Quasar Communications, Inc. (QCI), is a thirty-year-old, $350 million
division of Communication Systems International, the world’s largest
communications company. QCI employs about 340 people of which more
than 200 are engineers. Ever since the company was founded thirty yearsMarketing Research and Data Analysis
ago, engineers have held every major position within the company,
including president and vice president. The vice president for accounting
and finance, for example, has an electrical engineering degree from
Purdue and a master’s degree in business administration from Harvard.
QCI, up until 1996, was a traditional organization where everything flowed
up and down. In 1996, QCI hired a major consulting company to come in
and train all of their personnel in project management. Because of the
reluctance of the line managers to accept formalized project
management, QCI adopted an informal, fragmented project management
structure where the project managers had lots of responsibility but very
little authority. The line managers were still running the show. In 1999, QCI
had grown to a point where the majority of their business base revolved
around twelve large customers and thirty to forty small customers. The
time had come to create a separate line organization for project managers,
where each individual could be shown a career path in the company and
the company could benefit by creating a body of planners and managers
dedicated to the completion of a Quasar Communications, Inc. 165
Kerzner, H., & Kerzner, H. R. (2013). Project management : case studies.
Retrieved from http://ebookcentral.proquest.com Created from think on
2018-01-07 20:02:53. Copyright © 2013. John Wiley & Sons,
Incorporated. All rights reserved. project. The project management group
was headed up by a vice president and included the following full-time
personnel: ● Four individuals to handle the twelve large customers ● Five
individuals for the thirty to forty small customers ● Three individuals for
R&D projects ● One individual for capital equipment projects The nine
customer project managers were expected to handle two to three projects
at one time if necessary. Because the customer requests usually did not
come in at the same time, it was anticipated that each project manager
would handle only one project at a time. The R&D and capital equipment
project managers were expected to handle several projects at once. In
addition to the above personnel, the company also maintained a staff of
four product managers who controlled the profitable off-the-shelf product
lines. The product managers reported to the vice president of marketing
and sales. In October 1999, the vice president for project management
decided to take a more active role in the problems that project managers
were having and held counseling sessions for each project manager. The
following major problem areas were discovered. R&D PROJECT
MANAGEMENT Project manager: “My biggest problem is working with
these diverse groups that aren’t sure what they want. My job is to develop
new products that can be introduced into the marketplace. I have to work
with engineering, marketing, product management, manufacturing, quality
assurance, finance, and accounting. Everyone wants a detailed schedule
and product cost breakdown. How can I do that when we aren’t even sure
what the end-item will look like or what materials are needed? Last month
I prepared a detailed schedule for the development of a new product,
assuming that everything would go according to the plan. I worked with
the R&D engineering group to establish what we considered to be a
realistic milestone. Marketing pushed the milestone to the left because
they wanted the product to be introduced into the marketplace earlier.
Manufacturing then pushed the milestone to the right, claiming that they
would need more time to verify the engineering specifications. Finance
and accounting then pushed the milestone to the left asserting that
management wanted a quicker return on investment. Now, how can I make
all of the groups happy?” Vice president: “Whom do you have the biggest
problems with?” Project manager: “That’s easy—marketing! Every week
marketing gets a copy of the project status report and decides whether to
cancel the project. Several 166 QUASAR COMMUNICATIONS, INC.
Kerzner, H., & Kerzner, H. R. (2013). Project management : case studies.
Retrieved from http://ebookcentral.proquest.com Created from think on
2018-01-07 20:02:53. Copyright © 2013. John Wiley & Sons,
Incorporated. All rights reserved. times marketing has canceled projects
without even discussing it with me, and I’m supposed to be the project
leader.” Vice president: “Marketing is in the best position to cancel the
project because they have the inside information on the profitability, risk,
return on investment, and competitive environment.” Project manager:
“The situation that we’re in now makes it impossible for the project
manager to be dedicated to a project where he does not have all of the
information at hand. Perhaps we should either have the R&D project
managers report to someone in marketing or have the marketing group
provide additional information to the project managers.” SMALL
CUSTOMER PROJECT MANAGEMENT Project manager: “I find it virtually
impossible to be dedicated to and effectively manage three projects that
have priorities that are not reasonably close. My low-priority customer
always suffers. And even if I try to give all of my customers equal status, I
do not know how to organize myself and have effective time management
on several projects.” Project manager: “Why is it that the big projects
carry all of the weight and the smaller ones suffer?” Project manager:
“Several of my projects are so small that they stay in one functional
department. When that happens, the line manager feels that he is the true
project manager operating in a vertical environment. On one of my
projects I found that a line manager had promised the customer that
additional tests would be run. This additional testing was not priced out as
part of the original statement of work. On another project the line manager
made certain remarks about the technical requirements of the project. The
customer assumed that the line managers’s remarks reflected company
policy. Our line managers don’t realize that only the project manager can
make commitments (on resources) to the customer as well as on company
policy. I know this can happen on large projects as well, but it is more
pronounced on small projects.” LARGE CUSTOMER PROJECT
MANAGEMENT Project manager: “Those of us who manage the large
projects are also marketing personnel, and occasionally, we are the ones
who bring in the work. Yet, everyone appears to be our superior. Marketing
always looks down on us, and when we Large Customer Project
Management 167 Kerzner, H., & Kerzner, H. R. (2013). Project
management : case studies. Retrieved from http://
ebookcentral.proquest.com Created from think on 2018-01-07 20:02:53.
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
bring in a large contract, marketing just looks down on us as if we’re riding
their coattails or as if we were just lucky. The engineering group outranks
us because all managers and executives are promoted from there. Those
guys never live up to commitments. Last month I sent an inflammatory
memo to a line manager because of his poor response to my requests.
Now, I get no support at all from him. This doesn’t happen all of the time,
but when it does, it’s frustrating.” Project manager: “On large projects,
how do we, the project managers, know when the project is in trouble?
How do we decide when the project will fail? Some of our large projects
are total disasters and should fail, but management comes to the rescue
and pulls the best resources off of the good projects to cure the ailing
projects. We then end up with six marginal projects and one partial
catastrophe as opposed to six excellent projects and one failure. Why
don’t we just let the bad projects fail?” Vice president: “We have to keep
up our image for our customers. In most other companies, performance is
sacrificed in order to meet time and cost. Here at QCI, with our
professional integrity at stake, our engineers are willing to sacrifice time
and cost in order to meet specifications. Several of our customers come
to us because of this. Last year we had a project where, at the scheduled
project termination date, engineering was able to satisfy only 75 percent
of the customer’s performance specifications. The project manager
showed the results to the customer, and the customer decided to change
his specification requirements to agree with the product that we designed.
Our engineering people thought that this was a ‘slap in the face’ and
refused to sign off the engineering drawings. The problem went all the
way up to the president for resolution. The final result was that the
customer would give us an additional few months if we would spend our
own money to try to meet the original specification. It cost us a bundle,
but we did it because our integrity and professional reputation were at
stake.” CAPITAL EQUIPMENT PROJECT MANAGEMENT Project manager:
“My biggest complaint is with this new priority scheduling computer
package we’re supposedly considering to install. The way I understand it,
the computer program will establish priorities for all of the projects inhouse, based on the feasibility study, cost-benefit analysis, and return on
investment. Somehow I feel as though my projects will always be the
lowest priority, and I’ll never be able to get sufficient functional
resources.” Project manager: “Every time I lay out a reasonable schedule
for one of our capital equipment projects, a problem occurs in the
manufacturing area and the functional employees are always pulled off of
my project to assist manufacturing. 168 QUASAR COMMUNICATIONS,
INC. Kerzner, H., & Kerzner, H. R. (2013). Project management : case
studies. Retrieved from http://ebookcentral.proquest.com Created from
think on 2018-01-07 20:02:53. Copyright © 2013. John Wiley & Sons,
Incorporated. All rights reserved. And now I have to explain to everyone
why I’m behind schedule. Why am I always the one to suffer?” The vice
president carefully weighed the remarks of his project managers. Now
came the difficult part. What, if anything, could the vice president do to
amend the situation given the current organizational environment? Capital
Equipment Project Management 169 Kerzner, H., & Kerzner, H. R. (2013).
Project management : case studies. Retrieved from http://
ebookcentral.proquest.com Created from think on 2018-01-07 20:02:53.
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.