Philips Consumer Electronics

Content Management

Project communication and data gathering:

Influences on project effectiveness and efficiency

Philips Consumer Electronics

Graduation Report Edwin Elbertsen 1138642

Faculty of Management and Organization Rijksuniversiteit Groningen

August 2004

Graduation professor: Dr D.J. Kiewiet

Supervising professor: Drs. H.P. van Peet

Philips CE supervisor: L. de Jager

Preface

This graduation report is the result of six months of research at Philips Consumer Electronics as a graduation assignment for the study Business Development at the Rijksuniversiteit Groningen. In an environment where immediate results seem to be all that counts, I found it at first hard to establish a ground to base scientific research on, since theory and practice in a large international company with its immediate challenges and difficulties are difficult to unite. Especially in a project with considerable size as was the Content Management Chain, it was difficult to isolate the different stakeholders in respective groupings without losing oversight of the whole.

This report describes the problem areas as encountered and diagnoses the problems encountered in the specific situation of Philips Consumer Electronics in filling in the PFS2 content management database.

I would like to thank all the people who supported me during my graduation period, especially Luuk de Jager who, despite his busy schedule, took the time to familiarize me with the Philips organization and Gertie Werner for her continuous support.

Furthermore I would like to thank dr. Kiewiet for his feedback and comments, and drs. Van Peet for acting as second assessor.

Edwin Elbertsen

Putten, Augustus 2004

Management Summary

Philips Consumer Electronics, a product division of Koninklijke Philips Electronics N.V., has launched a content management program called the Content Management Chain (CMC). The CMC program automates and centralizes all product marketing related content in a central database called PFS2. The CMC project aims to reduce the variety of descriptions used in the description of product marketing related content in this way. Given the many stakeholders involved in the program, communication and coordination have become very complex. The question of the E-business department, held responsible for the timely deployment of the system to produce the European Catalogue from 2004 onwards, is to:

diagnose the current situation and provide advice on how to improve the existing situation for data-gathering in which problems occur frequently and are solved in a communication-intensive way, so to prevent these problems in the future situation.

From this broad research question, the first thing to establish in order to reach any meaningful result is a delimitation of the researched system. After a preliminary research, three groups of stakeholders were discerned, each with its own specific yet related problems. First there is the CMC management, with their general perception that there are serious problems with the efficiency of the entire process of creating product-marketing related content in the new PFS2 system. Second there are the different Business Creation Units (with underlying Business Creation Teams) that experience a high workload, insecurity about the new task, and feel there are not sufficient quality standards for the system in place to judge the quality of the output.

Third there are the regions, who fear a poor quality of the output of the system, as well share concerns on the timely completion to realize the input for the European Catalogue, which is to be the first output of the PFS2 system.

Because the people in the BCT’s are under high stress to complete this new task before the tightly set deadline, the information inserted is often of insufficient quality as judged by the Region. This leads to feedback cycles through CMC management, who has to intervene and make sure data is re-entered. A cause-result relationship between these parties and the problems they experience can be discerned. This perceived cycle dictates that the solving of the problems as is experienced by the different stakeholders should start with solving the problems as are experienced by the BCU’s since this is where data is put in and thus is the place where possible problems are created. Within this delimited system, the goal of this research is to:

identify the cause(s) of the inefficiency of the current process regarding the creation and collection of product content within the CMC program.

A bulk load of program content has to be loaded into the PFS2 system, which, being considered as a critical event in the project, is an event happening in the execution phase of the Project Life Cycle. The product marketing related content is build up out of several data fields that have to be entered in the system. For each individual product CTN (product-) specific data has to be entered and so called Global Data has to be created and/or be assigned.

The conceptual model that was created based on interviews with organization

members of different BCT’s leads to a set of nine hypothesis, which are tested by

comparing the results of an on-line survey that was conducted among those BCT

members that utilize the PFS2 system. The low response rate (20%) has however had

a detrimental effect on the validity of any conclusion(s) based on this research and there is only one group, the BCU AV Entertainment, on which a partial valid conclusion of the research can be defended, because this Business Creation Unit was the only one with sufficient persons from the different Business Creation Teams, of which the BCU is composed, replying to compare results. All other BCU’s had only one or two respondents per BCU, which makes the answers given arbitrarily and individual for the person filling in the questionnaire and thus can not be seen as being representative for the entire group. The Business Creation Unit AV Entertainment can also not be used as being representative for other BCT’s, as their data is often significantly different from data collected in the other BCU’s.

As the presumed relations can not be validated and the gathered data can not be generalized, only two general recommendations can be made as to how to improve the efficiency of the data creation process. The data does however support the statement to exclude the CMC management reporting as a source of uncertainty to the BCT’s.

First, an adaptation to the PFS2 system has to be made which allows the release of provisional data, which can subsequently be scrutinized by the Regions. The timing at which this data is released needs to be established on a per-BCT basis as the development times of products per BCT differ widely.

Second a horizontal coordination means should be available to the BCT’s to discuss shared descriptions for Global data, as to so prevent abuse of the system to accept similar data that has an unclear differentiation to existing data, which is necessary to discern the use of the data on different outputs.

In order to establish what data is exactly under discussion and which stakeholders are involved in the discussion, the coordination could be realized through setting up an on-line forum with topics based on the productnumber that is under discussion. The creation of a subject (consisting of the productnumber) in the forum should be automated and be triggered by an option in the PFS2 system that allows BCT members to ‘flag’ a description that they will be using for their own products, but to which description they as yet do not agree. A meeting is subsequently planned between these stakeholders, if possible face-to-face and otherwise through a conference call, to discuss the data and reach a mutually sound description.

If an agreement on the description is reached between the different stakeholders that

‘flagged’ the description, the topic is closed and the final description is entered into the PFS2 system. Use of the forum is only useful and thus limited to those discussions where time is not (yet) a serious restraint, and the number of stakeholders is small (a maximum of 3).

If no agreement can be reached between the BCT stakeholders, or the number of

stakeholders becomes to great, a meeting is planned between the stakeholders and a

member of the CMC Change Board. If possible, this meeting should be face-to-face,

otherwise the available members will be physically grouped with those who can not

attend joining through a conference call. If seen as fit, a copywriter will attend the

meeting. This way, if no solution can be found the member of the CMC Change

Board can force a decision in favor of one of the descriptions or decide to allow

multiple descriptions to be taken up in the PFS2 system.

Table of Contents

Chapter 1: Inducement for research ...5

1.1 Philips Consumer Electronics ...5

1.2 Content Management Chain ...5

1.3 Model of the CMC Program as a black box on organizational level...6

Chapter 2: Assignment set-up ...9

2.1 Management question ...9

2.2 Problem analysis ...9

2.2.1 System parts and problem owners ...10

2.2.2 Problem Owners...12

2.2.3 Research objective ...12

Chapter 3: Conceptual analysis...14

3.1 Modeling of systems ...14

3.2 System Model ...15

3.3 The CMC Program as a project: ...16

3.3.1 Actor Interdependency...18

3.3.2 Coordination between actors...19

3.3.3 Communication between actors ...19

3.3.4 Project Communication and commitment ...20

3.3.5 Information processing ...21

3.3.6 Commitment ...21

3.3.7 Uncertainty...23

3.4 Conceptual Model. ...25

3.4.1 Hypotheses ...26

Chapter 4: Empirical analysis ...29

4.1 Methods...29

4.2 Results...30

Chapter 5 Design...37

5.1 Timely release of data...37

5.2 Coordination of data ...39

5.3 Conclusion on designs ...42

Chapter 6: Conclusion...43

a) The diagnostic goal ...43

b) The developmental goal...44

Chapter 7: Reflection ...45 Appendix 1: Organization chart of Philips Consumer Electronics (outdated) ...Error!

Bookmark not defined.

Appendix 2: Project Life Cycle ... Error! Bookmark not defined.

Appendix 3: Questions and Results of the questionnaire. ...Error! Bookmark not defined.

Appendix 4: Partly overview of the PFS2 system ... Error! Bookmark not defined.

Appendix 5: Definitions as used in this report... Error! Bookmark not defined.

REFERENCES ... Error! Bookmark not defined.

Chapter 1: Inducement for research 1.1 Philips Consumer Electronics

Philips is one of the world's top three consumer electronics companies, with a range of products based on the company’s world-leading digital technology competencies, and are designed to enhance consumers’ everyday lives. Philips is a truly multinational corporation, it has sales organizations in more than sixty countries and circa 160 factories in all parts of the world. With a turnover of 29 billion Euro in 2003 it is Europe’s largest manufacturer of electronics and takes a tenth position as one of the largest electronics corporations in the world. Philips Consumer Electronics (CE) is a product division of Koninklijke Philips Electronics N.V.

Philips’ Consumer Electronics division is playing a key role in the realization of the Connected Planet: a vision that allows consumers to access and enjoy entertainment and information services wherever they are, whenever they want, in an intuitive, spontaneous and instant way. Integration of key technologies and marketing form the backbone for realizing this vision. The extensive product portfolio of Philips CE includes televisions, VCRs and tv-video combinations, audiosystems, loose components, portable devices and home cinema sets, recording equipment for audio and video, monitors and peripherals such as dvd+rw datadrives, cd-rewriters, pc- videocamera's, lcd-projectors and remote controls. Philips Consumer Electronics includes the sales- and marketing activities of personal communication products, which include regular as well as cellular and wireless telephones.

The countries in which Philips CE is active are divided in four geographical segments: EMEA (Europe, Middle East and Africa), APAC (Asian Pacific), NAFTA (North America) and LATAM (Latin America).

Under the CEO of Philips Consumer Electronics, two staff departments (HRM and CFO) fall and the CEO Business Groups and the CEO Global Sales and Services.

Under the CEO Global Sales and Services fall the E-business / P3C department and the four Regions that are discerned within Philips. Under the CEO Business Groups seven BCU’s and diverse other departments fall. An overview of the structure can be found in Appendix 1, although it must be noted that a static picture could never truly represent the structure of the organization nor the relative power of the entities.

Philips CE consists of seven Business Creation Units; BCU being the abbreviation for Business Creation Unit. These units are BCU Television; BCU Multimedia Displays;

BCU AV Entertainment; BCU Wireless Phones; BCU Mob. Multi. & Connectivity;

BCU Peripherals & Accessories and the BCU Digital Video STB. Under these BCU’s fall twenty-one Business Creation Teams (BCT’s).

1.2 Content Management Chain

To present itself as a more uniform organization and to cut back on costs Philips’

product division Consumer Electronics (CE) has launched a worldwide content management program which is led by the E-business department. This content management program is called the Content Management Chain (CMC), which aims to

"create a transparent and efficient flow of CE Marketing Product Information with

identified responsibilities to make that information available to the relevant people at

the right time in the right format." (Source: Philips CMC-intranetsite)

To reach this goal, it was decided to automate and centralize the creation, storage and delivery of all product related content for the CE websites, leaflets, (Digital) Product Launch Guides, Call Centers and printed catalogues. This is being done in a central database called PFS2, within the organization also known as ‘Marco Polo’. The generation of market input for the product creation process used to be the responsibility of the separate Regions, but has been agreed by the parties involved to switch to the product managers in the BCU’s, to be placed to where the product marketing content will actually be created in the database. The responsibility for filling this database lies thus with the Product Managers in the Business Creation Units (BCU’s).

However, because of the large number of staff and organizational entities involved, communication and coordination has become very complex. Information about this program and related initiatives is mainly kept in the heads of people and only limited amounts of information are centrally stored, while there is an absence of a clear communication strategy. Different parties are not clearly aware of their tasks, responsibilities, their deadlines and goals and the overall status and goal(s) of the Content Management Chain program.

Before a detailed description or delimitation of the researched system is given, first a model of the CMC program is placed in its relevant environment. This is done to show that the most relevant environment variables have had their own impact on the definition of this research but since they can not be influenced they are seen as meta- variables or conditions that are imposed on the program and can not be influenced.

The program will have to function within the limitations and constraints that these conditions impose.

1.3 Model of the CMC Program as a black box on organizational level.

Structural change: the Consumer Electronics (CE) organization restructuring A change effort affecting the whole CE organization, affecting the research environment and also the researched system itself as was defined in this research, is the Business Renewal redesign process.

This redesign effort aims to achieve breakthrough results, with three main objectives in mind:

Project Scope

Degree of dispersion of (BCU) stakeholders

Changing task

Time difference

Different Cultural values

CMC Program

Philips CE organisation

Structural change

Macro economic variables

Figure 1: The CMC Program on an organizational level

1. Further lower Cost of Organization (CoO).

2. Fundamentally change the ways of working within PCE. Reduce complexity and overlap.

3. Reinforce our company values to further improve speed, agility, market focus and passion.

This redesign effort has major implications for the structure of CE, which was at the beginning of this research as shown in the organization chart shown in appendix 1.

The increased convergence of technologies and synergies between different technologies and products have caused the organization to implement an restructuring of the organization to increase cooperation and synergy between departments.

The CMC project is not (managed as) a part of the CE Business Renewal change effort, even though when successfully implemented it will contribute to its goals in the long term. The project of realizing the CMC program is an independent change project happening alongside the CE Business Renewal change effort.

One of the main impacts of this restructuring is the change in structure for Philips Consumer Electronics and the subsequent change of terminology. Instead of speaking of 7 Business Creation Units there are now three Business Groups (BG’s) discerned;

also the name of the department under which (or for which) this research was conducted has changed from first E-Business / P3c to e-Business & Relationship Marketing to finally Global CRM, e-Business & Services. To avoid confusion the department will be addressed as E-business in this report.

This obviously has major implications for the terminology in this research and thus quite possibly also on its boundaries. Because this is a structural change that occurred during the end of the research period, the change had however not yet settled in the minds of people, whom still often speak of BCU’s, BCT’s and the “e-Bizz”

department.

Changes in the structure of the organization however do not only change the terminology used but could have a far larger impact on the validity on this research.

The organization of 7 BCU’s into 3 BG’s and underlying BLC’s mainly had an impact within the BCT’s, which impacted on this research. These problems however also added to the insight in the causes of the encountered problem of the E-business staff department from which the assignment originated, as it gave an insight in the perceived organizational (strategic) need for greater coordination between the Business Creation Units.

Because the terminology as used in this research is still in the heads of many people, there was no reason to adjust all the terminology in the description and diagnosis, especially because this would no longer describe “reality” as it was perceived (by the researcher himself as well as the people involved in the research,) but would instead describe an organizational model conceived by the people leading the Business Renewal program.

Changing tasks

Responsibility for the creation and collection of product marketing information swifts

from the Regions to the Product Managers in the BCT’s. This not only means that the

responsibility for the on-time creation of product marketing content lies with different

persons, but also that this content has to be created much earlier in the creation

process of a product. The product managers will have to go through a learning process

in order to learn and know how to timely collect, create and release the product

information.

Time Difference / Degree of dispersion

Because the different BCT’s are spread around the world, time differences can make it difficult to inquire information on the spot or share thoughts with persons in other BCT’s or within the E-business department. The more geographically dispersed the persons with whom contact is required are, the more difficult it becomes to pass information on timely and correctly.

Influence of cultural values / Macro economic variables

Cultural as well as macro economic variables may have their own impact on how people regard the added value of the CMC program. Macro economic variables may have had their own historic impact on the use of IT and ICT systems within countries and the people inhabiting it. Because Philips is an international organization with its own IT strategy, it is assumed that the use of IT systems and ICT programs is well- spread and accepted throughout the organization.

Cultural values may still have their own impact regarding the use of systems for the collection and creation of product marketing information. The emphasis placed on tasks versus relationships differs across individuals with varying cultural orientations.

Commitment to a task is often supported in individualistic (Western) cultures, while a commitment to relationships is often more supported in collectivist cultures. (Wasti and Arzu 2003) The use of the system is however mandatory and people have no choice but to use the system no matter what their preferred way of working is, was or would be. The preference or resistance to working with IT systems might however well be a topic for further research within Philips when problems stemming from a poor quality of information that is put into the system continue to occur.

Project scope

The CMC project aims to reduce the variety of descriptions used in the description of product marketing related content. This used to be decided on an individual level, with different persons responsible for different outputs using different descriptions for the same product. The standardization of the work process through the PFS2 program is introduced and needed in order to reach a standardization of output (and reduction of different output types) in a more efficient way. When data was put in individually over 10,000 different features existed, which has to be reduced to an expected 1500 features and 350 Key Benefit Areas and from 40,000 technical specifications to less than 3000.

The CMC program affects the entire way of working of the CE organization and all its parts and even that of some of its suppliers and customers. Because the scope of the project as a whole is so large that it forms no suitable basis for meaningful research and because the involved actors that should be taken into account depend on the part of the CMC project that is taken in account during the investigation is subject to the delimitation of the system as will be defined in chapter 2, the relevant scope of the CMC project will be discussed in chapter 3.

Problems experienced in the CMC program, which will be described in the next

chapter, may well be (partly) related to any of these external variables but lie out of

scope of this research because it is hardly possible to influence these conditions.

Chapter 2: Assignment set-up

The perception of the people from the E-business department leading the CMC program is that there are obstacles to communicate the changing tasks and responsibilities of the BCU’s and Regions and they find it is extremely difficult to communicate the priorities within the CMC program. The BCU’s are now responsible for creating the marketing related content, which is to be used by the Regions for their different marketing purposes and outputs. This is a new task for people in the BCT’s, bringing with it a large amount of uncertainty of what needs to be done, how this needs to be done and when this must be completed.

This lack of clearness leads to a chaotic situation in which the people leading the program have to push changes through by personally contacting the people responsible, reminding them of their tasks to be completed and of their deadlines and responsibilities. Also frequent personal contact with different people from the Regions or BCU’s in order to communicate and solve risen problems that are encountered has to take place.

2.1 Management question

The CMC program envisions to deliver the new standard operating procedures for the creation and collection of all product marketing related content and thus will change the way of working for BCU’s. The responsibilities of all stakeholders have been defined, as are the data(fields) and the idealized ways of data-generation and data gathering. These procedures however, are not yet communicated (detailed enough) because this is partly still work in progress and is a decision that has been taken at senior management level and is not yet fully deployed and understood by personnel that actually has to put in the information and work with it. They therefore often have to contact CMC program management for clarification.

The question of the organization is therefore to diagnose the current situation and provide advice on how to improve the existing situation for data-gathering in which problems occur frequently and are solved in a communication-intensive way, so to prevent these problems in the future situation.

2.2 Problem analysis

Currently the organization finds itself in a catch-up situation to reengineer the way of working, to create a standing organization with a renewed and updated business process for the creation, collection and distribution of product related marketing information. The future processes of updating and creating new product related marketing content will be similar to the current process of uploading information, so there is a real danger the future process will also elapse inefficient if the situation does not change and improve.

The current process of filling the Content Management database is an event

happening in addition to the current (existing) way of working. The first thing to

establish is therefore an adequate reasoning and proof of the causes from which the

problem stems.

This research can be qualified as policy supporting research aiming to produce concrete knowledge which is useful in a specific situation of a concrete customer and which satisfies a part of the total need for knowledge. (De Leeuw 1996:71)

The concrete customer in this situation is the eBusiness & Relationship Marketing department. De Leeuw (1997: 213) states that if we see a problem as a description of an individual problem situation of one ‘entity’ or person who experiences a problem, three sorts of problems can be discerned: perception problems, goal problems and reality problems. Perception- and Goal problems can (must) be solved by changing the set goals. Reality problems are problems in which the solution to the solving of these problems does not lie in the goals or perception of the entity or person experiencing the problems, but lies in changing reality itself. Reality problems are problems of control to the entity or person experiencing the problem. This research is relevant for the people that have to steer and control the process of information gathering within the CMC program, since the goal of this research is to offer insight in the problems experienced in the collection and creation of content, (which is a control problem to CMC management) in order to identify causes and offer possible areas of improvement to allow the process to be steered and controlled more effectively and efficiently.

2.2.1 System parts and problem owners

There are three agendas of change that must be managed in a project: The content agenda, the process agenda and the control agenda. (Boddy and Buchanan 1992) Within the Philips Consumer Electronics organization there are three systems discernable that are important for this research, as is shown in the (simplified) model below.

The first system that is discerned is the E-business department that experiences problems with the multiple stakeholders involved. The people in this department are held responsible for coordinating and managing the responsibilities in the newly to develop PFS2 system for creating product marketing information, and for assuring the successful development of new ICT systems and adaptation of existing systems within the set time-constraints. (The process agenda) The concerns of the E-business department itself are mainly related to the problems that are experienced in controlling the filling of the PFS2 database with correct product marketing information (which can be seen as a part of the control agenda). The frequent contacts with people in order to assure progress and quality are perceived to work inefficient and leads to a high workload for the BCT’s and results in such poor quality that these problems might ultimately result in classifying the project as a failure and resulting in the abandoning of the project.

The second group are the different BCU’s, which are under stress from the E-business

department and higher management to initiate and complete the filling of the

database. Because this is a new task, they experience several problems. The process of

getting CTN strokes (which are labels for products that are categorized by number) is

essentially a local process within the Regions and they are not able to extract all

needed information themselves. The collection of these CTN strokes is necessary

because they form the first input into the PFS2 system, the strokes identify the

products for which data has to be created. The publication of the new Product

Catalogue for 2004, which is the first output to be realized through the use of the

PFS2 system, is an important output for the Regions, postponement is unacceptable to them and the organization. The set deadline is however difficult to maintain within the BCU’s because of the quality problems encountered and the large amount of workload that is the result of correcting mistakes and finishing the creation of content.

(problems related to the content agenda) This is especially so because the deadline coincides with the Proco (Product Coordination) meetings in which the new range of products for the next two years is discussed and determined by the different BCU’s.

(this can be seen to be related to the process agenda, which can however not be influenced by the BCU but is established by CMC management. Because of the large number of stakeholders involved, this is not subjected to changes) More important, the BCT’s are not aware of the progress of other BCT’s and are not aware of information overlap or, even when aware of very similar but at critical aspects different information, they simply duplicate the previously entered similar information with a new name so the system will recognize it as a new entry and adjust their data as perceived to be necessary. The use (in the output of the system) of this information or the difference between the similar information may be very unclear to other actors using the system.

Third there are the Regions and National Sales Organizations (NSO’s), which are dependent on the output of the system. The data that is defined in the system will be used on all kinds of (marketing) communications towards resellers and towards the consumer and thus any mistakes or lapses in this information are clearly visible to them. Since the creation of the information is no longer the responsibility of the Region, these people fear they lose control over the quality of the information that is released. (problems related to the control and content agenda) All defined standardization principles within the PFS2 database relate to quantitative limitations, and there are no guidelines for qualitative specifications and no processes for checking or altering texts from a region perspective.

Because the problems encountered in the different agendas by the Regions and the E- business department can not be seen or solved independent from the other systems and their problems stem from the problems experienced with the content agenda in the BCU’s in the creation of product marketing information, the problems that are encountered in the BCU’s will be the focus of this research.

Figure 2: Overview of the major stakeholders and responsibilities PFS2

Content creation

Release of information

PFS2 System creation

(Translation) Trigo automated generation

of requested outputs BCT Input

(U.S. English)

NSO’s

Trigo system adjustment

BCU Responsibility

E-business department Responsibility

Region collection of product CTN’s

2.2.2 Problem Owners

As in most cases there can be multiple problem owners discerned with different but related problems. In terms of Ackoff, we speak of a mess (in: De Leeuw 1996:177) The amount of problem owners has been reduced by using a combination of techniques based on those used by De Leeuw (1997:212). First of all, the similarities between different problem owners in the interviewed BCT’s have been taken together to treat them as a single problem owner. This technique has also been used in the Region and the E-business department, which forms the second reduction, namely decomposing of the problem situation by differentiating between system-parts.

This still leaves three different problem situations that are faced by the main problem owners as is detailed below, each situation with its own specific characteristics. The third way of reducing the amount of problem owners is the deliberate choice of problem owners chosen. This choice, which was already made in chapter 2.2.1, is explicated in this paragraph. As was described in the previous paragraph, the three main problem owners are concerned about:

1) CMC management: Inefficiency of the process of finalizing and releasing data.

2) BCU’s (BCT’s): High workload, insecurity about a new task, no quality standards.

3) Regions: Poor quality of output, concerns on timely completion.

In terms of Haselhoff’s triptych (Haselhoff in: De Leeuw, 1987) CMC management’s perspective is mainly concerned with the organization as a technical-economic system focussed on the efficiency. The new process of creating product marketing information is their responsibility, and must be developed and work efficiently and effectively.

The regions see the outcomes of this CMC program as the basis of the organization in an open system focussed on survival, with the supplied product marketing information as a basis for sales.

The BCU’s see the filling of the database mainly as a new task that is added to their duties and find it important to view the organization of the creation process as a social system focussed on fulfillment.

A cause-result relationship between these parties and the problems they experience can be discerned. Because the people in the BCU’s are under high stress to complete a new task before the tightly set deadline, the information inserted is often of insufficient quality as judged by the Regions. This leads to feedback cycles through CMC management, who has to intervene and make sure data is re-entered. This process elapses highly inefficient and consumes a lot of time. This perceived cycle dictates that the solving of the problems as is experienced by the different stakeholders should start with solving the problems as are experienced by the BCU’s.

2.2.3 Research objective

The goal of a research forms the basis of the formulation of questions and thus steers

the process of obtaining knowledge. Also the goal is a tool for evaluation of the

research, both ex ante and ex post the research. A problem statement (consisting of

the goal(s) and the formulation of questions) of a research should be relevant, suitable

and researchable. (De Leeuw, 1996: 22-23, 123; Verschuren 1999: 45-46, 162) In this

research a discern is made between a diagnostic and a developmental goal. In these goals will be stated what this research wishes to establish.

The diagnostic goal of this research is to identify the cause(s) of the inefficiency of the current process regarding the creation and collection of product content within the CMC program.

The results of the diagnostic research will be used as input for the realization of the second (developmental) goal.

The developmental goal of this research is to identify possible areas of improvement in the efficiency of the creation and collection of content and recommend how to fit these in the existing organization.

The actual product content is out of scope of this research because this is already defined within the Content Management Chain (CMC) program in a document called the PmcRL (Product marketing communication Requirements List). In this document detailed definitions of the data elements that need to be created and the specifications to which these elements must comply are described.

When these goals are reached the eBusiness & Relationship Marketing department can guide and monitor the process of creation of product marketing information of the CMC-program in a more effective and more efficient, consistent and uniform way.

In order to reach these goals, the central research question in this research is:

What causes can be identified that influence the effectiveness and efficiency of the CMC program regarding the creation and collection of product marketing content?

It is assumed that when the causes of the problem are known, areas of improvement

can be identified and a course of action may be established to improve the existing

situation.

Chapter 3: Conceptual analysis

CMC Project scope

The first objective of the CMC program is to complete the creation and collection of all content required for the creation of the European Catalogue. This catalogue contains all products for sale in Europe and thus forms an important goal and deadline to reach. This means people have to work with a new standardized process, with which they are not yet familiar yet they can not allow any mistakes and have a very strict deadline to work with. The pressure this puts on people might well perceived to be too high, resulting in a poor catalogue quality which is not acceptable for the regions to use.

The results of this report are based on the current process that is running and applies to the collection of data for the publication of the European Printed Catalogue for May 2004 – April 2005.

The goal of this chapter is to construct a conceptual model that contains the possibly relevant system elements, properties and (causal) relationships that play a role in the creation of data in the BCT’s. To do this, first the system is defined in paragraphs 3.1 and 3.2. Next the CMC Program will be looked at at as a project in paragraph 3.3 to clarify the role of the BCT’s input of data within the larger whole, which is followed by a theoretical outset of concepts that relate to the problem under investigation.

These variables and their relation that might explain the effectiveness and efficiency of the data-input by the BCT’s form the basis for the paragraphs 3.3.1 to 3.3.7. In paragraph 3.4 the conceptual model and the hypothesis (paragraph 3.4.1) that form the basis of this research are presented.

3.1 Modeling of systems

A model is a system that resembles (contains the relevant aspects of) another system (or class of systems) one wishes to study, control or design. The use of a model usually has less pretension of general usefulness than the use of a theory, since they often only apply to - and are useful in - a specific situation. In order to make a model, one has to make modeling decisions that dictate among others the goal of the model and a delimitation of the system. The model has to specify to which aspects of the specific situation the model applies (De Leeuw, 1996:54). The modeling decisions that are relevant for the diagnostic conceptual model that follows will be elaborated upon in this section (based on De Leeuw, 1997:95).

0. Goal of the model:

The goal of the model is to give an insight in the probable causes (as identified by the researcher) of the inefficiency of the collection and creation of data within the CMC Program by the BCU’s.

1. Delimitation of the system

The system discerned in this research is composed of the functional department e- Business and Relationship Marketing, and the BCU’s (and thus BCT’s).

The scope of research concerning the collection of content in this paper is limited to

the EMEA (Europe, Middle East and Africa) region because the initial collection of

data will be used for the creation of the European Catalogue containing product

information for the European region. To verify whether or not the approach suggested

in this research paper will be applicable to the other regions is out of scope in this research but might well be a subject for further investigation when problems still arise in the future.

The BCU’s (and BCT’s) are geographically dispersed and not divided into regions but divided by product grouping. This means all BCT’s are taken into account.

2. level of aggregation

The smallest element identified in this research is the level of individuals. These are located in different groups (BCT’s), which often form departments (BCU’s).

3. Choice of system parts

The choice of system parts can be divided in a sub-, aspect-, and phase system. The central system parts of this research are the collection and creation of content (aspect) in the BCU’s of the organization division Consumer Electronics (subsystem) during the execution phase of the project lifecycle (phase system).

4. Sort of model

Models and systems can be both abstract and concrete. In this research a descriptive abstract model of a concrete system will be employed.

3.2 System Model

An organization is complex because everything is connected to everything. A lot of discussion in the science of organization circles around goals, individuals, organizations and the relationships between these notions. Themes like the area of tension between individual and organizational goals, the personal norms and values of managers and whether or not organizations are an entity above or outside the individuals that are part of it are often reoccurring. Many people believe that the individual level is more fundamental because it would generate more insight in the behavior of people, and that the most fundamental science is the science of psychology.

However, as De Leeuw (1997:139) states, this point of view cannot be held because organizations are hierarchical systems. In order to get a good insight, descriptions at multiple levels of the organization are necessary. Organizations are networks with autonomous cores (up to the individual employees) which find a direction and identity trough continuous negotiation (Caluwé, 1999:20)

The system is looked at at three different levels, as to so determine and define a suitable system for research; the first of which has been described above as the relevant environment (which can not be influenced) of the system. Second, as the figure below shows, we will look at the CMC Program on a Project level to show that the actions that are taken in the BCT’s are just the first step in a series of events that ultimately will lead to the creation of the selected outputs. Third we will explore the possible causes of the problems that are experienced in the BCT’s on the BCT-level and a conceptual model will be constructed.

Next follows an overview of the CMC Program on a project level (figure 3) and an

outset of the problems that might stem from following a project management

approach and thus might impact on the process of filling the database with product

marketing information.

The CMC Program on a project level: The CMC Program black-box reticulated

Responsibilities

• PFS2: Also known as Marco Polo. Database used for the collection of product marketing content from the BCU’s.

• Trigo: Database used for enrichment of product marketing data and translations.

• CCR: Central Content Repository, used by the BCU’s for among others the storing of product pictures and DFU’s (Directions for use)

• ATG: System that extracts required information from Trigo to fill the websites

• MW: System that extracts required information from Trigo for the European Catalogue

• Adobe: System that extracts required information from Trigo needed for the creation of Leaflets and the Digital Product Launch Guide product pages.

- BCU: Business Creation Unit (under which the Business Creation Teams fall) - MR: Marketing Release, act of signing off (approving) entered data, which is

required before data is transferred to the Trigo system

- SDL: Corporation that is the provider of translations using Translation Memory - NSO: National Sales Organization, checking and giving feedback on the translations.

3.3 The CMC Program as a project:

The CMC program uses a project management approach to implement the changes that are necessary to reach its goals. Changing can be viewed from many different perspectives on many levels. This research focuses on the implementation of a system in which actors are to input data that will constitute the product marketing information around a product. The CMC program in its project form can be seen as a transition period from a period in which coordination of outputs took place by mutual adjustment in a BCT to a new period in which coordination will take place by standardized work processes. This means the organization wishes to achieve a reduction of complexity and (coordination) costs by implementing a horizontal information system. The PFS2 system is a central decision-making system that

Leaflets, DPLG-product pages

System Relationship

Websites

European Catalogue

PFS2 TRIGO

MR BCU input

Region

SDL

NSO

Adobe ATG

MW

CCR

Legend:

Translation Process

Outputs:

Project goals (Deadlines) System

increments

System User Interface

Figure 3: The Content Mananagement Program on a project level

replaces a decentral (Non-IT based) decision making system for the creation of product marketing information. As DeSanctis and Jackson (1994;85) note, firms with highly autonomous business units that compete in unrelated businesses are least likely to invest in horizontal mechanisms for corporate/division collaboration.

What became obvious in the preliminary research is that the approach followed in the program showed a high degree of ‘blueprint thinking’ or a N-step approach to change.

Working in a project-form is representative for blueprint thinking. (De Caluwé, 1999:49)

All communication differs per color in emphasis, content and shape. In blue trajects there is a focus on content and the way of dealing with the change. Possible problem areas that are associated with a high degree of blueprint thinking are that irrational aspects are not taken into account sufficiently. Ideally blueprint thinking requires everything to be constructable and controllable and can be accomplished by rational planning (De Caluwé, 1999:59)

The purpose of control is to minimize idiosyncratic behavior and to hold individuals or groups to enunciated policy, thus making performance predictable (Tannenbaum 1968:3) Control can be conceptualized at different levels; there are however two considerations that are apt to be overlooked when control is conceptualized at the individual level. The first of these is flexibility. That an organization must maintain freedom of action when faced with a changeable environment has become an accepted tenet of organizational theory. When subunits face different environments flexibility becomes even more necessary. Decision making is delegated to prevent resources are wasted in endless communication (as an initial problem solving strategy CMC program management tried to adapt data in PFS2 centrally; reactions were negative and resulted in work having to be done again, indeed resulting in communications going back and forth).

A second constraint on predictability is the cost of control. Thompson (1967:57-59) argues that by grouping complementary functions, the cost of communication can be minimized and the cost of integration lowered. The level of control exerted over a sub-unit will therefore represent a compromise between the desire for predictability, the need for flexibility and the cost of maintaining control.

As stated before, the first goal of the CMC program is to create the European Catalogue. The procedures defined envision a standardization of work processes for the collection, creation and release of content. This standardization of work processes is required in order to reach a standardization of output in a more efficient way. This changes the coordination mechanisms the organization uses to create product- marketing information.

This research concentrates on the problems encountered by the BCU’s in filling the PFS2 database. As the above schematic overview of the program shows, this is only a part of the change effort and part of the systems and stakeholders that compose and are involved in the entire CMC program. The realization of the PFS2 system and the filling of the database with content is thus only a part of the entire change project.

During the phase in which the research was prepared and conducted, the entire program (or in casu project) was seen as being on the verge of “critical height”, meaning that the top of the project lifecycle would soon be reached and this would be a critical stage in the acceptance of the system and thus the entire CMC Program;

when data in the PFS2 system is not accepted, the whole program might collapse

backwards. If the data were acceptable, the program would prove it could produce

acceptable data for its intended outputs.

When the whole CMC Program is taken into account, the phase in which the filling of the PFS2 database theoretically took place in the execution or third phase of the project lifecycle (Adams & Barndt 1978). For more information on the CMC Program as a part of a project lifecycle and its project lifecycle stage see appendix 2.

However, because there are so many project parts, in practice the timing at which the filling of the database took place can be assessed to be at the intersection of the planning phase and the execution phase and progressed from there.

During the project a bulk load of program content has to be loaded into the PFS2 system, which is an event happening in the execution phase of the Project Life Cycle.

The product marketing related content is build up out of several data fields that have to be entered in the system. For each individual product, so-called CTN (product-) specific data has to be entered and so called Global Data has to be created and/or be assigned. Appendix 4 contains a partly overview of the PFS2 system.

After the uploading of the bulk content, new data, changed data and deletion of outdated data in the marketing related product content all will go through the same process before any changes to the information published on outputs can take effect.

The CTN specific data consists of the product type number, product name, the WOW (or Discriminator, the single, main reason to buy), a sub-WOW (not a mandatory field) and a marketing header.

The Global data consists of Key Benefit Areas (KBA’s), Features and commercial specifications (previously known as market-driven technical specs). All entered data is restricted by a maximum number of characters that is allowed in the description.

The next seven paragraphs deal with the theoretical foundations on which the variables of the conceptual model and their relationships, as presented in paragraph 3.4, are based.

3.3.1 Actor Interdependency

The interdependency of BCT’s to other stakeholders is operationalized using the interdependencies discerned by Thompson (reference in De Leeuw 1997:142; 292) and can take the following forms:

1. Low (weakest form of interdependence; Thompson: Pooled interdependence) The degree of interdependence is classified as being low when a person filling the database feels he can do so without consulting other stakeholders. Two forms of low interdependence can be discerned: The first occurs when the stakeholders involved use a joint source that is limited in capacity. The second occurs in the situation that the different stakeholders each constitute to the result in such a way that the total equals the sum of the partial results, which is the form applied in the PFS2 database.

The degree of interdependence on other stakeholders on a BCT level is assumed (by E-business management and thus in the system) to be pooled (low); every product manager creates the information for the products for which he/she is responsible.

2. Medium: (stronger form of interdependence; Thompson: Sequential interdependence) The degree of interdependence is classified as being medium when a person filling the database takes action only after a prior action has been completed.

There actually is a sequential interdependence discerned in the system; a CTN

(product) has to be created first by a Region before any CTN specific data can be created. This however does not yet affect the filling of the database, the process in which we’re interested. In this research a medium interdependency is assumed to exist and operationalized as the filling of the database is preceded by a perceived need to consult with (a) member(s) of another BCT and agreement was reached at the first meeting.

3. High: (highest form of interdependence: Thompson: Reciprocal interdependence) The degree of interdependence is classified as being high when the filling of the database is done (or is preceded by) (a group of) individuals that coordinate their content through multiple consultations.

3.3.2 Coordination between actors

Coordination is an enabling process which provides the appropriate linkage between different task units within the organization (Van de Ven, Delbecq, and Koenig 1976) There are six basic coordinating mechanisms (based on Mintzberg) discerned in this research: mutual adjustment, direct supervision, standardization of work processes, standardization of norms and values, standardization of output, and standardization of skills. In both the most simple and the most complex organizations, the coordinating mechanism used most often is mutual adjustment.

3.3.3 Communication between actors

The complexity of the structure within the Philips organization and geographical dispersion of BCT’s is seen as a given, and has not been incorporated in the conceptual model since the structure of the Philips organization lies outside the defined boundaries and outside the variables that might be influenced as a result of this research. The structure of the organization does however influence the way in which communication channels are and can be used by the organization. Whether people can be contacted immediately all at once, immediately individually or dispersed through time in groups or individually are limitations set by the structure of the organization and the amount of dispersion of the individuals with whom contact is needed. The organization of units into divisions and departments has traditionally been based on the need to collocate activities with high levels of interdependence, in order to reduce the communication costs associated with coordinating activities in the face of uncertainty (Thompson 1967 in De Leeuw 1997:273) But advances in electronic communication, especially its integration with computing technology obviate the need for physical proximity of nodes to achieve horizontal communication (Monge en Fulk 1995) The process of workflow coordination is increasingly becoming more of an electronic task then a physical one. (Fulk en Desanctis 1995:340)

The horizontal communication channel in this report is defined as the communication channel used between the different BCT’s to coordinate their content with other stakeholders.

Daft (1992) distinguishes the following communication channels from high touch to high tech: Face-to-face communication; Telephony; Written, addressed documents;

Written; impersonally addressed documents.

Based on this classification, the following classification of communication channels is used in this research (from high contact to high tech):

- Face to face physical meetings (individual to individual(s))

- Physical presentation meetings (individual to group / group to group) - Telephone calls (personal)

- Conference calls (group) - E-mail (written addressed)

- Intranet site (written impersonally)

Daft (1992) organizes different communication channels into four categories ranging from highest to lowest in information richness, which he defines to be the information carrying capacity of data communicated through that particular medium or channel.

For each lower medium, the communication cycles become longer. The longer the communication cycles becomes the less efficient the data is conveyed. When equivocality is high, individuals are likely to have different interpretations of problems. As a result, they may disagree as to what information is needed to come to a solution. Under these conditions, individuals must first create a shared sense (a common ground) of the situation before, through negotiation and feedback, a common response can be formulated. This requires a rich communication medium, one that provides interactivity and expressiveness (Kraut et. al. 1990), in short, a high touch medium.

Under conditions of uncertainty (that is, in complete absence of information) when data must be gathered that will reduce uncertainty, this may not be a problem.

Technology-based information systems, referred to as high tech means of interaction by Daft can provide this data effectively and efficiently. Such systems suffice when a firm “common ground” is already established.

However, longer communication cycles effectively hinder high touch interaction, which is particularly necessary for dealing with ambiguous situations in which issues cannot be objectively analyzed and understood and when additional data that will resolve an issue cannot be gathered through high tech means of communication.

Higher ambiguity requires creative solutions, which are typically not communicated through high tech systems, instead, these need to be communicated through high touch interaction.

3.3.4 Project Communication and commitment

There are two ways of approaching communication, a ‘thin’ approach that focuses on

communication about the change process and a broad approach that sees change as a

part of communication. (Caluwé, 1999:87) If people are at first not aware of the

constraints they are very likely to have either submitted or entered data that had to be

revised. This adds to the uncertainty people experienced, which may have had a

potentially large impact on their commitment, because they have been working hard

to gather information yet when they wish to insert it they find themselves constrained

by to them unknown limitations and have to do their work again. There were

indications people in the BCT’s were not enough aware of the conditions set within

the PmcRL and the system (the focus of communication lay on information about the

change process), which led to inefficiency in the working process. The vertical

communication processes might thus be ineffective and need a greater information

carrying capacity to allow a more effective and efficient coordination of data between

BCT’s. The (theoretically) best coordination mechanism is dependent on the task that has to be performed. The task investigated in this research is the filling of the PFS2 database with product marketing information, which is the responsibility of the BCU’s; the people in the BCU may be dependent on other persons for their input. The degree of dependency on other people influences the horizontal communication channel that can be used most efficiently.

3.3.5 Information processing

To obtain quality information, it is relevant to view information as having a lifecycle (Wang ea. 1998). If product-marketing information is managed as a product, we can also discern an information lifecycle. (Bollen 1999) Information has to be valid and used as long as one of the outputs of the system for that product is still in use (e.g. in the catalogue, on the website, leaflet etc.)

Human decision-makers according to Simon (1947 in De Leeuw 1997) are not only not perfectly informed but also have a limited capacity for processing information.

Their rationality is bounded and decision-making behavior characterizing the search process for an alternative stops as soon as an alternative with a satisfying result is found. Because the first objective of the CMC program is to generate data for filling in the European Catalogue, data that fits for the specific output may be generated that is useless in other situations (thus on other outputs). This possibility lies however out of scope of this research, but could be cause for future problems encountered and could be a subject for further research.

The degree of awareness of data limitations and specifications can be either low, medium or high and is measured and operationalized by data having to be revised to comply to specifications either Very often; often, (low awareness) normally, (medium awareness) or rarely to never (high awareness)

Because it is likely that the awareness increases over time, a high awareness can be expected in those BCT’s that held specifications as a restriction to data-entry from the beginning of content creation.

3.3.6 Commitment

The literature on change and change situations offers a large amount of documentation on (among many other subjects) resistance and overcoming resistance.

The conceptual model does however not take this subject into account as a separate influence on effectiveness or efficiency. The term resistance in itself carries with it a coloration of the facts. It suggests that the occurrence or happening of change is being prevented deliberately and at all cost, while it is a normal and even valuable phenomenon, which probably keeps us from chaos. Resistance could and may have been build up in the past, even before a new change was on the agenda (Caluwé, 1999:119).

The term ‘resistance’ seems to imply that those who resist are setting themselves to struggle against the inevitable (Collins 2002:91). Therefore the conceptual model uses commitment to measure the perceived attitude of individuals towards the program.

As uncertainty may relate to different causes (the goal, the (to be) controlled system,

the actual state of affairs and the (causal) model with which behavior can be

predicted), so too can any individual have commitment to different goals on different

levels. Commitment in this conceptual model therefore applies to commitment on the

individual level, as compliance (which is ensured because the delivery of content by individuals for the program is mandatory and thus) is forced by the hierarchical system. People should be committed to the system because they are the ones filling it and that will be working with it. Motivation could be viewed as a personal inner state.

Pinder (1998;11) defines work motivation as "a set of energetic forces that originate both within as well as beyond an individual's being to initiate work-related behaviors, and to determine its form, direction, intensity, and duration"

Project participants are motivated by the challenge of reaching set goals, but at the same time tight completion dates put pressure on them. However, a negative effect on individuals' health only occurs if pressure is not experienced as a challenge but as a too great burden. These experiences can attribute positively to goal fulfilment, but could also become destructive.

Apart from the tensions between motivation and stress, projects encounter issues that could negatively affect the working conditions for individuals involved. Unexpected incidents happen, and some of these affect the individual's perceptions of the working conditions, as they might be de-motivating in some way. Still, motivation is the driving force that supports individuals in their efforts to reach project objectives.

(Gällstedt; 2002:5) Additionally, the impact of goals is vital when it comes to motivating people (Latham and Locke 1979:68). Incidents with a negative impact might reduce motivation (Turner 1999) and provoke considerable stress due to concerns about not reaching the deadline and determined goal. (Cox; 1993)

There might on the other hand also exist a lot of energy in the direction of the wanted change. Both this possible energy for and the resistance to change can be taken into account when both measured as ‘commitment’ on different organizational levels.

The degree of commitment is an intuitively clear concept that in practice is difficult to precisely define. It is a subjective rationality in which a-priori an interpretation of the individual as a subjectively acting being is held. (De Leeuw, 1997:186-187) This thus means that the commitment that is held differs per individual.

A distinction can be made between behavioral and attitudinal commitment (Mowday et al. 1982;26) Attitudinal commitment focuses on the process by which people come to think about their relationship with the organization. In many ways it can be thought of as a mind set in which individuals consider the extent to which their own values and goals are congruent with those of the organization. Behavioral commitment, on the other hand, relates to the process by which individuals become locked into a certain organization and how they deal with this problem. The focus of commitment lies thus on what is called affective occupational commitment and is related to the task people are performing. Because the CMC Program changes the way in which product marketing information is created, individuals will have to be supportive of the way this is achieved (the creation of data in the PFS2 system) It is thus a form of attitudinal commitment that is discerned in the conceptual model.

Because we are only interested in the commitment people have towards the goals of

the CMC Program, and because results are on an individual level and thus may differ

per person, only a general distinction whether the change is perceived as positive or

negative is made. Since we are not looking for a framework to judge commitment of

individuals or groups, this practical definition of commitment will suffice.

Commitment will thus be measured as the positive or negative attitude of people that is experienced by the tight deadlines for the release of product marketing information that are imposed and the reaction to the pressure that is exercised over people by higher management to complete and release their data.

3.3.7 Uncertainty

Task interdependence is, together with task complexity, a primary contributor to task uncertainty. Task interdependence contributes to task uncertainty by increasing coordination requirements, while task complexity contributes to task uncertainty by increasing information-processing requirements. The coordination and information processing requirements induced by task uncertainty impact the structural design of organizations by increasing the need for adaptation, communication and integration mechanisms (Thompson 1967; Galbraith 1977). Complexity depends on decomposability, predictability, controllability, size & nature of the necessary information processing and similarity of administrative tasks. (De Leeuw, 1997; 141) A problem of control is less complex when it can be better decomposed (split up) into different parts. This splitting up into different parts must in the systems theory be seen in three directions: to sub-systems, to aspect systems and to phase systems.

In terms of Ashby the hierarchical system is a multi-stabile system, which is a hierarchical system that exists of a number of loosely coupled ultra-stable systems. In this research the main systems under investigation are the technical system PFS2, the different BCT’s and the Regions and the e-Business and Relationship Marketing department. In essence this is a reticulation of the earlier defined aspect system because in the collection of content these are the main parties involved.

Because the CMC program changes the way of working for the BCT’s and Regions, these systems go looking for a new equilibrium; in essence they seek to learn the new procedures, which will form the new standard way of working.

Complexity increases when there are more dependencies. This complexity is handled by distinguishing multi-stable systems where there is a weak interaction between these systems. The underlying fundamental thought is that decomposing gives rise to a coordination-need where these interactions are ‘cut’. This ‘cut’ is the border of the different systems and their environments as it has been defined in the modeling decisions. In practice it is often difficult to determine the strength of relations.

Because it has no use in this research to determine a quantitative strength of relations between the different departments, the relations will be judged at an ordinal level by assessing the relations as perceived by the different BCT’s according to the three different dependencies discerned by Thompson as defined earlier (De Leeuw;

1997:142)

The basic assumption is that, as the uncertainty an individual experiences at the time the task is being performed is larger, more information must be processed. This makes sense because information is (per definition) meant to reduce uncertainty. Uncertainty is thus defined as the difference between the information that is present and the information that is necessary to complete the task. Uncertainty can originate from different sources and may relate to: (De Leeuw, 1997:187)

1. The goal

2. The controlled system (actual state and the (causal) model with which behavior can be predicted.

3. The environment.