Summary of the Main Outputs during each project
The idea behind the application and implementation of ResNet was because of the increased financial losses that came from the call centers. Ideally, the goal behind the call centers was to generate sales that translated into revenue. The implementation of the project came at a time when financial constraints of Northwest Airlines were high. Thus, to get finances the project director had to make a convincing argument to secure funds for developing a new reservation system.
The ResNet project was divided into three segments. These were the ResNet Beta, ResNet 1995 and ResNet 1996. Each project had a different goal and output. The first project was the ResNet Beta, which started in 1993 and involved customization and testing of new reservation software and hardware using a small number of computers. Additionally, the project involved the formulation of a method of measuring the true benefits of ResNet before major financial commitments were made into the reservation systems project. The development of the second project, the ResNet 1995 resulted in the installation of personal computers in call centers in Baltimore, Tampa and Minneapolis. Additionally, ResNet software was developed for Reservations Sales and Support, new Iron Range Reservations Center and Sales Action Center. The ResNet 1996 project included installation and development of additional software. Other call centers were equipped with the new reservation systems.
What was Fay’s role in initiating ResNet? Why did she succeed when other NWA employees in the IS Department, who had similar ideas years earlier, did not?
Fay’s role was to ensure that ResNet would lead to improving the performance of NWA in terms of sales rather than service. A lot of money was being lost in the reservation call centers. Sponsoring a new information system would ensure that cost would be reduced in the different call centers. Fay succeeded, as she did not use the same approach as the employees from the information systems department. Instead of using information managers, she used business area leaders, which was a major culture change in NWA. Her perspective was different, as she did not approach the idea from a technology point of view rather she knew that for such a system to work it would have to be addressed from a business objective point of view. The use of sale agents was not effective and a new system would ensure customers get accurate information quickly. To achieve success the Fay knew that the project needed to include other aspects of the organization and that through sharing and exchanging ideas a better system would be developed.
Peeter was the project director for the ResNet project. His main role was to manage the whole project. On the other hand, Arvid was selected from the information system department based on his technical experience in working under the information system department. Because of his experience, Arvid was made responsible for developing a project plan for the beta system within a period of one week. Peeter made good decisions as seen in his resolution to continue working on ResNet even before the budget plans for the project were approved. This helped greatly in saving time. Peeter was able to provide arguments to support investment in the project based on facts that he had collected on investments concerning new reservations systems. Arvid on the other hand used his expertise in planning details of the beta project and made significant recommendations concerning hardware and software to use on the project.
What were some of Peeter’s strengths as a project manager? How do these strengths relate to concepts discussed in earlier chapters?
One of Peeter’s strength was his commitment in researching information about the project. He took the time to collect facts regarding how other competitors had implemented new reservation systems. Additionally, using his charisma he was able to convince people why ResNet was a worthwhile project to invest in for NWA. Furthermore, Peeter had significant experience in the airline industry thus was able to understand how reservations system worked and how to implement it successfully. This showed Peeter’s effectiveness as a project manager.
Review the executive summary Peeter prepared to help justify investing in ResNet. What points were made to convince the finance committee to support the project?
Firstly, Peeter was able to point out that the current reservation system that the company was using was 30 years old. Since then the capacity for the company had expanded and sales agents were having difficulties remembering certain commands that led to inefficiencies in the operation of the airline. Additionally, Peeter pointed out how other competitors of NWA had installed intelligent systems to improve the efficiencies of reservations and increase their sales. He provided financial analysis such as the NPV of the project, which seemed to convince the members and provide a detailed picture of what to expect when investing in the project. Peeter also indicated the project had a limited risk as it had been proven by a National Sales beta test at NW.
Discuss the major differences between the three ResNet projects. What was the emphasis for each project? How might each be managed differently?
The ResNet beta project involved customizing and testing new software and hardware on only 16 personal computers. Additionally, a system of evaluating benefits of ResNet was developed during this beta phase. The cost for this phase was $500,000. In ResNet 1995 personal computers were installed in three call centers and additional software developed. The total cost for this project was $13 million and it lasted from September 1994 to December 1995. In ResNet 1996, final installation of software and networks was done in other six reservations together with developing additional software. Cost for phase three was $20 million and lasted approximately 2 years. Focusing on each project alone was important in ensuring that financial risk was minimal. The first project was on a smaller scale and it was necessary to be done to ensure that the final project would be feasible. The output of each project needed to be used as an input for the next project.
