Procurement issues and project cost management in significant projects

¶ … Industries:

• Service (public and private)

• Manufacturing

• Software and IT

Compare the chosen industry with construction / building / maintenance with respect to how you would conduct project reviews to integrate procurement, risk management, and contractual obligations. How would the reviews differ in the two industries if the project were carried out completely in-house instead of involving a third party for some or all of the work?

I choose service (public and private) and compare it with construction / building / maintenance with respect to how I would conduct project reviews to integrate procurement, risk management, and contractual obligations. Similarities are that in both cases, the work has to go through a series of stages and these are planned with tasks delegated, decided upon, and monitored. Each stage is planned before implementation.

Both areas need planning too and implementing research in order to assess predictions that are relevant to the field. However, in the service realm this is more important and pertinent than in the construction realm, since the service realm involves a far more diverse and chaotic mix of factors that concerns different aspects and relevance of the service and way that the service should be delivered. The service realm is far more dependent on external circumstances and on cyclical nature of demand than the construction realm is (p.9). The former is far more contingent on stress and changing factors that may even deem their service irrelevant. The construction realm however is more stable with far less flux involved (xxi). These considerations impact the project reviews in regards to integrated procurement, risk management, and contractual obligations. Ethics too need to be taken into consideration and these are likely to be more complex in the service mode than in the construction mode although pertinent in both.

In both areas and when conducting reviews, I would assemble expert knowledge of workings of the place from peers, technical specialists, associated associations, experts, and the like. This set of knowledge would then be divided into 4 categories: project objectives, guiding principles, working assumptions, and technical perimeters. The guiding principles refer to rules of conduct; working assumptions are hypotheses that reviewer wants to check whether or not they are true, and technical perimeters refers to precisely defined and often quantifiable deliverables (xxiii).

Both reviews would incorporate aspects of health and safety of environment, with the focus in construction being more on the safety (although the service may have a great focus on safety too depending on its category). Focus too would be on HR rules of conduct and ethical regulations of employment and of treating employees. Review of service may have a higher focus on the way that service is delivered and satisfies customers, whilst construction may focus more on whether management is meeting labor laws. Both will assess extent to which organization is meeting government requirements. The review of the service factor is likely to be more complex than that of construction since service necessarily is fissured into many more categories and may likely involve more ethical regulations and project objectives as well as working assumptions. On the other hand, the review of the construction factor may have to deal with greater panoply of laws that involve intricacies of the construction realm.

Both also differ between "project life cycle" and "product life cycle" where service would revolve around the former since it deals with projects, and construction would revolve around the latter (p3).

Risk management is a factor that also applies to both factors and in both cases need to consider both exogenous and endogenous events. (p.50)