Who Owns the Program?

He knew something was wrong with his project mix after reading a three - month report showing the cumulative number of projects in several Programs done for the current year. To Frank Kaplan, Vice - President of Engineering for Interconnecting Cable, Inc. (EIC), the report showed that his engineers, for the first three months of the year, completed 48 small projects and 11 medium projects. None of the big projects were completed.

EIC, Inc.

EIC makes custom - made interconnecting cables for the health, computer, and other industries, with annual sales of $ 140 million. Typically, EIC would develop platform cables (big projects), per customer requirements. These platform cables could be changed to a minor degree, e.g., color and small changes of material (small projects) or to a great degree, e.g., color, major changes of materials, and length (medium projects). Platform cables were not very lucrative to make because they were costly to develop. In addition, buyers usually do not pay the full price, but share the cost with EIC. This is a main reason why EIC did not want to pursue too many platform cables. They, however, had to have enough of them to be able to adapt to small and medium projects, which would be the sources of their future revenue. In truth, the more small and medium projects were sold, the more would EICs cost sharing of platform projects be depreciated. Even though margin on small and medium projects was not big, it was certain. Moreover, it was easy to implement these bread and butter projects.

OUR FUTURE IS IN PERIL

Franks business instinct told him that having completed none of the big projects of his Program was a mistake. But he decided to wait and research the issue further. When the six - month report arrived, and showed that his engineers did 90 small projects, 20 medium projects, but no large ones, he was ready to make a splash. In the meantime, he called his project management consultant and explained the situation. The consultant told him that this was a frequent issue in companies as a result of some types of projects being overemphasized, eventually leading to the unbalanced project mix or project Program. Frank agreed and explained that if this problem persists, the skills of his company s best engineering talent will go rusty. If they constantly worked on small and medium projects, his engineers would not be up for the challenges of the big projects in the future. Without working on the big projects, they wouldnt be able to develop their skills further. The technical competencies of EIC would be in peril.

The consultant said the best approach to the problem would be to talk it over in a four - hour workshop with the Program managers as well as engineering and marketing departments leadership. Frank accepted the consultants idea, and scheduled the workshop in two months, but could not guarantee that marketing leaders would attend, although hed do his best. Later that day Frank called the vice - president of marketing, Dustin Miller. Dustin agreed with the idea and the date. He confirmed that he and his main people would attend the workshop.

On the day of the workshop, 11 people showed up. This included Frank and Dustin and their direct reports. Because the workshop was not designed for an educational purpose, it was rather short but informative. The consultant discussed the characteristics of the project Program and the responsibilities in managing EICs Program. The discussion on the responsibility for managing EICs project Program took an interesting turn.

Asked how that issue is seen, Dustin Miller answered that the marketing department owns the Program, but really does not manage it. He explained, What we do is we have a guy, called a bidder, who reviews customers requests and strives to pick those with the highest net present value (NPV). Frank added that he would like to have a say in selecting projects because it had a lot to do with the development of their skill set, EIC s competencies, and market position. Frank, actually, would prefer that EIC form a Program interdepartmental committee to manage the Program. Now, the power struggle developed as Dustin jumped in and insisted that some changes would be made in marketing to manage project Program in the way it was discussed in the workshop, but beyond these no other changes would be made. Dustin saw no need for real changes, nor for any single department except marketing, to be involved.

Discussion items

1- Who should manage project Program? Marketing? Engineering? Both? Some other groups?

2- How does project Program management influence engineers skill sets, a companys competencies, and market position?

3- Does the use of only NPV as a project selection method carry certain risks? What are they?

4- Why is it risky if EICs Program consists of 80 percent of the bread and butter projects?