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Case Analysis 2: Teradyne Corporation

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Case Analysis 2: Teradyne Corporation


Shenhar and Dvir would explain the discrepancy between the hardware and the software components as being attributed to a lack of understanding between the project expectations and the reality or true requirements of each project or component. For example, “all of the major hardware, for instance, had been developed in record time, and with minimal deviation from the plan” (Gino 1). With that being said, “software, a major component of the program, had run badly behind schedule… in addition, total development costs came in 35% higher than initially budgeted” (Gino 1). According to Shenhar and Dvir, this would somewhat be characterized as a failure in certain aspects, even though the product did launch and they did manage to garner a win with a strategic customer. Shenhar and Dvir point out that “Evidence/research shows that failure occurs even in well-managed projects run by experienced managers and supported by highly regarded organizations” (Shenhar 6).

Attached, one will find the Hardware and Software Diamond Models (Exhibit 1 and Exhibit 2 respectively) that help to illustrate the disconnect between expectations and reality. At first glance, it is easy to point out that for the most part, the hardware expectations aligned very well to the outcome in reality. The only discrepancy arrived when Teradyne agreed to accelerate its schedule due to the requirements of a strategic customer, AlphaTech, that they could not afford to lose. This posed stresses on the hardware development team, but they were able to achieve the change from Fast/Competitive to Time-Critical by adding additional resources and working increased hours. Software (Exhibit 2), on the other hand, posed a significant discrepancy between expectations and reality. One can see that the complexity and pace required were dramatically misaligned. Due to bringing on a real customer into the equation, and “bringing forward the first customer shipment date, required pushing features out the door before they were ready” (Gino 10). They launched the hardware product with minimum viable software that was extremely bug-laden. This certainly pushed the software team from Fast/Competitive to a Blitz mode, focusing entirely on fixing and improving the software that they just released, as they could not afford to lose the approval and confidence of Alphatech. Under this blitz environment, “The stress levels were off the charts. There was a lot of burnout… They were no longer doing development; they were just trying to fix bugs for AlphaTech. By the end, they were coding day-by-day and uploading the software to AlphaTech over the Web” (Gino 10-11). This shows that all focus had to be diverted and essentially moved from their core focus of developing an actual product, to putting out fires. With clearer planning, objectives, and the right software-specific tools, it becomes evident that there was definitely room for improvement at the front-end of the software development cycle.

One of the major contributors to the gaps between hardware and software development was the usage of the same exact tools for project management and evaluation. Hardware development is very different from software development, in that hardware development is much more rigid, whereas software is much more fluid. For example, Teradyne created a “phase-gate” model to “provide well-defined milestones and review points” (Gino 4). Yet these entries and exits are more accustomed for completion of concrete sections of a hardware product, whereas code for software can continuously be modified or improved. Teradyne would have benefited greatly from utilizing the Agile approach for software development and looking to align the milestones under Agile development to that of the hardware team’s schedule. This would allow for the comparison and contrast of the two schedules and allow for more scrutiny and better alignment of hardware and software for the actual launch of the product.


As Paul Rauch finally pulls up to work, he has a few key decisions to make. Implementing Ancona, Bresman & Kaeufer’s X-teams approach could yield positive results for him in improving the software development of his company. In particular, “X-teams are not needed when team and organizational goals are clearly aligned and the team has the support it needs, when team members have all the information they require to get their work done and the information and knowledge they need is not changing rapidly, and when the team’s task is not highly interdependent with other work within the organization” (Ancona, 8-9). In a nutshell, software development is the complete opposite of every aspect of that phrase outlined by the X-teams authors. Software development goals



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