The $7.4 billion AT&T/NCR merger was the largest corporate takeover of 1991, and probably the most risky. Many in the financial community were predicting doom because of the inherent conflicts that would arise between the two huge firms. In particular, the computer systems of the two firms were scheduled to be integrated at the time of the official merger, in 90 days. Sensing the short lead time and tremendous complexity of this effort, involving 12 independent divisions spread around the world, 55,000 employees, 450 projects, and 3000 activities, NCR engaged a private consulting firm with experience in managing projects involving substantial intangibles with inherent potential for conflicts.
The consulting firm set about defining a work breakdown structure (WBS) and master schedule for the integration process. The final WBS involved 12 level-two aggregate processes that were then taken down to the fifth level, resulting in 450 discrete work projects that could be definitively scheduled. Reports were generated for each project showing every interorganizational activity that might represent a potential conflict; in this way a number of conflicts were identified early and avoided. In one case, for example, it was found that marketing was planning on releasing a product before production had finished it.
Activity slippage charts were also generated and color-coded according to the following criteria: high risk (red)—slipped 14 days or more, or no schedule, or adversely impacted another division; medium risk (yellow)—slipped 6-13 days, or incomplete schedule, or adversely impacted by another division; andlow risk (green)—less than 5 days late, complete schedule, or no interdivisional conflicts.
To further identify where conflicts might occur, a functional risk assessment chart was prepared, again using red, yellow, and green signals for potential conflicts, that matrixed functional areas of the firm against each other. This "stoplight" chart provided a higher-level display of overall risk for top management to stay focused on throughout the merger.
In this fashion, the systems were successfully integrated without disrupting ongoing operations and conflicts were avoided. Using project management to guide the systems merger "enabled us to eliminate surprises that could have derailed the effort." By a year after the merger, AT&T/NCR's revenue and operating income have been strong and getting stronger, and there have been no disruptions or other problems between the firms, or their customers.
Sour«: E. Ho/stadto- "The Science of the Deal: Project Management Meets Wall Street," PM Nehrorli, Nov. 1992.
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.