Background of the Project

The Olympic Games or the Games of the Olympiad is an international multi-sport event that is held among 206 countries and at intervals of four years. The event is hosted in different cities in various countries. The host country is responsible for the complete organization of the mega-project (Vincent et al., 2018). In 2012, the UK got the opportunity to host the summer Olympic game for the third time after hosting it in 1908 and 1948.  In the country, Olympic Delivery Authority (ODA) was founded in 2006 to plan and manage the venue, infrastructure, and transportation facilities required for the 2012 Summer Olympic and Paralympic Games in London.  The ODA worked along with the London Organizing Committee of the Olympic and Paralympic Games (LOCOG) to develop 500 acres of Olympic park that consisted of some temporary and permanent venues.

From the outcome of the project, it was considered a success in terms of delivering all the requirements for the games and events associated with the summer Olympics. The project was completed on time. Quality venues with large seating capacity were delivered for the project. A 2.5sq km Olympic Park was created that included all the venues and non-competition facilities. During the development of the infrastructure, nine new venues were constructed. As part of the project, more than 46 thousand people were employed among which 12000 were involved in the construction of the main venue (Chappelet, 2019). The safety and security along the development of the project were maintained. No life losses or casualties were reported in the constriction phase of the project (“Venue Guide”, 2022). Although the event was a success there were some complexities in the project.

The Megaproject had its issues during the strategy development as well as plan implementation. There were challenges faced due to the financial planning and building of sustainable infrastructure for the events. Along with that, risk management and time management are complicated for a big project like this one.  There is also a discrepancy in project planning and its practical implementation.

For a project to be successful proper cost management is essential. The cost and productivity estimation target should be the same upon completion of the project. It can be achieved through resource planning, budgeting and cost controlling. An international event like the Olympics requires vast investment by host cities. Inefficient project cost management often results in cost overrun. In the 2012 London Olympic Project in the UK, the total cost was around $15 billion (Reis et al., 2017). The project initially had a budget of  US $2.92 billion which was increased to US$11.46 billion in 2007.

Project Outcomes

However, after completion, there was a cost overrun of 76 percent (McCarthy, 2022).  It is evident from the figure that there was a disparity in cost and expenditure-related planning and its implementation. According to the assessment of Azzali (2017), the Olympic stadium’s design and evolution were responsible for the increasing cost. The initial plan was to establish an athletic-only stadium with a capacity of 25,000. However, upon a further understanding of the requirements for the events, it was converted into an 85,000 seats multi-sport stadium (Sheng & Lin, 2018). The assessment indicates the problems in decision-making for the cost management of the London Olympic Project. Often the plans and decisions are made by political powers and it doesn’t align with a suitable urban design and the vision of long-term sustainable legacies. With the progress of the development of the project, the gap between planning and implementation is observed. One of the major issues identified when organizing an event like the Olympics is the construction of infrastructure that may not be useful for any future use and may require investment for maintenance in the future (Brown et al., 2017). The design strategies and budget management can help in avoiding the white elephant issue.  The 2012 London Olympic mega project was developed with a focus on adaptability, flexibility, and recyclability to address the white elephant issue However, continuous changes in the design of the venue became one of the reasons for cost overrun in this project. Despite early planning, the venue became an inefficient structure that could cost more money than the set budget (Whyte, 2019). Due to this, the venue underwent transformation changes starting before the game. However, these changes and transformations contributed to the massive cost overrun of the mentioned mega project.  These four permanent venues were finalized: the Aquatics Center, Copper Box Arena, Velodrome, and Eton Manor. During the years of the Olympics, there were investments in the transformation of the venue to make them reusable.

Project planning is considered the second face of a project life cycle that includes developing a plan for the project and formulation of the project based on the planning. The planning for the mega project for the London Olympics 2012 in the UK covered various key areas such as sporting venues, development of highways, river works as well as beaches, and other utilities (Clegg, Skyttermoen & Vaagaasar, 2020). This planning for the project also includes budget estimation for the construction of the main Olympic stadium. The planning involves transforming the venue, as well as removing and reselling the main Olympic stadium as well as narrowing the bridges after the games (Meredith, Shafer & Mantel, 2017). English projects, different authoritative bodies, subgroups, and groups were created to oversee the project. During the project design, land acquisition programs, transport programs, and many other programs have been created for managing as well as monitoring the different aspects of the London Olympic project. Hence to develop a project plan for this type of megaproject, it is highly essential to have a proper understanding of the internal and external environment of the project.

Project Issues

For making the project management related to the 2012 London Olympic project successful it focused on acquiring services and goods that are usually robust and involve numerous procedures in identifying all the requirements. In the United Kingdom, the London Olympics 2012 has been organized as one particular event that involves a huge amount of money spent on the procurement of services and goods from different service providers or suppliers. the London Olympics 2012 regarding the planning and documents on behalf of the private sector, public sector, and the planning involve the delivery of different facilities such as top-notch services and new stadiums (Kerzner, 2019). the areas of the London Olympic 2012 ensure that all the suppliers and contractors maintain sustainability. however, the most challenges faced by the Olympic delivery authority regarding procuring the services and goods in ensuring the quality of the services and infrastructure.

During the planning process for the London 2012 Olympic games, the Olympic delivery authority went for many conventional practices in using a different route for outsourcing goods and services that are required for the Olympic game. In this case, ODA used negotiation as a process of procurement where numerous companies wished to offer services and goods (Lee et al., 2018). However, these companies are being selected and invited to the negotiation table. For the 2012 Olympic games in Europe, the negotiation formula or approach excluded companies depending on their ability in handling mega projects. This negotiation allows project managers as well as all procuring officers in getting the best rates from their contractors. It has been observed that the procurement of goods and services for the 2012 Olympic games in London significantly boosted the economy of the country by offering numerous employment opportunities, establishing a first structure, and increasing GDP that helped not only London but also the other countries under Great Britain (MacRury & Poynter, 2017). According to Denicol, Davies, and Krystallis 2020 mostly all mega projects are required to have a complex supply chain that includes hundreds of contracts with contractors, subcontractors, and consultants. the study also identifies the system integration capabilities that are required to coordinate the software as well as farming collaboration between the organizations.

Project risk management is crucial and this helps to reduce the probability of the failure of any process or event. The risk management of a project involves various activities as this 2012 London Olympic games is a mega project and the cost of this project is much higher compared to any other project like the construction of buildings or Dams (Ludvigsen & Parnell, 2021). Hence, megaprojects like the Olympic games have a wide range of associated risks that need comprehensive risk analysis to mitigate these risks. These risks associated with the 2012 Olympic project are financial, risks with food safety, public health, the environment as well as the reputation of the host country (Duignan, Pappalepore & Everett, 2019). Walters et al. 2017 suggest that the number in terrorist activities increase has influenced the risk of safety at various levels in the Olympic games. Therefore, the risk assessment of the 2012 London Olympic project followed different phases such as Risk Identification, quantifying risk, and Risk mitigation (Walters et al., 2017).

Project Cost Management

The 2012 London Olympics, involved various risks related to the construction, infrastructure buildup, and organizing people effectively. The risks and their likelihood are being represented in this section as follows:

1. Timely delivery of the project- The opening date of the 2012 London Olympic games was from 27th July 2012 till 12th august. For this reason, the project has a fixed deadline and the likelihood of delivering a delayed project is very low as this project needs to be finished within the timeline.
2. Governance- 2012 Olympic games had a complex delivery structure related to the stakeholders and finding sponsors. However, with the efficient traffic management plan, policing and security at the venue, the likelihood of the project risk is moderate.
3. Terrorism- The UK often faces threats from terrorism activities through cyber-attack or other nonconventional methods like biological, chemical-related risks. The 2012 London Olympics is a high-profile event, the likelihood of such terrorist activities during the event is High.
4. Domestic extremism- These types of risks include crime at the venue or involve damaging assets or athletes at the Olympic Park (Gibb et al., 2018). Along with that, the chances of Cybercrime in this event are high as the games rely on various broadcast and internet technology. Hence, this type of risk may involve Olympic Websites, sites related to sponsors as well as electronic infrastructure that support the game. Hence the likelihood of these risks is high (Smith et al., 2017).

Conclusion and recommendation

Conclusion

The mentioned study proves a brief idea about managing a multinational mega project. Apart from that, the measures taken for establishing the core committee, budget segmentation, sectional division of workforce, and project management is highlighted in the mentioned study. The planning of the mega-project started in 2006, therefore, four years of planning and execution were involved in the mega project. ODA has allocated approximately 500 acres of land for the 2012 summer Olympics and Paralympics. At the beginning phase the gross estimation of the project was 2.92 billion USD however, in 2007 the budget increased to near about 11.7 billion. The planning committee of ODA segmented the entire project into a few simple stages for the betterment of the project. One of the most significant aspects of the Megaproject was increasing the seating capacity from 25000 to almost 85000 while considering the athletic stadiums. The ODA has achieved superlative appreciation by completing the mentioned job within 4 years.  The ODA had also developed 2.5sq KM of land for venues and other facilitations. While concerning the mentioned mega project the most significant issues had arrived in the project planning and execution phases.

In order to accomplish the project, ODA has started with a cost management committee. The ODA has segmented the overall events categorically and settled an approximate budget for each event. The most influential benefit was noted in the GDP of the UK. The ODA had also negotiated with multiple brands for sponsorships. Therefore, the findings related issues were mitigated by the joint investment and sponsorship strategies. Apart from that, the metro project provides a brief elaboration of project risks. Timely delivery of the project, governance, budget estimation, funding, and event organization is considered the most prominent risks to this mega project. The organizing committee had assessed the risk by comparing the impact as well as the likelihood of the risk. Therefore, the study concludes with an idea regarding risk assessment as well.

• Capital Expenditure (CAPEX) and Operational expenditure (OPEX) management is highly recommended while considered an international mega project.
• Workforce management is also considered the most important aspect of project management.
• A detailed appraisal of the macro, micro, and meso-environment is also essential for better of a megaproject.
• Assessment of organizational and structural complexity is also necessary.
• Managing the institutional level complexities can also be considered as the betterment recommendations.
• Determining the financial and contractual complexities alongside legal complexities is also required as the mentioned project is a multinational project.
• Contemplating the role of shareholders is also essential for such projects. This recommendation is capable of solving the effective execution complexities of an underlying project. 

References

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