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Off shoring and Outsourcing of design & research work has posed different type of challenges for operational and strategic management teams.
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2006 Management Meeting
PROJECT MANAGEMENT IN GLOBAL & OFFSHORE R&D ENVIRONMENT: ISSUES AND EVOLUTION OF PROCESS
Narendra Pratap [email protected]
About The Topic
Offshoring of product design, development, engineering and research is fairly new global phenomenon. Workflow at R&D center entails complexities in terms of varying size of work packets, work content, clarity level, type of work, control level etc. This is an effort to provide a practitioner's perspective about evolution of project management system & process at an offshore R&D and engineering center
– Structure• Phenomenon of offshoring• Categorization of workflow• Project performance of offshore center• Project Management Practices at the offshore R&D center
• Planning, Time, Communication, Cost, Quality, HR, Portfolio• System requirement, PMO and Future predictions
Product of Flat World
Driven by organizational ‘growth oriented’ forcesMarket expansion
SellingProduct customization & modification for local needsManufacturing localization for cost cuttingLocal engineering supportEngineering support to other business units’ engineering teams
Success of engineering & design teams – Created confidence
about skills
External Drivers like core competency, cost competitionIT outsourcingBP outsourcingKP outsourcingEngineering Services
OutsourcingOffshoring
Success & cost saving by IT, BPO & KPO – Created environment
Phenomenon of globalization of ‘Business’ is taken as ‘Flattening of World’Two forces, one from inside organization and another from external
environment shaped offshoring of design, engineering and R&D
•Currently 500 offshore Engineering and R&D centers working in India•No. growing @ 23% CAGR*
Working Model of Offshore R&D
Workflow – Projectizing it
To Do Task
sPro
jects
Issue of Performance Parameters
Traditional benchmarks for project performance parameterTime and schedule efficiency
Cost and financial efficiency
Resource utilization efficiency
Deliverables’ quality as per predefined ‘known’ acceptability parameters
– Performance benchmark for ‘Innovation’ center’s sponsor• Business value of output• Cost saving by offshoring• New initiatives• Intellectual property creation• Best utilization of all type of resources – proper administration
Corporate measures the project output of their offshore center, differently from the existing project performance parameters
TRIZ Framework for Project Categorization
TRIZ provides tools and methods for use in problem formulation, system analysis, failure analysis, and patterns of system evolution (both 'as-is' and 'could be').
Project Mgmt. Practices – Project Planning
General IssuesAway from market, customer & manufacturingMultiple locations / multiple systemsScopingOwnership
End to end project for offshore centerSpecs. by sponsor, detailing and execution at offshoreWork details from sponsor, ‘to do task’ at offshore
Interventions
ResolutionProcess for project initiation and authorization One innovation, product development processCollaborative planningScoping
Major role for sponsorOffshore center should try to fill ‘open space’ in scope, proactively
Clear-cut work breakdownClarity on ownership of WBS Time line, milestones & deliverables definition mutually agreedApproval on all aspects
Project Mgmt. Practices – Time Mgmt.
Vis-à-vis onsite, offshore working adds extra hours
Requirement understandingCommunicationData managementReviews, approvals and reportsAt least two layers of project management
Time efficiency becomes very important
ResolutionInvest time in requirement understandingSetting expectationFully aligned team for each location/programIntegrated project plan for both offshore and sponsor Time and task tracking systemFill gap projects and competency building for effective resource utilization
Under a projectDevelop schedule for WBSExtra care for the scheduling of shared ‘domain experts’Resource leveling as per project priority
Project Mgmt. Practices – Communication Mgmt.
Considered important for project successChallenge in offshore environment
Cultural aspectsDistance and sense of itPeople handling communication – hard core domain expert
Communicated things get lost in the haze of time
Provide required infrastructure
Mail/tele/video – con, recording, session sharing tools
Policy matter on communication
Calendar for real-time communicationOn-site visits at regular intervals
Communication RecordImportant with PDLCUnified system for communication archiving
Project Mgmt. Practices – Cost Mgmt.
Cost headsCost of human resources’ hrs.All project expensesCommon expensesCapital expenditure
CommonFacilities (e.g. RP Machines)
Time management systemAverage cost of hours from cost of human resource
Project management system based expense trackerInputs from financial operation
Well defined financial process and trackerOrganizational policy for common expense loadingDepreciation loading for common capex. directly related to hours of project e.g.= (hrs. on project ‘x’/ total hrs)*(total depreciation)
Tracker for the usage of special facilitiesLoad the cost to projects
•Cost saving – first reason of offshoring•Cost of project directly loaded to the cost of product, research program, new initiative
Project Mgmt. Practices – HR Mgmt.
Organizational StructureMore than just a matrix structure
Program (Vertical), Domain (Horizontal), COE’s (Bubble)
Support departments (Finance, HR, Operation) – Coordination
Performance ManagementInput from project portfolio systemAppraise from all elements of org. structureTraining need
RecruitmentFor thinking ability, application mind and then for knowledgeMcGregor’s ‘Y’ peopleFailure handling / high self esteem people
RetentionStrategic aspect – can make or break the result‘Maslow’s hierarchy
Inside a projectAssigning resource as per WBSProject leaderProject specific team structureDomain specific leaderProper resource leveling
Project Mgmt. Practices – Quality Mgmt.
Quality measurement for varying type of outputs
Objectively measurableQuality of unseen, unknownQuality of researchQuality as a feature
Subjective quality statement about quality of product would work as a guideline something like ‘Quality Mission Statement’
– Review deliverables at every stage – gate jointly by sponsor, domain experts and team members
– Review comments & feedback from sponsor as ‘first priority’ input
– Quality process for ‘measurable’– Usage of suitable processes for
subjective variables at appropriate stage– FMEA, Six Sigma, DFA, DFM
– Quality in-built with work
Project Portfolio Management
Central system, a repository of all projectsImmediate indicator about risk, deadlines, completionsReport to corporate about performanceProject based performance indicators
Business value creationDirect and Indirect contributionContribution in top-line, bottom-line and business sustenance
All project expenses and costsProgram performanceTeams, individualsCompetency development
System Requirement
Enterprise Project Management (EPM)Hosted and centralized systemEntail one resource repositoryCommunication enablerEnable quick changes in plan
Project Data and Document ManagementAll project data, documents, communicationEnabler of collaboration – PLM and EPM interconnectionTransfer for meaningful project data to product management system
ApplicationsEPM should be capable to talk with organization systems ( Financial models, expenses, operational processes, HRIS etc.)
Portfolio Management• Built upon project management system for data integrity• Dashboards with proper privilege definitions
PMO
Process owner and manager Process standardization / templates /best practices Support, guidance & training provider
Owner of project management systemStrong IT support team for project management system
Time management, engagement level assuranceRequirement more prominent as the size of is now felt prominentlyIntegrate the job for portfolio managementPractical exposer of product development / innovation process first priority, knowledge of PM methodology second
Future – Let’s Predict
Future of work in organizations will be projectized.Projectized vs. Operationalized
Creations/Innovation - projectizedImprovement/Renovation – projectizedProduct or service lifecycle shortening – projectized
There will be CPMO (Chief Project Management Officer) in the organizations.• When so much of work as project, why not centralize its’
control• When COO, why not CPMO or both
Friction transition coordination assimilation
End Customer as part of product development projectsLast mile consumer/ user of the productLike a stake holder - part of each milestone, review and input
Thanks
