Iskratel Case 2002

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Telekomunikacijski sistemi, d.o.o, Kranj Ljubljanska c. 24a, 4000 Kranj, Slovenia Tel.: +386 4 207 2829, Fax: +386 4 202 1525 http://www.iskratel.si

METHODOLOGY OF COMPLEX PROJECT MANAGEMENT IN ISKRATELBrane Krinar, Majda Stojsavljevi, Iskratel, d.o.o. Kranj, Ljubljanska cesta 24a, 4000 Kranj, Slovenia e-mail: b.kriznar@iskratel.si, Stojsavljevic@iskratel.si

ABSTRACT

Iskratel is a Slovenian company which produces telecommunication systems and delivers services. The development of new products is becoming increasingly complex; this is why our company felt compelled to implement new methodology of project management supported with appropriate tools. The article describes the role of project management and supporting activities of project office in our development process. Particular emphasis is being placed on implementing the work on projects, running in parallel.

KEY TERMS

Multiproject Environment Project Management Methodology Project Office Development Project

INTRODUCTION

Iskratel is a company, which succeeded in strengthening its position on the global telecommunications market during the critical years of economic recession. The company even increased its market share. For the first time in the company history, we have sold 1

more than a million ports. This impressive result has been achieved thanks to the high technology products. In Iskratel, we are engaged in producing and marketing telecommunications systems and services for IP and TDM networks. In order to sell successfully on the global market of convergence networks, the product diversification strategy is needed with a comprehensive collection of products that are interesting and competitive on the market. By selling them to its customers, the company can satisfy their needs and look for new market opportunities and business partners. The company is building its product strategy in accordance with the trends of the new information infrastructure that is developing towards integration of all the existing networks and upgrades with new IP technologies. The new generation of telecommunications is based on the IP technology. It is called New Generation Network (NGN). In order to be successful on the market today and to daringly plan competitiveness and an increase in turnover also in the future, clear product vision and ongoing strategic investments are needed. 20 % of the revenues are appropriated by the company for the development of the comprehensive collection of price competitive and state-of-the-art products. Within the framework of the development process, there are more than 200 highly specialised associates participating in developing new products. These colleagues work in various sectors within the research and development department.

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RESEARCH AND DEVELOPMENT ORGANISATION WITHIN ISKRATEL

The product diversification requires adequate organisational support. Iskratel is organised in business units (BU) that are responsible for the development of single product lines, for turnover and cost control. The business units are organised in profit centres (PC) that are responsible for specific product portfolio or target customers. Profit centres are relatively autonomous entities responsible for their product profitability. Their tasks are: sales budget management, financing plan management, product strategy management and obligation to monitor the entire financial flows of each single product. Research and development (R&D) is organized within BU as a department of common relevance, whose services are utilised by all profit centres, and which is not expected to generate extra profit. Through project managers, it provides project development ordered by profit centres. New product development is proceeding within the research and development department in a form of projects, ordered by profit centre managers and approved by the product boards of business units. Development engineers work in research and development sectors managed by functional managers. They are responsible for the development of certain functional assemblies such as: hardware development, system software development, applications software development, communications protocol development, and management software development. The project managers who ensure optimum project progress are organised within research and development in the sector of project management, managed by the project management manager. As it is normal that one project manager manages several projects - depending on the functional similarity of the 2

projects, project scope or the application domain required by the target customers - it is also possible that one performer collaborates on several projects. According to W. R. Duncan, the project organisation model is called composite organisation. In accordance with this organisation, a certain number of basic research projects are running in product-oriented organisation, other projects are carried out according to the matrix model. C E h x e i e f c u t i v e

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Project B Coordination Figure 1: Composite organisation model

Project A Coordination

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PROJECT MANAGEMENT DEVELOPMENT PHASES

CHARACTERISTICS

IN

PROJECT

Nowadays, only the companies, in which a sufficient number of right ideas generated on time and which launch an adequate number of projects for implementing ideas, are able to survive in competition race. It is important that we are able to offer a customer highly technologically advanced products on time and that the products meet all his expectations and needs, and that we are in a position to obligatorily service and upgrade them tomorrow. Successful implementation of projects is indispensable for establishing the key factors of the company's competitive advantage. In moving towards development project objectives, flexibility, introduction of state-of-the-art technologies, innovativeness, entrepreneurial orientation of the team play an important role at Iskratel. The main characteristics of development project management at Iskratel are: A large number of parallel projects

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The following projects may run in the research and development department: up to 15 market-oriented projects, 2 to 3 technologically-oriented projects, several maintenance projects and usually at least one generic research project. Complexity of projects There are generic, market-oriented, technological and maintenance projects. The quantity of planned work and the number of the performers needed greatly differ from project to project depending on the type of the project. We may carry out a small-scale project with less than one man-year, on which 5 to 10 performers collaborate. In parallel with it, a generic project can be carried out, where up to 40 man-years are planned and 100 or even more performers collaborate in the course of a project cycle. Diversity of projects Thematically and technologically, there are highly diverse projects, because we develop entirely different products, e.g. public telephone exchanges, PTSN and ISDN access nodes, IP access nodes, broadband access, exchanges for special networks, centralised management node, IP terminal equipment, service centres, etc. Highly specialised performers Since thematically and technologically there is a large collection of our products, the performers employed in functionally organized departments are highly specialised experts, for whom there is no immediate replacement without specialising new associates in this particular sphere of activity. This enhances the risk of implementing the projects, but reduces the costs at the same time. Performers collaborating on more than one project Involvment of the same resources on more than one project is necessary because of the high specialisation of performers. Maintenance projects We are obliged to promptly and qualitatively service all the products sold and put into operation at a customer's place. Remedy of critical defects in operation has absolute priority. Problems in precise planning of development activities Disturbances caused by critical defects elimination in servicing the products and unpredictable trouble having arisen due to imperfection of new technologies make the planning rather difficult. Unplanned projects Sometimes there are projects that need to be inserted between the planned and approved projects due to the sales activities, obligations to customers and because of the wish for market broadening. Frequently changed priorities The project priorities may change due to the current project status, a delay in project implementation, market situation and obligations to customers. 4

Training and synchronising the team The development of an innovative, technologically advanced product requires investments in new skills and the preceding target training of the project team members in order to provide a good project start and thus enhance success.

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PROJECT MANAGEMENT METHODOLOGY AT ISKRATEL

The complexity of planning, parallel project management, and management of optimum allocation of human resources in multiproject environment are the factors that have prompted the decision to start renovation of project management methodology. The project objective was introduction of information support for planning and monitoring the projects. This provided us with optimum utilisation of resources and better adhering to time schedules. The Primav