Microsoft Enterprise Project ManagementCustomer Solution Case Study

R&D project management system helps keep the

balance between individual skill and teamwork

OverviewCountry or Region: KoreaIndustry: ManufacturingCustomer ProfileMagnaChip is a Korean-based global manufacturer of non-memory semiconductors, both analogue and mixed-signal semiconductors. As of 2013, there are 3,500 members of staff working at the company, spread across its three facilities in Korea and branch offices in the United States, Europe, Japan, China, Taiwan and Hong Kong. It was listed on New York Stock Exchange in March 2011.Business SituationResearchers have been trying to find ways to devote less R&D project time to admin work such as scheduling and managing products.SolutionThe company has put in place a mid-term roadmap, phased in Project Server for project and portfolio management. It has also implemented SharePoint Server for collaboration and document sharing, thus completing the prototype that the EPM system would take.Benefits Scientific R&D performance evaluation Balance between individual skill and

teamwork Harmony of management and

technology

“With the new system, both project manager and members now have a clear understanding of

what to do in each stage as the management of projects has become systematized through a

clear, definite set of milestones. As each and everyone involved can clearly understand their role

and responsibilities, the company can make a clear, to the point decision and analysis of the

performance of organization, team and individuals”Kim Pilju, Director at MagnaChip

MagnaChip’s vision for its EPM (Enterprise Project Management) system has brought it to the industry’s attention. It had already established its project and portfolio management system in 2012 when it implemented Project Server for enterprise-level R&D. The company followed this up later the same year when it introduced SharePoint Server and Fast Search for SharePoint, which were in effect the final touches to its desired EPM system. MagnaChip’s desired EPM strategy is to increase R&D productivity through keeping the project on track and managing products. Its strategy also features collaboration and document sharing in R&D project management in order to initiate close cooperation between R&D, production and marketing, which is designed to ultimately bring about innovation in R&BD. The vision is to enable interworking with the ERP system to analyze price and performance from the R&D phase and thus use EPM system as an R&BD platform in the truest sense.

SituationMagnaChip’s EPM system continues to

evolve in line with the clear roadmap it established. The company started planning and building the next-generation EPM system for enterprise-level R&D in 2010. The momentum behind this was the then application of the project and portfolio management system to the research department under the product division; the system had previously been the sole preserve of the R&D unit under the technology division. It was against the backdrop of MagnaChip

management’s effort to improve R&D workers’ productivity that this EPM system project for enterprise-level R&D began. The company undertook a thorough look at how to strengthen leadership in next-generation technology development. After a period of investigation, management finally concluded that there was an urgent need for innovation in R&D related work, including resource allocation, optimization of research procedures and quantitative performance management. There was evaluated to be a clear business case for adapting to global trends in terms of having stronger competitiveness and a shortened product launch cycle.

Prior to carrying out process innovation, MagnaChip analyzed the traditional R&D work flow and thoroughly examined any problems that could cause inefficiency in R&D work. The most urgent problem was that researchers were feeling overwhelmed from the levels of admin work facing them, particularly around scheduling and managing products. They had no choice but to spend much time on project-related admin work, rather than just focusing on technology development. In order to free them from admin work, MagnaChip decided to extend the use of the project and portfolio management system from the department to enterprise-level R&D.

MagnaChip never looked at the EPM system project as a one-off. Instead, the company determined that the system needed to be pushed through according to established milestones and waypoints set by an overarching roadmap, whose ultimate purpose was to rearrange work processes. There was a vision put forward that would see the EPM system be developed to achieve three purposes:

Firstly, to build the kind of next-generation project and portfolio management system that would lay the foundation upon which all R&D-related work, including relevant admin work, would be able to handled within a single system. What came next was sharing and wide-spread of knowledge - in other words, the purposes of this project were to create a more creative and systematic working environment for individuals using a project and portfolio management system. This would then allow integrated document and knowledge management as a way to help individuals cooperate with each other and share their knowledge and experience. Last but not least, MagnaChip planned to begin both price and performance management from the pre-technology development stage, rather than at the product planning and production stage. This was designed to expand the concept of R&D to Research & Business Development (R&BD).

SolutionWith a clear roadmap in place for EPM at

enterprise-level R&D, MagnaChip turned to the question of how it could be implemented as a system. Different solutions were available, each suited for different business requirements. The question was whether to implement different systems for project and portfolio management, knowledge management, document management, and collaboration and performance management. To tackle this question head on, MagnaChip came up with a strategy that enables extension and interworking at the platform

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level, eschewing a complicated mix of solutions provided by several vendors. The reasoning was that if each requirement is implemented with different systems provided by different solution vendors, it would be too complicated and cause problems in terms of integration and maintenance, making the highly flexible platform preferable.

Microsoft solution was chosen as the one that best serves this purpose. From the familiar end-user Office productivity suite to Project Server and SharePoint Server, Microsoft’s established range of solutions were perfectly suited for MagnaChip’s roadmap in terms of platform-level interconnection and extension, as well as answering the needs of document management, collaboration and project management. MagnaChip thus adopted Project Server in 2010 for project and portfolio management, the primary purpose of the EPM project.

With the project and portfolio management system implemented, all projects conducted by MagnaChip's R&D division became listed on Project Server. Since then, small, but significant improvements have been witnessed at MagnaChip. A goodly proportion of the admin work handled by researchers became quickly automated through work-flow on Project Server. Projects registered on Project Server became center-managed by an appointed project manager, driving productivity gains in the R&D division. With project management quickly becoming

its new core competence, MagnaChip was poised, in the second half of 2012, to bring another innovation according to the roadmap. The second purpose of this project was to build an integrated document and knowledge management system for the R&D division - that was to implement the ECM (Enterprise Content Management) system. For the implementation of this system (named MagnaPro), MagnaChip adopted SharePoint Server and Fast Search for SharePoint. In terms of size, MagnaPro was bigger than the

project and portfolio management system implemented in 2010. This size difference was accounted for by the system’s inclusion in the ranks of its users of the technology division, research division and production technology and marketing departments.

The R&D division called for a greater level of protection and industrial security awareness. MagnaPro was able to answer this need as it is completely secured through DRM (Document Rights Management) and access control. Through strengthened security tends to means impinged user-friendliness, MagnaChip designed the system carefully in a way that the security does not disturb users from their use and sharing of knowledge and documents. For example, MagnaChip drew a clear line between things to be shared at enterprise-level - a team document box for collaboration - and those things that are to be controlled - an independent, personal document box. It also set a security policy that specifically detailed a document encryption/decryption process for the easier retrieval of all kinds of documents and knowledge, as well as incorporating an approval procedure for downloading or printing.

With the second phase of this project now completed, MagnaChip is now planning ERP integration as the third phase. In this phase, all kinds of information related to price and profit will be delivered to the ERP module (Profitability & Cost Management) through integration in the R&D stage.

Benefits

Scientific R&D performance evaluation With the EPM system evolving based on a

specifically-stated roadmap, MagnaChip achieved better-than-expected results in terms of work efficiency. The new EPM system is miles ahead of the legacy Project and Portfolio Management System, which had been used in some departments since 2004.

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The old system had been called upon only when managing progress or products. By contrast, the new EPM system with Project Server and SharePoint Server completely transformed the way in which the R&D division handles work. Now, any project conducted by the R&D division can be divided into phases based on an advanced process with a definite set of management milestones. Plus, executives or project managers can grasp the progress of project simply and in a way that’s easy to understand. What’s more, researchers no longer have to waste their precious time on admin work.

“The most significant change after using EPM system is that we can better understand the progress of the R&D division’s project. In the past, it was difficult to figure out who did what, when, where, why and how. With the new system, both project manager and members now have a clear understanding of what to do in each stage as the management of projects has become systematized through a clear, definite set of milestones. As each and everyone involved can clearly understand their role and responsibilities, the company can make a clear, to the point decision and analysis of the performance of organization, team and individuals”, said Kim Pilju, Director at MagnaChip.

Balance between individual skill and teamwork Perhaps unsurprisingly given the nature of its work, the R&D division handles more knowledge and documents than any other department. Such knowledge includes understanding market trends, discovering technologies fit to be new growth engines and planning R&D. Plus, all kinds of products throughout R&D phases add to the mountains of information that researchers need to be able to handle. At MagnaChip, the value of the knowledge acquired by individuals involved in R&D and documents has been augmented through EPM. The company enabled its EPM system to serve for collaboration and information-sharing among

members without a downside in terms of security risks thanks to the second-phase advancement project. After getting the system back up and running, the speed in which individuals share information has been staggering. As a result of building EPM system for quick search of information, individuals have really been able to solidify teamwork through bringing their own individual skills to the table.

“Collaboration and information sharing-based smart work is especially critical for the R&D division, arguably more so than with any other department", said Director Kim Pilju. “If there is any problem with collaboration and sharing, a person may repeat something that others have already done, meaning inefficiency in the use of information at enterprise-level. With this EPM advancement project, we now have a way in which knowledge and information acquired through trial and error can be shared among many people. Due to the nature of its work, R&D engineers have a tendency to be deeply caught up in their work and the EPM system is of great value as a tool that plants a sense of collaboration and sharing into the heart of their thinking", he added.

Harmony of management and technologyCompetition in the market being more intense than ever, the “smart” revolution has meant diversifying customer needs which require an answer. In this regard, collaboration between divisions, including R&D, production and marketing, has become essential. MagnaChip enabled R&D-related departments to keep up with such trends through the new EPM system - in other words, the company uses EPM system as a gear that interlinks between the drive shafts of market research, R&D planning, product development and production. In fact, MagnaChip strengthened collaboration and information sharing in EPM system with SharePoint Server, giving it the momentum it needs to roll-out ERP integration further and extend the use of EPM system to R&BD.

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Microsoft Office For more information about the Microsoft server product portfolio, go to:www.microsoft.com/office

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For More InformationFor more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers in the United States and Canada who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:www.microsoft.com

For more information about MagnaChip visit the website at: www.magnachip.co.kr

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.

Document published April 2013

Software and Services Microsoft Office

− Microsoft Project Server 2010− Microsoft SharePoint Server 2010