You Can be Great If You Really Want To

Unreliable spec coupled with a fixed priced project is the ultimate Project Manager’s nightmare. But even though we know this, there is still often a deficit between the needs of the project and the budget assigned to it.

The main block to solving these sorts of problems is the issue of risk and who dares to take it, and in a fixed price project the risk usually lies with the supplier, whereas with T&M the customer tends to take the risk. The risk in most projects is overrunning, with the cost of any work or resources after the scheduled completion date falling with one of the parties.

Theoretically the supplier should shoulder the risk in a fixed price project, as it is they who have set the price and timescales, and they who get the profit if the project comes in under budget. If it comes under they make more profit, if it goes over they are covered by the contingency that they probably added, so unless the project comes in really late everyone’s happy , and even if it does come in really late then surely it’s the suppliers fault so they should take the hit. Or is it their fault?

Wrong. In nearly all cases it is likely that the suppliers initial estimate was negotiated down in terms of cost, or up in terms of spec. They know what they can do for waht price, but most customers will negotiate and if the supplier doesn’t agree then plenty others will so they are forced to come to an arrangement-often a fixed price project planned with very little margin for error, which is most certainly a risk.
Even in cases where an overrun is completely the fault of the supplier, they still need to make a profit, and running at a loss is not a way to do this. So when this occurs a supplier may scale back the project, underdeliver or ‘cut corners’. Then the dread ‘change request’ excuse rears its ugly head, and we’re in territory no one wants to be in!

Assessing what the initial needs were/are rather than focusing on how to go about achieving them or what it will cost, is one way out of this scenario. By taking this view you are able to assess the gap between what is required and what can actually be done.

Project Managers can minimize the size of the gap by ensuring that the customer can see what they are going to get as soon as possible, which may mean showing small portions of work at a time. By doing this the want vs get battle is reached and resolved sooner and the project can continue efficiently.

We call this “Minding the Gap” and it takes a skilled project manager to employ this alone. By implementing strong project management software they can give themselves a helping hand, as bugs, issues and milestones are flagged automatically allowing them to be responsive and efficient

Learn more about bug tracking. Stop by Countersoft’s site where you can find out all about project management software and what it can do for you.

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