This is a true story. The company names
have been changed.
Losing staff and saving money
Acme Corporation, a British
manufacturer, was implementing a new billing system, including development of
custom reports, modifications, and interfaces. Acme assigned twenty of its own
staff either part-time or full-time to the project. In addition, Acme engaged
Standard Consulting, who assigned twenty part-time and full-time consultants to
the project. The consulting fees were
expected to be about two million Euros for the nine-month project.
The first phase of the project went
well, with the smallest Acme division starting to use the new billing system
after seven months, as scheduled. The remaining divisions, billing over
ninety-five per cent of Acme’s customers, were to be live nine months after the
start of implementation.
During the eighth month, one of Acme’s
four technology staff quit with very little notice. Acme’s IT manager wanted to
get a replacement hired quickly, but was also concerned about cost. When the
Standard project manager suggested that a Standard consultant could be added to
the team, the Acme IT manager declined due to the additional fees. Then the
Standard project manager offered to assist in the recruiting process, but the
Acme IT manager declined that option as well. Instead, the Acme IT manager
brought on a resource from a foreign country, which would save five thousand
Euros for the remaining time on the project.
The foreign developer arrived within a
week, and in less than two days it was obvious that the developer was not
qualified and also spoke very poor English. By the time the developer was
terminated, a person-month had been lost. Acme decided to add another Standard
consultant to the project to replace the terminated developer. This arrangement
started immediately.
Now a second Acme developer quit his
job, also with short notice. While recruiting was under way for the empty
positions, another Standard consultant was added to the project part-time.
Then, a third member of the Acme
technology team left his job with short notice. This time, the Acme manager
asked the Standard manager to assist with the process of hiring a contractor,
to ensure the new person was qualified to work with the new software and
development tools. The new contractor started right away to catch up on the
lagging work.
Go-live
The Acme and Standard technology team
members worked longer hours to try and catch up. However, enough time had
already been lost that it could not be completely caught up, and the go-live
date had to be delayed by a month.
During the project, the project team
ran test billings successfully. So, in order to save money, Acme’s IT manager
told the Standard project manager that no go-live support would be needed, and
the Standard consultants could leave. Standard Consulting’s project manager
thought it was wiser to keep a few of the consultants on site for a couple of
weeks after go-live to support Acme. This would have cost Acme about twenty
thousand Euros, which had already been included in the budget for consulting fees. However, Acme was insistent that they didn’t want to pay for it and that Standard should leave.
After go-live, Standard’s project
manager was shocked to find out that Acme was extremely unhappy. Upon
investigation, Standard’s manager found out that Acme had not properly run a
step that was required prior to running the billings. Acme’s staff did not have
the experience to solve the problem quickly and the billing had been delayed.
Acme’s CIO had been concerned that she would lose her job if they could not
produce invoices after spending millions on implementing the new software.
After all the work that had been done
well, Standard’s project manager was very concerned that Acme could end up
dissatisfied. In order to ease Acme’s concerns, he assigned a consultant to
automate the pre-billing step and did not bill Acme for the work.
Conclusions
Acme’s decision to choose the
unqualified foreign contractor to save five thousand Euros out of two million
Euros in fees was short-sighted, as the go-live date ended up being postponed for an
entire month.
The Standard Consulting project manager
discovered that it is possible for a project to go well and then for lack of
go-live support, the delivery team can lose credibility. He may have found it
worthwhile to manage this risk by assigning one consultant to stay or be
on-call for a week or two at go-live and not bill the client, or bill at a
discounted rate. Providing a bit of free service is what he ended up doing, and
perhaps they’d all have been happier if it had been done earlier.
It is tempting during a project, when
budget revisions are needed, to consider reducing or eliminating the go-live
support budget. In this case, where the client had continuous turnover, leaving
only the consultants with knowledge, it was an unwise decision. It may have
saved a few dollars but nearly prevented the company from running its
business.
Something I wonder: When the billing couldn’t be made to work,
and his boss, the CIO, was in danger of losing her job, why didn’t the manager
phone the consultants to ask for help?
