IT projects are complex, prone to delay and often fail to deliver the expected benefits, or any at all. Whilst each project is different, the reasons for failure are often similar. Sometimes the fault lies with the supplier, sometimes with the customer, frequently both.
In this article, we look at common failings on the part of suppliers and steps which they can take to avoid them. In a preceding article we considered failings more commonly initiated by customers.
1. The supplier over-promises
A response to RFP requires careful planning. Poor planning can result in a supplier underestimating the resources required or dependencies. Supplier resources may be spread thinly over other projects, particularly in a booming economy. Take care in considering the level of resource which can be (re)deployed to meet the needs of the project. Estimation errors are in nobody’s interest. Omission is far more significant as a source of error than variation, assuming the supplier is experienced and competent. If the response omitted something necessary, change requests will follow and one party will have to pay.
Plan carefully and make sure your estimates of resources, cost and time for delivery are documented well. This will give you ammunition to counter accusations of over-promising, should you need it. Expect the customer to question your bid and be prepared to explain your approach with confidence. Remember that you may have to explain the promises you make in the course of winning business.
2. Wrong consortium
A complex IT project may involve several technologies with one systems integrator taking overall responsibility for delivery. They will working closely with consortium partners and sub-contractors. It is the responsibility of the systems integrator to ensure the partners work together effectively. If they are unable to work together in a smooth and seamless manner, the customer will suffer the consequences of poor performance and delayed delivery. Managing this risk is difficult and demanding (as SIAM practitioners are discovering).
Choose your consortium partners carefully. Follow up references if you have not worked with them before. Whilst corporate reputations matter, personal behaviour, skill and working style are more important in a team. Ensure subcontracts address governance and other key performance issues in a manner consistent with the prime contract.
3. The wrong sort of work
An IT provider may be a specialist and market leader in the delivery of certain projects. Its experience and capabilities may not be readily translated to different types of project. The supplier should avoid exposing itself to the risks associated with delivering a system outside its general range of experience. It can manage such risks by engaging appropriate resources or consortium partners. We have seen disputes where a highly qualified supplier took on a project that was outside its expertise. It had disastrous consequences for both customer and supplier. The customer’s market position, sponsor’s reputation and development cost can all be lost in these circumstances, and the supplier can suffer irreparable reputational damage.
Play to your strengths and select your projects carefully.
4. Poor project management
In large programmes there are many dependencies. These frequently have elements that cannot be resolved with certainty. They are amplified by the degree of novelty, whether technological, business model or associated with people change. In these circumstances, project and programme management are critical skills with a direct impact on performance. Formal qualification and interview skills are only partially reliable guides to the ability of a project manager. In a complex project, experience is essential. A good project manager will be able to identify risks and issues and develop an appropriate approach.
Ensure you appoint a project manager with experience and skills which are equal to the task in hand. Resist the temptation to substitute a lower-cost alternative. Delivery requires more than the leader. The team will draw on the contribution of all members. Maintaining support within the customer is essential if the project is to succeed. Ensure the project manager has an effective delivery team with the correct mix of skill, enthusiasm and experience.
5. Selecting the wrong technology
Whilst some RFPs will specify the technology required, often it falls on the supplier to make a recommendation. It may consider the respective merits of an off-the–shelf or bespoke system. An off-the-shelf system will generally be cheaper and easier to deliver but a bespoke package will offer more flexibility. The wrong decision can have a negative impact on the project as a whole. One of us worked on a dispute where the supplier’s platform had significant elements out of support. We had suspicions that the platform suited the supplier but not the customer. The customer had no internal resources capable of scrutinising the architecture and had not considered taking independent advice. That omission proved to be expensive for both the customer and supplier.
Select the technology carefully, ensuring that it both meets the customer’s needs and is capable of integration with legacy systems. Be prepared to recommend alternatives if the customer asks for inappropriate options. Scrutinise the selection decision, hiring someone independent of the outcome if necessary.
6. Requirements not adequately defined
The requirements of the new system are generally not specified to a level of detail sufficient for development until the supplier has been selected. It is vital that during contract negotiation, the supplier and customer build their understanding of features, performance and outcomes together. The contract should accurately reflect this understanding. The business definition phase of delivery generates the detail of process and design. If these two exercises are not carried out diligently, the system delivery is unlikely to realise the expected benefits. The customer has a significant role in both and may be assisted by a sourcing advisor. Advisors work for the customer, assuring them that the agreement reflects its needs. During delivery the supplier leads and facilitates the process, being accountable for its outcome. Appropriate customer consideration and input is essential for success. One of us worked in the resolution of a dispute where the customer had been severely disappointed by the supplier’s first delivery of the system. We discovered that there had been minimal communication between the parties during the delivery, giving ample time for expectations to diverge without detection.
As a supplier, ensure you put the necessary effort into the requirements definition process and make sure that the customer does the same. Do put yourself in a position where requirements are unclear and you are building a system on unsettled ground.
7. Unstable delivery team
As with any project, continuity of resources is vitally important for successful delivery. In a lengthy IT project it is inevitable that there will be some change in the delivery team. However, frequent changes, especially at project management or workstream lead level, can result in serious disruption. These cause delay and compromise the quality of delivery. A complex project relies on personal knowledge to understand dependencies and their implications. This takes significant time to accumulate and can be lost in transition.
Maintain continuity of resource whenever possible and resist the temptation to re-assign skilled and experienced resources to other projects. If a change of project manager is necessary, ensure that the incoming project manager is more experienced than the outgoing. This gives partial compensation for the loss of direct knowledge of the project. Where you can, ensure that gaps in that knowledge are filled by existing members of the delivery team.
8. Failure to manage the customer
A supplier will want to ensure that the customer is satisfied with performance and will strive to meet the customer’s expectations. However, acquiescence with unreasonable demands can give rise to serious problems. A programme manager will expend considerable energy in engaging and managing senior customer stakeholders in a variety of departments. We have come across programme managers who do not possess the skill, enthusiasm or attitude to engage in this way. We have also found customer staff who refuse to engage with suppliers.
Ensure the customer provides the necessary resources to make the project a success. Insist on customer attendance at review meetings and engagement at the appropriate level. If the customer requires changes to the delivery, ensure such change is managed through the change control mechanism. This helps to manage the risk that the customer expects you to perform outside your contractual commitments.
Experience and research suggest that whilst there are few well established frameworks for success, the variety of creative approaches to failure are many. At the root of success are:
- A good, realistic agreement that cogently captures the intent of the parties.
- Competent delivery to plan.
- The provision of sufficient and skilled resource.
- Effective control and decision-making.
- The considered control of change.
All of which are easier said than done. Without these, the project may be doomed from the outset.
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This article was co-authored by Lee Gluyas, a partner at CMS Cameron McKenna Nabarro Olswang LLP, an international law firm with headquarters in London. Lee specialises in the resolution of disputes, particularly those arising from outsourcing contracts. He spends much of his time advising clients on the management of distressed projects, helping to get a failing project back on track if possible but ensuring his clients are in a strong position if the project fails and legal proceedings are commenced.
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A version of this article was first published in Outsource Magazine and is reproduced with permission.
