CHAPTER END CASE: GOOD STRUCTURE PAYS OFF PROJECT BACKGROUND The ABB Group (Asea Brown Boveri) is a multinational company headquartered in Zurich, Switzerland. Since 2005, it has focused on its core competences and has been organized in five business units, namely Power Products, Power Systems, Automation Products, Process Automation, and Robotics. In 2007, ABB operated in 100 countries and employed more than 110,000 people. The corporation was formed by the merger of ASEA AB (Sweden) and BBC Boveri (Switzerland) in 1988 and grew inorganically through numerous acquisitions worldwide in the 1990s. During this decade the corporation was organized de-centrally, developing new products in 550 facilities scattered around the globe. However, globalization urged the company to speed up the designing, developing, engineering and maintaining processes. New product development saw increasing complexity, with a cross-functional integration into an overall system with interface compatibility as a major challenge. In response to the new market and product requirements, a new project was launched with the objective of creating a common product platform for substation automation systems for power transmission. This platform should ensure a quick and easy 204 integration of the single sub-products from different ABB sites into one system configuration determined by global customers. The ultimate purpose was to reduce engineering time and complexity. The platform which was to be created as a result of the international project contained the following hard- and software products: control and protection terminal units for medium and high voltage (HV ) intelligent gas insulated sensors (GIS ) substation automation monitoring systems engineering tools and others. In addition, new functions needed to be integrated into the platform such as functions for the medium voltage feeder and motor protection, new functions in HV protection, and more. Part of the project plan was the delivery of the new platform as a pilot system to an Australian customer who needed the system in order to connect two power grids. Hence, on time delivery was crucial for project success. Due to the fact that specialists for the different platform elements were located around the globe in different ABB subsidiaries, the project needed to work with global development teams. The subsidiaries which had the necessary core competences were located in Finland, Germany, Italy, Sweden, Switzerland, and the USA. Hence, this project crossing geographical, organizational and cultural boundaries needed to be organized in a way that would meet the demand created by the global distribution of the team members. At peak times, 150200 employees were involved in this international project. ORGANIZATIONAL STRUCTURE OF SUBSTATION AUTOMATION 2.0 The overall project was called Substation Automation 2.0 (SA 2.0) and comprised several product development projects which in turn were broken down into sub-projects. SA 2.0 was sectioned into three organizational levels: overall project management, project co-ordination at business units and sub-projects. Six main roles with responsibilities and authority were defined: 1 Program manager: This individual hero overall responsibility for the success of the project and its integration with other projects the company was implementing (see also Chapter 2 ) 2 Release manager: This individual headed the project organization as the responsible project manager with support from three groups responsible for the system specification, the validation of developed products, and delivery to the end customer. 3 Steering Committee (STECO ): The steering committee of this project consisted of some senior managers at the top of different business units. Their main task lay in conflict resolution in the case of conflicting interests between the international local subsidiaries and the project. 4 Configuration Change Board (CCB ): The board met on demand which was more often than the steering committee could have met. It consisted of a group of selected line, project and product managers familiar with the technology and 205 market. Their task was to take quick operational decisions in terms of development priorities and functionality for single products. The CCB had full authority to take any kind of technical decisions. This ensured the timely implementation of the project and prevented delays. 5 Project co-ordinator: They needed to coordinate different sub-projects across national boundaries. Their main tasks were to update diagrams indicating the dependence on inputs from the different locations, to co-ordinate and resolve issues between the sub-projects, to co-ordinate reports for the milestone meetings, to initialize decisions where necessary, to report on the status of the sub-project, and to decide which sub-project managers should participate in the high-level status meeting (release meeting). 6 Sub-project managers: A sub-project was created with the purpose of enabling it to work as independently as possible. Typically, a sub-project was therefore limited to one geographical location and was focusing on a single product. Sub-project managers were responsible for the project plan of their sub-project, for defining the functionality of the product developed in their team, for updating the time and milestone plan, for the project follow-up and reporting, as well as for requesting deliverables from other sub-projects. These were the main roles and how they referred to each other in terms of an organizational structure. GOVERNANCE STRUCTURE OF SUBSTATION AUTOMATION 2.0 In an international project with many parties geographically dispersed, it is of the utmost importance to think of a suitable governance structure in order to ensure the necessary information exchange between the parties involved in the project. Hence, the following platforms were established. RELEASE MEETINGS The release meetings were a forum where all sub-project representatives and other key persons met on a regular basis to inform each other about actual problems with the development of the new product. With new product development, it is natural that unforeseen problems will occur. Discussing those in the release meeting fostered an awareness of the joint responsibility for the overall outcome of the project, and prevented a blame-game culture which pointed at other teams to look for the reasons for project failure. The release meeting also provided the release manager with an opportunity to reiterate the common project goal, to identify dependencies among subprojects, to co-ordinate interfaces among the different sub-projects, and to assure a common understanding of the status in relation to the overall goal. MONTHLY STEERING COMMITTEE ( STECO ) MEETINGS The steering committee had the task of aligning the interests of different stakeholders, mainly the goal of the project manager and sub-project manager, with the special interest of the management of the different local subsidiaries involved, e.g. the Italians, Americans, or Swedes. The steering committee needed to make sure that all stakeholders, inside and outside this international project, understood the strategic 206 importance of the project for the overall success of ABB. Hence, the top management members of the steering committee ensured project support by local entities. Project status was reported to the steering committee on a monthly basis, comprising critical issues where a decision was needed and the status regarding punctual delivery measured against milestones. CONFIGURATION CHANGE BOARD ( CCB ) Substation Automation 2.0 was a project without a formal contract regarding cooperation between the different national sites of ABB. This is typical for geographically dispersed new product development projects. As a result, it is very important to keep all the major parties involved in the decision-making process in order to maintain the flow of crucial information, to have the necessary expertise available, and to keep commitment and motivation flowing. New product developments come with a lot of uncertainty. Thus, frequent changes in the light of emerging technical problems are the order of the day. The configuration change board had to make sure that change decisions were taken quickly and consistently. In addition to these formal forums, there were so-called information meetings carried out at irregular intervals on the different local sites involved. Their main purpose was to inform all members of the sub-projects on one site about the project status, and to conduct more informal measures to keep everybody motivated. Sources: Eriksson et al. (2002); ABB (2008a); ABB (2008b)

Tasks

1 Create an organizational chart for the project SA 2.0.

2 Create a responsibility matrix for the roles mentioned in the case.

3 In your opinion, which are the critical factors contributing to the successful organization of this international project?