Delivering IT Projects

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Engaging Consultancy Suppliers

Posted by Cathryn in : Project Management , trackback

Most projects will need some external service or consultancy, whether that’s technical expertise you don’t have, extra staff because your own organisation is too stretched or (please!) someone to help you manage the project. Whether you’re engaging a major consulting firm or a one-person band, it is very important to make sure that they are given a clear understanding of what they’re expected to deliver, when its needed and your criteria for accepting their work. The easiest time to agree all this is at the beginning, before you’ve given them a purchase order and before they’ve committed a lot of time and effort.

As a minimum, you need a contract and a statement of work or small project definition to get started.

For project managers, the most important parts of the contract cover the way in which work is defined and accepted, changing an individual consultant if they are not performing, clarity as to who owns the outputs from the work (it should probably be the client), and how to handle it if work is not satisfactory, how to make a change to an agreed statement of work. This should all be agreed once with a particular supplier and reviewed regularly (perhaps annually) to make sure that it stays current.

Ideally, project managers should not have to get involved in this at all and a line manager will be designated as ‘owning the supplier relationship’ and gives continuity over many engagements. In reality, PMs often find themselves involved in contract negotiations as well as defining statements of work. You may already have a contract with the supplier if you use them regularly and it is important that you find that and make yourself familiar with it if you are going to manage them. If not, you’ll probably want to get a lawyer involved, especially if they have one.

The Professional Consulting Group provides some good templates for members, which are fairly balanced between the needs of client and supplier and particularly useful for engaging small suppliers. My own contracts are based on these.

The document which is most important for the project manager is the one which defines the work to be done. This may be called a Statement of Work, Terms of Reference, or even a mini Project Definition. From the supplier point of view, your work package may well be their project, and so there can be a difference in terminology. The important thing is the content.

Make sure you clearly define :

• the scope of the work, what’s in and, importantly, what is not in
• the products to be created - documents, software, installed packages, training, presentations, web sites, procedures. Acceptance criteria for these products are essential. Agreeing them now saves arguements and misunderstandings later.
• any assumptions that are made. The supplier should be able to assume that you will give them access to information they need, and people in your organisation. You should be able to assume that their staff a competent. Write these down, and make sure they are validated
• how you will work together. Is the supplier carrying out a mini-project, managing themselves to complete it? Or are they working in with the project team, and to your methodologies. If you need a weekly report, say so.
• any known risks or issues. It is worthwhile doing a risk assessment, to make sure you’ve thought everything through
• any constraints or interfaces What relies on this work package? What does this work package rely on
• where the work will take place, and who will do it. If its happening at your premises, you need to arrange desks, connections for laptops, access to the internet or whatever is agreed
• a plan for delivery. If it is a fixed price contract, the supplier may not want to discuss his / her resourcing, but there should at least be an agreed joint schedule which can be monitored
• the commercial basis for payment, whether that is time and materials, staged payments, payment on acceptance or whatever. Terms of payment should be covered in the contract
• agreement on governance. Client project managers often have a wider range of responsibilities than supplier ones, and so it can be appropriate to have governance between the client project manager and a more senior manager in the supplier organisation. Alternatively, a ‘project board’ may be set up including the client’s supplier manager and a senior manager in the supplier organisation.

Ideally, this document will be produced by the supplier based on information provided by the client and their own understanding of the work to be done. However, many smaller suppliers are not well equipped to do this and if they are not providing project management services themselves, it may be easier for you to do this yourself. The most important point is that both the supplier and the client understand very clearly what is to be done, and are signed up to do it.

I use a template which you’re welcome to try. I’ve used this a client as well as a supplier, and found it is effective in both situations, although I tend to have the ‘terms of engagement’ set out as a separate schedule to my contract. My templates are kept on my website, and are provided on an ‘as-is’ basis. If you do use them, and can suggest improvements, please let me know.

In a couple of weeks, I’ll talk about managing the engagement once its underway, and finishing an engagement.

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