Monday, 19 October 2015 07:09

From the Sponsor’s Desk – Even Project Managers Sing the Blues

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Let’s be honest. A project manager’s authority typically revolves around how to deliver a planned changed to the sponsor’s who, when, what, where and why dictates. When a sponsor doesn't make an essential call on a project issue, the PM can be left in limbo.

In this case, over a three-year period, the project in question went from a top corporate priority to an important project, to just one of the many things that had to get done. Sponsor passion for the endeavour went from sizzling hot to ice cold. The PM’s ability to get key decisions made followed the same pattern, from immediate to never. What could the PM have done differently? We’ll see.

Thanks to G.D. for the details on this case.

The Situation

This financial services organization was experiencing a decline in the rate of growth for a key product line. The products in question were administered with largely manual processes. They were slow, error prone, and costly. The company’s potential customers were turned off by the whole exercise. As well, some their competitors had solutions in place to capture, evaluate, and respond with a timely decision, in many cases in real time. With these other appealing options available, the company was losing business.

The VP of Administration (VPA) attributed much of the decline to the slow, cumbersome process of capturing the prospect’s information and the failure to provide a timely decision. With the executive committee’s support, the VPA launched a project to automate the evaluation and approval process.

Related Article: Best Practices Accelerate Value Delivery

The Goal

The VPA’s goal was to reduce costs, improve service, and increase sales through a streamlined capture, evaluation, and approval system. His initial target for real-time approval was 20% or more of the submitted applications. He wanted a solution implemented within twelve months with a target return on investment of 25%.

The Project

The VPA and the CIO discussed the project’s leadership needs and selected a contract PM that had worked for the organization before and had shown an ability to get things done on a number of different fronts. Given the urgency and tight timelines, the PM’s first challenge was to assess the available alternatives and select the best one to achieve their goals.
The target solution would affect the sales organization as well as the administrative staff so the PM called on the VPA, the project’s sponsor, to meet with the Sales VP to get his backing for the endeavour and provide the needed resources going forward. The Sales VP was familiar with the challenges the company was facing and fully supported the project. He promised to participate in the steering committee with the VPA and CIO and provide timely decisions as the need arose.

With the senior executives lined up and on side, the PM and his team proceeded to build the assessment criteria and identify and assess the available alternatives. The VPs had provided the requested subject matter experts. They were experienced, motivated and passionate about solving the problems they had lived with for far too long. In two weeks, they had an assessment criteria draft ready for review by the executives. It was turned around in two days with some minor adjustments. Two weeks later they had five possible alternatives identified including an in-house developed solution, one cloud solution, and three competitive software packages. After a half day review with the VPs, the list was cut to three options. The in-house solution was dropped along with two of the packaged software solutions.

The PM and his team went to work assessing the short list alternatives. One option rose to the top. It seemed to have the best functional and non-functional coverage and the greatest potential for early delivery. Again, the team reviewed their findings and recommendations with the executives in a half day session and emerged with a decision. They would acquire a software package that appeared to cover most of their needs, could be implemented in three stages (a couple of back end, administrative components and a web based front end), and had a good track record. The only challenge was the price. It was the most expensive.

The PM brought in the manager of Contracts in IT to negotiate the contract with the vendor. Because of the target 25% ROI, the Contracts Manager suggested a fixed price contract as a means of controlling potential cost escalation. The selected software vendor worked through a systems integrator (SI) so the discussions took longer than planned but in the end, a deal was reached. The contract was signed by the VPA and CIO and the real work began.

The Administration and Sales subject matter experts defined the new business processes, evaluated the chosen solution against those needs and documented the changes required. The turnaround from the SI was terrific, and the first back-end component was implemented successfully in six months. The same approach was used for the second back-end component. However, turnaround slowed dramatically. The SI maintained that the development budget had been consumed, and they were now restricted to the annual support amount specified in the contract. Of course, the PM had kept a close eye on costs and resources and was surprised by the SI’s claim. It turned out that the SI was adding a 25% overhead charge to the direct labour costs. The contract was not clear on the matter, and the SI refused to budge.

The PM approached the VPA for addition funding. His team had put together a business case that demonstrated the incremental funding for the second stage enhancements would still support the 25% ROI target. The sponsor indicated he’d review the plan and get back with a decision. Unfortunately, the sponsor was wrapped up in other priority initiatives and the reply didn’t come for six weeks. That put the twelve-month implementation target out of reach. The same challenges persisted with the third stage web front- end. Changes required by the business were prioritized and queued, and the SI nibbled away using the limited annual support budget. Appeals by the PM and affected management in the Administration organization were rebuffed or ignored outright. The sponsor had other priorities on his plate.

The Results

During the first stage work, the steering committee met monthly. The project progressed smoothly, and there was little need to engage with the executives beyond the monthly meetings. After the first stage implementation, the steering committee stopped meeting on a regular basis. When progress slowed because of lack of funding, the PM dealt with the sponsor. The CIO and Sales VP were essentially out of the loop.

The project took over three years to implement fully. Cost reduction, service improvement, and increased sales targets were mostly realized, but months or years later than planned. Even the realized ROI was close to target, at 21%. Timely decisions on the incremental funding required would have boosted the benefits significantly.
In the second year, the PM became totally frustrated with the drop in priority and lack of progress on funding approvals and resigned. Even project managers sing the blues, on occasion.

How a Great PM Could Have Improved the Outcome

The PM had a great financial case for additional funding, but he didn’t have the authority to make the decisions. Only the sponsor could bless the incremental expenditures. And the sponsor’s attention was directed elsewhere. It’s a difficult situation. But the PM had a couple of options:

  • Executives usually have overloaded plates and overbooked calendars. That can easily create an “out of sight, out of mind” condition. The challenge for this PM, for all PMs in fact, is to make sure your project always stays “top of mind”. That is the only way the organization to going to recoup those project expenditures. How do you do that? One way is to use a Decision Framework (use Project Pre-Check or create your own) and monitor key stakeholder satisfaction at a more granular level, on an ongoing basis. That cements continuing engagement.
  • Keep those steering committee meetings going. If attendance starts to drop off, change the content so the attendees will get value and provide value in return.
  • The PM could have worked with either or both the CIO and Sales VP to exert additional pressure on the VPA. The Sales VP especially had a vital interest in seeing the problems rectified. At the extreme end, if the CIO and Sales VP were on side but their entreaties ignored by the VPA, the PM could have encouraged them to engage the CEO. After all, the project was a corporate priority when it was launched.

Sponsor attention is vital but not always present, as in this case. So, if you find yourself in a similar situation, think about how you’re going to ensure ongoing commitment and engagement from your key stakeholders. Also, be sure to put these points on your checklist of things to do in future endeavors so you too can be a Great Leader. And remember, use Project Pre-Check’s three building blocks covering stakeholder, the decision management process and Decision Framework best practices right up front so you don’t overlook these key success factors.

Finally, if you have a project experience, either good or bad, past or present, that you’d like to have examined through the Project Pre-Check lens and published in this blog, don’t be shy! Send me the details and we’ll chat. I’ll write it up and, when you’re happy with the results, Project Times will post it so others can learn from your insights. Thanks

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Drew Davison

Drew Davison is the owner and principal consultant at Davison Consulting and a former system development executive. He is the developer of Project Pre-Check, an innovative framework for launching projects and guiding successful project delivery, the author of Project Pre-Check - The Stakeholder Practice for Successful Business and Technology Change and Project Pre-Check FastPath - The Project Manager’s Guide to Stakeholder Management. He works with organizations that are undergoing major business and technology change to implement the empowered stakeholder groups critical to project success. Drew can be reached at drew.davison@projectprecheck.com

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