The story of a regional project in Latin America
Regional Programme Manager and Project Portfolio Manager
Global companies look to establish a common footprint in business models, processes and technology landscape. That common footprint is not always achieved as a unique standard but serves as foundation to do business where the global company has presence. The footprint will have to be customized to meet local government regulations, culture, and other factors that may impact business operations. Standardization of technology landscape may sound easy; however, while replacing local applications by a standard centralized solution should bring benefits to the company in many areas, this “simple” solution will change the status quo, which usually is perceived as alienating to local organizations in both business and Information Technology (IT) areas. This paper will discuss the journey of the implementation of a regional application across 49 countries in Latin America.
A project is a temporary endeavor undertaken to create a unique product service or result. (Project Management Institute, 2008)
A global company in the logistics and transportation industry (“The Logistic Company”) was experiencing invoicing problems around the world, due in part to an accelerated organic growth, merge, and acquisitions in markets where The Logistic Company had no presence. Having a great variety of invoicing and billing applications across the world, local invoicing standards and nonstandard billing cycles, The Logistic Company was experiencing long month-end processes that furnished imprecise data to finance and accounting applications impacting country, regional, and global sales reports.
The Logistic Company started to assess different scenarios to address the selection of a billing solution, including: building an application from scratch, reusing or buying an “off-the-shelf” billing application, which would meet the company's billing process, providing accurate sales information, and expediting billing in order for finance and accounting applications to provide accurate reporting required for the decision-making process at country, regional, and global levels.
After a detailed assessment of the available options, The Logistic Company decided to reuse a billing application developed in its Asian region. The application core functionality fulfilled the company's billing process and would be able to be adapted to support local government regulations or other customizations as required.
With an application selected, The Logistic Company started the global billing system initiative, which was subdivided in regional initiatives that gradually started the deployment in all of The Logistic Company's regions: Latin America, Asia-Pacific, Eastern Europe, the Middle East, Africa, Europe, and the United States.
The project objectives were as follows:
- Harmonize billing process across all regions
- Establish a global governance board to assess and select application changes based on meeting government regulations, market requirements, and new functionality
- Reduce duration of billing cycle times (weekly, mid-month and month-end) in all countries across regions
- Produce accurate invoicing and furnish precise data to finance and accounting systems to produce timely reports required at country, regional, and global levels
- Cost savings through the elimination of local IT support for nonstandard local billing applications
- Leveraging labor arbitrage and economies of scale
Billing Solution Deployment in Latin America
Latin American Region Key Business Facts (Prior to Deployment)
The Latin American region of The Logistic Company included 49 countries divided into six areas, or “clusters,” as follows: Mexico, Brazil, the Caribbean, Central America, and South America (except Brazil). In these six “clusters,” five primary languages were spoken: Dutch, English, French, Spanish, and Portuguese.
Finance and billing teams were located in every country, with the exception of the Caribbean cluster, as were IT teams. Invoicing functions, including billing cycles, credit notes, debit notes, and adjustments were executed by finance and billing teams with the support of the local IT team. The duration of billing cycles varied from country to country due to the variety of billing systems implemented in each country of the region.
The Latin American region of The Logistic Company had a strong intra-country operation and strong commercial exchange with the United States.
For purposes of the implementation, the countries were classified as small, medium, and large. This classification was based on the country's monthly sales volume.
The Application Ecosystem Around the Billing Solution
The application ecosystem that preceded the implementation in every country was a complex mix of local applications and a legacy billing application, which translated into a high-maintenance and unstable environment, due to technology obsolescence and country customizations.
The purpose of the project was to harmonize the application ecosystem using the billing solution selected by The Logistic Company and other standard global and regional applications available in other regions. The new simplified application eco-system is depicted in Exhibit 1.
Exhibit 1: Billing solution ecosystem (to be).
The Project Timeline
The baseline project timeline was 4 years. It was designed to deploy cluster waves, and, for each cluster, sequential implementations in the countries within the cluster. The estimated average deployment duration for small countries was 1 month, for medium countries 2 months and for large countries 3 months. Prior to deployment activities, other required activities such as data cleansing, data migration, and training took place, usually 1 month in advance of the deployment.
Project Organization Structure
The project structure consisted of roles and responsibilities that brought together the various interests and skills involved in, and required by, the project. The structure aided communication and led to improved decision making. The project roles differed from an individual's organizational seniority and were related to what was required for the project.
The project organizational structure included:
- Project board consisting of:
- Regional chief financial officer (CFO) as the executive sponsor
- Regional chief information officer (CIO) as senior supplier
- Senior users represented by the cluster CFOs.
- Project manager
- Project assurance
- Country IT
- Country billing
- Technical support team
A specific rule for the project was that the project board and project manager roles could not be delegated and that the project manager role should not be combined with any project board role.
Exhibit 2 depicts the project organization for the regional project.
Exhibit 2: Project organization structure.
The project board provided overall direction and management of the project and was accountable for success of the project. The project board approved all major plans and authorized major deviations according to the project plan. The executive was the key decision maker and was supported by the senior users and the senior supplier.
Project Assurance ensured the quality of project management and that the qualities of the project deliverables were satisfactory to the customers and to users.
The project manager ran the project on a day-to-day basis on behalf of the project board. The project manager's main responsibility was to ensure that the project deliverables met the quality standards and within the specified constraints of time, cost, and incremental benefits.
Country IT teams identified applications eligible for decommissioning and developed interfaces required for integration with local application ecosystem.
Country billing teams prepared for the adoption of the new billing process, new organizational structure, and reassignment or elimination of positions within the country billing team
The Technical Support team prepared the centralized environment and configured each country's instance of the new billing solution. The Technical Support team provided ongoing support and addressed any technical issue reported by the end users.
The billing optimization program (BOP) provided billing process standards and supported process harmonization across all countries. BOP conducted gap analysis of the existing billing processes and standardized to a unique billing process supported at the shared service center and countries' billing groups.
In a multiannual project, in addition to considering dependencies inherent to the project (i.e., the availability of interface to integrate with the country's application), it is mandatory to manage external dependencies before it turns into a project issue. During the implementation of the regional project, several global and regional applications that fed data into the billing solution, as well as others that used data extractions from the billing solution, were in the process of being implemented or upgraded to a newer version.
Coordination with the global and regional project managers was instrumental in identifying potential risks and defining mitigation plans to address them. One time, the deployment of the billing solution had to be delayed for 1 month because one global application was not implemented on time.
As the project was executed, several changes took place that included executive shareholder attrition and reorganizational changes. The following list details the changes with high impact to the project and how they were approached by the project manager and the team.
Executive shareholder attrition
At different points during the project the executive team suffered changes. Those changes included the regional CEO, regional CFO (project executive and sponsor) and the regional CIO. The open positions were then filled with capable individuals coming from other organizations and did not have all of the details about the project. The project team faced this challenge during the monthly progress project meetings, in which the new executive was debriefed about the project progress and the incremental benefits as of as the date of the meeting, the project forecast (which included the project budget), and incremental benefits. Transparency was vital to build trust with the new executive shareholders to continue with the project.
The Logistic Company went through several reorganizations during the project, among others the consolidation of the Latin American Region as a subregion from the Emerging Markets region, which led to a change in priorities and temporarily suspending the deployment plan in Latin America while the new version of the billing solution was developed. This pause in the deployment gave the project team the opportunity to regroup and refine the implementation plan for the following waves, which started on completion of the development of the new version of the billing solution. Although the same billing solution was being deployed in the Emerging Markets region, the project priority was different from the Latin American project. In order to continue with the deployment of the new version, a detailed presentation and a great deal of back-up information was required to convince the new Emerging Markets stakeholders to continue with the project as planned. Project progress, project cost, budget forecast, and incremental benefits were reviewed in detail, and any variance required thorough justification.
The original scope of a multiannual project can be defined to a certain extent, and as the project progresses, the scope will need to be modified to fulfill events that were not contemplated at the time of the scope definition. Such changes should follow a formal change management process and support the original project vision and mission. During the implementation of the billing solution, there were changes that impacted budget and schedule in a large scale:
Creation of Economies of Scale
Replacing the local billing systems for a centralized billing solution provided the opportunity to create economies of scale. After the implementation in the first wave of countries, a discussion about creating a shared service center to serve all countries in back office functions was presented to the board for approval. Diverting budget devoted for training, changing organizational business structure at the country level, standardizing billing processes, managing billing functions by a single entity, expediting implementation time for the reminder countries, and enabling countries to speed-up the adoption of the new billing solution were the supporting arguments to approve the creation of economies of scale for the project through the establishment of a shared service center.
Changes in Government Regulations
New business requirements were submitted to comply with changes in government regulations issued in different countries. A large majority of such changes were published in advance by government entities, which enabled the project team to submit new business requirements to the billing solution development team in order to provide the required functionality. There were some exceptions in which sudden changes to government regulations were made on very short notice and required the creation of a “SWAT team” to develop and deploy the new functionality in order to comply with the new governmental regulation and also thereby to avoid hefty fines for noncompliance.
Harmonization of the Billing Process
The harmonization of the billing process enabled countries to establish specific time frames for executing billing functions with predictable results and furnishing accurate data to other financial and reporting systems. The harmonized billing process was defined by the regional office, documented by BOP, and executed by the shared service center.
Centralized System vs. Local System
A centralized solution enabled:
- Standardization of the technology landscape
- Elimination of obsolete technology and reduction of the country's IT cost
- Standardization of interfaces required for integration with country's application ecosystem
- Management of deployment of new versions of the billing solution as well as patches
- Leverage of support and development resources from global data centers
- Reduction of IT cost at global level.
Leveraged Economies of Scale
Establishing a shared service center defined a single entity to execute the billing functions for all counties with well-defined service levels to support centralized back office functions and billing processes. The shared service center was able to identify habitual tasks eligible for automation, which led to a process improvement and better response times during billing cycles.
The project manager and project team need to be flexible and adapt to sudden changes during the project execution. In a multiannual project serving multiple countries, the project will experience changes in market conditions, government regulations, currency re-expression, and new fiscal laws, among others, that will impact the project scope and budget. Some of those changes will be known in advance and may give the project team some room to plan, whereas other may be sudden changes for which reactive measures will be required.
A project manager needs to be a master of relationship building and creating alliances. Those become helpful during the course of the project, especially when references and recommendations are required. Relationships may have ups and downs, and the project manager needs to learn when to agree and when to disagree to maintain relationships in good health. A good relationship can provide support during difficult times.
A well-defined communication plan is a “must” in a project of this nature. Communication tools and artifacts need to be developed to reach stakeholders at all levels. At the beginning of the project, a thorough shareholder assessment should be conducted in order to identify their communication needs in terms of details and frequency. During the implementation in the first wave of countries, their IT and billing teams reacted adversely to the adoption of the new billing solution, since most of the control at the local level was taken away. In order to avoid this adverse reaction in the countries for which implementation of the billing solution had not yet taken place, a communication campaign was developed and executed 6 weeks in advance before the migration activities started. The effect of the campaign helped to set expectations in advance, which in turn helped the implementation team to have a smoother deployment.
In a project touching several groups and organizations, the lines of power and personal interest of stakeholders will be affected, and this can lead to conflict. The project manager should master conflict management skills to avoid engaging in endless discussions and arguments that can tarnish relationships with stakeholders. There are conflicts that should be addressed directly by the project manager and others that need to be delegated to upper or lower management levels, depending on the nature of the conflict. If the conflict cannot be resolved by the project manager, proper escalation and tracking should follow until the final resolution is reached and communicated to the involved parties. The best thing for the project manager to do is avoid taking conflicts personally.
Reporting Incremental Results
A multiannual project needs to continually provide results in order to create and maintain trust at the project board level. Delivering incremental results during project progress review meetings will enable the project board to create the required level of confidence in the project. It is important to engage the project board in the project through the delivery of “quick wins.” Good examples of “quick wins” are incremental benefits that are not limited to the progress of the implementation but that are also measured in terms of the impact to countries where the implementation took place and the final result at regional level. One of many graphic tools used to show incremental results is shown in Exhibit 3.
Exhibit 3: Project cost and benefit profile.
The Logistic Company's Latin American region was the first region, among others, to successfully complete the deployment of the billing solution. From inception to conclusion, the project plan was a working document that was updated to take advantage of the lessons learned after the implementation in each country, inclusion of economies of scale (not considered in the original scope), reutilization of technology artifacts (i.e., interfaces, automation scripts, etc.), process optimization, among many others things. Such changes to the plan led to the realization of incremental benefits and savings during the implementation that enabled The Logistic Company to set the foundation for becoming a standard footprint in business models, processes, and technology landscape. The lessons learned by the Latin American region have been shared and leveraged by other regions of The Logistic Company during the implementation of their regional initiatives.
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© 2008, Conrado Morlan, MBA, PgMP, PMP, PRINCE2 Practitioner
Originally published as a part of 2009 PMI Global Congress Proceedings – Orlando, FL
Presents the latest thinking regarding good and accepted practices in the area of scheduling for a project.