Millennium Dome Project

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MILLENNIUM DOME PROJECT

Gurpreet Singh (23), Neha Ansal (35), Soham Chowdhury (59)

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Agenda

Introduction: Why Project Management

Project Scheduling

The Organizational Context

Project Selection and Portfolio Management

Leadership and Project Manager

Scope Management

Project Team Building, Conflict and Negotiation

Risk Management

Cost Estimation and Budgeting

Project Scheduling I

Project Scheduling II

Critical Chain Project Scheduling

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Introduction



The

The Millennium Dome

Millennium Dome is the original name of a large dome-shaped building, originally used to

is the original name of a large dome-shaped building, originally used to

house the

house the Millennium Experience

Millennium Experience , a major exhibition celebrating the beginning of the

, a major exhibition celebrating the beginning of the third

third

millennium.



The project was largely reported by the press to have been a

The project was largely reported by the press to have been a flop

flop

:

: badly thought-out, badly

badly thought-out, badly

executed, and leaving the government with the embarrassing question of what t

executed, and leaving the government with the embarrassing question of what to do with it

o do with it

afterwards.



During the 12 months it was

During the 12 months it was open there were approximately 6.5 million visitors

open there were approximately 6.5 million visitors —

_{— significantly}

significantly

fewer than the approximately 10 million paying visitors that attended the

fewer than the approximately 10 million paying visitors that attended the Festival of

Festival of

Britain

Britain , which only ran from May to September

, which only ran from May to September ..



According to the UK

According to the UK National A

National Audit Office,

udit Office, the total cost of The Dome at t

the total cost of The Dome at the liquidation of the

he liquidation of the

New Millennium Experience Company in 2002 was

New Millennium Experience Company in 2002 was £789 million, of which £628

£789 million, of which £628 million was

million was

covered by National Lottery grants and £189

covered by National Lottery grants and £189 million through sales of tickets etc

million through sales of tickets etc . A surplus

. A surplus

of £25 million over costs meant that the full lottery grant was not required.

of £25 million over costs meant that the full lottery grant was not required. However, the £603

However, the £603

million of lottery money

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Millennium Dome - Location

Located on the Greenwich

Peninsula in South East London,

England, the exhibition was open to

the public from

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Chapters

1 Introduction: Why Project Management?

2 The Organizational Context 3 Project Selection and Portfolio

Management

4 Leadership and Project Manager 5 Scope Management

6 Project Team Building, Conflict and Negotiation

7 Risk Management

8 Cost Estimation and Budgeting 9 Project Scheduling I

10 Project Scheduling II

11 Critical Chain Project Scheduling 12 Project Closeout and

The Parameters of success in a project:

TIME: 1997-2000 COST: £750 million CLIENT ACCEPTANCE: 12 million visitors PERFORMANCE: World-class dome

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Introduction: Why Project Management

Chapters

Management

7 Risk Management

The elements of the project were the following:

• Unique: It was at the dome that the national exhibition was to be held as

part of the millennium celebrations.

• Time scale: The time line was fixed- started in 1997 and ended in 2000.

• Budget: The project was to be funded by National Lottery, visitors and

commercial sponsors and had an estimated budget of £750 million.

• Limited resources: Fixed amount of human resources and equipments,

raw material etc. were allotted.

• Cross-functional dimension: Involved human resources from all

domains like designing, construction, hospitality, electricity and water

boards etc.

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Project Life Cycle

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7 Risk Management

CONCEPTUALIZATION

February 1996 The Millennium Commission decides in principle to proceed

with a Millennium Exhibition.

March 1996 The site at Greenwich is selected from four short-listed options.

January 1997 The Commission announce their 'in principle' support for the

Dome. The Government decided that the project should be delivered in the

public sector.

February 1997 Millennium Central Ltd (later renamed the New Millennium

Experience Company Ltd) became operational.

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Project Life Cycle

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DEVELOPMENT

May 1997 The New Millennium Experience Company finalizes its business

plan which sets an overall cash cost of £758 million.

June 1997 The new Government confirms its commitment to the Dome.

Construction of the Dome and associated infrastructure begins.

July 1997 The Millennium Commission awards a lottery grant of £449 .

EXECUTION

April 1998 The Company issues its first Corporate Plan.

November 1998 Budget review by the Company and the Commission.

March 1999 Competition to select a user for the Dome after the Millennium

Exhibition begins.

September 1999 Tickets go on sale to the public on 22 September.

January 2000 The Dome opens to the public on 1 January. The Company

revises its forecast number of visitors from 12 million to 10 million on 28

January. The Company reverses its decision not to sell tickets at the gate.

February 2000 The Commission awards an additional grant of £60 million to

the Company on 4 February. The Company's Chief Executive Ms Jennifer

Page CBE is replaced by M. P Y Gerbeau.

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Project Life Cycle

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TERMINATION

May 2000 The Company revises its forecast number of paying visitors to

6 million in its application for an additional grant of £38.6 million submitted

on 19 May.

The Chairman of the Company (Mr Robert Ayling) resigns & is replaced.

July 2000 The number of paying visitors reaches the three million mark.

August 2000 The Commission awards an additional grant of £43 million

to the Company on 4 August. The Company revises its forecast number of

paying visitors to 4.5 million.

September 2000 The Commission awards an additional grant of £47

million to the Company on 5 September. Mr David James CBE is

appointed Executive Chairman and Accounting Officer of the Company on

5 September. Mr Quarmby steps down and becomes Vice Chairman.

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The Organizational Context

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MISSION STATEMENT

•

To create, build, and operate a national Millennium Experience which attracts,

inspires, entertains, educates and involves visitors and participants.

•

To seek, through the Experience, to influence positively each individual's view

of themselves and the world's view of this nation.

This mission statement was well in line with the objectives set forth by the

company to build in a world class exhibition dome for the millennium

celebrations.

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Executive Chairman Board of Directors Executive Directors Chief Executive Finance & Corporate Services Non Executive Directors

Site & Structure Transport Commercial_Director

Sponsorships Licence Trade Travel Operations Director Ticketing Daily Operations Challenger Director Implementation Director Production Director Greenwich content & events

Marketing & Communications

Director

Accounting Officer

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Key Stakeholders

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INTERNAL STAKEHOLDERS Chief Executive Officer Board of Directors The Millennium Commission Project Managers Functional Managers Accounting Officers EXTERNAL STAKEHOLDERS NMEC The Millennium Commission National Lottery Fund Distribution Department Governm ent, UK Department of Culture, Media and Sports Visitors Environment Groups National Audit Committee

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The basis for selection of this project for building the Dome

was:



Past History:

The commission wanted the Millennium Exhibition of a scale and

stature comparable to that of:

• The Great Exhibition of 1851

• The Festival of Britain of 1951

Since, they already had such exhibition domes built earlier like

the above; they could now focus on this Dome easily as they

had past data with them which brought them higher in the

learning curve.



Financial aspect

–

Balanced Budget:

The millennium commission was approved as it would achieve a

balanced budget - costs and income of £758 million and it would

result in a 12 million paying visitors.

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Leadership and Project Manager

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7 Risk Management

Ms.Jennifer Page was Chief Executive

of the London Millennium Dome project

from 1 March 1995 until she was fired

after a flawed opening night and poor

early attendance at the start of 2000.

Page was sacked as Chief Executive on

5 February 2000. She had come under

pressure after an opening night fiasco on 31 December 1999, followed

by poor attendance in January 2000 and a revolt by sponsors.

Page added to her criticism of ministers by insisting that the unexpected

decision by the Prime Minister Tony Blair to invite one million

schoolchildren to the Dome for free had had a significant impact on

its income .

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Scope Management

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The scope of the project was to build a Millennium Dome so as to conduct the

millennium exhibition. The following is the : Work Breakdown Structure (WBS):

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Responsibility Matrix

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Project Team Building

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The major players included:

The New Millennium Experience Company

The Millennium Commission

The Department of Culture, Sports and Media

The designing and construction was outsourced to different project based

teams.

A few examples:

Civil Engineer - WS Atkins

Services Engineering - Buro Happold Consulting Engineers

Acoustic Consultant - Sandy Brown Associates

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Conflict and Negotiation

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Peter Mandelson

–

Minister for Trade and Industry

was made the Dome Secretary.

Conflict of Interest:

The dome was being sponsored by a number of

companies - such as Rupert Murdoch's BSkyB

which were affected by rulings from the

Department of Trade and Industry

“My role in relation to the dome is as shareholder, not as head of the

sponsorship team."I have never been and never intend to be

involved in procuring or negotiating sponsorship deals, so no

conflict arises.” –

Peter Mandelson addressing the House of

Commons.

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Risk Management

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Risk Consequence Score

Likelihood Score Impact Potential Score 1 Schedule Risk High 0.8 Medium 0.7 Serious 0.56 2 Cost Estimate Risk High 0.9 Medium 0.8 Serious 0.72 3 Market Risk, volume High 0.7 High 0.8 Serious 0.56 4 Market Risk, price High 0.7 High 0.7 Serious 0.49 5 Political Risk Medium 0.5 Medium 0.4 Moderate 0.2 6 Technical Risk Medium 0.4 Low 0.2 Minor 0.08 7 Financing Risk High 0.9 Medium 0.4 Serious 0.36 8 Promotion Risk Medium 0.4 Medium 0.4 Moderate 0.16 9 Technical Risk Medium 0.5 Low 0.2 Moderate 0.1 10 Operating Risk Low 0.3 Low 0.3 Minor 0.09 11 Integrating Risk Low 0.1 Low 0.1 Minor 0.01 12 Environmental Risk Low 0.1 Low 0.2 Minor 0.02

Overall Probability:

P

_f

= (0.8 + 0.9 + 0.7 + 0.7 + 0.5 + 0.4 + 0.9 +0.4 +0.5 + 0.3

+ 0.1 + 0.1 + 0.8)/13 = 0.55

Overall Consequences:

C

_f

= (0.7 + + 0.8 + 0.8 + 0.7 + 0.4 + 0.2 + 0.4 +0.4 +0.2 +

0.3 + 0.1 + 0.2 + 0.1)/13 = 0.26

Overall Risk Factor = P

_f

+ C

_f

–

_(P

f

) * (C

f

)

= 0.55 + 0.26

–

_0.55*0.26

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Risk Impact Matrix

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1 Construction (Schedule Risk) The Dome might not be completed on time.

The Dome opened on schedule on 1 January 2000. The fit out of the Dome, originally to be completed by October 1999, continued up to opening day. This meant that there was limited opportunity for trial running.

2 Cost Estimate Risk

Costs might exceed the May 1997 budget.

Costs moved over the period May 1997 to September 2000. As at September 2000, the budget had increased by five per cent. 3 Visitor numbers (Market Risk, volume)

Visitor projections might be too high.

The projected number of paying visitors reduced from 12 million to 4.5 million.

4 Marketing (Promotion Risk/ Market Risk, price) Marketing might not

successfully sell the Dome to the public, particularly if there was considerable negative publicity.

The public perception of the Dome was of a 'risky purchase'. But the majority of people visiting the Dome enjoy it.

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THE RISKS WHAT HAPPENED IN PRACTICE 6 Sponsorship

Delays in finalizing contracts, and the unattractiveness of certain zones to sponsors, might result in a failure to secure anticipated levels of

sponsorship.

The total amount of sponsorship received (cash, 'value in kind' and 'budget enhancement') was below the original budget of £175 million

7 Sale Proceeds

Buyers might not be found for the Dome, and an adequate selling price might not be achieved.

A preferred bidder for the Dome was announced in July 2000 with an offer of £105 million, but withdrew in

September. The process of finding another buyer was then restarted.

8 Political Risk

Political unrest, strike, riots, terrorism etc.

The Secretary for trade and industry, Peter Mandelson had been given the responsibility for the Millennium Dome and was charged by the opposition for conflict of interest between his two jobs. The dome was being sponsored by a number of companies - such as Rupert Murdoch's BSkyB - which were affected by rulings from the Department of Trade and Industry.

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Cost Estimation and Budgeting

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Cost Sheet

Sponsorship income, compared with the Company’s forecast

Ticket sales income, compared with the Company's forecast

Actual total and paying visitors compared with the Company's

successive targets

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Project Scheduling

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Gantt Chart

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Network Diagram

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The concept of CCPM could be applied to the Millennium Dome project and

work could be completed before schedule without any delay because of the

safety and feeder buffers.

WITHOUT CCPM

The total days required to complete the project was 1128 days before applying

CCPM.

WITH CCPM

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Project Closeout and Termination

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CHAPTER LIST

Body of the write up

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