Commercial Project Management

Description of topics including reading samples

Learning outcomes of the unit

Learnings from your experience, this and prior unit reading, assignments

Supporting documentation including your prior learning

Week 4 Topic: Managing Stakeholders' Commercial Interests vs. Stakeholders' Political Interests.

Collaborative Project Procurement Arrangements (2015) by Derek H. T. Walker and Beverly M. Lloyd Walker;

4. Explain and apply methods of identifying and reconciling inconsistent and conflicting objectives and drivers that develop, maintain, mange relationships and communication with key stakeholders.

The objective of this week’s topic is to make sure you have an appreciation of the Role of the Project Manager in Commercial Negotiation.

Walker & Walker (2015) discuss a number of aspects of Project Characteristics what are your thoughts regarding:

1. What new ideas can be gained from the NCTP perspective for ideas and practice around Commercial Negotiation?

Ans: Commercial negotiation entails negotiating project contracts for the maximum possible returns. Also called commercial management, it involves identifying developing available opportunities in the market and Novelty, complex technology, and pace (NCTP) directly influences commercial negotiation (Walker & Walker, 2015). Novelty will help exploit market opportunities but come with the risk of competitors copying novel ideas. Pace on the other hand helps to introduce new ideas early in the market before rival can exploit the available advantages. The idea of adopting technology will also help to increase the efficiency in work performance while complex big projects should result in better pay offs. Engineers must be conversant on the impact of each element on profitability and returns

2. What new ideas can be gained from the Four-Quadrant perspective concept for ideas and practice around Commercial Negotiation?

Ans: The four-quadrant framework for solving engineering problems can help to define complex problems in a systematic way as opposed to jumping to possible conclusion. It helps in defining the objective of the project, generating multiple alternative courses of action and brainstorming over possible strategies before settling on specific action (Walker & Walker, 2015). This process helps to make informed decision during contract negotiations

3. What new ideas can be gained from the Organizational Learning Process perspective concept for ideas and practice around Commercial Negotiation?

Ans: Organization learning process refers to the ways in which organizations encode inferences gained through experience into the ways they approach projects. Learning experiences attune people and organizations to adopt a specific way in negotiation (Walker & Walker, 2015). The implication is that engineers must understand experiences of an organization or clients and how it shapes project contract negotiations.

4. What new ideas can be gained from the Identity perspective concept for ideas and practice around Commercial Negotiation?

Ans: Identity negotiation is the process through which parties to a project define their individual roles. Once parties agree, it is fundamental that each party remains committed to the identities agreed upon (Walker & Walker, 2015). It is imperative that during the negotiations, engineers only commit to undertaking aspects of the projects that they have requisite knowledge and understanding. This approach will help to avoid possible cases of breach of trust

5. What new ideas can be gained from the Complex Product-Services perspective concept for ideas and practice around Commercial Negotiation?

Ans: A complex product or service refers to the integration of many products or services into a large one. The integrated projects have their revenue projections and product owners. In contract negotiations, it is important to understand the individual value and implications of each project to the overall value of the project (Walker & Walker, 2015). The implications for commercial negotiations is that project managers have to factor the increased costs associated with building cross functional teams that can adequately respond to complex projects involved. This element has a direct bearing on cost and returns.

Walker & Walker (2015) then in Chapter 2 discuss a number of aspects of Project Life-Cycle Theory and Project Procurement Forms what are your thoughts regarding:

1. What new ideas can be gained from the Project Life Cycle perspective concept for ideas and practice around Commercial Negotiation?

Ans: Project life cycle entails five stages through which a project must go through to reach a successful end. The first stage is the product initiation, planning, and execution. Once project ideas have been implemented, it is important for the project manager to monitor and evaluate whether the project complies with the plans (Walker & Walker, 2015). In commercial negotiation, it is important that the project manager evaluates the project goals at every stage along the cycle to ensure compliance with budgetary allocations, quality standards, and projected returns. Dividing the projects according to the life cycle phases helps to structure the project into meaningful and logical steps that are highly manageable.

2. What new ideas can be gained from the Forms of Project Procurement perspective concept for ideas and practice around Commercial Negotiation?

Ans: There are different forms of project procurement. Fixed price contract is one of procurement forms. This form of procurement is essential when there is uncertainty regarding the scope of work to be done. The seller in this type of procurement bears the largest risk as they are bound to provide for the project contract as agreed. Cost reimbursable procurement occurs when a contractor is reimbursed for all expenses incurred plus an additional profit that was agreed at the beginning of the project (Walker & Walker, 2015). The payment may be tied to completion of the project on time and meeting quality defined standards. Lastly there is a purchase order which chiefly relate to the purchase of goods. The project manager must be conversant with the effect of each form of procurement and how they impact the project performance and returns. The best procurement form during commercial negotiations is one that maximizes value for money and time.

Finally, Walker & Walker (2015) look beyond the “Iron Triangle”, and so what are your thoughts regarding:

1. What new ideas can be gained from the Beyond the Iron Triangle perspective concept for ideas and practice around Commercial Negotiation?

Ans: The beyond the iron triangle is a metaphor that expects project manager to make reasonable trade-off between competing concurrent and heterogeneous constraints. In commercial negotiation, the project manager must evaluate not only the cost constraints but also the time and quality constraints (Walker & Walker, 2015). All these factors have a direct impact on the value and returns of the project.

In conclusion to this week:

· Do the ideas in Chapter 2 help in structuring your thoughts around Commercial Project Negotiation?

Ans: In conclusion the ideas presented in chapter 2 help in structuring my understanding of commercial project negotiations. Understanding project life cycle helps to break down the project in a systematic manner that promotes effective evaluation and control. Breaking down the project and understanding the essential aspects of each stage in the cycle will inform better management of the project from initial contract assessment to project termination. Various forms of project procurement discussed in chapter 2 can also determine the level of project profitability. Fixed procurement binds the seller to the terms of the agreement regardless of changes in the marketplace and fluctuations in the scope of the project. It is important that project managers have a thorough understanding of the project to ensure they address the primary objectives of the stakeholders

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Have you any insights you can add from other units you have studies or readings you’ve made?