The present chapter has the objective of examining the relevant literature to form a solid base for identifying the issues that this research is concerned with. After defining project management, in order to correctly identify the role of the Front-End phase, the research will discuss the importance of project life cycle in standard projects. Subsequently, Front-End phase will be analysed to identify the main issues managers should deal with. Finally, a framework of other relevant element to manage in the Front-End will be presented.
A project is defined as a number of temporary tasks executed in a particular period combined with the company resources and capabilities in order to improve a product or a service that already exists or to create a new product, service or result ensuring a great advantage among competitors (Morris & Pinto, 2007, pp.14-17). Successful strategy must be aligned to the company’s activities, principles and culture throughout the formation and the implementation of the project (Johnson et al., 2011, p. 16). Its temporary nature indicates that a project has a clearly defined beginning and end.
The end is reached when the project’s objectives have been achieved or when the project is terminated because its objectives will not or cannot be met, or when the need for the project no longer exists. A project may also be terminated if the client (customer, sponsor) wishes to terminate the project (Morris & Pinto, 2007, p. 15). Temporary does not necessarily mean the duration of the project is short. It refers to the project’s engagement and its longevity.
Project Management, therefore, is the application of skills, tools, techniques and knowledge to project activities in order to meet the project requirements. Effective Project Management practices help organizations carry out project on time, on budget and with the minimal disruption to the rest of the business. It is, moreover, extensively adopted as a complex of techniques and tools for delivering strategic objective and goals (PMI, 2013, p. 25). In the interest of understanding the main actions that have to be carried out in a project, it is relevant to classify Project Management processes into five groups: initiating, planning, executing, monitoring and controlling, and closing. The one that is relevant for this study is the initiating process, due to the fact that this action is been controlled in the Front-End phase. The project management brings a unique focus shaped by the goals, resources and schedule of each project and project managers are the ones that must set the milestones and thus lead the entire process.
Is then important to remember that Project managers are not expected to complete the project work by themselves, even though they are always the ultimately accountable for the project. Project managers have project teams working alongside them who support and help them to achieve all of the objectives of the project (PMI, 2013, p. 14).
Project management has the duty to combine comprehensive upfront planning with detailed downstream planning in order to ensure that strategic and tactical issue are addressed early in the project (Termini, 1999, p. 21). Project managers or organizations, moreover, can divide projects into phases to provide better management control over the project. Collectively, these phases are known as the project life cycle.
To understand the importance of the Front-End phase, it is important to understand where it is located. Often decision- makers do not know how to handle this phase because they are not able to identify it. The Front-End phase is a sub-phase of the project life cycle, and precisely is part of the conception phase. However, although it is not a primary stage, it is vital because any decision taken in this sub-phase of the lifecycle impacts significantly on all the other phases of the project. Furthermore, any modification of the project can be implemented at a lower cost in Front-End phase than in the future states. A project’s life cycle refers to the path a project takes from the beginning to its end. A standard project is typically characterized by four (4) main phases, each with their own tasks and issues: conception, planning, implementation and closure. Patel and Morris (1999, pp. 20-22) argued, “The life cycle is the only thing that uniquely distinguishes projects from non-projects ». At this point, it would be valuable to examine what role the project life cycle plays in the conduct of project management. According to the same source, the structure of the project is significantly affected by the sequence of phases through which the project evolves. Subsequently, Patel and Morris (1999, p.21) define the generic sequence of phases in the basic life cycle as: Conception, Design, Production, and Hand-over. They note that while the names for these phases may vary according to the industry of organization where the project is being implemented, the concept remains the same whereby the transfer from one phase to another is characterized by evaluation and approval points. They call these ‘gates’. The method of division of a project into phases may differ somewhat from industry to industry, and from product to product, but the phases shown in the Figure 1. The project manager and project team have one shared goal: to carry out the work of the project for the purpose of meeting the project’s objectives. Every project has a beginning, a middle period during which activities move the project toward completion, and an ending that can be either successful or unsuccessful (Jensen Oellgaard, 2013). As previously stated a standard project typically has the following four major phases (each with its own agenda of tasks and issues): initiation, planning, implementation, and closure. Taken together, these phases represent the path a project takes and are generally referred to as the project “life cycle” (Jensen Oellgaard, 2013).
The Phases of the Project Lifecycle
Below, each of the phases of the project lifecycle is discussed in detail.
Phase 1: Initiation/Conception
The initiation phase, indicated as “starting point of the project” by the Project Management Institute (hereafter referred as PMI) includes all the activities necessary to begin planning the project. This phase typically begins with the exploration and the elaboration of an idea. Other elements considered in the initial phase are motivations of the project, the feasibility, the resources needed and how to find them (internally or externally), the boundaries of the project and the results to be achieved. One of the critical steps is represented by the Front-End phase, which will be discussed later. Project stakeholders’ alignment must be guaranteed at this stage to ensure that all the people involved in the project have shared goals.
Phase 2: Planning
In this phase, the requirements that are associated with a project result are specified as clearly as possible. The emphasis of the planning phase is to develop an understanding of how the project will be executed and a plan for acquiring the resources needed to execute it.
Phase 3: Execution/Implementation
The project takes shape in this stage, involving the construction of actual project results. These results are evaluated by benchmarking them with the list of requirements created in the previous phase. In this regard, is necessary to understand that it is hardly possible to achieve a project result that precisely meets all of the requirements that were originally specified in the definition phase (Nauman & Ullah, 2015).
Phase 4: Closeout
The closeout phase – or using PMI’s nomenclature, “closing of the project”—represents the final stage of a project. Project staff is transferred off the project, project documents are archived, and the final few items or punch list is completed. The project client takes control of the product of the project, and the project office is closed down. The purpose of project closeout is to assess the project, ensure completion, and derive any lessons learned and best practices to be applied to future projects.
Innovation is one of the crucial factors of the success of competitive enterprises. Nowadays, for many firm, technological innovation is a strategic imperative to successfully emerge from the competitive dynamics of the market, acquiring or maintaining positions of market leadership. Additionally, the pace of change has increased because of the growing turbulence of the business environment, and it requires companies to have greater flexibility and efficiency in innovation processes.
Innovation can be defined as an iterative process that takes its cue from the perception of a new market opportunity for an invention based on technology: this involves all the activities of development, production and marketing with the aim to achieve commercial success of the invention (Utterback, 1996, p. 14). It relates to the process of translating an idea, or invention, into a good or service that can be valuable for the customers. Thus, the innovation process involves the technological development of an invention combined with its introduction on the market to the final users. Adler (1992, p. 25) states that the passage of an invention through the steps of production and commercialisation is necessary for obtaining an innovation. A discovery that comes out of a laboratory experiment it is only an invention (Adler, 1992, p. 26). On the contrary, a finding that moves from the laboratory to the production and the commercialisation, and causes an increase of value for a company, even in terms of cost savings, can be labelled as innovation. Moreover, other authors argue that the innovative process is iterative by nature, in the sense that an initial grade innovation is followed by further innovations, which bring improvements to the first attempt (Garcia & Calantone, 2002, p. 122; Howells, 1999).
The nature of innovation and the rate of technological change greatly differ from sector to sector (Puga and Trefler, 2010). Some sectors are characterised by quick change and radical innovations, others by smaller, incremental changes. Innovations are often classified in accordance with several dimensions in order to provide a better understanding of the general phenomenon. Such classification not only helps in considering the different opportunities offered, but also clarifies demands presented by the innovation (Abernathy & Clark, 1985, p. 17). These classifications are often based on the perspective of observer and are not mutually exclusive. A company needs to classify the innovation in order to understand the risk and rewards involved. Depending on the risk appetite of the company, it can focus on certain types of innovation and allocate its resources accordingly (Menzel et al. 2007, p. 732). Some possible classifications are listed below.
Process vs. Product Innovations
Process innovation refers to novelty in an organization’s way of doing business. Novelty could consist in a shift in organisational activities, such as marketing, production or sales, or it could be in the linkages between the activities. Process innovation may refer to the implementation of a new or significantly improved production or delivery method, including significant changes in techniques, equipment and/or software. Minor changes or improvements, an increase in production simple capital replacement, changes resulting purely from changes in factor prices, customisation, and regular seasonal or other cyclical changes are not considered innovations (Garcia & Calantone, 2002, p. 118).
On the contrary, product innovation refers to the development and the sequent market introduction of a new, redesigned or substantially improved good or service. Reasons to enable a product innovation may lie in a change in customer requirements, or in the opportunity to tap new markets or market segments, or to increase the product life cycle.
Incremental vs. Radical Innovations
Increment innovation involves a minor change to existing practices, whereas a radical innovation is a larger leap in the practices. Incremental innovation concerns an existing product, service, process, organization or method whose performance has been considerably improved or upgraded. A simple product, for example, may be improved in performance or cost reduction through use of better components or materials, or a complex product comprising a number of integrated technical subsystems may be improved by partial changes to one of the subsystems (Von Tunzelmann & Acha, 2005).
A radical or disruptive innovation is an innovation that has a substantial impact on a market and on the economic activities of firms in that market. The innovation could, for example, change the structure of the market, create new markets or revitalise obsolete products. However, it might not be apparent that an innovation is disruptive until long after it has been introduced, and the cut-off point between incremental and radical innovation might be set at different levels (Abernathy & Clark, 1985, p. 22). In Schumpeter’s view radical innovations create major disruptive changes, whereas incremental innovations constantly advance the course of change (Schumpeter, 1942).
Competence enhancing vs. Competence Destroying Innovations
This perspective of looking at innovation is very useful for companies. Competence enhancing innovation implies an improvement in abilities the company already has, building the innovation on the existing knowledge base. Competence destroying innovation, instead, requires a new set of skills, abilities, and knowledge in the development and production of a product relative to those held by existing firms in an industry (Tushman and Anderson 1986, p. 442). A competence destroying innovation is often faced with resistance amongst firms. Innovations involving new competence acquisition take longer to implement and are positively associated with organizational change (Garcia & Calantone, 2002, p. 39).
Small and Medium-Sized Enterprises
Small to medium-sized enterprises (hereafter SMEs) play a significant part in economic activity through employment, innovation and growth (Floyd and McManus, 2005).
Several different definitions of SMEs have been proposed based on their nature and characteristics (McAdam and Reid, 2005, p. 235). For the purpose of this research, the European Commission’s definition will be taken into consideration. The European Commission (2005, 2008) defines small and medium enterprises as follows:
• Medium – up to 250 employees and, and turnover of less than €50 million
• Small – less than 50 employees, and turnover of less than €10 million
• Micro – less than ten employees, and turnover of less than €2 million
Another classification of SMEs has been provided by Ghobadian and Gallear (1997, p. 95), in which the authors focus their attention on the differences between SMEs and larger organizations. The main differences can be expressed in term of:
• Processes: SMEs require simple planning and control systems, and informal reporting.
• Procedures: SMEs have a low degree of standardization, with idealistic decision-making.
• Structure: SMEs have a low degree of specialization, with multi-tasking, but a high degree of innovativeness.
Rothwell and Dodgson (2007, p. 228) identify several advantages of SMEs if compared to large companies in terms of innovation. The authors analyse SMEs’ advantages in term of (i) Management, – SMEs benefit from “Entrepreneurial Management”, characterised by short bureaucratic procedures and rapid decision-making processes, whereas large firms suffer from high degrees of bureaucracy and lack of dynamism; (ii) Communication – SMEs have a more informal and effective internal communication network, while long decision chains that would result in slow reaction times could hamper large firms communication; (iii) Marketing – SMEs can react faster to changing market, dominating narrow market niches. Larger firms, instead, might ignore emerging market niches with grow potential; (iv) Finance – Innovation can be less costly in SMEs that gain market advantages from R&D (Research and Development) efficiency, while large firms operate under the pressure of stakeholders on focusing on short-term profits. SMEs are also more likely to be capable of “fast learning” processes and adapting new routines and strategies, while large firms are slow-to-learn (Turner, 2009, p. 930) and locked into well-established practices; (v) Government and Regulation – especially in the past years, governments assist and support innovation in SMEs, not only by offering tax credits for innovation to SMEs that focus on R&D, but also by encouraging patent to secure innovations.
Table of contents :
1.1 Research Objective
1.2 Research Question
1.3 Unit of Analysis
1.4 Significance of study
1.5 Disposition of the study
2. Literature Review
2.1 Project Management
2.1.1 Project Lifecycle
2.1.2 The Phases of the Project Lifecycle
2.3 Small and Medium-Sized Enterprises
2.4 Innovative Small and Medium Enterprises
2.5 Front-End Phase
2.6 Response Strategies
2.6.1 Uncertainty reduction strategies
2.6.2 Equivocality Reduction Strategies
2.6.3 Complexity Reduction Strategies
3. Research Methodology
3.1. Ontology, Epistemology and Axiology
3.2 Research Approach
3.3 Research Strategy
3.3.1 Case Study
3.3.2 Time Horizon
3.4 Data Collection – Methodological Choices
3.6 Assessing the Research Quality
3.7 Ethical Considerations
4. Data Analysis in Practice
4.1 Participant Selection
4.2 Interview design
4.3 Interview Transcription
5.1 Defining the Front-End Phase
5.2 The Role of the Front-End Phase
5.3 Perception of Innovation
5.4 The Common Pitfalls in the Fuzzy Front-End
5.5 Front-End Strategies and Techniques
6. Discussion of the Findings
6.1 Project Managers’ Perception of the Front-End Phase
6.2 Project Managers’ Perception of the Innovation
6.3 The Role of the Front-End Phase
6.4 Front-End Strategies
7.1 Answering the Research Questions
7.2 Limitations of the Study
7.3 Practical Implications
7.4. Theoretical implication
7.5 Validity and Reliability Revisited