For some, IT project partners, vendors and suppliers can be a source of pain. Some IT Project Managers may even be on the brink, considering a partnership termination. But, as some will attest, termination is time-consuming, costly and bitter; where the eventual fallout could even negate all the good that came before. In situations like this, it’s critical that all the possible options are evaluated, as termination shouldn’t be taken lightly and should only ever be considered as a last resort. That’s why we’ve outlined these 8 steps to saving your IT project partnership.
Breakdowns in communication and misunderstandings of each party’s goals, can lead to a frustrating deadlock that sees lower than expected performance, shirty email exchanges, and a great number of calls missed because people were in ‘meetings’.
Relationships can be saved, even when the outlook is bleak. But it takes a lot of effort from both sides to identify the problems and the various elephants in the room, so that both parties can work towards restoring trust.
This eight step checklist will help you to identify the implementation issues you need to discuss with your vendor. At the end of the process, you will have gathered the evidence you need about what has gone wrong, what you want to change, whether that evidence supports your business objectives and what you want to achieve. It may also give you a steer on whether the relationship can indeed be saved, or if termination is inevitable.
Step 1: Evidence the expectations you had at the outset
The starting point is to remind yourself what business objectives you were expecting from your IT project in the first place. These should be detailed in your original business case and possibly your tender documents.
Now ask yourself:
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Have these expectations changed since?
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What were the operational improvements you expected, and what did you believe the vendor said it would deliver, to help you achieve your operational improvements?
Next, list all the material challenges you’re experiencing with your vendor’s implementation, which don’t align with enabling the business outcomes you originally expected. Do you have details of how long those challenges have been outstanding?
Step 2: Understand which expectations are actually in the written contract terms
Once you’ve reminded yourself of your original expectations, you’ll be able to check how these are reflected in the written contract terms. Are all of the schedules – your requirements, expectations, implementation plan and so forth – specifically referenced in the written contract or are you assuming they are implied into it?
How the written contract was developed is also important here. If the contract was:
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1. Negotiated from scratch, then the contract terms are unlikely to help you to get the project back on track, if they can be interpreted too widely.
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2. The vendor’s standard terms without modification, then under the Unfair Contract terms Act (UCTA) it will be easier to deal with terms that might not work in your favour, when recovering the implementation.
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3. The vendor’s standard terms with some modification, then dealing with the ramifications can involve more detailed work, but the contract can still be re-aligned to meet your expectations, again using useful insights from UCTA. Check if both you and the vendor actually signed the contract. We occasionally see contract terms that have been agreed but not signed or that schedules haven’t been attached to. This can cause misunderstandings that undermine trust.
Your first port of call should be to agree in principle, your business objectives, then negotiate with your vendor to restructure the contract terms to align with those objectives. This will enable both you and your vendor to drive the right behaviours, to reshape the terms and enable on-going agile scoping of the project. This helps your vendor to provide you with better advice and ask you the right questions, and avoids future misunderstandings over their expert responsibilities.
Step 3: Quantify your unexpected costs
The third action is to quantify the unexpected financial costs you have incurred, which you believe have primarily arisen because of your vendor’s inability to deliver an appropriate system. These include, but are not usually limited to:
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The time you’ve spent working with the vendor to address implementation issues
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The costs of external advisors you’ve had to engage to help remedy the position
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Any legacy system, maintenance and development costs you’ve had to continue incurring
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The costs of interim or temporary staff you’ve had to employ, to ‘keep the wheels on’ by operating your business-as-usual processes.
This is important because if the implementation problems cannot be resolved due to your vendor not reasonably delivering to your expectations, then recent case law usually allows you to formally reclaim these costs from your vendor, to the degree your vendor caused the issues you’ve experienced with the system implementation.
Step 4: Understand your respective contractual obligations and responsibilities
A vital step in understanding the cause of poor performance is to ascertain who was contractually responsible for certain key aspects of the relationship.
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Who in the written contract terms was responsible for project management, to achieve the implementation’s objectives?
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What was the vendor’s role in managing the project, and how did your own people participate in (a) project management and (b) managing the written contract between you and the vendor?
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Was it a term of the written contract that there would be a true ‘partnership’ approach to managing the relationship or was it expected that each side would just manage their own elements of the project?
Next, determine the extent to which you relied on your vendor’s advice. This has a key bearing on the vendor’s expert responsibilities:
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Did you rely on the vendor’s advice as to the benefits the solution would bring to your organisation?
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If so, are there any documents to evidence that you had this reliance, such as the vendor’s proposal or bid response, which outlined the benefits you were expected to receive from the implementation? Don’t be concerned at this stage whether you believe those documents are part of the contract schedules.
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Alternatively, were you happy that you undertook enough due diligence on the vendor and its solution, so you did not need to rely on its advice as to whether its solution would be fit for its intended purpose?
Step 5: Work out your objectives in recovering the project with your vendor
To get your implementation back on track, it’s important to have clear objectives and to document them clearly.
What do you believe is an appropriate outcome from bringing this matter to a head?
Is it to:
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Get the vendor to resolve the issues you’re experiencing, prevent further issues arising and implement a solution that helps you achieve your business outcomes?
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Resolve the problems and, in addition, receive compensation or reduced fees for the problems you perceive the vendor has caused you?
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Get out of the project quickly, but with minimum technical, financial and operational risk, so you can bring the project back in-house or buy time to put a replacement vendor in place?
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What do you think the vendor would consider an appropriate solution?
Your chances of rebuilding the relationship and getting implementation back on track are enhanced if you also consider the vendor’s position in your planning. In summary, work out what it would take to satisfy you and what you believe would be an equitable solution for all involved.
Step 6: Ensure you cover all of the other pertinent factors
In addition to the actions we’ve listed above, you need to consider a number of general points.
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First, it helps to have an independent view of your situation, to ensure your perception of events is fair and equitable.
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Have you had your expectations, contract terms, requirements, schedules and perceived implementation issues independently validated?
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If so, did this review suggest where you and your vendor need to change behaviours, so you can rebuild trust and get back on track?
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Overall, do you believe the evidence you have of your vendor’s poor performance would stand up to independent scrutiny?
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Having been through these steps, do you think there are any other factors that could have caused those issues?
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Could there be more than one cause of the symptoms you’re experiencing?
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Do you believe your expectations were not appropriately quantified or sufficiently transparent, so your vendor couldn’t understand them? Note that misunderstanding your expectations doesn’t let the vendor off the hook, because of their expert responsibilities and duty to warn.
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Could it be that the problems are predominately due to your vendor’s lack of competence?
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Was time of the essence in achieving the end-to-end implementation? Would you know whether timing was an express part of the contract?
You also need to consider whether some of the problems could have been caused by your own team. For example, your team’s actions could have contributed to the problems you are experiencing, by preventing the vendor from performing appropriately. In the original contract, you will also have agreed to provide appropriate resources, to allow the vendor to achieve your outcomes. Did you provide them, when you were supposed to? Alternatively, some symptoms of the poor implementation may have stemmed from your vendor’s due diligence – or lack of it – before it signed the contract with you.
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In hindsight, do you believe the vendor should have asked more questions about your expectations, to ensure your expected business outcomes were clear and that you would be able to achieve them through the implementation and correct use of their system? If so, in which areas?
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Could the vendor have warned you more clearly about any of your objectives you think it has misunderstood? If so, have you had any conversations with your vendor where it was inferred your vendor could have better advised you of the compromises you would face, before accepting the agreement or starting the implementation?
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Is it also possible that your own team might, albeit inadvertently, have hindered the due diligence process? When the vendor was originally investigating how it might achieve your business outcomes, were all of your responses to its questions factually correct?
Communication with your vendor about the issues you’re experiencing is another key point. It’s always helpful, although not mandatory, to have been documenting the problems to the vendor on a regular basis, in writing or by email. In addition:
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Have you escalated those issues in line with the procedure in your written contract terms?
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Do you have a formal issues log, with vendor acknowledgements of the problems being experienced?
Finally, consider the current state of your relationship with your vendor:
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How strong is the relationship?
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Have you withheld payment for invoices that you dispute due to the specific deliverables they have provided? If so, for what specifically?
Step 7: Sanity check your evidence
Once you’ve gathered your evidence, consider whether it reflects the situation as you thought it would, and that you have a clear understanding of:
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Where you have fulfilled your obligations to the vendor and where you have not.
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Where you believe the vendor has provided fit-for-purpose elements of a system to you, and where it has not. At the end of the sanity checking stage, you should know whether your evidence fairly reflects both your performance and your vendor’s. Evidence is often imperfect. All you are looking for is whether, on balance, the vendor has delivered a fit-for-purpose system and whether your own team may have materially hampered the vendor in any way. Having undertaken the previous seven actions, you should now have a much clearer idea of whether your vendor has discharged its expert obligations, including its duty to warn you of issues that, in its experience, may have a material impact on its ability to provide a fit-for-purpose system to you.
Step 8: Compile a schedule of points to discuss with your vendor
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The first seven actions will give you a clear idea of what you need to communicate to your vendor, so you can start to rebuild the relationship and get the project back on track.
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Start by creating a basic chronology of events, from the inception of the relationship. This will include the background to why you selected the vendor and felt comfortable with its expertise. Explain what you perceive to have gone wrong, your evidence that supports these perceptions and the work you’ve done to review the evidence. Next, state your objective in raising these issues. Explain the business outcomes you would like to achieve by getting the implementation realigned and why you want this relationship to work. Highlight the behaviours on both sides that seem to work well, and those that appear to be misaligned to a successful outcome. Ask the vendor for its views, given the evidence you have collated, of what behaviours it thinks both its own team and yours need to change, on what basis and how. Set out the timeframes by which you would like to start the reimplementation and say that you would like to work with your vendor to determine how to measure the success of that rebuilding.
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Finally, have pre-prepared dates for when your senior officers will be available to meet the vendor’s senior officers, to agree how to move the relationship forward.
Time to turn it around
With the evidence you’ve compiled, you should now be in a better position to have a frank conversation with your vendor. It’s important that you approach the meeting in a positive frame of mind though, no one takes criticism well so your evidence and your findings need to come across in such a way that you don’t ruffle their feathers too much whilst still getting the point across. In offering them an olive branch, you’ve taken the first step towards re-alignment that will enable both you and your vendor to work more closely to realise your ambitions. Be clear about what the business needed the project to deliver, and evidence how well, or not well, that has gone so far; taking pains to illustrate the gap between where you are and where your organisation should be by this point. Be open to your vendor’s feedback and be sure to find out whether there are any other factors at play that you might be unaware of. If all goes well, you should leave the meeting with a definitive and positive course of action.
Summary
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The key to fixing poor implementations is identifying the cause of the issues, rather than getting wrapped up in the symptoms.
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There will often be several causes, some of which will result from your own team’s behaviours and some from the vendor’s.
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The eight actions listed below will establish the root causes of poor implementation, show where behaviours on both sides need to improve and where re-scoping is required.
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Gathering this evidence will help you remove any subjectivity and assist you to work with your vendor to significantly improve implementation, rebuild trust and achieve your business outcomes.
