Discussion:
Assess organizational readiness
Analyze how the Critical Success Factors(CSFs) apply to the facts of the case study. Provide examples to support your analysis.
Critical Success Factor as Rockart defines it, is "The limited number of areas in which results, if they are satisfactory, will ensure successful competitive performance for the organization. They are the key few key areas where things must go right for the business to flourish. If results in these areas are not adequate, the organization's efforts for the period will be less than desired". He also concluded that CSF are "areas of activity that should receive constant and careful attention from management. Critical success factors are strongly related to the mission and strategic goals of a business or project. Whereas the mission and goal focus on the aims and what is to be achieve, critical success factors focus on the most important areas and to get every heart of both what is to be achieve and how it will be achieve.
In the case the following critical success factor apply to the facts of the case study. Current power capacity was inadequate to meet India's need, energy Deficit of 18% was recorded according to the 8th Five year plan(1992-1997), Frequent power cuts allover India, State Electricity Boards had monopoly of power distribution within the states, Many State Boards were close to bankruptcy at the time of the project, the industry was regulated at the central or National level, Central government ministry of power was responsible for regulating and were in charge of decision on capacity additions-pricing/tariffs- power related investments, the government embarked on a process of liberalizing the economy i.e. less government control , with more private sector autonomy, tariff reforms in the power sector-fixed tariff for sunk costs to variable tariffs for operating fuel costs. On the part of Enron;s- Eron saw a large opportunity in India-to provide power-earn profits-to obtain more projects if they are successful with their first one, India fits in nicely with Enron;s global objectives at that time.
These and many other critical success factors apply to the facts of the case study and in my opinion if these are satisfactory, will ensure competitive performance for the project
Determine the project benefits, organizational readiness, risk culture of the company in the case study. Provide justification for your response.
Enron had initiated the project since it was in line with its strategy. A Power Purchase Agreement(PPA) was drawn up where the MSEB agreed to purchase a certain quantity of power from the Enron-led Dabhol power corporation(DPC) at a certain tariff The DPC ensured that adequate power will be made available MSEB took care of demand risks with PPA initial price was Rs 2.4/KwH. A 20 year renewable concession was signed and dispute resolution was done through the international arbitration, these and many more were beneficial to Enron.
Enron readiness was proven when the organization went to international arbitration which ruled in its favor. A six panel experts review was initiated and a revised proposal with major changes was accepted by the organization in May 1996.The risk culture of the company in the case can be seen when Enron as a multinational company became complacent and took the critical cultural barriers in global strategy. In the case Enron gave privacy to the political and economic variables to direct its strategy in India but ignored the core culture values as part of its organizational strategy.
Develop at least three(3) project recommendations based on the analysis from criteria number 1 and 2 of this assignment.
Identify the initial categories of risks(level1 and 2) that you see as being present in the case study using example risk checklist(figure A-2,Hilson and Simon text.)
The initial categories of risk that I can see being present in the case study are; 1) Social Demographic- public perception of the project imposed additional requirements for the project. 2)Political-A change in government resulted in changed in priorities and legislation, which was negative for the initial plan. 3) Technical interference-There was data inconsistence across interfaces which brought about required rework. $)Environmental/weather- there was an unexpected environmental change when the politics changed. .
References:
Hilson D.$ Simon, P. Practical Project Risk Management: The Atom Methology(second edition)
Heldman, K(2005) Project manager's Spotlight on Risk Management. San Francisco, CA; Jossey.
Custom Book, 2011). Bus 519; Project risk management; Casepack 2011. New York J. Wiley$ sons.Flynn, Simon I. Risk management , 2008