IBM—华为PDM项目BR06.ProjectInvestmentManagement0205.doc

Business Re-engineering Project PlanBR06. Project Investment ManagementInformation Technology Strategy and Plan ConsultancyPhase 3 ReportFebruary 1999BR06. Project Investment ManagementScope and ObjectiveThis project is concerned with creating a process for the evaluation and approval of project investment proposals to ensure there is consistent and clear criteria used in the evaluation and selection of new project investment alternatives. In addition, this project will introduce appropriate support technology to ensure project investment proposals, once approved, are monitored and managed within cost limits. The process, once established, will cover all expenditures, in all parts of the business over a predefined limit (determined from time to time by an “Investment Review Board” and will specifically include Research & Development project expenditures. Typically, expenditures approved in this process will have been identified at a high level and approved in principle during the annual budgeting cycle. (Refer Budgeting and Forecasting Project)This project addresses the following: Establishment of a process to develop project investment proposals. Definition of a standard format for presentation of project investment proposals. Establishment of a process to select and approve, or reject project investment proposals. Establishment of a process to select and approve or reject investment proposals. Establishment of guidelines for reviewing progress on approved investments and cancelling non-performing projects. Capture of project costs and reporting against approved project budgets. Implementation of Oracles Project Costing and Project Connect applications.This initiative will address all significant expenditures within Huawei but the main areas where this project will have applicability will be in product development, information technology and business process re-engineering. In each case, a key tenet of the process to be developed is that financial review and justification of each project is undertaken prior to project approval. Project funding and control is to be managed using the following overall approach: Broad project descriptions and justification with approx 80% accuracy in project costs for approval of expenditure in principal and to set capital budget cap during the budget cycle (Refer Budgeting and Forecasting Project). Individual projects are approved throughout the year based on individual justification. Additional expenditure authorisation required if project exceeds approved amount by 10%. Additional authorisation required if expenditure falls below 90% of approved amount.The focus of this project is on expenditure approval and cost monitoring for individual projects approved in principle during the annual budgeting cycle and includes linkages to: The IPD project The Budgeting and Forecasting projectIn designing new project costing processes, the project will seek to Ieverage the features provided in the Oracle Project Costing and Project Connect modules. Use of these Oracle applications is recommended as they fall within the overall applications architecture and standard ERP system currently in use within Huawei. A key aspect of the Oracle implementation is to ensure integration is properly designed and implemented. This is to be achieved by reviewing other processes that feed or take data into the project to ensure project related tasks are properly completed e.g. project coding during the purchasing process. Specific objectives of this project are to establish a process that covers: Creation of a mechanism to allow product development proposals to be presented in a consistent manner and assessed on an investment basis. Documentation and justification of requests for capital expenditures, mainly product development proposals. Establishment of criteria for expenditure evaluation. Evaluation and selection of desirable expenditures, including ranking of project investment alternatives. Approval and control of capital within predefined budget limits. Establishment of a consistent approach to managing large investment projects. Introduction of a system to capture project costs and track these against an approved project budget. Post completion audit of approved projects.At the completion of this project Huawei will be positioned to: Manage and treat product development initiatives as a project with the requisite project management disciplines. Co-ordinate and effectively apply resources across multiple development projects. Rapidly evaluate product opportunities in terms of expected financial return and release funding for proposed projects according to financial criteria. Reassess projects at specific milestones throughout the product development process in terms of expected financial return. Cancel development projects early when financial objectives are not likely to be met.In addition, this project will deliver a number of outcomes recommended in the IT Strategy and Plan Consultancy Phase 1 report and will provide critical support for other key improvement initiatives. The following capabilities will be created: The ability to accurately capture cost information for specific product development projects and thus provide cost histories for use in determining likely costs of future projects. The ability to accurately capture and report cost information such as actual cost versus plan for each phase and estimated costs to complete for specific product development projects to support exit analysis as part of the IPD initiative.These capabilities will be created through delivery of the following outcomes recommended in the IT Strategy and Plan Consultancy Phase 1 report: Development of a common framework by which all new product projects and technology projects will be evaluated from an investment viewpoint. Establishment of an Investment Review Board (IRB) with responsibilities including: approval of all major investments, such as new product development, major I/T projects, fixed asset additions and external investments, and reviewing all new product feasibility studies against a standard evaluation framework before granting approval. Staged release of budget for each new product authorised in conjunction with the Integrated Portfolio Management Team (IPMT) for the next phase as the team successfully completes a phase as reviewed by the IPMT. Implement the Oracle Project Costing to enable project cost tracking and reporting. Set criteria and format of feasibility study reports. Lay out investment evaluation process, including information flows and timing. Identify investment policy alternatives and agree on financial strategy. Create mechanism for monitoring of financial information for capital investments.Note: This project has specifically excluded any reference to Year 2000 capability including Year 2000 contingency planning and compliance issues. As such the IBM consultant team has not provided any advice nor does it make any recommendations in respect of ensuring Year 2000 compliance for any existing or proposed systems. In all cases where technology solutions are referenced the technology supplier should be contacted to determine Year 2000 compliance status.Business BenefitsIssues being resolvedThis project will have a positive impact on overcoming the following specific issues: New product decisions being technically driven. The absence of consistent and clear criteria in the evaluation and selection of new projects. Relatively few development projects are cancelled. Absence of clear guidelines for cancellation of development projects. Product development projects being funded via calendar budgets rather than as “projects” that may extend over a single year. The need to enhance project management disciplines within Product Development. Lack of clarity and overlap of authority between departments for acquisition of I/T eg acquisition of enterprise wide solutions like Notes and ERP.Intangible benefitsThis project will benefit Huawei by contributing to: Ongoing sound financial management, cost control and asset management. A realignment in thinking to consider expenditures in light of their individual return to the business. Establishment of rigour and structure in the overall management of funds.Tangible benefitsThis project will provide the following tangible benefits: Increase in project approval turnaround time. Increase successful rate of new projects.Overall, this project will not deliver any direct cost savings. The key benefit will come through capital rationing of all future expenditure projects, to ensure only those expenditures that provide worthwhile benefit, in terms of financial return, are approved and undertaken. Most importantly, once approved, those expenditures will continue to be monitored and managed within cost limits. If at any stage they appear unlikely to meet the expected financial objectives they will be able to be assessed and where appropriate can be cancelled at an early stage.ApproachThis project will be undertaken in 3 phases, namely, Focus, Invent and Launch as set out below.FocusThe focus phase defines the Project Investment Management process objectives in the overall evaluation, selection and subsequent management of investment projects. This phase will identify and agree specific project investment management goals and project cost management objectives in the context of Huaweis overall objectives. Specific outcomes desired but currently not being achieved in project investment evaluation, project costing and specific costing approaches relevant to project management will be identified. Outcomes not being achieved in the current evaluation and costing processes together with weaknesses in the way the processes operate today will be targeted for improvement.InventThe Invent phase will look to develop a set of criteria for identifying and selecting the most desirable projects and may include establishment of benchmark returns on investments as part of the overall evaluation. In designing the investment evaluation components of the process, elements such as the following will be included: Establishment of an investment evaluation group with responsibility for approving expenditures. Establishment of authority levels for “approval” of investment proposals. Establishment of a standard form for gathering information, completing investment analysis and presenting requests for funds. Establishing links between allocation of funds through the Project Investment Management process and provision for capital expenditures in the budgeting cycle. Establishment of links between allocation of funds through the Project Investment Management process and reporting of cost performance against such approvals. Establishment of a mechanism to recognise the longer-term nature of investment projects compared with the annual budgeting cycle. Definition of the support technology and organisational infrastructure required to implement an effective project investment management process. Definition of project ranking and prioritisation methods.In designing a robust project cost management environment to support the project investment evaluation process, elements such as the following will be addressed: Definition of project hierarchies for cost collection purposes eg relationships between task, activity, sub-project and project. Definition of project cost data to be collected e.g. time, expense type, material type and units for each. Definition of the nature of costs to be collected e.g. standard costs, actual costs, direct costs, direct plus indirect costs. Definition of reporting to enable projects to be managed and tracked from a cost perspective including reporting frequency and reporting responsibilities Project authority levels. Use of appropriate support technology such as Oracles Project Costing and Project Connect applications. Alignment of work breakdown structures between project management approaches (i.e. task completion management) and collection of costs (i.e. financial management) to ensure consistency between project and financial records.The Invent phase will include documenting the Project Investment Management process to show each of the steps involved in constructing investment proposals, submitting these for approval, gaining approval for the allocation of funds, setting up projects, capturing relevant cost data and maintaining appropriate project costing records. Throughout the above Huawei will need to carefully consider the level of detail that is to be captured to satisfy the combined goals of effective project management and financial control.Finally, the Invent phase will include identification of required project investment management and project costing skills and assessment of the availability of those skills within Huawei.LaunchThis phase will ensure that the project investment management process is properly introduced, that the supporting systems chosen are appropriately configured / developed, tested and rolled out and that all staff involved in the new processes are trained and capable of performing their new responsibilities.Details of activities and tasks to be undertaken are set out in the appendix to this document.Resources and TimingSkills and Experience RequiredThis project requires a combination of resources that bring skills and experience in Project Investment Management, process re-engineering and system configuration to the project. Specifically, the project requires access to resources that have an in-depth knowledge of current Huawei Project Investment Management practices and procedures. The skills required by the project are listed below. Note: It is important that the scope of these skills be covered by the entire project team. It should not be expected that a single individual possess all the required skills in the categories under which they are listed. Huawei Skills: Knowledge of current project investment management practices within Huawei. Knowledge of current systems being used in Huawei for project investment management. Oracle Skills: Specific knowledge of the capabilities and configuration options of the Oracle Project Costing and Project Connect modules. System capacity planning and definition of infrastructure requirements. Oracle application Database Administration. Consultancy Skills: Business process re-engineering expertise Subject matter expertise in Project Investment Management including: Knowledge of alternative investment evaluation approach Development, standardisation and assessment of project investment proposals Experience in project cost evaluation in a manufacturing environment Establishment of guidelines for reviewing progress on approved investments and cancelling non-performing projects Project costing and project cost management Packaged based business transformation including process assessment, system assessment organisation assessment, process improvement design, solution design, implementation strategy and planning.Resources RequiredTo complete this project requires a coordinated team of Huawei and consulting resources as set out below:Huawei Project Core Team Project Executive Sponsor part time role to review and approve recommendations made by the project team. In addition the Project Executive Sponsor will be required to support the project team by removing obstacles to the projects success should they arise. It is expected that the head of the Finance department will undertake this role.Project Manager - full time responsibility (in conjunction with the Consulting Project Manager) for overall project delivery. Specifically the Project Manager will be responsible for liaison with other Project Managers to ensure consistency across the overall Program, liaison with the Consulting Project Manager to ensure project effectiveness, consultation with the Huawei Project Executive Sponsor and Huawei management to ensure understanding and acceptability of designs and solutions.Subject Matter Experts full time role to provide advice on current practices and work with the consulting team to develop the new process designsHuawei Business Department staff Subject matter experts in finance and accounting, with specific knowledge of current project evaluation and cost management policies and practices to support the project on an “as required” basis. ConsultantsProject Executive part time quality review for subject matter rigour and consistency within the overall Program initiative.Project Manager full time responsibility (in conjunction with the Huawei Project Manager) for overall project delivery. Specifically the Project Manager will be responsible for liaison with other Project Managers to ensure consistency across the overall Program, liaison with the Huawei Project Manager to ensure project effectiveness, consultation with the Huawei Project Executive Sponsor and Huawei management to ensure understanding and acceptability of designs and solutions.Lead Consultant full time responsibility for day to day direction of the project team. Specifically the Lead Consultant will be responsible for project planning; provision of subject matter expertise and leadership in thinking and issue resolution; directing the new process design; coordinating the re-engineering and application specialist consultants to ensure cohesion between the process and systems.Re-engineering Consultant full time role undertaking re-engineering activiti