Don’t Be Guilty, it’s Expensive

On budget, on time - or content?

Too often development projects are either behind schedule or over budget. Or projects didn’t quite reach the goals they were set up for, especially the more challenging projects.

Could it be, that failing a project is not such a bad thing for everyone?

Roles for vendor and clients

The goal for a limited company is to profit its shareholders. When IT-vendors are usually these kinds of companies, it’s a good thing to keep that in mind. Usually most clients’ goals are making profits too. If the companies are successful in their goals, it’s only a good thing. More tax revenues to have.

The basic idea of a successful development project is that everyone reaches their goals.


Don’t be guilty, it’s expensive

This has happened: Client tells in the beginning of the project that they do not need any project management. “This is a fixed-price project, we know how much it costs. If it goes overtime, we get a discount”.

And when this fixed-priced project has been finished, we hear that it has gone overtime and over budget. Root cause for failure: the client didn’t do their part –> Client becomes guilty –> So all the expenses from going over budget and overtime goes to the client. Fixed-priced doesn’t stay fixed-priced after all.

Couple of examples, how one might become the one who pays the bills:

  1. Specifications, that are the basis of the contract, are not done properly –> Solution realized doesn’t support the business –> Change requests –> Client pays.
  2. Server purchases, that are the client’s responsibility, are not done on time –> Software installation delayed –> Schedule doesn’t hold –> Client pays.

Who failed, who didn’t?

The project from that example failed. Well, at least from the client’s point of view, but not necessarily from the vendor’s point of view. Usually vendors create contracts so that the client’s negligence doesn’t interfere with vendor’s profit margins. This is to make sure the goal consistent to limited company law is fulfilled.

Smarter contract guarantees success – still, don’t be guilty

To secure the success, there might be contracts that try to make vendors into partners. Together we succeed, or together we fail. Most of the time these contracts work how they are supposed to, they help to succeed. But nevertheless, don’t choose the role of guilty. It can become expensive.


An example of a project that almost succeeded

We were celebrating one successful project in an event. Everything was done on time, on budget and all the goals were reached. There were nice speeches and hugging. “We did it!”
But at the bar vendor’s director starts to open up: “Well that was not a good project”.
My mouth dropped open: “What do you mean?!”
He answers: “You did such great work with the use cases, we only received a couple of small change requests. We didn’t meet our sales goals.”lp.

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