Project Inception - Simply Put!

Introduction

In the Marstan Guide Introduction to Project Management, we said that Project Inception is the first of seven stages of a capital project.

Project inception should be the shortest stage of the project, but it should also have the most significant impact on the way that the project progresses throughout its life.

Plato said:

The beginning is the most important part of the work

The main purpose of Project Inception

The main purpose of project inception is:

To determine the overall shape and scale of the project, before you embark on the time consuming and expensive task of working up the details.

The four main components of Project Inception

The four main components of project inception tend to be iterative rather than sequential. In other words, you may alter your course when you find that some of the ideas for your project are impractical or unaffordable.

The four components are:

1. The outline brief
2. Option appraisals
3. Strategy and feasibility
4. Budget cost

Case Study

Throughout this guide we will illustrate the concepts by relating to a small family business which publishes management information. They have 20 people but now need to expand by employing 10 more people.

1. Outline brief

The outline brief for our case study should refer to all of the matters related to the proper functioning of the business, including:

1. Operational requirements. Are the new facilities to work in a similar way to the existing, or are there some additional requirements?
2. Space standards. How much space is needed per person or for individual rooms? Is it the same as existing or is there a need for more?
3. Quality standards. Is the existing standard what you want to achieve or do you want something smarter (more expensive) or less elaborate (more economical)?
4. Location. Do you have to be in the same area or can you be flexible?

2. Option appraisals

The options considered in our case study could start with the following:

1. Do nothing. This is the benchmark for all other options and creates a useful way of identifying the operational requirements and business case for your project. E.g. if it limits your business, you should identify how.
2. Re-configuring existing accommodation without increasing the space. This might involve changing the position of partitions or “squeezing people in” by using new furniture arrangements or the like.
3. Extending the existing premises.
4. Buying new premises and selling the existing.
5. Buying new premises and letting the existing as an investment.
6. Retaining the existing premises but acquiring an “annex” office.
7. Leasing a new office and selling the existing.
8. Leasing a new office and retaining the building as an investment.

As is clear from the above list, there are a number of potential options, even without a long list of alternative sites or buildings.

3. Strategy and feasibility

Each option should be tested to see whether it is practical for the business.

For example, how are you affected by the following:

1. Disruption (or ability to function at all) during alterations.
2. Delays in finding new premises.
3. Ease of acquiring planning permission.
4. The different scenarios of capital and revenue costs.
5. The comparative space or quality standards of each option.

4. Budget cost

If you are faced with a number of options you will not be comparing like with like. You will instead be making judgement about the relative value of very different solutions. It is easy under these circumstances to lose sight of the need to control costs. It is better, therefore, to provide some outline limits to the budget costs.

This might be done in a number of different ways:

1. Setting a capital cost limit (based on typical benchmark costs for the type of accommodation you need).
2. Setting a figure for the price per square metre that you are prepared to pay (for building costs or for rental).
3. Modelling the impact of each option on the overall finances of your business, taking account of the impact on revenue generation as well as the costs of capital or facilities management.

Appointing a small team of key advisers for the Project Inception stage

As we explained in the Marstan Guide Introduction to Project Management, the outline brief and other items in this stage are not to be produced by a Client alone. Otherwise there is a danger of getting the wrong result or wasting money.

In our case study the following advisers might be considered:

1. An Architect.
2. A Structural Engineer (for any options related to alteration to the existing building).
3. A Cost Adviser.
4. An Estate Agent (for any options requiring a new site or different leasehold premises).
5. A Project Manager to co-ordinate all activities.

You need not commit yourself to a long term appointment for these advisers because you will have a clearer idea of the long term requirements when you have narrowed your options.

The “deliverables” of the Project Inception stage

At the end of this stage you should have a summary of the following:

1. A clearer statement of your brief (based on a much deeper understanding of the effects of each option).
2.  A budget cost statement based on a search of the market and cost information from your advisers.
3.  A shortlist of options that you wish to explore in more detail.
4. An outline programme or timetable.