At the end of the day, any business needs to make money to survive. Increasing the customer base and revenue is one obvious strategy to meet this goal. Sales teams will then be instructed to sell the product heavily and the project queue can quickly become full. While an effective sales plan and a robust customer queue is certainly a good thing, the push to increase revenue by increasing customers should not sacrifice normal project management practices. In fact, the project management process should control the entire delivery pipeline from sales to go-live.
I work at a company that sells and delivers software. This software is highly configurable, with a full team of project specialists that work with customers to configure the software to meet their needs. One specific customer proved to be quite difficult to implement and was dissatisfied with several attempts to deliver a solution. A large portion of our staff had to dedicate many hours over and above the scoped estimate to rebuild and support this solution, which of course cost the company money, resources, opportunities, and staff morale.
To fully understand how we ended up in this position we must analyze the entire flow of the project from sales to delivery. The customer was sold the solution via an on-site demo as we often do for a promising client. Because this customer was viewed as a strategic opportunity to break into a particular state with large clients, company owners conducted the demo and requirement gathering instead of the sales team. They closed the deal, drafted our standard SOW, and the project commenced. Once the actual project work began, the project team immediately recognized that the contract was insufficiently scoped and exceeded our feature set.
Every time we attempted to conform the software to the client’s requirements, they would push back and escalate a complaint directly to senior management stating that the work didn’t meet their needs. Often, the customer would be told we would accommodate their request at no additional cost despite requiring custom development. As a result, we have delivered triple what was promised in the contract at no additional cost and their installation is highly customized, difficult to support, and not repeatable for other clients. To this day they are unsatisfied. The price tag of this blunder produced unhappy and burned out staff, neglected customers, and a severely over-budget project.
When you’ve reached this point, the question becomes, “Is it more expensive to keep the customer or let them find a solution elsewhere and recoup costs with other clients?”
What went Wrong?
“Any cost control system is only as good as the original plan against which performance will be measured. Therefore, the designing of a planning system must take into account the cost control system.” – Harold Kerzner Project Management: A Systems Approach to Planning, Scheduling and Controlling (502)
How did we get to the point where we are thinking of “firing” a strategic customer? It started from the sales strategy to use senior management and not follow normal sales procedures. This created a lack of understanding in what our product could do versus what the customer was promised. The SOW (a very important document!) was too vague and lacked any controls for the future. By the time the customer was added to our implementation pipeline their expectations were inflated. Because the project team was not empowered, their authority quickly became undermined and quality protocols were bypassed. Without a cost control measure in place, we struggled to identify risks and manage them effectively. However, even with this, it might have proved difficult to follow since our SOW lacked distinct/accurate measures of success, estimates, and milestones.
Lessons Learned
While I am certain there are customers that always be slightly dissatisfied with their service or product(s), I think a better project management culture and practices could have saved this customer.
Here are a few things that we could do differently:
- Empower our sales team to sell.
- Educate the sales team about our software.
- Educate the sales team about the project management process so customers know what to expect after the sale.
- Increased communication between sales and implementation so better information can flow both directions.
- Better defined SOW with clearly stated milestones and metrics.
- Better estimation of projects hours and resources required.
- Implement a cost control system that we can use to control our internal cost and control the customer. A cost control system that tracks monetary cost and tracks hidden opportunity cost.
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