Knowledge lost: Challenges in changing project manager between sales and implementation in software projects

JPMA-01642; No of Pages 11

Available online at www.sciencedirect.com

ScienceDirect International Journal of Project Management xx (2014) xxx – xxx www.elsevier.com/locate/ijproman

Knowledge lost: Challenges in changing project manager between sales and implementation in software projects Paula Savolainen a,b,c,⁎, Jarmo J. Ahonen a,c a

c

University of Eastern Finland, School of Computing, P.O. Box 1627, FI-70211 Kuopio, Finland b Lero — The Irish Software Engineering Research Centre, University of Limerick, Ireland School of Information Systems, Technology and Management, Australian School of Business, The University of New South Wales, Sydney, NSW 2052, Australia Received 27 February 2013; received in revised form 1 April 2014; accepted 8 April 2014 Available online xxxx

Abstract The knowledge acquired during the sales phase of a software development project is very important for supplier firms. However, the knowledge that a project manager has acquired before the project starts, and during the sales phase, is not necessarily available when the project is starting. We draw theoretically on the project marketing cycle and emphasize a discontinuity in the project marketing cycle between the preceding phases of the project and the project implementation phase. Our study revealed an ignored phenomenon that is an inherent part of supplier firms. The phenomenon originates from funnel-like sales processes and volatile projects' situations, which force supplier firms to select a project manager other than the one who was involved in the case during the sales phase. This creates a knowledge management challenge in supplier firms. Our study contributes to project management research, studying management of a project in a project business context, and reveals a knowledge management challenge in supplier firms. © 2014 Elsevier Ltd. APM and IPMA. All rights reserved. Keywords: Software development; Knowledge management; Project management; Project start-up; Supplier; Customer

1. Introduction Software development has its roots in the 1960s, and since then, software has become an essential part of modern society. With the help of software, it is possible to write a report, build a bridge, control the space shuttle, build social networks on the Internet, and it may play a crucial role in the overall economy. As software development projects work with knowledge as their core input material (Reich et al., 2012), knowledge and

⁎ Corresponding author at: University of Eastern Finland, School of Computing, P.O. Box 1627, FI-70211 Kuopio, Finland. Tel.: +358 40 763 6494 (mobile); fax: + 358 2 9445 7318. E-mail addresses: paula.m.savolainen@uef.fi (P. Savolainen), jarmo.ahonen@uef.fi (J.J. Ahonen).

knowledge management (KM) related to software development projects should be understood. Knowledge management in general (e.g. Argote and Ingram, 2000; Demarest, 1997; Goh, 2002; Koskinen, 2000; Nonaka, 1994; Teo, 2012; Wong, 2005) and related to software development (e.g. Joshi et al., 2007; Karlsen and Gottschalk, 2004; Lee, 2001; Pee et al., 2010; Reich et al., 2012) has been studied extensively. However, there are few studies on KM in situations where a supplier develops software for an external customer. In such situations, there are two parties, a customer and a supplier; the former acquires the software, and the latter develops software for the customer. In these situations, the customer and the supplier come from different organizations, and both parties have different perspectives with divergent goals (Taylor, 2007). Therefore, knowledge is not easily available for both parties, and the general gap between business

http://dx.doi.org/10.1016/j.ijproman.2014.04.003 0263-7863/00/© 2014 Elsevier Ltd. APM and IPMA. All rights reserved. Please cite this article as: P. Savolainen, J.J. Ahonen, 2014. Knowledge lost: Challenges in changing project manager between sales and implementation in software projects, Int. J. Proj. Manag. http://dx.doi.org/10.1016/j.ijproman.2014.04.003

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professionals and software professionals is further widened by organizational boundaries (Pee et al., 2010). From the supplier's perspective, orientation to the potential customer's problems and needs starts during the sales phase. The supplier firm has a pre-sales team consisting of e.g. sales persons, a project manager, and technology specialists, who work together and gather knowledge of the potential customer's business and processes, relevant people, background of the project, other information systems, practices, and requirements. The team works closely with the potential customer for a period that might span a few days or a couple of years in order to understand the customer's business objectives and, based on the business objectives, what the potential customer's real needs are (Blomquist and Wilson, 2007). The information from the customer is processed; this knowledge and possible new data are accumulated and combined with technical information and information about operative capabilities (Turkulainen et al., 2013). As a result, a tender with an initial solution is submitted to the customer. If the potential customer accepts the tender, the supplier starts preparations for the project implementation. In our former study (Savolainen, 2011; Savolainen et al., 2011), we interviewed project managers on what happens in supplier firms after the potential customer has accepted the tender and, consequently, the supplier has won the contract. We learned that the supplier's project manager is nominated for the starting project only after the supplier has won the contract. Moreover, we learned that they start to gather all extant material and knowledge regarding similar projects, material from other projects developed for the same customer, and miscellaneous material from the sales phase. Furthermore, we learned that they start to familiarize themselves with the project, and many of them said they quite often have no prior knowledge of the project before they were nominated to manage the starting project. On the other hand, many project managers interviewed said they are quite often involved in the case during the sales phase, before a tender is submitted to the potential customer or before the potential customer has accepted the tender. This contradiction of the supplier's project manager being involved before the contract has been won, and at the same time, not having prior knowledge on the starting project, raised our interest. Moreover, Blomquist and Wilson (2007) observed from their case firms that, in IT/IS firms, project managers get involved in the pre-project phase, where the project and its requirements are developed, in order to define and clarify the aims of the project before the contracts are signed. However, they did not report changes of project managers after the contracts are signed. In our study, the project managers interviewed said they are involved with the case during the sales phase. This means they are part of the sales team, and they should become acquainted with the customer, the customer's needs, the intended solution, and the forthcoming project in general. However, at the same time, the project managers said they quite often have no prior knowledge of the project and expressed the need to familiarize themselves with the project after his/her nomination as a project manager. This means that project managers have acquired knowledge in other projects during the sales phase, not the starting project.

This conflict was present in the answers from every firm from which project managers were interviewed. The conflict was so apparent that we could not disregard it, and it prompted us to analyze the interviews again, especially from this point of view. In addition to re-analyzing interviews, we looked at literature in the early phases of a software development project from this perspective. Because our interviews were conducted in supplier firms, we examined literature, which concentrates on project management from the supplier's perspective. Therefore, our theoretical background described in Section 2 is based on the project marketing cycle and the sales funnel. In the same section, we present connections to requirement engineering and knowledge management in a project business context. We present our research methodology in Section 3, and the results of the analysis of interviews are presented in Section 4. Section 5 discusses limitations and directions for future research. Finally, the conclusions are presented in Section 6. 2. Theoretical background In this section, we outline the theoretical background of our study. The first part covers the project marketing cycle and its general structure. The second part presents the sales funnel concept that is well known in practice but rarely mentioned in academic literature. The third part briefly presents tangible and intangible knowledge needed for software projects. 2.1. Project marketing cycle As we are interested in software development projects, the basic form of the definition of ‘project’ comes from the standard ISO/ IEC 12207 Systems and software engineering — Software life cycle processes, as “an endeavour with defined start and finish dates undertaken to create a product or service in accordance with specified resources and requirements” (ISO/IEC, 12207, 2008, p. 5). However, this definition does not distinguish internal projects from projects that are actively marketed to external customers and that represent the primary source of revenue for the company (Skaates et al., 2002). The definition, which embodies projects that always involve buying and selling organizations, and one that explicitly deals with issues related to external marketing (Skaates et al., 2002), is provided in marketing literature, where ‘project’ is defined as “a complex transaction covering a package of products, services and work, specifically designed to create capital assets that produce benefits for a buyer over an extended period of time” (Cova et al., 2002, p. 3), encompassing both tangible and intangible deliveries. The studies connecting marketing and project management have started to use the concept of ‘project marketing’. This has been defined as “a multifunctional process of managing networks and buyer–seller interaction within and between projects in businesses where the value creation process includes the search, preparation, bidding, negotiation, implementation, and transition of a project” (Jalkala et al., 2010, p. 125). This definition is based on the marketing cycle for projects, which was developed and evaluated by Holstius (1987) while studying large Finnish project exporters. Since then, this model has been used in the project

Please cite this article as: P. Savolainen, J.J. Ahonen, 2014. Knowledge lost: Challenges in changing project manager between sales and implementation in software projects, Int. J. Proj. Manag. http://dx.doi.org/10.1016/j.ijproman.2014.04.003

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marketing field (e.g. Cova and Holstius, 1993; Skaates et al., 2002; Cooper and Budd, 2007; Kujala et al., 2007; Jalkala et al., 2010). Before looking at the project marketing cycle more closely, we would like to emphasize the distinction between project marketing and project management. When delivering projects to various customers, it is not enough to regard a project as a set of managerial actions taken by the supplier, i.e. as mere ‘project management’ (Skaates and Tikkanen, 2003). Instead, the delivery encompasses individual project supply processes, and the management of business relationships between the buying and selling firms is important before, during, and after the delivery process (Skaates and Tikkanen, 2003). Moreover, the project management is studied in the project business context (Artto and Kujala, 2008; Jalkala et al., 2010), where the supplier's business strategy, business situation and resources influence the project (Savolainen, 2011). The project marketing cycle was developed in the seminal study of Holstius (1987). For the purposes of this article, we want to differentiate the phases that precede the project and the phase that follows the project from the project itself. We edited the original project marketing cycle slightly and drew lines showing the phase which precedes the project and the phase which follows the project, as done by Artto et al. (2008), Haapio and Ahonen (2006), Taylor (2005) and partly by Cooper and Budd (2007). The final result (Fig. 1) is an adapted model of Cooper and Budd (2007), which is derived from the project marketing cycle of Holstius (1987, p. 54). Although each project is different, the marketing of all projects passes through a relatively similar process, having the following six phases (Holstius, 1987; Skaates and Tikkanen, 2003): – Search phase: Identifying project opportunities and relevant industry developments. – Preparation phase: Undertaking a feasibility study; preparation for the bidding process; establishing contacts with buyer(s); evaluating the competitive situation. – Bidding phase: Preparing the bidding documents after receiving the invitation to bid; making decisions concerning price and the use of local resources. – Negotiation phase: Starting with the seller making the preliminary offer for the project; ending with the signing of a contract. – Implementation phase: Delivering and supervising the project; training buyer's personnel; possibly creating aftersales systems.

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– Transition phase: Evaluating the project as a whole; building up knowledge for future offerings; supplying additional services to the buyer. In the project marketing cycle, the Search, Preparation, Bidding, and Negotiation phases precede the project. These phases together can also be called the sales phase, during which leads for new business opportunities are explored, the most promising bidding opportunities are selected, and a tender is made (Smith, 2001, p. 42–45). As a result of the sales phase, the customer may place an order, a contract may be lost to a competitor, or the sales phase may be abandoned (Cooper and Budd, 2007). Once the customer has submitted an order, the Implementation phase means, according to the project marketing cycle, delivering the project and resolving any problems that may arise during the project execution. During the Transition phase, the project organization is dismantled, and the resources of the project are transferred to other projects (Holstius, 1987). Transition also means that an evaluation of the project performed and building up knowledge for use in the future are completed (Cova and Holstius, 1993). When a project is conceptualized using the project marketing cycle, three issues have to be emphasized. First, there is a project only if the owner (potential customer) decides to externalize the project or part of it (Blomquist and Wilson, 2007; Cova and Salle, 2005). Therefore, before the potential customer's decision, the focus is on selling activities in order to secure the forthcoming project. Only after the customer's decision, it is possible to nominate the project manager, reserve other resources for the project, start other preparation for the project implementation, and thus transfer the focus to the management of the project. The turning point and interface between the preceding phases (Pre-project) and the Implementation phase (Project) is marked with a dash line in Fig. 1. Second, when the project marketing cycle is used to conceptualize the project, the perspective of the study on projects is the supplier's. Because of the perspective, business issues are an inherent part of the project management. The supplier's revenue is either partly or totally dependent on projects delivered to external customers, and therefore each project should be profitable. Moreover, each project may serve as a reference project and enhance the possibilities of winning future contracts (Holstius, 1987) from the same customer or

Fig. 1. The adapted project marketing cycle. Please cite this article as: P. Savolainen, J.J. Ahonen, 2014. Knowledge lost: Challenges in changing project manager between sales and implementation in software projects, Int. J. Proj. Manag. http://dx.doi.org/10.1016/j.ijproman.2014.04.003

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other customers. Therefore, project managers in supplier firms have, in addition to management of the project, other concerns which are complicated and may be contradictory in terms of project goals and goals at the business level (Blomquist and Wilson, 2007; Jalkala et al., 2010; Savolainen, 2011; Shenhar et al., 1997). From project managers, this requires a reflective and responsive approach towards the customer and business aspects from the project management function during the project implementation (Hellström and Wikström, 2005). Third, the project marketing cycle is a continuous process from searching for project opportunities to supplying other services to the customer after project delivery. This means a continual maintenance of the customer relationship from the first contact with the customer. Customer relationships are developed and maintained by account managers, but, during the project implementation, the project manager is at the forefront of the customer interface. Hence, during the implementation of the project, the project manager has a central role in handling the customer relationship instead of the marketing personnel (Jalkala et al., 2010). Despite the project manager's central role of managing the customer relationship during the project implementation, the existing project marketing theory mainly limits itself to the earlier phases of the project cycle (search, preparation, bidding, and negotiation) and lacks understanding of the management of the project as well as interaction between the customer and the supplier during the implementation and transition phases (Jalkala et al., 2010). The gap in project marketing theory noticed by Jalkala et al. is related to the situation that concerned us. However, our concern about the project manager's participation in the sales process, knowledge acquisition during the sales process, and the sudden dissipation of the knowledge acquired, is novel, especially in software development projects. Traditionally, the focus of studies on software development projects has been on the project implementation phase (e.g. Barry et al., 2002; Cerpa and Verner, 2009; El Emam and Koru, 2008; Linberg, 1999; Procaccino et al., 2002; Procaccino et al., 2005) without any special emphasis on the preceding phases of the project or even considering the context wherein the project is studied. Therefore, our context awareness of software development projects, together with our concern about the dissipation of project managers' acquired knowledge, renders this study both novel and considerable. Only recently, have there been studies which recognize the context and examine the perspectives in which the projects are studied; and in that way, these studies entail awareness of the preceding phases of the project (Ahonen and Savolainen, 2010; Savolainen, 2011; Taylor, 2005). Therefore, we conclude that when the perspective is that of the supplier, the project marketing cycle provides the theoretical foundation for studies on software development projects. 2.2. Sales funnel In project business research, Cova et al. have developed a model, describing in detail the internal steps taken in a

supplier firm until negotiations are finalized, and the project is completed and delivered to the customer (Cova et al., 1994; Skaates and Tikkanen, 2003). Both Cova et al.'s model and the project marketing cycle present the process as an unbroken chain from the beginning to the end of the cycle. However, in the real business world, the process breaks off, and the cycle does not reach the project implementation phase as often as it is understood. Therefore, the process has a funnel-like shape rather than, for example, that of a tunnel. In the business world, the sales funnel concept is well known, but it is rarely mentioned in academic literature (Cooper and Budd, 2007). However, there exist two seminal studies: one is more theoretical and the other contains an analysis on empirical data. The former was conducted by Cooper and Budd (2007), who have developed a framework for integrating the sales process with project operations. The main focus of the framework is on revealing the need for coordinating the movement of potential customers through the sales funnel with the company's internal project capacity. The latter study was conducted by Söhnchen and Albers (2010), and is based on a large-scale survey among German industrial companies. Their study confirms that the concept of the sales funnel is well applicable to and accepted in business practice, and that it accurately reflects the structure of the industrial project sales process (Söhnchen and Albers, 2010). Söhnchen and Albers structured the sales funnel, utilizing one of the oldest and most widely accepted paradigms in the sales discipline – commonly referred to as the “seven steps of selling” – where various consecutive stages must successfully be completed by any sales organization in order to close a sale (Long et al., 2007; Moncrief and Marshall, 2005; Söhnchen and Albers, 2010). In their study, Söhnchen and Albers defined six stages for the sales funnel, and these are 1) Qualification, 2) Approach, 3) Product presentation, 4) Design of an offer, 5) Handling objections/ overcoming resistance, and 6) Closure (Söhnchen and Albers, 2010). This sales funnel, with its comparability with the project marketing cycle, is depicted in Fig. 2. In addition to structuring the sales funnel, the study of Söhnchen and Albers contains exact numbers characterizing the sales funnel in business-to-business firms which actively sell projects (Söhnchen and Albers, 2010). In their survey, more than half (57%) of all firms (147) were from Engineering or Software & IT industries, and about 4/5 of all firms were rather small and operated with less than 500 employees. The respondents were divided into two groups, where firms generating more than €50 million as turnover formed a sub-sample “Large,” and firms generating less than €50 million were assigned to the sub-sample “Smaller.” Within this sample, and based on their survey data, Söhnchen and Albers calculated success probabilities (%) for every single stage for both sub-samples. These numbers are presented in the lower part of Fig. 2. The success probabilities for various stages traced by Söhnchen and Albers reveal, how unlikely it is to proceed to sales closure, i.e. win a contract. For example, when the supplier submits tenders to customers, only about half of the cases (small 48%/larger 51%) will eventually lead to a contract.

Please cite this article as: P. Savolainen, J.J. Ahonen, 2014. Knowledge lost: Challenges in changing project manager between sales and implementation in software projects, Int. J. Proj. Manag. http://dx.doi.org/10.1016/j.ijproman.2014.04.003

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Fig. 2. The adapted project marketing cycle and the sales funnel.

2.3. Tangible and intangible knowledge When the sales team works with the potential customer in order to find out the customer's business objectives and what the potential customer's real needs are, it is a learning process for the members of the sales team. If the project manager is a part of the sales team, s/he absorbs knowledge about the customer and becomes familiar with the goals of the project. A part of project-based knowledge acquired during the sales phase is captured into specifications and these specifications – or requirements in software development terminology – define what the software should do (Cheng and Atlee, 2007). Requirements define the purpose of a software system as well as the needs of all relevant stakeholders (Nuseibeh and Easterbrook, 2000). In software development projects, requirement engineering contributes to precise and stakeholder-appropriate requirement specifications to cost-effectiveness (Nuseibeh and Easterbrook, 2000) and, thus, requirement engineering is an important factor for productivity and (product) quality (Damian and Chisan, 2006). However, a part of project-based knowledge acquired during the sales phase is intangible, implicit or even tacit knowledge. This knowledge is difficult to transfer and, as individuals are important repositories of knowledge (Argote and Ingram, 2000), it is not possible to transfer all acquired knowledge to another person only by handing over documents. Instead, deliberate cognitive learning promotes knowledge transfer significantly and learning about client has a positive impact on suppliers' cost control (Deng and Mao, 2012).

Therefore, both written documents and knowledge embedded in individuals involved during the sales phase are needed for successful implementation of software projects.

3. Research methodology The data analyzed in this article is part of a larger study on pre-project activities of supplier firms. The larger study consists of two different interviews performed in four software engineering firms. One part of the interviews concentrated on activities performed in the tendering process, and the other part focused on initiation activities performed in the project start-up phase. In this article, we analyze the latter part, comprising interviews on the project start-up phase. As most firms in the software industry are relatively small (Cater-Steel, 2001; Fayad et al., 2000; Richardson and Wangenheim, 2007), we concentrated on small to mediumsized firms, which employed between 25 and 249 people. Of the four participating firms, two carry out software development projects for various customers; the other two firms do embedded software projects. The age of the participating companies varied from 5 to 23 years. The size of the project groups varied from 2 to 10 team members. The common characteristic of all four participant firms that we were interested in is that they deliver unique products (software or embedded software) for their customers. For all four firms, projects are their main way of doing business.

Please cite this article as: P. Savolainen, J.J. Ahonen, 2014. Knowledge lost: Challenges in changing project manager between sales and implementation in software projects, Int. J. Proj. Manag. http://dx.doi.org/10.1016/j.ijproman.2014.04.003

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Within the firms, we interviewed 14 project managers, or those who were responsible for project management although they did not have that title. Participants were asked to focus on their own projects. The duration of the majority of the projects ranged from 1 month to 15 months, although one firm had projects that lasted for up to three years. We developed an interview instrument described elsewhere.1 The interviews were semi-structured and took the form of a discussion. We collected information regarding whether the project manager was also responsible for selling projects to customers, whether he/she was used also as a sales support person, or whether he/she entered the stage after other persons have sold the project. With these participants, the interview structure and the interview content, we were able to get a broad perspective on activities performed in supplier firms before the start of the project. Those interviewed included eleven project managers, one business unit manager, one team manager, and one engineering manager, altogether 14 people. We use the title ‘project manager’ when referring to all interviewees, irrespective of their actual titles. The project managers' working experience varied from 7 to 25 years, and they had worked for their current firm from 1.5 to 18 years. A more detailed description of the research methodology and the results from our first analysis of the interviews on the project start-up phase is presented elsewhere (Savolainen, 2011; Savolainen et al., 2011). The interviews concentrated originally on initiation activities performed during the project start-up phase, and therefore each project manager described his/her own experiences and opinions of the project start-up phase in general. Going through the interviews for this article, we learned more from our data, and created the following specific questions: 1. Does the project manager participate in the sales process? If yes, will he/she become a manager for that project? 2. How is the project manager selected? 3. How does the project manager describe knowledge acquisition? Are there firm-specific processes or approaches? Does the project manager have his/her own methods of acquiring knowledge? 4. How does the project manager describe communication with the customer? 5. How does the project manager describe project (re-)planning during the start-up phase? Drawing on these questions, we examined our interviews thoroughly. However, we found shortcomings in our data. For example, because each project manager described his/her own experiences and opinions of the project start-up phase, we had general descriptions on the project start-up phase instead of exact answers related to a specific project and a specific situation. Moreover, it was not possible for us to evaluate how common or rare a described occurrence was. Nevertheless, we systematically looked for answers from each interview, and as the analysis progressed, we formulated 1

Available on request from the corresponding author.

seven propositions, which are presented in Table 1. We sifted through our data again and searched for support for these propositions. Our analysis is based on practice as proposed by Blomquist et al. (2010). We present the results of our analysis for the five questions with the help of these propositions. 4. Analysis of interviews 4.1. Answers to questions At first, we were interested in knowing whether the project manager participates in the sales process and formulated two propositions. Most of the project managers mentioned that they participate in the creation of the tender. In addition to being part of the team that prepares the tender, some project managers mentioned that they are involved on a larger scale in sales activities, while some mentioned giving only technical backup support if needed. All these occurrences are shown in Table 1 as participation in the sales process. Our first interest reveals one of the most important results of our analysis. Only one project manager stated that if s/he participates in the sales process, then s/he also becomes the project manager for that project. Among other project managers, the situation varied, and we identified three patterns. Firstly, some project managers know beforehand, during the sales phase itself, that s/he will not be a manager for that project in the event of winning the contract. One project manager described this situation thus: “Being involved in the selling of projects for which it has been decided from the beginning that someone else will be the project manager.” In a second group, the project manager is involved in the case during the sales, and s/he is projected to be the manager. However, if the contract is won, another project manager may be appointed for that project. Two quotes describe this: “Projects that I have been involved in the selling are sometimes directed to others, and I got projects that others have been selling.” and “The planned project manager may be changed if he is busy or for other reasons.” In the third group, the project manager was involved in the case during the sales process, but rather late. The reason for this was that s/he will be appointed for that role if the contract is won; as expressed by one project manager: “Brought into sales quite late if it is thought I'll be the project manager.” In the first two situations, the project managers have acquired knowledge of the case, the customer's business and processes, relevant people, background of the project, other information systems, practices, and requirements. This acquired knowledge is no longer available if another project manager is appointed to take up the responsibility of the project. With our second question, we concentrated on looking for practices in project manager selection: who, how, and when? Four project managers did not mention anything connected to selection of the project manager. Three project managers explicitly said that the management selects the project manager. Other project managers expressed the view that someone from the firm makes the decision. Those project managers did not specify the party or the individual responsible for the decision. Our third interest consists of three questions, and we formulated two propositions (4 and 5 in Table 1). The first

Please cite this article as: P. Savolainen, J.J. Ahonen, 2014. Knowledge lost: Challenges in changing project manager between sales and implementation in software projects, Int. J. Proj. Manag. http://dx.doi.org/10.1016/j.ijproman.2014.04.003

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Table 1 Questions, propositions, and support. Question Proposition

PM PM PM PM PM PM PM PM PM PM PM PM PM PM Tot 1 2 3 4 5 6 7 8 9 10 11 12 13 14

1 1

x

x

x x

x

x x x x x

x

x x x x

x x

2 3 3 4 5

1. PM participates in the sales process 2. If PM participates in the sales process, he/she will always become the PM for the project 3. Organization/Management selects PM 4. PM describes specific practices for knowledge acquisition 5. PM encounters difficulties in acquiring knowledge 6. Clarifications from the customer are required 7. Project re-planning during the project start-up

proposition is related to specific practices for knowledge acquisition and the second to difficulties in acquiring knowledge. Twelve project managers mentioned some practices for knowledge acquisition. Unfortunately, it was not possible for us to evaluate whether they meant firm-level practices or their own practices. None of the project managers said that there were firm-level practices, but this does not mean that such practices do not exist. Knowledge acquisition seems to be problematic. Nine project managers said they encounter difficulties in acquiring the required knowledge. Project managers described having problems finding documents; documentation was incomplete; they have to look for persons who know about the project, or they do not know what knowledge is still relevant and what is out of date. Moreover, some project managers were of the view that not all of the important knowledge is necessarily on paper, and therefore it is essential to ask questions from those persons who participated in the sales process. Some explanations for difficulties in finding documentation were that the documentation is not in a single place, but scattered in different databases, files, emails, and memory sticks, and in some cases, the project manager did not have rights to the relevant repositories. The fourth question is closely linked to knowledge acquisition. We studied how project managers describe communication with the customer and especially what the motive for discussion with the customer is. Seven project managers stated that clarifications from the customer are often required. In many cases, it is a consequence of missing or incomplete documentation, or it was not possible to retrieve the knowledge required from persons (who were) involved in the case during the sales phase. This is described by one project manager: “We have to get a lot more information about the case from the customer anyway, apart from how the offer has been made …. Very often, information has already been obtained during the sales phase, but it won't necessarily always be passed on automatically to the project manager.” Hence, it is often necessary to contact the customer in order to clarify issues already discussed during the sales phase. The last issue is related to the previous question because, without sufficient knowledge and understanding of the case, it is not possible to commit to an existing project plan or develop it further. We looked for how project managers describe planning or re-planning the project. Seven project managers explicitly stated that they do project re-planning while other project managers did not mention project planning or re-planning at all. Three project managers expressed the need for project (re-)planning quite clearly:

x

x x

x

x x x x

x x x

x

x

x

x

x

x x x

x

x x

x x x

x x x x x

x

x x x

x

x

x

13 1

x x x x x

10 12 9 7 7

“The real project plan is made and agreed on with the customer in this phase.”, “In any case, the project is totally re-planned after the agreement has been signed.”, and “We often re-plan the project with the customer, after all.”. These quotes reveal a slice of supplier firms' circumstances in practice: although effort has been made in order to win a contract and thus every project has already been planned, quite often planning has to be started all over again after winning the contract.

4.2. Why project managers are changed? Our analysis of the interviews revealed that although the project manager has been involved in the case during the sales phase, s/he will not necessarily continue as a project manager of the forthcoming project. Instead of a project manager who is already familiar with the project, another project manager may be nominated as a project manager for the starting project. This finding explains the contradiction that we found earlier, and which compelled us to analyze the interviews again. There are at least two reasons why another project manager may be nominated. The first one is hidden behind the sales process, where the number of potential projects is the biggest at the top of the funnel and the smallest at the end of the funnel (Cooper and Budd, 2007; Söhnchen and Albers, 2010), as presented in Section 2.2. The number of potential projects before the agreement is signed diminishes, and this partly explains why the project manager involved during the sales process is not nominated as the project manager for the starting project. For supplier firms, it is quite challenging to estimate which sales cases will eventually lead to an actual project, and therefore the selection of the right project manager to support the sales case is challenging, too. The supplier has to consider previous projects, ongoing project, and possible projects when selecting the project managers who will participate in the sales process. The supplier has to consider the customer and previous relations to that customer when the supplier makes decisions on the use of resources (Baxter, 2012; Hüttinger et al., 2012; Schiele et al., 2012). Another reason is the constantly changing situation where projects are starting earlier or later than anticipated; projects do not end as scheduled; a project does not start at all; or a project is terminated suddenly.

Please cite this article as: P. Savolainen, J.J. Ahonen, 2014. Knowledge lost: Challenges in changing project manager between sales and implementation in software projects, Int. J. Proj. Manag. http://dx.doi.org/10.1016/j.ijproman.2014.04.003

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In a multi-project environment, there is a constant need to utilize resources to deliver promises and fulfill contractual obligations with respect to the project itself and, at the same time, a need to ensure constant revenue in the future (Cooper and Budd, 2007; Söhnchen and Albers, 2010). Because firms have a more or less constant capacity (Söhnchen and Albers, 2010), each starting project may utilize resources from other projects, and this interferes with their schedules, at least when there is a scarcity of resources. Moreover, duration variability in one project may lead to delays in other projects, which might jeopardize stability across the system and result in rapid deterioration of on-time, within-budget performance, and other problems for all projects (Cooper and Budd, 2007). This volatile project situation, coupled with the funnel-like sales process, exerts an influence on the selection of a project manager for the starting project. Given this situation, we identified, from the project managers' interviews, three different explanations for not selecting the project manager involved in the sales phase for the starting project. We illustrate these explanations using three cases in Fig. 3. In each case, we present a sales case, and below that, we present the situation of the project manager who participates in the sales case. In Case 1, everything has been agreed upon, but the final decision of the customer is still pending. The contract has not yet been signed, and the company is not assured of the deal in order to start the project. Because the situation is unclear and the project manager has finished his/her previous project, the project manager is nominated for another project instead of merely awaiting the customer's decision. When the customer finally makes the decision, the planned project manager is not available any more. Therefore, another project manager is nominated for the starting project. In this situation, the project manager's familiarity with the sales case is not exploited, and another project manager starts his/ her own knowledge acquisition.

The project managers interviewed reported that it is quite common for the customer to delay his decision for an indefinite period. Therefore, the project manager involved in the sales process is no longer available. Moreover, the supplier might have been forced to allocate other planned resources to other projects. Such situations may cause severe problems for the supplier, and the whole project may be endangered as discussed by Ahonen and Savolainen (2010). Case 2 illustrates a situation where the sales case has proceeded as anticipated, and the contract has been won. However, the project manager's current project is delayed for some reason. That makes the project manager unavailable when it is time to start the new project. Therefore, another project manager has to be nominated to the project in order to get it started on time. In this case, the knowledge acquired by the project manager during the sales phase is not utilized. In Case 3, either the sales process takes longer than anticipated or the project manager's project is finished earlier than expected. If there is another project starting, the project manager is nominated for that project instead of waiting for the closure of the ongoing sales case. Therefore, the knowledge of that project manager is, again, not available for the project s/he was selling. These three examples partly explain why another project manager is selected instead of the project manager already familiar with the starting project. Although there are many reasons why other project managers are nominated, the main problems still exist and are related to the sales–project interface. 5. Limitations and future research There are two main limitations in our study. Firstly, empirical data was collected in small or medium-sized software firms, and

Fig. 3. Possible cases in which the project manager will not be nominated to the new project. Please cite this article as: P. Savolainen, J.J. Ahonen, 2014. Knowledge lost: Challenges in changing project manager between sales and implementation in software projects, Int. J. Proj. Manag. http://dx.doi.org/10.1016/j.ijproman.2014.04.003

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therefore the knowledge management challenges found may not be identical to those in larger software firms or in firms operating in different business domains. However, Turkulainen et al., who studied the cross-functional integration of project sales and project operations, conducted their study in a global automation system supplier firm specialized in projects related to automation and information management application networks and systems, field control technology, and life cycle performance services, employing 3200 people (Turkulainen et al., 2013). They found the interface between sales and project operation challenging, and they studied how the integration is managed in different contextual conditions. Therefore, we believe that similar challenges do exist in other supplier firms that operate in project business. Secondly, the interviews were not originally intended to collect data on the phenomenon analyzed in this article. Moreover, only project managers were interviewed. Therefore, we do not have information on the phenomenon at the management or at the organizational level, for example. For that reason, our study does not cover organization-level issues that influence the behavior of the supplier. Nevertheless, our study reveals a hitherto largely ignored phenomenon that is an inherent part of supplier firms. The phenomenon originates from the funnel-like sales process and volatile project situations, which force supplier firms to select another project manager instead of a project manager involved in the case already during the sales phase. There is a knowledge flow that crosses two organizational units horizontally, but that breaks off when a project manager does not continue as the project manager after the sales phase. In theory, there should be a continuous process from sales to project implementation. In practice, the situation is different. The sales team is dismantled after winning the contract, and a new project team is formed for the project delivery. This creates a knowledge management challenge in supplier firms. Although we have identified a real-life problem, we are not able to give any solutions. However, we offer here research themes that are of interest.

5.1.1. Knowledge acquisition and requirement engineering during the sales phase There are three types of project-based knowledge that are critical to software development projects, and they are technical design knowledge, business value knowledge, and one that is often neglected, organizational change knowledge (Reich et al., 2012). When a supplier develops software for an external customer, that knowledge is acquired partly during the sales phase, by a sales team. It would be interesting to know how a sales team gathers information from a customer organization and processes it into knowledge. As an individual is an important repository of knowledge (Argote and Ingram, 2000), how much knowledge is explicitly expressed in documentation? Moreover, how much and what kind of necessary knowledge is tacit knowledge without any formal representation? How well is the latest mainstream of RE research supporting knowledge acquisition during the sales phase?

5.1. Project managers as part of a sales team

5.2. Advantages and disadvantages of selecting another project manager

Project managers are needed for managing projects, and therefore project managers focus most of their attention on the implementation of the projects that they are currently managing. However, based on the analysis of our interviews, firms tend to have a project manager in a sales team. Having a project manager in a sales team, knowing that in only about 50% or less of the cases, where a supplier has submitted a tender to a customer, have a possibility to lead a project (Söhnchen and Albers, 2010), puts pressure on selecting the appropriate project manager for a sales team. Therefore, it might be of interest to investigate how supplier firms eventually select project managers for a sales team. What are the reasons for selecting a specific project manager? We identified three different patterns for project managers' participation in sales process. Does a project manager's role differ according to the pattern?

5.1.2. Knowledge transfer to a project team When a sales team works with a potential customer, it is a learning process for the members of the sales team. That knowledge cannot be given to another person only by handing over documents. A project manager might be the only person who continues with the starting project. How is knowledge transfer from a sales team to a project team done in practice? Are there differences if the project manager has been in the sales team or not?

5.1.3. Sales process and project profitability Selling is not costless, and in most cases, only about 50% or less of cases lead to a project after submission of a tender (Söhnchen and Albers, 2010). Numeric figures would reveal how much effort is spent for different sales cases. How about when a project manager participates in sales team? Do software suppliers consider costs of the sales process in terms of the forthcoming project's profitability? How much effort should be put into each sales case?

The change of a project manager increases the risk of misunderstanding the software requirements, and misunderstanding the requirements is one of the most important software project risk factors (Nakatsu and Iacovou, 2009). In addition, there are studies in which one has found that changing the project manager is negatively correlated with project success (Verner and Evanco, 2005) and another that such a change may lead to failure (Ahonen and Savolainen, 2010). However, we found that it is common in practice to select another project manager for the starting project instead of a project manager who has been involved already during the sales phase. One research theme would be to investigate the advantages and disadvantages of changing a project manager after being involved in the sales process, especially from the viewpoint of the starting project.

Please cite this article as: P. Savolainen, J.J. Ahonen, 2014. Knowledge lost: Challenges in changing project manager between sales and implementation in software projects, Int. J. Proj. Manag. http://dx.doi.org/10.1016/j.ijproman.2014.04.003

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5.3. Same phenomenon in large firms

Acknowledgments

Our study consists of interviews in small and medium-sized firms. In larger firms, there are larger units, for both sales personnel and project managers. Of interest is to study the same phenomenon in larger firms. Do they have the same challenges? If yes, how do they tackle these challenges? How is the management of acquired knowledge organized in large firms compared to smaller firms? Are there other or similar patterns for a project manager's participation in the sales phase, which we identified from our interviews?

This research was funded by the Finnish Funding Agency for Innovation (Tekes) with the grants 70011/08 and 70054/54, and supported, in part, by Science Foundation Ireland grant 03/CE2/I303.1 to Lero — The Irish Software Engineering Research Centre.

6. Conclusion In this paper, we have concentrated on software development projects, and in particular, on projects delivered to external customers. In our previous study, we found a conflict in the answers of project managers that we interviewed in supplier firms. Project managers claimed that they are involved in the case before the contract has been won and, and at the same time, they admitted they do not have prior knowledge of the starting project. This discrepancy prompted us to analyze the interviews again. When analyzing interviews again, we found that almost all project managers participate in the sales process. We found three different patterns, which reveal that it is not evident that the same project manager will be selected to manage the starting project. Reasons for not selecting the same project manager to manage the starting project originate from the funnel-like sales process and volatile project situations, which force supplier firms to select another project manager instead of a project manager involved in the case already during the sales phase. We draw theoretically on the project marketing cycle and the sales funnel. Our study contributes to project management research, especially studying management of a software development project in the project business context. Moreover, our study contributes to the understanding of the operation of software supplier firms. With the help of the analyzed interviews and the literature, we have demonstrated the existence of a gap in understanding of/ related to software development projects in the project business context. As part of project-based knowledge acquired during the sales phase is intangible, it is not possible to transfer to another person only by handing over documents. Our study ascertains the lacuna in project marketing theory noted by Jalkala et al. (2010). In addition to highlighting a gap theoretically, our study reveals a largely ignored phenomenon that is an inherent part of supplier firms. We believe that more studies on the phenomenon may contribute to the understanding of the success and failure of software development projects. Therefore, we emphatically encourage other researchers to conduct studies on software development projects in the project business context.

Conflict of interest There is no conflict of interest.

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Please cite this article as: P. Savolainen, J.J. Ahonen, 2014. Knowledge lost: Challenges in changing project manager between sales and implementation in software projects, Int. J. Proj. Manag. http://dx.doi.org/10.1016/j.ijproman.2014.04.003