Project Management: The Gap Between Want & Get
Unreliable spec coupled with a fixed priced project is the ultimate Project Manager’s nightmare. But even though we know this, there is still often a deficit between the needs of the project and the budget assigned to it.
The main block to solving these sorts of problems is the issue of risk and who dares to take it, and in a fixed price project the risk usually lies with the supplier, whereas with T&M the customer tends to take the risk. The risk in most projects is overrunning, with the cost of any work or resources after the scheduled completion date falling with one of the parties.
When a project is fixed price, theoretically it should be the supplier who is willing to shoulder the risk (and any related cost), as it is they who have set the deadline and all associated milestones. If a fixed price project comes in late then the cost is covered by the contingency that they added into their pricing, and if it comes in early then it means they get more profit. So everyone is satisfied, unless the project is completed so late that it takes the profit and contingency along with it, but then that’s the suppliers fault- right?
Wrong. In nearly all cases it is likely that the suppliers initial estimate was negotiated down in terms of cost, or up in terms of spec. They know what they can do for waht price, but most customers will negotiate and if the supplier doesn’t agree then plenty others will so they are forced to come to an arrangement-often a fixed price project planned with very little margin for error, which is most certainly a risk.
Even in cases where an overrun is completely the fault of the supplier, they still need to make a profit, and running at a loss is not a way to do this. So when this occurs a supplier may scale back the project, buying online drugs underdeliver or ‘cut corners’. Then the dread ‘change request’ excuse rears its ugly head, and we’re in territory no one wants to be in!
One potentially effective way out of the problem is to assess what the initial needs were, rather than how they are to be fulfilled or what the cost implication is. Then we can ascertain the difference between what the customer wants and what they are going to get.
Project Managers can minimize the size of the gap by ensuring that the customer can see what they are going to get as soon as possible, which may mean showing small portions of work at a time. By doing this the want vs get battle is reached and resolved sooner and the project can continue efficiently.
This is cheap drugs no prescription referred to as “Minding the Gap” and knowledge of this has grown from the realisation that on large and ongoing projects it is rare there is only one gap, and so the need to manage the gap is heightened, and can be helped by employing project management software.
Want to find out more about project management software, then visit Countersoft’s site to see howagile project management can help you in your projects.