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BUS419002VA016-1206-001 - Project Est and Budgeting

Project Performance

John Corpening

on Sun, Aug 30 2020, 3:39 PM

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PROJECT PERFORMANCE 1

Project Performance

John Corpening

1 Project Estimating and Budgeting

8/27/20

Project Performance

Executive Summary

Coffee consumption is a very common practice among Americans. With approximately 64% of adult Americans consuming coffee as a beverage the demand for quality coffee is high. 1 Circus Coffee is a project aimed at meeting that demand, located in Santa Fe, northwest region. Consumers' 1 curiosity is strong in the coffee-house business. We shall launch the project in the northwest region of Santa Fe called Circus Coffee. The project will be limited to eastern and central regions. Some of the products and services that Circus coffee will provide for its customers include entertainment, service to customers and food. 1 The coffee house will offer consumers a range of choices. All kinds of coffee and tea are open. Juice, beer, and non-alcoholic beverages will also be on offer. Wine will be on offer along with food. Breakfast, lunch, and dinner will be served in Circus Coffee.

The building's interior design will concentrate on the creation of a comfortable setting. They will split circus Coffee into various areas. They shall fill most of them with tables and benches, others have large vintage lined couches and seats, end tables, dining tables, bookshelves full of books and newspapers, lamps, and tongs. Installation of a public address system to facilitate the hearing of the music and the entertainment. There should be a large array of table games.

Circus Cafe will be a coffee house/restaurant at Hart Center, 37th major street, and Holgate's southeastern corner. The coffee house gives its consumers a range of choices. All kinds of coffee and tea are open. Coffee options vary from espresso to latte and mango to strawberry mocha. The teas range from English to herbal.

Juice, beer, and non-alcoholic beverages will also be on offer. Wine and alcohol are on offer for those who prefer to try something special. A bottle or a carafe will order wine. They will distribute the brew in micro-brewed cans.

Since they divide Circus Coffee into various sections. The advantage of original sections is that customers can take part disturbing no one in different activities (i.e. policy discussions won't interfere with music or music won't interfere with those play board games or readings).The focus ought to be on supplying the consumer with a friendly atmosphere where they continue to live and come back several times (Cheng, Al Saglab, & Cavanaugh, 2016).

Risks and Risk Mitigation

2 One of the major ways by which business organizations make losses instead of profits is through improper planning. This means that the plans that are used are either too rigid or too flexible. Plans that are too rigid result in failure due to unexpected events. Plans which are too flexible are dangerous as well because they are not very different from no plan. An effective plan needs to balance between rigidity and flexibility in business practices within an organization. By doing so, organizations are able to accommodate risks and unexpected events into the plan. It also makes the plan solid enough such that it can be scheduled and budgeted which is a necessity in every organization (Sidorenko, 2017). Some of the risks involved in the Circus Coffee project as well as their mitigation include:

1. Outsource Product Manufacturing

Outsourcing has its shortcomings despite its potential to increase operations efficiency. For instance, there is a possibility to get products of low quality which then break down on the customers costing the organization the customer’s loyalty. If any issues arise due to outsourcing, the executive team have to meet to come up with a fast solution. The executive team needs to assign the task of restoring efficient functionality to an experienced employee in dealing with people, potentially the head of Human Resource. The solution to the problems that arise has to ensure that business operations do not stop as this could have consequences which go beyond monetary loss. The executive staff can consider switching manufacturers to a more compliant company.

Every endeavor in business and in life generally comes with its risks. Identifying risks in endeavors which a business organization involves researching on other businesses which have gone through the same and learning from them. Once a business identifies a risk which is applicable to their business environment, the project team should research on viable mitigation plans and implement them.

2. Specialization on one viable product line

Focusing on the most successful product line in the business environment, the organization can achieve success much more than diversifying in different products in which the business is not well experienced in. This is the business model that companies such as Nike have adopted with much success (Collins, 2001).

Specializing in one product line does not mean specializing on one product. This is focusing on a family of related products which a company chooses to market. If one product fails to succeed as expected the company can always choose the second one in the line and focus on it.

The major risk with specialization is that an organization greatly limits its target market. The way to mitigate this risk is to expand in terms of the coverage area. Globalization is the best way to increase the target market for the organization in the case that they have specialized.

3. Increasing the workforce of the company

Circus coffee is a rather large project with lots of moving parts. To meet the project goals, more workforce will be required. This will give the company the required number of employees to expand to unchartered territories in the marketplace.

If the burden of having too many employees is unbearable to the company, the executive staff can always fire the least performing employees to cut costs. The productivity of the employees can be used to categorize the employees in the company for promotions and demotions if necessary.

The biggest risk when it comes to a large workforce is problems in management. This risk can be mitigated through purchasing a Human Resource Information System. This system monitors the productivity of each employee by logging the time they report to work, the activities they perform at their desks, and the time they leave the premises (DeSanctis, 1986).

Project Performance via EVM

3 Earned Value Management is a great tool for project managers as it helps them measure the performance of a project. By doing so EVM ensures that the progress in terms of adhering to the project schedule as well as managing costs is simplified.

2 In 2008 a global financial services company called Lehman Brothers Inc. was declared bankrupt. The company was the fourth largest investment bank in the United States. The major cause of the company worth billions of dollars could be attributed to poor risk management practices by the company’s administration (Pmit211314, 2014). The company had $693 billion worth of assets and $619 billion in debt by the time of the collapse. Poor management of the assets and the lack of properly implemented risk management practices led to the collapse of the company. This is clear evidence of the consequences a business organization can face if they do not properly implement effective risk management practices. The company blindly trusted their risk management to mathematical models which were very effective at the beginning but lacked multiple elements which if were forever implemented would have saved the company.

An effective Earned Value Management system needs to satisfy certain requirements to a business organization. Practices need to be implemented which follow the following outline:

1. 2 Identify – the practices need to identify risks in a business encompassing strategic risks, operational risks and financial risks. This process has to be incorporated into normal business plans such that there is no single meeting that is entirely about risks. As risks are present in every business operation, it makes sense to include the risk identification practice into every business planning session within the organization.

2. 2 Quantify – the identified risks then need to be prioritized according to the size and according to the potential impact they may have on the business. The risks that pose the biggest challenge should be at the top of the list with the less crucial ones lower in the list. The likelihood of the risk to occur also needs to be considered when quantifying the risks.

3. 2 Controls – each risk that has been quantified needs to be properly managed according to its severity and urgency. Controls to mitigate the risks need to be chosen per risk according to the priority they have. The controls chosen to need to be effective in managing the risk as well as be affordable to the business.

References

Collins, J. L. (2001). Flexible Specialization and the Garment Industry. https://doi.org/10.1177/102452940100500203

DeSanctis, G. (1986). Human Resource Information Systems: A Current Assessment. MIS Quarterly Vol. 10, No. 1 (Mar., 1986), pp. 15-27. DOI: 10.2307/248875

Pmit211314. (2014). Risk Management: 2 Lehman Brothers Case Study [VIDEO]. Retrieved from: 2 https://www.youtube.com/watch?v=ALe2UyVk8Rc

Sidorenko, A. (2017). 67. 2 What is Enterprise Risk Management (ERM)? [VIDEO]. Retrieved from: 2 https://www.youtube.com/watch?v=MqGq3RExPSs

Citations (3/3)

1. 1 Another student's paper: Author: John Corpening; Submitted: Sun, Jul 26 2020, 5:57 PM; Filename: John Corpening Project Proposal.docx

2. 2 Another student's paper

3. 3 Another student's paper

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