendency of hampering the overall scope of the project.

Concerning the first risk, Paladin Inc. has not received the approval from the concerned legislative bodies for the outdoor shoots. Out of six, four of the episodes have fifty percent of the coverage to be made in the outdoor locations. Considering this plan, necessary procurements have been made and layouts have been designed by the time along with the episode plans. Also, the participants have been shared with their part of scripts whereas the concerned guests have also been given the programme outline. Furthermore, Natasha Sharma, the Asian participant in the show, is already engaged with the rival channel and we have not received the confirmation from her as of now.

In addition to that, the PR team has been provided with the timelines and their concerned role but till the last update received from the team head, Mi Chung Lee, the team is still performing its preliminary planning for necessary marketing strategy whereas one month has been lapsed. This risk is of mild nature and can have an effect on the desired outcomes of the project if necessary remedial actions are not taken thoroughly.

Considering the fact that the necessary legislative restrictions are not duly met 11th April, 2013 which is two weeks from the actual date, as per the costing of the accounts department, the overall loss would be of USD 0.3 Million. Along with that, the overall progress of the project may also get severely affected as the guests and the participants may not be available at the later stage. Considering the accounting figures and the impact of this risk on the overall projects progress, this risk can be considered of a severe nature.

Recommendations

After evaluating these risks, few back up strategies have been devised accordingly. First and foremost, as a primary foundation of project management, planning and budgeting need to be performed in the preliminary phase. Also, the inherent risks to the current situation should be analyzed and are addressed as per last planner model. A new method, often called Last Planner, to cope with the situation met in construction production control, has been developed by Ballard (2000) since 1992. The method has emerged in an inductive manner from a series of industrial experiments (Ballard and Howell, 1998). Considering this theory, following remedial actions are suggested considering that the risks have materialized.

a) In case where outdoor shoots are not permitted by the city government which will be known to the production team in next three working days, the in-house studio of Paladin Inc. will be used for the coming three shoots. In order to add surprise element to these episodes, some of the shooting will be conducted at the residences of the guests and the participants or other locations as suggested by them. Considering the planning timeline, after three working days, the planning and other necessary communication can be performed in next two working days. The outline for this plan has been already shared with the board of directors.

b) Where Natasha Sharma fails to show her consent within next three working days, the offer made t her will be already null and void, since the format of the program demands an Asian representation, one of the Asian actor Rajesh Kutharpali, can be contacted for a single episode. Overall time demands, that shooting one episode takes five working days. Rajesh is already working in another project of Paladin Inc. And is currently under contract. Therefore, he will be readily available in case the board of directors gives permission.

c) The PR Team must be provided with the necessary budget. The team head has been already given a deadline to share the marketing plan in next two working days and commence the marketing activities within seven working days after this submission. Also, the progress of the marketing team is required to be shared with the Project Management team on bi-monthly basis.

While addressing these issues, the concept of Management-as-planning and Management-as-organizing, are used to mitigate all these risks in the planning phase.

Resource Risks

Resource risks refer to the absence of the necessary resources required for the execution of the project. These risks can be of financial nature as well as human resources a swell. In the current state of the project, the equipments required during production have been outsourced by the specialized supplier named as "Shooting Specialists Inc.." The costing has not been received by the team and therefore cannot be incorporated in the project budget. Also, the PR team has not shared the requisition of the project required by it. The equipments have been received and have been used for the preliminary shoots. However, at more than three occasions, the equipments have malfunctioned.

As of now, the production has already started its activities and has hired a team of freelancers who will be working on 35% of the visual effects of the overall show and will be fully responsible for the editing after the shoot has been completed. Considering these risks, one can consider them risks of mild nature if the variance between the costing given above is less than 8%. More than that will declare the project to have signification risks faced during its execution.

For addressing these risks, Strategic Management Theory has been used. For the purpose of this report, an extension of this theory is used which is known as Research-based view. RBV is based on an assumption that every entrepreneur has its own set of skills and assets which provides it with differential advantage (Barney & Hesterly, 1996). Because of the specialized nature of this industry, this approach has a special significance (Chan-Olmsted). 'In a content analysis of media strategy research, Chan-Olmsted (2003a) identified an even split between the SCP and RBV approaches in strategic management research on media companies.

Recommendations

The recommendation given below are devised after evaluating the above mentioned scenarios in the light of concepts of execution and control of project management theory and referring them to the strategic management and RBV concepts.

Since the vendor has failed to provide the necessary costing even after four written reminders and the equipments provided are faulty, therefore it is suggested that another vendor should be hired with immediate effect. For the purpose of this hiring, recommended vendors names have been already shared with the procurement department. In the meanwhile, necessary equipments have been taken from another project of Paladin Inc. named as "Poor Uma." The show is almost completed and in its editing phase. However, the equipments borrowed cannot be used in the longer run as "Real Life-Real Faces" is a fashion-based show and the equipments required for it must of high resolution. Therefore, necessary equipments must be provided in the next three days.

Secondly, it is necessary that the vendors must be hired so that Production Team can design its budget accordingly and submit it to the board of directors. As mentioned above, the budget needed by the production team is USD 0.9 Million other than the costs of cast finalized. Variances in this cost is acceptable up to the level of 8% dependent on the exact costing shared by the planning and procurement department after hiring the new vendor for the equipments. Up to this variance, the risk faced is of mild nature. Above that it is not acceptable and may turn out to be severe.

Timing Risks

Timing and scheduling are the fundamental success factors for any project. Other than budgeting and scope, the third dimension playing substantial role in defining the direction of the project. Considering the current state of the project, there are various factors which can lead affect the over scheduling of the project.

The project needs to be completed by the production team by 23rd June, 2013. For this purpose, the production activity must be commenced at 23rd April, 2013. However, the current status of the project defines that they are legal formalities t be met, cast and budget to be finalized, and marketing activities to be commenced. All these factors in their individual capacity have a tendency of impacting the overall scheduling of the project.

In addition to that, the overall project performance is still in the form of monthly targets as decided by the board of directors and the departmental heads. However, considering the strict deadline that has been given to the respective department, time management is an aspect of this project which cannot be neglected or underestimated. Since, the deadline is given in the form of monthly targets to every department, therefore, as per the estimated schedule which has been shared with the board of directors in the last email; the deviation of five working days is acceptable without missing the deadlines. Other than that, the risk will reach a severe level and will affect the overall progress of the project.

Recommendations

While evaluating the impact of miscalculation of time or missed deadlines, we have used all three aspects of Management theory ie. planning, execution and control. Using these concepts, all the teams i.e. Marketing, Production, Editing, Visual Effects and Legal Department, are required to present their planning in the form of a Gantt chart. Gantt chart is a tool which not only allows performing planning at micro as well as macro level but is also used during the execution of the project and act as a control tool as well since it refers to the deviation from the standard performance expected at a particular time frame.

While evaluating risks that may arise in this case, the corrective actions are suggested in the light of thermostat model. The thermostat model is the cybernetic model of management control that consists of the following elements: there is a standard of performance; performance is measured at the output; the possible variance between the standard and the measured value is used for correcting the process so that the standard can be reached (Koskela, 2000).

Since the contingencies that might appear at individual departmental level have been already considered therefore it is necessary that all the remedial actions must be taken in the e planning phase and also deviations from the Gantt chart performance must be addressed in timely fashion and reported to the management as well.

Strategic Risks

Strategic risks have a potential of reshaping the overall performance of a project. Now that we have completed more than 80% of our planning and have already started shooting. The market intelligence has reported that the rival channel DEF Entertainment is also launching a similar kind of show. The show has a format quite similar to "Real Life-Real Faces" and is also a small scale project with a dedicated team. Since, there launch date is 15th July, 2013, a week earlier than our launch, therefore the risk does exists however it can still be considered of mild nature.

There are various factors which provide us an edge over this new venture of our competitor. First and foremost, the viewership of our channel is 35% more than DEF Entertainment therefore covering the major demographics would be difficult for them. The portfolio of their marketing team is not highly qualified. On top of that, the guests that they have chosen for their show are from the same channel with low to moderate Target Rating Points. Therefore, competition is not substantial.

However, the launch date can give them an edge, therefore the necessary viewership has to be captured now.

Recommendations

This recommendation is given in the light of execution and correction theories of project management. Since during the execution of the project, a constraint has been met therefore; necessary corrective measures are required to be taken. As per this ideology, it is recommended that the marketing team needs to speed up its planning and instead of launching the product profile in the market by June, 2013, it should target mid of May, 2013. Once again, this is a target given on monthly basis. Formal timeline can now be amended with the recommendations from the marketing head.

Secondly, the marketing team needs to be more aggressive in its prior efforts of capturing the targeted audience. For this purpose, audience polls and opinions can be used as a tool and can be launched in the mid of May, 2013 in the Prime time intervals. The Production team can amend its schedule accordingly for shooting viewer's opinions.

Environmental Risks

Environmental risks usually arise from the factors governed by environmental forces and are usually beyond human error. Similarly, Paladin Inc. is currently facing a similar scenario. The whole concept of this show along with the scheduling, resourcing and execution was performed keeping the event of "The Fashion Show" which was to be commenced on 23rd July, 2013. All the marketing campaigns and production layouts were designed keeping the theme of this show in accordance.

However, due to the terrorists activities in Milan fashion show which took place three days back and threats of continuing such activities in the similar events, the event managers and the sponsors of this show have decided to cancel it.

The overall theme of this project was designed in accordance with the concerned show. Similarly, all the planning, execution and control tools were defined accordingly. Out of the allocated USD 3.5 Million, USD 1.2 Million (other than 0.2 Million paid to one participant), have been spent and if the contract is ratified, will result in penalties. Other necessary expenses include production expenses worth USD 0.3 Million along with payments to outsourced parties and freelancers. In addition to that, the marketing team has incurred expenses of USD 0.5 Million so far for the commencement of promotional activities. The overall expenditure already incurred USD 2 Million. And if the project is stopped at this point, Paladin Inc. is expected to incur further USD 0.6 Million in terms of penalties.

Since a heavy amount of capital, time and resources has been already allocated to this project, therefore, it is suggested that rather than cancelling it completely, it should be reshaped.

Recommendations

This suggestion is based on new product development theory and Diffusion theory. These two theories advice how the new products can be used as a strategic weapon. The importance attached to new-product development reflects the fact that an organization's ability to innovate successfully has been linked to financial performance. Within the media management and mass communication literature, there has been relatively little examination of new-product development processes Franke and Schreier (2002). Similarly, Diffusion theory refers to the adoption of innovative research (Rogers, 1995).

In the light of these two theories, it is suggested that rather than cancelling the whole show, it should be amended in a manner which would save the resources that have been already used and will also help in gaining more TRP. For this purpose, it is suggested that along with the participants, random individuals should also be included in the show for a makeover.

The format of the new project is as followed:

a) The new show should now be launched with the time frame of new exhibition, "Unilever Lifestyle" which is to be conducted on 5th August, 2013 and is expected to gather over eight thousand visitors in 6-days time.

b) The format of a show would require general public to send their entries who will be selected through random selection and then will be given makeover as per desired celebrity look.

c) Also, designers and Stylists should also be included in the show for giving tips regarding fashion and styling to the live audience and to those who called. The time slot allocated for both the activities in three minutes each which would curtail the original show to thirty eight minutes. However, this shortage can be managed in the editing phase.

d) The marketing team and production team's needs to alter their respective plans accordingly as now the deadlines have extended and the format of plan has changed.

e) When approved, the budget and schedule of the new show will be shared. The costing for this new project is expected to be 5% higher than the earlier project.

Conclusion

Paladin Inc. is a leading TV producer having a decade long presence in the industry. This report was designed to analyze the performance of its current project, "Real Life-Real faces" in the light of traditional project management theories. In the light of these theories, the respective risks that have or may arise have evaluated and addressed accordingly.