Project management skills are in short supply. Good project managers are rare, but you need to find the best of the best if you’re to make Fixed Price Projects (FPPs) successful. It’s not just a matter of getting things done on time, but of getting things done profitably for you, and to your customer’s satisfaction.

Although project management is often regarded as a specific skill, my own preference is that a project manager should have a good understanding of technical aspects of the project. Without this it is difficult for him or her to judge the plausibility of estimates, solutions and excuses.

Good Commercial Project Management means:

• Delivering the project at a level of quality that meets the client’s reasonable expectations
• Delivering the project on time, assuming that the client has met his obligations in terms of timings, and assuming that the project manager has accepted the project plan
• Delivering the project within estimated consulting and development days, assuming that the project manager has accepted the estimate
• Ensuring that staff are motivated to deliver on time and estimate
• Ensuring that the project meets its profit targets
• Ensuring that the scope of the project is, at all times, well-defined and that all out-of-scope work is charged (usually through separately contracted Change Request Forms/Orders)
• Ensuring that staff document their activities well enough to support all out-of-scope work if it happens either ‘accidentally’ or is agreed
• Managing client expectations to ensure they are reasonable

When passing a project from the sales phase to the delivery phase it may be wise to document the salesman’s understanding of the client’s expectations. Does the client expect perfection? Is he willing to compromise? Is he reasonable? We might call this an ‘expectations audit’.

Collectively, when starting the delivery of a project, you must be able to answer these questions:

• Does the client understand that a fixed price project is limited to a defined scope?
• Does the client understand that estimates must be based on documented assumptions, specifications, and descriptions, and that if they are not, areas of imprecision must be highly constrained in terms of requirements (for example, if reports are not clearly defined)?
• Does the client understand that it is we who can say whether a requirement is clearly stated or not
• Does the client understand that out-of-scope work must be separately specified using a Change Request Form and that he will be charged?
• Does the client understand that if we carry out extra work due to the mistakes of his staff or due to delays for which his staff are responsible, then he will be charged for this time?
• Does the client understand that our fees are reasonable?
• Does the client accept that compromise will sometimes be pragmatic if he is to obtain benefit from the project?
• Does the client understand that his staff must be motivated, and encouraged, and must behave reasonably and cooperatively?
• Does the client understand that software development is difficult?
• Does the client understand that software quality is rarely perfect?

If the answer to many of these questions is ‘No’ then the salesman hasn’t done a good job, and a question arises as to whether the project is worth the risk. If it is, then all involved, and principally the project manager, must continue to move the client’s expectations towards the ‘optimal’ ones.

If a project manager is to manage a project well, he must keep in close contact with consultants and developers who are involved more deeply in the detail of the project, and must be alert to out-of-scope tendencies. It is also essential that time spent on the project be captured at task level so that comparisons with estimates (assuming, as one should, that estimates are drawn up at task level) can alert the project manager to commercially dangerous situations as early as possible.

If all of these and other issues have gone through your mind when considering, scoping, selling, planning and contracting a fixed price project, then you might just do it well.

See also:

FPP – A Frightening Acronym

FPP – Estimating Fixed Price Projects

FPPs – Mitigating Some of the Risks

FPPs – More Pitfalls to Avoid

FPPs – Yet More Thoughts on What Could Go Wrong

FPPs – Getting Paid and Getting Out

Summary

• Ensure that client expectations are reasonable and that the client understands the implications and risks of a fixed price project from both his and our perspective
• Ensure that scoping is as precise as possible and well documented
• Ensure that initial estimates are based on well stated assumptions and are agreed by sales and consulting staff
• Try to persuade the client to engage in a first clarification and design phase that is jointly funded and which will deliver more precise scope and estimates
• Make sure that the contract protects you from the unknown unknowns, and that nothing is open ended
• Make sure that staff are motivated to deliver on time and within estimate
• Monitor task actuals continuously during project execution
• Make sure that payments cannot be unreasonably withheld