TYPICAL SCENARIO
The business gets to the end of the procurement phase, agrees the contract, budget and start-date and then appoints a project manger to coordinate the plan and resources and oversee the implementation.
THE POSSIBLE PROBLEMS
Very often the initial request for proposals or invitation to tender is less than perfect because at this early stage the client may know what they want, but not necessarily the best tool or method to achieve this. The procurement phase is really one of discussion rather than design.
The contact will doubtless outline what the supplier-vendor sees as the key issues, generally ignoring elements which are non-standard which “can be discussed later”. Moreover there may be all sort of assumptions and dependencies that both parties don’t fully appreciate.
The contract may be vague about the implementation and instead focus on the product with the consequence that whilst some elements may be fixed the variable cost may be unspecified and significant without an agreed mechanism to anticipate, manage and control.
The latter two elements combine where there is any ambiguity of who does what. For example the split of work between the supplier-vendor and client for training, testing, documentation, meetings, design and decision. At one extreme each party maybe expecting the other to resource this, with consequential impact on time, scope and costs if expectations differ.
CASE STUDY
Organisation A contacted for what they anticipated was substantially an industry standard off-the-shelf solution from supplier-vendor B. When it come to delivery a huge amount of time & materials costs was escalating and at 30% of the project they were at 90% of the budget.
Organisation A felt that they were being unnecessarily charged for work which was standard and should be included in the contracted costs, and certainly not escalating unchecked. Moreover it was impossible to reconcile these costs to a product delivered and working.
Supplier-vendor B felt that each installation was different according to the needs, standards, processes of the client and it was the clients responsibility to be clear, succinct and specific about their requirements up-front and the time in discussion, debate, design was rightly the clients choice and expense.
The contract was not specific about payment, complaint or mediation mechanisms. For example: Payment on completion or acceptance; Definition of “done” or other success or acceptance criteria; Need to project future costs rather than report historical past costs (Leading to uncertainty about end-costs).
The above is a combination of experiences rolled into one case study to illustrate and keep the parties involved confidential.
RECOMMENDATIONS
Lawyers are excellent at reviewing contract terms and conditions, as well as matters over data-protection, licence and ownership. However an experienced Project Manager or Project Assurance can be a useful resource, even if only for a few hours to review the contract, budget and project initiation document and make observations and recommendations.
Moreover a Project Assurance can also provide a useful independent and impartial review at any point during the project to help both parties get back on track.
Finally, mediation can be a good method to resolve issues and improve relations. Mediation is not a sign of failure, it is a sign of the commitment to work together and achieve a great outcome. Mediation promotes listening and understanding. It encourages a mutual solution focus, and therefore repairs and rebuilds collaboration, communication and trust and will deliver better outcomes.
WHAT IS PROJECT ASSURANCE?
Project Assurance is the process of critically assessing the health and viability of a project (at the risk of over-simplifying it, think of it as an audit function).
Quality assurance in project management is a process of verifying quality standards through inspection to ensure that the outcome meets standardization and quality requirements for a product or a service.
The two are often best combined and provided externally and independently to offer objective and impartial assessment for the benefit of client / customer and vendor / supplier.
The Association for Project Management (APM)’s identify ten areas in a project organisation which assurance can increase the likelihood of success:
1. Client and scope
2. Risks and opportunities
3. Planning and scheduling
4. Organisational capability and culture
5. Supply chain
6. Solution
7. Finance
8. Social responsibility and sustainability
9. Performance
10. Governance
There may be10 areas, but each may be viewed differently according to one of these three perspectives:
Business assurance…
measures project performance against its projected benefits to the organization. Is it an effective use of the company’s resources, for both finances and manpower?
User assurance…
considers the intended recipients of the project outcome, be it a product or service, and if they are being met.
Specialist assurance…
measures how suitable the delivered solution is for software and technical requirements.
Project Assurance can offer a view on process and product, outputs and outcomes and ostensibly as a coach guiding the conversation, rather than client or vendor making decisions it can facilitate a better communication, coordination, and collaboration in design, documentation and delivery of products and projects.
WHAT IS MEDIATION?
Business Mediation is an effective method for conflict resolution. It is successful between around 80% of the time. Parties discuss their disputes facilitated by an impartial third person(s) who supports them reaching a mutually agreed outcome.
It can be better than alternatives including court litigation, arbitration or ombudsman decision because is inherently less adversarial, less expensive, and less stressful and confidential allowing for a flexible process which may help to preserve relationships.
People are far more likely to stick to an agreement reached in mediation because people place a high value and greater ownership in outcomes they shared in creating
ABOUT THE AUTHOR
I have more than 30 years’ experience delivering projects, programme and change and have gathered many tools, templates and tips for every type and scale of project. I love drinking coffee and exchanging ideas, so if you need anything please feel free to message me.
Follow me on a journey exploring new ideas and opportunities @timhjrogers #timhjrogers
Tim HJ Rogers
MBA Management Consultant + Change Practitioner
ICF Trained Coach, IoD Business Mentor, Mediator
PRINCE2 Agile-Scrum Projects, Programmes and PMO
Mob 447797762051 Tim@AdaptConsultingCompany.com
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