Managing Technology-Based Projects

Tools, Techniques, People and Business Processes

Hans J. Thamhain

• Publisher: Wiley
• Year: 2014
• ISBN:
  9781118415160
• Edition: 1
• Topic: Business
• Subtopic: Project Management
• Index: Business

A GUIDE TO EFFECTIVE PROJECT MANAGEMENT IN TECHNOLOGY-BASED FIRMS

Used effectively, project management can increase a firm's market share, product quality, and customer satisfaction. Though technology-based companies place themselves at a competitive disadvantage if they neglect this strategic tool, many overlook project management's benefits because they see themselves as continuously adapting organizations. In reality, this role makes project management even more vital.

Managing Technology-Based Projects imparts the latest approaches and tools essential to lead a successful technology-based project. It outlines the practical integration of project management with four key areas: strategic alignment of projects within the enterprise, the project management process and its organizational support system, invaluable tools and techniques, and the individual and group leadership within a project's organization. Complete with examples of industrial applications, the book includes:

• Methods for defining key performance indicators and assessing project management process effectiveness
• Suggestions for fine-tuning and continuous improvement
• Practical case scenarios, discussion topics, end-of-chapter reviews, and exercises
• Attention to project management as it applies to a globalized business

No one in a managerial role should be without Thamhain's expert advice. This guidebook is your road map to successfully incorporating enterprise project management into technology-based work.

Chapter 1
Challenges of Managing Projects in a Technology World

APPLE IPHONE 5

Photo courtesy of Apple Inc.

When Apple introduced its newest smartphone iPhone 5 at the Yerba Buena Center in San Francisco in late 2012, it was positioned for success. “iPhone 5 is the most beautiful consumer device that we’ve ever created,” said Philip Schiller, Apple’s senior vice president of Worldwide Marketing. “We’ve packed an amazing amount of innovation and advanced technology into a thin and light, jewel-like device with a stunning 4-inch retina display, blazing-fast A6 chip, ultrafast wireless, even longer battery life; and we think customers are going to love it.”

The announcement marked the end of an 18-month product development cycle that included intricate collaboration with several software developers, dozens of component manufacturers, partners and the iPhone fabrication at Hon Hai Precision Industry (also known as Foxconn in Zhengzhou, China). Indeed, the new product is state of the art. It is the thinnest and lightest iPhone ever, completely redesigned to feature the new display screen, the world’s most advanced mobile operating system, and over 200 new features such as new maps, turn-by-turn navigation, Facebook, Passbook, and more Siri® features.

However, recovering the investment for product development and rollout of the new 16 GB iPhone is not without challenges. For one thing, the cost to produce the phone is high. At over $200 per unit, Apple had to count on wireless companies to subsidize the purchasing price. Nevertheless, business analysts were optimistic that the iPhone 5 would be profitable in the long run—and as it turned out, their optimism was not misplaced. Following up on the impressive success of the iPhone 5, in September 2013, Apple introduced the iPhone 5S and the iPhone 5C.

1.1 PROJECT MANAGEMENT IN A CHANGING WORLD: CHALLENGES AND OPPORTUNITIES

The complexities and challenges faced by Apple in developing the iPhone 5 might look modest by comparison to super projects, such as major aerospace missions, the relocation of Tata’s steel plant to the Gulf of Bengal, or the organization of the next Summer Olympics. Yet, the iPhone 5 has all of the characteristics that we find in millions of technology-intensive projects. Project management has become an important variable for success in today’s complex business environment, where projects span organizational lines, involving a broad spectrum of personnel, support groups, subcontractors, vendors, partners, government agencies, and customer organizations. Hence, successful execution relies on effective linkages, cooperation, and alliances among various organizational functions, critical for proper communication, and decision making. Top-down control no longer works in most of these environments, but authority must be earned and team commitment must be built as critical conditions to successful project management.

Despite its challenges, this changing environment—especially advances in computers, IT, and communication technology—creates enormous opportunities for enterprises across all industries. It is possible to execute larger, more complex projects, with leaner budgets and more predictable schedules, and to connect with a wide spectrum of resources across the world. However, technology creates its own challenges, requiring additional investment in equipment, software, infrastructure, services, and skill sets. Advances in technology have also accelerated the changes in our business environment, leading to tougher competition, lower barriers of market entry, and shorter product life cycles, requiring more agile and flexible approaches to project management. These changes have shifted the project paradigm with strong impact on business performance. This got the attention of management across all industries, many of them recognizing project management as a critical toolset for providing common language and methodology for executing multidisciplinary ventures.

1.2 GLOBAL DIMENSIONS

The changes in the global business environment have pushed these challenges to an even higher level. To succeed in our ultracompetitive, interconnected world of business, companies are continuously searching for ways to improve effectiveness. They look for partners that can perform the needed work better, cheaper and faster. Speed especially has become one of the great equalizers of competitive performance. In the case of the iPhone, a new product may be obsolete in less than a year, unless provisions for continuous upgrading and enhancement have been built into the system and are implemented in response to evolving market needs. This results in complex project organization and execution processes, involving joint ventures, alliances, multinational sourcing and elaborate vendor relations across the globe, ranging from R&D to manufacturing, and from customer relations to field services.

Project complexity has been increasing in virtually every segment of industry and government, including computer, pharmaceutical, automotive, health care, transportation, and financial businesses, just to name a few of the most noticeable ones. New technologies, especially in computers and communications, have radically changed the workplace and transformed our global economy, focusing on effectiveness, value and speed. These technologies offer more sophisticated capabilities for cross-functional integration, resource mobility, effectiveness and market responsiveness, but they also require more sophisticated skill sets both technically and socially, dealing effectively with a broad spectrum of contemporary challenges, including managing conflict, change, risks and uncertainty.

As a result of this paradigm shift we have seen a change in the dynamics of teamwork and a change in managerial focus from efficiency to effectiveness, and from a focus on traditional performance measures, such as the quadruple constraint, to include a broader spectrum of critical success factors that support innovation, work integration, organizational collaboration, human factors, business process agility, and strategic objectives. Traditional linear work processes and top-down controls are no longer sufficient, but are gradually being replaced with alternate organizational designs, new management techniques and business processes, such as agile processes, concurrent engineering, User-Centered Design, and Stage-Gate protocols (Thamhain 2011). These techniques offer more sophisticated capabilities for cross-functional integration, resources mobility, effectiveness, and market responsiveness, but they also require more sophisticated management skills and leadership.

1.3 PROJECT DESERVE SPECIAL ATTENTION WITHIN THE ENTERPRISE

Projects are different from ongoing operations. They are one-time undertakings, such as the Apple’s iPhone development, with a specific mission, purpose, and objective, usually driven by the needs and wants of a sponsor or customer, who could be an individual or an organization, internal or external to the enterprise, or both. In essence, this description identifies the components and uniqueness of projects:

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Producing specific deliverables within given time, resource and quality constraints that satisfy the project sponsor/customer.

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It also identifies the boundary conditions of time, resources, quality, and customer satisfaction, referred to as quadruple constraint, to be discussed in the next chapter in more detail.

By their very nature projects are multidisciplinary, requiring resources and support from many organizational units. This is disruptive to the ongoing operations of the enterprise. It interferes with the mission and objectives of functional departments, and is inconsistent with established central management processes for command, control, and communications.

Thus, to minimize interference with ongoing operations, projects need to be organized and managed separately from the ongoing operations, yet well integrated with the enterprise. With the emergence of contemporary project management, virtually every enterprise with project-related activities established its own project management system with various degrees of formality and sophistication. The aim is to have a common infrastructure with methodologies, supportive processes, tools, and measurement systems that ensures consistent project delivery across the enterprise. Communication is at the heart of any of these management systems for effectively connecting among all team members, including partners, support organizations and other internal and external stakeholder communities.

As it has evolved over the past 60 years, modern project management provides the type of disciplined yet flexible framework for effectively planning, organizing, and executing projects. It has its own body of knowledge, prov...