INTRODUCTION It was June 3, 2001. Zhou Jianglin, project manager for Ji'nan Broadcasting Corporation (JBC) was waiting for a meeting with Nortel Network's account sales manager, Frank Kang. There were many questions that Zhou intended to ask Kang regarding JBC's data and voice project (DVP): Could Nortel work in conjunction with Alcatel or Lucent to complete the project? Should the network be centrally controlled or should adjustments be allowed remotely? How could JBC be assured that the project would be completed on time, as specified and on budget? Headquartered in Ji'nan, the capital of Shandong province in China, JBC planned to provide data and voice services to thousands of residential and business customers in 60 sites throughout the province. JBC had planned to go into competition with the national data and voice carriers in anticipation of liberalization of state-owned telecommunications markets. These services were scheduled to commence in January 2002, six months away. Based on the request of his managing director of Data and Voice Services, Han Xiaowei, Zhou had arranged an initial meeting with Eastern Postel (Postel) in late May 2001. Postel was a national manufacturer and installer of, among other products, data transmission equipment. To meet the requirement of the DVP, Postel had contacted Nortel for its Passport data and Meridian voice products. Nortel assured Postel that they could meet JBC's project goals, and a Nortel pre-sales team was dispatched from Hong Kong to perform a project scope. In the meantime, however, Zhou had heard rumors of conflict between JBC's departments regarding the DVP. The managing director of radio and television programming, Liu Zhongshi was said to have voiced his objection to the project, insisting that providing telephone and Internet service was the domain of China Post & Telecom, the government-owned national provider. Shao Yangwei, managing director of corporate services had mentioned that after consulting colleagues in Beijing, he believed that Alcatel voice products "were more robust" than Nortel products. Perhaps, Shao insisted, Nortel and Alcatel products could be tested head-to-head to determine superiority. The president of JBC, Guang Chengmen, had listened to these comments and, expressing that he had little time to deal with them at the present, passed the suggestions on to Han in Internet Services. Guang requested that these suggestions be taken intoJrnnn aaoaocnenno cospoaamon (JBC) Created alter the Second World War, JBC was Shandong province's public broadcaster. It operated one high-powered broadcast station and two low-powered broadcast stations, providing three television channels and seven radio channels for the province. Television and radio content were created in-house and purchased from national government-nut networks- At the start of 2001, JBC had four busineSs departments: Television and Radio Programming, Television and Radio Broadcasting, Corporate Services {human resources, publicity, business advertisement sales) and the newly created department of Data and Voice services. It employed 850 people in four locations, serving a population base of nine million people. Currently, JBC received revenues of RMBIGB millionI from the government for operational expenses. Below was a breakdown of 21100 expenditures: Jec Expenditures, zone (in RMBa] Intemal program production costs 25 million Purchased programming 25 million Broadcastin costs 15 million Salaries and we es 25 million Capital expenditures and other expenses 18 million In response to anticipated competition from selected foreign companies, the Chinese government announced publicly in February 2001 that .I'BC would he privatized before 2005, with shares listed on the Shenahen Stock Exchange. This energized everyone at IBC it was expected that employees would be granted stock options based on several factors including \"department efficiency" and seniority. Although the reward structure seemed straightfonvard, it was noted by IBC insiders that during similar privatization efforts in Beijing, responsibility for the division of employee stock options had been left to the company president. The Growth Plan: Focus on Serving the Business Market In early April 200], Guang sat down with his three managing directors, to lay out his new strategic growth plan. Central to JBC's growth was its focus on the under-served Shandong business market There were estimates of more than 5,000 companies of all sizes operating within 250 kilometers of Ji'nan, and that number was expected to grow rapidly if China gained acceptance into the World Trade Organization. Many of these customers were exporters or export-ready rms awaiting the chance to conduct business with international customers. J'BC, Guang proclaimed, would provide provincial and national advertising services, telephony, and Internet services. In addition to announcing the creation of a fourth department, Internet services, Guang laid out a reorganization plan and new department targets for the next four years: Jae Targets (in Ross: cum Broadcast 20 million 40 million Advertising Revenue Data and Voice [5 million 30 million 48 million 42 million 38 million 35 million 42 million 38 million 35 million Guang ended the meeting by announcing that THE had been granted an additional lump sum of RMBI 50 million to prepare for its initial public olfering (IPCIL scheduled January 3, 2005. ZHDU JLANGLIH In 1997, Zhou joined JBC as a production assistant in the Television and Radio Progranuning department This was his first job after graduating from Tsinghua University, where he completed an undergraduate degree in electrical engineering For his last year of university, because of his good grades and his uency in English, Zhou was selected to be an exchange student in London, England. There, he was introduced to global television programming, and he marveled at the vast selection of programs available to Londoners. In addition, he encountered the Internet for the first time, using it to converse with contacts around the world. Convinced that his ideal career lay in the broadcast industry, Zhou relied on his network of contacts to sectu'e an interview at THE. A year later, he landed thejob and moved to Ji'nan. During his spare time, he visited the local university to use the Intemet for basic functions such as email, news and games. On May [5, 2001, 211M was promoted to project manager. Because he was the only person in the company with both internet and electrical engineering experience, he was assigned the task of managing the data and voice project implementation. THE DATA AND VOICE PROJECT {ova} lntended to cover an area roughly 200 square kilometers, UV? could provide voice and data services so 90 per cent of Shandong's businesses and inhabitants. No data services existed in the province, and telephone services local and long-distance were provided by China Post & Teleeorn. Zhou had been informed that there existed a budget of RMB] 10 million to spend on this project. [-Ian wanted this project to yield the following results by January I, 2002: - Capacity to provide up to 5,000 high-speed ( l0 megabits per second) data lines, and up to three million voice lines. a Ensure that the equipment was \"evergreen" meaning that it could be used in conjunction with next generation equipment and scalable. JBC aimed to purchase blocks of long-distance and data capacity from the state-owned national carrier, China Post & Telecom via China Unicom (a new national carrier), reselling it to Shangdong's businesses and general populace. With its new network, JBC would be able to service and bill customers for outgoing data and voice, while incoming data and voice would continue to be handled by China Post & Telecom. At this point, Zhou was still unsure if reselling long-distance capacity from China Post & Telecom was permitted under current government rules. Zhou was certain that Han had checked this detail - after all, no mention of this restriction had been made to Zhou. Another issue related to in-house telecommunications engineering expertise: JBC had none. Zhou wondered whether he should request a team be hired, retain an outside engineering firm or rely on Postel. With many questions on his mind, he made his first telephone call to Postel. EASTERN POSTEL (POSTEL) Originally named Eastern Telecom Equipment Factory (ETEF) under the Ministry of Post & Telecommunications, Postel was one of the leading manufacturers of telecommunications equipment in China. In 1997, China Post & Telecom privatized Postel, issuing 100 million common shares on the Shenzhen Stock Exchange. In the three years following privatization, Postel had grown to 1,800 employees, including 700 senior- and middle-management staff. At the end of 2000, it had RMB1 billion in assets and income of more than RMB600 million. Postel focused on the design, manufacturing and marketing of telecommunications equipment, breaking its businesses into five categories: Data communications Wireless communications Distribution equipment Electrical equipment Cabling systems Postel stated that it would remain dedicated to serving China's telecommunications industry, supplying equipment to national and regional carriers. In addition, Postel exported its products to many countries, including Russia, Vietnam, Korea, Nepal, Cuba, Bangladesh, Pakistan, Colombia, Singapore and China's Hong Kong region. A Postel Business Category: Data Communications and Transmission To provide data services, networks required data communications and transmission equipment. Postel had a history of working with Nortel. In 1992, Postel had collaborated with Northern Telcom (Nortel's previous name) to produce DPN-100 packet switching equipment for data communications. This had resulted in Postel garnering more than 80 per cent of China's packet switching network. In 1996, Postel continued to provide customers with multi-service integrated data solutions by constructing integrated information networks (internal, dedicated networks) for companies in both the broadcast and television industry and the broadband multimedia industry.In addition, Postel had designed in-house products for data transmission, including plesiochronous digital hierarchy/synchronous digital hierarchy (PDH/SDH) equipment, PCM multi-service access equipment, El cross-connect equipment, converters and power distributors. ZHOU'S FIRST MEETING WITH POSTEL After exchanging pleasantries, Zhou requested a face-to-face meeting with Postel's network sales manager, Chin Anshang. To build the DVP, Chin explained to Zhou, Postel would have to use a combination of the latest generation of Nortel Passport data equipment, Nortel Meridian voice equipment and Postel data transmission equipment. Chin noted Zhou's other questions, promising to address them in a few days. The first move was to allow Postel's preferred supplier, Nortel, to perform a project scope. Zhou agreed, emphasizing that it was imperative they move quickly in order to meet the completion date. THE DVP PROJECT SCOPE Zhou was informed that a project scope was necessary before Nortel could submit a bid to provide equipment. Chin had added that he was considering allowing Alcatel and Lucent to bid but was unsure if this would delay the project further. After all, Chin had estimated that preparing a network of the DVP's size required a lead time of eight to nine months. If Nortel was the sole supplier, Chin explained, the project would move much more smoothly than if two or three manufacturers were involved. On June 3, 2001, Nortel's five-member team, headed by Enterprise Manager John Kang, arrived at JBC's headquarters and were allowed to inspect current equipment and gather information. They were informed that JBC had purchased Fujitsu data equipment for use between its offices. Nortel's team confirmed that the Fujitsu equipment could be integrated into the system with some engineering work. This integration required a specific connection and about two weeks of testing, with both Fujitsu and Nortel personnel present. Nortel completed the scope in a day and presented general results to Postel and JBC. To meet JBC's requirements, Nortel would provide Passport and Meridian equipment for 60 nodes. Some of these nodes were as far as 90 kilometers from the central station. Kang added that he was confident Nortel and Postel would be able to provide the network equipment for the price at which JBC budgeted. Chin announced at the meeting that he would not ask Alcatel to perform a project scope. Instead, he would inquire about the price of voice equipment necessary to complement Nortel Passport data equipment. Zhou's Questions During a break in the meeting, Zhou presented his questions to Kang. Could Nortel work in conjunction with Alcatel or Lucent to complete the project? Should the network be centrally controlled or should adjustments be allowed remotely? How could JBC be assured that the project would be executed on time, as specified, and on budget? First, Kang explained that Nortel would be willing to work with Alcatel or Lucent as long as demarcation points were identified. Demarcation points indicated where the work of one manufacturer stopped and another started. For example, a telephone service provider's demarcation point with a consumer ended at the phone jack installed into the consumer's house wall. From that point, the consumer was responsible forthe function of his or her telephone equipment. Therefore, it would be possible for Nortel to provide data and Lucent to provide voice products as long as all four stakeholders (Nortel, Lucent, Postel, JBC) could agree on the demarcation point. In this scenario, Nortel would be responsible for testing its own equipment up to the agreed-upon demarcation point. Kang continued by saying that the network could be centrally or remotely controlled. It was just a matter of whether JBC had the expertise to monitor the network remotely. Last, he assured Zhou that a project team consisting of JBC, Postel and Nortel stakeholders would be struck, and timelines for the completion of the project would be set. In addition, Nortel could provide all the engineering support necessary to complete the project. Satisfied with these responses, Kang ended the meeting by stating that he looked forward to the start of the DVP. REPORTING BACK TO THE MANAGING DIRECTOR Han, Zhou's managing director, was pleased that the project was underway. He indicated to Zhou that he had consulted with his colleagues and that they continued to harbor some objections to the DVP. Han promised to keep his colleagues informed about the latest developments on the DVP, emphasizing to Zhou that this project carried significant political weight. Regarding the programming managing director's objection (that JBC had no right to provide data and voice services), Han informed Zhou that he would look into it personally. Since Shao Yangwei, managing director of corporate services, had requested that Alcatel products be used in place of Nortel products, Han asked if Zhou could develop a comparison between the rival products. Zhou diligently took notes. A FOLLOW-UP MEETING WITH POSTEL On June 5, 2001, Zhou had his second meeting with Postel. He received a proposal from Postel. Here was the summary page: Recommended Option: 60 nodes in broadcasting and TV centers located in various towns and villages. Trunk equipment would run standard Nortel Passport. Three Ist degree nodes (Passport 15000 VSS), 528 sets, 14 2" degree nodes (Passport 7480 equipment, 148 sets), and 43 3" degree nodes (Passport 7440 equipment, 148 sets.) Each node would be equipped with a Postel 350 Ethernet exchange. 155M single module optical fiber would be applied between trunk nodes to connect relay chain. Nortel Meridian voice equipment matched with Passport throughout. Cost = RMB 109 million. Products had life spans of approximately eight years each. Engineering and installation extra. Delivery date, January 1, 2002. Alternative: Exchange Meridian voice equipment with Alcatel voice equipment. Reduces total equipment cost by RMB950,000. Note: Newest generation Alcatel voice product not yet 'Type Approved."' Incorporating current equipment: RMB850,000 for engineering work to link Fujitsu voice equipment to network. Reduces cost of Nortel-sourced equipment by RMB400,000. Engineering and installation (managed by Postel) provided by Nortel estimated at RMB22 million. Routine maintenance support (managed by Postel) estimated at RMB15.4 million in the first year, full- cost (includes salaries, building, training, other expenses)Recommendation 1: >"Nortel could work in cooperation with Alcatel or Lucent to complete the project." Rationale: > Before receiving a bid, Zhou was advised that a project scope was required. In addition, he said that he was discussing whether to open the project up to Alcatel and Lucent's bids but wasn't sure if doing so would cause further delays. Chin had calculated that an eight-to-nine-month advance time was needed to prepare an infrastructure the size of the DVP. According to Chin, the project would go considerably more quickly if Nortel was the only provider as compared to two or three other manufacturers. In a single day, Nortel finished the scope and gave Postel and JBC an overview of the findings. Nortel would deliver 60 nodes' worth of Passport and Meridian gear to fulfill JBC's needs. A few of these nodes were up to 90 kilometers away from the main station. In the conversation with Kang, it was made clear that Nortel would cooperate with Alcatel or Lucent if clear dividing line points were established. Where the labor of one manufacturer ended and another began was marked by demarcation points. Therefore, as long as all four parties (Nortel, Lucent, Postel, and JBC) could agree on the demarcation point, Nortel could offer data while Lucent may provide voice products. Process group: Process: 13.2 Plan Stakeholder Engagement > Plan Stakeholder Engagement is the process of creating strategies to include project stakeholders based on their requirements, objectives, areas of expertise, and potential effects on the project. Tools & technique: 13.2.2.1 Expert Judgement > Individuals or organizations having particular knowledge or training should be considered for their expertise. Measurements of expertise should include the organizational environment and culture both inside and outside the organization, knowledge from previous projects, knowledge of the traits of stakeholders, stakeholder groups, and organizations related to the current project might be involved in earlier, comparable projects