Read through the Sharp Printing, AG case found in chapter 5 of the textbook. This case refers to Lauren, an experienced employee who is assigned as the project manager to the project at hand. According to the WBS, the estimate on this project was increasingly over budget. In preparation for a meeting with stakeholders, Lauren brainstormed suggestions to resolve some of the estimates originally compiled.
Decide what you would do if you were the project manager on this project. Identify which suggestions offered were supportive to the end result of the project.
Answer the corresponding questions provided at the end of the case (500-750 words). Use references from the reading materials to support your response.
Sharp Printing, AG
Three years ago the Sharp Printing (SP) strategic management group set a goal of
having a color laser printer available for the consumer and small business market
for less than $200. A few months later the senior management met off-site to
discuss the new product. The results of this meeting were a set of general technical
specifications along with major deliverables, a product launch date, and a cost
estimate based on prior experience.
Shortly afterward, a meeting was arranged for middle management explaining
the project goals, major responsibilities, the project start date, and importance of
meeting the product launch date within the cost estimate. Members of all departments
involved attended the meeting. Excitement was high. Although everyone
saw the risks as high, the promised rewards for the company and the personnel
were emblazoned in their minds. A few participants questioned the legitimacy of
the project duration and cost estimates. A couple of R&D people were worried
about the technology required to produce the high-quality product for less than
$200. But given the excitement of the moment, everyone agreed the project was
worth doing and doable. The color laser printer project was to have the highest
project priority in the company.
Lauren was selected to be the project manager. She had 15 years of experience in
printer design and manufacture, which included successful management of several
projects related to printers for commercial markets. Since she was one of those
uncomfortable with the project cost and time estimates, she felt getting good
bottom-up time and cost estimates for the deliverables was her first concern. She
quickly had a meeting with the significant stakeholders to create a WBS identifying
the work packages and organizational unit responsible for implementing the work
packages. Lauren stressed she wanted time and cost estimates from those who would
do the work or were the most knowledgeable, if possible. Getting estimates from
more than one source was encouraged. Estimates were due in two weeks.
The compiled estimates were placed in the WBS/OBS. The corresponding cost
estimate seemed to be in error. The cost estimate was $1,250,000 over the senior
management estimate; this represents about a 20 percent overrun! The time
estimate from the developed project network was only four months over the top
management time estimate. Another meeting was scheduled with the significant stakeholders to check the estimates and to brainstorm for alternative solutions;
the cost and time estimates appeared to be reasonable. Some of the suggestions
for the brainstorming session are listed below.
• Change scope.
• Outsource technology design.
• Use the priority matrix (found in Chapter 4) to get top management to clarify
• Partner with another organization or build a research consortium to share
• Cancel the project.
• Commission a break-even study for the laser printer.
Very little in the way of concrete savings was identified, although there was
consensus that time could be compressed to the market launch date, but at
Lauren met with the marketing (Connor), production (Kim), and design (Gage)
managers who yielded some ideas for cutting costs, but nothing significant enough
to have a large impact. Gage remarked, “I wouldn’t want to be the one to deliver
the message to top management that their cost estimate is $1,250,000 off! Good
1. At this point, what would you do if you were the project manager?
2. Was top management acting correctly in developing an estimate?
3. What estimating techniques should be used for a mission critical project such