WHAT ORGANISATIONS NEED TO CONSIDER

 

With almost 70% of all software development projects running substantially over budget, organisations have come to understand the importance of controlling and managing projects.

Too often, organisations fail to dedicate adequate resources and the right level of control to allow projects to stay on course, consequently risking the project running out of budget.

This article outlines the critical steps organisations need to take to ensure projects stay within budget.

Client stakeholders

The client represents a key player in the development of projects and as such should be heavily involved in the engagement process. Before engaging with a software vendor, the client will determine the amount of funding and resources that will be allocated to the project and must ensure that this is adequate to cover the agreed-upon requirements of the project.

The resources allocated to the project will need to comprise of the key stakeholders including – end-users and the decision-makers. Allocating irrelevant resources or resources who are not in a position to make decisions poses a significant risk to the project.

Positioning those with the authority to make decisions quickly at the forefront of the project allows the client to effectively communicate their needs and avoid any miscommunications at the point of contact. Clients who fail to do this, risk the
possibility of adding considerable costs by constantly changing the system due to loose definitions of their needs or constantly changing their minds about their requirements.

Clients need to be realistic about the budget for a project. A software development client-vendor relationship should be based on a mutual goal of success. Clients that aggressively pursue the vendor to reduce the price of the project could leave a vendor with no option but to cut costs which could potentially jeopardise the quality, and ultimately, the success of the project.

It is important for the client to understand that software projects can only succeed in the context of collaboration and mutual support. As such, a key requirement would be to dedicate as much effort and time to the project to ensure it remains within the predetermined budget.

Vendor stakeholders

Project Managers

Within any client engagement, it is the role of the project manager to understand the key goals of the project and how the client intends to receive a return on investment. In doing so, it is easier to communicate the plan to the team and ensure
the schedule is followed to successfully deliver the client’s requirements.

Project managers will need to proactively manage risks and problems by reviewing the business case in conjunction with the progress of the project to ensure business objectives are still being met. This will involve reviewing the budget on a daily basis to allow a clear view of resource usage to be acquired.

Additionally, project managers will need to make sure the right stakeholders are engaged in the process. It is important to actively involve those who have the authority and ability to make decisions quickly to drive the project in the right direction. If the client is fully informed of the process and the state of development simultaneously, the project is likely to
come under or within budget.

The underlying factors for project success lie in the ability of project managers to communicate with the client and account managers to ensure risk factors that could affect the budget are identified and rectified as early as possible – preferably before they even occur. A strong user-base engagement where project managers are contactable and available when needed is required to help ensure desired outcomes are achieved.

Sales and Account Managers

Prior to engaging with a client, the sales personnel will need to make sure there is a strong and real business case with a reasonable return on investment measure. This will allow success factors to be defined upfront so that a clear benchmark is established and the success of the project can be easily measured.

Once this has been done, the sales team must focus on developing a strong relationship founded on understanding what drives or motivates the sponsoring client. This will enable a greater appreciation of the project thus encouraging the
vendor to meet the requirements of the client in a way that will keep the project within budget. A key responsibility of this engagement is to protect the parties from any situation that may take advantage of either the client or the vendor.

By constantly nurturing the relationship, the sales person can become a key contributor to the project’s success. If the client is satisfied with the level of interaction with the vendor, they are more likely to cooperate to ensure the project is successfully delivered on time and within budget.

Conclusion

Delivering projects within budget is in the best interests of all parties and as such both the vendor and the client should continually strive to manage and control the engagement process to ensure the success of the project.

From the vendor’s side, project managers and the sales team will need to work towards understanding the business case and the drivers of the client organisation in order to effectively deliver the key requirements of the project. It is through this understanding that projects are likely to stay within budget.

Similarly, clients need to understand the complexity involved in software development projects and trust the vendor to direct their efforts to achieving the best solution for the organisation. Adding requirements that are outside the scope of the project may detrimentally jeopardise the success of the project and will make it difficult to stick to the agreed-upon budget.

A software development engagement should be based on a trusted relationship between the vendor and client. A vendor should provide the adequate expertise required to ensure the client has achieved their goals. In return, the client needs to trust that the advice the vendor provides is based on the best interests of the client, and not commercially motivated for the vendor’s gain. A trusting, collaborative, non-combative relationship between a vendor and client will always ensure projects succeed and are well within budgets.