Kerzner, H., (2006). Project Management Case Studies (2^nd ed.), John Wiley & Sons, Inc., Hoboken: NJ.

Quantum Telecom: pp. 329-330

In June 1998, the executive committee of Quantum Telecom reluctantly approved two R&D projects that required technical breakthroughs. To make matters worse, the two products had to be developed by the summer of 1999 and introduced into the market place quickly. The life expectancy of both products was estimated to be less than one year because of rate of change of technology. Yet, despite these risks, the two projects were fully funded. Two senior executives were assigned as the project sponsors, one for each project.

Quantum Telecom had a world-class project management methodology with five life cycle phases and five gate review meetings. The gate review meetings were go/no-go decision points based upon present performance and future risks. Each sponsor was authorized and empowered to make any and all decisions relative to projects, including termination.

Company politics always played an active role in decisions to terminate a project. Termination of a project often impacted the executive sponsor's advancement opportunities because the projects were promoted by the sponsors and funded through the sponsor's organization.

During the first two gate meetings, virtually everyone recommended the termination of both projects. Technical breakthroughs seemed unlikely, and the schedule appeared unduly optimistic. But terminating the projects this early would certainly not reflect favorably upon the sponsors. Reluctantly, both sponsors agreed to continue the projects to the third gate in hopes of a "miracle."

During the third gate review, the projects were still in peril. Although the technical breakthrough opportunity now seemed plausible, the launch date would have to be slipped, thus giving Quantum telecom a window of only six months to sell the products before obsolescence would occur.

By the fourth gate review, the technical breakthrough had not yet occurred but did still seem plausible. Both project managers were still advocating the cancellation of the projects, and the situation was getting worse. Yet, in order to "save face" within the corporation, both sponsors allowed the projects to continue to completion. They asserted that, "If the new products could not be sold in sufficient quantity to recover the R&D costs, then the fault lies with marketing and sales, not with us." The sponsors were now off the hook, so to speak.

Both projects were completed six months late. The sales force could not sell as much as one unit, and obsolescence occurred very quickly. Marketing and sales were blamed for failures, not the project sponsors.

QUESTIONS:

1. Identify at least 3-5 main risks of these projects? Create a 5x5 risk matrix and assign values to the matrix and then each of the risks you have identified to indicate where you believe the risks fall within the risk matrix. Explain why you have placed each where you did.
2. How can we develop a methodology where termination of a project is not viewed as a failure? What techniques would you use to close out a terminated project?
3. Were the wrong people assigned as sponsors? Did the organizational structure play a part in the issues? How? Explain your answers.
4. What is in a risk management plan and how could the risk management plan have been used to help the sponsors?
5. What processes would you have in place to manage conflict, process gates, and approvals? Explain how they would be used for this case.
6. What would your recommendation have been for this case study and why?