In my last post, I covered the importance of developing a comprehensive design document to help create a road map for a successful capture software implementation. Of course, at Datacap (an IBM Company), we have alternatives to the design document for smaller projects or for those customers who don’t believe a full-blown design specification is warranted, but in general, we believe the design document is the best way to assure a successful software implementation.
Much more broad and ill-defined is the distant cousin of the design document, known as the statement of work (SOW). The SOW typically outlines the tasks to be completed and the estimated number of hours to complete these tasks, based on a limited amount of discovery (in some cases just a sales call). While payment can be on an hourly/time and materials basis, most end users will still want to know the answer to their initial question — how much the whole thing is going to cost — and insist on fixed pricing.
Insisting on fixed pricing for a project that hasn’t been fully defined is a sure-fire way to get your engagement off on the wrong foot. The professional services vendor will no doubt pad the estimated hours to protect against unforeseen delays, misunderstood requirements and the inevitable scope creep that rears its ugly head in any sizable implementation. You, the customer, will then negotiate down the price, forcing the services provider to either lose the business or try to fit 10 lbs. of professional services into a proverbial 5 lbs. bag. In this scenario, almost inevitably somebody has to lose.
What, then, can be done to minimize the risk that your professional services engagement becomes an adversarial stand-off and maximize its chance for success? Here are some basic guidelines that should help.
1. Prepare
The more fully thought-out (and documented) your project is before engaging any professional services provider, the better off you’ll be. Simply put, there is no such thing as providing too much information.
Have you identified a “go-to” person or project champion on your side that will be the focal point for all interactions with the vendor? Have you thought through each possible business scenario, workflow, and use-case? Have you collected all the necessary technical information on your existing systems (and identified a technical contact for each, to whom the integrator can reach out with specific questions)? The more time you spend preparing, the less time a service provider will have to spend (and bill) for doing it.
2. Communicate
Make sure whoever you hire has a thorough understanding of the underlying business problem you are trying to solve. A poor or mediocre provider will begin designing a solution immediately; a good one will take the time to listen.
3. Negotiate Price, not Hours
In these challenging times both the customer and the service provider are under increasing pressure to win business, control costs, and deliver solutions cost effectively. No doubt you’ll be sending out RFPs or requesting quotes from a number of vendors; perhaps you’re even considering using the services of an offshore company to lower costs. You will have followed all the advice given above, fully documented what you want done, communicated to each vendor effectively the business problem you need solved. Depending on the project, the underlying products and technology, and the service provider, you may get a wide range of prices back.
If you think the price quoted for your project is too expensive, tell your provider that they need to lower their rates, not that something they think will take four weeks will only take two weeks. By all means inquire if their time estimates are out of skew with others you’ve received; perhaps there has been a miscommunication somewhere during the process.
However, arguing how long a particular task will take to complete is a fool’s errand. Your solution provider is, presumably, the subject matter expert, otherwise you wouldn’t be hiring them. If they tell you something is going to take six weeks, either take them at their word or find another provider. Having them make concessions will only force them to cut corners and/or take unwanted shortcuts, set unrealistic timelines and expectations, and your engagement will be doomed from the start.
With the proper foundation, professional services doesn’t have to be a zero-sum game where one party winning necessitates the other losing. The right professional service provider will be looking to develop a long-term relationship, with both parties equally incented to put in place the right solution to grow your organization — and win future business — not just for the current engagement, but for the years that follow.
