Project Reviews and Procurement Issues
The two industries chosen for comparison are construction and building and software industry. In software and IT systems any process will define project review points throughout the lifecycle of the procurement of the system. Sofroniou (2004) says that reviews are undertaken for procurement projects of all levels of change. Additional interim reviews may sometimes be carried out during the life of a procurement project. On the other hand, in construction and building projects reviews are conducted to provide assurance to the procurement team that contract documents are well defined, complete, consistent, coordinated and understandable to bidders. Sofroniou (2004) says that for big projects that has a long time span between reviews such as implementation of SAP systems in public sector, an additional project review may be arranged before a significant decision point such as the announcement of a preferred supplier.
In the procurement of the SAP solution e-HR for Abu Dhabi Police, the project review focused on internal audit and considered the incorporation into the procurement team and consulting colleagues who were familiar with implementing the specific SAP system components. During the review process the consultants provided the procurement with technical support throughout the review.
Project reviews in the construction industry spend more time because the reviews are held before key decisions points in the lifecycle of project procurement (Sofroniou, 2004). The review teams are made up of independent experienced practitioners who bring their prior knowledge and skills to bear to identify the key issues that need to be addressed for the project to succeed. In a software project a review is carried out over a period of 4-5 days at the most with the review report presented and discussed with the team before the review team leaves the client premises. As a result project reviews will necessarily spend some time on procurement issues in these situations.
In constriction of Revlon Healthcare Limited, Molenaar &Yakowenko (2007) noted that the project reviews by the procurement team resulted to time wastage. Selecting the project review method in construction and building required an adequate understanding of each delivery method and contracting approach and the ability to distinguish their differences. Formal reviews in construction project were scheduled at milestones or critical project stages. Nicholas & Steyn (2012) says that the reviews in construction of Revlon Healthcare Limited served as a precondition for continuing with the project and signing the contractual obligations. The decision to continue or terminate the project at the end of a phase depends on the results of the review.
The review meeting of the construction of Revlon Healthcare Limited in United Kingdom was done weekly. Because this review focused on contractual and financial aspects, procurement first examined the contracts with the contractor for existing obligations and performed a detailed analysis of the risk management measures and contractual obligations. The meeting held included a weekly onsite progress meeting and an office staff meeting that covered the progress of the entire project. The meeting reviewed the contractual obligations and looked for ways to manage risks associated with the construction of Revlon Healthcare Limited in the United Kingdom.
In both software and building and construction projects, reviews can be used to integrate procurement, risk management, and contractual obligations through collaboration. Stellman & Greene (2008) says that collaboration between the project team and the vendor is enhanced and they can identify areas associated with the highest risks and fix any flaws associated with the project. Edwards & Bowen (2005) say that project reviews enable staff in the risk management department to play a more facilitating role and coordinating the project risk knowledge capture processes on every step of the project. In the construction industry, project reviews seek to maintain a continuous improvement cycle for the risk management cycle and ensure that the project team work inline with the project timelines (Edwards & Bowen, 2005). In both software and building and construction projects, contractual obligations should be carefully reviewed for clauses that identify when compensation for changes will be awarded and the type of compensation that will be permitted.
In construction projects reviews done in-house can be conducted early in the project, during the design or construction process or upon any significant change to the budget, schedule or project goals. Nicholas & Steyn (2012) says that in construction projects, in house reviews unlike third party reviews are able to scrutinize the plans, schedules, budgets, constraints and overall management of the construction project. For example the in-house project review of Revlon Healthcare Limited in UK enabled team members to review project progress, identify constraints to progress, assess the effectiveness of the contractor in doing its job. The in-house team was able to advice the management the possible solutions to problems because they could monitor the site on daily basis (Nicholas & Steyn, 2012).
According to Stellman & Greene (2008) third-party reviews in software and IT can be time consuming much more than an in-house project review. Compared with construction and building projects, in-house project review team is already familiar with the organization standards and there are usually plenty of examples to work from (Stellman & Greene, 2008). An in-house team usually understands the mission of the organization. For example during the implementation of the SAP solution e-HR to Abu Dhabi Police, the solution generated errors. As a result they contacted the in-house SAP representative for support. Defect resolution of e-HR system required to be resolved by the in-house contact person who was also involved in the review process.