Discuss how you can use P-D-C-A cycle to control and correct the project gap

16 Sep

Project Management

1. What are the various methods for selecting a project? Assume that you are the Managing Director of a manufacturing company that is currently challenged by low-cost competition. Come up with a list of criteria by which you would select and prioritize projects for your company.

2. Who are stakeholders in a project? Describe the responsibilities of each of the following: Directors of a project, project manager, consultants and steering committee with reference to any “metro rail project” in India.

3. Assume that you are the project manager for an “Indian railways new railway line” project and the project is in the finishing stage. But, it is apparent that one of the project’s deliverables will not be completed before the project is wrapped up.

a. Explain what options do you have as the project manager for the uncompleted deliverable?

b. Discuss how you can use P-D-C-A cycle to control and correct the project gap.

Explain what options do you have as the project manager for the uncompleted deliverable

16 Sep

Project Management

1. What are the various methods for selecting a project? Assume that you are the Managing Director of a manufacturing company that is currently challenged by low-cost competition. Come up with a list of criteria by which you would select and prioritize projects for your company.

2. Who are stakeholders in a project? Describe the responsibilities of each of the following: Directors of a project, project manager, consultants and steering committee with reference to any “metro rail project” in India.

3. Assume that you are the project manager for an “Indian railways new railway line” project and the project is in the finishing stage. But, it is apparent that one of the project’s deliverables will not be completed before the project is wrapped up.

a. Explain what options do you have as the project manager for the uncompleted deliverable?

b. Discuss how you can use P-D-C-A cycle to control and correct the project gap.

Assume that you are the project manager for an “Indian railways new railway line” project

16 Sep

Project Management

1. What are the various methods for selecting a project? Assume that you are the Managing Director of a manufacturing company that is currently challenged by low-cost competition. Come up with a list of criteria by which you would select and prioritize projects for your company.

2. Who are stakeholders in a project? Describe the responsibilities of each of the following: Directors of a project, project manager, consultants and steering committee with reference to any “metro rail project” in India.

3. Assume that you are the project manager for an “Indian railways new railway line” project and the project is in the finishing stage. But, it is apparent that one of the project’s deliverables will not be completed before the project is wrapped up.

a. Explain what options do you have as the project manager for the uncompleted deliverable?

b. Discuss how you can use P-D-C-A cycle to control and correct the project gap.

Who are stakeholders in a project

16 Sep

Project Management

1. What are the various methods for selecting a project? Assume that you are the Managing Director of a manufacturing company that is currently challenged by low-cost competition. Come up with a list of criteria by which you would select and prioritize projects for your company.

2. Who are stakeholders in a project? Describe the responsibilities of each of the following: Directors of a project, project manager, consultants and steering committee with reference to any “metro rail project” in India.

3. Assume that you are the project manager for an “Indian railways new railway line” project and the project is in the finishing stage. But, it is apparent that one of the project’s deliverables will not be completed before the project is wrapped up.

a. Explain what options do you have as the project manager for the uncompleted deliverable?

b. Discuss how you can use P-D-C-A cycle to control and correct the project gap.

What are the various methods for selecting a project

16 Sep

Project Management

1. What are the various methods for selecting a project? Assume that you are the Managing Director of a manufacturing company that is currently challenged by low-cost competition. Come up with a list of criteria by which you would select and prioritize projects for your company.

2. Who are stakeholders in a project? Describe the responsibilities of each of the following: Directors of a project, project manager, consultants and steering committee with reference to any “metro rail project” in India.

3. Assume that you are the project manager for an “Indian railways new railway line” project and the project is in the finishing stage. But, it is apparent that one of the project’s deliverables will not be completed before the project is wrapped up.

a. Explain what options do you have as the project manager for the uncompleted deliverable?

b. Discuss how you can use P-D-C-A cycle to control and correct the project gap.

Project Management

16 Sep

Project Management

1. What are the various methods for selecting a project? Assume that you are the Managing Director of a manufacturing company that is currently challenged by low-cost competition. Come up with a list of criteria by which you would select and prioritize projects for your company.

2. Who are stakeholders in a project? Describe the responsibilities of each of the following: Directors of a project, project manager, consultants and steering committee with reference to any “metro rail project” in India.

3. Assume that you are the project manager for an “Indian railways new railway line” project and the project is in the finishing stage. But, it is apparent that one of the project’s deliverables will not be completed before the project is wrapped up.

a. Explain what options do you have as the project manager for the uncompleted deliverable?

b. Discuss how you can use P-D-C-A cycle to control and correct the project gap.

Project Management

02 Sep

Case 1   Disaster Recovery at Marshall Field’s (Another Chicago River Story)

Early in the morning on April 13, 1992, basements in Chicago’s downtown central business district began to flood. A hole the size of an automobile had developed between the river and an adjacent abandoned tunnel. The tunnel, built in the early 1900s for transporting coal, runs throughout the downtown area. When the tunnel flooded, so did the basements connected to it, some 272 in all, including that of major retailer Marshall Field’s.

The problem was first noted at 5:30 A.M. by a member of the Marshall Field’s trouble desk who saw water pouring into the basement. The manager of maintenance was notified and immediately took charge. His first actions were to contact the Chicago Fire and Water Departments, and Marshall Field’s parent company, Dayton Hudson in Minneapolis. Electricity—and with it all elevator, computer, communication, and security services for the 15-story building—would soon be lost. The building was evacuated and elevators were moved above basement levels. A command post was quickly established and a team formed from various departments such as facilities, security, human resources, public relations, and financial, legal, insurance, and support services. Later that day, members of Dayton Hudson’s risk management group arrived from Minneapolis to take over coordinating the team’s efforts. The team initially met twice a week to evaluate progress as the store recovered. The goal of the team was to ensure the safety of employees and customers, minimize flood damage, and resume normal operations as soon as possible. The team hoped to open the store to customers 1 week after the flood began.

An attempt was made to pump out the water; however, as long as the tunnel hole remained unrepaired, the Chicago River continued to pour into the basements. Thus, the basements remained flooded until the tunnel was sealed and the Army Corps of Engineers could give approval to start pumping. Everything in the second-level basement was a loss, including equipment for security, heating, ventilation, air-conditioning, fire sprinkling, and mechanical services. Most merchandise in the first-level basement stockrooms also was lost.

Electricians worked around the clock to install emergency generators and restore lighting and elevator service. Additional security officers were hired. An emergency pumping system and new piping to the water sprinkling tank were installed so the sprinkler system could be reactivated. Measures were taken to monitor ventilation and air quality and dehumidifiers and fans were installed to improve air quality. Within the week, inspectors from the City of Chicago and OSHA gave approval to reopen the store.

During this time, engineers had repaired the hole in the tunnel. After water was drained from the Marshall Field’s basements, damaged merchandise was removed and sold to a salvager. The second basement had to be gutted to assure removal of contaminants. Salvageable machinery had to be disassembled and sanitized.

The extent of the damage was assessed and insurance claims filed. A construction company was hired to manage restoration of the damaged areas. Throughout the ordeal, the public relations department dealt with the media, being candid yet showing confidence in the recovery effort. Customers had to be assured that the store was safe and employees kept apprised of the recovery effort.

This case illustrates crisis management, an important aspect of which is having a team that moves fast to minimize losses and quickly recover damages. At the beginning of a disaster there is little time to plan, though companies and public agencies often have crisis guidelines for responding to emergency situations. Afterwards they then develop more specific, detailed plans to guide longer-term recovery efforts.

Questions:

1. In what ways are the Marshall Field’s flood disaster recovery effort a project? Why are large-scale disaster response and recovery efforts projects?

2. In what ways do the characteristics of crisis management as described in this case correspond to those of project management?

3. Who was (were) the project manager(s) and what was his or her (their) responsibility? Who was assigned to the project team and why were they on the team?

4. Comment on the appropriateness of using disaster recovery efforts such as this.

5. What form of project management (basic, program, and so on) does this case most closely resemble?

 

Case 2 Flexible Benefits System Implementation at Quick Medical Center

The management committee of Quick Medical Center wanted to reduce the cost and improve the value and service of its employee benefits coverage. To accomplish this it decided to procure and implement a new benefits system. The new system would have no meet four goal; improved responsiveness to employee needs, added benefits flexibility, better cost management, and greater coordination of human resource objectives with business strategies. A multifunctional team of 13 members was formed by selecting representatives of departments at Quick that would rely most on the new system—Human Resources (HR), Financial Systems (FS), and Information Services (IS). Representation from each department was important to assuring all departmental needs would be met. The team also included six technical experts from the software consulting firm of Hun and Bar Software (HBS).

Early in the project a workshop was held with team members from Quick and HBS to clarify and finalize project objectives and develop a project plan, milestones, and schedules. Project completion was set at 10 months. In that time HBS had to develop and supply all hardware and software for the new system; the system had to be brought on-line, tested, and approved; HR workers had to be trained how to operate the system and load existing employee data; all Quick employees had to be educated about and enrolled in the new benefits process; and the enrollment data had to be entered in the system.

The director of FS was chosen to oversee the project. She had a technical background and, prior to serving as director, had worked in the IS group where she assisted in implementing Quick’s patient care information system. Everyone on the team approved of her appointment as project leader, and many team members had worked with her previously. Two team members had worked with her previously. Two team leaders were also selected, one each from HR and IS. The HR leader’s task was to ensure that the new system met HR requirements and the needs of Quick employees, and the IS leader’s task was to ensure that the new software interfaced with other Quick systems.

Members of the Quick team were committed to the project on a part-time basis. Roughly 50 percent of the time they worked on the project; the rest of the time they performed their normal daily duties. The project manager and team leaders also worked on the project part-time. When conflicts arose, the project took priority. Given specific performance requirements and time deadlines, the Quick top management committee made it clear that successful project completion was imperative. The project manager was given authority over functional managers and project team members regarding all project related decisions.

Questions:

1. What form of project management (basic, program, and so on) does this case most closely resemble?

2. The project manager is also the director of FS, only one of the departments that will be affected by the new benefits system. Does this seem like a good idea? What are the pros and cons of her selection?

3. Comment on the team members’ part time assignment to the project and the expectation that they give the project top priority.

4. Much of the success of this project depends on the performance of team members who are not employed by Quick, namely the HBS consultants. They must develop the entire hardware/software benefits system. Why was an outside firm likely chosen for such an important part of the project manager in meeting project goals?

 

Case 3   Glades County Sanitary District

Glades Country is a region on the Gulf Coast with a population of 600,000. About 90 percent of the population is located in and near the city of Sitkus. The main attractions of the area are its clean, sandy beaches and nearby fishing. Resorts, restaurants, hotels, retailers, and the Sitkus/Glades County economy in general rely on these attractions for tourist dollars.

In the last decade, Glades Country has experienced a near doubling of population and industry. One result has been the noticeable increase in the level of water pollution along the coast due primarily to the increased raw sewage dumped by Glades County into the Gulf. Ordinarily, the Glades County sewer system directs effluent waste through filtration plants before pumping it into the Gulf. Although the Glades County Sanitary District (GCSD) usually is able to handle the county’s sewage, during heavy rains the runoff from paved surfaces exceeds sewer capacity and must be diverted past filtration plants, directly in to the Gulf. Following heavy rains, the beaches are cluttered with dead fish and debris. The Gulf fishing trade also is affected; pollution drives away desirable fish. Recently, the water pollution level has become high enough to damage both the tourist and fishing trade. Besides coastal pollution, there is also concern that as the population continues to increase, the county’s primary fresh water source, Glades River, will also become polluted.

The GCSD has been mandated to prepare a comprehensive water waste management program that will reverse the trend in pollution along the Gulf Coast as well as handle the expected increase in effluent wastes over the next 20 years. Although not yet specified, it is known that the program will include new sewers, filtration plants, and stricter anti-pollution laws. As a first step, GCSD must establish the overall direction and mission of the program.

Wherever possible, answer the following questions (given the limited information, it is okay to advance some logical guesses; if you are not able to answer a question for lack of information, indicate how and where, as a systems analyst, you would get it):

Questions:

1. What is the system? What are its key elements and subsystems? What are the boundaries and how are they determined? What is the environment?

2. Who are the decision makers?

3. What is the problem? Carefully formulate it.

4. Define the overall objective of the water waste management program. Because the program is wide-ranging in scope, you should break this down into several sub- objectives.

5. Define the criteria or measures of performance to be used to determine whether the objectives of the program are being met. Specify several criteria for each sub-objective. As much as possible, the criteria should be quantitative, although some qualitative measures should also be included. How will you know if the criteria that you define are the appropriate ones to use?

6. What are the resources and constraints?

7. Elaborate on the kinds of alternatives and range of solutions to solving the problem.

8. Discuss some techniques that could be used to help evaluate which alternatives are best.

 

Case 4 West Coast University Medical center

(This is a true story.) West Coast University Medical Center (Pseudonym) is a large university teaching and research hospital with a national reputation for excellence in health care practice, education, and research. Always seeking to sustain that reputation, the senior executive board at the Medical Center (WCMC) decided to install a comprehensive medical diagnostic system. The system would be linked to WCMC’s computer servers and be available to physicians via the computer network. Because every physician’s office at WCMC has a PC, doctors and staff could access the system from these offices as well as from their homes or private-practice offices. By simply clicking icons to access a medical specialty area, then keying in answers to queries about a patient’s symptoms, medical history, and so on, a physician could get a list of diagnostics with associated statistics.

The senior board sent a questionnaire to manager in every department about needs in their areas and how they felt the system might improve doctor’s performances. Most managers felt it would save the doctor’s time and improve their performances. The hospital computing and information systems (CIS) group was assigned to investigate the cost and feasibility of implementing the system. CIS staff interviewed medical-center managers and software vendors specializing in diagnostic systems. The study showed high enthusiasm among the respondents and a long list of potential benefits. Based on the study report, the senior board approved the system.

The CIS manager contacted three well-known consulting firms that specialized in medical diagnostic systems and invited each to give a presentation. Based on the presentations, he chose one firm to assist the CIS group in identifying, selecting, and integrating several software packages into a single, complete diagnostic system.

One year and several million dollars later the project was completed. However, within a year of its completion it was clear that the system had failed. Although it did everything the consultants and software vendors had promised, the few doctors that did access it complained that many of the system “benefits” were irrelevant, and that certain features they desired were lacking.

Questions:

1. Why was the system a failure?

2. What was the likely cause of its lack of use?

3. What steps or procedures were absent or poorly handled in the project conception phase?

 

Case 5 X-philes Data Management Corporation

X-philes Data Management Corporation (XDM) requires assistance in tow large projects it is about to undertake: Agentfox and Mulder. Although the projects are comparable in terms of size, technical requirements, and estimated completion time, they are independent and will have their own project managers and teams. Work for both projects is to be contracted to outside consultants.

Two managers at XDM, one assigned each to Agentfox and Mulder, prepare RFPs and send them to several contractors. The RFP for Agentfox includes a statement of work that specifies system performance and quality requirements, a desired completion deadline, and contract conditions. As an incentive, the contractor will receive a bonus for exceeding minimal quality measures and completing the project early, and will be charged a penalty for poor quality and late completion. The project will be tracked using precise quality measures, and the contractor will have to submit detailed monthly status reports. The REP for Mulder simply includes a statement of the type of work to be done, an expected budget limit, and the desired completion date.

Based on proposals received in response to the REPs, the managers responsible for Mulder and Agentfox each select a contractor. Unknown to either manager is that they select the same contractor, Yrisket Systems. Yrisket is selected for the Mulder project because its specified price is somewhat less than the budget limit in the REP, and Yrisket has a good reputation in the business. Yrisket is chosen for the Agentfox contract for similar reasons—good price and good reputation. In responding to the Agentfox REP, Yrisket managers had to work hard to get the price down to the amount specified, but they felt that by doing quality work on the project they could make a tidy profit through the incentive offered.

A few months after the projects are underway, some of Yrisket’s key employees quit their jobs. Thus, to meet their commitments to both projects, Yrisket workers have to work long hours and weekends. It is apparent, however, that these extra efforts might not be enough, especially because Yrisket has a contract with another customer and will have to start a third project in the near future.

Questions:

1. What do you think will happen?

2. How do you think the crisis facing Yrisket will affect the Mulder project? The Agentfox project?

 

Case 6 Star-Board Construction/West-Starr Associates

Star-Board Construction (SBC) is the prime contractor for Gargantuan Project, a large skyscraper project in downtown Manhattan. SBC is working directly from drawings received from the architect, West-Starr Associates (WSA). Robert Starr, owner and chief architect of WSA, had designed similar buildings and viewed this one as similar to the others. However, one difference between this building and the others is in its facing, which consists of very large granite slabs—slabs much larger than traditionally used and larger than anything with which either WSA or SBC has had prior experience.

Halfway into project, Kent Star, owner and project manager for SBC, started to receive reports from his site superintendent about recurring problems with window installation. The windows are factory units, premanufactured according to WSA’s specifications. Plans are to install the granite facing on the building according to specifications that allow for dimensional variations in the window units. The architect provided the specification  that a ½-inch tolerance for each window space be made (that is, the window space between granite slabs could vary as much as ¼ inch larger or smaller than the specified value). This created a problem for the construction crew that found the granite slabs too huge to install with such precision. As a result, the spacing between slabs is often too small, making it difficult or impossible to install window units. Most of the 2,000 window units for the building have already been manufactured so it is too late to change their specifications, and most of the granite slabs have been hung on the building. The only recourse for making window units fit into tight spaces would be to grind away or reinstall the granite. It is going to be very expensive and will certainly delay completion of the building.

Question:

1. What steps or actions should the architect and contractor have taken before committing to the specifications on the window units and spacing between granite slabs the would have reduced or eliminated this problem?

 

Project Management

03 Jul

CASE STUDY: 1

Amalgamated Enterprises is a broadly diversified company with presence in a variety of sectors such as cement, textiles and industrial specialized chemicals.

After a through review of various capital projects undertaken in the last 5 years, the executive committee of Amalgamated Enterprises felt that the quality of a market and demand analysis of most of the projects was somewhat patchy.

As a marketing analyst, you have been invited by Shekhar Dutt, the managing director of Amalgamated Enterprises to do a seminar on market and demand analysis for the business heads of the company. He wants to address by you following issues.

Q1) How should one evaluate secondary information?

Q2) Discuss the steps in a sample survey?

Q3) What is your opinion about sample survey?

Q4) Briefly describe the various methods of demand forecasting?

 

CASE STUD: 2

The cash flow associated with three projects P, Q, & R are given below.

 

Net Cash Flow

Year

P

Q

R

0

(2000)

(2000)

(2000)

1

1400

500

500

2

600

1100

500

3

400

900

1600

Q1) What is NPV explain in detail?

Q2) How is modified NPV calculated?

Q3) Calculate the net present value of each project at discount rate of 0 percent?

Q4) Calculate the NPV of each project at discount rate of 5 percent, 10 percent, 15 percentm 25 percent and 30 percent?

 

CASE STUDY: 3

Microelectronics Company Corporation is currently at its target debt equity ratio of 0.5 : 1. It is considering a proposal to expand capacity which is expected to cost Rs 500 million and generate after tax cash flows of Rs 130 million per year for the next eight years. The tax rate for the firm is 30 per cent. Mahesh, the CFO of the company, has considered two financing options.

1) Issue of equity stock. The required return on the company’s new equity is 20 per cent and the issuance cost will be 12 per cent.

2) Issue of debentures at a yield of 13 percent. The issuance cost will be 3 percent.

Q1) What are the three steps involved in calculating a firm’s WACC?

Q2) What is WACC for Micro-electronics?

Q3) What is micro-electronics weighted average flotation cost?

Q4) What is NPV of the proposed after taking into account the floatation costs?

 

CASE STUDY: 4

N Electricals Ltd. is evaluating a capital project requiring an outlay of Rs 12 million. It is expected to generate an annual cash inflow of Rs 3 million for 6 years. The opportunity cost of Capital is 20 per cent. N Electricals can raise a term loan of Rs 8 million for the project. It will carry an interest rate of 18 p.c. and will be repayable in 8 equal annual installments, the first installment falling due at the end of the second year.

The balance amount required for the project can be raised by issuing external equity. The issue cost is expected to be 12 per cent. The tax rate for the company is 30 per cent.

Q1) What is base-case of NPV?

Q2) What is adjusted cost of capital?

Q3) What is adjusted NPV if the adjustment is made only for the issue cost of external equity?

Q4) What is the present value of the tax shield on debt finance?

Project Management

03 Jul

Case 1 Millau Viaduct: Creating an Engineering wonder

Introduction

The Millau viaduct was constructed to solve a severe traffic bottleneck on the A75 highway in France. The cutting-edge technology used in its design and construction, and the impressive aesthetics of the structure made it an engineering marvel. With careful planning, and by making optimum use of technologies that have become available only recently, the project consortium was able to complete the extremely complex project ahead of schedule.

On December 17, 2004, the Millau viaduct, constructed over the Tarn Valley in the southern region of France, was inaugurated by the French President Jacques Chirac (Chirac). The viaduct, standing 343 meters tall, was the world’s tallest cable stayed bridge.The viaduct was named after Millau, a small town in the middle of the Tarn Valley. The viaduct over the Tarn Valley was proposed to ease the traffic congestion on the A75 motorway, which connected the French towns of Clermont Ferrand and Beziers. A multiple cable stayed bridge with seven piers, designed by a team consisting of engineer Michel Virlogeux (Virlogeux) and architect Lord Norman Foster (Foster), was selected as the best possible solution in 1996.

The Government of France (GoF) invited tenders in June, 2000, to award the contract for the construction project. Eiffage Group TP (Eiffage) won the bid. Eiffage along with its subsidiaries and partners constructed the viaduct, raising the funds required on its own. Eiffage was to earn returns on its investment through the collection of toll charges.

The construction of the Millau viaduct began with the building of the concrete piers in December 2001. Later, the steel deck, which was fabricated at off-site production plants, was assembled and pushed onto the piers from the two sides of the valley using hydraulic jacks. After the deck was joined in the middle, the pylons, cable stays, and side barriers were fixed. The construction of the Millau viaduct involved the use of cutting-edge technology and satellite guided GPS systems. The Millau viaduct was not only an engineering marvel but also a well planned and executed project. With the viaduct operational, motorists would be able to cross the valley in 20 minutes as opposed to the three-hour drive (during summer) that was required earlier

Background Note

The original A75 motorway, which linked Clermont Ferrand and Beziers, passed through the town of Millau in the middle of the Tarn Valley. Motorists had to descend into the valley through a steep road and cross the town of Millau, to reach the other end of the valley. The roads were generally crowded and the situation worsened in the summer months when motorists took close to three hours to cross the valley. Therefore, the French authorities commissioned studies to find a solution to ttraffic bottleneck without affecting the scenic beauty of the Tarn Valley The initial studies to find a solution to the traffic problems started in 1988. These studies came up with four possible solutions.

The ‘eastern option’ involved the construction of a bypass to the east of Millau town and included two large bridges over the rivers Tarn and Dourbie. The ‘western option’ involved the construction of a bypass almost 12 km to the west of Millau and the construction of four bridges.

The ‘following the path of Route Nationale 9 option’ passed right through Millau but at the cost of unwanted intrusion on the town and several technical difficulties. The last option – the ‘median option’ – meant going over to the other side through the middle of the valley. The ‘median option’ was considered to be the most suitable as it avoided several geological problems encountered in the other options. Implementation of this option was to have minimal environmental impact, offer better safety, and involve lower costs. This option also received overwhelming support from the local populace.

On June 28, 1989, the median option was selected by Aix-en-Provence’s Centre d’Etudes Techniques del’Equipement (CETE), a public consulting firm under the GoF with the authority to propose technical solutions for traffic management.

The Pre-Construction and Planning Stage

The construction of the viaduct was to be handled by several Eiffage subsidiaries including Eiffage Construction (in charge of the construction of the piers, the abutments and the toll facility), Eiffel Company (Eiffel) (to construct the steel deck and pylons), Forclum (to handle all the electrical works, and Appia Research (Appia) (responsible for the development and application of the coating for the deck). Eiffage also created a subsidiary company – Compagnie Eiffage du viaduct Millau (CEVM) — specifically to manage the toll facility and maintain the structure.

Construction Begins

The first stone at the construction site was laid by Jean-Claude Gayssot, French Minister for Transport, on December 14, 2001. After about two weeks, work began with the digging of the bored-pile foundations for the piers.

Completion of the Project

The construction of the bridge was planned in such a manner as to minimize the environmental impact. By using steel in place of concrete for most of the construction, the project employed fewer machines and trucks. This limited the inconvenience to people living in the surrounding towns. Eiffage engaged the services of two environment specialists who guided them through the planning as well as execution stages of the project so as to ensure the environment friendliness of the project.

Outlook

The Millau viaduct became the centerpiece of the new A75 roadway which, in turn, was part of the Paris-Barcelona highway, a distance of about 750 km (465 miles). Traffic on the Millau viaduct was forecast to be about 25,000 vehicles per day in the summer months and about 10,000 vehicles per day the rest of the year. The 24 km (15 mile) journey up and down the Tarn Valley, which had earlier taken three hours, was cut to less than 20 minutes.

Issues to be addressed:

1. How would you gain insights based on the case into the planning for a major project.

2. Analyse the importance of planning in order to reduce risks, cost, and delays.

3. What is Build-Operate-Transfer Model? Explore the possibilities offered by the Build-Operate- Transfer model in the execution of such large and complex infrastructure projects.

 

Case 2: The Delhi Metro Project: Effective Project Management in the Indian Public Sector

Introduction

The Delhi Metro project gave Delhi a world-class mass rapid transit system. More importantly, it stood out from most other public sector projects in India in that it was completed on schedule and within the budgeted cost.

“The successful implementation of the Delhi Metro project would not have been possible without timely availability of funds and the necessary political support. An equally important role has been played by the DMRC’s corporate culture, which emphasizes that targets are most sacrosanct and our dignity is in performing our duty well.”

E. Sreedharan, Managing Director, Delhi Metro Rail Corporation Ltd., in 2005.

With a 6.5 km section of Line 3 becoming operational in April 2006, Phase I of the Delhi Metro project was nearing completion. Of the total length of 65.16 km of the first phase, 62 km had been completed and opened for service. This phase was set to cost Rs. 98 billion. As of early 2006, around 450,000 passengers were traveling by the Delhi Metro every day.

The Delhi Metro was meant to solve Delhi’s traffic problems, which had become almost unmanageable. The first steps to build a metro system in the city were taken in the early 1990s. In 1995, the Government of India (GoI) and the Government of the National Capital Territory of Delhi (GNCTD) formed the Delhi Metro Rail Corporation Ltd (DMRC) under the Companies Act to construct the Delhi Metro.

Conceived as a social sector project, a significant portion of the project cost was funded through a soft loan provided by the Japanese government through Japan Bank International Corporation (JBIC). The rest was contributed by GoI and GNCTD through equity.

Mr. E. Sreedharan was appointed managing director (MD) of the DMRC and project manager for Phase I of the project in November 1997. Work on Line 1 of Phase I started in October 1998. DMRC formed consortiums to advise it on the project and to provide it with the latest technology. It also saw to it that the foreign companies worked with the Indian companies to ensure that the latter assimilated their expertise and technological know-how. The DMRC faced any number of technical and systemic challenges during the construction of the metro.

However, thanks to thorough planning, an effective project design, and a ‘we-mean business’ culture, it was able to overcome all these hurdles. The organizational culture was based on punctuality, honesty, and a strict adherence to deadlines. The DMRC successfully managed the various stakeholders in the project like the general public, government bodies, etc., and also ensured that the project was environmentally safe.

With Phase I of the Delhi Metro project nearing completion, the GoI decided to extend the metro network and work on Phase II of the Delhi Metro project was set to commence in September 2006.

In the process of implementing the project, the DMRC had gained a lot of technological expertise, which would be used by other cities in India and abroad to build metro systems similar to the Delhi Metro.

Background Note

Metro systems were generally considered as a transport option when the population of a city crossed the 1 million mark. Delhi crossed that milestone as early as in the 1940s. The 1950s saw a doubling of the city’s population; with that, the vehicular traffic also soared. By the early 1990s, Delhi had more registered vehicles than Mumbai, Kolkata, and Chennai put together.

It had become one of the most polluted cities in the world, with automobiles contributing to more than two thirds of the total atmospheric pollution. There was an urgent need felt at this point to improve both the quality and availability of mass transport services in Delhi.

The first ever traffic study of Delhi (titled the ‘Origin – Destination Survey of Traffic of Greater Delhi’) was carried out by the Central Road Research Institute (CRRI) in 1957. As many as 35 more studies on Delhi’s transport problems were conducted subsequently by various entities. Almost all these studies recommended the Mass Rapid Transit System (MRTS) as a means to solve Delhi’s traffic problems.

In 1989, the GNCTD, with support from the GoI, commissioned a feasibility study for developing an MRTS for Delhi. The study was undertaken by Rail India Technical & Economic Services Ltd. (RITES) and completed in 1991.

The Delhi Metro Project

In order to implement the Delhi Metro project, the GoI and the GNCTD set up a 50:50 joint venture company called the Delhi Metro Rail Corporation Ltd. (DMRC). The company was incorporated under the Companies Act in May 1995.

Funding the Project

Globally, most urban MRTS projects were financially unviable because the fares could not be fixed solely on a commercial basis. If the fares were fixed too high, the passenger numbers would remain low, thereby defeating the very purpose of setting up the system. Therefore, the concerned governments generally bore the capital costs of an MRTS system. In the case of the Delhi Metro project too, the GoI and the GNCTD bore the capital costs. The total cost of the first phase of the project was initially estimated at Rs. 60 billion, at April 1996 prices. Later in 2002, with the cost of the project rising by approximately 10% per year, the estimate was revised to Rs. 89.27 billion.

The Project Team

With the funding for the project being finalized, the next step was to constitute a project team. Sreedharan was appointed as project manager and managing director of the DMRC in November 1997. A technocrat, he had had a long stint in the Indian Railways (IR) and had retired in 1990. During his service with IR, he had earned a reputation for completing major projects on time and within the budget…

Planning the Project

In India, major infrastructure projects are often stalled because of a lack of funds, political interference, lack of professionalism and accountability, property disputes, corruption, etc. Therefore, even before the commencement of the project, the DMRC attempted to put in place effective systems to ensure the smooth progress of the project.. Funding was not an issue in the case of the Delhi Metro project because it was settled even before the project commenced.

In order to steer clear of political interference, the DMRC sought autonomy on all major matters and the GoI promised to give it this autonomy. “Financial powers were vested in the managing director. Also, the managing director was the last authority on tenders,” said Anuj Dayal (Dayal), chief public relations officer, DMRC.

Project Implementation

Construction work on the project commenced on October 1, 1998. The entire project was divided into three lines. Further, these lines were divided into sections.

Line 1 (Shahdara to Rithala) ( Sample out of the three line )

The work on Phase I commenced with the Shahdara-Tis Hazari section of Line 1, covering a distance of about eight kilometers. The work involved utility diversions, barricading, and actual civil construction. A major part of this section was on elevated tracks. All tracks in the elevated corridor were laid on concrete (ballastless). The tracks were supported on single piers.

Managing the Stakeholders in the Project

Effective project management involved not only completing the project on schedule and within the budget, but also managing the project’s stakeholders. The stakeholders included the governments, the contractors, the funding agencies, and the general public. Despite assurances that the DMRC would enjoy autonomy, it faced political pressure not only in its recruitment processes, promotions, and contract awarding but also in land acquisition.

Project Evaluation

The successful completion of the project effectively silenced the critics who had been skeptical about the ability of an Indian public sector organization to complete any project, let alone one as complex and costly as the Delhi Metro, on time and within the budget.

Outlook

The Delhi Metro was expected to play a major role in relieving the transport problems faced by the city’s residents. Moreover, with the GoI planning extensions to the Metro, it appeared that the benefits of an efficient transport system would be enjoyed by people living in a wider geographical area than originally planned. The GoI and the GNTCD had prepared a comprehensive plan to extend the Delhi Metro to 244 km by 2021 in three subsequent phases.

Issues to be addressed:

1. Based on your understanding, examine what are the preliminary activities to be taken up before a large infrastructure project like this can be started

2. Establish the significance of the role of a project manager in project execution

3. Illustrate the importance of the right work culture in successful project management and the importance of managing the various stakeholders in a project.

4. What do you presume are the difficulties involved in the execution of large infrastructure projects in developing countries, and how these can be overcome?

 

Case 3: The Concorde Project – A Technical Engineering Triumph but a Commercial Disaster

Introduction

This case narrates the various stages in the project life cycle for an ambitious project taken up by two governments, UK and France, to create a plane that would break down the barriers of distance by traveling at speeds greater than that of sound. The case tells how the project sponsors’ (UK and France) dream of creating a supersonic passenger plane materialized and the various problems that resulted in huge cost and schedule over runs. This is a typical example of a project that was technologically successful but was a commercial failure.

On 5th November 1956, the Supersonic Transport Aircraft Committee (STAC) was established. The committee was made up of representatives of Britain’s aircraft and engine manufacturers, as well as government officials and personnel from the Royal Aircraft Establishment (at Farnborough, England), to study the possibility of building a supersonic airliner.

On 9th march 1959, STAC recommended design studies for two supersonic airliners, one to fly at a speed of Mach 1.2 and the other at Mach 2.0.

In 1962, the French President Charles de Gaulle requested Britain and France to cooperate in building a civil aircraft that would fly at supersonic speed. Both the countries aircraft industries would have to be involved in this project as the building of such an aircraft would be too expensive for Britain or France to fund alone. The British Minister of Aviation, Julian Amery and the French ambassador, Jouffroy de Coursel, signed a draft treaty for collaborating on the construction of a supersonic aircraft.

The treaty stipulated that Great Britain and France “must in all aspects of the project make an equal contribution in both the costs to be taken on and the work to be carried out, and to share proceeds from sales equally.”

The building of this aircraft was assigned to four companies:

The British Aircraft Corporation (Britain)

Sud Aviation (France)

Bristol Siddeley (Britain)

SNECMA(France)

The British Aircraft Corporation (Britain) and Sud Aviation (France) were responsible for building the airframe and Bristol Siddeley (Britain) and SNECMA (France), had to manufacture the Olympus 593 jet engines.

Concorde’s primary legacy is in the experience gained in its design and manufacture which later became the basis of the Airbus consortium. For example, Snecma Moteurs’ involvement with the Concorde programme prepared the company’s entrance into civil engine design and manufacturing, opening the way for Snecma to establish CFM International with General Electric and produce the successful CFM International CFM56 series engines.

On 11th September 1965, work commenced on the airframe at the British Aircraft Corporation’s division at Filton. Only 40% of the airframe was to be built in Britain; the other 60% was the responsibility of the French.

Britain’s Bristol Aeroplane Company and France’s Sud Aviation were both working on designs, called the Type 233 and Super-Caravelle, respectively. Both were largely funded by their respective governments. The British design was for a trans-Atlantic-ranged aircraft for around 100 people, while the French were intending to concentrate on a medium-range sector.

The designs were both ready to start prototype construction in the early 1960s, but the cost was so great that the British government made it a requirement that BAC look for international co-operation. Approaches were made to a number of countries, but only France showed real interest. The development project was negotiated as an international treaty between the two countries rather than a commercial agreement between companies and included a clause, originally asked for by Britain, issuing penalties for cancellation (Britain’s Treasury twice came close to cancelling the project). A draft treaty was signed on 28 November 1962. By this time, both companies had been merged into new ones, thus the Concorde project was between the British Aircraft Corporation and Aerospatiale.

At first the new consortium intended to produce two versions of the aircraft, one for long range and one for short. However, while shopping the design to prospective customers, no interest was shown in the short-range version. Plans for this version were dropped, and the consortium secured orders for over 100 of the long-range version from the premier airlines of the day: Pan Am, BOAC and Air France were the launch customers, with six Concordes each. Other airlines in the order book included Panair do Brasil, Japan Airlines, Lufthansa, American Airlines, United Airlines, Air Canada, Braniff, Singapore Airlines, Iran Air, Qantas, CAAC, Middle East Airlines and TWA.

Construction of two prototypes began in February 1965: 001, built by Aerospatiale at Toulouse, and 002, by BAC at Filton, Bristol. 001 made its first test flight from Toulouse on 2 March 1969 and first went supersonic on 1 October. As the flight programme progressed, it embarked on a sales and demonstration tour on 4 September 1971. 002 followed suit on 2 June 1972 with a tour of the Middle and Far East. 002 made the first visit to the United States in 1973, landing at the new Dallas/Fort Worth Regional Airport to mark that airport’s opening.

These trips led to orders for over 70 aircraft, but a combination of factors led to a sudden number of order cancellations – the 1973 oil crisis (Concorde used considerably more fuel per passenger mile than its subsonic competitors), acute financial difficulties of the partner airlines, a spectacular crash of the competing Soviet Tupolev Tu-144, and environmental concerns such as the sonic boom, take-off noise and pollution. Only Air France and British Airways (the successor to BOAC) took up their orders, with the two governments taking a cut of any profits made. In the case of BA, 80% of the profit was kept by the government until 1984, while the cost of buying the aircraft was covered by a state loan.

The United States had cancelled its supersonic transport (SST) program in 1971. Two designs had been submitted; the Lockheed L-2000, looking like a scaled-up Concorde, lost out to the Boeing 2707, which was intended to be faster, to carry 300 passengers and feature a swing-wing design. Industry observers in France and the United Kingdom suggested that part of the American opposition to Concorde on grounds of noise pollution was orchestrated by, or at least encouraged by, the United States Government, out of spite at not being able to propose a viable competitor, despite President John F. Kennedy’s impassioned 1963 statement of commitment. Other countries, such as India and Malaysia, ruled out Concorde supersonic over flights due to noise concerns.

Both European airlines flew demonstration and test flights from 1974 onwards. The testing of Concorde set records that have not been surpassed; it undertook 5,335 flight hours in the prototype, pre-production and first production aircraft alone. A total of 2,000 test hours were at supersonic speeds. This statistic equates to approximately four times as many as similarly sized subsonic commercial aircraft. Unit costs were £23 million (US$46 million) in 1977. Development cost overrun was 600%.

Issues to be addressed:

1. Enumerate the facts of the case.

2. Based on the facts analyze the market feasibility of such project

3. Identify the importance of a project plan and control mechanisms for the successful implementation of such a huge project

4. Establish the involvement of external factors and its influence on the technically success of a project.

 

Case 4: New Extranet That Simplifies Life for IT and Sales Staffs

Introduction:

Robert Mondavi needed a faster, more cost-effective way to get sales and marketing information to thousands of trade partners. The company decided to build a new extranet but wanted a clean break from its old content management system, which required IT involvement for all site changes. This swamped IT staff with routine change orders and frustrated content owners. With assistance from Allin Consulting, Robert Mondavi chose Microsoft Windows Server System integrated server software featuring Microsoft Content Management Server 2002 as its new portal technology. The company was attracted to the system’s simple programming environment and sophisticated capabilities. The new site lightens the support burden on the sales force and provides trade customers with 24-hour access to product information. Robert Mondavi expects to save U.S.$100,000 the first year alone in reduced maintenance and consulting costs.

Situation

Robert Mondavi employs Old World methods of making its wines but embraces modern technology in selling them. Three years ago, the company launched an employee intranet and an extranet for distributors. The sites proved so successful that Robert Mondavi decided to launch a second extranet, for trade customers.

Robert Mondavi uses a three-tier distribution system: a sales force sells the company’s 22 wine brands through distributors, who sell the wines to trade customers, who ultimately sell wine to consumers. Trade customers include hotels, restaurants, airlines, and wine shops. In the wine business, building ongoing relationships with accounts and providing timely wine information to wine buyers, restaurant managers, waiters, shopkeepers, and staff is essential.

The primary way Robert Mondavi used to provide thousands of trade partners with sales and marketing information was through its sales force and distributors. However, this process was inefficient from both a system and resource perspective because it often involved e-mailing large attachments or sending documents through the mail and did not always allow trade partners to get information immediately.

In developing the new trade partner extranet, Robert Mondavi wanted to take advantage of the information already on its existing intranet and extranet. However, the company wanted to build the new site using new content management technology and then transition the older sites to the same technology.

“The original content management technology we used on our first two sites was cumbersome and time consuming to use, requiring a ton of custom programming work to create and maintain,” explains Brian Shelden, IT Director of Robert Mondavi. “Changing the appearance of a screen took two days. Launching a new brand on the Web took three to four weeks. Maintenance using the proprietary scripting language was unbearably time intensive. There was no code reuse. It was a large, fragile, custom environment that took a lot of bodies to maintain.”

In addition to Robert Mondavi’s intranet and distributor extranet, the company maintains a dozen labelspecific consumer sites. Each requires a lot of work to post changes, and content creators at Robert Mondavi weren’t happy with the IT bottleneck.

“Internal customers were clamoring for more functionality and more hands-on participation in site revisions and updates,” Shelden says. “They rightfully complained that feature additions and changes took too long. Because the IT staff had to develop every change, it really delayed the transfer of information to customers.”

Launching a new site using old technology would be like pouring new wine into old bottles, and Robert Mondavi did not want to do that. It was highly motivated to find a new content management environment that would allow it to quickly and easily publish information about its wines and get out of the custom coding business. Robert Mondavi was eager to get a site up and running before the key 2003 fall/holiday selling season, and knew that it would never meet the deadline using its old content management system.

Solution

The Robert Mondavi IT staff revisited the portal market to evaluate the latest offerings and found that Microsoft® Windows Server System™ integrated server software—with Microsoft Content Management Server 2002 and SQL Server™ 2000 running on the Windows® 2000 Server operating system—had taken its place alongside leading content management solutions. What they saw impressed them. They saw an integrated solution that promised to reduce the complexity of their current, heterogeneous solution and lower their IT management costs.

Microsoft .NET Technology a Big Plus

Robert Mondavi liked the idea of building on Microsoft .NET software to connect information, people, systems, and devices. “We had previously spent a year building a Java-based application and found the Java architecture to be very complex with lots of moving parts and too much dependence on third-party products,” says Shelden. “Microsoft .NET is the exact opposite: It’s an integrated environment that’s simple to work with yet still has many of the same advanced capabilities as Java, such as the C# language and Web-based applications. The fact that Content Management Server is a Web-based, .NET-based application is huge for us. It’s streamlined and straightforward.”

Shelden wanted a content management system that would relieve the IT staff of so much involvement in updating websites. “We wanted to completely turn publishing and site maintenance over to content owners,” he says. “And we didn’t want to expend a huge effort deploying new sites. All our sites are similar, so we wanted an environment that would let us reuse a large percentage of code.”

Robert Mondavi brought in Microsoft Corporation and Microsoft Gold Certified Partner Allin Consulting to do a proof of concept with Content Management Server and SQL Server, to ensure that the solution would meet the company’s needs. After this four-day engagement, Shelden and staff gave Microsoft portal technologies a thumbs-up, and development of the new trade customer extranet began.

Allin Consulting used the Microsoft Visual Studio® .NET 2003 development system to design the high-level site architecture and then worked hand in hand with Robert Mondavi staff to build, test, and deploy the extranet. The effort took three full-time people and two part-time people about five months, four of which were spent on design and development and one on testing.

“Microsoft .NET was brand new to Robert Mondavi’s IT staff, but the ease of learning .NET and C# was part of the win,” explains Karl Kuhnhausen, E-Business Solution Director for Allin Consulting. “Making the transition from one object-oriented language to another was relatively easy.”

Online Wine Resources

Robert Mondavi’s new trade customer extranet (tradeconnect.robertmondavi.com) allows some 400,000 hotels, restaurants, wine shops, airlines, and other volume buyers of wine to learn about Robert Mondavi wines, read tasting notes and accolades (third-party write-ups), and access a library of bottle and label images. Customers initially sign up for the site, completing a brief profile. On subsequent visits, the site shows each customer only content that is relevant to its business.

For example, customers indicate whether they are on-premise or off-premise companies (indicating where the wine is consumed). Some Robert Mondavi brands are available only to on-premise customers, so soon these visitors will not even see the off-premise brands. Robert Mondavi has plans to develop more audience-specific content catering possibly to restaurants, hotels, or specific geographic regions. (There is no e-commerce component on the site due to strict laws governing wine sales.)

“We really like the concept of templates and placeholders in Content Management Server,” says Kuhnhausen. “Robert Mondavi had defined four content types in its old content management system, and Content Management Server allowed us to re-create those content types in the new environment. We also like the extensibility of the application programming interface [API]. The site had to look and feel like the two existing sites. With the Microsoft API, we were able to customize and even improve on the old site design.”

Initial concerns about site performance were quickly put to rest. “The performance of Content Management Server is phenomenal,” Shelden says. “The underlying .NET-based infrastructure yields much of the performance increase, and the tight integration with Microsoft SQL Server 2000 provides the rest. Our distributor extranet, built with the old content management system, also runs on SQL Server and is very similar in design. But performance of the new portal is at least four times better than that of the older one. Great site responsiveness, of course, generates more customer goodwill.”

Robert Mondavi uses Microsoft SQL Server 2000 as its content repository. The tight integration between Content Management Server and SQL Server improves performance and simplifies application development and maintenance by allowing developers to take advantage of common Microsoft development tools and skills. “SQL Server is very easy to manage and maintain,” Shelden says. “We already had SQL Server experts in-house; it was a natural for this application.”

One popular feature of the site is the download manager, which speeds up downloads over dial-up connections. A customer can go through the site, select documents or images to download (point-of-sale materials, labels, bottle shots, and the like), and “click” them into a shopping cart, e commerce style. When the customer is finished, Content Management Server puts all the items in a zipped file and creates a selfextracting executable file that dramatically speeds up download time over a dial-up connection.

The new Robert Mondavi Trade Connect site runs on two servers: a dual-processor Web server that runs the Microsoft Windows 2000 Server operating system and Content Management Server 2002, and a four-way database server (expandable to eight processors) that runs Windows 2000 and SQL Server 2000.

These internal servers, accessible by content publishers, are replicated on identical external servers beyond the firewall. Content Management Server extracts changes from the internal systems and replicates them on the external read-only systems accessed by customers.

Benefits

The new trade customer extranet based on Microsoft portal technologies makes it easier to add and change site features and is easier for developers to maintain, thus providing Robert Mondavi with a far less expensive Web publishing environment. Mainly, the site lightens the support burden on the Robert Mondavi sales force and provides trade customers with 24-hour access to information about Robert Mondavi brands and wines. This increases trade customer knowledge and ultimately yields increased sales.

Faster, Easier Development and Maintenance

The new trade partner extranet based on Microsoft Content Management Server 2002 is a breeze to manage compared with the sites created with the old content management system. Making a routine site change has gone from an average of two days to five minutes. Launching a new brand site has gone from two to four weeks to 10 to 15 minutes. And most of those 15 minutes are spent collecting information such as logos, not wrestling with the software.

“One of the features that attracted us to Content Management Server was the ability to build additional sites and features very quickly and efficiently, while still utilizing information stored on our old content management system,” Shelden says. “Besides, it would have been prohibitively time intensive or impossible to build some new features—such as a stylized home page, self-administered sign-up, and brand hierarchy— using the old system.”

When the IT department does need to change the site, Content Management Server helps to simplify the work. “Everything is so much simpler to deal with, because nothing is custom,” Shelden says. “Content Management Server uses standardized functionality and reusable code, so new features or changes are extremely fast to implement. For example, in the Java environment, it took us a good week to put together the code needed to do single sign on. In the Microsoft-based environment, it took five minutes, and three of those minutes were used to read the documentation.”

The more straightforward programming environment translates into better use of limited IT resources. “The IT staff can focus on solving new business problems rather than maintaining existing sites,” Shelden says. Their first task will be to reengineer the two older sites with Content Management Server, a job that Shelden estimates will take only a couple of months, versus the eight months it originally took to build them. Then his staff can get busy on a new SQL Server analytics project and a harvest management application.

Lower Costs

With Content Management Server 2002, Robert Mondavi will be able to maintain 15 websites (2 extranets, an intranet, and 12 public sites) with a head count of just two people. The old system required almost one fulltime person per site. This means that Robert Mondavi can redeploy existing staff to new projects and expand its Web presence without hiring more people.

Additional cost savings come from lower maintenance fees. “Annual maintenance on our old content management software was a six-figure sum,” Shelden says. “With Microsoft, it’s a fraction of that.” Robert Mondavi also saves on consulting because Shelden’s staff can do more work in the .NET-based environment without outside help.

“In the first year, our new Web portal solution on the Microsoft platform will probably save us $100,000 in reduced maintenance and consulting costs,” says Shelden. “The ROI [return on investment] will be 18 months to two years, tops.”

Happy Customers Who Buy More Wine

Everyone at Robert Mondavi is toasting the move to Microsoft portal technologies. The IT staff is happy because developers are working on a modern, standards-based system that is easy to use. Internal customers are happy because they are more easily able to publish their own information without IT assistance. And Robert Mondavi’s trade customers are happy because they get fast answers to questions about Robert Mondavi wines and have fast access to a treasure trove of marketing materials with which to educate their staffs about ines.

Issues to be addressed:

1. Bring out the Facts ( such as situation, solution ,benefit etc ) of the case.

2. How would you analyse the facts in order to create integration between the situation, solution and the benefits.

3. In terms of the specific example quoted in the case, Establish how was it useful in making the project successful.

 

Case 5: Phoenix Technologies and its End-to-End Solution

Introduction

Phoenix Technologies develops firmware and applications that enable, protect, and recover computers and devices on a network. The company’s marketing department relied on IT staff to publish Web content from Microsoft Content Management Server 2001 to a Linux-based Web server. The process was time-consuming and costly, requiring at least one employee with specialized skills to manage integration. Seeking a streamlined approach to publishing, executives evaluated end-to-end systems and chose an all-Microsoft solution because it cost less and was easier to maintain. Phoenix migrated from Linux to Microsoft Windows Server 2003, upgraded its content management software, and installed Microsoft Systems Management Server 2003 to deploy software updates. The company simplified its publishing procedure, automated the update process, and saved U.S.$100,000 per year in total costs compared with a Linux solution.

Situation

Phoenix Technologies helped launch the PC industry nearly 25 years ago by creating the basic input/output system (BIOS) for computers. A BIOS is a set of essential software routines that tests hardware at startup, starts the operating system, and supports the transfer of data among hardware devices, including the date and time. Today, a Phoenix BIOS, now called Core System Software, ships in more than 100 million new computer systems each year.

Phoenix Technologies is headquartered in Milpitas, California, and has offices in China, Japan, Korea, and Taiwan. Each office has its own Web site, and each international office translates the English content on the U.S. Web site into its local language. All Web sites are hosted in California.

To publish to its public Web site, the company’s marketing department in the United States first created content by using Microsoft® Content Management Server 2001, a tool that enables companies to quickly and efficiently build, deploy, and maintain mission-critical, content-rich Web sites. Once a day, the IT department ran an automated custom script that exported the content from Content Management Server 2001 to a Linuxbased Apache server using a Microsoft .NET connection software script. However, because of emergency content updates such as news announcements or content errors, the marketing department often had to ask the IT department to publish content outside its regularly scheduled publishing.

Because managing the integration between Content Management Server and the Linux-based server computer required at least one individual with specialized skills, the process of producing content was not only time consuming but also expensive. In addition, IT personnel had to maintain updates for two technologies, detracting from the department’s job of building new productivity tools and applications.

“Managing the integration between Content Management Server 2001 and the Linux server required at least half of a full-time employee’s time, and this person had to have expert knowledge of Linux software,” says Cliff Bell, Chief Information Officer of Phoenix Technologies.

As the twenty-fifth anniversary of Phoenix Technologies drew near, the company decided to redesign its Web site. Executives reviewed the content publishing process and determined that it could be simplified by moving to an all-Microsoft or all-Linux solution. The goal was to gain an integrated solution that would publish content efficiently, remove the IT department from the publishing process, and help IT distribute software updates easily and efficiently. Finally, the company wanted to keep costs down by not having to hire any new employees to manage the solution.

Solution

Phoenix Technologies evaluated both Microsoft and Linux operating systems as part of an end-to-end solution. Company executives discovered that the open source solution was more expensive because it required more staff to maintain compared with the solely Microsoft-based solution. “When we evaluated both Linux and Microsoft-based solutions from a total-cost of ownership standpoint, Microsoft was clearly the better choice,” says Bell.

With the help of Microsoft Gold Certified Partner Allin Consulting, Phoenix Technologies migrated its Web server computer from Linux to the Microsoft Windows Server™ 2003 operating system, the foundation of Microsoft Windows Server System™ integrated server software.

Along with migrating from Apache to Internet Information Services (IIS) version 6.0 (the Web server in Windows Server 2003), the company upgraded to Microsoft Content Management Server 2002. Next, project members placed all desktop and server computers within the Active Directory® service—a virtual, central location to manage users, computers, and applications. To deploy updates, Phoenix Technologies implemented

Microsoft Systems Management Server 2003. Finally, Phoenix Technologies upgraded to the Microsoft Windows® XP Professional operating system to help improve security.

Benefits

In 10 weeks, Phoenix Technologies standardized its Web publishing infrastructure on Microsoft Windows Server System, upgraded its content management software, gained an automated update management solution by using Systems Management Server 2003, and redesigned and refreshed the content on its five Web sites. Today, IT resources no longer are tied up in publishing, and each office can publish content at any time of day from Content Management Server 2002 to Internet Information Services 6.0. To achieve this, all employees of the marketing departments at each Phoenix location received training on Content Management Server.

“The biggest benefit of standardizing our infrastructure on Microsoft Windows Server System is that it truly is an integrated, seamless solution—from content creation to the user viewing the content online,” says Bell.

Streamlined Process Reduces Publishing Time by 80 Percent

Phoenix Technologies no longer needs someone to manage the process of exporting content from Content Management Server to the Linux-based server. In the past, it required at least one staff member with expert knowledge in Linux software and the custom interface. Now, content automatically publishes in real time to the IIS server computer, thus avoiding the scheduling delays of having to involve the IT department. Since moving to Windows Server 2003, the company has reduced the time that it takes to publish Web content by 80 percent.

Update Automation Improves Security

Phoenix Technologies added a new level of desktop management and automation to its infrastructure by placing desktop computers within Active Directory and deploying software updates by using Systems Management Server. IT employees no longer have to manually manage the process of installing updates because Systems Management Server deploys the updates automatically. This leaves more time for IT employees to focus on new projects.

Business Saves Money by Not Increasing Staff

Phoenix Technologies has one staff member that is well-versed in Linux; however, if that individual left the company, Bell believes it would be a challenge to hire someone else with the same expert knowledge. “It would probably cost me $100,000 a year more if we went with a Linux solution, because I would have had to hire at least one other person,” says Bell. “The IT department can provide more services to the business for less money.”

Training Increases Productivity, Removes IT from Publishing Process

Publishing to the international Web sites now is done at each office, instead of being done in the United States by the IT department. The employees of each office received training on Content Management Server 2002. This saves Phoenix Technologies money and time, because the IT department no longer has to be involved in the publishing and staff members can update content whenever they need to. “We can send content to our international offices, and they translate it and post it directly to their own Web sites,” says Bell.

“My decision to go with Microsoft really comes down to total cost of ownership,” Bell concludes. “If you look at just the price of Linux software, it seems cheap. But if you factor in the price of extra staff to maintain the system, it very quickly gets expensive.”

Anyways the consequence was very conspicuous with the good news that the Software Company Saves $100,000 per Year by Replacing Linux with End-to-End Solution.

Issues to be Addressed:

1. Bring about the Facts of the Case.

2. Based on the facts, Establish the crucial aspects which made Phoenix get success in their venture.

3. What exactly is your perspective towards the End- to – End solution with regard to the application of the software: (a) Microsoft (b) Linux

Project Management

03 Jul

CASE STUDY: 1

Anand Enterprises is broadly diversified company with presence in a variety of sectors such as cement, textile, chemicals. After a thorough review of various capital projects undertaken in the last 5 years the executive committee of Anand Enterprises felt that the quality of market and demand analysis of most of the projects was somewhat patchy. As a marketing analyst you have been invited by Arvind Swami, the managing director of Anand Enterprise, to do a seminar on market and demand analysis for the business heads of the company. Among other things, he wants you to address the following issues.

Q1) How should one evaluate secondary information?

Q2) What are the sources of uncertainties in demand?

Q3) Discuss the steps in a sample survey?

Q4) Briefly describe the various methods of demand forecasting?

 

CASE STUDY: 2

Sagar Ltd is a leading manufacturer of automotive components. It supplies to the original equipment manufacturers as well as the replacement market. Its projects typically have a short life as it introduces new models periodically. You have recently joined the company as a financial analyst reporting to Shekhar Dhawal, the CEO of the company. He has provided you the following information about three projects A, B & C they are being considered by the Executive Committee of Sagar Ltd.

a) Project A is an extension of an existing line. Its cash fund will decrease over time.

b) Project B involves a new product. Building its market will take some time and hence its cash flow will increase over time.

c) Project C is concerned with sponsoring a pavilion at a Trade Fair. It will entail a cost initially which will be followed by a huge benefit for one year. However, in the year following that a substantial cost will be incurred to raze the pavilion.

The expected net cash flows of the 3 projects are as follows :-

Year    Project A      Project B     Project C

0            (5000)          (5000)         (5000)

1                3500            1000           15000

2                2500           3000          (10000)

3                1500            4000

Shekhar Dhawal believes that all the 3 projects have risk characteristics similar to the average risk of the firm and hence the firm’s cost of capital viz. 12% will apply to them.

Q1) What is payback period and discounted Payback period?

Q2) Find the payback periods and the discounted payback periods of Projects A & B?

Q3) What is the Net Present Value (NPV)? What are properties of NPV? Calculate the NPV’s of Projects A, B & C?

Q4) What is internal rate of return (IRR)? What are the problems with IRR? Calculate the IRRs for A, B & C?

 

CASE STUDY: 3

A project consists of 12 activities and their time estimates are shown below.

Activity Time (in weeks)

ta         tm       Tp

(1–2)       4           6        10

(1–3)       3           7         12

(1–4)       5           6         9

(1–7)       2           4         6

(2–4)      6          10       20

(2–6)      3           4         7

 

Q1) Draw the network diagram?

Q2) Determine the critical path?

Q3) Calculate event slacks and activity floats?

Q4) Find the standard deviation of the critical path duration?

Q5) Compute the probability of completing the project in 30 weeks?

 

CASE STUDY : 4

Microelectronics Corporation is currently at its target debt equity ratio of 5:1. It is considering a proposal to expand capacity, which is expected to cost Rs 500 million and generate after tax cash flows of Rs 130 million per year for the next 8 years. The tax rate for the firm is 30 percent. Mahesh the CEO of the company, has considered two financing options.

a) Issue of equity stock. The required return on the company’s new equity is 20 per cent and the issuance cost will be 12 per cent.

b) Issue of debentures at a yield of 13 percent. The issuance cost will be 3 per cent.

Q1) What is the WACC for Micro-electronics?

Q2) What is Microelectronic’s weighted average flotation cost?

Q3) What is the NPV of the proposal after taking into account the flotation costs?

Q4) Do you have any suggestion to Mahesh?