Do you wonder why the Time & Material (T&M) projects are failing in your organization?
Did you ever felt like, “Only if we could have provided better specifications, we would have got the desired business outcome”?
If you answered ‘Yes’ to any of the above questions, then I have good news for you.
"You are not alone!"
It is de-facto a standard in IT outsourcing industry to provide services such as software development, quality assurance, project management etc., preferably based on T&M pricing model.
However, in essence, T&M contract is pitched as ideal for a project without a clear or accurate estimate of the time and costs involved. In other words, if the requirements are not clear, precise specifications could not be laid out, none of the parties involved in the contract knows what they need, and the specifications will change inevitably. It is typically an uncharted space, i.e., Genesis phase on a Wardley map. Yet, the failures in T&M project are attributed to the inability to provide the precise specifications.
N.B. If you are unaware of the concept of Wardley mapping, then you may take a course from an amazing teacher of Wardley Mapping, Ben Mosior @ https://lwm.events/gofast. If you have patience too, then you may also read the book from the inventor of Wardley Mapping, Simon Wardley @ https://lwm.events/book.
Experimentation should be time-bound, and as with all well-designed experiments, the procedure, time, and materials that are necessary to conduct an experiment are well defined.
Failure is expected in a T&M project, but unless the learnings are derived from those experiments, it leads to wastage of valuable resources.
In some cases, ever-changing goal post which are typically related to power dynamics in an organization, may lead to early failures. Fail-fast, in this case is futile and a never-ending story.
Project management and purchasing methods: No One-Size Fits All
However, some key questions to ask are,
1. Who gets benefited from T&M projects, Is it the client or the vendor, or both?
In most cases, the vendor gets benefited from T&M projects, because the onus of articulating the specifications or requirements of the project is on the client. The vendor may get away with delivering solutions that are not aligned with the desired outcome, because they still meet the specifications.
This creates a downward pressure on the client to specify things better, while monitoring ever-running T&M meter.
Client may only get benefited from T&M if they leverage T&M for well-designed experiments that has potential to provide valuable insights to them.
2. Is it impossible to articulate requirements in T&M project?
The word requirement/specification is restrictive in nature, and does not go well with T&M project. It is however, possible to design an experiment to achieve results that may prove to be useful. Leveraging T&M for time-bound experiments leads to efficient use of resources to carry out explorations that may prove to be valuable. Think 'Spike' in an Agile/Extreme Programming realm.
3. How to travel towards the business outcome?
There may be genuine cases in which it is almost impossible to specify the requirements precisely. However, in majority of IT projects, the lack of focus on things we don’t know we know (Unknown Knowns), leads to our inability to articulate the desired business outcome. Our obsession with Agile and SAFe, has shifted our focus from the desired business outcome to the feature trains that run towards failure faster than ever. We end up creating a feature factories that keep us busy, instead of spending our energy and efforts on satisfying the user needs.
Exploring Unknown Knowns – Things we don’t know we know.
In order to take a step towards achieving a business outcome, one must explore the things we don’t know we know, by focusing on the existing knowledge capital that includes the known knowns. These exploratory sessions help us understand our own situation better, and lead towards a metric of value that can be maximized to achieve desired business outcome.
In a mapping discussion with my friend today, we could not only figure out a value metric (desired business outcome), but also the value-based pricing that makes most sense for a potential project.
The nature of project was such that, prima facie, it looked like a perfect fit for T&M, but after further exploration, it was clear that this project is a candidate of an Outcome based pricing.
It’s the journey from perceived unknown towards discovering the known that we did not know we knew already, or could know through exploration.
Towards the business outcome, a journey worth taking!
The journey may not be straight forward, but it’s up to us to decide if it is worth taking! However, if you have already trodden this path, there are chances that your perspective on the cost of doing business have completely changed (mostly applies to late product or commodity like components on a Wardley map), and you have ability to correlate the IT spend with the business value to gain competitive advantage.
At Worthum Business Solutions Pvt. Ltd., we help our customers realize meaningful business outcomes that positively impacts the end users and the society, by leveraging technology that complements humans, and not replace them completely. Our endeavor is to integrate technology with business processes that are focused on user needs. We build and operate software & IT systems that creates business value and ensures profitability for our customers.
We want our customers to be the winners in their digital transformation journey, and we are equally invested in them.
If you’d like to connect with to us regarding IT services for your awesome project, then write to us at email@example.com or visit https://www.worthum.com/contact
We are also hiring for a few positions. Do visit https://www.worthum.com/careers regularly to see if any of the roles excite you. If you do not find a role, but you think that you have the skill and attitude to work at Worthum, then share your resume, with your skills and work experience at firstname.lastname@example.org. Note that the number of years is not considered as an indicator of rich experience.
Visit https://www.worthum.com for more…
Thoughts and comments welcome!
You may reach out to me on twitter @andankar_manish.