PM Blog: Professional commercial & project management: starting successfully, setting the scene for the right outcome

Companies only embark on projects that they believe will have successful outcomes, but may need the help of professional commercial and project managers to drive their achievement of this, especially at initiation.

There’s an overload of information on the internet about why projects fail, and many books have been produced on the same subject. So given this wealth of information and well documented past experiences, why is it that there are still so many failures?Getting the project commercially agreed and initiated correctly is half the battle. Whilst problems can arise at any stage of the project leading to overruns on cost or time, and lack of clarity on the requirements can lead to solutions being developed which don’t meet what the business needs, there is no doubt that the a lack of experienced input just prior to and at the initiation phase can subsequently unhinge a project . Businesses today are being buffeted by forces which require them to remain flexible and ‘fleet-of-foot’ to be able to deal with their dynamic marketplaces. Directors and managers have to maintain a keen focus on these even whilst a key project is being defined to introduce efficiencies and reduce costs. This can lead to the responsibility for commercial closure and project initiation being given to those who not have have the experience to successfully negotiate with suppliers nor put the building blocks in place which will provide the foundations for success. At nil plus ultra, our commercial and project managers understand these pressures and support businesses to help them through these early stages. Our senior procurement and commercial specialists guide the business through their make or buy decisions, and provide expert advice during the supplier selection and negotiation process. Without expert input, businesses face many pitfalls, such as inadvertently selecting a solution from a supplier which is still under development, or having their expectations incorrectly set about the features and functions of a particular solution. During the commercial negotiations, our commercial managers will qualify the suppliers, and work with businesses to negotiate the right contracts which accurately meet the business’s needs, clearly lay out both their and their supplier’s obligations and remedies.

Graham Jackson, co-founder of nil plus ultra, an IACCM Fellow and Crown Representative on the Cabinet Office’s Efficiency and Reform Group, is one of Europe’s foremost supply chain and commercial experts. Graham said “Once the commercials are in place, projects can face challenges even at the very start. Business Requirements may not have been clearly defined at the detailed level during the pre-contract stage, may be incomplete, or the boundaries of the scope may be ill-defined, This typically occurs in public sector organisations where the procurement phase is protracted and political changes may lead to a change in policies and decisions within the organisation. In private sector organisations, change may result from mergers and acquisitions, new product development, management changes in the organisation, new challenges in the marketplace, or changes in the business strategy. Analysing how these changes affect the achievement of the quantified benefits is a key contributor to making the right decisions. Every potential change needs to be carefully assessed in terms of cost and benefit and impact on timelines.”

On the supplier’s side, particularly on IT projects, enterprise software is subject to constant revisions and enhancements by product development, and suppliers are often keen to encourage customers to implement the latest version so that this becomes referenceable. But this comes with huge risk, and businesses need to consider carefully whether they can justify taking this risk.

Caroline Birkby, one of nil plus ultra’s most senior Programme Directors, said “Many IT projects have been derailed by an ill-thought out decision to implement the latest version of a product, with product bugs causing major delays. Worse still, decisions to switch to a newer version halfway through a project without a careful impact analysis as well as a full cost / benefit analysis beforehand can lead to major problems and even project termination. If there is a real benefit to be achieved by the business in taking such a step this requires stringent planning. One option is to continue the project on the current version but instigate a parallel stream of work to implement the new version so that in the event that it is not fit for purpose, the project can continue on the original version and deliver the benefits as originally envisaged. Businesses need to be fully aware of the risks and additional costs likely to be incurred.”

Caroline commented that new releases, or ‘bleeding edge’ technology can only get businesses ahead of the competition if it works and delivers a tangible competitive and / or business advantage. The risks of delays due to the newness of the software and undetected bugs might impact business’s achievement of any of the additional benefits envisaged for this version. It may be that the business benefits to be achieved with older, more mature versions are significant enough that the risk of using newer versions cannot be cost justified. Caroline said “Businesses don’t take these decisions lightly, and engage professionals to assist in evaluation of their options.”

Project initiation activities include defining how the supplier and customer teams will interact, which business individuals are key knowledge holders and can articulate the existing business processes, and which supplier resources can work with them to map these to the new solutions. Reporting lines and project governance needs to be put in place, individual terms of reference defined and risks agreed between all parties. This is a busy time for project managers, and if businesses cannot dedicate individuals to carry out these activities, they need professional support.

“The smart businesses who utilise the services of experienced project managers can be confident that the right foundations are being laid for future success while they focus on their business imperatives” – Caroline Birkby

nil plus ultra’s programme managers are experienced and accredited Prince2 and PMI professionals.
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