Research Korner: Event Management & Marketing Proposal

London Olympics

London Olympics   Introduction Background   London 2012 was the successful bid for the 2012 Summer Games, to be held in London with most events taking place in Stratford, Newham.  The British Olympic Association had been working on the bid since 1997.  In December 2000 the report was shown to Government ministers.  After the failure of three consecutive bids in 1992 (Birmingham), 1996, and 2000 (Manchester), London was the city that had a chance of being selected by the International Olympic Committee when put up against other world cities in a competitive bidding process.    Definition of the project             The main areas for project definition and development would include that following: ·        Development proposals in the Olympic Zone that needs to be refined.  This is in discussion with the local authorities, in order that they are aligned with their regeneration plans to the maximum advantage of both, and form the basis of further quantification of the wider benefits.  ·        The legacy uses for key Olympic venues like the stadium need to be secured. ·        A land acquisition has to be further developed ready for immediate implementation if a decision is made to bid. ·        The opportunities for maximizing tourism potential from both the bid and the Games need to be explored ·        The attribution of costs to the various agencies and public sector budgets should be determined among other things in order to establish more precisely what public expenditure is attributable to the Olympics and what would happen anyway, and the proportions of income and expenditure that will accrue to LOCOG and to the taxpayer respectively.   Defining Project and its Environment   Main players and project environment             The proposals for the London Olympics Institute have been developed jointly by a consortium of partner organizations including the Department for Culture, Media and Sport, Department for Education and Skills, Department of Health, NHS, London Higher, Sport England, the English Institute of Sport and UK Sport, working closely with local authorities and agencies in East and South East London and the British Olympic Association.  These organizations, and others including the National Endowment for Science, Technology and the Arts, British Council, Arts Council England and Loughborough University have all produced a statement of support, committing themselves to helping London 2012 to develop and promote the London Olympic Institute The point of this event is to bring focus onto Project Management as one of the principal keys to regenerating Britain in terms of its construction and IT infrastructure, its culture and its sense of pride.  It is also a specific response to the question “What can industry do for the London 2012 Olympic bid?”  The bid is a major regeneration opportunity for Britain currently.               The event is being led by the Royal Institution of Chartered Surveyors Project Management Faculty and the Engineering Project Management Forum (EPMF) and will attract an audience of professionals all wishing to network, learn, exhibit, entertain and support the bid.  Many members of the institutions that belong to EPMF are professionals who will be directly involved with work arising from a successful bid, notably from the Stanford Regeneration.  There is general agreement that a collective show of support will make a solid contribution to a successful bid.  The size and shape of the Royal Albert Hall allows presentations to be spectacularly illustrated.  The Presentation Themes are all essential for a successful project and for a successful bid.  In addition, a Best of British trade exhibition will run during the day providing a major marketing opportunity to participants   Project team matrix structure   Project conception             The aim of Vision London was to create an opportunity for young people in Creative Partnerships London East schools to engage with the concept of the Olympic Festival and what a successful bid would mean for London. Feasibility and risk management               The cost and revenues included in the analysis are the best estimates based on the information currently available to us.  In the absence of agreed project objectives and outputs and an apportionment of obligations and responsibilities between the various agencies, this evaluation is a hybrid between a cash flow business plan and a conventional cost benefit analysis. Attributable costs have been built up and the incomes for bidding, preparing and staging the Games, made provision for risk, and estimated the residual values of the assets created.  This produces a total direct cash flow for LOCOG and all the public sector agencies that ultimately must provide the investment and the guarantees.  From a commercial point of view, this would produce a cash deficit (or surplus) if, hypothetically, one agency was responsible for everything.  The additional benefits, both quantified and unquantified, must justify the funding gap and the risk   Risk management   Sensitivities to estimate overall risk is used in the absence of a detailed risk assessment.  The sensitivity analysis shows the financial deficit as sensitive both to substantial cost over-run and to a lesser extent to a substantial reduction in media income.  It would also be sensitive to a greatly reduced ticket income, but it would be very unlikely that a London Olympics would fail to sell the number of tickets assumed.  The risk assumption used in Figure S1 is that all bidding and staging costs will be 5% higher than estimated and that capital costs will be 30-50% higher than estimated in the last three years before the Games as the deadline for completion approaches.  These provisions total ₤109 million, making a total deficit of ₤494 million.  A provision for reduced media income is not included because it is just likely to be higher than estimated as lower.  The opportunity therefore cancels out the risk.    There are also risks attached to implementation of the physical and transport proposals, to the technology requirements of the Games, and to security (including the threat of a major terrorist attack a year or two before the Games which could impact not only on cost but on ticket revenues and tourism benefits).  These risks will need to be taken into account in the decision whether or not to bid, but should be set against the opportunities to avoid or mitigate risk through management, anticipation, and planning.   Figure S1 – Summary Financial Analysis (NPV discounted at 6%)   (Expressed in ₤m)                         Expenditure    Income          Surplus/deficit   Bidding for Games                                 13                                 7                                  -6 Operating account for staging                  779                               864                               +85 the Games Elite sport development                          167                               0                                  -167 programme Capital cost of infrastructure                    403                               0                                  -403 and facilities Land purchase and residential                 325                               431                               +106 Value Cash flow balance                               1,687                            1302                             -385 Provision for risk                                    109                               -                                   -109 Cash flow including risk                      1,796                            1302                             -494 (Source:)   Implementation operation and termination             It is critically important that implementation agencies exist with sufficient powers and resources to ensure that all the preparations are in place in time for 2012, and that the potentially very expensive risks are managed so that they are reduced to a minimum.  These agencies are crucial: (1) for a credible bid; (2) for staging the Games if the bid is successful; (c) for managing costs and risks; and (d) for securing the wider benefits.               Without implementation agencies there can be no Olympic Games, and without effective agencies, national and London prestige is at risk.  If the management of the event falls short of what is expected, the memory will be sour rather than positive.  If concentration of sufficient powers and resources in agencies with an Olympic mission is not politically acceptable, it would be better not to bid for the Games               The Olympic Delivery Authority (ODA) will ensure delivery of the physical infrastructure for the Games, including the construction of the new venues.  To help do this, it will be granted special powers to purchase land, compulsory of necessarily, and to grant detailed planning permissions in the Olympic Park.  The ODA will also ensure effective coordination of central and local government in the preparation and staging of the Games.               The ODA will be granted special powers to enable it to operate as an Olympic Transport Authority, which will control and coordinate all the transport requirements of the Games.  To ensure coordinated security planning and delivery, the UK Government will create a Cabinet-level Olympic Security Committee which will include the Metropolitan Police, the armed forces and the intelligence services as well as the LOCOG’s Director of Security.   Revisiting the levels of risk               London will provide a low-risk environment as Host City for the Olympic and Paralympic Games in 2012.  The assessment below is based on data provided by independent international bodies and relevant United Kingdom authorities as cited.                Plans for the Games, developed in close coordination with the London Fire Brigade (LFB), exemplify the importance attached to fire prevention and protection throughout the UK.  The nation’s fire services have extensive legal powers to regulate fire safety in publicly used premises.  These regulations cover evacuation times and methods, alarms and sprinkler systems.  The LFB is already working closely with London 2012 planners and architects to devise engineering solutions for the new and existing venues that will house the Games.                During the Games, the LFB will provide a full-time prevention and protection service to all Olympic venues, with special emphasis on the Olympic Park.  Dedicated resources will include two pumping appliances, a fire rescue unit and an incident response unit (with facilities for mass decontamination).  The on-site fire crews will be under the command of a divisional officer.  Olympic venues outside London will have similar levels of protection.    Secure Olympic facilities             New Scotland Yard is already working closely with London 2012 to incorporate physical and technical security measures throughout the Olympic facilities; starting with the design and planning phases.  These efforts will continue with the LOCOG to mitigate risk at every opportunity through high quality, robust security for every location and venue.              Surveillance and security operations will begin at the start of construction or adaptation for every venue and will continue throughout the Olympic and Paralympic Games.             Though civil disobedience in the UK is not unknown, it is rare.  Public demonstrations are considered to be expressions of civil liberties and are generally peaceful.  If trouble does occur, the police are well equipped – both legally and operationally – to contain any problems.              London’s Metropolitan Police Service (MPS), in particular, is well-experienced in the discreet and good-tempered handling of large crowds and demonstrations among a highly diverse population.   Reliable essential services             London’s position as a global communications and business center depends on a highly reliable infrastructure for delivering every utility.  The Games will benefit from this same degree of reliability.  The Nationality Security Advice Center (NSAC), part of the Security Service (M15), has developed the concept of a critical national infrastructure to introduce a common understanding of key sectors and functions that need to be preserved in the public interest.  Such safeguards come on top of years of significant investment.  The UK’s state-of-the-art transmission network for electricity and gas has benefited from investment of $50 billion in the past 18 years.  The telecoms network has attracted similarly high levels of investment.  The result is a highly resilient service capable of operating independently of mains electricity.  Five independent mobile network operators provide a huge capacity and are fully geared to giving the emergency services priority coverage if necessary.    Well-managed roads and railways             The UK has one of the world’s most robust transport security programmes with rigorously enforced regulations and stringent codes of practice.  The industry has a strong and well embedded culture of security established over many years.  Extensive road traffic control systems, supported by proactive traffic policing, will help ensure the safe and smooth operation of road transport during the Games.  Proactive traffic policing will focus particular attention on Olympic lanes and their safe use.  Transport for London (TfL) states that the traffic volume for the weeks of the year selected for the Games is normally 13% lower than at peak times.  Within central London, traffic congestion has been reduced by over 30% thanks to the positive impact of the congestion charge.               The Rail Safety & Standards Board reports that rail travel in the UK is safer than at any time in its history.  The railway system operates a safety case regime that will continue to ensure sound risk management.  Planned improvements to the rail network during the course of the next eight years, coupled with increased regulatory control, will result in further safety improvements.   Treatment of risk             London Resilience, a multi-agency partnership that ensures readiness to handle major incidents or catastrophes, states that London is located well away from major seismic faults and storm patterns.  Flooding from surge tides on the River Thames had previously been a concern; however, completion of the innovative  in 1984 resolved this problem.  Mitigating risk through regulation             Comprehensively drafted and conscientiously applied and enforced regulations are a feature of life in the UK.  These extend to rules governing the petrochemical and biotechnological industries and every aspect of transport including the carriage of potentially dangerous substances by air, road, rail, and sea.  Navigation along the River Thames, which flows near most of the Games venues, is controlled and policed by the Port of London Authority and the MPS.              In the unlikely event of a major incident, the police, fire and ambulance services are expertly equipped, trained, coordinated and rehearsed to deal with a emergency and contain it.  The UK has no nuclear power stations within 100 km of London.                          Summary Recommendations             While it has been found that the London Olympics 2012 will have its threat to financial matters following the successful bid, Olympic organizers then announced new plans for the 2012 Games that will further concentrate facilities and save 95 businesses threatened with being moved from their present site just north of Stratford, in East London ( 2006 January 31).              However, the lawyer for more than 200 firms, many of which still fear compulsory purchase orders (CPOs), claimed that plans for the Olympic Park had been drawn up so as to save compensation money “now that the overrun in the budgets can be perceived”.  The 95 businesses, affecting about 1, 200 jobs, will no longer need to be relocated because the temporary car and coach parking on Fish Island, on the edge of the Olympic Park, will be moved to a multistory car park in nearby Stratford.  In addition, new homes will not have to be found for 70 residents in the same area.              According to , chairman of the organizing committee, the changers will bring the facilities close together within the Olympic Park, resulting in an improved layout that will make the site even more secure for all users, including athletes and spectators as well as visitors, staff and community (2006 January 31).              The chief executive of the London Development Agency (LDA), Manny Lewis added that these improvements will help deliver an enhanced legacy for London and Londoners, which has always been the core of their vision.  This will significantly reduce the impact on local businesses, he said ( 2006 January 31).  The desired target is to get vacant possession of the main Olympic site by next year so that work can start on the main projects.  Moreover, one benefit of the new plans is that work on the Olympic Village will be able to start next year and take four years instead of the scheduled maximum of three, thus reducing pressure and costs.              After the Government’s failure to announce extra long-term funding, Olympic officials have been forced to approach a City bank to secure a ₤1 million loan so that more competitors can start preparing properly for the 2012 Games in London.  The details of the plans were discussed after the 200 days mark since London secured the 2012 Games.  The national governing bodies were optimistic that competitors would get the extra funding out from the new plans.              In the need for a properly funded program, Brian Stocks, the presidents of British Gymnastics, praised the British Olympic Association for its initiative in setting up the scheme with the bank and added that it was a brilliant idea ( 2006 January 26).  Conclusion             The plans to develop sites for the games affected residents in the area and up to 300 local businesses as well.  Following the success of London’s bid, the games were quoted as a chance to transform one of the poorest and most deprived parts of the capital city and unlocking sporting talent.  However, according to  (2006), behind these expected spin and effusive patriotism, what basis is there for the fulfillment of such grand promises?  The concern now is with the local residents, workers, and experts about the lasting social or economic benefits that this Olympic will bring to London.   added that if we’ll be accounting to the previous games experience, the event could turn out to be a major liability for Londoners, who will still be paying for years after the games have come and gone.

London Olympics

London Olympics Introduction Background London 2012 was the successful bid for the 2012 Summer Games, to be held in London wi...