Well begun is half done...
You just completed a plush assignment or maybe its your first job....or maybe It is your new assignment on a new job whatever the case maybe, i am sure everyone in their career, has been there sometime.
Especially if you are in the consulting world like me, you will see a lot of "First Days on a project or in a new organization"
My approach to this first day has changed a lot over time...here are some thoughts related to that....
Remember when we were beginning our life's journey as 3-4 year old, our parents held our hands and took us to a pre-school, Pre-K, Kindergarten, first grade etc....and then when we grow up, more experienced about schooling, we planned our first days to college, who do we meet there? What to wear?, How to walk, talk etc.
Then comes the professional world...here again initially we are in the blank and need some hand holding, then we turn deft and know how to tread and where...I will try to give some tips and observations on what i have seen and experienced...
Let's say, you just finished a Job assignment and have landed another meaty assignment after aceing an interview.
Here's how and what you should plan for,
1> Background
Nowadays every bit of information about a company is online, especially if it is a listed company. Try to gather as much about the company as you can. It is always good to know what business the company is in, who are the clients, overseas business, turnover, revenues and most importantly the competitors....This information gathering will help hone your thinking process towards understanding the company, the culture, the business, the steps taken at the C-Level etc.
Here again try to gather information about the company culture, the corporate goals and objectives etc.
This will help you even if you are not an employee of the company and are just going to work there as an external consultant.
Based on the above and your area of skillset for which you are hired, prepare a 2-3 minute elevator pitch about yourself. Not necesarily, say it out to every other person you meet on your first day (Unless you want to make it your last day too). Depending on the type of conversation or meeting you are having, be ready to use it in parts or whole as required.
2> Social Networking sites- LinkedIn etc
Social Networking can help you a lot here in terms of gaining useful perspectives from people who work at that organization, their view points about the organization, people performing different roles at the organization on how they view their peers, subordinates, C-Level executives and the business in general.
3> Know your work area and domain
You already are a master of your domain area because this is what is going to be your most useful weapon which will help you outshine your peers and help you in gaining trust within the organization. If there is a certain area of skill that you need to perform or something you know you are not too comfortable with, try working on it, polishing it, so you do it confidently when you need it.
4> Unlearn
This is very important. Every Organization has its own working Methodology and process and steps to execute a project. In IT, some may follow waterfall, Agile, RUP and some have flavors of their own. They have their own internal politics and work culture nuances that you may have been used to, and your brain may have been accustomed to think that it is right. But it may not be so.
So be ready to unlearn the old and accept the new, if need be. For this, make sure you watch, watch and watch, people around you...
5> Communicate, Communicate and Communicate
Last but not the least, when you in, be ready to communicate, talk to your peers, subordinates, bosses, customers, partners. Understand the roles that they perform and their viewpoints. This will help streamline your thought process and give you a 360 degree perspective on the business as a whole.
Once you are armed with the above, things should become fairly easy. Make sure you are pleasant and greet people you meet. Atleast give a smile, right from the person next to you in the elevator to the colleague who sits next to you.
When you meet someone have a good erect posture, confident smile and a few lines to say to the other person. Give the other person a line or 2 about yourself and inquire about him/her asking about his job background general local information etc. These generally act as good ice breakers.
If you are not comfortable, doing this...practice this a few times if front of the elevator...Remember your first day on the job is just as important as the job interviews...because this is when people (by way of human nature) will form an initial opinion about you, which if for any reason is a wrong one,it will be very difficult to reason and build a new one.
As they say, Plan before execution....sooner than you think, you will be sitting amongst the best in the crowd and be accepted for your skills and expertise and the genuine person that you are.
Please comment if you agree, if there is something you feel i missed here
Wednesday, January 2, 2013
Thought process Transformation
They say..If you show a dollar coin to an IT and Business Person both will look at it differently...
Business person will say "I wonder what is today's exchange rate?" and the IT person will say...""hhhmmm, this coin is shaped more like Alpha character "O" (Letter Oh) rather than numeric Zero"..(Not true...just made it up....but you get my point)....
IT developers and the business folks live and operate in 2 different worlds....unfortunately sometimes it is true...There should be steps taken by both sides to minimize this gap as much as possible...
Why?
A very basic necessity of working in today's world is to understand the business you are in and work towards supporting the business using your technology acumen and skills.
This is true, unless you work in a IT product based environment or somewhere else, where you may be working only to service your internal IT customers e.g. IT Infrastructure in a IT Company etc or you work alone on a marooned island manning a lighthouse switch.
Beyond that you have to work with the business.
This is required because Business is what drives Profits, Revenue and Sustainability to an Organization. Business has drivers like internal and external customers and partners, Competition, Compliance etc that decide and drive business and its exective decisions.
Coming from a Technology background, sometimes it becomes really difficult to think in terms of business, it is very easy to go back to the "Ones" and the "Zeros". During my initial IT Career days, being a consultant you have to wear the hat of an IT Developer cum Business Analyst, it becomes very difficult, to not think in terms of Tables and Columns and integrity data checks, rather in terms of Actors and Use cases, in front of the customer, who maybe as a Claims adjuster, is trying to explain how to send data to a glass vendor from the claim screen and wait for an amount estimate for damage repairs and then has to follow an escalation process so it gets approval if amount for repair was above the assigned claim adjuster's limit.
This really requires a major mindset change, a paradigm shift, if you may... wherein you get away from the developer mindset, where you in your own world do an efficient and scalable High level and low level designs and develop and unit test your own software to a Business person who tries to understand the people who run the business, their process and thinks of ways the technology can help them to make their work easier, better, faster and more efficient and smoother.
How?
The most important way to do this is, "to place yourself in the other person's shoes" and think the way he/she goes about the business day. This will help understand their painpoints and in turn help you to help them.
Certain steps that can be taken to overcome this chasm would be,
1> Get IT and Business aligned...In terms of Corporate Business goals and Objectives.
2> Companies to organize trainings, seminars for IT folk and business alike to make each side of the other side. For instance, hold workshops for business expaining them an IT lifecycle, what is a Functional document, high level designs, Integration, System Testing etc. Similarly for IT Folks, explain them the business processes and not just give them specs and expect the work to be done.
3> Have regular IT/Business meetings, maybe on a monthly/weekly basis where there will be general updates from both sides, Q&A to understand more and better
4> More involvement of IT Developers in Business meetings so they can understand the discussions and business painpoints and start thinking in terms of making those better.
Let me know your comments if you feel there are some points that can be added/modified to help you.
Business person will say "I wonder what is today's exchange rate?" and the IT person will say...""hhhmmm, this coin is shaped more like Alpha character "O" (Letter Oh) rather than numeric Zero"..(Not true...just made it up....but you get my point)....
IT developers and the business folks live and operate in 2 different worlds....unfortunately sometimes it is true...There should be steps taken by both sides to minimize this gap as much as possible...
Why?
A very basic necessity of working in today's world is to understand the business you are in and work towards supporting the business using your technology acumen and skills.
This is true, unless you work in a IT product based environment or somewhere else, where you may be working only to service your internal IT customers e.g. IT Infrastructure in a IT Company etc or you work alone on a marooned island manning a lighthouse switch.
Beyond that you have to work with the business.
This is required because Business is what drives Profits, Revenue and Sustainability to an Organization. Business has drivers like internal and external customers and partners, Competition, Compliance etc that decide and drive business and its exective decisions.
Coming from a Technology background, sometimes it becomes really difficult to think in terms of business, it is very easy to go back to the "Ones" and the "Zeros". During my initial IT Career days, being a consultant you have to wear the hat of an IT Developer cum Business Analyst, it becomes very difficult, to not think in terms of Tables and Columns and integrity data checks, rather in terms of Actors and Use cases, in front of the customer, who maybe as a Claims adjuster, is trying to explain how to send data to a glass vendor from the claim screen and wait for an amount estimate for damage repairs and then has to follow an escalation process so it gets approval if amount for repair was above the assigned claim adjuster's limit.
This really requires a major mindset change, a paradigm shift, if you may... wherein you get away from the developer mindset, where you in your own world do an efficient and scalable High level and low level designs and develop and unit test your own software to a Business person who tries to understand the people who run the business, their process and thinks of ways the technology can help them to make their work easier, better, faster and more efficient and smoother.
How?
The most important way to do this is, "to place yourself in the other person's shoes" and think the way he/she goes about the business day. This will help understand their painpoints and in turn help you to help them.
Certain steps that can be taken to overcome this chasm would be,
1> Get IT and Business aligned...In terms of Corporate Business goals and Objectives.
2> Companies to organize trainings, seminars for IT folk and business alike to make each side of the other side. For instance, hold workshops for business expaining them an IT lifecycle, what is a Functional document, high level designs, Integration, System Testing etc. Similarly for IT Folks, explain them the business processes and not just give them specs and expect the work to be done.
3> Have regular IT/Business meetings, maybe on a monthly/weekly basis where there will be general updates from both sides, Q&A to understand more and better
4> More involvement of IT Developers in Business meetings so they can understand the discussions and business painpoints and start thinking in terms of making those better.
Let me know your comments if you feel there are some points that can be added/modified to help you.
Friday, July 27, 2012
Giving Feedback
Who's and why's of Feedback?
There is a saying - 'No Man is an Island', which means no one, absolutely no one can survive without others (On second thought, i take that back, i know a few people who do!!!).
We interact with people, we work, play, argue, fight etc.
So overall, in the personal and professional conundrum of life, people 'interact' with each other.
In our personal and professional dealings, there are times when we act or react in a certain way that is unacceptable to others - Alas, 'We cannot please everyone all the time'.
Always remember, every person follows some thought process and the golden rule is 'Everyone of us does what he/she thinks is right, in that situation'. Be he/she the CEO of a Corporation or Super villian in a comic book.
So when we observe this sort of behavior in our Project Team, what do we do, how do we react as Project Managers? and most importantly, if we are ones on the receiving end, how do we take the feedback that others give us.
Let us take a real life situation that happened with me many years back. I was a rookie in a IT Large Firm and was working on a big multi million dollar Project. It was my first project right out of college. A large size manufacturing Company had hired our IT Vendor services to Automate one of their new plants. I was part of the development and installation team onsite with other 40 resources (Client and Vendors included) working dedicatedly on various aspects.
Then just a week before go live, my Project Manager had to go on a Personal leave for a Family emegency. I was the only available backup on that short notice. I was representing our Develpoment and Testing Groups now. Things were going fine with the dry runs, system tests etc till the day of go live.
On the night of go live, we started our deployment, things were going by the book for the first few hours then suddenly all hell broke lose, hardware starting failing, drives, switches, programs were not working, networking issues developed. This being a commercial Manufacturing plant which was being controlled by our PLC (Programmable Logic controller) programs, all the Silos, drives and Switches started malfunctioning. It was also a continuous process plant and a break in the process would have meant raw materials losses worth millions and indirect impacts in terms of Go Live date delays, commited dates and other dependencies.
Everyone in the plant started to panic, right from the half asleep Janitor to the Top C-level executives. Since we were the service providers and i was the only highest sitting mark representing our corporation's totem pole, guess who received the flak for all this....me!!!...Yes, and that too in no soft words or even in private...you get the rough idea.....
Finally, the situation was salvaged and we started resolving the issues one by one and things started running fine again.
After nearly 20 years that incident still gives me cold sweats, not so much the things that failed or the soup we were in, but the verbal lashings i got...
What went wrong here? Absolutely everything....How could it have been handled...definitely in a more professional manner...
Even in our Day to day IT Projects, we come across similar situations about our Team members, colleagues etc who needs to be repriminded or think annual appraisal sessions of your team members.
Feedback Process handling
So coming to - How to handle this situation>
Approach 1>
Plain and simple - Speak your mind.
Approach 2>
Provide feedback with a little preparation and technique. I call it the 'AGES' approach.
It needs a little Homework. Follow the below 4 steps -
1> A - Assess
Assess the Situation. Understand the problem
2> G - Good
Quantify other positive contributions of the person in focus. Think what value he provides to the Team, project and the corporation in general.
3> E - Empathize
Empathize with the person and elaborate the negative impacts of his/her actions, understanding that he/she was not doing it on purpose.
4> S - Solution
Think about ways to help the person.
Now let's analyze a Situation with the help of above 2 approaches
e.g. Situation is - We are in midst of an Agile project for which there are daily 9 AM Sprint meetings and all Team members are present except Mark. Mark is consistently late for the sprint stand-ups past few days.
Approach 1>
I approach Mark and reprimind him (Openly or in private).
'Mark, your behavior is unacceptable. You are always late for the stand ups. Make sure this does not happen again'
What happens during/after this? Mark immediately shuts off. He thinks of me as a rude, negative and inconsiderate person. This impacts his work, interactions with the Team and finally his work deliverable or the project as a whole.
Now this is not a very Leader like behavior. A Leader has to motivate and lead by guiding his team on the journey. Help them in their issues, understanding and Guiding them when and wherever possible.
So now let's try approach 2>
A - Assess
I analyze the situation and prepare my response. I focus on Mark's contributions and the current 'glitch' that is being observed for past few days. I also work out a few practical ways this can be resolved. Then i talk to Mark one on one.
G - Good
'Listen Mark, I know the project is in full flow and i see you are working very hard - day and night and especially your work on the ISO webservice solution was extremely well received by the client and it had zero defects too'
E - Empathize
'To continue the same trend of success, we as a Team have to focus on the project. That is why the daily sprint attendance is important, so everyone can understand the current Project progress, work dependencies, issues, project announcements, if any'
'Now i understand everyone has a personal life and sometimes there are some things that have to take a priority'
S - Solution
'So if there is anything there i can do to help you here, like changing your Office timings for a while or there is something you want to share, let's talk about it'
Which conversion do you think will have more impact.
So to summarize, to provide feeback, Keep your mind open, unbiased and clear, understand the situation or focus on the problem at hand not the person, understand the circumstances and behavior of the other person and help him/her resolve it positively. When you leave your feedback meeting, make sure neither one of you leaves with a bitter taste in his mouth, leave with a positie mark. After all, projects are a Team work.
There is a saying - 'No Man is an Island', which means no one, absolutely no one can survive without others (On second thought, i take that back, i know a few people who do!!!).
We interact with people, we work, play, argue, fight etc.
So overall, in the personal and professional conundrum of life, people 'interact' with each other.
In our personal and professional dealings, there are times when we act or react in a certain way that is unacceptable to others - Alas, 'We cannot please everyone all the time'.
Always remember, every person follows some thought process and the golden rule is 'Everyone of us does what he/she thinks is right, in that situation'. Be he/she the CEO of a Corporation or Super villian in a comic book.
So when we observe this sort of behavior in our Project Team, what do we do, how do we react as Project Managers? and most importantly, if we are ones on the receiving end, how do we take the feedback that others give us.
Let us take a real life situation that happened with me many years back. I was a rookie in a IT Large Firm and was working on a big multi million dollar Project. It was my first project right out of college. A large size manufacturing Company had hired our IT Vendor services to Automate one of their new plants. I was part of the development and installation team onsite with other 40 resources (Client and Vendors included) working dedicatedly on various aspects.
Then just a week before go live, my Project Manager had to go on a Personal leave for a Family emegency. I was the only available backup on that short notice. I was representing our Develpoment and Testing Groups now. Things were going fine with the dry runs, system tests etc till the day of go live.
On the night of go live, we started our deployment, things were going by the book for the first few hours then suddenly all hell broke lose, hardware starting failing, drives, switches, programs were not working, networking issues developed. This being a commercial Manufacturing plant which was being controlled by our PLC (Programmable Logic controller) programs, all the Silos, drives and Switches started malfunctioning. It was also a continuous process plant and a break in the process would have meant raw materials losses worth millions and indirect impacts in terms of Go Live date delays, commited dates and other dependencies.
Everyone in the plant started to panic, right from the half asleep Janitor to the Top C-level executives. Since we were the service providers and i was the only highest sitting mark representing our corporation's totem pole, guess who received the flak for all this....me!!!...Yes, and that too in no soft words or even in private...you get the rough idea.....
Finally, the situation was salvaged and we started resolving the issues one by one and things started running fine again.
After nearly 20 years that incident still gives me cold sweats, not so much the things that failed or the soup we were in, but the verbal lashings i got...
What went wrong here? Absolutely everything....How could it have been handled...definitely in a more professional manner...
Even in our Day to day IT Projects, we come across similar situations about our Team members, colleagues etc who needs to be repriminded or think annual appraisal sessions of your team members.
Feedback Process handling
So coming to - How to handle this situation>
Approach 1>
Plain and simple - Speak your mind.
Approach 2>
Provide feedback with a little preparation and technique. I call it the 'AGES' approach.
It needs a little Homework. Follow the below 4 steps -
1> A - Assess
Assess the Situation. Understand the problem
2> G - Good
Quantify other positive contributions of the person in focus. Think what value he provides to the Team, project and the corporation in general.
3> E - Empathize
Empathize with the person and elaborate the negative impacts of his/her actions, understanding that he/she was not doing it on purpose.
4> S - Solution
Think about ways to help the person.
Now let's analyze a Situation with the help of above 2 approaches
e.g. Situation is - We are in midst of an Agile project for which there are daily 9 AM Sprint meetings and all Team members are present except Mark. Mark is consistently late for the sprint stand-ups past few days.
Approach 1>
I approach Mark and reprimind him (Openly or in private).
'Mark, your behavior is unacceptable. You are always late for the stand ups. Make sure this does not happen again'
What happens during/after this? Mark immediately shuts off. He thinks of me as a rude, negative and inconsiderate person. This impacts his work, interactions with the Team and finally his work deliverable or the project as a whole.
Now this is not a very Leader like behavior. A Leader has to motivate and lead by guiding his team on the journey. Help them in their issues, understanding and Guiding them when and wherever possible.
So now let's try approach 2>
A - Assess
I analyze the situation and prepare my response. I focus on Mark's contributions and the current 'glitch' that is being observed for past few days. I also work out a few practical ways this can be resolved. Then i talk to Mark one on one.
G - Good
'Listen Mark, I know the project is in full flow and i see you are working very hard - day and night and especially your work on the ISO webservice solution was extremely well received by the client and it had zero defects too'
E - Empathize
'To continue the same trend of success, we as a Team have to focus on the project. That is why the daily sprint attendance is important, so everyone can understand the current Project progress, work dependencies, issues, project announcements, if any'
'Now i understand everyone has a personal life and sometimes there are some things that have to take a priority'
S - Solution
'So if there is anything there i can do to help you here, like changing your Office timings for a while or there is something you want to share, let's talk about it'
Which conversion do you think will have more impact.
So to summarize, to provide feeback, Keep your mind open, unbiased and clear, understand the situation or focus on the problem at hand not the person, understand the circumstances and behavior of the other person and help him/her resolve it positively. When you leave your feedback meeting, make sure neither one of you leaves with a bitter taste in his mouth, leave with a positie mark. After all, projects are a Team work.
Wednesday, June 27, 2012
IT Negotiations
There are a very few natural born negotiators, the rest have to practice.....
Negotiations happen everyday and everywhere, in various forms all around us. Our day starts reasoning with the kids to make them drink a glass of Milk, negotiating the price of an antique showpiece you want, from a mom & pop Thrift shop.
Even Professional negotiations follow the same rules as these day to day negotiations, maybe on a more detailed level.
Not everyone is an expert negotiator, but someone who has the skills and has been doing it with the right attitude & panache, actually does a lot of winning.
Nowadays IT projects consume a major chunk of an organization's revenue, sometimes upto 20-25 percent according to a recent study. Many companies are utilizing their hard earned revenues to solidify and streamline their IT Process and systems, so that they can reap the business benefits in times to come. For this reason it makes sense for both parties in an IT deal to be Negotiations savvy. Due to the fear of an unknown outcome, Negotiations are very much dreaded by IT and business folks alike. It is kept as a last minute activity and attacked head on when time comes - Something like a Deer staring at a racing car's Headlights and then you know how it goes.
If proper time is spent on planning and executing negotiations, you will reap the benefits in times to come - in form of increased profits and revenues and successfully executed projects.
IT Negotiations occur at various levels - Marketing, Pre-Sales, Sales, Project Scoping, Resourcing, Contractual agreements in terms of Contract types, SLAs, Milestones and Commit dates etc
Negotiations occur between various parties - IT Firms, Servicing companies, Clients (Insurance companies in my case), at various levels - project level between Team members, leads and resources, clients and vendors, suppliers and end users etc
Negotiation skills help,
Achieve project goals and objectives
Avoid unnecessary conflicts and arguments later in the project lifetime
Build trust and priorities amongst the project teams
How to be a good negotiator?
Practice, practice and some more practice.
Good negotiation skills should be imbibed in your senses. Organizations usually have a cut out approach towards negotiation, something that defines their org culture, e.g. having negotiation planning meetings, specific negotiation templates and proceses etc. Overall, the negotiation Team's objectives and motives have to be aligned with the organizational agenda. The corporate direction could either be a Win All-Lose none (Aggressive), Win some-Lose Some (Moderate) or Win-win for both (Practical). It all depends on what strategic importance the deal has for the corporation.
On a personal level, an important skillset for a successful negotiator is soft skills - i.e. ability to have meaningful and engaging conversations. Conversations that lead the other party to reveal or atleast point to their interests and areas that will help you build focus and leverage. Something that will help develop relationships between with all parties involved. Remember here from a psychological perspective, everyone wants to win in life, be it negotiations or a free 5 day cruise to the Caribbean.
To cite an example - On one of the projects i was managing, we responsible for an Insurance Installation for a mid size P&C Carrier, the contract was signed based on initial high level estimation, but during the actual scoping and definition phase, the client wanted the everything under the sun to be included.
After much efforts and involvement of many a c-level executives and a heavy level setting exercise, the client finally agreed on the scope which could be delivered in the duration of the project. The way the client agreed to the option was, if the client wanted 100 things to be done in the project duration and cost, the quality of the product would suffer, but to have the best quality installation within the project cost and timeline which will help the client achieve set their business goals, it was beneficial to both parties to cut scope and go live with 70 items which would have the best quality.
Negotiation Steps
Every negotiation is a logical process, it has a beginning, the actual process and the end or specifically "Pre-Negotiation", "Negotiation" and "Closing".
Pre-Negotiation involves
Establishing an objective, background preparation or doing your homework, (Always start with a 10000 ft view of what you want out of the negotiation and why you want it - i.e. laying the objectives, ground rules and favorable expected outcome and finally how you wil get there).
This includes establishing a steering commitee, involving all related stakeholders, end users, everyone who will be impacted by the project or contract negotiation. Because doing this later in th`e game will not give you much wiggle room to try and resolve issues, incase an impacted party gets left out or finds something that may de-rail the whole deal. Preparing the RACI chart for all involved parties also helps as it clearly defines what is expected of each involved party. Laying down the negotiation rules and guidelines on rules of conduct during the negotiation path.
Negotiation includes
Meeting on the set dates and having discussions per agenda and guidelines decided. This helps to have focused discussions and helps achieve the desired positions effectively. Also make sure the Teams meet internally on a regular basis afterwards, while negotiations are in progress so if team member needs to be aligned or steered or some points need to be given in or held against, can be avaluated and then comes
Negotiation Planning should include contract break clauses, long term contract pricing policies and sharing the Total cost of ownership for a contract.
The total breakdown of all fees sould be enforced in a contract, SLAs and other KPIs to evaluate the levels of service provided.
Closure and Lessson learned (This is the most important step in every negotiation and is also the most missed one). If this is followed as a regular process, rather than a 1 time post negotiation activity or if done only for certain high profile negotiations it will miss its actual impact and utility.
Lessons learned will actually help you learn and do course correction which may help save many a future negotiations. This may also help you lay foundations for setting an organization culture in terms of process and templates setup
Essentially for any negotiation to be successful you have to have the right set of people, tools and strategies, past experiences, thoughtful planning and documentation.
Negotiations happen everyday and everywhere, in various forms all around us. Our day starts reasoning with the kids to make them drink a glass of Milk, negotiating the price of an antique showpiece you want, from a mom & pop Thrift shop.
Even Professional negotiations follow the same rules as these day to day negotiations, maybe on a more detailed level.
Not everyone is an expert negotiator, but someone who has the skills and has been doing it with the right attitude & panache, actually does a lot of winning.
Nowadays IT projects consume a major chunk of an organization's revenue, sometimes upto 20-25 percent according to a recent study. Many companies are utilizing their hard earned revenues to solidify and streamline their IT Process and systems, so that they can reap the business benefits in times to come. For this reason it makes sense for both parties in an IT deal to be Negotiations savvy. Due to the fear of an unknown outcome, Negotiations are very much dreaded by IT and business folks alike. It is kept as a last minute activity and attacked head on when time comes - Something like a Deer staring at a racing car's Headlights and then you know how it goes.
If proper time is spent on planning and executing negotiations, you will reap the benefits in times to come - in form of increased profits and revenues and successfully executed projects.
IT Negotiations occur at various levels - Marketing, Pre-Sales, Sales, Project Scoping, Resourcing, Contractual agreements in terms of Contract types, SLAs, Milestones and Commit dates etc
Negotiations occur between various parties - IT Firms, Servicing companies, Clients (Insurance companies in my case), at various levels - project level between Team members, leads and resources, clients and vendors, suppliers and end users etc
Negotiation skills help,
Achieve project goals and objectives
Avoid unnecessary conflicts and arguments later in the project lifetime
Build trust and priorities amongst the project teams
How to be a good negotiator?
Practice, practice and some more practice.
Good negotiation skills should be imbibed in your senses. Organizations usually have a cut out approach towards negotiation, something that defines their org culture, e.g. having negotiation planning meetings, specific negotiation templates and proceses etc. Overall, the negotiation Team's objectives and motives have to be aligned with the organizational agenda. The corporate direction could either be a Win All-Lose none (Aggressive), Win some-Lose Some (Moderate) or Win-win for both (Practical). It all depends on what strategic importance the deal has for the corporation.
On a personal level, an important skillset for a successful negotiator is soft skills - i.e. ability to have meaningful and engaging conversations. Conversations that lead the other party to reveal or atleast point to their interests and areas that will help you build focus and leverage. Something that will help develop relationships between with all parties involved. Remember here from a psychological perspective, everyone wants to win in life, be it negotiations or a free 5 day cruise to the Caribbean.
To cite an example - On one of the projects i was managing, we responsible for an Insurance Installation for a mid size P&C Carrier, the contract was signed based on initial high level estimation, but during the actual scoping and definition phase, the client wanted the everything under the sun to be included.
After much efforts and involvement of many a c-level executives and a heavy level setting exercise, the client finally agreed on the scope which could be delivered in the duration of the project. The way the client agreed to the option was, if the client wanted 100 things to be done in the project duration and cost, the quality of the product would suffer, but to have the best quality installation within the project cost and timeline which will help the client achieve set their business goals, it was beneficial to both parties to cut scope and go live with 70 items which would have the best quality.
Negotiation Steps
Every negotiation is a logical process, it has a beginning, the actual process and the end or specifically "Pre-Negotiation", "Negotiation" and "Closing".
Pre-Negotiation involves
Establishing an objective, background preparation or doing your homework, (Always start with a 10000 ft view of what you want out of the negotiation and why you want it - i.e. laying the objectives, ground rules and favorable expected outcome and finally how you wil get there).
This includes establishing a steering commitee, involving all related stakeholders, end users, everyone who will be impacted by the project or contract negotiation. Because doing this later in th`e game will not give you much wiggle room to try and resolve issues, incase an impacted party gets left out or finds something that may de-rail the whole deal. Preparing the RACI chart for all involved parties also helps as it clearly defines what is expected of each involved party. Laying down the negotiation rules and guidelines on rules of conduct during the negotiation path.
Negotiation includes
Meeting on the set dates and having discussions per agenda and guidelines decided. This helps to have focused discussions and helps achieve the desired positions effectively. Also make sure the Teams meet internally on a regular basis afterwards, while negotiations are in progress so if team member needs to be aligned or steered or some points need to be given in or held against, can be avaluated and then comes
Negotiation Planning should include contract break clauses, long term contract pricing policies and sharing the Total cost of ownership for a contract.
The total breakdown of all fees sould be enforced in a contract, SLAs and other KPIs to evaluate the levels of service provided.
Closure and Lessson learned (This is the most important step in every negotiation and is also the most missed one). If this is followed as a regular process, rather than a 1 time post negotiation activity or if done only for certain high profile negotiations it will miss its actual impact and utility.
Lessons learned will actually help you learn and do course correction which may help save many a future negotiations. This may also help you lay foundations for setting an organization culture in terms of process and templates setup
Essentially for any negotiation to be successful you have to have the right set of people, tools and strategies, past experiences, thoughtful planning and documentation.
Friday, September 30, 2011
Vendor Procurement and Management
Family man, family problems....My wife and i have been working on finding a Nanny for our 3 year old for past few weeks....Let me say its not an easy task....you have to go through classifieds, talk to your network of friends, interview people for the position, negotiate terms, the whole nine yards...
This activity made me think about writing this article.
Working as an IT Manager, many a times we come across similar scenarios wherein the Client would want to go through a Vendor procurement Process.
For the sake of simplicity, we will refer to the Organization seeking Vendor Services as a "buyer".
Here are a few scenarios from my Insurance world, why a buyer would look for Vendor services,
1> Outsourcing Services
- An Insurance company say. wants to focus its attention on the Insurance Business and does not want to be sidetracked with IT Issues. So it would naturally want to partner with one or more IT Firms to run its business applications, maintain hardware, do application modifications to maintain and Competitive edge in its business domain.
2> IT Consulting Services
- An Insurance company in business for years and decades would have lots of in-house and Third party applications and services communicating with each other. Thus if the company wants to overhaul and upgrade its infrastructure, hardware or software systems for better and reliable performance and scalability, it has to procure services from Vendors who have handled similar Business Transformation Initiatives.
3> Technology Solutions
- An Insurance Company wants to (say.) move away from its Legacy applications and march towards the latest and greatest state of the art application suite available in the market to better run its business.
These are some of the reasons why the procurement manager would want follow proper Vendor Procurement guidelines. Failure to do so, may lead to problems and issues in the whole venture and many a times may lead to scrapping the whole deal either midway or towards the end of the project.
Here are the top 3 reasons why Procurement process may fail,
1> No clear requirement specifications and hence no clear understanding of the exact scope of work.
2> Carelessness in terms of contract clauses negotiations. No clear review of Vendor Contract terms and conditions.
3> Unrealistic targets and deadlines promised and accepted by both parties during the procurement process.
A Vendor Procurement process just like any project life cycle has 4 distinct phases, They are,
1> Requirement scope and Elaboration
- The Buyer has to elaborate on the exact requirements that will be shared with the Vendors and clearly defines why you are seeking the vendor services. These requirements may be Technical, functional etc as the case demands.
There will be a team of Business analysts and Functional experts who will meet the necessary business users to gather the exact requirements and thus prepare the requirements specifications documentation.
2> Vendor Selection
- The requirements specifications created are used to prepare an RFI (Request for Information), RFP (Request for Proposal) or RFQ (Request for Quotation) etc as the case may be.
The buyer Organization prepares a selected Vendor list and sends RFIs/RFP to them. The set of vendors must meet a predefined selection criteria set by the buyer organization. These prospective vendors will be someone, who already do similar service for the buyer organization or are in similar business as the work scope demands.
Before sending out the questionnairre to the Vendor make sure there is a confidentiality Non Disclosure agreement signed, as here the buyer may share some Business sensitive information with the potential vendors. It is necessary to safeguard the business information and Intellectual property from competition.
After this, if the vendors have some technical questions or need any clarifications, the buyer may arrange for a common Q&A session or they may request the vendor questions via email.The buyer sets a deadline for the questions and queries so they can be reviewed and answered.
The prospective Vendors have to be aware of the milestone dates and the formal processes like routing the questions through the procurement Manager etc.
The Procurement Manager is responsible for responding to the questions. The same information should be shared with all vendors, so that no one gets any unfair advantage in this process and in turn will also help the vendors understand the requirements better.
3> Contracting and Contract Administration
After receiving responses from the Bidders or Vendors, the buyer has its own selection criteria to finalize the vendor for the job. This is usually based on some weightage program, Vendor rating system, Proposal evaluation technique or expert judgement etc.
After the vendor selection is complete, then comes the contracting phase. In this phase, the contract agreement (this may also called as the Statement of work, Letter of Intent etc) that is sent by the vendor company has to be carefully read and scrutinized so that both parties agree to the terms and conditions in the contract and it is favorable to both parties. If there is any clarification, ambiguity in any of the points, seek clarification from the Vendor representative immediately.
Contract Administration is a very important phase for successful execution of the Contract. During execution, there may be some changes required to the Project scope, milestone and deadlines approval processes set.
The Contract should also be a project acceptance and completion criteria specified. e.g. For a new Policy System installation and enhancement project, the acceptance criteria specified should be in terms of service or scope delivery timeline (say 12 months) with (say) 2 Critical, 4 Medium and 6 low level bugs open.
There should be software SLA specified in the contract.
There should also be processes set for change controls. This includes tools, techniques and activities that help to monitor the change control process and control the project scope and timeline.
These contracts are generally prepared and reviewed by the legal departments with definite help and inputs from the procurement manager who forms the main coordinator. So make sure the contract is well understood by you - the Procurement Manager. It is detailed and elaborate. The contract has to specify the penalties to be imposed on the vendor in case of missed deadlines like any pricing credits or additional resource guarantee etc
4> Exit and Renewal criteria
The contract also has to specify the exit criteria for extreme cases like either party wants to exit out. e.g. If the buyer wants to default on a contract, there will be a penalty of (say) $500,000 and 2 months notice period and the entire knowledge base will become the Intellectual property of the Vendor Organization.
In case the buyer wants to extend the contract with the vendor, the renewal criteria also has to be specified.
e.g. Annual Maintenance contract for supporting Policy and Claims Administration system can be extended with IT vendor 'X' provided the application went live with max 2 open defects and specified timeline. This will have an elaborate pricing, resourcing and timelines specified.
The service SLA for Annual Maintenance is response in 1 business day and solution within 2 business days for critical issues and 3 business days for regular issues.
Thus Vendor procurement and Contract Management is a very important process for organizations that do business with external vendors. So proper knowledge of the process is an absolute must for both the Buyer and Vendor Organizations.
This activity made me think about writing this article.
Working as an IT Manager, many a times we come across similar scenarios wherein the Client would want to go through a Vendor procurement Process.
For the sake of simplicity, we will refer to the Organization seeking Vendor Services as a "buyer".
Here are a few scenarios from my Insurance world, why a buyer would look for Vendor services,
1> Outsourcing Services
- An Insurance company say. wants to focus its attention on the Insurance Business and does not want to be sidetracked with IT Issues. So it would naturally want to partner with one or more IT Firms to run its business applications, maintain hardware, do application modifications to maintain and Competitive edge in its business domain.
2> IT Consulting Services
- An Insurance company in business for years and decades would have lots of in-house and Third party applications and services communicating with each other. Thus if the company wants to overhaul and upgrade its infrastructure, hardware or software systems for better and reliable performance and scalability, it has to procure services from Vendors who have handled similar Business Transformation Initiatives.
3> Technology Solutions
- An Insurance Company wants to (say.) move away from its Legacy applications and march towards the latest and greatest state of the art application suite available in the market to better run its business.
These are some of the reasons why the procurement manager would want follow proper Vendor Procurement guidelines. Failure to do so, may lead to problems and issues in the whole venture and many a times may lead to scrapping the whole deal either midway or towards the end of the project.
Here are the top 3 reasons why Procurement process may fail,
1> No clear requirement specifications and hence no clear understanding of the exact scope of work.
2> Carelessness in terms of contract clauses negotiations. No clear review of Vendor Contract terms and conditions.
3> Unrealistic targets and deadlines promised and accepted by both parties during the procurement process.
A Vendor Procurement process just like any project life cycle has 4 distinct phases, They are,
1> Requirement scope and Elaboration
- The Buyer has to elaborate on the exact requirements that will be shared with the Vendors and clearly defines why you are seeking the vendor services. These requirements may be Technical, functional etc as the case demands.
There will be a team of Business analysts and Functional experts who will meet the necessary business users to gather the exact requirements and thus prepare the requirements specifications documentation.
2> Vendor Selection
- The requirements specifications created are used to prepare an RFI (Request for Information), RFP (Request for Proposal) or RFQ (Request for Quotation) etc as the case may be.
The buyer Organization prepares a selected Vendor list and sends RFIs/RFP to them. The set of vendors must meet a predefined selection criteria set by the buyer organization. These prospective vendors will be someone, who already do similar service for the buyer organization or are in similar business as the work scope demands.
Before sending out the questionnairre to the Vendor make sure there is a confidentiality Non Disclosure agreement signed, as here the buyer may share some Business sensitive information with the potential vendors. It is necessary to safeguard the business information and Intellectual property from competition.
After this, if the vendors have some technical questions or need any clarifications, the buyer may arrange for a common Q&A session or they may request the vendor questions via email.The buyer sets a deadline for the questions and queries so they can be reviewed and answered.
The prospective Vendors have to be aware of the milestone dates and the formal processes like routing the questions through the procurement Manager etc.
The Procurement Manager is responsible for responding to the questions. The same information should be shared with all vendors, so that no one gets any unfair advantage in this process and in turn will also help the vendors understand the requirements better.
3> Contracting and Contract Administration
After receiving responses from the Bidders or Vendors, the buyer has its own selection criteria to finalize the vendor for the job. This is usually based on some weightage program, Vendor rating system, Proposal evaluation technique or expert judgement etc.
After the vendor selection is complete, then comes the contracting phase. In this phase, the contract agreement (this may also called as the Statement of work, Letter of Intent etc) that is sent by the vendor company has to be carefully read and scrutinized so that both parties agree to the terms and conditions in the contract and it is favorable to both parties. If there is any clarification, ambiguity in any of the points, seek clarification from the Vendor representative immediately.
Contract Administration is a very important phase for successful execution of the Contract. During execution, there may be some changes required to the Project scope, milestone and deadlines approval processes set.
The Contract should also be a project acceptance and completion criteria specified. e.g. For a new Policy System installation and enhancement project, the acceptance criteria specified should be in terms of service or scope delivery timeline (say 12 months) with (say) 2 Critical, 4 Medium and 6 low level bugs open.
There should be software SLA specified in the contract.
There should also be processes set for change controls. This includes tools, techniques and activities that help to monitor the change control process and control the project scope and timeline.
These contracts are generally prepared and reviewed by the legal departments with definite help and inputs from the procurement manager who forms the main coordinator. So make sure the contract is well understood by you - the Procurement Manager. It is detailed and elaborate. The contract has to specify the penalties to be imposed on the vendor in case of missed deadlines like any pricing credits or additional resource guarantee etc
4> Exit and Renewal criteria
The contract also has to specify the exit criteria for extreme cases like either party wants to exit out. e.g. If the buyer wants to default on a contract, there will be a penalty of (say) $500,000 and 2 months notice period and the entire knowledge base will become the Intellectual property of the Vendor Organization.
In case the buyer wants to extend the contract with the vendor, the renewal criteria also has to be specified.
e.g. Annual Maintenance contract for supporting Policy and Claims Administration system can be extended with IT vendor 'X' provided the application went live with max 2 open defects and specified timeline. This will have an elaborate pricing, resourcing and timelines specified.
The service SLA for Annual Maintenance is response in 1 business day and solution within 2 business days for critical issues and 3 business days for regular issues.
Thus Vendor procurement and Contract Management is a very important process for organizations that do business with external vendors. So proper knowledge of the process is an absolute must for both the Buyer and Vendor Organizations.
Monday, September 26, 2011
Art of Negotiation
Negotations - how can anyone live without it. Every day and in every walk of life, we use different negotiation forms on a personal and professional level.
Kids negotiate with their parents on what they want to (or dont want to) watch/eat/play? (and somehow always win...hhmmm i wonder why?..)
We negotiate with our better halfs on whether we eat the leftover cold pizza for dinner or dine out (Guess who wins there?)
At work, we negotiate with our bosses for better career roles, better projects, salary, promotion etc.
While on a project we negotiate the project deadlines, the workscope, experienced resources with skillsets matching the requirements etc etc. In a sales role, we negotiate with the prospects on the RFP Scope and costs. After bagging the project we negotiate with the client on Scope, timelines of the current project.
Well the point here is, Negotiations happen everywhere.
What is Negotiation?
Negotiation is a process where 2 or more parties get together and work towards a mutually acceptable solution to an issue in question.
This is also something that is closely associated to "Workplace Politics". Now generally the term politics is usually referenced or viewed in a negative sense, but it need not be the case. Politics is about talking, negotiating, convincing your Team, resources, stake holders to understand your point of view. For a person to really understand workplace politics, you have to invest your time into it. I mean really invest into it.
For this there are certain necessary steps that you have to take like,
You have to be really interested in people, their likes and wants, their concerns. This helps develop a level of trust and credibility between the 2 parties involved and this Trust is what makes it easier for the other party to understand you, accept you and your viewpoints
But this is not always an easy task to accomplish. But it is an art that can be learned, honed and sharpened with time.
Pre-Steps to a Negotiation
In any type of negotiations, there are certain guidelines to be followed. For e.g.,
1> Invest some time in genuinely understanding the other person or party. This may not always be possible but if you have a chance to do, please do it.
2> Do not deal any negotiation from an emotional angle. Always be ready to have alternatives, walk away solutions
3> Think and work on alternatives that are Win-Win for both.
4> Always make sure you have the deal makers or the actual decision makers at the negotiation table
Rules of Negotiation
1> Listen, Listen, Listen
- When on the Negotiation table, Sincerely listen to understand the other party, their viewpoints and beliefs. Many a deals and arguments are lost because one party did not try to understand the other party.
Always remember, when an person acts, (he may be right or wrong from your perspective) it is because he BELIEVES this is the right thing to do at that moment in time. So step in his/her shoes and things will be easier from that point on.
2> Do not take anything personally
- Negotiations can be stressful, tempers may rise and unwanted and harsh words may be thrown around. Try to keep your calm and focus on the situation rather than the person.
3> Focus on Relationships
Always be empatic to the other person. Focus on strengthing relationship with the other party
- Not all negotiations will end the way you want. In some cases you may get your way and in other cases, you may not. But always remember in the end, people matter more than the deal in hand so do not try to win any negotiation at the cost of losing people.
4> Backup plan
And last but not the least, always remember to work out a back up plan if your current project negotiations fail.
Negotiation Types
Any type of negotiation falls in either of these negotiation styles,
1> Accomodating
- This mostly leads to a Lose-Win situation in which first party is more emphatic to the other person's problems and issues and ultimately succumbs to a compromise.
This happens more so, when first party is more concerned about preserving the relationships with the other party rather than the Negotiation in hand.
e.g. Consider that you as a Project or account manager are siting at a negotiation table with your prospect and are discussing and finaling the project deal. You are leaning and advocating 'X' dollars per hour more than the Prospect But a savvy negotiator would give in wherever possible if there is a prospect of a better deal/s in the future.
or
You are in the last few weeks of developing your Policy and Billing System and now you are told about a new change that business wants to push in, since you want to be in the Good books of the business director and are also a non confrontational person, you may agree to the change (with the accepted risk of quality compromise, elongated Testing Cycle leading to extended timeline possibility) and log more work hours for your Team .
This usually leads the compromising party feeling resentment and short changed
2> Avoiding
- This is a more of a Lose-Lose situation where the first party may try to move away from any contradictions and issues that exist in the negotiation. This may seem as a skillful act by the other party but is actually not. As in the end, both parties tend to lose if the actual issues and problems are simply swept under the carpet.
Consider that on your Policy System implementation project, you want to integrate to a Third party medical Bill review system but the system vendor does have a good delivery record. When you are discussing budgeting and Vendor procurement for this integration with your Business Sponsors and avoid talking about the issues with Vendor performance and delivery, you tend to lose on a larger scale. Becuase when you are actually implementing the project that is when the actual realtime problems will hit you head on.
3> Collaborating
- This negotiation style leads to more of a Win-win situation than other Negotiation tactics for the simple reason being, both parties are willing to collaborate and understand each other's problems and come up with a middle ground
Consider that in your Claims Implementation project, you are developing a Legal evaluation solution in the application, but the business requires this functionality be linked to another third party application which actually feeds overnight to a (say) reporting data warehouse.
You as a project manager understand that, the Legal Evaluation functionality is required in the application for the business to complete their claims entry and processing workflow, but at the same time the business Team understands that you cannot complete the third party system integration in this short time frame without compromising on quality. So you both adjust your scope to implement the UI functionality in the shorter term, but not the integration atleast for the current release and then commit a later release date for the integratin piece of it.
4> Competing
- This leads to a Win-Lose situation wherein the first party negotiator looks at the negotiation as a 'Must Win' game and will try any all creative tactics to win at the game. In this type of behavior the first party negotiator tends to lose on the relationship aspect with the other party as the other party may feel short changed later in the whole deal and may not want to do business with you ever again.
e.g. In your Policy System implementation project, the client wants to implement the endorsement functionality before project release, but you do not want to give in, in any case and will come up with 'n' reasons and workarounds to 'NOT' do the change. In the end, you may win this negotiation, but lose your relationship with the Business Owner or jeopardise future long term deals with the Client,
5> Compromising
- This Negotiation style again may lead to a Lose-Win Situation because the first party wants to close to deal as soon as possible and not look at other possible alternatives and solutions. This may serve to the other party's advantage at the best.
Consider an example where you are working on a Client contract bid and are negotiating the proposal with the Client Business Manager. The Client does not agree to the implementation approach and may want to cut corners by shortening the Testing phase, now based on this concern, the first party instead of trying to come up with some creative alternatives, will begin to lean and then agree towards corner cutting and closing the deal which may not benefit your project and organization as a whole in the long term.
Negotiation Tactics
People who are skillful negotiators or have sufficient street smarts will use various negotiation tactics. Inept or unskilled people may not recognise these. Here are some such techniques used,
1> Playing Good Guy-Bad Guy
- There are 2 guys on one side of the table and one of them will be pro-deal and other one will be anti-deal guy.
2> Competitor Threat
- Negotiators may try to squeeze benefits from the other party by throwing other cometitor names in the mix.
3> Delay
- Skillful negotiators will try to delay and lengthen the negotiation process by using unnecessary questions, viewpoints and delays thrown in the whole mix. The whole purpose of doing so is to tire you out mentally and emotionally so you will agree to the other party's demands.
4> Not enough Authority
- Skilled negotiators never impress on the other party that they are the decision makers and will always leave some wiggle room to think over things. That is why always make sure you have the right decision making people at the negotiation table
5> Low balling
- Skilled negotiators will always try to low ball a deal and will offer you something that is much below the actual deal price (Although this may not always be true). So make sure you do your homework about the deal in question, the market position etc
Negotiation always happen between people (You do not negotiate with a robot, atleast not yet in the real world). This means each party/person will come with his own bag and baggage of emotions, goals and objectives etc. It is therefore mandatory and beneficial to come to a negotiation with a clear mind. Your attitude and perception sets the tone on the Negotiation table (atleast partially, if not completely). Please comment on whether you agree to these points or you feel there is anything else to add here.
Kids negotiate with their parents on what they want to (or dont want to) watch/eat/play? (and somehow always win...hhmmm i wonder why?..)
We negotiate with our better halfs on whether we eat the leftover cold pizza for dinner or dine out (Guess who wins there?)
At work, we negotiate with our bosses for better career roles, better projects, salary, promotion etc.
While on a project we negotiate the project deadlines, the workscope, experienced resources with skillsets matching the requirements etc etc. In a sales role, we negotiate with the prospects on the RFP Scope and costs. After bagging the project we negotiate with the client on Scope, timelines of the current project.
Well the point here is, Negotiations happen everywhere.
What is Negotiation?
Negotiation is a process where 2 or more parties get together and work towards a mutually acceptable solution to an issue in question.
This is also something that is closely associated to "Workplace Politics". Now generally the term politics is usually referenced or viewed in a negative sense, but it need not be the case. Politics is about talking, negotiating, convincing your Team, resources, stake holders to understand your point of view. For a person to really understand workplace politics, you have to invest your time into it. I mean really invest into it.
For this there are certain necessary steps that you have to take like,
You have to be really interested in people, their likes and wants, their concerns. This helps develop a level of trust and credibility between the 2 parties involved and this Trust is what makes it easier for the other party to understand you, accept you and your viewpoints
But this is not always an easy task to accomplish. But it is an art that can be learned, honed and sharpened with time.
Pre-Steps to a Negotiation
In any type of negotiations, there are certain guidelines to be followed. For e.g.,
1> Invest some time in genuinely understanding the other person or party. This may not always be possible but if you have a chance to do, please do it.
2> Do not deal any negotiation from an emotional angle. Always be ready to have alternatives, walk away solutions
3> Think and work on alternatives that are Win-Win for both.
4> Always make sure you have the deal makers or the actual decision makers at the negotiation table
Rules of Negotiation
1> Listen, Listen, Listen
- When on the Negotiation table, Sincerely listen to understand the other party, their viewpoints and beliefs. Many a deals and arguments are lost because one party did not try to understand the other party.
Always remember, when an person acts, (he may be right or wrong from your perspective) it is because he BELIEVES this is the right thing to do at that moment in time. So step in his/her shoes and things will be easier from that point on.
2> Do not take anything personally
- Negotiations can be stressful, tempers may rise and unwanted and harsh words may be thrown around. Try to keep your calm and focus on the situation rather than the person.
3> Focus on Relationships
Always be empatic to the other person. Focus on strengthing relationship with the other party
- Not all negotiations will end the way you want. In some cases you may get your way and in other cases, you may not. But always remember in the end, people matter more than the deal in hand so do not try to win any negotiation at the cost of losing people.
4> Backup plan
And last but not the least, always remember to work out a back up plan if your current project negotiations fail.
Negotiation Types
Any type of negotiation falls in either of these negotiation styles,
1> Accomodating
- This mostly leads to a Lose-Win situation in which first party is more emphatic to the other person's problems and issues and ultimately succumbs to a compromise.
This happens more so, when first party is more concerned about preserving the relationships with the other party rather than the Negotiation in hand.
e.g. Consider that you as a Project or account manager are siting at a negotiation table with your prospect and are discussing and finaling the project deal. You are leaning and advocating 'X' dollars per hour more than the Prospect But a savvy negotiator would give in wherever possible if there is a prospect of a better deal/s in the future.
or
You are in the last few weeks of developing your Policy and Billing System and now you are told about a new change that business wants to push in, since you want to be in the Good books of the business director and are also a non confrontational person, you may agree to the change (with the accepted risk of quality compromise, elongated Testing Cycle leading to extended timeline possibility) and log more work hours for your Team .
This usually leads the compromising party feeling resentment and short changed
2> Avoiding
- This is a more of a Lose-Lose situation where the first party may try to move away from any contradictions and issues that exist in the negotiation. This may seem as a skillful act by the other party but is actually not. As in the end, both parties tend to lose if the actual issues and problems are simply swept under the carpet.
Consider that on your Policy System implementation project, you want to integrate to a Third party medical Bill review system but the system vendor does have a good delivery record. When you are discussing budgeting and Vendor procurement for this integration with your Business Sponsors and avoid talking about the issues with Vendor performance and delivery, you tend to lose on a larger scale. Becuase when you are actually implementing the project that is when the actual realtime problems will hit you head on.
3> Collaborating
- This negotiation style leads to more of a Win-win situation than other Negotiation tactics for the simple reason being, both parties are willing to collaborate and understand each other's problems and come up with a middle ground
Consider that in your Claims Implementation project, you are developing a Legal evaluation solution in the application, but the business requires this functionality be linked to another third party application which actually feeds overnight to a (say) reporting data warehouse.
You as a project manager understand that, the Legal Evaluation functionality is required in the application for the business to complete their claims entry and processing workflow, but at the same time the business Team understands that you cannot complete the third party system integration in this short time frame without compromising on quality. So you both adjust your scope to implement the UI functionality in the shorter term, but not the integration atleast for the current release and then commit a later release date for the integratin piece of it.
4> Competing
- This leads to a Win-Lose situation wherein the first party negotiator looks at the negotiation as a 'Must Win' game and will try any all creative tactics to win at the game. In this type of behavior the first party negotiator tends to lose on the relationship aspect with the other party as the other party may feel short changed later in the whole deal and may not want to do business with you ever again.
e.g. In your Policy System implementation project, the client wants to implement the endorsement functionality before project release, but you do not want to give in, in any case and will come up with 'n' reasons and workarounds to 'NOT' do the change. In the end, you may win this negotiation, but lose your relationship with the Business Owner or jeopardise future long term deals with the Client,
5> Compromising
- This Negotiation style again may lead to a Lose-Win Situation because the first party wants to close to deal as soon as possible and not look at other possible alternatives and solutions. This may serve to the other party's advantage at the best.
Consider an example where you are working on a Client contract bid and are negotiating the proposal with the Client Business Manager. The Client does not agree to the implementation approach and may want to cut corners by shortening the Testing phase, now based on this concern, the first party instead of trying to come up with some creative alternatives, will begin to lean and then agree towards corner cutting and closing the deal which may not benefit your project and organization as a whole in the long term.
Negotiation Tactics
People who are skillful negotiators or have sufficient street smarts will use various negotiation tactics. Inept or unskilled people may not recognise these. Here are some such techniques used,
1> Playing Good Guy-Bad Guy
- There are 2 guys on one side of the table and one of them will be pro-deal and other one will be anti-deal guy.
2> Competitor Threat
- Negotiators may try to squeeze benefits from the other party by throwing other cometitor names in the mix.
3> Delay
- Skillful negotiators will try to delay and lengthen the negotiation process by using unnecessary questions, viewpoints and delays thrown in the whole mix. The whole purpose of doing so is to tire you out mentally and emotionally so you will agree to the other party's demands.
4> Not enough Authority
- Skilled negotiators never impress on the other party that they are the decision makers and will always leave some wiggle room to think over things. That is why always make sure you have the right decision making people at the negotiation table
5> Low balling
- Skilled negotiators will always try to low ball a deal and will offer you something that is much below the actual deal price (Although this may not always be true). So make sure you do your homework about the deal in question, the market position etc
Negotiation always happen between people (You do not negotiate with a robot, atleast not yet in the real world). This means each party/person will come with his own bag and baggage of emotions, goals and objectives etc. It is therefore mandatory and beneficial to come to a negotiation with a clear mind. Your attitude and perception sets the tone on the Negotiation table (atleast partially, if not completely). Please comment on whether you agree to these points or you feel there is anything else to add here.
Thursday, September 1, 2011
Project Estimation basics
What is Project Estimation?
Last weekend, my wife and I along with our three year old went for a movie. As it was not a kid flick, my son had zero interest in watching the movie. So he starts with his version of the "20 Questions" game. All questions go towards "When do we go home?" and i gave him some creative answers like "As soon as all the bad guys in the movie are caught"..."As soon as this song ends" (Indian Movie) and so on and so forth.....
This is what is estimation is all about. To arrive at an estimate means to use "Calculated Approximation methods using inputs available to assist in a planning objective"
Preparing IT Project estimates is usually not a one man job (of course that depends on the size of the project), there may be several people involved in preparing a project estimate, right from Project Manager to Business analysts, Development Team, Testers, QA, Infrastructure resources to Project sponsors and End users. Everyone has a say and a stake in making sure the project estimates are to the mark or nearabouts.
As we all know a project has multiple phases...Initiation, planning, development, testing, deployment etc. The projects estimates have to account for each and every one of this phases along with areas that are not phase dependant e.g. Project Management, Vendor procurement, Software licensing, hardware and infrastructure etc items.
Why do we need estimations? Benefits
There is no downside in preparing a project estimate but the advantages are manifold. Project estimation is more of a science than an Art. Projects are usually undertakings that cost time and money. To avoid slippages and failures due to any of these known/unknown factors, the projects have to be properly estimated and controlled.
As both overestimation and underestimation pose a problem to a project. Overestimation will cause the project to get over budget or even cancelled and Underestimation may caue resource, scope, quality and timing issues, again may lead to Project failures.
So what is the need to estimate a project...several reasons
1> To get approval for the project so sponsors get an idea how much the project will cost - ballpark, */-10% etc, resource, time requirements
2> To streamline, monitor and guide project costs, resources when project is in progress
3> To determine project success or failure based on final project costs vs estimation
Estimation Process
Estimation Process
There are 3 processes one can use to do project estimation
1> Analogous Estimation
This estimation process makes use of knowledge base from similarly executed projects and prepares project estimates based on those.
2> Expert opinion
This process makes use of experience of people/projects from prior similarly executed projects.
3> Activity breakdown estimation
This process makes use of breaking down the project into multiple Tasks and activities and estimation is done based on these individual tasks and activities
Estimation Techniques
There are quite a few techniques that can be employed to estimate a project
1> Three Point estimation
This is my favourite project estimation technique (I call it the BMW technique - Best, Most likely, Worst case) wherein we use statistical data and information and come up with Best case, Most likely and Worst case estimates
To prepare these estimates, we use the Activity breakdown process. This means the Project is broken down into multiple tasks and estimates are prepared for each of the individual tasks and then added up together.
Estimates are prepared for the foll 3 scenarios - Best Case (B), Most Likely (M) and Worst case (W).
Based on this we come up with,
A> Standard deviation value, SD = (W - B)/6
B> Weighted Average, E = (B + 4M + W)/6
2> Base and Contingency Estimation
This is a very simple and straight forward estimation technique but not that accurate, wherein we prepare estimates for the best case and worst case scenarios. But this does not give you a similar confidence level as obtained by the prior method as it is more scientific.
How does it work?To calculate the base value assume that the project is executed in the minimal time duration possible and estimates are prepared based on that. To calculate the contingency (or Risk) values (which generally ranges from 10-50% of base estimate) list down all the project risks in a risk register and use that for preparing your project estimates.
These two values are then summed up to prepare the final Base and contingency estimate.
Note that for calculating the contingency value, user can also prepare an actual list of expected risks and issues instead of assuming a fixed percentage of the base. This gives a more nearer number for the risk value.
Also as mentioned earlier, along with the Project task level estimates we have to make sure we account for the non technical areas as well, like,
i> Infrastructure and Hardware costs
ii> Vendor costs
iii> Training costs
iv> Project Management
v> Business Analysis
vi> Testing Costs
vii> Quality Analysis etc
3> Ball park or Order of Magnitude estimation
Here the estimates calculated are usually two to three times that of the actual estimates.
To perform an order of magnitude estimation, break the project into multiple tasks and activities and then score them on basis of Complexity and Amount of work effort involved.
Based on this weighing factors prepare estimates in terms of resources and Time. For e.g. a Task with medium complexity and small size would need (say) 2 resources for 2 weeks.
Summary
Like i said above, project estimation is a Science more than an Art. Always use your prior experience and expertise of others who have been involved in similar projects to come up with a more real to life estimation. Make sure you give sufficient weightage to the risks and issues involved in estimating a project.
Also ensure that you review your estimates at the end of the project to see where you went wrong or what can be done better in the future.
Hope this article will help you in better estimating your projects. Please let me know your thoughts and comments.
Last weekend, my wife and I along with our three year old went for a movie. As it was not a kid flick, my son had zero interest in watching the movie. So he starts with his version of the "20 Questions" game. All questions go towards "When do we go home?" and i gave him some creative answers like "As soon as all the bad guys in the movie are caught"..."As soon as this song ends" (Indian Movie) and so on and so forth.....
This is what is estimation is all about. To arrive at an estimate means to use "Calculated Approximation methods using inputs available to assist in a planning objective"
Preparing IT Project estimates is usually not a one man job (of course that depends on the size of the project), there may be several people involved in preparing a project estimate, right from Project Manager to Business analysts, Development Team, Testers, QA, Infrastructure resources to Project sponsors and End users. Everyone has a say and a stake in making sure the project estimates are to the mark or nearabouts.
As we all know a project has multiple phases...Initiation, planning, development, testing, deployment etc. The projects estimates have to account for each and every one of this phases along with areas that are not phase dependant e.g. Project Management, Vendor procurement, Software licensing, hardware and infrastructure etc items.
Why do we need estimations? Benefits
There is no downside in preparing a project estimate but the advantages are manifold. Project estimation is more of a science than an Art. Projects are usually undertakings that cost time and money. To avoid slippages and failures due to any of these known/unknown factors, the projects have to be properly estimated and controlled.
As both overestimation and underestimation pose a problem to a project. Overestimation will cause the project to get over budget or even cancelled and Underestimation may caue resource, scope, quality and timing issues, again may lead to Project failures.
So what is the need to estimate a project...several reasons
1> To get approval for the project so sponsors get an idea how much the project will cost - ballpark, */-10% etc, resource, time requirements
2> To streamline, monitor and guide project costs, resources when project is in progress
3> To determine project success or failure based on final project costs vs estimation
Estimation Process
Estimation Process
There are 3 processes one can use to do project estimation
1> Analogous Estimation
This estimation process makes use of knowledge base from similarly executed projects and prepares project estimates based on those.
2> Expert opinion
This process makes use of experience of people/projects from prior similarly executed projects.
3> Activity breakdown estimation
This process makes use of breaking down the project into multiple Tasks and activities and estimation is done based on these individual tasks and activities
Estimation Techniques
There are quite a few techniques that can be employed to estimate a project
1> Three Point estimation
This is my favourite project estimation technique (I call it the BMW technique - Best, Most likely, Worst case) wherein we use statistical data and information and come up with Best case, Most likely and Worst case estimates
To prepare these estimates, we use the Activity breakdown process. This means the Project is broken down into multiple tasks and estimates are prepared for each of the individual tasks and then added up together.
Estimates are prepared for the foll 3 scenarios - Best Case (B), Most Likely (M) and Worst case (W).
Based on this we come up with,
A> Standard deviation value, SD = (W - B)/6
B> Weighted Average, E = (B + 4M + W)/6
2> Base and Contingency Estimation
This is a very simple and straight forward estimation technique but not that accurate, wherein we prepare estimates for the best case and worst case scenarios. But this does not give you a similar confidence level as obtained by the prior method as it is more scientific.
How does it work?To calculate the base value assume that the project is executed in the minimal time duration possible and estimates are prepared based on that. To calculate the contingency (or Risk) values (which generally ranges from 10-50% of base estimate) list down all the project risks in a risk register and use that for preparing your project estimates.
These two values are then summed up to prepare the final Base and contingency estimate.
Note that for calculating the contingency value, user can also prepare an actual list of expected risks and issues instead of assuming a fixed percentage of the base. This gives a more nearer number for the risk value.
Also as mentioned earlier, along with the Project task level estimates we have to make sure we account for the non technical areas as well, like,
i> Infrastructure and Hardware costs
ii> Vendor costs
iii> Training costs
iv> Project Management
v> Business Analysis
vi> Testing Costs
vii> Quality Analysis etc
3> Ball park or Order of Magnitude estimation
Here the estimates calculated are usually two to three times that of the actual estimates.
To perform an order of magnitude estimation, break the project into multiple tasks and activities and then score them on basis of Complexity and Amount of work effort involved.
Based on this weighing factors prepare estimates in terms of resources and Time. For e.g. a Task with medium complexity and small size would need (say) 2 resources for 2 weeks.
Summary
Like i said above, project estimation is a Science more than an Art. Always use your prior experience and expertise of others who have been involved in similar projects to come up with a more real to life estimation. Make sure you give sufficient weightage to the risks and issues involved in estimating a project.
Also ensure that you review your estimates at the end of the project to see where you went wrong or what can be done better in the future.
Hope this article will help you in better estimating your projects. Please let me know your thoughts and comments.
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