The Fiona Stanley Hospital project’s deliverables primarily concern the construction of a new large-scale healthcare facility that would service people closer to their homes. The Government of Western Australia Health Department (WA Health) was expected to open the facility in May 2014 and make it available to the public (Western Australian Auditor General, 2010). It had to appoint two contractors, one of which would build the hospital, while the other would provide various services that were not directly related to healthcare after the opening (Western Australian Auditor General, 2010). It was initially supposed to accomplish the construction while fitting within a $420 million budget, though the sum grew considerably with time (Western Australian Auditor General, 2010). Lastly, it would be responsible for operating the facility after its completion, including the hiring of staff, maintenance, and other aspects of management. The hospital would have to provide a wide variety of services as part of a project to improve the range of medical help available closer to people’s homes.
Benefits and KPI
The primary benefit of the hospital would be the ability to serve Western Australian populations better and with smaller associated costs. The mostly rural nature of Australia meant that people would have to travel considerable distances to reach a healthcare facility, and the Fiona Stanley Hospital would partially address that concern by providing such an institution nearer to places where many people live (Western Australian Auditor General 2010). The higher ease of hospital access would improve the overall health of the population, advancing the goals of WA Health. The FSH would further both of these goals using its wide variety of departments, as the limited availability of specific treatments is a significant reason to travel long distances to a medical institution. Furthermore, the addition of a new hospital would ease the burden on other facilities and improve the healthcare system’s capacity to serve numerous customers at once (Western Australian Auditor General, 2010). New job positions would be created for medical professionals as well as members of service industries, and the construction contractor would benefit from a large-scale contract.
Many of the benefits of a hospital’s construction would be challenging to quantify in the short as well as long term, as health is a complex construct that consists of numerous factors. Nevertheless, Kerzner (2017) suggests a suitable quantitative KPI evaluate the efficiency of the project with regards to ease of visiting. The number of visits made to hospitals across Western Australia overall should see a considerable increase if the project succeeds at its goal. Analysing only patients who come to the Fiona Stanley Hospital would potentially be a wrong move, as it could be attracting people who would previously have gone to another facility without generating any new traffic. Considering the hospital has 643 beds (Western Australian Auditor General 2010), an increase in admissions of approximately 25,000-26,000 per year might be a warranted expectation. Providing people who would usually go elsewhere with a new, more convenient location is one of the project’s primary goals, but it should expand the scope of healthcare coverage as a whole.
The project might have been experiencing issues concerning strategic alignment, as it relied on external contractors and consultants. The purpose of WA Health is to promote the overall wellness of the population by providing quality care and health education. The project’s goals were to build a hospital with predetermined service capacities while incurring minimal costs and following the schedule outlined before construction. Western Australian Auditor General (2010) noted that consultants would often work overtime without discussing it with the project managers and demand extra pay regardless, a practice that was not discouraged in any manner. Furthermore, WA Health rehired the same consultants after the development of the business case cost three times as much as what was initially agreed (Western Australian Auditor General, 2010). These findings indicate that the manager may have been taking a negligent approach and failing to align the people involved in the project. Despite the poor outcomes of prior partnerships, WA Health did not look for alternatives when the time to make new consulting contracts came, choosing the easier option of retaining the same people.
It is possible that the situation surrounding Fiona Stanley Hospital’s construction resulted from a misconception with regards to strategic alignment. Information Resources Management Association (2016) notes that there are two views with regards to the concept, one of which sees it as final while the other regards it as a continuous process. It is possible that the managers of the FSH project held the first view and restricted it to the members of WA Health who worked on the project, expecting the offered payments to motivate the external workers. The management team failed to convey its aims to the contractors, who may have been primarily driven by self-interest, which would not include the needs of the project. Romano (2017) also states that some theorists believe that strategic alignment can only be achieved for short periods and requires continuous readjustment, and so it is possible that none of the members was fully committed to the project near the end. As such, the project’s financial performance would suffer from misconceptions and poor data quality, leading to incorrect predictions and extra costs as well as delays.
Project Planning Problem
Inaccurate estimation was one of the most significant issues with the project, as both the budget and the deadlines had to be adjusted significantly multiple times throughout the project. Kassel (2017) notes that these sorts of failures tend to occur in public projects such as the construction of the Fiona Stanley Hospital with an extremely high frequency, though the scale is usually not as high. Levy (2017) states that construction projects are also prone to underestimations of pricing, as such an endeavour cannot be cancelled easily in the middle of its execution. The many degrees of separation between the source of the capital and the implementation of the building process also may have complicated the issue, as it would be easier to justify increases in funding when the details became unclear during the transition from the contractor to the government. As such, checking the validity of claims would be harder, especially if not all members of the project offered reliable estimations.
This weakness could be avoided with proper cost management practices and increased attention to the details. Martinelli and Milosevic (2016) describe them as “cost performance measurement, forecasted budget at project completion, change impact analysis, recommended corrective actions, and making updates to the project management plan and budget baseline” (274). Most of these practices were utilised in the Fiona Stanley Hospital project, but to a low degree, as the numerous failures indicate. The project managers should have employed independent consultants to evaluate the financial plans and statements made by the initial contractors and find inaccuracies and discrepancies. Furthermore, the team should have followed national guidelines during planning, as suggested by Western Australian Auditor-General (2010), to obtain more accurate predictions. Regardless of whether the final figure was the real cost or one inflated by previous failures, it would become known earlier.
Good Project Planning
Despite the numerous issues with the project’s handling, some of its components received praise during the audit. The Western Australian Auditor General (2010) noted that the team’s approach to evaluating change requests was sound and should have been applied in the project’s further execution. Over $10 million worth of variations was either approved or awaiting an examination at the time, and the budget allowed for their implementation (Western Australian Auditor General, 2010). The exact mechanism is not described, but it can be assumed that the managers followed project management guidelines regarding the practice. Lehmann (2016) described a standardised change request form as the first step to the proper evaluation, as it would separate important matters from those that are less relevant. Considering that the team had budget estimations for submissions that had not yet been evaluated, it is likely that a unified and detailed submission process was in place.
The decision on whether the request should be approved would be the next step in the process. The unsuitability of a proposal should not necessarily mean total rejection, as it may only require some modifications to become viable. As such, Kuster et al. (2015) propose a framework that includes a review by the business board, a technical analysis on the feasibility of the change and the effort required, and a final judgment by the management board. The Fiona Stanley Hospital team likely followed a similar system, and considering the number of suggestions it accepted, it is likely that not many propositions were rejected entirely. Nevertheless, the auditor’s report praises the process (Western Australian Auditor General, 2010), suggesting that the management cooperated with various stakeholders and produced changes that satisfied all parties involved. Such an approach may be considered the ultimate goal of project management, as work was accomplished without damage to the team’s relations.
- Information Resources Management Association. 2016. Educational Leadership and Administration: Concepts, Methodologies, Tools, and Applications: Concepts, Methodologies, Tools, and Applications. Hershey: IGI Global.
- Kassel, David S. 2017. Managing Public Sector Projects: A Strategic Framework for Success in an Era of Downsized Government. 2nd ed. Boca Raton: CRC Press.
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- Romano, Luca, ed. 2017. Project Portfolio Management Strategies for Effective Organizational Operations. Hershey: IGI Global.
- Western Australian Auditor General. 2010. Fiona Stanley Hospital Project.