Barriers towards integrated product development — Challenges from a holistic project management perspective

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International Journal of Project Management xx (2013) xxx–xxx

JPMA-01585; No of Pages 13

Barriers towards integrated product development — Challengesfrom a holistic project management perspective

Anita Friis Sommer ⁎, Iskra Dukovska-Popovska, Kenn Steger-Jensen

Center for Logistics, Institute of Mechanical Manufacturing and Engineering, Aalborg University, Denmark

Received 5 March 2013; received in revised form 20 October 2013; accepted 29 October 2013

Abstract

The basis for product development in many large industrial companies is a traditional project management method positing non-overlappingphases, independent activities, and a dedicated project team. Research findings indicate that the use of integrated product development methodsincreases performance compared to traditional methods in contexts of complex problem solving, which are disruptive and non-linear. Even thoughintegrated product development has been the focus of a large number of research studies, these studies mostly focus on identifying success criteriaand improving performance, while the requirements for implementing integrated product development remain under-researched. This study takes amore holistic project management perspective and identifies both the challenges and the requirements of successful implementation through an in-depth case study. It was found in a chosen case company that successful implementation requires awareness and skills of integrated productdevelopment in senior management, as well as a set of cross-organizational project governance structures.© 2013 Elsevier Ltd. APM and IPMA. All rights reserved.

Keywords: Integrated product development; Project management; Project governance; Case study method

1. Introduction

Product Development (PD) can be a crucial competitive leverin the global marketplace (Browning and Ramasesh, 2007). Inmost of today's industrial manufacturing companies, PD is stillconducted using traditional project management methods fol-lowing linear process models (Haque, 2003), even though this isidentified as a main cause of low PD performance and marketfailure (Browning and Ramasesh, 2007). The alternative totraditional PD is found in the well-established research area ofIntegrated Product Development (IPD), which represents themost dominating paradigm in PD research today (Gerwin andBarrowman, 2002). Integrated Product Development (IPD) is amanagerial approach for improving product development perfor-mance through managing the overlapping, parallel executionand concurrent workflow of activities (Gerwin and Barrowman,

⁎ Corresponding author at: Fibigerstræde 16, 9220 Aalborg Øst, DenmarkTel.: +45 28444016.

E-mail address: [email protected] (A.F. Sommer).

0263-7863/$36.00 © 2013 Elsevier Ltd. APM and IPMA. All rights reserved.http://dx.doi.org/10.1016/j.ijproman.2013.10.013

Please cite this article as: A.F. Sommer, et al., 2013. Barriers towards integratedInt. J. Proj. Manag. http://dx.doi.org/10.1016/j.ijproman.2013.10.013

.

prod

2002; Naveh, 2005). In contrast to traditional sequential PD, IPDregards overlap and interaction of certain activities as highlyimportant (Duhovnik et al., 2009; Gerwin and Barrowman, 2002;Takeuchi and Nonaka, 1986). Furthermore, IPD research hastaken up a more holistic view on managing PD by includingseveral other performance-affecting elements than the PD processitself. These elements include project management (Danilovicand Browning, 2007), project governance (Winch, 2001),organizational structure (Menguc and Auh, 2010), and humanresource related aspects (Knudsen, 2007; Lee et al., 2008;Martins and Terblanche, 2003; Ojanen and Hallikas, 2009)among others. IPD environments are characterized by a highdegree of uncertainty, whereas traditional PD is based on theassumption of a low uncertainty environment (Buijs, 2003; DeMeyer et al., 2002). Uncertainty in PD stems from assumptionsabout activity dependencies, the need for information exchangewithin and between domains, and the people needed to solveproblems in product development. Managing all of these aspectsrequires approaches to aid the understanding of multiple domainsworking simultaneously and in an integrated way (Danilovic and

uct development— Challenges from a holistic project management perspective,

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2 A.F. Sommer et al. / International Journal of Project Management xx (2013) xxx–xxx

Browning, 2007). Therefore, it is argued that a holistic IPDapproach is necessary to increase PD performance, since itacknowledges the complexity involved (Takeuchi and Nonaka,1986; Tracey, 2004) and includes more aspects than the PDprocess itself (Tan and Tracey, 2007).

Despite prescriptive research on IPD improvement and IPDsuccess, implementation of IPD in companies is still not adequate,and old problems such as poor communication and integration offunctions are still rampant (Griffin, 1997; Haque, 2003; Tracey,2004). There is a need to investigate the current challenges in PDfrom a holistic viewpoint and to examine why suggestions forperformance-enhancing solutions in IPD research are not imple-mented in practice (Gerwin and Barrowman, 2002; Haque, 2003).Hence, the aim of this research is to investigate the currentchallenges in integrated product development and which require-ments are necessary for the successful implementation of IPD froma holistic viewpoint.

The paper is structured as follows. Firstly, a literature reviewon PD project management and holistic IPD elements ispresented and summarized through a holistic IPD framework inthe Theoretical background section. Secondly, the method isdescribed, including an overview of the elements of the in-depthcase study. Thirdly, the results are presented, analyzed, anddiscussed. Finally, suggestions for further research and theconcluding remarks of the paper are presented in the Conclusionsection.

2. Theoretical background

First, it is important to distinguish between the notion of aprocess model, a process, and a project. In this paper, a processmodel is regarded as a generic view of the main activities of aproject divided into phases, while the process itself is theunique series of interconnected activities involving severalstakeholders across functions and organizations. The project isthe temporary organization working to accomplish a certain,inter-subjectively determined task (Packendorff, 1995).

In this section follows a literature review on relevant research,including PD project management, PD process models, projectgovernance, the IPD framework, improvement of PD perfor-mance, and challenges in PD.

2.1. Product development project management

A project is generally understood as a series of tasks with cleargoals, limited time and resources, and inherent uncertainties(Nicholas and Steyn, 2012). Projects are viewed as different frompermanent business processes, since projects are characterized bydiscontinuous personal constellations, lack of organizationalroutines, short-term orientation, and trans-disciplinary integrationof internal and external experts (Muller et al., 2005). Thetraditional understanding of projects being a means to an end ischanging towards projects being viewed as temporary organiza-tions (Bakker, 2010; Packendorff, 1995) which is also theunderlying understanding of a project in this paper. This changein perception has altered the focus in project managementresearch from evaluation of project tools towards a more holistic

Please cite this article as: A.F. Sommer, et al., 2013. Barriers towards integrated prodInt. J. Proj. Manag. http://dx.doi.org/10.1016/j.ijproman.2013.10.013

approach, including project governance, employee/team interac-tion, organizational constructs, and human resource management(Packendorff, 1995).

A holistic approach is broadly characterized by the belief thatthe parts of something are intimately interconnected andexplicable only by reference to the whole (Oxford Dictionaries,2013). A holistic approach to PD including a project managementperspective was first proposed in 1986, when Takeuchi andNonaka called for a change from the linear approach to anintegrated approach called the ‘rugby approach’ (Takeuchi andNonaka, 1986). They argue that executives must realize that thesequential traditional product development method is insufficientto stay competitive. They derive a list of six characteristicsfor successful cross-organizational project management inlarge industrial organizations. These include built-in instability,self-organizing project teams, overlapping development phases,multi-learning, subtle control, and organizational transfer oflearning. Takeuchi and Nonaka (1986) argue that the goal is tocombine these characteristics to improve internal collaborationon product development, and to increase not only efficiencybut also innovativeness and product performance. The holisticapproach has since been supported by numerous IPD researchstudies (Balachandra, 2000; Jayaram and Malhotra, 2010;Knudsen, 2007; Koufteros et al., 2010; Naveh, 2005; Rauniar etal., 2008; Tracey, 2004; Un et al., 2010). Through these studies,researchers have found that successful implementation of IPD isdetermined by how organizations are able tomanage the interplayof a set of IPD characteristics (Danilovic and Browning, 2007;Duhovnik et al., 2009; Gerwin and Barrowman, 2002). Forinstance, Duhovnik et al. (2009) find three characteristics to becornerstones in IPD: parallelness of activities, standardization ofIPD process, and integration of processes.

2.1.1. Process modelsProcess models are used as project management tools to

frame project tasks (Nicholas and Steyn, 2012). Many differentprocess models exist. However, most are activity-based processmodels, visualizing the flow of activities during the projectperiod. The two dominant models are the sequential and iterativeprocess models (Browning and Ramasesh, 2007). The sequentialmodel is the most broadly used model within PD projectmanagement (Griffin, 1997; Grönlund et al., 2010; Ovesen,2012). It is often referred to as a stage-gate model, inspired by thestage-gate® model introduced by Cooper in 1979 (Cooper, 1979;Griffin, 1997). Here, project tasks are divided into a number ofsequentially dependent stages with well-defined gates in between(Nicholas and Steyn, 2012). The main challenge of the sequentialmodel lies in the rigidity of its nature (Browning and Ramasesh,2007). Due to the sequential interdependency of the stages, thesequential model does not allow for any tasks to bypass the gatesnor to repeat former tasks. Hence, in more uncertain projects, thismodel is not the most appropriate choice (Cunha and Gomes,2003; Minderhoud and Fraser, 2005).

In complex problem solving, defining requirements andanalyzing the setting are often necessary more than once (Stabelland Fjeldstad, 1998; Zhang, 2013). In these cases, an iterativemodel is more applicable than a sequential model, conceiving



3A.F. Sommer et al. / International Journal of Project Management xx (2013) xxx–xxx

product development as a set of planned iterations through allof the major project stages (Browning and Ramasesh, 2007;Minderhoud and Fraser, 2005). The iterative model is primarilyused in projects with a high level of uncertainty where, forinstance, it is necessary to review the requirements several timesas the project progresses (Browning and Ramasesh, 2007;Stabell and Fjeldstad, 1998). Recently, iterative models andmethods from software development have been applied andfound adaptable to industrial product development settings(Ovesen, 2012; Sandmeier, 2008; Schwaber, 2009). Suchmodels and methods include SCRUM (Schwaber, 2009) andExtreme Programming (Beck and Andres, 2004) among others.

2.1.2. Project governanceProject governance is an area of increasing attention within

project management research (Sanderson, 2012). Project gover-nance from a temporary project organization perspective isbroadly defined as a set of management systems, rules, protocols,relationships, and structures that provide the framework withinwhich decisions are made for project development and imple-mentation to achieve the intended business or strategic motiva-tion (Bekker and Steyn, 2007). The aim of project governanceis to enable efficient and effective project decision making(Garland, 2009). For structuring the governance of large capitalprojects, Bekker and Steyn (2007) identify four categories:project steering committee, cost estimating/control, projectreviews, and ethical conduct. In addition, Klakegg et al. (2008)find that governance functions include designing the decisionmaking process, setting clarity in priority, making resources forplanning available, and quality control of documents. Resourcemanagement is also identified as a central element in projectgovernance through other research studies. For example, resourcemanagement in IPD can be included in portfolio management(Killen et al., 2008). Implementation of portfolio management ispositively related to better inter-functional integration (Perks,2007), alignment of projects in the portfolio with businessstrategy, including a better balance in the portfolio (Killen et al.,2008), and for managing project uncertainties (Petit, 2012).According to Miller and Hobbs (2005), governance of largecomplex projects requires dynamic governance that can changeand adapt to the context. Hence, portfolio management alone isnot sufficient for IPD governance, but must include categories foradaption and change of governance constraints.

In summary, IPD governance includes three main categories:

- Portfolio management — including strategy develop-ment, prioritizing, performance management, and resourcemanagement.

- Knowledge management — including continuous learningand improvement of decision making.

- Project ownership — including cost control, quality control,reviews, and ethics.

2.2. Holistic integrated product development framework

A holistic IPD framework has been developed from thefindings in the literature review. This framework is presented in


Fig. 1. The perspective taken here includes viewing IPD fromboth a hierarchical perspective and a network perspective,which is in line with Klakegg et al. (2008). This has resulted ina model where project management is the core in IPD beneathproject governance in the project organization hierarchy. Theinfluencing elements (network aspect) external to the IPDorganization are the basis organization, the involved humanresources, and the external stakeholders. The core of IPD includesan iterative, concurrent project model and the project team. This issupported and enabled by project governance including portfoliomanagement, knowledge management, and project ownership.Grounded in existing literature, IPD is based on seven character-istics: parallelness of activities, standardized IPD process, processintegration, built-in instability, self-organizing project teams,subtle control, and multi-learning. The framework will be usedas a frame of reference when analyzing the case study.

2.3. Improvement and challenges

Improving efficiency in product development has been an areaof interest for both practitioners and researchers for decades and issought to be accomplished through various measures, includingoptimizing the process model (Govers, 1996; Piedras et al., 2006;Rogers et al., 2004; Yamashina et al., 2002; Zirger, 1990),implementing information technology solutions (Durmusoglu andBarczak, 2011; Jiao et al., 2007), and restructuring the organiza-tional structure (Gokpinar et al., 2010; Graber, 1996; Wang et al.,2009) among others. Implementation of IPD and the subsequentbenefits that were achieved has been investigated in severalcase studies (Brookes and Backhouse, 1998; Duhovnik et al.,2009; Riedel and Pawar, 1991; Shina, 1993). However, littleattention has been given to the actual challenges experiencedby practitioners in managing and implementing IPD in practice(Haque, 2003).

Product development efficiency can be improved byimplementing project management standards (Nicholas andSteyn, 2012). However, traditional project management methods,still promoted by the dominant project management standards,fail on several counts (Turner et al., 2010):

• Processes: the processes are formal and often bureaucratic.• Procedures: the procedures encourage specialization andformal decision making.

• Structure: roles are well defined and traditional projectmanagement stifles innovation.

• People: traditional project management is focused on systemsrather than people.

The most reported limitations and drawbacks of existingproject management methods are that they are inadequate forcomplex projects and unable to model the ‘real world’ (White andFortune, 2002). The two most dominating project managementstandards in PD are the Project Management Institute's (PMI) “AGuide to the ProjectManagement Body of Knowledge”(PMBOK)(PMI Standards Committee, 1996), and The Association forProject Management's (APM) “Projects In Controlled Environ-ments version 2” (PRINCE2) (Office of Government Commerce,



Fig. 1. Proposed holistic framework for integrated product development.


2002). PMBOK is the most applied method in the US, whilePRINCE2 is the most applied method in Europe. The content ofPMBOK describes thoroughly what a project manager shouldknow (PMI Standards Committee, 1996). This is in contrast toPRINCE2 that does not describe what the project manager shouldknow, but instead describes what should be done (Kousholt,2008). The basic tool in PRINCE2 is the stage-gate process model(Office of Government Commerce, 2002), and thus the core ofPRINCE2 is a sequential process model supported by traditionalproject management methods.

In 2003, Haque (2003) conducted a comparative case studyon the problems experienced in concurrent product develop-ment in three industrial companies, which all had implementeda version of the stage-gate process model. The main problemsthat were identified in the IPD were poor coordination of theprocess, lack of clear strategy, poor transition between stages,lack of or poor use of technology, and poor integration ofconcept design. The main barriers to successful implementationof IPD were found to be the strength of the functionalorganization, poor coordination and collaboration, and poorsupplier involvement. Even though IPD has been present formany years, this comparative case study shows that ‘old’problems such as weak matrix structure, lack of communication,and lack of coordination are still eminent management issues(Haque, 2003). The case study, however, does not investigatehow the companies responded to the identified challenges, andtherefore, it does not provide an answer as to why companies donot improve their practices according to the prescriptions in theIPD literature.

To narrow the scope of this paper, we choose to focus onIPD in companies within technology intensive industries with adedicated product development process and a proven productrecord, following the argument by Muller et al. (2005) thatthese companies have a high project orientation and that theirsuccess is strongly dependent on innovation. Based on theliterature review, two research questions have been developed:


Q1: What are the challenges in Integrated Product Developmentin the technology intensive industry from a holistic viewpoint?Q2: What are the requirements for the implementation ofIntegrated Product Development?

3. Method

In order to gain an in-depth understanding of the challengesof the product development projects, a longitudinal case studyof a market-leading European wind turbine manufacturer hasbeen conducted. This enhances the possibility of acquiring arich understanding on the challenges of the product develop-ment projects, thus allowing greater depth and clarity (Yin,1994). The value of using qualitative methods for developingsystemic models for project management has been highlighted asan important supplement to the dominating quantitative researchtradition (Edkins et al., 2007; Williams, 2003). Data collectionwas divided into three phases. First, stakeholders from all threehierarchical levels of the project organization were interviewed ina cross-sectional study using a semi-structured interview guide.These interviews included seven project managers, four linemanagers (members in steering committees) and six projectemployees (group interview). Project managers and projectemployees were selected with the aim of obtaining a broadorganizational representation in the interview study. Thus, thestudy included PD project managers from the organizationalfunctions of software development, electronic manufacturing,product upgrades, and new product development at two differentlocations in Europe. Project employees covered the functions ofsoftware development, electronic manufacturing, technical ser-vice, and purchasing at the business units' headquarters. The fourline managers were responsible for the functions of manufactur-ing, supply chain management, new product development, andbusiness improvement, respectively.

The single-person interviews had an average duration of 1 h,and the group interview lasted 2½ hours. The interview guide




was developed on the basis of the IPD framework (Fig. 1),including open-ended questions on each element. Inspired bythe method used by Haque (2003), the respondents were askedto identify challenges and barriers to IPD both internal andexternal to the projects, process context of problems, andpossible improvement initiatives. Each interview was recorded,transcribed, and transferred into a document for further analysis.The document was structured as a conceptually ordered display(Arbnor and Bjerke, 2008), where the interview questions wereconceptually clustered according to the general theme they wereexploring. This document was compared to extensive notes takenduring two interviews in a joint iterative research processbetween theory building and data analysis (Eisenhardt, 1989).The second phase was an observation exercise to investigate therequirements for IPD implementation in practice. This phaseincluded observing nine evaluation committee meetings during asix-month period. Recording during committee meetings wasprohibited, and therefore extensive research notes were takeninstead. The notes were combined in one document for analysisand grouped according to subjects. PowerPoint files, models, andfigures presented during the meetings were available for analysis,and were used for data triangulation to the research notes toincrease internal validity (Yin, 1994). The last phase was anevaluation of the improvement initiatives implemented as a resultof the committee's directions. The research team conducted a2½-hour group interview with 11 project managers one year afterthe first interview round to examine the results of the implemen-tation. As in the first interview study, a semi-structured interviewguide was used, including open-ended questions. The interviewsand observations are depicted in Fig. 2.

The interview data was analyzed for each project resourcegroup (line managers, project managers, and project employees)to identify the dominant challenges experienced in each group.This was done through pattern matching in the transcribedinterview data. The collected and categorized interview data wasthen analyzed using a problem matrix combined with identifica-tion of cause and effect relations (Riis, 1992) to identify therelations between challenges and root causes. Through theproblem matrix analysis, the identified problems for each internalIPD element (project governance, projects, and human resources)were mapped. Arrows were placed between related problemswith intermediate problems forwarded to other areas in thedirection from the causing problem to the effect. For instance,lack of portfolio management from line managers generates aproject manager problem of executing projects without manage-ment prioritizing. Through this process, the root problems, whichcause or enhance the related challenges, in each area were

Fig. 2. Overview of interv


identified. An IPD requirements framework was developedthrough an analysis of both the longitudinal study and theevaluation study in combination with the results from the initialinterview study. The analysis included a listing of similarities anddifferences between the identified challenges in the interviewstudy. Furthermore, the progressing work and final result of theimprovement committee were compared with the final evalua-tion. The analysis revealed a relation between successful IPDimplementation and specific human related requirements andproject governance requirements. The IPD requirements frame-work emerged through an iterative research process betweenanalysis of the rich data set and revisions of the results betweenmembers of the research group.

3.1. Case company description

The case company, here named Alfa, is a large Europeanindustrial manufacturer of wind turbines, employing more than20,000 employees worldwide. The company was chosen due totheir market leadership and vast experience with conductingtechnology intensive new product development of highlyinnovative products. They are organized in four separate businessunits, each one responsible for a part of the final product. Inproduct development projects, the business units collaborateacross functions and units on interdependent product parts. Thisresearch study was conducted in the business unit responsible forelectronic equipment including software, and has about 400employees at three cities in Europe and a production facility inChina. The electronic equipment has the highest degree ofinterdependency of product parts both internally and at the otherbusiness units. The organization was studied in a time whereimprovement of project performance was debated among topmanagement. The company established an evaluation committeeconsisting of six senior project managers to evaluate the currentsetup and ultimately propose and implement a solution toimprove the overall project performance. Project managementin Alfa was based on the company's sequential project model,which was a customized version of the PRINCE2 project model.The project managers were certified in PRINCE2, which waschosen as the official project management approach of thecompany.

4. Results and discussion

In this section, the case study results are presented usinginterviewee statements to highlight and support the majorfindings. An overview of the identified challenges is introduced

iews and observation.




in Table 1. A detailed presentation of the results is providedin the following subsections, including project context andproblem consequences, project challenges, project governancechallenges, and human resource challenges.

4.1. Project related challenges

Project managers struggle to keep the projects on track andmeet project deadlines. In Alfa there is a lack of systematicguidelines and practices regarding project planning: “We havea generic project model, but it is not operational in detail. Fromour level and down, it is up to the individual project managerhow to manage it. We work on trying to synchronize it, but weare in an initiating phase. We have just talked about it, and aprogram has been bought to solve the planning issues. But itdoes not solve the structural and organizational problems”(Project manager B). ‘We are at a very low level of projectstandardization. Then, it is individual achievements instead ofa combined achievement’ (Project manager A). ‘I think theproject model ought to start defining what a project is and whenit is ordinary work. For instance, if things are repeated over andover again, are they then projects?’ (Line Manager A). Hence,there is a general lack of support for projects and projectmanagement in the organization.

Formally, delivery of projects from one business unit toanother takes place between phases of the project model. Thehandover is conducted officially according to a set plan, butinternal deadlines are pushed without changing the end-date:‘The time demand is constantly changed by other departments.We can never trust the time estimates they give us. They changethe scope of the project all the time along the way, and we arechallenged on our resources. They should be better at keepingto their time estimates. That would make us more efficient’(Project manager C). ‘I think it [the project model red.] is greatif it is used. But the problem is that it is not used. This is notgood. I know it is not used because the deadlines do not changebut the start date is changed from [the other business unit red.]all the time. Then we compensate for this by throwing the rulesoverboard to try and reach the deadlines because they cannot bechanged’ (Project manager F). ‘…we do have many difficultieswith [the other business unit red.] not keeping to their project

Table 1Challenges in IPD related to each of the three project organization elements.

Projects Project governance

Line managers • Inadequate project model • Poor resource manag• Lack of knowledge m• Lack of portfolio man• Poor strategic plannin• Poor collaboration be

Project managers • Poor standardization• Inadequate project model• Not following project model•Lack of steering committee• Lack of project tools

• Lack of management• Poor knowledge shar• Lack of project office• Lack of portfolio man• Poor resource manag

Project members • Lack of structure• Poor project processes• Not following project guidelines

• Poor prioritizing• Poor knowledge shar• Lack of alignment of


model. And we cannot keep our deadlines if they do not keeptheirs. They are moving on through a gate even though they arenot finished, and then change the product later on while we areworking on it, but our deadline is still the same. And we have towork overtime, and we do that, but it is expensive for everyone’(Project employee D). The statements highlight the identifiedproject related challenges. First of all, the generic project modeldoes not provide guidelines and tools for practical projectmanagement. Second, the project model is not followed incross-organizational projects. Third, delivery dates to cus-tomers remain constant, but internal deadlines are either pushedor not used. Combined, these three challenges put a strain onprojects and project employees in the business unit.

4.2. Project governance challenges

The existing organizational setup challenges resource alloca-tion to the projects: ‘The problem is that development of projectsis done by the best people in the operations. But they have notbeen given less tasks in the line organization. So they have beendelivering to the projects out of goodwill rather than reward, andthe results are affected by it. They are the key persons, becausethey have key knowledge. This is the paradigm because it is thepeople that you cannot do without in the line organization that areused in the projects. Then the best people have much more tasksthan everyone else’ (Project manager D). Portfolio managementis conducted by the executive board in the business unit,consisting of seven of Alfa's line managers. However, theportfolio is currently not managed systematically: ‘Currently, it isthe one shouting the loudest that gets their projects through, andthat is not always a good idea. When we have no overview, wecannot prioritize, which means that some people work on projectsthat might not be the most important to us’ (Line Manager C).‘We need management to be very sure of what they prioritize,because if it is the one who shout the loudest who gets what hewants, then it will not work. It must be aligned from top tobottom’ (Project manager E). ‘I think it is a matter of maturity.Right now we have left the teenager with the credit card. It is amatter of teaching the organizations the rules. They need tofollow the rules and the frames of the vision and the strategy.They should not define the strategy themselves. Then we have a

Human resources

ementanagementagementg, prioritizing and alignmenttween line and project organization

• Poor project culture• Unclear roles and responsibilities

prioritizinging

agementement

• Unclear roles and responsibilities• Lack of meeting and learning culture• Lack of engagement and passion• Lack of employee education

ingpriorities between departments

• Unclear roles and responsibilities• Lack of project manager education




mature organization that is ready for bottom up. We are notthere at the moment. The leadership needs to step up and setthe direction. They must provide the strategy and prioritizethe projects. This is the most important thing to me’ (Projectmanager D).

Line managers argue that portfolio management would be animportant management method to improve this situation. Suchmethod should include an overview of the project idea-base,current portfolio, and projects status: ‘If we had the tool, itcould be a more controlled situation. We would like to knowwhich projects we have, what they cost, and how many hoursthey [the projects red.] have. We need the overview in one,common tool […] it would provide an overview and a basis fora dialog with my managers on what they should spend their timedoing. And also work as a follow-up tool’ (Line Manager C).‘They [factory managers red.] have a more or less authorized liston who works with what. This is interrupted when other projectscomes ‘dropping from the sky’, because we have to participate in,for instance, product upgrades. We have no choice, because wehave to participate in these projects, and the other projects aredowngraded. Therefore, it would be great to have a common tooland use the same models, so we could tell what our departmentsdo’ (Line Manager D).

Currently, there is no structured knowledge sharing, andemployees express concern about their lack of knowledge onwhat goes on in other projects: ‘There is a general assumptionthat if people get information, they abuse it. So, sometimes youget just what you need to know, or sometimes even less thanyou need to know. I have attended meetings where I was toldthat the information was restricted from my manager. That isproblematic. Our culture comes from the belief that our windturbines are unique. So we protect ourselves in every aspect wecan think of. I don't know. Maybe we are unique; I have a hardtime believing it. And if someone wanted the information, Ithink they would find it anyway. We have already restrictedpeople with their contracts. Then, please let the informationflow internally’ (Project manager C).

To summarize, project governance challenges includespoor resource management, lack of and reluctance to sharingknowledge between projects, lack of portfolio management,and poor alignment of priorities between business units.

4.3. Human resource challenges

Unclear roles and responsibilities within the projects areidentified as a major challenge within human resources: ‘In thelarge projects, we have not talked about roles and responsibil-ities at all. I have an idea of what I probably should do, since Iam from a specific department, but the exact interfaces to theother departments, I do not know. I could ask about it, but Iguess not even the project manager knows about it’ (Projectemployee E). ‘… everyone here are proud to work at [Alfa red.],but nothing is done to help you understand where your place isin the machinery, and how you add value. It is important to dosomething about this’ (Project employee C). Project managersalso have issues fulfilling their role as project managers: ‘Theteam concept, to empower people, to motivate. This I feel


disconnected from, and this frustrates me the most. I can attendmeetings with my team, and tell what I need and explain theimportance of the project. People seem to understand and aremotivated, but when they must deliver they have not done a bitwork on the project, because back in their line department theywere told differently. I feel it is a waste of time’ (Project managerA).

Some employees are overloaded with project tasks, and theyrelate this to low efficiency and instances of burnout: ‘Anotherthing that is dangerous in this is, that we find out who to contact‘beneath the surface’, but then this person is overloaded withtasks and becomes a bottleneck, and then people find anotherperson to exploit, until this person is also a bottleneck andburns out. We burn people out because the pressure is noton the entire surface, but on the individual person.’ (Projectemployee B) Currently, time registration is only conducted inprojects and not in the line organization. This is identified as achallenge related to exploitation of some employees: ‘It is ariddle to me why they currently check resources on someprojects but not on the line organization. Why don't theyhave interest in checking the line organization for efficiency’(Project manager A).

The final challenge identified within human resources is alack of internal education of project members: ‘There has beendone a lot of work educating the project managers, and that isgreat, but they are not the ones who carry the project. It is theproject members, and they have not received any education,and as long as they don't know what a project is and howyou should be in a project, it cannot work. They need anunderstanding of the project and that the projects are asimportant as the operational tasks in the line organization. Theyneed to understand that if they stall their project tasks, they stallthe entire project, and that has a much larger impact on theorganization than they know’ (Project manager E).

4.4. Problem consequences

Product development projects in Alfa are large, involvingpeople from multiple departments across a functional organi-zation: ‘We often have more than 50.000 hours in the project.Many people are involved, about 60 people in total. They[the projects red.] usually run for more than six months. That iswhy it is important to have a proper organization around it. Wework much with it. We want to turn away from the presentsituation with dividing into departments where the line managerscontrol many people and decide what they should do, and aproject manager that tries to tie it together. We are somewhere inbetween right now’ (Project Manager B). As outlined by theproject manager, they are aware of challenges in the currentsituation. However, there is no formal overview of the financialloss related to the existing challenges, and, as stated by a linemanager, ‘…the top management group does not have anoverview on what kind of projects are running here. No onehas’ (Line Manager A). The line manager further argues thatrunning projects are often canceled, because there are two ormore similar development projects running in parallel in otherparts of the business unit. Another strong indication of substantial



Fig. 3. Problem matrix analysis of relation between identified challenges.


financial loss can be found at assembly and erection of the windturbines. Customer implementation of wind turbines has a setdate. Yet, project development activities often exceed this date,and therefore, on-site construction and erection are initiated whileproduct parts are still under development: ‘… we could not finishprogramming before erection of the wind turbines had started onsite. In the end, not one of the wind turbines had the sameelectronics, because we had continued working on it. It requireda lot of rework from the maintenance department’ (Projectemployee A). The pre-set end dates on projects have a negativeeffect on project management: ‘The deadline cannot be changedbecause of [the other business unit red.]. They have a deliverydate to the customer, and they pull all orders through the valuechain. In [Alfa red.] we do not push deadlines, but it puts apressure on people’ (Project manager F). Hence, there are strongindications that current challenges decrease product quality,increase development cost, and decrease employee performance.

4.5. Analysis and discussion of challenges

The results of the interviews form a picture of a productdevelopment organization in crisis. At all organizational levels,employees express concern about project management andperformance. To analyze the relation between the identifiedchallenges, a problem matrix is used. The matrix is built upon thethree challenge areas: projects, project governance, and humanresources. The challenges are sorted as internal, imprinted, orforwarded problems within each of the three areas. The relationsbetween the challenges are shown as arrows. This way, therelations between challenges can be identified along with theinternal root challenges within each of the three areas. Theprocess of developing the problem matrix relations has beeniterative both during and after the interview study. The finalrelations have been discussed both internally and externally withfellow researchers. The model shows the most dominant relationbetween challenges and does not comprise interdependencies.For instance, we find that low motivation is caused by lowefficiency in the projects, however it can be argued that thesefactors are interdependent, and a negative relation betweenthe two creates a downward spiral of decreasing motivationand decreasing project efficiency. However, for the sake ofsimplicity, we have chosen that arrows in the chart only point inthe dominating direction identified through the interviews. Theproblem matrix is presented in a simple form in Fig. 3.

Through the problem matrix analysis, four root challengescreating or increasing other challenges are identified:

- Lack of resource management.- Lack of knowledge management in project governance.- Lack of fitting project model in projects.- Lack of education and training of human resources.

It was debated whether portfolio management is internal orimprinted. However, since line managers argue that they needinput from projects in order to develop the portfolio, theinadequate project model is viewed as the root cause of thischallenge, keeping in mind that a sufficient project model alone


will only enable but not generate portfolio management. Throughthe problem matrix analysis, we have answered our first researchquestion, Q1, identifying the challenges in integrated productdevelopment in a technology intensive industry using the holisticframework and understood the challenges' complex relations andsorted them accordingly.

In Section 4.2 we will return to these challenges, as they arethe key to implement a solution to improve IPD in Alfa, whichis investigated to answer Q2. Firstly, the actual implementationproject is presented which was conducted in Alfa to solve theidentified IPD challenges.

4.6. Company solution

After the interview study, a committee in Alfa assessed thechallenges and implemented a solution to increase projectperformance during a six-month period of time. The committeegenerally pointed at similar challenge areas as the ones identifiedthrough our interview study. Especially, challenges related to theuse of the project model were deemed of major importance by thecommittee. They found that the necessary initiative to improveproject performance would be to support project managers witha modified sequential project management model to fit theirproduct development setup. Debates during the meetings were




heavy and consensus was hard to obtain by the committeemanager, since opinions of viable solutions spanned from ideasof implementing a project management office, time managementacross the entire organization, agile project management, toadopting a project model from another business unit. Thecommittee initially agreed to examine all proposals. Eventually,however, several of the ideas were abandoned, primarily due tolack of follow-up on the ideas from the assigned senior projectmanagers, who gave lower priority to this project than to some ofthe product development projects. Furthermore, the committeemanager initiated each meeting with the same slideshow of themanager's personal ideas of a project management solution (seeFig. 4), which was described as a PRINCE2 solution that hadbeen implemented in a candy factory by the manager in his priorposition a few years ago. During some of the final meetings, thissolution was dominating and was accepted at an executive boardmeeting. With this solution, the committee chose to supportproject managers by offering a project management toolbox at theintranet site. Tools for portfolio management were includedas one of the elements additional to the project managementtoolbox. An overview of the committee's solution is presented inFig. 4.

The committee spent six months on refining and developing adetailed sequential project management model and implementingit as an IT-tool on their intranet site. The model was, like theircurrent model, based on PRINCE2 but more detailed, fittingproduct development stages and gates in their business unit ratherthan the generative model provided by the headquarters in Alfa.The committee generally expressed confidence in this newmodel.

Resource management challenges were addressed by present-ing possible IT portfolio management tools to the executive board.The executive board did not make any final decisions on how tosolve these challenges in the duration of the case study. Unclearroles and responsibilities were acknowledged as a challenge,and the committee solution to change company culture was toimplement a tool for assigning roles and responsibilities in the

Fig. 4. The committee's solution framework for


intranet toolbox for project managers. No initiatives directed attargeting cultural change were initiated.

The final part of the case study was a revisit by theresearchers and an evaluation of the implementation efforts.Meanwhile, the market share, which Alfa held internationally,had declined. During the past six months they had stopped allhiring at a global scale and future firing rounds were probable.At the revisit, project managers expressed a high degree offrustration towards the solution that had been adopted, sincethey did not experience any improvement in their work. Thenew project model had been developed and coordinated withthe other business units. Project managers had been instructedin the new project model and started using it. Yet, timeschedules and project handovers were still not followed, andproject efficiency continued to be low due to lack of bothresource management and knowledge management within thebasis organization and the other business units. The intranettoolbox for project managers was viewed as a nice yet unnecessaryfeature, and only few had visited the site and used any of thetools in practice. Project managers had already called for topmanagement to assess the situation once more. Now, projectmanagers expressed a joint concern about the situation as well asthe future of the company.

5. Requirements for implementation

Even though Alfa made an effort to solve their challengesduring an entire year, including the evaluation and implemen-tation of a new project model, the challenges endured. In thissection, we aim at clarifying why the company continues tostruggle with poor project performance by comparing theinitiatives at Alfa with the IPD characteristics presented in theIPD framework in Fig. 1. Based on this, a set of requirementsfor IPD implementation is proposed.

The solution implemented by Alfa was based on PRINCE2,which is a traditional project management standard, includingpre-definition of time periods and resource consumption in a

project performance improvement in Alfa.




business case specification, and requires a dedicated projectteam (Office of Government Commerce, 2002). The sequentialstage-gate method in PRINCE2 is optimized for projectmanagement involving simple problems (Snowden and Boone,2007; Stabell and Fjeldstad, 1998). The misfit between theapplied project management standard and IPD characteristicsprovides an explanation for the lack of improvement experiencedby project managers. Using traditional project managementmethods for IPD has proven to decrease project performance insimilar cases, and improving IPD performance by implementinga traditional project model can be predicted to fail (Browning andRamasesh, 2007). In other words, the company rightly identifiesthat their project management maturity is low. However, theychose to improve their traditional project management tools,which do not fit their need for IPD methods. The core of the IPDapproach is a complex problem solving process, and the key tomanaging this process is to understand that management ofcomplex problem solving is different from managing simpleprocesses (Browning and Ramasesh, 2007; Gerwin andBarrowman, 2002; Stabell and Fjeldstad, 1998). The implement-ed solution should have enabled IPD, including parallelnessand iteration of activities, while supporting process integrationacross departments and business units.

The question “why a market leading company with years ofexperience in product development of highly complex productsfailed to implement an IPD solution?” then remains. Whatprerequisites and elements were missing? Through the analysis ofexisting personnel skills, we found that the committee membersresponsible for the solution proposal were all certified inPRINCE2. During the committee meetings they discussedprevious successes with implementing PRINCE2 in othercompanies, and they, especially the committee manager,wanted to apply these experiences in the current setting.Hence, based on their education and previous experience, theydid indeed implement the best solution available. They did notrealize that complex problem solving of IPD differs fromsimple product development in their previous companies,where product development was based on a set of simplercharacteristics. Furthermore, PRINCE2 basically advocatesfor a process-based tool approach, which is exactly what thecommittee solution entailed. Given the knowledge of thetool-oriented perspective versus the temporary organizationperspective, this case indicates that the committee members havetaken on a tool-oriented approach. Hence, their solution does notembrace the complexity of the temporary organization and itsmany facets, which are included in the holistic IPD framework.Without the awareness and skills for IPD, it is not possible toimplement the appropriate governance structures and projectmanagement methods, and without this, project managers spendtheir resources battling the restraining structures. Therefore, ouranswer to why implementation of IPD failed in Alfa is theimplementation of a wrong solution due to a combination of lackof IPD skills and awareness of projects as temporary organizations.

The issues related to resource management were not properlyaddressed through the solution, and these issues continued toinhibit project management practice afterwards. The researchersfound that cross-organizational resource management is a


prerequisite within project governance for IPD implementation,since limited, shared resources are a constraint for IPD projects.In IPD research, a dedicated team is typically either an initialprerequisite (Gerwin and Barrowman, 2002) or a proposedsolution including organizational changes to include a dedicatedteam (Duhovnik et al., 2009; Sandmeier, 2008). When a dedicatedteam is not available, which is the case in many industrialcompanies (Haque, 2003), cross-organizational resource manage-ment is an essential project governance mechanism.

After implementation of the solution in Alfa, project managersstill experienced challenges related to knowledge sharing acrossprojects and business units. Knowledge management is essentialin IPD due to the interdependent activities, including continuouslearning and improvement of project procedures. Since activitiesspan across both departments and business units, knowledgemanagement in IPD is necessary throughout the entire organiza-tion in order to avoid redundancy, while managing designoscillations, and engineering change orders (Wright, 1997).

Hence, the main requirements for IPD implementation arefound within project governance, including portfolio manage-ment, cross-organizational resource management, and cross-organizational knowledge management. In our originally pro-posed IPD framework, resource management is viewed as part ofportfolio management. Yet, due to the need to coordinate andprioritize activities together with the basis organization, resourcemanagement is required at the cross-organizational level, and ittherefore entails more than the project portfolio. During theanalysis, portfolio management challenges were identified asrelated to missing project structure and overview within theprojects. However, the portfolio management challenges wereenhanced rather than generated by this challenge. Furthermore,the inherent governance mechanisms, including strategy devel-opment, performance management, and prioritizing up front arenot dependent on project structure, and could therefore be viewedas governance structures themselves. Hence, portfolio manage-ment is identified as one of the three central project governancerequirements for successful IPD implementation. Based on theempirical findings, we propose a requirements framework forimplementation of IPD, which is presented in Fig. 5.

Obtaining IPD skills can be accomplished through cross-organizational education and training and/or hiring skilled humanresources. Knowledge of IPD is related to IPD performance(Knudsen, 2007), which can be influenced by training andeducation (Edum-Fotwe and McCaffer, 2000). An IPD trainingprogram should support the IPD characteristics, including thelearning activities across the project organization. Furthermore,the training program should include a shared IPD projectmanagement model and portfolio management method (Killen etal., 2008). Skills and awareness of IPD are requirements fordevelopment of an appropriate governance structure, which isnecessary for IPD implementation and increased product devel-opment performance.

Through the IPD requirements framework, we have coveredthe central findings of the case study and answered our secondresearch question identifying the requirements for implemen-tation of IPD. However, the framework has yet to be tested forgeneralizability and context dependencies. We recommend that



Fig. 5. Requirements framework for the implementation of integrated product development.


deeper research into the requirements for IPD implementationin practice should be undertaken across more industries.Especially, we propose to examine the generalizability of theidentified relation between project governance requirementsand IPD implementation through larger quantitative studies.Additionally, we recommend further qualitative research oncoordination between IPD projects, the basis organization, andacross business units. Case studies of successful IPD implemen-tation already exist (Duhovnik et al., 2009; Kumar andWellbrock,2009;Wang et al., 2009), yet current research tends to focus solelyon the implemented IPD solution and performance improvement.Only few articles include research on iterative IPD modelsin industrial settings (Duhovnik et al., 2009; Ovesen, 2012;Sandmeier, 2008). Further investigation of the application ofiterative project models in IPD is also recommended. This is alsoproposed for general project management in related recentliterature (Pinto, 2013). This includes studies on the effect ofiterative models on IPD performance, and studies on howcompanies implement and use such models in practice.

6. Conclusion

Traditional project management methods, including linearprocess models, are still used by many industrial manufacturerseven though this is identified as a main cause of low PDperformance and market failure. An alternative to this approach isprovided in the well-established research area of IPD, offeringsolutions to increase performance by a holistic mindset, viewingproduct development project management as management chal-lenge of a temporary organization rather than having a toolperspective. The aims of this case study were to identify thechallenges in product development in the technology intensiveindustry from a holistic viewpoint, and to identify the requirementsfor integrated product development implementation. We used asingle in-depth case study as the method, and followed theimprovement of product development project management at anow former European market leader within the international windturbine industry during one year. First, we identified their existingPD challenges, which were afterwards sorted and grouped using aproblemmatrix analysis. Four root challenges were identified: lackof resource management, lack of knowledge management inproject governance, lack of fitting project model in projects, andlack of education and training of human resources.

The company chose to implement a solution based on atraditional project management standard, which did not give theexpected improvements in project performance. Our analysis ofthe implementation showed that the involved senior project


managers did not have sufficient awareness, the necessaryskills, or a set of project governance structures for implemen-tation of IPD. Based on the case study findings we propose aset of IPD requirements that includes skills and awareness ofIPD, and three IPD governance elements (portfolio manage-ment, cross-organizational resource management, and cross-organizational knowledge management).

Our findings resonate with existing research on IPD. Ageneral lack of PD governance is also identified in three othercase studies by Haque (2003), including the challenges inapplying linear process models, which is also supported by IPDresearch studies (Browning and Ramasesh, 2007; Minderhoudand Fraser, 2005). Regarding the proposed IPD framework, allthree recommended IPD governance requirements are identi-fied through independent research as significant requirementsfor IPD. Portfolio management is highlighted as crucial forinter-functional integration in three case studies by Perks(2007) and for managing project uncertainties by Petit (2011).Cross-organizational resource management has been recog-nized as an important element in project portfolio manage-ment, increasing alignment between projects, and alignmentto the business strategy (Killen et al., 2008). Finally, cross-organizational knowledge management is established as arequirement for complex product development in networks byLee et al. (2008) and (Knudsen, 2007). Hence, our findings arein line with similar findings in other studies, yet our findingsare unique in proposing a joint IPD requirements framework.

Since our findings are based on a single case study, we willnot attempt to generalize them. Rather, our findings can serveas a basis for future studies on integrated product development,testing the results for generalizability, for instance, acrossdifferent types of organizations and industries. The results haveimplications for senior managers that can use the findings toreconsider the skills and awareness of employees, along withrequired governance mechanisms, in their own organizationsprior to launching any large PD performance improvementproject.

The case company is now approaching the edge of collapse.Several rounds of layoffs have devastated the company, and theyare still unsuccessfully trying to solve their product developmentchallenges. The few project managers promoting integratedproduct development have left the company, seeking careeropportunities elsewhere. Recently, the company has set up aglobal taskforce to evaluate product development across the entirecompany and to investigate options for a more integrated projectmanagement approach including a company-wide governancestructure.




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Documents

Barriers towards integrated product development — Challenges from a holistic project management perspective