African Journal of Business Management Vol.5 (30), pp. 11844-11855, 30 November, 2011
Available online at http://www.academicjournals.org/AJBM
DOI: 10.5897/AJBM10.1265
ISSN 1993-8233 ©2011 Academic Journals

Full Length Research Paper

The importance of project management in small- and
medium-sized enterprises (SMEs) for the development
of new products through E-collaboration

Marjan Mohammadjafari
1
*, Shamsuddin Ahmed
1
, Siti Zawiah Md Dawal
1
and Hadi
Zayandehroodi
21
Department of Engineering, Design and Manufacturing University of Malaya, Lembah Pantai, 50603 Kuala Lumpur,
Malaysia.
2
Department of Electrical Engineering, Kerman Branch, Islamic Azad University, Kerman, Iran.


of final products for ultimate customers. In the case of
their final products, SMEs cannot compete with larger
companies without paying due attention to customer
*Corresponding author. E-mail:
[email protected]. Tel: 0060173141328.
needs. In the current customized market environment,
SMEs are able to increase product varieties, but the time
for developing a new product is often more than initially
thought.
However, new product introduction must be very timely
and cost competitive. One of the paths to time and cost
reduction in new product development is to create a
collaborative environment between the various
departments of one factory. Four departments, namely
design, production, planning and procurement, have a
key role in SMEs (Bashir, 2008; Kusar et al., 2004;
Roberts, 2006; Xie et al., 2002; Zhou et al., 2008).
Collaboration can be established in different ways using
different tools, one of which is E-collaboration (Bafoutsou
and Mentzas, 2002). The use of E-collaboration
technologies has become essential for supporting
Mohammadjafari et al. 11845
technologies (Cai and Kock, 2009). “E-collaboration and
collaborative tools bring geographically dispersed teams
together for virtual meetings across great distances”
(Bafoutsou and Mentzas, 2002). “The field of
collaborative computing encompasses the use of
computers to support coordination and cooperation of two
or more people who attempt to perform a task or solve a
problem together” (Borenstein, 1992). In this study, the
authors consider E-collaboration between different
departments of one factory. Project management

Initially, a project emerges because there is something
important and complex to be solved. The project
organization then develops due to a need for a
purposeful organizational effort and a high level
coordination in order to execute a number of activities
(Sِderlund, 2004). Project management is a methodology
for managing a project (Ramaprasad and Prakash,
2003). “Project management, including the tools,
techniques, and knowledge-based practices applied to
manage the creation of products and services, is
becoming an increasingly accepted and applied discipline
across industry sectors” (Jugdev et al., 2007). Project
management is “the manner of implementation, of
expertise, paraphernalia, knowledge and modus operandi
to an extensive range of activities for the fulfillment of
prerequisite of the specific project” (Qureshi et al., 2009).
Table 1. Project management institute project management area.

Project management area
Description
Integration management
Unifying the activities and resources of the project to complete.
Scope management
Ensuring that the project includes all the work required, but only the work required to meet the project
requirements.
Time management
Ensuring timely completion.
Cost management
Ensuring that the project can be completed within the project budget.
Quality management
Ensuring that the project product will satisfy the project requirements.
Procurement management
Managing the purchasing and acquisition of outside goods and services required to complete the
project.
Risk management
Identifying and managing project risks.
Communications
management
Ensuring timely and appropriate project communication.
Human resource
management
Organizing and managing the project team.

Adapted from Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK Guide), 3rd ed., Project Management
Small and medium enterprises in developing E-
collaboration

Small and medium enterprises (SMEs) play an important
role in promoting economic development (Ale Ebrahim et
al., 2009a). In most countries, SMEs dominate the
industrial and commercial infrastructure (Deros et al.,
2006). SMEs play a very important role in national
economies, providing job opportunities, act as supplier of
goods and services to large organizations, and any lack
of product quality could adversely affect the competitive
ability of the larger organizations (Deros et al., 2006).
“Small firms are indeed the engines of global economic
growth” (Acs et al., 1997). SMEs have an important role
in flows of foreign direct investment (Kuo and Li, 2003).
SMEs also serve as the key engine behind equalizing
income disparity among workers. SMEs are increasingly
internationalizing their business activities (Beck et al.,
2005).
According to Ale Ebrahim, there are many accepted
definitions of SMEs. The classifications vary from industry
to industry and from country to a country, different
countries accept dissimilar criteria such as employment,
sales or investment for defining small and medium
enterprises. In the absence of a definitive classification,
an agreement has developed around the European
Commission (EC) criteria for SME classification. This
definition adopts a quantitative approach emphasizing
Knowledge creating
(Ale Ebrahim et al., 2009b; Egbu et al., 2005) Excellent at multi-tasking
(Ale Ebrahim et al., 2009b; Schätz, 2006) Powerfully correlated and inter-related with respect to innovation
(Bhagwat, 2006; Gray, 2006; Huang et al., 2001; Jutla et
al., 2002) Capable to answer quickly to customer requests and market changes,
customers focused
(Abdul-Nour et al., 1999; Ale Ebrahim et al., 2009b; Kim et
al., 2008) Quick decision making process
(Lawson et al., 2006; Schätz, 2006) Able of going global rapidly
(Ale Ebrahim et al., 2009b; Gassmann and Keupp, 2007) Routine processes, flexible structures

By investigation into prior research, the author finds one
of the problems in many industries is the long time
required to develop a new product. From the literature
review, it is discovered that four departments are
influential in reducing time and cost in new product
development in manufacturing companies. These
departments are those of design, procurement, planning
and production (Bashir, 2008; Carter, 1997; Clift and
Vandenbosch, 1996; Griffin, 1997; Roemer and Ahmadi,
2010; Selvaraj et al., 2009; Tan and Vonderembse, 2006;
Xie et al., 2002). A summary of the prior studies is shown
in Table 4. METHODOLOGY

Model verification methodology

The primary ideas on the development of a conceptual model were
devised based on a brainstorming process with academics.
Following the primary expansion of the conceptual model, feedback
was obtained from participants in the industry and academics. The
objectives of obtaining feedback on the model include:

(1) Identify how integration can be achieved among different parts
of a manufacturing company.
(2) Reduce new product development time by using the conceptual
model.
(3) Reduce the cost of new product development by using this
model.

Westerlund and Rajala, 2008) Strategy formulation on the basis of what available, lack a long run
perspective
(Ojeda-Gomez et al., 2007; Yusuff et al., 2005) Limited degree of information technology (IT) implementation

(Chou, 2008; Egbu et al., 2005; Eikebrokk and Olsen,
2007; Sarosa and Zowghi, 2003) Lack of industrial engineers or right kind of manpower to apply various
statistical and managerial methods or tools
(Ahmed and Hassan, 2003; Ale Ebrahim et al., 2009b) SMEs shy away from formal projects and long-term initiatives and instead
only participate in small-scale, once-off initiatives
(Burke and Gaughran, 2006)
concepts from the literature. In the feedback process, the opinions
of the industrialists and academics were obtained based on their
knowledge and experience.
departments that affect the completion of projects in
terms of time and budget: design, planning, production
and procurement. The effects of these four departments
have been studied separately under several theoretical
perspectives in recent years (Mohammadjafari et al.,
2011; Roberts, 2006; Roemer and Ahmadi, 2010;
Selvaraj et al., 2009). However, none of these studies
has proposed a model that specifies practices that should
be undertaken to facilitate the progression to reduce time
and cost in developing new products in SMEs.
To understand the importance of coordinating these
sections with the project manager and validated the
model, the author interviewed 20 project managers. The
majority of project managers interviewed stated that the
lack of coordination between the related departments in
production was the major problem in the inability to
reduce time and cost. Our interviews led us to the
primary conclusion that the long time required for new
product development results from a lack of coordination.
The companies interviewed were in the electronics
industry. The purpose of these interviews was to
understand the companies’ process for collaboration
among four departments into product and process
development and to elicit insights into how they had
overcome barriers along the way.
Using the information from these interviews, we
developed a conceptual model that is characterized by
the major activities required for interdepartmental
collaboration in new product development. Our case
studies suggest that companies that had achieved

Involvement of
partners
Concurrent
product
Team structure
Project strategy
Concurrent
engineering
Training and
rewarding
Simplification of
structure
Lead user
Supplier
integration
Virtual
production
Time
compression
Technologies
CAD technology
Setting buffers
identifying
critical chain
Development
capacity
Techniques
Speed

Reference


(Clift et al., 1996)
√
√

√
√

√
√ (Carter, 1997)
√

√


√

(Athakorn et al.,
2001)
√
√

√


√

(Kusar et al., 2004)
√


√
(Tan and
Vonderembse, 2006) √

√
√

(Zhou et al., 2008)
√


√

√
√
√
√ √

(Selvaraj et al.,
2009)

√ √
√

(Lifang et al., 2009)

√


(Hebert et al.,
2010)
√

√
√
√
Research methodology

Source information
E-collaboration

Time
cost
Quality
variety
Other

Simulation
Process Model
Theory -Building
Framework
Case study(small n)
Empirical(large n)
Experiment
Math. Modeling
www-based
Review
statistical
pattern matching
prototype
pilot study
creative software

Reference √ (Griffin, 1997) √


(Hartley et al., 1997) √

√
√
√

√
(Kusar et al., 2004) √
√
√
√ (Tan and Vonderembse, 2006)
√

√
√
√

√

(Zhou et al., 2008) √
√ (Bashir, 2008)

√
(Selvara et al., 2009) √ √


(Lifang et al., 2009)
√

√
√ √

√
√ (Roemer and Ahmadi, 2010)
model (Figure 9) and supported by prior
researchers (Petersen et al., 2005; Roemer and
Ahmadi, 2010; Xia-Bao and Li-Xi, 2009; Zhou et
al., 2008). In this model, we consider four sets of

and cost that were identified in past studies and
Mohammadjafari et al. 11851 Figure 2. Number of publication in field E-
collaboration, project management and new product
(source: Web of Science ® 2010). Figure 3. Number of publication in field e-
collaboration, project management and SMEs
(source: Web of Science ® 2010). Figure 4. Trend of E-collaboration (source: Web of
Science ® 2010).
validated from a survey. Increasingly, more studies
create awareness of the critical success factors that are Figure 8. Schematic diagram of the literature.

Project
Manager by
E-Collaboration
Department
of Design
Department
of Production
Department
of Procurement
Department
of Planning

Production Line
H1
H4
Reduce Time
of Product
Decrease Cost
of Product
H2
H3

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