Page 259 - DMGT521_PROJECT_MANAGEMENT

Project Management

Notes framework. Specifically, PCA aims to identify operating difficulties in order to impose
intervention, assess manager’s expertise to establish reward systems and lower managerial
autonomy to the local level (1992). PCA is the process of monitoring and evaluating a capital
investment project through a comparison of the actual cash flows and other benefits with those
that are forecasted or planned at the time of authorisation for start-up (2007).
PCA is also referred as post completion review. In this framework, PCA is a process of assessing
ex post efficiency and effectiveness of capital budgeting as well as its implementation. It compares
planned and actual actions, cost and resource allocation and results against benefits analysis. In
addition, it reviews the assumptions made earlier about markets, technology, human resources,
financing schemes and other external variables. As a result, PCA intends organizations to learn
and improve through adoption of processes that is rationalized by continuous analysis of their
implications (2007).
There are three specific purpose of PCA; namely, to support continuous improvement in the
capital investment and implementation process in forward-looking stance, allowing the
organization to determine and execute corrective actions as intervention strategies that suggest
opportunity to evaluate financial factors at the date of review but also future cash flows and
allow the review of current processes and create more efficient ones to improve future decision
alternatives leading to better conformance of results (2007).
PCA helps the firm to be a learning organization. It also polishes the rough edges that the
organization uses when it is forecasting or creating forecasting parameters. A learning
organization is one that is skilled in crating, acquiring and transferring knowledge in which it
uses these to change its behavior towards better results. This definition makes PCA an important
component of learning approach because it sets conditions for the organization to develop an
effective learning capability especially on projects (1998).

Circumstances for Post Completion Audit

PCA is carried under circumstances of a project’s life; namely, the regular monitoring of a
project during its planning stage, the regular monitoring of a project during its early phases of
operation, the examination of the performance of managerial employees who are responsible
and accountable with the operations and the extensive examination of the initial evaluation of
the project against its actual results (1992).

In the case forwarded by Baker Corporation, PCA should be implemented in cases where the
project has new and ambiguous technology in it. The organization was left unaware about the
effectiveness of the IT department’s program that is why the PCA is conducted to detect the
actual competencies of the new technology. In the implementation, PCA was called post-
implementation audit or PIA where it is defined as a top-to-bottom evaluation of hard and soft
benefits derived from a strategic information system, the security of the system and the project
management process for deploying the technology. At the end of PIA, it is found that the firm is
able to save at least $150,000 yearly and identified that the returns on the new technology is
pulled down by unexpected need for additional operators which served as additional cost pressure
(2007).
The experience of Baker showed that PCA is a tool that not only determine the strengths of an
uncertain technological strategy but also it transforms the organization of proactive thinking
because employees are able to create solutions to problems as they emerge. In effect, employees
are more confident with the new technology because they know its potential if only they
cooperate as well as actual benefits. In addition, PCA is also applied during continuous
improvement strategies because an organization will not know how much they improve if they
do not have a benchmark (2007). In a study, PCA is applied only if the project exceeded a
specified monetary amount of the budget. However, the author argued that this approach or

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