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Design technologies for the implementation of billing systems for corporate clients (part 2)

We work with risks at the global level


We in the last article about design cases talked about problems. In one example, a waterfall had to expand the boundaries of the project, change the BPI, and reconcile budgets. In the second project with a flexible methodology, the customer did not benefit at all. In the third case, the hybrid approach allowed us to complete the project successfully and on time only because the project team on the part of the customer was well motivated for the result and, recognizing the limited resources, introducing new settings, removed less priority tasks from sprints. We will refer to the first article, so if you have not read it, it makes sense to look at it at least diagonally - here is the link .

It is easy to retroactively describe these cases and designate them as successful or unsuccessful. But in the process of working on them, everything looks more complicated and it is impossible to indicate a negative result in advance. Moreover, financial and reputational losses on corporate projects can be very, very large.

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First of all, we assess the risks from the point of view of us, as an executing organization for an automation project:

  1. We determine the main risks of the new project and their criticality.
  2. We compare the project goals announced by the customer with the fact that we can consider them to be real needs based on our project experience.
  3. We determine the priorities of the deadlines, budgets, declared functionality.
  4. Then we must make fundamental decisions about the scenarios of reaction to the risks that have developed.
  5. We fix an acceptable amount of losses for ourselves if everything went very badly.
  6. We estimate how much the volume of risks is increasing in the whole portfolio of projects that Forward is currently conducting, if we take a new project.
  7. And in the end, we decide how much loss or reputation damage will force us to initiate legal proceedings, how much we are willing to spend on legal support.

Importantly, here we assess the risks for us, as an organization as a whole, that can damage our integrity, as a structural unit and lead to the collapse of the organization. A more detailed risk assessment of a particular project is carried out within the framework of the project itself and is recorded in the project documentation in accordance with the chosen project management methodology.

Now about the risks that are beyond our control and the key aspects without which it would be impossible to complete the work in the described projects without reputational and financial losses.

It does not depend on us


Here is a list of risks that we affect little or cannot affect at all, but we must consider:

  1. Loss of financial stability
    The Customer is not able to pay further and freezes / terminates the project.
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  5. Regulatory changes
    For example, the law of Spring. There are things that you donā€™t know in advance when you start work. But these changes can simply kill the projectā€™s economy, forcing the customer to abandon the project.

These risks are easily combined in real projects. We had such that on one project the regulator blocked financial flows and the customer was forced to freeze part of our activities. Then the customerā€™s management changed and the company management paradigm was revised, respectively, it was required for the implementation of the subsystem that were different from the originally planned.

Straw must be laid in advance


And by straw we mean correctly drawn up contracts and agreements.

If under the contract we only have to, we have no rights, and the customer is not responsible for anything - the price of such a contract is worthless. It doesnā€™t matter how good personal relationships are with customer representatives. Even in a short project, changes can occur that will fundamentally change the map of forces on the project. The owner may change, a key functional customer will leave the organization, the company will begin financial difficulties.

The agreement must explicitly spell out the possibilities for changing the boundaries of the project at the initiative of each of the parties and under what conditions changes can be initiated. Saving on lawyers when drafting and concluding a contract is impossible. Moreover, it is necessary that the lawyer is well versed in our specifics of activity or specially spend time studying the issue in order to correctly set the working conditions.

Is there any communication? And if I find it?


Negotiations are the cornerstone. The basis of fixed obligations and responsibilities, formed expectations and a common understanding of what is happening.

Without a good negotiator, the sales funnel is sharply reduced, because it simply does not work to convince the customer to work with us. In the project where the risks worked, the negotiator will have to justify budget changes, agree on new terms or dividing the functionality into several phases. In the worst case scenario, it will be necessary to complete the work with the client on some neutral note, minimizing losses for themselves.

For example, in the second case from the last article, we talked about the fact that the customer did not get the finished result, at some point scoring to continue work and not forming a new sprint. If we understand that the project has frozen, then it is necessary to summarize the work performed, present this information to the owner and try to revive the project. This is also a task for the negotiator.

The negotiatorā€™s tasks also include helping functional customers with communications within the customerā€™s project team if they lack their competencies.
Our negotiator, depending on the size of the project, its features, stage of the negotiation process, can be sales, project manager (RP), account manager, director.

Sales conducts initial talks and presentations. In large projects, after successful initial negotiations, sales transfers information to the project team and is no longer involved in negotiations. In small projects, sales can take on part of the communication with the customer, partly fulfilling the functions of a salesperson and account manager.

RPs are often perceived as a manager of a purely technical nature, who cannot discuss their decisions on business logic with customers. Therefore, it is necessary to connect heavy artillery.

An account manager is a high position and the account should be included in the same circles with the customer. Then we get an open and substantive conversation. In most projects, it is the account manager that is the main negotiator and is generally responsible for managing risks on the project. If necessary, the account attracts directors.

If at the initial stage of the discussion of the project directors were involved to discuss critical issues, then lower-level managers are afraid to violate the agreements and escalate problem situations so as not to take responsibility.

The algorithm for analyzing the triggered risk is approximately the following:

  • We analyze the problem, its causes.
  • We develop options for the win-win model, arrange them in the form of a road map.
  • We sit down at the negotiating table and openly offer options to the customer.

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Is there a correct contract and negotiators on the part of the customer and the contractor? Sellers and functional customers agreed on the desired, estimated the amount of work? Even the decision makers agreed on everything? It's still too early to relax.

Ahead of the project itself is months, and sometimes years of work with deadlines, activation of work on the stages of the project, commissioning of the functional to experimental and industrial operation, user training.

For the work to be effective, adequate motivation and interest of the teams of the customer and the contractor are needed. And itā€™s good for us, as performers, to know what motivation the customerā€™s team has. And sometimes it even makes sense to focus on this at the initial stages of the project in order to better understand the balance of power and interests. You can offer the decision maker of the customer to introduce special motivation for his team.

Globally, there are two approaches:

  1. Monetary

    When the project is completed on time with maintaining margin, the team receives 5-7% of the cost of the work.

    In practice, the circuit rarely works. Most projects are not completed on time, because in the implementation process there are many changes. Because of this, the participants become demotivated - they worked for almost 6 months at night to meet deadlines, and now the setting has changed, the basic plan of the project has been rewritten, the calendar has been updated and the total period has increased by three months.

    The gap in the interests of performers and business. Contractors are waiting for incentives in the specified time period and against changes affecting the budget, labor costs and the shift of time. And business no longer needs the original statement of the problem. The business realized that now the trend is different.

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    The third element is initially decent earnings. Without this, you cannot recruit a qualified team for a project. Without this, the specialist will not think about the quality of the code or the correctness of the business process being developed, but about the fact that he is paid little.

In the third case with a hybrid methodology, we had tight deadlines for launching MVNO. The customer team was highly motivated on the same thing as us - a successful launch. There were no undercover games, competition between units and latency. There was an active interaction, the desire to agree to obtain a result. And as a result, success is the timely launch of MVNO.

Conclusion


Business automation is a greater risk for the client than for us - performers. But first of all, it depends on us how the situation will develop, in case of problems on the project. We must be able, without fatal damage to the client and ourselves, to bring the project to launch and not leave the client to the mercy of fate.

After each project, we conduct a retrospective. We recall what we had at the input of the project in terms of work, evaluation, cost and compare with what happened in the end. We analyze the deviations and the risks involved: where we made a mistake in the assessment, where the customer himself changed the task, where the problem did not depend on us at all. The retrospective objective is to increase the accuracy of labor input estimates in similar future projects.

Retrospective Results - Training Material. Our employees see in what places the lack of work of the analyst and the shortcomings of TK result in unnecessary labor costs. We also create a repository of the best solutions. And when in the new project we see that the tasks are similar, we turn to the repository - reuse it, and not invent it from scratch - thereby reducing customer costs.

For ourselves, we have derived the following axioms:

  1. Document all decisions and arrangements.
  2. To approach negotiations and the formation of expectations as a process. Purposefully agree, do not drop everything and do not go into silence. Continuously receive feedback from the customer.
  3. Understand for yourself the importance of motivating our team on the project and explain the decision-maker of the customer the importance of building a system of motivation for the result of the customer team.

Share your experiences in the comments. What causes you the most problems on projects? What risks were triggered on your projects and how did you deal with the consequences?

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