An investigation of the BBC’s failed Digital Media Initiative project is likely to rehearse many of the previous failures of large scale IT projects. We can all recite them: too ambitious; project scope creep and not enough governance to name but a few.
It is time for Commercial Management to stand up and say we can provide the tools to avoid this for future projects. There are four key areas we should report on monthly which, if carried out correctly, will flag some of the problems early so the Board can make decisions with full knowledge.
- Obligations Register which shows the Suppliers, the Clients and the Joint obligations and how they are being observed on a month by month basis. For each one not being met there can be a clear action plan.
- Change Control Register. A sizeable amount of change controls reflect scope creep and cost increase and such a register is a quick way to indicate possible problems. Anything over the estimated level at project inception should trigger a full review.
- Goodwill Register to cover work at risk and those services given as value added (for example an extra couple of days of project management time etc.). By reporting on this it avoids goodwill or work at risk being used to massage the change control number. I have seen contracts where the supplier was providing 30% of total contract value as goodwill and, needless to say, the Finance Director was not aware of this. After calculating the value and its impact on the bottom line, it was clear that it was time to introduce it as a methodology throughout the business.
- Dispute and Claims Register. By maintaining a good record of these you get a proper overview of the project. Nothing can be hidden in this category in order to massage the overall figures.
Such reports should fit on to a simple one page dashboard that enables the Board to raise questions as soon as the numbers start to move in the wrong direction.
Unlike Project Managers who might be revising the dates of delivery, costs etc. to keep the project “on track”, Commercial Managers should be clear and indicate the percentage difference between the authorised project and the revised project plan. Anything over an agreed set of defaults should trigger a full review. Questions like what was wrong with the initial plan? Why are the costs/delivery/ solution changing so much? What is the confidence level in the new plan being delivered?
Commercial Managers normally sit outside of a project, in chain of command terms, so their report should be directed to the Board to enable the Board to quickly question movements in the project from the original authorised project. The intent is not to be a tell-tale but to ensure the organisation does not end up with a BBC DMI or NHS IT project. Feel free to contact us to assist you.