Jennifer DiTomasso Jacobsen U63594427 January 31, 2005 Case Study: South American Adventures Unlimited 1. To what extent does project management apply to Adventures Unlimited? Each one of their tours is an individual project, since each has a beginning, middle, and end, which have classic project phases, including a definition or selection phase, a planning phase, and an execution phase. Project management involves budgeting of resources, and their resources include their administrative staff and tour guides. In addition, project management includes project selection: the Rodriguezes need to be able to accurately anticipate the costs of each tour that they consider undertaking, so that they may make wise decisions about which tours to operate. Project management includes financial analysis, for instance calculating the net present value of each tour that they are considering offering. In addition, since their tours involve many details, the project planning methods taught in project management would be helpful for them as well. Using gantt charts to plan out the details of each tour would help them to avoid problems that they have had in the past, for instance, having missed a train connection in Blanco Puente. Project planning with Gantt charts would also help them to clearly delineate the details involved for each tour, and to be able to not only plan the logistics of each detail, but anticipate the cost of it as well. 2. What kind of training in project management should the Rodriguezes, the administrative staff, and tour guides receive to improve the operation of Adventures Unlimited? Try to identify major topics or skill sets that should be addressesd. Project planning training would allow them to effectively manage the many details of each of their tours. Training in developing work breakdown structures and gannt charts would help them in their efforts to ensure that the small staff effectively handles the details surrounding planning and executing each tour. Cost management training would help them to effectively manage the price of each tour. In addition, they need to gain a clear sense of how each cost that they incur impacts the overall cost of each tour, throughout their operations, rather than after their taxes were prepared, as has been the case. Financial analysis training would aid them in selecting the most profitable tours for the future. Communication and conflict resolution training would help them to effectively manage their clients’ expectations, smoothly operate their business, and effectively handle conflicts that arise. Project leadership training, which the Rodriguezes in particular should receive, so that they may influence their administrative staff and tour guides to have a passion for the business, work hard, give their clients the best experience possible, and make decisions that fit with the company’s strategy. Their tour guides need strong leadership skills as well. Risk management training would help them to quantify their risks, assess the importance of them, and devise cost-effective mitigation strategies. 3. What risks do they face? How should they mitigate such risks? Individuals may cancel their reservations, leaving Adventures Unlimited committed to costs for operating underbooked tours, such as paying tour guides, paying for accommodations, or paying for travel arrangements. They should mitigate this risk by having a clear cancellation policy that covers any of their non-refundable expenses. Travel is fraught with uncertainty. Even if they attempt to follow a schedule perfectly, they may find that inclement weather, traffic jams, or other disruptions make it impossible for them to make connections, and that clients miss an airplane, for example. They could mitigate this risk by identifying alternate routes to the airport, planning extra travel time into their tour schedules, or by planning to have additional resources on hand, such as a backup motorcoach, or a backup tour guide. Since there are costs associated with each of these risks, they should use the risk management tools taught in project management, such as assigning weights to each risk (a missed airplane), assigning a percentage for the likelihood of each risk, determining the cost if the risked event is realized (full-price tickets on another flight), and determining the cost of the proposed mitigation strategy. With these tools, they could make educated decisions about how to cost- effectively mitigate their risks. They can also mitigate this risk by having a clear policy, or a contract that clients sign when they book a tour, that explains whether or not Adventures Unlimited would incur additional costs as a result of a disruption in travel plans, or if the client would incur the additional costs instead. This document should also provide details on what Adventures Unlimited will do in the event of a disruption in travel plans. For example, let us say that the tour group misses a flight. Another flight to the same destination leaves in an hour, but is on a different airline and will therefore cost hundreds of dollars extra per person. The originally booked airline has a flight that leaves tomorrow, at no extra cost. Staying overnight would also necessitate hotel rooms. Adventures Unlimited should have a policy in place that makes it clear to the tour guide whether or not they will absorb the extra cost of the earlier flight, or of the hotel rooms, and that makes it clear to the clients as well. They also risk failing to meet their clients’ expectations, which could result in clients either expecting refunds, or result in a negative reputation for the company. They can mitigate this risk with communication. A significant part of project management involves managing clients’ expectations. If, for example, it rains frequently in Peru, Adventures Unlimited should communicate that to their clients before booking. If the accommodations will be tents under the stars, they should let their clients know, so that they do not arrive expecting the Ritz Carlton. The expectation that they cultivate in the minds of their clients should fit with the strategy of Adventures Unlimited. If they strive to provide a luxury, five-star experience, then they should promote that image in their advertising, in their contacts with prospective clients, and throughout their tours. If they strive to provide no-frills outdoor adventures, then they should clearly promote that image instead. Their staff and tour guides should be certain of the company’s strategy, so that the decisions that they make that impact a client’s experience will fit with the strategy. Another method for mitigating customer dissatisfaction is providing a clear communication channel for clients to report if any aspect of their tour does not meet their expectations, as well as a clear policy regarding what Adventures Unlimited will offer dissatisfied clients. For example, if Adventures Unlimited decides to advertise their tours as satisfaction guaranteed, they should give clients that book tours their policy in writing, including details on what percent or part of a tour cost they are willing to refund, and how to go about reporting any problems. Since they have such a small staff, they risk being unable to offer a tour that they have promised, because they are so dependent on each member of their staff. For example, a tour guide might become ill, or quit when it is too late to find a replacement. They could mitigate this risk by hiring a few more tour guides than they need at any given time, with the understanding that backup tour guides must be on notice to go on any tour as needed. Before doing so, Adventures Unlimited should assign weight to this risk, determine the cost associated with hiring these additional guides, the impact of hiring them to their profitability, and the cost that they risk by not hiring them. Since their tour guides are hired on a trip-by-trip contract basis, they should include details in their tour guides’ contracts about notice that they must give before quitting. Similarly, contracts for their support staff would be useful as well. Case Study: Bob is not willing to work Saturdays 1. Do you think the project manager Jim is correct in accepting the extra work from the customer knowing that he has underestimated the initial project effort? No, I do not believe that Jim is correct in accepting the extra work at the same deadline. Jim must ensure that the customer’s expectations are realistic, and in order to do so, he must be honest. He absolutely should not have committed to doing the work before securing his resources. His resources in this case are the extra hours required of his staff. Since the initial project has a fixed deadline mandated by law, and since Jim has found that he underestimated the effort required to implement it by a month, his first priority should be to do everything possible to meet the deadline for the project at its original scope. 2. Can you ignore the wishes of a very important customer and say “No” to them? Especially if your business has a “customer first” philosophy? What if you lose their business next time around? You cannot ignore the wishes of a very important customer, but in order to keep their trust, you must communicate with them what a realistic deadline is for the additional work that they have requested. Whenever you as a project manager are certain that you will not meet the original deadline for the original work that you have agreed to, you must let your customer know it, as soon as possible. A “customer first” philosophy includes constant and truthful communication with your customer. They may be able to plan effectively, given correct and timely information from you, and you and your customer may be able to mitigate the impact of a missed deadline, with advanced notice of the problem. Instead of saying no to them, you should be clear with them about how changes to project scope will affect their deadline, and negotiate a realistic project scope and timeline. It may be that the four reports that they have asked for are more important to them than a larger portion of the already agreed upon project scope. You may find that only part of the project must be completed by the original deadline, and be able to negotiate a second deadline for version two of the software, for example. You will most definitely lose their business next time around if you continue to tell them that you can do the work for them when they expect it, if indeed you cannot. If you manage their expectations now, you have a much greater chance of keeping a good relationship with them, and getting repeat business from them. They may much prefer to deal with you, if you honestly tell them no when the answer is no, rather than risk dealing with another contractor who might tell them yes when they mean no. 3. How will you solve the problem if you were the project manager? What are your recommendations? I would speak with the customer, as soon as possible, and let them know that we will not be able to include the extra work that they have asked for at the same deadline. Before doing so, I would review the details of the project, and prepare alternative deadlines and project scopes for them to review, so that I would be prepared to negotiate a solution that works for them. Results of searching on http://bostonworks.boston.com/browse/jobs/ When I searched for the keyword “pmp,” I found twenty-one jobs. They ranged from middle management to senior management positions, and they were in information technology and biotechnical industries. Searching for either “project management” or “project manager” yielded 1579 matches, the majority of which were middle management jobs, although there were many senior management jobs, and a few entry level positions as well. The majority of the positions were in information technology and biotechnology, although they included a wide variety of industries, including cabinet making, financial asset management, and construction.
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