1. Type author names here © Oxford University Press, 2012. All rights reserved. Operations Management Chapter 11 Planning for Projects, Crises and Business Continuity Jones & Robinson

2. Jones & Robinson: Operations Management Explain how project management differs from operations management Understand the tools used in project management Understand the principles of risk management Differentiate between a crisis and a disaster Understand business continuity planning Learning Objectives

3. Jones & Robinson: Operations Management A project is a temporary endeavour with a definite beginning and end in which the delivery of outcomes is constrained by a clearly defined scope statement. It has a defined budget, an agreed timescale and an approved set of resources allocated to it. What is a Project?

4. Jones & Robinson: Operations Management Due to the nature of a project, Project management differs from Operations management in two main ways: Uniqueness – it is something which has never been done exactly the same before, thereby carrying a degree of risk Cross-functional – project teams will often consist of people from different departments or from different companies, whereas Operations are usually hierarchical from within Project Management

5. Jones & Robinson: Operations Management There are 4 main stages in a project: Project scope – concerned with goals, specifications, tasks and responsibilities Planning – concerned with schedules, budgets, resources and risks Implementation – concerned with status reports, changes, quality and forecasts Evaluation – concerned with training, documentation, releasing staff and lessons learnt Stages in a Project

6. Jones & Robinson: Operations Management Stages in a Project

7. Jones & Robinson: Operations Management Projects are often controlled using laid down standards. Project Management Institute (PMI) in the USA publish ‘A Guide to the Project Management Body of Knowledge (PMBOK ® ) Association for Project Management (APM)in the UK have their own set of rules and guidelines Standards used in Project Management

8. Jones & Robinson: Operations Management APM Group Ltd are licensed by the Office of Government Commerce (OGC) to deliver PRojects IN Controlled Environments (PRINCE2) Generic best practice approach to managing projects, widespread use in both the public and private sector Tailored and scaleable method for all types and sizes of project PRINCE2

9. Jones & Robinson: Operations Management Once the ‘scope’ of a project is agreed and understood then it can be planned. A set of activities are listed A Work Breakdown Structure (WBS) is constructed – this separates the activities into different functional or deliverable headings A Gantt chart is then drawn up – following the WBS – showing how long each activity will take and the inter- relationship between them The Critical Path is then calculated as the path with no free time or ‘slack’ in the activities Tools used in Project Management

10. Jones & Robinson: Operations Management Typical Project

11. Jones & Robinson: Operations Management Work Breakdown Structure

12. Jones & Robinson: Operations Management Gantt Chart

13. Jones & Robinson: Operations Management Network Diagram and Critical Path

14. Jones & Robinson: Operations Management All projects are inherently risky due to their uniqueness Risks can be identified and categorized by their likelihood to occur and their impact on the project if they do. Uncertainty is now a major feature of projects in certain environments, such as IT and software development This has led to different approaches such as Scrum, Extreme Programming (XP) and Adaptive Software Development (ASD) in these environments Project Risk Management

15. Jones & Robinson: Operations Management Uncertainty in Projects

16. Jones & Robinson: Operations Management Despite all efforts to identify and control risks in project things still can go wrong. A crisis or ‘an unexpected consequence’ then ensues. Recent examples of crises: New York Twin Towers (9/11) (2009) Chilean Mining Disaster (2010) BP Deepwater Horizon Oil Spill (2010) A crisis brings out different behaviours in those involved Crisis Management

17. Jones & Robinson: Operations Management Crisis Behaviour

18. Jones & Robinson: Operations Management Business Continuity Planning (BCP) refers to ways in which operations and business activities can continue in the event of a crisis. BCP is covered by a number of standards detailing what to do in the event of a crisis: –BS 25999-2 ‘Specification for Business Continuity Management’ (2007) –ISO 17799/27001 Business Continuity Planning

19. Jones & Robinson: Operations Management A BCP has 5 phases: Analysis Solution design Implementation Testing and organization acceptance Maintenance Many different solutions are possible depending on the size and nature of the organization Business Continuity Planning