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Sales Process Meets Project Management
By Mike Cunningham

The essential characteristic of most sales situations is that the supplier is keen to sell and is in competition situation with other vendors. Conversely, the customer has a choice of vendor and is seeking the best capability on the most favorable terms. All the time the sales team will be under pressure to offer the best price and delivery time. The vendor is keen to win the business and not do anything to put that at risk. Equally the customer is keen to secure the best deal. In this situation there may be negotiated changes in pricing, and undocumented promises and assumptions that introduce delivery risk and latent issues. For example:

  • During commercial negotiations project pricing may be reduced without clear and fully justified reductions in scope.
    • The timeline is invalidated due to changes in scope, budget or start date.
    • Risks are overlooked and not sufficiently reflected in contingency
  • Risks are not all understood by vendor management nor customer management.
  • Customer expectations become misaligned but are not properly addressed.

All of this can cause a project to fail before it even starts and if it starts without addressing these problems it will accumulate delays and will fail to meet customer expectations. It highlights the importance of involving project management during the sales cycle and effectively managing the transition from sales to the delivery team. Most important perhaps is robust quality assurance starting at the pre-sales stage and running throughout the project life cycle.

Ultimately, it is the project manager’s responsibility to ensure that his or her project is launched on a sound foundation with commonly agreed objectives, scope, plan, budget and risk profile. Clearly the project manager will need to deal with any issues in a clear and robust manner but with considerable tact to manage the situation successfully from both a customer, sales and commercial perspective.

The key to ensuring projects are contracted and launched on a sound basis is involvement of the project manager and key technical specialists in the preparation of proposals along with thorough commercial and technical quality assurance prior to their submission to the customer. This is often the case however the same approach must also be adopted during commercial negotiations so that any revision to any aspect of the proposal is reviewed and approved by the project manager and quality assurance prior to it’s resubmission to the customer. It is critical that a contract is not signed before the project manager approves its deliverability within given constraints of time, cost and quality. Once the contract is signed the customer will expect delivery as committed. Where the project manager takes handover from sales post contract and issues arise they will typically have to be absorbed within the commercial constraints of the contract which will raise the risk profile of the project or worst case lead to delivery delay and budget overrun.

Given none of the above is “rocket science” why is it that these issues so often arise? Quite simply, it often comes back to the inherent nature of many sales situations. That is, the supplier is keen to make the sale and the customer to extract the best deal. In these circumstances it is all too easy for the vendor to accommodate greater levels of risk or cut corners. The answer is for the vendor to put in place a rigorous and actively applied process for preparing and approving bids such that the delivery and commercial risks are transparent. The vendor needs to fully understand from the outset the commitment they are making and the associated scale of delivery risk.

Central to an integrated sales and project management is involvement of project management in the sales process supporting the technical proposition and scoping, planning and estimating delivery. Specifically, this should include:

  • Understanding customer business goals and/or critical success factors
  • Scoping functional and technical requirements
  • Scoping specific deliverables (system functionality, documentation)
  • Planning project delivery timelines, resources, effort and cost estimates
  • Identifying and assessing risks as well as planning their mitigation
  • Assessing of changes arising during commercial negotiation

With this approach the vendor can be confident that the proposal can be delivered as committed though perhaps explicitly recognizing exposure to certain risks or perhaps accepting reduced contingency or margin. Throughout the process it is also important that the project manager secures sign-off from a delivery director who if required can take-up any issues that arise and support timely resolution before proposals are put to the customer.

When there is no or ineffective participation from the delivery team in the sales phase, it will typically fall to the project manager to discover what has been sold after the sale or possibly after the contract has been signed. In this worst case situation an effective handover from sales is particularly important and any previously unidentified issues or risks surfaced must be addressed from the outset of the delivery project. The result may still lead to an engagement where the service delivery team struggles to fulfill the commitments originally made by the sales team but the project can still be placed on a sound project management foundation with a predictable outlook for delivery.

Mike Cunningham is a Freelance Program Manager.

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