Teradyne Corporation – The Jaguar Project

This case examines Teradyne’s implementation and use of new approaches to project
management and project teams in the development of a new-generation tester, code-named
Jaguar. The development involved significant hardware and software design

Strategically, this was a very important project for the company as the timing of the launch and
performance of the product would have a significant impact on the company’s revenues for years
to come. Due to competitive conditions, time to market was viewed as a critical success factor.

Since 1996, Teradyne had been engaged in a multi-year effort to improve its product
development capabilities and performance, and had adopted various tools and concepts such as
aggregate project portfolio planning, product line road mapping, phase gate reviews, more
integrated project team structures, and post-project reviews. The company reported mixed
success with the implementation of these methods. One of the lessons learned from previous
projects was that failure to properly project scope and deliverable timelines were root causes for
project delays.

For Jaguar, it was decided from the beginning that the project would build on the existing
concepts but also implement a more detailed and rigorous up-front planning and makes use of
tracking and reporting tools. The hope was that this approach to product development would
facilitate the identification and corrections of problems in planning, tracking and controlling the
development of the Jaguar project so as to ensure the delivery of a high-quality product on time
and within budget.

For this case, you should take the role of a consultant hired by the CEO to determine the
effectiveness of this approach and the general lessons for the management of product
development and project execution strategy.

In managing the Jaguar project, the approach Teradyne used was very rigorous. Yet, part of the
project failed. Was the rigorous approach Teradyne used appropriate for the company given that
Jaguar was a highly complex project involving both software and hardware development? You
should explore the links between product development, project management, and potential
behavioral biases causing unintended consequences in the use of project management tools.

The decision about what tools should be used also allows you to understand and explore why
different project management tools and approaches may be more or less appropriate within
specific organizational and strategic settings. In general, despite the existence and availability of
advanced project management tools, there is widespread evidence that product development
projects are consistently late. The traditional approach to the problem is to develop better models
for project management and more sophisticated in-process management tools (such as real time
scheduling and earned value progress charts) and to undertake more planning activities. You
should recommend and understand when and under what conditions this is in fact a good
approach.
 You should report on the following themes: Project Management tools, The tension between
flexibility and discipline in project execution, Dynamic learning versus static (project execution)
and behavioral issues in project management.

Here are some general questions to consider when developing your presentation.

1)   Compare and contrast Teradyne’s traditional project execution strategy to the approach it
used in Jaguar? What was similar? What was different?

2)   What impact did the project management tools have on the Jaguar project? Specifically,
how did they change behavior? How did they influence performance?

3)   What were the unintended consequences of using the project management tools? What
lessons should Teradyne take away from the Jaguar project?

Teradyne Corporation: The Jaguar Project

About Teradyne Corporation

• Teradyne was founded by Alex d’Arbeloff and Nick DeWolf, who were classmates at the
Massachusetts Institute of Technology (MIT) in the late 1940s.
• Teradyne is a 45 year old corporation
• Sales of $1.8 billion in 2004 with over 6000 employees
• Teradyne corporation has following major units:
o Semi-Conductor Test (64% revenue)
o Assembly Test
o Broadband Test
o Connection Systems and Diagnostic Solutions

About Jaguar Project

• The project was envisioned as a culmination of sorts in Teradyne’s 8 year effort to

improve product development process
• In 2001 O’ Brien, a 25 year veteran of Teradyne’s engineering organization is appointed
project leader
• Company decided to abolish the markets-segment-focused platform into a single platform
engineering group
• Teradyne senior management made a pivotal strategic decision to embrace a flexible
platform strategy
• Aim was to create a flexible tester platform that can be easily adapted to the needs for
difference device segments
• Main emphasis was to use project management tools to streamline the product
development activities

Question1: Compare & contrast Teradyne’s traditional project

execution strategy to the approach it used in Jaguar? What was
similar? What was different?

Strategy Traditional Project Jaguar Project Execution

Execution
Goal and Scope Goals and scopes were not
definition defined clearly up front. Since
the requirements were not clear
and not defined, the engineering
and other stakeholders added
many features during
development which increasing
the delivery time & quality
Project Management Teradyne’s culture was to
tools mandate the use of specific tools,
but if was left up to the
individual divisions and
managers to decide
Visibility to higher There was very less visibility to
management higher management on the
project status and phase
Project Status Progress tracking was highly
tracking variable even within divisions,
some were using phase gate
model, detailed project planning,
conduction after-action reviews
and others not
Test Strategy Market-segment-focused
platform for testing. There was
different test platform for each
market segment
Resource allocation Mostly over committed. Some
times to the extent of 300%
Requirements & scope are very
clearly defined. Delivery date is
also finalized and adding scopes
during development was not
allowed
Formalized project management
tools like Work Breakdown
structure, 3-point estimation,
Critical Path analysis, Earned
value analysis are used
Clear visibility and tracking was
possible
Usage of tools resulting in near
accurate tracking of project
status
Embrace a flexible platform
strategy
Correct commitment was
provided, but sometimes forced
 people into commitment which
was not possible in real world

Question 2: What impact did the project management tools have on

the Jaguar project? Specifically, how did they change behavior?
How did they influence performance?

• Higher management did not pay enough attention to the data provided for project
management tools and they did not get the understanding of the metrics
• Most of the time in meeting were spend on finding the right tool, right way to report the
data rather than think about the product solutions
• The Teradyne culture of individual contribution was slowing eroding and people started to
feel that they are not responsible for the project delivery timelines
• Hardware system were largely able to keep on track on timelines, but the software
development emerged as a problem
• Software development division were under enormous pressure to keep the timelines
• The learning required for new software platform like windows NT was affecting the project
delivery
• The software challenge turned out to be a bigger than anticipated. Even though the
hardware units were on time due to software delays the push out was delayed by 6
months for “Ultra Flex” systems

Question 3: What were the unintended consequences of using the

project management tools? What lessons should Teradyne take
away from the Jaguar project?

Unintended consequences of using the project management tools

• Some of the metric were not understood by the management teams and they choose to
use the metrics which was easier and understandable for them. This did not reflect on the
correct project status
• More development resource were wasted due to the training, tracking and status update
meeting
• Employees and development teams did not feel that it is their responsibility for project
delivery and expected higher management to govern.
• The need to update status and maintain the project management tools created a
diversion for the development teams from the real problems
 Lessons should Teradyne take away from the Jaguar project

• Value of the project management tools has to be taught to the project manager teams
• The need to understand and report the most important metric has to be training. Project
management maturity assessment to identify strengths and weakness, and areas of
improvement in the organizations project management practice
• The use of project management tools required a cultural change
• There is a need for continuous monitoring of the project progress
• Process is not important, but the capable people has to be there to execute these
process
• Information overload should be avoided
• Project management tools cannot be used for the development stuff where there is lots of
uncertainty.