Project management principles and practices

Project Management: Case Study in Managing a Complex Shipyard Project in Singapore

Background of Complex Shipyard Construction Project

Company background

Project Overview and Objective

Work Process of Building Construction

Issue Analysis in Shipyard Construction Project Management

Literature Review of Project Management

Issues in Scope Management

Methodology of Scope Management

Lessons Learned from Scope Management

Issues in Cost Management

Methodology of Cost Management

Lessons Learned from Cost Management

Issues in Human Resources

Methodology of HR Management

Lessons Learned from Human Resource Management

Case Study in Managing a Complex Shipyard Construction Project in Singapore

Introduction.

This paper introduces the special features of a completed shipyard project, together with its construction and human resource management processes as well. The organization of the paper provides an introduction to the topic, an overview and background of the In the first part, this project illustrates overview of the complex background of a complex ship-building project as envisioned by Koppel Shipyards of Singapore, the project objective and the background of the company involved. A critical review of the scholarly and relevant literature concerning project management and scope management is followed by an examination of case studies in ship-building that provide some guidance and insights into the underlying processes and problems that can be expected. Respective methodologies and lessons learned is followed by a summary of the research in the conclusion.

1. Background of Complex Ship-Building Project.

The shipbuilding and marine industry, just like any other, badly needs brave thinkers of the unthinkable, who are prepared to back their hunches by putting them into practice. Innovation remains both valid and necessary in shipbuilding and marine industry, and we depend on it to make ship building processes more efficient, better at the jobs they do and more productivity, quality, reduce industrial accident, cost reduction, minimize. raw material wastage and ultimately better profits for the entire stake holders. Fortunately, In the Keppel Group, there is a cadre of capable executives who are proactive and enthusiastic for business innovation. On the programme board, or computer, the sums all add up and the promises of the innovation look overwhelming. But reality has a habit of showing us unintended consequences of our apparently brilliant actions, and the shipbuilding process will very often find flaws in our finest and most innovative methodology when the project is on going through out the whole spectrum. So courage and innovation go hand in hand.

Industry today needs innovators because they can offer the hope of something better than the present. Without them we could anticipate no growth, no improvement, no dramatic increase in performance, and no cost savings. An absence of innovation would condemn us to a stagnant, uninspiring sameness and ultimately become mediocrity instead of differentiation advantage and gradually withering to its extinction.

Due to the innovators remaining active consistently in Keppel shipyard groups, over the past few years, there has been significant improvement across the board like relatively costs and materials usage efficiencies, shorter delivery schedule, better interaction in inter-dependency processes such as pre-fabricated material and panel flow, and certainly the increase of profitability. A system of shipbuilding and steel-handling has been devised that has been described as the most important innovation in ship construction since the inception of the innovative campaign. The greatest successes that we have had reckoned so far is the safety record of virtually zero accidental figure in the ship construction processes. From Keppel's perspective, there will always be far more sufficient room for further innovation to take place. Therefore, whenever there any achievement in business innovation regardless whether it is in a micro or macro level, it can be regarded as another milestone achievement rather than as a whole.

The Singapore Shipbuilding Industry particularly the Rig construction and Fuel Production and Storage and off Load (FPSO)is competing in a world-market -which is in crisis- and facing injurious pricing far below the cost price of the Korean, China and Middle East competition. Market prices dropped due to overcapacity, demand outstrips supply.

The changes in the Shipbuilding and FPSO conversion market are discussed with examples of specific markets. The distorted market, resulting from a price war, is illustrated with cost price comparisons. The result is that the market position of the Singapore Shipbuilding Industry is deteriorating. Our world leadership in the arena of Rig building and FPSO conversion may be lost if no immediate further investments in restructuring, improving of quality and productivity. A significant portion of the future of hindered shipbuilding industry in Singapore will be in the conversion market.

The management of a ship conversion can be a volatile business, in which planning and supply chain flow can be by unforeseen, but often anticipated changes in the work scope as the project is carried out. This paper outlines some of the crucial innovations that Keppel Groups of shipyard in Singapore have implemented with significant achieved results in its Shipbuilding and Conversion business. Managing the complexity of the ship conversion process is highly demanding in manpower and usually requires the use of external sub-contract companies. Very detailed information is exchanged as a matter of routine, and it is not uncommon for paper documents to go astray or be held up and wrongly captured. An increasingly IT aware industry will allow for the development of an integrated software system that could not only vastly increase the flow of information within a company, but aid in its planning and management functions particularly in the HR management.

Seeing the present threats for the Singapore Shipbuilding Industry, caused by injurious shipbuilding policies and targets of the major shipbuilding countries are compared. The top management of Keppel Shipyard Groups of Company, the market leader in Singapore has determined to have a drastic change in the conversion process technology so as to boast its productivity as well as quality. The "Business Innovation Scheme" was launched by its groups chairman Mr. Coho Chiew Beng on the 18th Jan 2003 at Keppel Benoi Shipyard Singapore and the groups' Managing Director was assigned to champion this "Business Innovation Scheme" and was urged by the chairman to guarantee a quantum leap given with a six-month time.

Mr. Richard Tong the managing director of the Keppel Groups of Shipyard Singapore upon the delegation of this assignment of "Business Innovation Scheme" organized a meeting with his various production managers as well as some long-term partnership sub-contractors and the meeting was held on the 25th Jan 2003 at Keppel Benoi Shipyard so as to inviting creative suggestions, ideas and their active involvement in this "Business innovation Scheme." Among all the senior staff and sub-contractors who participated in this meeting, Mr. Peh the senior manager of Business Development and Sub-Contracting Department was appointed to head this challenging innovation task together with the writer (Managing Director of Candid Marine Engineering Pte Ltd.) of this assignment. Mr. Peh, a very well experienced man in the context of manpower resources, cost control and production processes and given with the writer vast experiences in human resource management and production in the context of shipbuilding and conversion processes together we have identified and determined to prioritize two sectors namely manpower control and welding technology, quality and productivities because our industry is so human resources intensive particularly welding sector which is not only the most manpower intensive sector but also highly quality intensive

There are significant risks associated with the conversion of the existing tonnage, quality defective, man-hour wastage and in common with other forms of offshore construction. The FPSO conversion sector has seen numerous examples of projects which have experienced substantial cost overruns and delays. The waste of man-hour and quality defective, in particularly the welding sector were reckoned as the main culprits. The risks of conversion itself are usually shared between the contractor and shipyard. It is therefore important to identify and assess carefully the risks of the project in the areas of man power management and quality defective, let alone the scope of work, management, design liabilities, title, insurance, etc.

As lower cost solutions for field development is to be sought as well as the improvement of welding quality in this "Business Innovation Scheme" The challenge for the shipyard and contractors is how to manage and share the risks of delivering suitable capacity in a manner that will not only enable them to generate an acceptable rate of return but to make the conversions business sustainable in the many years to come. The Business Innovation Scheme was officially launched on the1st of February, 2003.

1.1 Company Background.

Keppel Shipyard Benoi is an ISO certified organization located on the west coast of Jurong sea front; it is one of the group that underwent a few changes in its ownership as well as its name since its inception as Hitachi Zosen Robin Shipyard to Keppel Hitachi Zosen Singapore under the merger between the two marine engineering giants and, finally its present name of Keppel Shipyard Benoi, wholly owned by Keppel corporation. Over the past 3 decades, the core activities of Keppel Shipyard Benoi have been building and repairing of ships as well as FPSO (Floating Production Storage and Off Load) conversion since its inception and the present. According to its corporate profile, Keppel Offshore & Marine, integrating the experience and expertise of Keppel FELS, Keppel Shipyard, Keppel Singmarine and Keppel yards overseas, was established in 2002 (About Us 2004). Keppel Shipyard Benoi is a wholly-owned subsidiary of Keppel Corporation, one of the largest offshore and marine groups in the world. The company enjoys a strategic network of 16 yards serving regions including Asia Pacific, Gulf of Mexico, Brazil, Caspian Sea, Middle East and the North Sea (About Us 2004). The Keppel Shipyard (Benoi) specifications are set forth in the table below.

Yard Size

350,000 sq m

Berthage

1,163 m

Drydocks

No. 1 drydock

300,000 dwt

350m x 60m

No. 2 drydock

170,000 dwt

300m x 60m

Mooring Quay

No. 1 quay

Length 217m x Depth 7m

No. 2 quay

Length 352m x Depth 10m

No. 3 quay

Length 270m x Depth 8m

No. 4 quay

Length 224m x Depth 7m

Landing Quay

Length 100m x Depth 5m

Slipway

Length 230m x Width 40m

Dock and wharf cranes

Gantry cranes

80 tonnes

100 tonnes

25 tonnes

50 tonnes

20 tonnes

45 tonnes

15 tonnes

Source: Keppel Shipyard 2004].

The physical layout of the Keppel Shipyard (Benoi) is illustrated in Figure 1 below.

Figure 1. Physical Layout of Keppel Shipyard (Benoi) [Source: Keppel Shipyard 2004].

1.1.2 Recent Successful Technological Innovations.

1.1.2.1 Increased Productivity & Waste Reduction in Tank Blasting.

This innovation reflects technology transfer from industrial bridge painting contractors and equipment suppliers to the shipyards. Bridge contractors have realized the savings offered by Recyclable Ferrous Metallic Abrasive (RFMA) for many years and their equipment and process knowledge have evolved to a point where they are finally to be used in a shipyard. The innovation of this waste reduction in Tank Blasting had integrated the bridge industry procedures and equipment into a cost saving process for the shipyard, resulting in projected savings of 15 to 25% in Tank Blasting costs. Keppel has been adopting and practicing this hybrid technology since June 2003.

1.1.2.2. Innovation in Welding using Laser Pipe Welding.

This innovative programme has determined the weld quality and return on investment that a shipyard can expect by applying recent advances in laser welding technology to pipe welding during ship fabrication. Conventional pipe welding often requires multi-pass welding of beveled joints. Significant cost savings are anticipated due to elimination of multipass requirements while taking advantage of the deep penetration offered by keyhole laser welding, which will enable direct, single-pass butt-welding of pipes with little or no bevel required. Specific laser welding technologies that will be addressed include high power Nd:YAG (up to 6 kW, more than twice the power available for previous NSRP laser pipe welding studies), fiber laser technology and laser-assisted GMA (hybrid) welding. This innovation has reduced about 20% of process time as compared to the previous method because of single pass run as compared to conventional multiple root runs and finishing run.

1.1.2.3. Tandem Spin-Arc Welding Process.

This innovation has successfully met manufacturing needs in the small batch-mixed production environment of ship conversion with a new arc welding approach that will easily accommodate the multiple parameter-torch setups needed for the full range of fillet weld sizes and dependably provide seam tracking at high production rates. This project had integrated the excellent seam tracking - small fillet performance of Spin-Arc gas metal arc welding (GMAW) with a high deposition trailing GMAW torch to develop a new variant of tandem GMAW. It has been proven that the Tandem Spin Arc process had offered the best weld quality, seam tracking performance, and productivity over the full range of fillet weld sizes (3 to 8 mm) for ship construction. Productivity has been significantly improved with lesser defect. Fillet weld is to weld joint steel materials in a T- Shape form with cutting of bevel on steel plate. It is more on reinforcement materials.

All of these innovations in processes and constructions techniques enabled Keppel to successfully bid for a major construction project described below.

1.2 Project Overview and Objective. The objective of the TPG 500 project was to deliver four completed strips to the Caspian Sea where Keppel O&M's subsidiary, Caspian Shipyard Company (CSC), which will then integrate the strips in a floating drydock in Baku.

Figure 2: Artist's Conception of Completed Rig (Source: BP awards U.S.$20 million follow-up job to Keppel yard in the Caspian 2004).

The completed TPG 500 jackup shown in Figure 2 above will be the first world-class gas-condensate platform to be located in the Caspian Sea. The platform hull itself is comprised of 15,000 tonnes of steel and was formed of 12 block sections and over 680 steel panels. The hull strips were completed within the 12-month timeframe, and with a safety achievement of more than four million man hours without a lost time incident and won a Silver award at the recent Annual Safety Performance Award organized by the Singapore Ministry of Manpower (BP awards U.S.$20 million follow-up job to Keppel yard in the Caspian 2004).

The TPG 500 was fabricated in four sections; the sections were then trial-assembled in the Keppel Fels dry dock to minimise assembly time during the in-country assembly stage in Azerbaijan. This precautionary step also helped to ensur that the hull sections fitted perfectly together before the components are shipped to Baku. In Baku, the four sections will be assembled to form the platform substructure to be installed offshore in 2006 (Shah Deniz Loads Out TPG 500 Platform Hull from Singapore 2004).

The hull sections are scheduled to be transported by a heavy-lift vessel (Mighty Servant III) operated by Dockwise. The fabrication of the accommodation block for 120 personnel has also been completed by Keppel Fels safely and on schedule, and will be shipped separately using a heavy lift vessel.

Finally, the parties to the Shah Deniz Production Sharing Agreement (PSA) are:

BP (operator - 25,5%)

Statoil (25,5%)

The State Oil Company of Azerbaijan Republic (SOCAR - 10%),

LUKAgip (10%)

NICO (10%)

Total (10%), and TPAO (9%) (Shah Deniz Loads Out TPG 500 Platform Hull from Singapore 2004).

1.3 Work Process of Slated Construction. On July 26, 2004, British Petroleum (BP) announced it has awarded a $20 million follow-up job to Keppel. Keppel announced that it had delivered the main hull sections of the BP Shah Deniz TPG 500 platform on schedule to BP Exploration (Shah Deniz) Ltd. A year after securing this U.S.$96 million contract. Following the successful completion of this highly complex fast-track project, the joint entity, Keppel FELS and Keppel Offshore & Marine (Keppel O&M) has now received a U.S.$20 million award by BP Exploration (Shah Deniz) Ltd. To integrate these hull sections for the jackup platform. According to Mr. Choo Chiau Beng, Chairman & CEO of Keppel O&M, "Our near market, near customer strategy of having a network of shipyards in strategic locations has enabled Keppel Offshore & Marine, as a service provider of choice, to provide our customers with the shared expertise and total solutions of the Group. "CSC and Keppel FELS are participating with Technip and BP in the execution of this fast-track project." A self-installing jackup drilling/production/quarters platform, the TPG 500 jackup will be the first world-class gas-condensate drilling/production platform to be installed in the Caspian Sea when it is completed in the third quarter of 2006.

For the work on the hull sections, Keppel FELS achieved four million man-hours with zero loss time incident and won a Silver award at the recent Annual Safety Performance Award organised by the Singapore Ministry of Manpower. Mr. Tong Chong Heong, Managing Director/Chief Operating Officer of Keppel Offshore & Marine (Keppel O&M) said, "The TPG 500 clearly reflects how Keppel can execute our contracts successfully amid challenges while maintaining a high standard of safety practices. "To meet the contractual schedule, we had to start production while the detailed engineering work was still being carried out by BP's designer, Technip. This called for the project teams to be very innovative, flexible and meticulous in the management of each phase of the project. "I am glad that the strong teamwork and open communication between Keppel FELS, BP and Technip have facilitated the smooth execution of this project."

According to Dr. Rob Kelly, President of BP Shah Deniz, "I would like to congratulate everyone at Keppel FELS and the overall Shah Deniz Singapore Team for safely and successfully delivering the four main strips of the TPG 500 platform. "It was always going to be a very tough challenge to meet our tight schedule for sailaway and I have been delighted with the drive, commitment and flexibility shown by everyone to meet our expectations. "However, what has pleased me most of all is that this has been achieved safely, with over 4 million man-hours worked on the project without a Day Away From Work Case. "Everyone can be rightly proud of what has been achieved and Keppel FELS have definitely lived up to their 'Can Do' motto" (BP awards U.S.$20 million follow-up job to Keppel yard 2004).

2. Issue Analysis in Construction Project Management. According to Adedeji Bodunde Badiru, project management is "the process of managing, allocating, and timing resources to achieve a given goal in an efficient and expedient manner" (1993:1). The goals that comprise the specified project management objective may be expressed in terms of time, costs, or technical results. "A project can be quite simple or very complex. An example of a simple project is painting a small, vacant room. An example of a complex project is launching a space shuttle" (Badiru 1993:2). Today, project management techniques are used widely in a number of enterprises, including construction, banking, manufacturing, marketing, healthcare services, transportation, R&D, public services, and so forth; the standard hierarchy of the elements of project management consists of system, program, project, task, and activity, which are described further below.

System:

project system is comprised of interrelated elements that are intended to be organized for the purpose of achieving a common goal. The elements are expected to work together synergistically to generate a unified output that is greater than the sum of the individual outputs of the components (Badiru 1993).

Program: For project management purposes, a program should be viewed as a very large and prolonged undertaking. "Typically," Badiru says, "such project endeavors span several years. Programs are usually associated with particular systems, for example, a space exploration program within a national defense system" (Badiru 1993:3).

Project: A project is a linear time-phased effort; in sharp contrast to the program, a project is of much smaller scope and duration. On occasion, programs are viewed as being comprised of a set of projects; however, industry practitioners frequently refer to both without regard to such a distinction. According to Badiru, "Government projects are often called programs because of their broad and comprehensive nature. The industrial sector, on the other hand, tends to use the term project because of the short-term and focused nature of most industrial efforts.

Task: A task is a functional element of a project. A project is normally composed of contiguous arrays of tasks that all contribute to the overall project goal.

Activity: An activity can be defined as a single element of a project. Activities are generally smaller in scope than tasks. In a detailed analysis of a project, an activity may be viewed as the smallest, practically indivisible work element of the project. For example, we can regard a manufacturing plant as a system. A plant-wide endeavor to improve productivity can be viewed as a program. The installation of a flexible manufacturing system is a project within the productivity improvement program. The process of identifying and selecting equipment vendors is a task, and the actual process of placing an order with a preferred vendor is an activity.

In this regard, the global Keppel O&M group is the system in question. The overall Keppel "system" endeavors to provide one-stop shopping for its corporate clientele, which represents its program. In support of its program, the company has an established reputation in the international market for its versatility, reliability, quality service, timely delivery, good project management and commitment to excellence. "Quality solutions to customers are enhanced by proprietary technology and critical engineering expertise" (About Us 2004:3). For the purposes of the project in question, the company is also the world's leading designer and builder of jackups, having manufactured the majority of jackups on order over the last 10 years. In order to meet the needs of deepwater drilling operations, its proprietary suite of semisubmersible designs also include the newly built DSS-20-CAS-M. In its Floating Production Storage and Offloading (FPSO) and Floating Storage and Offloading (FSO) conversions, Keppel O&M is also the world leader and is a leading shiprepairer for LNG and LPG carriers and a niche player in specialised conversions and construction. The company's expertise in specialised new-building also extends to a wide range of small to medium-sized customised vessels including Anchor Handling Tug Supply vessels, multipurpose support vessels and cable ships for a worldwide clientele (About Us 2004).

The individual tasks that comprise the BP Shah Deniz TPG 500 project have become a matter of course for the company, having gained an enormous amount of expertise in this area. For instance, in the last three decades, Keppel Shipyard Benoi has not only delivered a considerable number of new ships to the world's fleets but has also delivered huge significant number of repair works on commercial vessel and above all delivery of many turn-key FPSO projects that met the requirements of international standard of quality as well as owner's satisfaction respectively. Because of its sound location, expertise, high quality performance, timely delivery, good safety track records and above all full-service capabilities thus, for the past few decades the world Eastern bond commercial fleet has been heavily relying on Keppel Group of Shipyards Singapore for its maintenance as well as periodical sea worthiness repair as compliance to the international marine regulation and these have helped the yard developed into one of the leading shipyards in the South East Asia.

Concerning the fundamental tasks associated with BP Shah Deniz TPG 500 platform project, Keppel's chairman and CEO, Mr. Choo Chiau Beng, reported on July 26, 2004 that the fabrication of the TPG 500 platform hull had been a challenging and complex project. "The yard invested four million man-hours in to the project and I am proud to say we accomplished zero incident throughout the 365 days we took to complete this job" (Speech by Mr. Choo Chiau Beng 2004:2). Mr. Beng noted that this project also symbolised Keppel's first direct partnership with BP, and the TPG 500 jackup will be the first gas-condensated drilling production platform to be deployed in the Caspian Sea. "What's most interesting about this project is its fast-track construction schedule," Mr. Beng added. In addition, Keppel also demonstrated its ability to construct the hull while responding to changes as detailed engineering drawings came in from the project designers. The press release from Mr. Beng stated that the Keppel shipyard was responsible for the entire out-country fabrication, which involved the fabrication of the hull, topsides and living quarters. "And what is most unique about this project is that instead of building the whole hull, it was fabricated in four sections" (Speech by Mr. Choo Chiau Beng 2004:3).

According to Geoff Vine (2002 in Orbeck) the Shah Deniz field is one of the most difficult drilling environments in BPs portfolio anywhere in the world. "The field is deep (4500-6500 metres below seabed) with pressures up to 14,000 psi downhole. It requires complex technology to manage the depth, tectonic stresses, narrow pore/frac pressure windows, wellbore stability and numerous shallow subsurface hazards" (Vine 2002:3). Vine explained that the development plan is based on a progressive step-out to maximize learning for project management purposes (Orbeck 2002).

For instance, a maximum step-out was imposed in line with the industry drilling envelope which will limit the wellbore inclination to 35 degrees or less. Vine notes that the jackup structure is subjected to significant tectonic stresses and associated wellbore breakout, factors that are expected to contribute to drilling challenges associated with the development drilling campaign. The technical expertise required for the initiative has been engaged to determine the magnitude of the tectonic stresses and predict wellbore stability issues for the development wells (Orbeck 2002).

The offshore facilities are comprised of a fixed platform based on the proprietary TPG500 self-installing jack-up design. When production from the platform wells begins to decline in the future, a second drill center is planned, initially planned to be located approximately 5 km south of the first installation in approximately 300m water. In addition, the second center is planned as a subsea satellite with wells tied back to a subsea manifold, with a multi-phase product transported via subsea flow lines to the fixed platform for gas/liquid separation (Orbeck 2002). Gas and condensate will be transported through two 100km marine pipelines from the fixed platform to the onshore terminal at Sangachal; a new gas export pipeline installation will be constructed from Sangachal through Azerbaijan and Georgia to the Turkish border.

The transportation of materials and equipment to a country with no sea connection is a major project management challenge for Keppel. The current project management strategy for construction of the TPG 500 offshore jack-up is to build it in four hull sections out of the Caspian and then to deliver them through one of the canals and assemble and commission them in Baku. The delivery of the sections has been constrained by weather conditions, though, with the canals generally freezing in November and not opening again until April. Vine adds that the project's schedule is delivery as soon as the canals open in 2004, a timetable that was met successfully by the company. The TPG 500 was planned to be installed offshore in March 2005, with the first gas to Turkey targeted for 4Q 2005 (Orbeck 2002).

2.1 Literature Review of Ship-Building Project Management.

2.1.1. Innovation in Project Management. Project management of such enormous project as the TPG 500 jackup requires innovation in both thought and approach. Innovation in the context of business indicates something new has been introduced in contrary to established custom or what has been in practicing in an established business sector or its existing culture. It is some thing new that has taken place in a revolutionary form but not evolutionary. The definition is not just a change in material, product, model, management and marketing strategy. It relates also to values and ideas when implementing it become innovation. This gives four terms to identify innovation namely;

Someone has to take action to create innovation.

Innovation is change and gives birth to change.

Innovation happens in a context.

Innovation gives new value to an existing situation

Much of the innovation literature tends to be inherently biased towards success. However, there is another side of the coin - innovation failure. Superficially, failure can be defined as the inability to successfully market an innovation. It can then be asked whether the failure was due to shortcomings in the innovation, the innovator, or the innovating team. Undoubtedly, radical innovations can be so intrinsically flawed, either in terms of customer perception of their utility, performance, or cost, that no organization could successfully market them.

According to Margaret Wheatley: "Innovation is fostered by information gathered from new connections; from insights gained by journeys into other disciplines or places; from active, collegial network and fluid, open boundaries. Innovation arises from ongoing circles of exchange, where information is not just accumulated or stored, but created. Knowledge is generated anew from connection that weren't there before"

Ikujiro Nonaka (professor at the Center for Research and Investigation of Advanced Science and Technology in Tokyo) says:" To explain innovation, we need a new theory of organizational knowledge creation. The cornerstone of our epistemology is the distinction between tacit and explicit knowledge...the key to knowledge creation lies in the mobilization and conversion of tacit knowledge." For the evolutionary approach, innovation is a key ' milestone' in the linear process which begins with the invention of a new product, process or system and concludes with the diffusion of an artefact within a given population of 'users'. In the most often cited version of this view Freeman defines 'innovation' as the point of 'first commercial application of a new process or product' (Freeman 1982).

For Freeman (1982) neither the 'technology push' nor 'market pull' explanation alone is convincing and both fail to account for the view that technological capabilities and market needs may be ' matched' together within the innovation process. Thus Freeman argues that innovation is 'essentially a two-sided or coupling activity' requiring a matching of technological development to market requirements. No matter what levels of organisational or institutional sophistication are involved, 'this remains a groping, searching and uncertain process' and the coupling of technological development to changing market needs raises key issues concerning the nature of the innovation process within organisations (Freeman 1982).

Following the research trend towards interactive process perspectives (Van de Ven & Rogers, 1988; Slappendel, 1996), West & Farr (1990:9) have attempted to combine these views by presenting innovation as the "intentional introduction and application within a role, group or organisation of ideas, processes, products or procedures, new to the relevant unit of adoption, designed to significantly benefit the individual, the group, organisation or wider society." Furthermore, we refer to innovation as a cyclical social process encompassing observation, initiation, implementation, and stabilisation. In this process, observing refers to the identification of a gap between the existing and something feasible for adoption and/or further development, e.g. idea generation and/or identification of opportunities to adopt an existing innovation or generate something new. Initiation houses a communicative phase where the observation is transmitted to others in a social system. Depending on acceptance, the material or immaterial artefact can be commercialized and thus systemically implemented. In the case of rejection, the innovation may be abandoned or looped back for refinement, resulting in recurring cycles of observation and initiation.

As pointed out by Sneep (1991), the distinction between incremental and radical innovation is difficult, as there is no absolute measure for intrinsic newness. Intrinsic newness relates to the scientific knowledge component of technology, whereas architecturality refers to the organizational component (i.e. how knowledge, artefact and auxiliaries are organized and combined in a new way that changes existing patterns).

Standardization occurs when a successful implementation of an innovation has diffused to relevant areas of application and become fully routinized (West, 1990). Here, in contrast to individualists' and structuralists' views (Slappendel, 1996), innovation is therefore not portrayed as linear, stepwise or symmetrical, but as an embedded, continuous, bi-directional and dynamic social process, involving social structuration and diffusion, as well as material and immaterial inputs and outputs.

In Madsen (2003)'s theory, Strategic Innovation is a systematic approach focused on generating beyond incremental, breakthrough or discontinuous innovations. Innovation becomes "strategic" when it is an intentional, repeatable process that creates a significant difference in the value delivered to customers. Strategic Innovation generates a portfolio of breakthrough new business growth opportunities through a structured yet creative process. This theory is indicated in Figure 4 as follows.

Source: Arne Stjernholm Madsen, New dimensions of Innovation Management http://www.strategic-innovation.dk/Engelsk/Welcome.html

2.2 Issues in Scope Management.

The scope definition delineates the content of the project, how the project will be approached and explains how it will help to solve the client's needs or problems.

The definition of a project's scope serves to establish a method whereby all the items of work that are required to be carried out to complete the project can be identified (Burke 1993). According to authors of A Guide to the Project Management Body of Knowledge (2004), the purpose of defining scope is to "clearly describe and gain agreement on the logical boundaries of your project. Scope statements are used to define what is within the boundaries of the project and what is outside those boundaries" (2).

Just as with virtually all types of effective planning, the Guide recommends including as many aspects of the scope of the project as can be identified, and provides the following types of information as being useful in defining a project's scope:

1. Solicit potential scope change requests from any project stakeholders, including the project team, clients, sponsors, etc. The scope change can be surfaced through verbal or written means, but it will be formally documented using a Scope Change Request Form.

2. Enter the request into the Scope Change Log for tracking purposes.

3. Assign the scope change to a project team member for investigation. (The project manager could assign it to himself or herself.) The team member will investigate the impact on budget and schedule for various viable options

4. (Optional). If the impact on project cost, effort and duration falls below a threshold (say less than 20 hours) and the project will still be completed within the agreed upon cost, effort and duration, then the project manager and client manager may approve the scope change request. This threshold needs to be identified and approved in advance. The purpose is to keep from surfacing many small changes to the Sponsor for approval. However, the sponsor must have agreed to delegate this responsibility - usually up to a certain threshold of dollars or effort.

5. Take the scope change request, alternatives and project impact on the Scope Change Request Form to the Project Sponsor for a resolution.

6. Document the resolution or course of action on the Scope Change Request Form.

7. Document the resolution briefly on the Scope Change Log. If the Sponsor does not agree to the change request, then the request should be closed as 'not approved' on the Scope Change Log.

8. If the resolution is agreed upon, the appropriate activities are added to the work plan to ensure the change is implemented. The project budget should also be updated, if necessary.

9. If an approved scope change results in a substantial change to the project, the original Project Definition should be updated.

10. Communicate scope change status and resolution to project team members and other appropriate stakeholders through the Manage Communication process, including the Project Status Report (A Guide to the Project Management Body of Knowledge 2004:3-4).

The scope of the technical specifications for the subject project are provided below.

BP Shah Deniz TPG 500 - Technical Specification.

Rig Type

Jackup

Overall Dimension

90 m X 90 m

Operational Water Depth

101 m side Weight

20,000 tonnes

Accommodation

120 people

Production rates

8.4 bcm per annum of gas (900 mm scf per day) mm tonnes (14.6 mmbbls) per annum of condensate (when at maximum production)

Other Specifications

15 well slots

100% production capacity separator and 1 x 100% test separator export routes from the platform of 100 km each - a 26" pipeline for gas and a 12" pipeline for condensate

Source: BP awards U.S.$20 million follow-up job to Keppel yard in the Caspian 2004.

2.2.1 Methodology of Scope Management. Based on the enormity of the BP Shah Deniz TPG 500 project, Keppel was compelled to reassess its existing sourcing methodologies, as well as the manner in which it administered its human resources to provide more efficient and effective workers who would be able to devote more of their workdays to actual job functions rather than the administrative tasks associated with the HR function.

2.2.2 Lessons learned from Scope Management.

2.3 Issues in Cost Management. Delivery of a completed ship by a specified date requires careful planning. Following the introduction in the United States of the critical path method of planning and control by the E.I. du Pont de Nemours and Company about 1959, new techniques were adopted in many shipyards around the world (Pounder & Conn 2004).

The critical path method is the basis of network analysis, a common technique used in planning complex production projects. The network, and the information that is discerned from it, are used for the overall planning of a project; they are also used for detailed planning with production progress control (Pounder & Conn 2004). The network provides the project manager with a logical, graphical representation of the project, and indicates the individual elements of work and their interrelation in the planned order of execution. Each of the components of work, or tasks, is represented by an arrow, the tail of which is the beginning point of activity and its head representing the completion point. The arrows on the graph are drawn to any suitable scale and may be straight or curved. Any type of event, which represents the completion of one activity and the beginning of another, is generally indicated by a circle and described further by a number within the circle; however, each type of activity need not be completed before the next activity is started (Pounder & Conn 2004).

The logical order of steelwork used in the manufacture of in a hull in a shipyard, for example, is:

1) detailed drawings of steelwork;

2) ordering of steel;

3) manufacture and delivery of steel;

4) storing of steel material in stockyard;

5) shotblasting, cleaning, and forming operations;

6) subassembly work; and 7) erection of structure on berth (Pounder & Conn 2004).

These individual operations can be represented on a ladder-type of diagram. A number of these diagrams, including ladder and other types, are aimed at identifying and graphically illustrating the total aggregate operations involved in the building a ship. "When the proper sequence of operations is decided upon, times must be allocated to each operation to ensure that the workers in charge understand their obligations. Planning, based on realistic estimates of times and costs, must begin at the precontract stage, so that, throughout the building program, a clear plan, with scheduled dates for each major section, is available" (Pounder & Conn 2004:17).

To this end, detailed networks are required to be prepared for each of the major sections, indicating required dates for completion; the earliest and latest permissible starting and finishing times are indicated for each activity (Pounder & Conn 2004).

The critical path of a project is a series of activities whose duration cannot be increased without delaying the completion of the project as a whole. In large networks there may be more than one critical path. Up to about 100 activities can be dealt with manually but, for more complex cases, the numerical work is done by computer. The spare time available for a series of activities -- "i.e., the maximum time these activities can be delayed without retarding the total project -- "is aggregated into a "total float." This is considered to be a factor of safety to address unanticipated breakdowns, mishaps, and labor issues that might arise. Intelligent and experienced project managers will use the critical path method, and others as appropriate, to provide information that can be used to guide the project on a day-to-day basis, as well as identifying problems areas before they can adversely affect the project schedule (Pounder & Conn 2004). The process begins even before an order is placed; for instance, the main technical qualities of the ship are decided upon and a general-arrangement drawing of the vessel, indicating the disposition of cargo, fuel, and ballast, and crew and passenger accommodation is prepared. This proforma plan also provides the owners and designers with a complete picture of the finished vessel. The proforma plan is generally accompanied by detailed specifications of hull and machinery; this general-arrangement plan and the specifications provide the framework of the contract between shipowner and shipbuilder (Pounder & Conn 2004).

The project manager can then employ these tools as the work begins and progresses. As soon as an order for a shipyard project is confirmed, drawing offices and planning departments create the requisite working plans and instructions. Because ships are generally constructed according to the rules of a classification society, the stipulated structural plans are typically submitted to the society for peer-review and approval. The spacing of bulkheads in passenger ships, for instance, must be approved by the appropriate authority. For all ships, passenger and cargo, though, the approval of the maximum permissible draft must be secured from the responsible classification society.

The working drawings that are required for this purpose include the lines plan and detailed plans of the steel structure (shell plating, decks, erections, bulkheads, and framing) as well as accommodation spaces, plumbing, piping, and electrical installations, and main and auxiliary machinery layout (Pounder & Conn 2004).

There are also other project management functions that use these tools to help manage large projects; for example, the planning and production department prepares a detailed progress schedule, establishing dates for the completion of various stages in the construction. A berth in the yard is then allocated to the ship, appropriate arrangements are made for the requisite materials, labor, personnel, and machines, and precautions are generally taken to ensure that the many interrelated operations will progress according to the timetable (Pounder & Conn 2004).

In order to better understand how a shipyard manages identifies and refines costs along the critical path, as well as coordinating and negotiating as the project proceeds, an examination of a sample case study in cost management will be useful.

Once any organization has selected a project, a supplier or contractor (in-house or external) must then be selected. This decision will therefore contribute in significant ways to the success or failure of the enterprise. A review and discussion of the role of communications in project management in which the Department of the Navy Acquisition Reform Office (RD&A) awarded contracts to Sea Ark Marine, Inc., to build seven seacraft and Swiftships, Inc. In 1996 follows. This examination will extend to how the RD&A administered its requests for proposals, including how the request for proposal (RFP) process was handled, what criteria were used for evaluation, and the type of contract used and the supporting rationale.

The decision to contract for services in this case was based on the need for high-speed riverine assault craft (RAC) to support heightened drug interdiction operations by the U.S. government. On March 16, 1990, then-Commandant of the Marine Corps, General A.M. Gray, signed a statement of Urgency (SOU) to procure six RACs. The acquisition of armed and highly maneuverable pursuit craft was intended to strengthened the Marine Corps Air-Ground Task Force tactical capabilities, and drug interdiction proficiency. According to a case study developed by the Department of the Navy (DoN), in 1986, the U.S. Congress passed legislation that gave preference to the acquisition of Commercial Items and Non-Developmental Items (NDI) for military use. Since that time, Commercial Item and NDI procurements have become the accepted and preferred method of fulfilling the mission requirements of the Department of Defense (DoD) (Riverine Assault Craft, 1996).

However, historically such Commercial Item and NDI acquisitions presented buying activities and Systems Commands with unique acquisition and support requirements that frequently resulted in programmatic and logistic shortfalls, as well as increased life cycle support costs. In view of the challenges that commercial procurements present to the DoD community, the RD&A emphasized that it is important that program managers, logistics, engineering, and contracting personnel, learn from their past experiences, as well as those of other buying activities (Riverine Assault Craft 1996).

2.3.1 Requests for Proposal Processing. According to the case study cited above, the request for proposal (RFP) for the production contract specified procurement of a commercial/NDI RAC that met the requirements of the approved performance description and statement of work. As a result, six contractors responded to the RFP and were subsequently evaluated by the source selection team. The successful bidders got on the bidders list because of their corporate leadership which, although different is size and form, responded with timely and careful proposals based on the government's newly identified requirements. According to Chopp and Paglia of Pepperdine University (2002), this level of responsiveness requires a top-down culture in which people in the organization understand the basics of economic profit. From the CEO's perspective, then, communication must be viewed as a critical feedback loop so people can learn which actions are working and, just as important, which actions are not working so they can adjust what they do to create more value for the organization. In this regard, Chopp and Paglia write:

The organization has to have consistency around all of its key management practices so that improvement in economic profit over the long-term is the goal of the organization.... Communication of results will provide the necessary feedback to the organization about how their actions are impacting shareholder value. Lack of feedback on how actions are impacting value will disrupt the learning process, signal a lack of importance around the initiative, and ultimately cause the initiative to lose momentum (2002).

2.3.2 Evaluation. The source selection process scored each proposal using a 60/40 rating system with technical compliance weighted more than cost. A contract review board and a technical evaluation board were used to evaluate the proposals and select the best proposals. The final contract award was based on "Best Value" criteria. The case study states that such Best Value contracts are awarded based on the proposal that is considered most responsive and advantageous to the government, with price and other factors being considered. A complete description of the process is provided at the appendix.

2.3.3 Types of Contracts Used. SeaArk Marine, Inc. was awarded a contract to build (7) craft (funding was allocated to purchase 7 instead of 6 craft) for field user evaluation. Because the ensuing operational tests of the Sea Ark boats proved satisfactory, an NDI procurement strategy for a follow-on competitive contract was justified. This satisfactory performance was based on SeaArk Marine's commitment to quality boatbuilding making the company an industry leader in design and construction of quality commercial boats. "SeaArk Marine has been under the same ownership for over 45 years, many of our key craftspeople have been here for over 30 years, and our pledge of satisfaction to the buyers and operators of the boats we build remains as important as is it was in 1959" (Welcome to SeaArk 2003:2). SeaArk Marine in located in Monticello, Arkansas. According to their corporate literature, SeaArk's investment in technology and state of the art designs is solidly coupled with old-fashioned craftsmanship. While the company's products are not the cheapest when it comes to price, fully 95% of their business each year is from return buyers.

Swiftships, Inc. was the other successful bidder and was awarded a firm fixed price (FFP) contract to build (25) RACs, and to retrofit the seven boats previously purchased from Sea Ark, Inc.; the first RAC was delivered to the Marine Corps in the 3rd QTR FY93 with the last RAC was delivered in the 4th QTR FY95 to complete the terms of the contract. In contrast to SeaArk's closely held owner/manager business structure, Swift Group, LLC is a holding company formed to own a family of companies that, when taken together, constitute a diverse, international ship design and shipbuilding company. The companies that comprise Swift Group, LLC are referred to collectively by the original trade name, "Swiftships," with Swiftships Shipbuilders, LLC being the primary operating company. According to their corporate literature, Swiftships has "a long and proud history of designing and building the highest quality, most reliable mid-size vessels anywhere in the world. Swiftships' vessels, ranging in length from 35-feet to 225-feet, play a vital role in meeting both military and commercial customer requirements worldwide" (Welcome to Swiftships 2003:2-3).

The proposal submitted by Swiftships was success in part because of the company's commitment to "providing its customers with products that meet or exceed requirements."

2.3.4 Analysis of Success. There were several winners in this RFP approach. The Department of Navy was successful in securing the RAC it required in a timely fashion; the case study notes that market research conducted at the time determined that there were no other government R&D procurements or previous designs that would meet the critical performance specifications for the RAC. This, together with the need to respond to the statement of urgency, the "up front " cost savings, and the expeditious nature of commercial acquisitions, reinforced the Marine Corps' decision to buy commercially available products. The benefits of fielding Commercial Items and NDI equipment are well established since this approach allows for timely deployment of world class technologies, reduced developmental risk, and the use of innovative and streamlined acquisition practices by DoD Systems Commands (Riverine Assault Craft 1996).

2.3.5 Recommendations to improve the process or the results.

The case study notes that as a result of this RFP, a number of observations emerged concerning how things could have been done differently, with the following recommendations:

The content of future RFPs should include verbiage which specifically addresses the extent of logistic support desired for the proposed program. Too often, the RFP process fails to establish even minimal logistic support requirements for offerors to consider in their proposals. An RFP that clearly describes the required program logistic support parameters, will quickly eliminate many bidders that may have otherwise been considered in the source selection process. This screening technique would save on resources typically expended during the proposal evaluation process, and allow for more effective use of acquisition funds.

The pre-award evaluation process must be improved to ensure that it is accurate and meaningful. A well trained and knowledgeable evaluation staff is essential to performing expert investigations into the contractor's facility and processes, and should result in the selection of the best qualified vendor.

It is essential that a risk management analysis (RMA) be performed for commercial procurements. A RMA would identify programmatic risk areas and recommend corrective actions to reduce risk to an acceptable level. Additionally, a RMA would enhance management of the acquisition process and help ensure that the government has accounted for all possible pitfalls in the acquisition, support, and lifecycle management, of commercially procured systems (Riverine Assault Craft 1996).

2.3.6 Summary. The research showed that SeaArk and Swiftships were the successful bidders for a lucrative government contract because these companies were committed to consistently providing quality products that met or exceeded their customers' expectations and requirements. While not the cheapest on the market, both SeaArk and Swiftships's products were consistently noted for their superior performance over their competitors, and this level of performance contributed to their corporate success and to their future success in securing additional contracts.

According to Gray and Larson, the most common way of shortening a project's completion time is to simply add more manpower; but there are limits as to how much speed can be gained by adding manpower. "The relationship between manpower and progress is not linear; doubling the size of the workforce will not necessarily reduce completion time by half. The relationship would be correct only when tasks can be partitioned so no communication is needed between workers, as in harvesting a crop by hand" (219). This is in fact the precise case with the sailboat design and construction process, with some steps requiring completion before others can be started.

An examination of the costs and time periods required according to the case study are provided in the spreadsheet below.

2.3.2 Methodology of Cost Management. Given the above-described budget of $3.2 million and a completion deadline of 45 weeks, the following cost-time permutations provide some potential critical path networks for the timely completion of the construction of the design and construction of the sailboat, as well as the second phase of the project requiring selection and training of crew.

According to Badiru (1993), schedule compression refers to the prodcess of reducing the length of a project network. This is frequently accomplished by "crashing" activities. "Crashing, sometimes referred to as expediting, reduces activity durations, thereby reducing project duration. Crashing is done as a trade-off between shorter task duration and higher task cost" (Badiru 1993:55). Project managers must determine whether the total cost savings realized from reducing the project duration is enough to justify the higher costs associated with reducing individual task durations. Should there be a delay penalty associated with a project, it may be possible to reduce the total project cost even though individual task costs are increased by crashing; however, if the cost savings on delay penalty is higher than the incremental cost of reducing the project duration, then crashing is justified. Using conventional crashing, the further the duration of a project is compressed, the higher the total cost of the project. The goal, though, is to determine at what point to terminate further crashing in a network. Normal task duration refers to the time required to perform a task under normal circumstances; the crash task duration refers to the reduced time required to perform a task when additional resources are allocated to it (Badiru 1993).

If each activity is assigned a range of time and cost estimates, then several combinations of time and cost values will be associated with the overall project. Iterative procedures are used to determine the best time or cost combination for a project. Time-cost trade-off analysis may be conducted, for example, to determine the marginal cost of reducing the duration of the project by one time unit. Table 3 below an extension of the data for the example problem to include normal and crash times as well as normal and crash costs for each activity.

The normal duration of the project is 11 days, as seen earlier, and the normal cost is $2,775.

Table 3. Normal and Crash Time and Cost Data [Source: Badiru 1993].

Activity Normal

Duration Normal

Cost Crash

Duration Crash

Cost Crashing

Ratio A 2 $210 2 $210 0 B. 6 400 4 600-100 C. 4 500 3 750-250 D. 3 540 2 600 60 E. 5 750 3 950-100 F. 4 275 3 310 35 G. 2 100 1 125 25 $2,775 $3,545

According to Badiru, if all the activities were reduced to their respective crash durations, the total crash cost of the project will be $3,545; in that event, the crash time is found by analysis to be seven days, but activities C, E, and G. remain critical. In some instances, the crashing of activities may result in a new critical path. T he Gantt chart in Figure 2-16 shows a schedule of the crashed project using the ES times. In practice, one would not crash all activities in a network. Rather, some heuristic would be used to determine which activity should be crashed and by how much. One approach is to crash only the critical activities or those activities with the best ratios of incremental cost vs. time reduction. This approach is then repeated in an iterative fashion in order of activity preference until no further reduction in project duration can be achieved or until the total project cost exceeds a specified limit (Badiru 1993).

The subtotals for phase 1 of the in the spreadsheet in Table 4 below show that an additional 12 weeks total could be realized by resorting to the crash time alternatives at an additional cost of $1,200,000; further, an additional 18 weeks could be slashed from the second phase involving housing, crew, and crew equipment selection, and the other training required by resorting to the crash time alternatives at an additional cost of $1,630. This first alternative scenario would result in a total cost of $4,820,000 with a savings of 30 weeks (assuming phase 2 components could be completed during certain periods of phase1 construction; this is also assuming that weather permits adequate time for sea trials and other crew training activities). However, this alternative is $1,620,000 over budget. Since the normal construction costs are $2,990,000 without any crash costs being incurred, there is only $210,000 over and above the budgeted amount to expend on crash cost alternatives.

Depending on the priorities of the team at the time ("Sometimes a wait-and-see strategy is the wise move" [Gray & Larson 225]), these alternatives could be applied to the following choices to achieve the most return for the cost-time trade-offs involved:

Table 4. SeaArk and Swiftships Crash Times.

Crash Cost thousands)

Gain in Time weeks)

Extra Cost thousands)

Design

Order mast

Install mast & sails

Select crew

2.3.3 Lessons Learned from Cost Management.

Cost management is a major consideration for Keppel Singapore today. The company's parent builds everything from condominiums to energy plants, and the company's financial operations in Singapore control assets approaching $1.9 billion. In the recent past, Keppel has also branched out to property management, transportation, and telecommunications, and it is a leading distributor of PABX systems. While it is possible to make fairly accurate budget forecasts for virtually any sized project, the reality of sourcing in today's global marketplace means that project managers must be alert to signs of trouble before they can affect the project, and must recognize opportunities for improvements over existing contractual provisions when they present themselves.

2.4 Issues in Human Resources. According to Doug Decarlo, James P. Lewis and Robert K. Wysocki (2001), "Project management is the "in" thing at the present time. More and more people are becoming project managers. Certificates and degree programs are being offered by colleges and universities throughout the country. Conferences are cropping up at an unprecedented rate. You would think we had discovered the holy grail of management" (15). However, people have been managing projects, even massive ones, for thousands of years. For instance, the first project managers built the Pyramids; Stonehenge; the Maya, Aztec, and Inca temples; the Roman roads; the Great Wall of China; and many other wonders (Decarlo et al. 2001).

The fundamentals of project management are fairly straightforward and it would seem natural that these techniques should always work. "That it does not always work can be shown by the number of organizations that have initiated project management and then have given up, often in disgust, and returned to a line/functional organization" (Stuckenbruck 1981:8). Causes of project management failure are mixed; however, experience to date suggests that most failure can usually be attributed to one or both of the following causes:

1. Internal Conflict: Strong and continuous conflict existed between the project management and line/functional organizations, characterized by foot-dragging on the part of the line organizations, resulting in poor schedule and budgetary control.

2. Inadequate Authority. The project manager was given inadequate authority to accomplish goals and responsibilities. Top management failed to provide the necessary back- ing to the project office for the commitment of money, resources, personnel, and facilities on the project.

In fact, both of these causes of failure may be considered to be symptoms of the problems resulting from a single underlying mistake: "The project management approach was inadequately sold to all key members of the organization" (Stuckenbruck 1981:11).

Other HR issues involved relate to the type of project involved and what type of project manager will be required. The four project types and their associated project manager types are defined as follows:

Type IV-- Simple Projects. These are led by a team leader.

Type III-- Organizationally Complex Projects. This level of project is led by a project manager or senior project manager.

Type II-- Technically Complex Projects. These types of projects are led by a project manager or senior project manager.

Type I-- Critical Mission Projects. These are led by a senior project manager or program manager (DeCarlo et al. 2001).

Clearly, Keppel has much to consider as it approaches how best to manage the enormous projects it undertakes, from procurement to supply chain management to human resource management. To the extent that the company is able to refine its operations in any of these areas is therefore the extent to which it will likely be able to maximize its return on investment in any of these categories.

2.4.1 Methodology of Human Resource Management.

In the past, the role of the human resource (HR) department was generally restricted to the hiring and firing of staff (Huczyniski & Buchanan, 1996). Other HR responsibilities included negotiating contracts and ensuring that appropriate company procedures were followed regarding recruiting and terminations; however, over the years, a number of theories have come and gone concerning what role the HR department should play in accomplishing an organization's goals. As a result, with the theories of social man and the results of the Hawthorn studies, there was an increased recognition of the need for continuous motivation that employees require in order to be more productive and add a greater level of value to the value chain in terms of human labor (Huczyniski & Buchanan, 1996). There are a number of traditional human resource responsibilities such as the coordination and tracking of training and development of staff, the motivation and communication to staff of changes, the development and retention of culture and the compliance with labor laws which are all aspects of the departments tasks. These broader responsibilities have resulted in an expansion of many human resources departments. However, the introduction of improvements in technology and telecommunications have provided a number of powerful tools for human resource professionals today which increase both the efficiency with which the recruitment process can be accomplished as well as the workload involved. Nevertheless, certain human resource functions such as feedback, periodic evaluations, and other counseling issues should be performed in a personal meeting between the principals involved. Today, most information systems are computer systems designed to assist businesses, government agencies, and other organizations in accomplishing their goals in a number of ways. Businesses have long relied on computers to handle basic bookkeeping jobs, such as payroll and billing; however, computer-related information systems, popularly known as "management information systems," actually help managers make complex business decisions and better plan for potential developments in market conditions. The industry is dynamic and while the outlook for some industries may be dim, the research shows that by and large, almost every industry will benefit to some extent or another through an intelligent application of information systems. For example, practically all businesses today rely on some form of telecommunications which are used to connect, or network, computer systems and transmit information. Further, various computer network configurations are possible, depending on the needs of an organization. Local area networks join computers at a particular site, such as an office building or an academic campus. Wide area networks connect machines located at different sites, and often within different organizations. The Internet, of course, is a network of networks which connect millions of computers located on every continent. Through these IT applications and others, personal computer users can gain access to information resources, such as large databases, and to human resources, such as coworkers and people who share their professional or private interests.

The development of computerized information systems during the last part of the 20th century has resulted in a globalized marketplace and a healthy economy in the United States. The efficiencies and advantages provided by information systems have also resulted in fundamental changes in many industries, and universities are scrambling to create e-commerce degrees and businesses are jumping on the Internet bandwagon in a major fashion; however, while people all over the world are enjoying a new sense of the opportunities provided by these information systems, the impact on some industries has resulted in a reduction of some jobs and the creation of others. From a human resources perspective, there are many aspects of personnel recruitment that can be facilitated by information technology. One of the most important benefit of IT must be seen as the ability to use the Internet and the world wide web to recruit new staff. In a global market where skills are transferable between employers and the right knowledge and skills base can be seen as giving a company a competitive advantage, the importance of recruiting the right people at the right time can be seen as a paramount concern. The need for the correct staff includes the recruitment and selection process ensuring that those taken on have not only the correct academic and skills but also possess the character type that will fit in with the company's culture. The need for the right staff is becoming increasingly important and as such it would make sense for any company to use every tool that they may to gain the competitive advantage over other companies when it comes to recruiting the right staff.

There are two primary methods whereby a HRM department may access this medium for recruitment. The first involves undertaking the advertisements themselves, through online boards or through an agency. When we look at the primary information that is available on the Internet or in the press, it is apparent a company may undertake online advertising in isolation, in partnership with another company such as a recruitment company, whether a specialist online recruitment agency, or general recruitment agency, of simply through a third party without any first hand involvement. Even the companies that specialize in Internet recruitment may enter into partnerships with those able to benefit them, such as with the software or the expertise required to accomplish a specific function more efficiently (Thomas & Ray, 2000). In some cases, businesses compete on some things and cooperate on others. Many of these developing companies actively seek partners -- firms that can help them develop, test, or refine products and services (Thomas & Ray 2000).

In addition, the HR function seeks to identify individuals who bring technical or other expertise to projects. In many cases, this expertise means identifying capabilities that extend the reach of both partners well beyond what either of them alone could achieve. In fact, partnering is regarded by some as the only effective way to make substantial progress in some areas where the information technology, customer expectations, and competition are all in motion. "Creating world-class solutions is easy when great partners work together," maintains an executive with Mercury Interactive, whose partners include system integrators, value-added resellers, e-business integrators, and solutions partners with "innovative, industry-leading technologies and practices" (Dearstyne 2001:11). Many of the examples these companies cite concerning ways in which they have used IT applications are fairly modest in comparison, but the ways in which information technology can potentially save a company time or money, or make their work faster or easier, can continue to be identified as technology and needs are recognized by the HR community. For example, a new software and computer system allowed the Colorado Rockies baseball team to automate the complex process of scheduling and managing their Coors Field employees, including more than 800 game-day workers. Further, troublesome sign-in/sign-out procedures were replaced by ID badges that workers merely swipe to take care of payroll. Information technology also makes employee scheduling easier: "Using touch-tone screens, employees can choose to accept or decline their posted schedules or go on standby. Other functions were also automated using the latest software. Employees like it, and satisfaction levels and retention are up. Managers love it: Employees are easier to manage, and reports such as event labor costs can be generated almost instantly" (Schwartz 2000).

These examples are fairly standard illustrations of the beneficial use of digital information systems in helping manage people. However, understanding the fundamental perspectives of how these companies use IT shows that the importance of information is on the rise, and large-scale change will continue to be the norm instead of the exception. According to Dearstyne, successful companies in the future will have to view information as "a dynamic, strategic resource. These companies thrive on information! Their perspectives reinforce the general and continuing theme that major parts of business, government, and society in general are now information based -- they are in the information business, and they work at using, creating, and moving information" (Dearstyne 2001:17). These companies may not have yet been able to conceptualize information in the same as the effective IT community does or understand the need for its systematic management, but these same companies will not be able to function in the future without sophisticated information systems. However, the use of the Internet as a recruiting tool is not a futuristic notion, and has actually been around for many years with early online presentations from human resources agencies taking place back in the mid-1990's (Thomas & Ray 2000). Nevertheless, some companies seem to be able to communicate their recruitment messages more effectively than others, while some companies do a better job with the applications once they are received than the competition.

Some of the companies have distilled their essential messages to attention-grabbing slogans (some copyrighted or trademarked), themes, and images that attempt to communicate that:

1) Information is essential to the success of modem institutions;

2) Approaches need to be aggressive and dynamic to succeed; and 3) New strategies and partnerships are the order of the day (Dearstyne 2001).

While IT applications will likely never replace the HR manager, they are helping take care of some of the more time-consuming tasks involved. The main objectives of information systems today are to facilitate communication and collaboration between the members of an organization and to facilitate them between organizations. Various IT applications allow an organization to place documents and messages in an electronic format which can then be classified, indexed, and stored for easy retrieval. This allows individuals to access information on demand. One type of office information system, known as a workflow system, is used to route relevant documents automatically to all appropriate individuals for their contribution. Other types of office information systems handle digital messages in the form of electronic mail, facsimile, and voice mail. Another IT application is an intranet which is simply a private computer network that mimics the feel and features of the Internet. Intranet use what is commonly known as "groupware," which allows such systems accomplish this by continually sending updated documents such as business proposals, new designs, or progress reports to each user's computer. A real benefit of these approach is that these individuals and their computers need not be located in the same office or even the same building. Groupware is usually deployed over an intranet, a private network that is closed to the general public, and is often accessed by using software originally developed for the Internet (Information systems 2004).