applied project management - case study of vietnam

8/4/2019 Applied Project Management - Case Study of Vietnam

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Cover Sheet for Individual Assignments

Name: Thanh Hai PhanStudent ID No: 1151961Subject Name: Applied Project Management 1Assignment: 3Due Date: 13/11/2006Lecturer: Prof. Vernon Ireland

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Name: Thanh Hai Phan

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Date: 13/11/2006

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Table of Contents

1. Introduction of Project.................................................................................3

2. Purpose of the Project..................................................................................43. The Objectives.............................................................................................5

3.1 Scope Objective...................................................................................5

3.2 Time Objective.....................................................................................5

3.3 Cost Objective......................................................................................6

3.4 Requirements to be satisfied................................................................6

3.5 The Benefits.........................................................................................8

4. People and Sponsor......................................................................................9

4.1 Roles and Responsibilities of People...................................................9

4.2 Value Proposition of Sponsor............................................................11

5. Strategy Implementation............................................................................11

5.1 Constraints and Assumptions.............................................................11

5.2 The Impact of Project on Stakeholders..............................................12

5.3 Milestones and Activity Schedule......................................................13

5.4 Enterprise Environmental Factors/Organizational Process Assets.. ..13

6. Plans for Managing...................................................................................15

6.1 Project Management Form.................................................................15

6.2 Project Implementation......................................................................15

6.2.1 Period of Investment Preparation............................................16

6.2.2 Period of Investment Execution...............................................17

6.2.3 Period of Investment Completion............................................24

6.3 Project Human Resources Management............................................29

6.4 Project Risk Management..................................................................30

6.4.1 Time Analysis..........................................................................30

6.4.2 Cost Analysis...........................................................................32

7. Lessons Learned........................................................................................34

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1. Introduction of Project

Our companys project is a project of investing, designing, constructing and

commissioning a building in Vietnam. This building will be invested,designed, constructed, decorated, equipped and commissioned in Ho ChiMinh city, the most developed city in Vietnam.

As an investment company working in the construction industry for morethan 10 years, with a powerful capital available and experienced staff ourConstruction Investment Company - Vietnam (CIC - Vietnam) frequently isthe owner and sponsor of projects like this one.

This building project is administrated by project manager Master Van HongNguyen who is also company vice-director and others project team membersfrom architects, engineers to accountants, etc.

This project is divided by many phases, namely:

Finding the location to construct the building.

Submitting the permission to the local government.

Clearing the ground and compensating population for the groundclearance.

Analyzing the geology and environment (soil, water, etc). Holding a design tender and choosing the most suitable design.

Holding execution tenders and choosing suitable contractors toexecute the building construction for each part of the building frommain structure (foundation, frame, roof, etc), water system, electricitysystem, to decoration (internal and external), equipment, etc.

Choosing an independent inspection organization to inspect the wholebuilding construction execution.

Calculating the price of product (in this project is US$/1 meter square)

and putting the building to be commissioned.

Project stakeholders are individuals and organizations that are activelyinvolved in the project, or whose interests maybe positively or negativelyaffected as a result of project execution or project completion; they may alsoexert influence over the project and its results. In this project, they mainlyare:

Our Construction Investment Company - Vietnam (CIC - Vietnam) asthe owner and sponsor of this project.

Master Van Hong Nguyen as the project manager and the individualresponsible for managing the project.

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Project team members such as architects, engineers, accountants, etc.

Contractors, subcontractors, design company, inspection organizationwhich directly involve in doing the work of this project.

Local government and population who frequently inspect the

buildings influences to the environment.

2. Purpose of the Project

With the population of nearly 8.5 million people and a dynamic economicsdevelopment, Ho Chi Minh city is the most developed city in Vietnam. Inrecent years, the foreign investment in Vietnam continuously increasesleading the rise of services (shopping, entertainment, food and beverage,etc), living standard (spaces, environment, transportation, etc), labor force

from others provinces or cities. Thus, the needs of service and living spaces,especially high quality ones, are significantly arising. This project is,therefore, the reasonable and wise investment of our company.

This building consists of 2 basements which are mainly used for car parkingand technical zones and 15 floors which are leased for shopping,entertainment and services in 1st and 2nd floor, floors from 3rd to 15th forapartments leased or sale which has 8 apartments in each floor and fromapproximately 80 to 120 m2per one apartment.

This project is invested with the purpose to serve customer who intend torent a car parking space in the basements, to operate the business in 1st and2nd floor and to live in apartment from 3rd to 15th floor and. Because of thehigh standard of this building, prospect customers of this project are mainlyfrom high income groups.

Construction technologies are very diversified and remarkable developing inrecent years. However, because of the regional characteristics (tropical, hot,

sunny, humid) and technical influences from Russia, construction technologymainly and widely utilized in Vietnam is concrete and steel techniques. Thatmeans that all main structure parts of this building such as foundation, slabs,

beams, columns will be made of concrete and steel whilst walls will be madeof bricks.

The project implementation is executed in order of task responsibilities that:

Project team overall manage the project (plan, monitor and control).

Design organization undertakes the building design.

Contractors and subcontractors undertake the construction execution(structure parts, water system, electricity system, fire system, etc).

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Independent inspection organization undertakes the inspection ofconstruction execution.

Project team is responsible to calculate the price of product (US$/m2)and completion the building.

Furthermore, this project implementation is supported by many advantages,namely:

The stable economics and politics.

The generosity of local and government policies.

The strong encouragement from the company and government.

The powerful capital available and full staff.

Good location which positive affects the customers.

The wide popularity and utilization of construction technologies.

The diversified and cheap labor force.

3. The Objectives

3.1 Scope Objective

This building project is invested with the objectives to provide populationwith:

Car parking spaces in 2 basements. Service spaces for shopping, entertainment, food and beverage, etc in

1st and 2nd floor.

High quality apartments for lease or sale in from 3rd to 15th floor whichhas 8 apartments in each floor from 3rd to 15th and approximately from80 to 120 m2 per each apartment.

Others services such as security, cleaning, fixing, warranty, etc.Therefore, this building project must ensure these essential elements below:

Wide space, clear view and convenient circulation for car parking in

the basements. Wide space, good view and well equipped for service spaces in 1 st and

2nd floor.

Apartment quality such as durability, decoration, equipment, view,environment, services, space, etc.

3.2 Time Objective

This project is implemented for 6 years (from 01/2001 to 12/2006) and this

period of time is divided by many phases: Planning phase : 06 months

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Planning verification phase : 03 months

Permission submission phase : 03 months

Ground clearance and compensation phase : 12 months

Geology survey and analysis phase : 02 months

Design phase : 06 months Design verification phase : 02 months

Construction execution phase : 30 months

Construction execution inspection phase : 33 months

Product price calculation phase : 06 monthsThese phases above can be implemented in order and in parallel. The periodof them is just estimated. The project manager must ensure that any phasesof this project or whole project will be implemented and completed timely.

3.3 Cost Objective

The cost objective of this project is to estimate or calculate the cost of eachphase and to monitor and control the cost utilized. Project cost is mainlyexpensed for 3 period of a project, that is:

Period of investment preparation which includes planning, planninginspection, permission submission, ground clearance andcompensation, project team operation.

Period of investment execution which consists of survey and analysis,design, design inspection, holding tenders, construction execution(structure, water, electricity, etc), decoration, equipment, executioninspection, project insurance, project team operation.

Period of investment completion which includes price calculation,marketing, project audit, project team operation.

The cost of each period is approximately estimated by percentage of the sumof the project investment, namely:

Period of investment preparation : 3.5 %

Period of investment execution : 88 %

Period of investment completion : 8.5 %

3.4 Requirements to be satisfied

Information is very essential for the project. In this project, informationaffecting the project successfulness and must be concerned is the marketinformation, labor force, technology development, groups of customers,customers interest and trends, stability of economics and politics, local andgovernment policies. Therefore, information collection must be seriouslyundertaken. This is easily executed from many sources, that is:

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Specific reports, new policies which are periodically published byorganizations and government.

Collective information from reports, magazines, televisions, internet,newspapers, etc.

Customer surveys, market analysis, economics analysis which areperformed by organization itself.

Conferences, seminars and exhibitions are opportunities where usefulinformation can be collected.

Project team is the company representative to manage project. The projectsuccessfulness much depends on the working ability and effectiveness of the

project team. Thus, project team must satisfy these requirements below inorder to manage the project successfully:

Lead by a project manager high skill and experience in project andconstruction industry.

Project team members must be from many specific majors of project,from engineers, architects to accountants.

Project team has to work in an independent environment with fullequipment such as place, furniture, electronic tools, means oftransportation, etc.

Project manager has to communicate with the manager staff of thecompany frequently.

Besides, others requirements are indispensable to project successfulness,those are:

Building location must be convenient for the transportation, not too farfrom the city centre (less than 15 km radius) and near the populationareas.

This location also satisfies the requirements of water and electricityavailability.

Cheap labor force for physical works is preferred especially from

country sides or others provinces. Technology suitable, cheap, easy and wide utilized is preferred, high

technology utilization is not necessary because of customersunreliability and its high cost.

Contractors, subcontractors, design company, inspection organizationmust have capacity certifications which are certified by authorizedorganizations.

Transaction between parties must be performed through legalcontracts which have full and clear terms and conditions.

Project must have a strong encouragement from the company (CIC-Vietnam), the owner and sponsor of this project.

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Constant finance provision from company in order to assure that theproject will not be interruptedly operated.

3.5 The Benefits

All companies definitely have a goal to survive and grow. It is also true toour company. This organizational goal is frequently implemented throughorganizations strategies. As a company working in the investment andconstruction industry Construction Investment Company - Vietnam (CIC-Vietnam), construction or investment projects play a key role in theorganizations strategy implementation. This building project must beimplemented based on advantages and opportunities:

The needs of service and living space are remarkably rising.

The strong encouragement from the mother company. The experience and strong finance status of the mother company.

The generosity of local and government policies.

The stable economics and politics.

The wide application of construction technologies.

The cheap and diversified labor force.

In order to implement this project successfully, project team has to proposeclear aims or objectives must be achieved in each phase or period of this

project. Those namely are: All phases or period must be implemented exactly according to project

schedule to ensure the project time completion.

Cost of each phase or period must be inspected, monitored andcontrolled frequently. Furthermore, it must be regularly updated by

both project manager and project team members and informed tomanager staff of the mother company.

Quality of each phase and period must be implemented not only byindependent inspection organization but also the project team. That

quality must be precisely complied with the designs approved bycompany and authorized organizations.

This project is trying to achieve benefits which occupy 5-10% for thecar parking spaces, 10-20% for living spaces and 30-40% for servicespaces of the sum investment of each kind of space.

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4. People and Sponsor

4.1 Roles and Responsibilities of People

This project is managed by a project team which includes from projectmanager, engineers, architects to accountants and others people involved in

project. In order to implement each phase of project independently andeffectively, roles and responsibilities of each individual must be clearlyassigned. In this project, a project team must consist of those whose rolesand responsibilities are:

Project manager playing a key role in a project has responsibility tooverall manage the project in all aspects such as scope, time, cost,quality, risk, human resources, communication and procurement.

Furthermore, he has duties to integrate all those elements thoroughlybecause this integration much affects the project successfulness.

Architect as a project team member has responsibility to inspect andmonitor quality of architecture parts such as dimension standards(height, length, width, space, area, etc), internal and externaldecoration, furniture equipment and arrangement, design standards,material standards (decoration materials such as paint, tiles, lights,furniture, etc). This task is implemented based on architecture designsor drawings which are approved by company and authorized

organizations and in parallel with the tasks undertaken by independentinspection organization and it must be informed to project managerregularly.

Structure engineer as a project team member has responsibilities toinspect and monitor quality of structure parts such as foundation,slabs, beams, columns, concrete standards, steel standards and othersmaterials standards. This task is implemented based on structuredesigns or drawings which are approved by company and authorizedorganizations and in parallel with the tasks undertaken by independent

inspection organization and it must be informed to project managerregularly.

Water engineer as a project team member has responsibilities toinspect and monitor quality of water parts such as water supplysystems, drainages, fire extinguish systems, water pump systems,waste treatment systems, water tank systems, water back-up systems,water design standards, water materials standards (pipes, water pumps,water equipments, etc). This task is implemented based on waterdesigns or drawings which are approved by company and authorized

organizations and in parallel with the tasks undertaken by independent

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inspection organization and it must be informed to project managerregularly.

Electricity engineer as a project team member has responsibilities toinspect and monitor quality of electricity parts such as lighting

systems, alarm systems, communication systems, thunderbolt resistsystems, electricity design standards, electricity materials standards(electrical wires and devices, thunderbolt resist devices,communication devices, etc). This task is implemented based onelectricity designs or drawings which are approved by company andauthorized organizations and in parallel with the tasks undertaken byindependent inspection organization and it must be informed to projectmanager regularly.

Fire engineer as a project team member has responsibilities to inspect

and monitor quality of fire parts such as fire alarm systems, fireextinguisher systems, fire design systems, fire device standards. Thistask is implemented based on fire designs or drawings which areapproved by company and authorized organizations and in parallelwith the tasks undertaken by independent inspection organization andit must be informed to project manager regularly.

Accountant as a project team member has responsibilities to inspectand monitor the cost of project such as project team operation cost,

planning phase cost, ground clearance and compensation phase cost,

survey and analysis phase cost, design phase cost, execution phasecost, inspection phase cost, commissioning phase cost, insurance cost,back-up cost, etc. Besides, he has a duty to monitor project contractssuch as implementation, rate of progress, etc. This task is implemented

based on contracts between owner and contractors or subcontractors,periodical finance reports of project and it must be informed to projectmanager regularly.

Besides project team, roles and responsibilities of others people whoseinterest and activities are involved in this project are:

Director of Construction Investment Company Vietnam, which is anowner and sponsor of this project, is the one inspecting, monitoringthe results of project through the project manager. He is also the onehaving duties to provide finance for the project implementation.

Directors of design company, contractors, subcontractors, inspectionorganization having interest and transactions with this project are theones having responsibilities to provide services for the projectimplementation through legal contracts. They are also theirorganizations representative to enter the contracts with CIC-Vietnam.

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4.2 Value Proposition for Sponsor

As the owner and sponsor of this project, Construction InvestmentCompany-Vietnam (CIC-Vietnam) is the one directly earning profit from

this project investment. Profit expected from this investment after thecompletion is estimated by percentage of the sum investment for each kindof service that:

Car parking space : 05-10 %

Living space : 10-20 %

Service space : 30-40 %Meanwhile, the sum investment of the whole project assigned by percentagefor each kind of service is below:

Car parking space : 05 %

Living space : 80 % Service space : 15 %

Therefore, profit is estimated by percentage of the sum investment of thewhole project for each kind of service is:

Car parking space : 0.25-0.5 %

Living space : 8.0-16.0 %

Service space : 4.5-6.0 %Finally, CIC-Vietnam expects to earn profit from 12.75 % to 22.5 % of thesum investment of the whole project. That profit above is expected for the

first year after the project completion. From the 2nd year, after apartmentsfrom 3rd to 15th floor are already sold to customers, profit earning is mainly

based on the business of car parking space, service space and living space forlease. Consequently, profit from this year is estimated about 8 % to 10 %annually.

5. Strategy Implementation

5.1 Constraints and Assumptions

As mentioned above, this project appearance and implementation is based onadvantages and opportunities. On the other hand, there always are constraintsexisted through the project implementation. With the purpose to implement

project successfully, they must be recognized and classified:

Project must be completed within 6 years from 01/2001 to 12/2006 inwhich period of investment preparation must be completed in 2 firstyears and period of investment execution and period of investmentcompletion must be completed in 3 years remaining.

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All phase or period execution must strictly comply with contractualterms and conditions. All contracts must be directly signed betweenthe owner and contractors, subcontractors, design organization andinspection organization.

The cost of this project must not more than project budget which ispre-defined approximately 160,000,000,000 VND (160 billion VND)or 10,000,000 USD (10 million USD).

5.2 Impact of Project on Stakeholders

As mentioned above, project stakeholders are individuals and organizationsthat are actively involved in the project, or whose interests maybe positivelyor negatively affected as a result of project execution or project completion;

they may also exert influence over the project and its results. Theircorporations and conflicts are indispensable in project. Thus, in order toimprove their corporation and resolve conflicts, the impacts of project onstakeholders must be recognized:

CIC-Vietnam, as the owner and sponsor, is the organization investingand providing finance for this project. Therefore, the impact of projectcould much negatively or positively affect CIC-Vietnam. Obviously,the successfulness of this project makes CIC-Vietnam earn profit,have trade name improved; whereas the unsuccessfulness makes CIC-

Vietnam lose profit, have trade name decreased. Contractors, subcontractors, design company, inspection organization

are organizations directly involving in doing the work of this project.If the time and quality of their service provided by them can satisfythe projects requirements, they will be rewarded completely andtimely. On the other hand, the rewarding will be interruptedlyundertaken because of unsatisfied time and quality of services.

In the construction execution phase, environment impact of thisproject such as noise, dust, waste water, smell, etc on the population

living near the building location is inevitable. This can impede theprogress or time completion of the project because of health damagethey suffer leading the litigations.

This project implementation helps project team members such asproject manager, engineers, architects, accountants, etc improve theirskills and knowledge in project management.

This project successfulness helps local government improve budgetrelied on tax payment, reduce unemployment because of more jobscreation and mitigate the arising needs of spaces in Ho Chi Minh city.

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5.3 Milestones and Activity Schedule

As mentioned above, project implementation is divided by 3 periods ofproject for 6 years from 2001 to 2006. Each period of project consists of

many phases and their milestones and activity schedule are: Period of investment preparation : 01/2001-12/2002 (24 months)

Planning : 01/2001-06/2001 (06 months)

Planning verification : 06/2001-09/2001 (03 months)

Permission submission : 09/2001-12/2001 (03 months)

Ground clearance, compen. : 12/2001-12/2002 (12 months)

Period of investment execution : 12/2002-09/2006 (45 months)

Geology survey and analysis : 12/2002-02/2003 (02 months)

Design : 02/2003-08/2003 (06 months)

Design verification : 08/2003-10/2003 (02 months)

Holding tenders : 10/2003-12/2003 (02 months)

Construction execution : 12/2003-06/2006 (30 months)

Execution inspection : 12/2003-09/2006 (33 months)

Period of investment completion : 01/2006-12/2006 (12 months)

Price calculation : 01/2006-03/2006 (03 months)

Marketing : 03/2006-06/2006 (03 months)

Project audit : 09/2006-12/2006 (03 months)

These milestone and schedule above is just a preliminary plan. A moredetailed plan is in Part 6 (Plans for managing).

5.4 Enterprise Environmental Factors/Organizational Process

Assets

A project success is affected by many factors and one of them is theenterprise environmental factors. In order to have this project successfullyimplemented, enterprise environment factors including external

environmental factors and internal organizational environmental factors mustbe recognized:

Ability of contractors, subcontractors, design organization, inspectionorganization, etc much influences the project implementation, or inother words the project success. This ability must be known that itconsists of engineers, workers, execution means and machines, etc.Their abilities must be certified by authorized organizations or theymust have approved ability profiles which are popularly used to enterthe tender in Vietnam.

Finance ability of contractors and subcontractors especially inconstruction execution phase is very important to the project

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implementation. Indeed, because of construction industry features inVietnam where contractors and subcontractors must advance theirmoney to execute the construction and then received the paymentfrom the owner or sponsor, their finance ability obviously decides the

progress of the project completion or the project success. Project team members such as project manager, engineers, architects,

accountants are selected from existing employees of the companyCIC-Vietnam, for example Master Van Hong Nguyen is the projectmanager as well as the company vice-director.

Thanks to more than 10 years working in the investment andconstruction industry, CIC-Vietnam has a pretty good trade name inthe business. That trade name can make the project more reliable andattractive to customers.

CIC-Vietnam reserves a private workplace for project managementteam. This workplace is located in the CIC-Vietnam building. Thismakes a lot of advantages because not only communication between

project management team and top mother company manager staff isconstantly and conveniently maintained but project management teamalso takes full advantage of existing infrastructure such as internet,

phone line, electricity system, water system, etc. Furthermore, thissaves a lot of money of the first project investment leading the projectcost reduction.

Besides enterprise environmental factors, organizational process assets arefrequently used to influence the project success. In this project, they mainlyinclude:

As mentioned above, CIC-Vietnam has more than 10 years experiencein investment and construction industry. So the lessons learned andavailable historical information such as estimating data bases, recordsof past project performance, etc assists project planning process inverifying assumptions and assessing alternatives that are identified asa part of this process.

Because project team members are selected from existing employeeresources, project personnel policies such as hiring and firingguidelines, employee performance reviews, etc are based onorganizational policies. This makes benefits because theorganizational policies of personnel administration is completely

perfected for more than 10 years and therefore project managementteam need not to create it at the beginning.

Organizational policies of quality management such as process audit,continuous improvement targets, etc and financial controls such as

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time reporting, accounting codes, standard contract provisions, arealso applied to project management policies.

6. Plans for Managing

6.1 Project Management Form

This project is implemented with the form that CIC-Vietnam, as the ownerand sponsor, directly administrates this project through the projectmanagement team. Contracts and transactions are directly performed

between CIC-Vietnam with contractors, subcontractors, design organizationand inspection organization.

CIC-Vietnam

Design Contractors Inspectionorganization organization

Subcontractor Subcontractor Subcontractor

6.2 Project Implementation

As mentioned above, this project is implemented through 3 periods ofinvestment: period of investment preparation, period of investment executionand period of investment completion.

CIC-Vietnam Building Project

Period of Investment Preparation

Period of Investment Execution

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01/2001 06/2001 06/2001 09/2001

09/2001 12/200112/2001 12/2002

Period of Investment Completion6.2.1 Period of Investment Preparation

This period of project consists of many phases such as planning, planninginspection, permission submission, ground clearance and compensation. Thecost of this period occupies 3.5 % of the sum investment of the whole

project, that is: 3.5% x 10,000,000 = 350,000 USD. And percentage of eachphase in this period is assigned that:

Planning (01/2001-06/2001, 06 months)7.5% x 350,000 = 26,250 USD

Planning verification (06/2001-09/2001, 03 months)0.3% x 350,000 = 1050 USD

Permission submission (09/2001-12/2001, 03 months)

0.3% x 350,000 = 1050 USD

Ground clearance and compensation (12/2001-12/2002, 12 months)78.1% x 350,000 = 273,350 USD

Project management (01/2001-12/2002, 24 months)13.8% x 350,000 = 48,300 USD

Task Start End Duration(months)

Cost(USD)

Doer

Planning 01/2001 06/2001 06 26,250 CIC-VietnamPlanningverification

06/2001 09/2006 03 1050Authorized

organization

Permissionsubmission

09/2001 12/2001 03 1050Local

government

Groundclearance andcompensation

12/2001 12/2002 12 273,350 CIC-Vietnam

Period ofinvestment Planning Planning verification

preparation

Period of Ground clearance Permission submissioninvestment and compensation

preparation

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12/2002 09/2006

12/2002 02/2003

08/200302/2003

10/2003

12/200310/2003

09/200612/2003

08/2003

12/200306/2006

6.2.2 Period of Investment Execution

Period of investment execution is implemented through these phases below:

Period of investment execution

Geology survey and analysis

Design

Design verification

Holding tenders

Construction Executionexecution inspection

Some of those phases above are uniquely implemented whilst others must beimplemented through sub-phases such as design phase and constructionexecution phase.

Design phase is implemented through these sub-phases below:

Architecture design including plan design, section design, verticalsurface design, perspective design.

Structure design including foundation and basement design, framedesign (column, beam, slab), cover design (roof, wall), rigid coredesign (lift, staircase).

Water design including water supply system design, drainage design,waste treatment system design and fire extinguish system design.

Electricity design including lighting system design, communicationsystem design, thunderbolt resist system design, alarm system design.

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Fire design including fire alarm system design, fire extinguishersystem design.

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Design Work Breakdown Structure

Design

Architecture Structure Water Electricity Fire

Plan Foundation & Supply system Lighting system Alarm systemdesign base. design design design design

Section Frame Drainage Communication Fire extinguisher design design design system design system design

Vertical surface Cover Waste treatment Thunderbolt resist.design design system design system design

Perspective Rigid core Fire water Alarm systemdesign design system design design

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05/2003

05/2003 08/2003

08/2003

08/2003

08/2003

05/2003

05/2003

05/2003

Structure design

Water design

Geology Architecture Designsurvey Design Design

and analysis design verification

Electricity design

Project management team Project management team

(engineers, architects,) (engineers, architects,)

Fire design

Design Gantt Charts

Start Finish

02/2003 08/2003

02/2003

Examination

Last examination

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The construction execution phase is implemented through tender packages.Holding tenders is to choose capable contractors and subcontractors toexecution these packages. These tender packages in the constructionexecution phase are:

Tenderpackage

Task Start FinishDuration(months)

1Foundation and basementexecution

12/2003 04/2004 04

2 Frame and completion execution 05/2004 06/2006 29

3 Lift system supply and installation 08/2004 09/2005 13

4 Cable installation 03/2005 10/2005 07

5 Infrastructure execution 09/2005 12/2005 03

6 Fire alarm system installation 10/2005 12/2005 02

Furthermore, in order to manage, monitor and control the quality of thebuilding in a part or the project in a whole, execution inspection tasks areimplemented in parallel with all tender packages in the constructionexecution phase and it will be implemented 3 months longer after thecompletion of the construction execution phase, from 12/2003 to 09/2006.

Besides the execution inspection organization, the quality management of

the project, especially the construction execution phase, is also undertakenby design organizations responsible to inspect the copyright of their designsand project management team members such as engineers, architectsresponsible to examine whether the execution is complied with the designsand the inspection organization is completely on duty.

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Construction Execution Work Breakdown Structure

Construction Execution

Foundation Frame & Lift system Cable system Infrastructure Fire alarm

& basement completion system

Piling Column Lift Telephone Water system Fire alarmexecution execution installation cable execution system

installation

Foundation Beam Lift cable Television Electricity systemexecution execution installation cable execution

Basement Slab Lift control Internet Thunderboltexecution execution panel cable resist system

installation execution

Completionexecution

Walling Mortaring Painting

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05/2004

Design organization

Foundation & Frame &Basement completion

Project Construction Constructionmanagement execution execution

Lift system Cable system

CIC-Vietnam

Infrastructure Fire alarm

system

Inspection organization

Examination

Start Finish

12/2003 06/2006

12/2003 06/2006

08/2004 10/2005

09/2005 12/2005

Inspection

Inspection

Inspection

Inspection

03/200509/2005

10/200512/2005

04/2004

Design Gantt Charts

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As mentioned above, the cost of this period of investment executionoccupies 88% of the sum project investment, that is 88% x 10,000,000 =8,800,000 USD. And the percentage of each phase is assigned:

No Task % Cost ($) Doer 1 Geology survey and analysis 0.26 22,880 Survey or.

2 Design 2.30 202,400 Design company

3 Design verification 0.03 2,640 Authorized or.

4 Holding tenders 0.01 880 CIC-Vietnam

5 Construction execution 89.6 7,884,800 Contractors

6 Execution inspection 6.5 572,000 Inspection or.

7 Project management 1.3 114,400 CIC-Vietnam

Sum 100 8,800,000

The cost of sub-phase of design phase is:

No Design task % Cost ($) Doer

2.1 Architecture design 30 60,720 Design company

2.2 Structure design 30 60,720 Design company

2.3 Water design 15 30,360 Design company

2.4 Electricity design 15 30,360 Design company

2.5 Fire design 10 20,240 Design company

Sum 100 202,400

The cost of sub-phase of construction execution phase is:

No Execution task % Cost ($) Doer

5.1 Foundation and basement 27 2,128,896 Contractor

5.2 Frame and completion 63 4,967,424 Contractor

5.3 Lift system 4.2 331,162 Contractor

5.4 Cable system 3.2 252,314 Contractor

5.5 Infrastructure 1.4 110,387 Contractor 5.6 Fire alarm system 1.2 94,617 Contractor

Sum 100 7,884,800

Note:or. : organization

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01/2006 12/2006

12/2006

01/2006 01/2006 01/200602/2006

02/2006 03/2006

03/2006 04/2006

03/2006 03/2006

03/2006 04/200603/2006 04/2006

04/2006

6.2.3 Period of Investment Completion

The period of investment completion is implemented through these phases:

Period of investment completion

Finished work Testing Building manager profile operation hiring

accomplishment

Project audit Sanitary Employeeexecution recruitment

Product pricecalculation

Marketing

Procurement

After the completion of the building construction, the business such asservice space for lease in 1st and 2nd floor, apartments for lease from 3rd to

15th floor and car parking space for lease is administrated by a buildingmanager hired out-of-company because CIC-Vietnam is not capable toadministrate building. Furthermore, new employees such as security, cleaner,accountant, etc are recruited for the building operation.

Marketing aims to bring the end product to the market or population with theprice of each service. This price is precisely calculated for each servicebrought to the market such as service space for lease in each floor, apartmentspace for lease or sale in each floor, etc.

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As mentioned above, the cost of this period of investment completionoccupies 8.5% of the sum investment of the whole project, that is 8.5% x10,000,000 = 850,000 USD. The cost of each phase in this period is assigned

below:

No Task % Cost ($) Doer

1Finished work profileaccomplishment

0.40 3,400 Contractors

2 Project audit 0.30 2,550 CIC-Vietnam

3 Product price calculation 0.30 2,550 CIC-Vietnam

4 Testing operation 7.20 61,200 CIC-Vietnam

5 Sanitary execution 0.40 3,400 CIC-Vietnam

6 Building manager hiring 0.80 6,800 CIC-Vietnam

7 Employees recruitment 8.50 72,250 CIC-Vietnam8 Marketing 7.30 62,050 CIC-Vietnam

9 Building insurance 2.00 17,000 Insurance Co.

10 Back-up budget 72.0 612,000 CIC-Vietnam

11 Project management 0.80 6,800 CIC-Vietnam

Sum 100 850,000

Price Calculation Work Breakdown Structure

Price calculation

Car parking Service space Apartment Apartmentfor lease for lease for lease for sale

Basement 1 1st floor 3rd floor 3rd floor

Basement 2 2nd floor 4th floor 4th floor

. .

15th floor 15th floor

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The product price is calculated with these following assumptions:

The sum investment : 10,000,000 USD

The living investment : 8,000,000 USD (80% x 10,000,000)

The service investment : 1,500,000 USD (15% x 10,000,000)

The parking investment : 500,000 USD (5% x 10,000,000) The sum living area : 6,949.8 m2 (534.6 m2/floor x 13 floors)

The sum service are : 934.4 (467.2 m2/floor x 2 floors)

The sum parking are : 454.4 m2 ( 227.2 m2/base. x 2 base.s)

The price of the apartment for sale is calculated below:

Price before tax:P.B.T = = = 1,151.11 USD/m2

Price after tax:

P.A.T = P.B.T + 10% x P.B.T= 1,151.11 + 10% x 1,151.11 = 1,266.22 USD/m2

Company interest:C.I = P.A.T x 10% = 1,266.23 x 10% = 126.62 USD/m2

Apartment sale price :A.S.P = P.A.T + C.I = 1,266.23 + 126.62 = 1,392.85 USD/m2

Final sale price in each floor:F.S.P = A.S.P x K (K: floor factor)

Floor Sale price (USD/m2) K Final price (USD/m2)3 1,392.85 1.090 1,518.20

4 1,392.85 1.075 1,497.31

5 1,392.85 1.060 1,476.42

6 1,392.85 1.045 1,455.52

7 1,392.85 1.030 1,434.63

8 1,392.85 1.015 1,413.74

9 1,392.85 1.000 1,392.85

10 1,392.85 0.985 1,371.95

11 1,392.85 0.970 1,351.06

12 1,392.85 0.955 1,330.17

13 1,392.85 0.940 1,309.28

14 1,392.85 0.925 1,288.38

15 1,392.85 0.910 1,267.49

The price of the apartment for lease is calculated below:

Apartment sale price :A.S.P = P.A.T + C.I = 1,266.23 + 126.62 = 1,392.85 USD/m2

Interest rate: i = 10%

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Period of capital refund: n = 10 years

Lease price per year to refund capitalL.P.Y = A.S.P * = 1,392.58* = 226.68 USD/m2/year

Lease price per month to refund capital

L.P.M = L.P.Y/12 = 226.68/12 = 18.89 USD/m2/month Final lease price in each floor:

F.L.P = L.P.M x K (K: floor factor)

Floor Lease price (USD/m2/month) K Final price (USD/m2/month)

3 18.89 1.090 20.59

4 18.89 1.075 20.31

5 18.89 1.060 20.02

6 18.89 1.045 19.74

7 18.89 1.030 19.468 18.89 1.015 19.17

9 18.89 1.000 18.89

10 18.89 0.985 18.61

11 18.89 0.970 18.32

12 18.89 0.955 18.04

13 18.89 0.940 17.76

14 18.89 0.925 17.47

15 18.89 0.910 17.19

The price of the service space for lease is calculated below:


Price after tax:P.A.T = P.B.T + 10% x P.B.T

= 1,605.31 + 10% x 1,605.31 = 1,765.84 USD/m2


Service space sale price:S.S.P = P.A.T + C.I = 1,765.84 + 176.58 = 1,942.42 USD/m2



Lease price per year to refund capital:L.P.Y = S.S.P * = 1,942.42* = 316.12 USD/m2/year

Lease price per month to refund capital:

L.P.M = L.P.Y/12 = 316.12/12 = 26.34 USD/m2/month

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Final lease price in each floor:F.L.P = L.P.M x K (K: floor factor)

Floor Lease price (USD/m2/month) K Final price (USD/m2/month)

1 26.34 1.120 29.502 26.34 1.105 29.11

The price of the parking space for lease is calculated below:


Price after tax:P.A.T = P.B.T + 10% x P.B.T

= 1,100.35 + 10% x 1,100.35 = 1,210.39 USD/m2


Parking space sale price:P.S.P = P.A.T + C.I = 1,210.39 + 121.04 = 1,331.43 USD/m2



Lease price per year to refund capital:L.P.Y = P.S.P * = 1,331.43* = 216.68 USD/m2/year

Lease price per month to refund capital:

L.P.M = L.P.Y/12 = 216.68/12 = 18.06 USD/m2/month Final lease price per car per:

F.L.P = L.P.M*1.85*4.8 = 18.06*1.85*4.8 = 160.35 USD/month

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6.3 Project Human Resources Management

CIC-Vietnam Project manager

Architect Structure Water Electricity Fire Accountantengineer engineer engineer engineer

Period ofinvestment Planning Planning Planning Planning Planning Cost inspection

preparationDesign Design Design Design Design Cost inspectioninspection inspection inspection inspection inspection

Period ofinvestment Tender Tender Tender Tender Tender Contractexecution selection selection selection selection selection preparation

Execution Execution Execution Execution Execution Contractinspection inspection inspection inspection inspection monitoring

F.W profile F.W profile F.W profile F.W profile F.W profile Cost inspectionPeriod of inspection inspection inspection inspection inspectioninvestmentcompletion Operation Operation Operation Operation Operation Project audit

inspection inspection inspection inspection inspection

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6.4 Project Risk Management

6.4.1 Time Analysis

Project time risk is analyzed by Crystal Ball software. And the results arebelow:

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According to statistical information, the project completion time could befinished for 1,887 days, later than it is expected 121 days (1,766 days).Therefore, all phases of the project must be inspected regularly andmeticulously in order to make sure the completion time meet the expectation.

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6.4.2 Cost Analysis

Project cost risk is analyzed by Crystal Ball software. And the results arebelow with the cost of each year:

Year 2001 2002 2003 2004 2005 2006

Cost ($) 28,350 321,650 259,306.7 3,860,145.4 3,508,183.1 2,022,364.8

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As the information shown above, the cost of this project could be totallyexpensed $10,665,075, much more than the expectation $665,075. Thus, the

project cost management must be implemented thoroughly. Besides, theback-up capital is always prepared for the worst cases.

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7. Lessons Learned

Through this course, I have learned a lot of very useful knowledge. In thefirst place, that is the knowledge and understanding of the basic content of

the discipline of project management. That is the concept of project, projectmanagement, stakeholder, leadership, process, phase and so on. With theuseful knowledge, I have known and collected the essential information to

plan a project such as reason of project essence, market influence,technology influence, business environment, market needs, finance analysis,etc.

Secondly, I have mastered the knowledge and understanding of thetechniques of the discipline of project management. This is very important

because nobody can implement the project successfully without the projectmanagement techniques. The very useful and wide spread technique must beacknowledged is the application of PMBOK model. This projectmanagement model includes and covers all aspects of a project which arescope, time, cost, quality, risk, procurement, human resources andcommunication. Furthermore, some other techniques should be concernedare PRINCE2 model application, project evaluation techniques such as NPV,IRR, DCF, Six Sigma method, etc.

Finally, through assignments including set questions and final project, I haveacknowledged why to implement a project and how to plan and perform itsuccessfully.

applied project management - case study of vietnam

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