Ask yourself: who do you think feels more frustrated when a multi-month outsourced project drags on long past the original completion date and costs much more than planned? The vendor charging for the service (the custom web/software development, engineering services, construction, and marketing companies of the world) or the customer paying for the project work?
You get a gold star if you guessed the customer! Having felt this with our vendors Setpoint began utilizing our project management philosophy with them. One of our strategic partners implemented our system when they began working with us and had great results. Recently GapZen conducted primary research with both vendors and customers of complex projects, and can state with complete confidence that customers feel significantly more pain when projects drag on incessantly, costing more than planned. And, if we’re all being honest with ourselves, these types of projects are rarely, if ever, delivered on time and on budget.
Over 90 percent of the customers they surveyed and interviewed were eager to express intense feelings of frustration and distrust (to put it mildly) for their vendors. Customers feel a total lack of control and never seem to have a clear idea how much work has actually been done on a project, when it will really be complete, and how much it will truly cost in the end. Customers dislike feeling “locked-in” to poorly performing vendors who never seem to share bad news until the project is so far along that it is cost prohibitive for the customer to make a switch. And customers really hate receiving final invoices that are eye-poppingly higher than expected.
Though not as severe, project vendors also expressed feelings of pain. Many vendors feel that realistic bids are unlikely to win contracts, so they submit low bids up front and opt to “fight it out” with the customer later on. Vendors know that scope is never clear enough up front, leading to an inevitable barrage of scope change requests from the customer. And some vendors have felt the painful sting of not finding out until after completing a project that it has actually lost money.
Are these painful problems simply an unavoidable consequence of outsourcing project work? Or can these gaps between vendors and customers be closed to the mutual delight of both parties?
We know these gaps can be closed. Over the last two decades we have perfected a better system for managing complex outsourced projects. Using this system, we’ve won awards for completing projects on time when they were delivered six weeks late. And if your customer doesn’t think you’re late, you’re not!
We’re so excited about closing these gaps that we wrote a book and created a website to help others implement our system. Vendors will find a nuts and bolts management and financial system in our book, Project Management for Profit. Customers will find a simple yet powerful system for managing their vendors at www.pm4profit.com.
We invite you to investigate these solutions to repair shattered customer confidence in multi-month outsourced project vendors while simultaneously enabling these vendors to run more profitable businesses.