White Paper The relevance and critical success factors of Project Management in the face of convergence

1 Abstract Quick technological changes along with political, social and economical decisions have led the Telecommunication industry to become a very dynamic and changing sector. International partnerships are everywhere and the tighter relation to IT represent highrisk potential. Statistics show that 70% of IT projects are either out of time or budget or simply fail. With such perspectives, measures ought to be taken to avoid the replication of this pattern. Efforts should be aimed to find out the relevant skills, practices and knowledge necessary to avoid pitfalls in the implementation of telecommunication projects.Quick technological changes along with political, social and economical decisions have led the Telecommunication industry to become a very dynamic and changing sector. International partnerships are everywhere and the tighter relation to IT represent highrisk potential. Statistics show that 70% of IT projects are either out of time or budget or simply fail. With such perspectives, measures ought to be taken to avoid the replication of this pattern. Efforts should be aimed to find out the relevant skills, practices and knowledge necessary to avoid pitfalls in the implementation of telecommunication projects. The Telecom Challenge 2 1 The Telecom Challenge During the last two decades, the telecommunication industry has gone through abrupt changes, we have seen the liberalization of the industry in countries where telecommunications were typically government controlled as well as a technological transformation (Horan and Schooley, 2004). Telecommunications are also considered a critical piece in the infrastructure of economic development and there are many economical reasons why countries tend to exercise tight control over their infrastructure. A term commonly used in the telecomm sector is the average revenue per user (ARPU) , this term explains how much has been billed to a customer phone, pager, TV decoder, etc., per month. Unfortunately, ARPU has been declining in time (McClelland, 2004). Some causes of this phenomenon are attributed to a rising traffic volume, increasing competition forcing providers to differentiate their offer based on price, causing, in turn, a drop in the revenue per bit as operators try to cut their costs per bit traffic. Source: Alcatel-Lucent, 2007 Figure 1. Traffic/Revenue Divergence World statistics show that the number of subscribers will continue to grow for the next 3 years up to 50% and that voice traffic will continue to be the main source of revenue for operators (Xavier and Ypsilanti, 2007). Yet the ARPU will continue to decline in developed markets and remain low in high growth markets. Lately, the industry has also been greatly affected by new competitors entering the market like cable TV operators offering voice services and broadband and not to ignore is the great impact internet has had in our daily lives (instant messaging, for example The Telecom Challenge 3 Skype) (Plank, 2006). What was thought to be a realm exclusive to telecomm operators has now become more of a commodity and yielding less profits for incumbents. In an attempt to counteract this profit loosing trend and to regain market share, the industry is moving in the direction of converged communications. Converged communications propose a challenge to telcos, by forcing them to strengthen partnerships with global and local competitors, suppliers and service providers, even by forcing a cross-industry interaction (content suppliers, for example), they are also challenged by the investments they need to make in large projects to enable their infrastructure to support unified communications, which is the current technological trend followed by the industry (Morse, 2006; Xavier and Ypsilanti, 2007). On the other hand, customers are demanding additional services: selected content, personalization, blended life style multimedia experience available universally. Such applications generate large amounts of traffic and have to be delivered at attractive rates, not to mention the large amount of investments being made to enable the infrastructure to deliver and support such services. Due to these conditions of competition and user demands, network providers are transitioning from legacy telecom technology, networks, and services to next generation networks that support convergence and blended personalized, enhanced applications and services (Vergados et al., 2000). Providers face the challenge of a major infrastructure transformation and although the possibilities expand the spectrum of new sources of revenue; implementing, deploying, operating and maintaining this new infrastructure of networks, systems, devices and services is a complex and costly task (Lanzolla and Anderson, 2008). Moreover, industry experts maintain that telecommunications are becoming more and more the realm of Information Technology and that a clear differentiation between the two sectors is nowadays difficult to identify (Adamopoulos and Papandreou, 2004; Oh and Lee, 2005). Telecom organizations are engaging on projects mainly related to IT at different stages of their infrastructure, the conditions are taking them to partner with international firms and providers. Unfortunately, past experiences showed, in general, that IT projects are very risky undertakings and the IT industry still struggles to improve their efficiency rate when it comes to successful projects (Nelson, 2007). Under these circumstances, the convergence of telecommunications propose an unlimited but also risky environment, as possibilities expand also do the chances of repeating the IT Project failure phenomenon. IT’s Risky Territory 4 2 IT’s Risky Territory Most of the research has focused on evaluating information technology projects in terms of schedule, cost and functionality, and amazingly enough the findings lead us to attribute failures in any of these fields mainly to human resource issues in other words: the team and the stakeholders (Yetton et al., 2000; Napier et al., 2007; Iacovou and Nakatsu, 2008). Some factors jeopardizing success and even completion in international IT projects are depicted in Figure 2. Source: Iacovou and Nakatsu (2008) Figure 2. Risk factors of international projects There are, on the other hand, assumptions that the IT project participants might require a unique set of technical, social and emotional skills to achieve success. The question IT’s Risky Territory 5 magnifies when it comes to managing culturally mixed teams. Hofstede and Hofstede (2005), and Trompenaars and Woolliams (2007) argue that culture is the underlying factor that leads humans facing similar situations to act differently based on their values, beliefs and/or customs. Demeester (1999) affirms that “science and technology are context-blind components of real life problems, but they can only affirm themselves in a cultural context”. The question then arises if new technology deployments in the telecommunication industry are not being jeopardized or constrained due to the reasons exposed above. In many IT-related studies, project success has been attributed to specific critical success factors (CSF). Nevertheless, CSF differ from one manager to another depending on the context he faces in the organization and according to geographical regions (Rai et al., 1996; Niazi et al., 2006). Other studies have shown supportive evidence of the impact of culture on managerial practices (Allen et al., 2005; Kayes and Kayes, 2005; Kanungo, 2006). Despite globalization and trends towards convergence of management practices, there appear to be many differences still between behavioural patterns. But what is actually going on in the telecommunications sector? What are the success factors for project management in this field? How can we better understand and leverage the factors that foster project success? Scholars in Action 6 3 Scholars in Action At the department of Information Management, we are concerned with the low rate of success of IT projects. Particularly, watching the speed at which the telecommunication sector is demanding IT services and products, we focus in unveiling the skills and practices necessary for successful IT project management in this industry. Based on a multi-country analysis of projects, a typology for each participant country is to be derived and a cross-cultural framework for IT can be proposed. Figure 3. Project Management Environment Our suggestion is to describe the project management environment assuming that skills, knowledge, technology and techniques are the fundament of a successful project. This fundament should support key areas of the a project as shown in Figure 3. Moreover, asking professionals in the field is a tool widely used in the scientific community. Involving field experts enable us to collect important facts that in turn enrich the body knowledge confirming, rejecting and generating new assumptions about this phenomenon. By using qualitative research methods it is possible to derive a set of skills and practices relevant to the specific context of telecommunications and provides the basis for generalization. This evidence aids in the design of a questionnaire (using likert-scale) to be applied in a larger sample for further analysis. Based on advanced statistics, we are able analyze the extend of the critical success factors, its impacts in a project realization and the role of the project manager and the necessary skills accordingly.