Project Management Institute

Multinationals and multi-nations

project management in the Asia Pacific region

James R. (Jim) Weisser, PMP

Introduction

This paper will focus on a number of different knowledge gaps that project managers have about Asia, focusing on the fact that Asia is a geography, not a culture, as well as recognizing the breadth of variation in project management process development in different parts of the region.

Through a set of real-life examples from Japan and S.E Asia, the authors present a compelling case to incorporate Asia specific operational needs into the global project management environment, managing stakeholder commitment, project procurement management, risk and communications in a way that matches both human resources and country specific expectations.

Using case study methodology to both illustrate success and failure, the following are a sample of what will be addressed in the paper:

  • Supply chain solution rollout in SE Asia by a leading consumer goods organization that single-mindedly focused on common and consistent global business processes
  • A global ISP deploying DSL in Japan based upon an existing global model and the successes in localization of both this model and external project management generally.
  • User adoption and technology infrastructure gaps that nearly derailed a sales force automation project by a Fortune 500 automotive company in SE Asia

The goals of this paper is to both share experiences and stimulate discussions of relevance to multinationals working in Asia-Pacific, as well as to share lessons learned with fellow PMPs. The authors will focus on Information Technology and Telecommunication projects in their study

Wither Project Management?

According to Standish Group's 2004 CHAOS report [copyright The Standish Group International, Inc.], only 29% of all technology based projects succeeded (delivered on time, on budget, with required features and functions); 53% were challenged (late, over budget and/or with less than the required features and functions); and 18% have failed (cancelled prior to completion or delivered and never used). The cumulative research presents a decade of data on why projects succeed or fail – representing over 50,000 completed IT projects (9,236 in 2004), plus 450 workshops, focus groups and project group therapy sessions. The CHAOS study provides a global view of project statistics but has a heavier concentration on the United States and Europe. Fifty-eight percent (58%) of respondents are US-based, 27% are European, and the remaining 15% represent the rest of the World. Forty-five percent (45%) of these companies are considered Fortune 1000 type companies; another 35% would be considered mid-range and 20% are small range. They span a diverse number of vertical industries.

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To our best of knowledge no such study has been conducted with an Asia Pacific focus, but from our collective experience we believe the success rates in Asia are much lower than the US and Europe numbers. We believe several key factors contribute to this:

•     Many project sponsors are based on title, rather than on interest or experience.

•     Within Asia, English as a primary language is a recipe for disaster in Japan, parts of China and Korea but is normal business practice in Singapore, Hong Kong and the Philippines.

•     Project management in some countries is more focused on “face-saving” and blame mitigation than project delivery.

•     Multinational companies (MNCs) tend to believe that global deals are the best deals.

•     Intra-regional differences in technology infrastructure, planning and risk management significantly deviating from reality

•     Head office perception, a one-size-fits-all approach and lack of appreciation for cultural differences while managing change

The authors endeavour to bring forth an understanding and appreciation for the diversity in project management practices in the Asia Pacific region to better manage stakeholder expectations as well as present a compelling case to develop and implement PMI best practices.

Case Study #1: Supply Chain Improvement Project, US Multinational in S.E Asia

The organization, a global leader in apparel and footwear industry, recognized the need in 2000 to embark on a globally coordinated and regionally executed strategy to implement the best supply-chain management practices and technologically advanced integrated systems into their business platform. The goal was to have an integrated supply-chain platform throughout the business to allow for greater visibility, similar business rules, and improved financial/business agility. To execute the strategy, the organization formed a special business unit led by a senior executive and staffed it with the best multi-national team.

The project involved every department throughout the Sales & Marketing organization, including: Sales, Finance, Delivery, Order Management, Product, IT, HR, and Marketing, as well as third party logistics carriers. In July 2004, the South East Asia team completed the most successful implementation to date, executing a simultaneous implementation in Singapore, Thailand, Malaysia, and the Philippines. In total, 160 employees were mobilized to execute the implementation plus an additional 40 external partners. Organizations were reviewed, and employees organized and trained, as necessary to support the new business practices. To adequately prepare for the new processes, nearly every employee received intensive training lasting, at times, up to 160 hours. Post project planning for project employees began early to ensure the organization leveraged their new knowledge and skills while trying to best fit their expertise to challenging opportunities.

Ultimately, the program was a success because of strong project sponsor support and the ability to create a sense of “ownership” in the project through every department in the organization. Localization was necessary to accommodate language specific needs and certain unique business processes in S.E Asia, but the integrity of the core template was maintained to preserve the common global business process flow.

The new business processes/systems have enabled risk reduction, which have translated into increased revenues and increased management agility. The project enhanced margins via lower inventories resulting in lower warehousing costs, decreased off-price sales, and lower obsolescence reserves. The business was further enhanced by an integrated web-based customer ordering tool which improved service & speed to customer.

BEFORE - 4 countries: different business rules, processes, systems

AFTER- one instance, best practices, transparency, integration, communication, discipline

Case Study 2: Japan-wide DSL Rollout: US Joint Venture with Japanese Carrier

Background: Japan in 2002 was in the midst of a DSL explosion. After years of protesting that DSL would interfere with the existing, legacy ISDN system, NTT was forced to un-bundle copper at rates that allowed for a competitive marketplace. Unlike most other parts of the world, Japan DSL usage has three prominent characteristics:

•     High population density, allowing for high bandwidth offerings to a large% of the population.

•     Post bandwidth scarcity pricing model—per Mbps rates varied little with additional bandwidth.

•     First flat rate, affordable service (ISDN had per minute charges)

It was within this environment that our client needed to go to market. Due to scepticism in the head office and slow reactions by their joint venture partner, they were in a position of following, rather than leading, and now needed to roll out DSL across all of Japan within two months.

Scope: Deploy DSL across Japan, with the top priority areas coming online within two months, and the rest of Japan being addressable within the next n months.

Internal Business Challenges:

•     This organization had no PMO, and little history of successful projects in Japan.

•     DSL deployments had occurred internationally, but all were considered to be at best marginally successful, taking a minimum of three months and much network re-engineering to complete.

•     Management had changed several times since the joint venture began, ranging from partner company employees to US expatriates, all of whom were replaced within one to two years.

•     Typical of many Japanese joint ventures, many of the employees were actually “seconded” by the venture partner, creating a situation where loyalties were mixed. Additionally, one of the personnel responsible for negotiating the local loop portion of the wholesale deal used to work for one of the local loop provider that was going to be used.

•     Software installation tools had to be localized off of the US version for other locations, creating version matching issues.

•     Final approval for third party contracting had to come from the head office.

•     Several of the team members had weak enough English skills that it was important to communicate in Japanese when doing one on one conversation.

•     Marketing and sales materials, along with setup CDs, had to be created several weeks prior to launch.

External Project Challenges:

The local loop providers required three to four months lead time to provision back-end systems for deployment. Japan local loop access is available from NTT East and West, two different (if related) companies.

The internal management sponsor for this project was the (somewhat) new COO, who believed:

•     External project managers were generally preferable to internal operations personnel.

•     Success on this project would occur if and only if he was able to remove internal obstacles for us.

After meeting with the project team for the kick-off, we communicated expectations that this project would be on time, and our jobs were to make sure that happened. As expected, there was significant scepticism about the capabilities of us and the organization to deliver in time.

Working with the team generally, having project managers who both spoke Japanese and understood Japanese cultural expectations were key to overcoming the personnel language issues and (to a lesser extent) the divided loyalty issues. Also, like any Japan project, communication outside of the normal work environment (i.e. over beers) was critical to addressing the communication issues with the organization. Additionally, though, was setting ground rules that applied specifically to our project meetings—things like “No resolution in meetings” and “Be on-time and prepared, or your department will be reported as delaying the project” worked well.

Localization of the US software product for Japan required a bit more effort, however, as the US had just released a new version that had not been Japan approved for dial-up testing. Working with the internal test team, we developed a plan which would roll-out the previous (already localized and tested) version with a DSL option, cutting development and testing time to four weeks from the original thirteen week plan. Simple support documentation was drafted by the software team working in conjunction with the call centre team to address the most likely issues, along with the known bugs.

Network deployment was a more complex issue-while pricing was adequate, Japanese telecommunications companies are traditionally not known for their speed or flexibility. In fact, when our initial request for POPs went out, the Osaka based local loop company came back with an estimate of four months for some of the key locations. After some internal consultations, estimating what we believed to be the actual time required for these high priority locations, we decided to make a trip out to visit the head office—two foreign project managers and one client representative. While they could not promise anything at the meeting itself, they assured us that they would “try very hard” to meet our requests, particularly considering we had travelled across Japan to talk with them. Within the week we had a commitment from them to deliver on or ahead of our schedule.

As we moved towards launch, our sponsor continued to work the organization internally, but failed to address the contractual sign-off issues with the US-leading us to slip from our targeted six week delivery time frame to seven weeks—still one week ahead of schedule, and five weeks faster than any of their other global rollouts.

Case Study 3 – Sales Force Automation project, Global Automotive industry leader

Background: By the late 90's, research and surveys showed that educated and well-informed consumers were beginning to increasingly use the internet in their automobile shopping process. During the dot com boom, third party referral sites were aggressively building new online tools and capability to attract and “own” the consumer. This multinational automotive industry leader sought to gain early mover advantage to work with dealers to integrate “bricks and clicks” and to recapture the customer relationship from dot.com competitors.

Japan had one of the highest internet penetration rates in the world, and by far the most connected country in Asia Pacific region. Buoyed by the opportunity of the internet to reach out to consumers, the organization had brought to life, an online, fee-based referral service in Japan, a joint venture with its local automotive OEM business partners. The software solution was based on a leading CRM product. A local dot com veteran was hired to run the New co business. Initial results were encouraging; the traffic to the site was fuelled by aggressive advertisements, promotional efforts and marketing support from the US MNC's fully owned subsidiary in Japan. It seemed that the business model could be successfully deployed in any country in Asia.

The ASEAN & India team sought to replicate Japan's success story in the sub-region. The management approved the proposal to deploy a localised version of the global online shopping tool, coupled with a dealer-facing sales force automation solution. The then lead management system was manual and based heavily on the dealerships. Some of the challenges were:

Business Challenges

o     Internet usage was at its infancy in ASEAN & India, although showing promise

o     Automotive shopping experience in these markets was a hugely “touch and feel” experience, and internet couldn't deliver the tangible experience

o     Franchise dealerships had full control of the customer experience and were not always consistent with the manufacturer's vision

o     Limited number of leads could be managed with the manual process

o     Inability to estimate the number of leads followed-up for successful sales closure

o     Inability to track campaigns and effectiveness of marketing efforts to increase sales

o     Communication delays between the manufacturer and the dealer, due to traditional “snail-mail” channels for information distribution

At the time of awarding contract to a System Integrator, neither the internal nor the external team was fully aware of the technology challenges that would later become a serious issue. The project team had decided on a “thin client” technology to simplify ongoing application maintenance.

The first pilot country had gone live and then September 11 tragedy struck. The team lost 3 weeks due to corporate travel restrictions and non-availability of visas for some of the key project team members.

Some of the key technology challenges began to surface at this stage:

Technology Challenges

o     The solution was unable to support local language scripts out of the box. That meant significant configuration work to make the solution usable by the dealers.

o     Relatively cumbersome user interface in the ‘thin' client led to poor usage within dealerships.

o     Dial-up access speed from remote sites was very slow and dealers were unable to access the application

A remedial solution was provided to dealers by way of a standalone application, with intermittent synchronization with main server. This alleviated both internet connection issues and also utilized a less cumbersome User Interface. This remedial solution led to a cost and time over run for the overall project.

The organization eventually benefited from deploying a multi-channel lead management system, but not before learning the painful lessons that nearly derailed the organization's strategic initiative.

Conclusion

While all successful projects include the elements below, the following are key points of emphasis (and potential points of failure) for multinational implementations in Asia:

1.     The Project Sponsor

2.     Location specific requirements

3.     Head office resources

In many Asian companies, project sponsors end up being chosen based on seniority rather than on interest or skill. While this approach may have some advantages in terms of demonstrating senior management commitment, we do not believe it is conducive to superior project performance.

Head office requirements are best executed when broadly defined, as the more narrow the definition, the less likely creative solutions can be implemented that both fit local needs and meet head office reporting and regulatory requirements.

The greatest challenge for an Asian-wide IT project is matching up the global business needs with the location specific accounting, language and business practice requirements. Additionally, availability of key vendors, telecommunications and other types of services and pricing varies enough that multiple technology implementations should be considered during design to ensure that business justification happens within each location, not just across the region. Despite whatever global relationships might already exist, local management of the relationship is critical to the implementation's success.

For the project manager who wishes to be successful in Asia, over-communicating these needs to management and project sponsors will not necessarily guarantee success, but will provide higher probability of an on-time, on-budget project.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

©Arun Sethuraman, PMP & James R. Weisser, PMP
Originally published as part of Proceedings PMI Global Congress 2006 – Bangkok, Thailand

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