Global project management organization setup in a new combined difficult company
Chen Pengzhi, PMP
Senior Project Manager, Nokia Networking
Bu Hong, PMP
Senior Specialist, Nokia Networking
The purpose of this paper is to introduce new product introduction (NPI) pilot project management process setup, global PMO setup, and the arguments for and against such new organization change in a new combined company, under a challenging world industry situation. Readers will be introduced to the fundamental enterprise environment changes of the telecom industry, strategic business management skills shown to synergize the acquired company and the existing system, and the final project organization structure.
In this manner, readers will become acquainted with process, organization setup, and adjustments, according to change management and strategy management when a company is in a re-forming situation.
Projects change the world, and projects change a company. Around 2010, a telecom equipment manufacturer was meeting a challenge from the customer and the market share. The customer complained the new project introduction pilot project's schedule was often behind their market requirement, and the product software (SW) and hardware (HW) quality issues often caused their customers’ complaints. At the same time, there was strong business competition worldwide in the telecom market. Accordingly, the market share was partly taken away by other competitors, partly because the new product introduction pilot projects could not finish on schedule with qualified quality.
Projects with the same products and the same service but with different customers and within different countries have different regulations and expectations. It is valuable to demonstrate how to set up a global NPI process as well as a program management office (PMO), and successfully manage the global customers, especially government stakeholders, with a mature process, after another company is acquired. In this case, the company's program management office, project management process, and special quality department were retained from the acquired company. These changes finally saved two companies (the primary company and the acquired company) from destruction.
After another multinational company was acquired, we were meeting market/customer challenges regarding the product quality and the delivery schedule pressure. A new product introduction program management office setup shows that the organization/program management office setup/changes benefit the organization strategy and the business increasing in the world market. The resources/information sharing between the different projects among different regions (Asia, Europe, Africa, and the United States) improves the project management efficiency. The program management office working model and project manager's working process can benefit the intermediate audiences.
This paper aims at explaining the principles of the process of introducing new product introduction pilot project management process setup, global PMO setup, and the arguments for and against such new organization change in a new combined company, under a challenging world industry situation.
The intention is to help the project managers and the high-level managers get the following skills:
- Understanding the company's strategy alignment. To learn the high-level company strategy and vision is very important.
- Setting up a program management office. After acquiring a company, learn the values of the acquired company, and then accept the structure (program management office, balanced organization structure, program management structure, and process are key to the whole organization) in the combined organization.
- Fine management based on the defined process/requirement. In a challenging environment, the executive force, the leadership, can be demonstrated with a fine management style.
The high-level management team identified why/from where the problems arose; analyzed the current process/organization gap; elaborated on the expectations from the customer and the market; and reiterated the company's vision, strategy, and culture, based on a couple of anonymous employee engagement surveys provided by a third-party vendor.
The high-level management team used the following five key strategies to create the global NPI program management office/project management process: highlight visions and strategies, learn from others, change organization structure, make changes step by step, and improve continually (see Exhibit 1).
1. Highlight Visions and Strategies.
The high-level management team highlighted that change is coming fast. Today, most people are connected. In the coming years, the focus will be on connecting things in addition to people. In fact, by 2025, we believe there will be at least 50 billion connected things, and in time, all these connected things will come together. Our vision and our purpose is to expand the human possibilities of the connected world. This is a noble goal and one that positions us well for the opportunities that will come as the world of technology changes.
The high-level management team frankly told all the staff about the challenges we were facing (the SW/HW issues rate, the cost of the product issues resolution every year in the whole customer market, etc.), and broadcast the proposed organization changes and the project management process changes again and again with the internal communication media and the town hall.
There was workforce reduction in the company in order to align the organization changes. Given that employment is not only related to survival but also to human dignity, especially in some eastern countries, workforce reduction in these countries caused some concerns. In order to gain the understanding and support from these countries’ governments, the company's high-level management team met some of the countries’ leaders (e.g., President, Premier, Vice-President, Minister of Industry) and explained the organization changes. The strategy and structure changes had the same objective: focusing on our customer to deliver our products and services on schedule and within budget, and to provide the planned and relevant benefits to the people.
Exhibit 1: Solutions to set up a global PMO.
2. Learn From Others.
In 2011, when the company acquired another company's telecom equipment division, it was discovered that there was a mature new project introduction process. The existed mature process could speed up the project delivery, identify the clear ownership, lead to the challenging schedule, and take the strict process to perform quality assurance. The high-level management team made a final decision that the company should set up a program management office organization to take on the responsibilities of covering new product introduction pilot projects with the customer and marketing/sales team, and resolving the schedule/quality issues—not just importing the existing process but also proposing some adjustments innovation.
In the previous acquired company, the NPI pilot plan included the following information:
- Document revision history
- Glossary of terms and acronyms
- Table of contents
- Distribution list
- Overview and objectives
- Customer/site configuration
- Software and documentation requirements
- Deployment teams and responsibilities
- Problem reporting and escalation
- Deployment schedule
- Feature information
- Performance testing
- Acceptance criteria
- Additional information
The previous acquired company’s NPI pilot plan should be approved by the following team representatives: local/customer team, R&D maintenance team, account team, deployment team, and quality team.
After the new combined company is setup, the newly built NPI pilot kickoff meeting will not happen until the key stakeholders have approved the following items:
- Main stakeholders and meeting participants for kickoff meeting,
- Scope of pilot project,
- NPI project plan overview,
- NPI project entry and exit criteria,
- Statement of Reasons (SoR) (project stakeholders/interface partners),
- Resource plan overview,
- NPI enabling plan,
- NPI project follow-up,
- Escalation path, and
- Backup slides at the end of the presentation.
In the new combined company, the following key stakeholders will be engaged in the NPI pilot projects: customer team, pilot program manager, pilot project manager, R&D project manager, and product manager.
The pilot program manager is the sponsor of the NPI pilot project, the pilot project manager is responsible for managing the project, and the product manager is responsible for supplying the customer with product information and the support required to allow the NPI project manager to plan and manage all deployments and monitor the product life cycle. The product manager can be regarded the “customer” of the pilot project.
3. Change Organization Structure.
It was not easy to change the previous company's organization, because it had been working for more than 30 years with the functional organization. The high-level management team proposed the new organization change and the roles and the responsibilities assignment, and mainly highlighted the ownership of the new project introduction program office.
Before the organization structure was changed, the pilot project was executed mainly by technical support team engineers, and supported by R&D engineers and local customer team. A couple of teams were engaged in the project, but no owners were responsible for coordinating the project from beginning to end. Accordingly, when issues arose during the project, the investigations into the issues were neither efficient nor effective.
A new organization NPI program team was set up, focusing on the NPI pilot project, after the new combined company passed day one. Accordingly, the NPI became the sole owner who was responsible for tracking/driving the pilot project and coordinating/driving the issues resolution if they happened in the customer fields. In the organization, the role of the pilot project manager was defined, with the following skills and responsibilities requirement:
- Good pilot project–specific knowledge
- Adequate project management knowledge
- Basic technical knowledge on target product/release
- Focal point in pilot project management communications and questions
- Main tasks:
- 1) Project establishment (in cooperation with local project manager): project plan and schedule
- 2) Project follow-up: project progress tracking and reporting. Ensures fast responses for project management issues
- 3) Project closure: close the project and provide pilot report
- On-site support during critical phases of the project (20%), otherwise remote support (80%)
With the previous clear roles/responsibilities requirement, the pilot project manager will be the only focus point and the single owner of the project, the person who is responsible for leading the pilot project from the initiation through the closure to the project.
4. Make Changes Step by Step.
After the solutions to the proposed organization changes and PMO setup were proposed, they were first piloted in two countries (China and India) where we had a good relationship with the customer and a good coordination relationship internally among the sales team, product management team, product support team, R&D development team, and pilot team. The pilots happened smoothly in two years, proving the process could do well. The total project schedule successful rate was improved by about 43%.
During the “pilot” of the NPI pilot project management process, the team enhanced the final closure process.
The following table (Exhibit 2) defines the quality records that the process creates and the responsibilities for each quality record. The project management plan (PM01) will state any deviations from this standard list, with a reason why. The author is also by default the owner.
Exhibit 2: Responsibilities for each quality record.
5. Improve continually
Before becoming a great company, we faced deep restructuring and fundamental change across the company. As we went through the changes we kept our eyes on our customers. In recent years we have received remarkable support from the customer for the new strategy, the new pilot project process, and the new program management office organization; but, we still faced the challenges from the customer and we needed to implement continuous improvement. Continuous improvement (Business Case Studies, n. d.) is often referred to by the Japanese word Kaizen. Kaizen means “change for the better” and covers all processes in an organization. These include engineering; IT; financial, commercial, and customer service processes; and manufacturing.
After three years of organization changes and the pilot project program management office established globally, the software/hardware quality issues could be set a “virtual zero” objectives (at a level of Six Sigma, a virtual “zero defects” approach to quality, for every million opportunities to create a defect only 3.4 defects may occur!), which could better satisfy the customers. The company has received 11 continuous positive profits in the quarterly report. The organization changes, the new product project the program management office set, and the new processes implementation have made indispensable contributions to these outstanding results.
In order to handle the escalated issues from the customer more efficiently and effectively, a top-issues process was created. One top issue was defined as a highest service impact and revenue impact (for example, penalties and holdbacks) to the customer. When top issues happend in the field pilot project, a war room was then set up to coordinate the issues’ status. A daily update meeting, including the product support manager, pilot project manager, R&D engineers, test engineer, and local customer team representative, was held to give the update for the issues, and meeting minutes with executive summary, key topics tracking history, and action items (with the owners and due date) were required to be included. This tight matrix would make sure the issues were under control and led in the right resolution direction. Such a process improvement was imported when the top issues were met in the pilot project and they would block the project from moving forward.
Changes are often happening within the industry, in some of the biggest companies in the telecom world; but the unchanging things are always to keep studying, learning, and finally getting improvements and innovations.
Business Case Studies. (n. d.). Continuous improvement as a business strategy. Retrieved from http://businesscasestudies.co.uk/corus/continuous-improvement-as-a-business-strategy/continuous-improvement.html
© 2015, Chen Pengzhi, Bu Hong
Originally published as a part of the 2015 PMI Global Congress Proceedings – Orlando, Florida, USA