Dealing with vendors has never been a cakewalk for CIOs. Farming out projects to these providers forces IT leaders to manage burdensome issues such as cost, timing and scale--any of which, when done wrong, can lead to failure. In his new book, Management Rewired, consultant Charles S. Jacobs writes about how a then-new leader at Cambridge Technology Partners, an application development provider, changed the way CIOs and their partners build effective relationships.
The biggest dislike in application development has always been projects that run over time and budget. It makes it impossible for CIOs to plan and effectively manage their business. Worse yet, such projects destroy their credibility with the line. To eliminate this source of frustration,
CTP decided to offer guaranteed fixed-time, fixed-price contracts. The company knew that this strategy couldn't be easily matched by the competition because all of their systems, including compensation, were based on billing for time and materials. To match CTP's offering, they would have to completely redesign their businesses, and the cost and time involved would be prohibitive.
To make this change work, others were needed. For the company to guarantee a fixed time and a fixed price, it had to eliminate change orders and midcourse corrections. Standard practice in the industry was for the client to give the vendor the specifications for the application; inevitably this handoff would lead to misinterpretations, which would require adjustments. The way around this was for the client and vendor to create the specifications together. CTP's approach was to form a team made up of representatives from both who would spend a week working together to create specifications.
But this was an expensive proposition, so it led to other changes. CTP turned what had been a service into a product by putting a fixed price on the process of creating the specifications. To make sure the team used its time effectively, they staffed each project with a trained facilitator, and this allowed them to address another key frustration. Most development projects focused only on the technology, and inevitably there would be behavioral issues when it came time for implementation. With the participation of the facilitators, these issues were identified and addressed up front.
There is always friction in the relationship between consultants and their clients, particularly when it comes to sales, but the team approach prevented it from occurring. In other firms, the vendor would sit across from the client and pitch their services, but at CTP, there was no pitch to sell services. Instead, at the end of the week-long workshop to develop the specifications, the CIO would come in for a presentation given by his people. Effectively, the CIO's own people were the ones selling him on the application. Not only had Jim changed a service sell into a product sell with a fixed price, he had the client selling himself.
One simple shift, from meeting needs to eliminating frustrations, led to a counterintuitive habit of mind, an idea lodged at a high level, which was then brought to bear on all aspects of the business, even turning problems into opportunities. Since the company was growing so quickly, it was forced to hire a number of young developers right out of school. These people were in front of the client from day one, in contrast to the established industry practice of having only senior people meet with the client. The necessity quickly was recast as a virtue. As the president described it to me, "Initially we were concerned how clients would respond, but we just stressed how much fun it was to work with young, bright, energetic people. After awhile, they saw them that way too."
Excerpted from Management Rewired: Why Feedback Doesn't Work and Other Surprising Lessons from the Latest Brain Science by Charles S. Jacobs by arrangement with Portfolio, a member of Penguin Group (USA), Inc. Copyright (c) Charles S. Jacobs, 2009.