If you are in the initial stages of vendor selection for your transformation program, or perhaps you are “seeing red” in your program status reports or are in the throes of wrestling with a significant change order, it can be difficult to grasp how to properly manage your resources and plan for a sustainable program.
Program status reporting is rooted in two common frameworks: the project management triangle of cost, time, and scope, or the three-legged stool of cost, time, and quality. However, statistics on program failures and experiences indicate that industry program management practices are average at best.
PMOs are sometimes viewed and staffed as “news reporters,” delegated to reporting what has happened. Unfortunately, like everyone else, PMOs are poor at predicting the future. Regardless, PMOs need to look into resource management beyond “budget” items to gain insight into actionable tactics that can alleviate obstacles and course correct when needed.
Here are three tactics to incorporate into your vendor negotiations and into your PMO practices:
Despite it being a determining factor of program success, talent selection is often overlooked at the onset of the program and then given heightened attention resulting from a quality or performance issue. Two key components for talent management include role descriptions within program Statements of Work (SOW) and the process of qualifying talent brought to the engagement.
Written role descriptions within the SOW will benefit all parties. Vendor role descriptions set the client’s expectations of the talent offered by the vendor. The vendor role description allows the client to hold the vendor accountable for providing qualified resources for the program.
Clients have an opportunity to vet vendor personnel during pre-SOW meetings. During these meetings, they are advised to do additional diligence to compare SOW vendor role descriptions with résumés and references of the vendors’ proposed leadership personnel and key positions. Vendors should accommodate a client’s request for references and résumés for key roles and should not question a client’s request to replace personnel.
Additionally, client role descriptions dictate the vendor’s expected roles and capabilities provided by the client. Thus, clients should expect the vendor to hold them accountable for providing the resources in the role descriptions.
Vendor Change Orders may or may not directly reference the quality of client-provided resources, but this can be a root cause for delays or issues related to client deliverables. Clients willing to provide average and available internal resources are staffing for failure.
Staffing management runs deeper than the Red-Amber-Green (RAG) status reporting of anticipated and planned resources. Clients should require their vendors to report resource management status KPIs and Leading Indicators, including a forward-looking onboarding status forecast for all program resources. Timely personnel onboard is always an issue in tight labor markets, new and popular technologies, or locations with limited skills.
A resource forecast would identify expected off boarding to depart in 30-, 60-, and 90-day sequences. Forecasting delayed departures will assist in hitting expected milestones and deliverables, managing unplanned costs, and confirming knowledge transfer as well as help in meeting internal security requirements.
Regardless of if the contract is fixed fee or time and materials, the ability to predict and confirm the timely arrivals of all program resources is critical to maintaining the health of the program. Accounting for off boarding program resources improve cost control and supports internal corporate security controls.
Management issues are significant and expensive. Despite this, capacity management is rarely done proactively and is often an afterthought. In fact, most organizations manage reactively after realizing an elongated history of one or more poorly performing workstreams. Capacity issues take time to manifest and identify, and even more time and resources to resolve.
Capacity management issues exist for both vendor and client, but the consequences for the client are harder to solve and usually more expensive for the client. The vendor has virtually infinite resources, while the client’s limitations are determined by availability of internal resources and competing priorities within the company.
Assuming qualified resources are on the team, capacity issues could lead these teams to gradually fall behind plan. A “burn down” chart will show planned output vs actual output, but just like a RAG qualitative status, there is nothing to indicate cause of performance status.
Capacity management includes knowing expected “Takt” time (planned time to complete) and measuring cycle time (actual time to complete) of the performing team or workstream. Teams fall behind because actual cycle time is greater than planned time to complete. Common causes include defective inputs, lack of load leveling, or insufficient resources and an unrealistic plan.
Vendors can point to client capacity issues due to lagging performance and program latency. At the beginning or transition of a phase of work, clients are advised to require the vendor to demonstrate the feasibility of the proposed plan for the impending phase of work.
Vendors should be able to demonstrate the expected workstream function, proposed takt and cycle time, expected quality of inputs, and expected ramp-up of team performance. Clients should ask their vendors for clarity on details and how impediments are resolved. Requesting revisions to the timeline may result in a change order – and that may be what is required.
Your ability to contractually embed your requirements for talent management, including forward-looking personnel management practices and reporting, will impact your ability to predict and manage labor costs.
Some vendors will resist clients’ transparency requests for numerous reasons, including the fact that role descriptions are written for staffing level and not for specific technologies, visibility to resource management is not needed for vendors’ fixed fee estimates, and the vendor proprietary dashboard capabilities are limited. Our experience shows other vendors will work with clients to meet reasonable expectations, especially when the client demonstrates an active interest and expresses their intentions to support and sustain their program.