Qualifying the project management consulting opportunity

the gateway to top performance

Concerns of Project Managers

Issue Focus

David M. Goodling, PMP, Digital Equipment Corporation, Winston-Salem, North Carolina

Project management consultants must identify and qualify project management consulting opportunities. As a consultant, you may be independent or associated with a consulting firm. In either case, you may be at least somewhat responsible for both winning and delivering your services.

Much of the current literature assumes that the decision to proceed with the project has been made and that the project manager has been chosen. In most cases it is assumed, for better or for worse, that the project manager is currently an employee of the company doing the project. In companies that have a project office, a project manager is assigned to a project along with the decision to proceed. However, suppose the company does not have an available, qualified project manager. The expertise of an outside project management consultant may be needed. One of the first things you must do when considering a project management consulting opportunity is to fully qualify the project and client. You need to quickly determine if certain criteria are met before investing time and money in going after the opportunity. You must be able to overcome obstacles and increase the probability of success, or disengage upon recognizing that the situation is unworkable. Also, you must be prepared to position your qualifications and services against competitors in order to increase the probability of winning the consulting opportunity.

Skill at qualifying the opportunity can help avoid wasted effort while helping to ensure successful, satisfying, and profitable consulting.

This article will identify criteria necessary for a project to proceed, and discuss techniques for determining if the client has a need for project management consulting. Client organization and environment are also considered to determine the client's inclination to contract for outside project management consulting. Service delivery options and contractual issues are identified. Finally, ways to address competition and objections are suggested.

QUALIFYING THE PROJECT

This section will help you determine if the project is likely to proceed past the conceptual stage. In the author's experience, six criteria must be met in order to establish that the client has a valid project opportunity. The assumption is that these criteria can be used to accurately predict the outcome of a given opportunity as well as develop more effective winning strategies.

Discussing the following with your client is not threatening or manipulative, and may help your client with the decision process. You should be able to determine the following during a few brief, preliminary interviews:

Business problem. Companies do projects to solve business problems, typically resulting in increased revenues or reduced expense. It is important that you identify and understand the business problem your client is trying to solve. This is essential for managing the scope of the project. A clear, consistent problem statement tends to be characteristic of projects that proceed.

Sponsor. It is necessary to identify an individual within the company who has the authority, responsibility, and control to make decisions about the project. The project should be consistent with his or her charter and approval level. The sponsor should feel responsible for solving the business problem. You are more likely to win opportunities where this sponsor has the desire, time, energy, commitment, and political clout to move the project forward.

Funding. An important characteristic of project opportunities that proceed is that the project has significant return on investment potential and the client is focused on the value—not cost—of the project. Most companies will spend a dime to get (or save) a dollar. Few will spend a dollar to get (or save) a dime. If the return on investment is weak, you may need to help adjust the scope of the effort or find some other business problem that is worth solving. Determine if the project is budgeted, funded, and the client is able to spend money on outside consulting.

Deadline. A client who is feeling significant deadline pressure is motivated to explore implementation options beyond what current methods and resources will afford. No deadline means the client will probably make do with what is currently in place and get the project done when convenient. Projects need deadline pressure to underscore the need for planning, control, and action.

Risk. A client who is feeling significant risk will tend to seek expertise to help reduce this risk. A client who feels the project is well within in-house capabilities will be unwilling and unable to justify spending money for outside consulting. Large, complex projects, crossing disciplinary and organizational boundaries, should be a cause of concern for any client.

Staffing. A staff that is over-committed and unable to grow beyond a set size may be unable to address the new project. Outside consulting may be the only implementation alternative. On the other hand, idle labor would tend to prohibit the use of outside consulting (but may be an opportunity for advisory consulting or training).

These six criteria are sufficient to determine if your client has a valid project opportunity and may need help. Strong positive signals do not guarantee that you can win the business. They simply indicate that a project opportunity exists, and outside help may be needed.

QUALIFYING THE CLIENT

Easton and Day [1, p.13-23] suggest ways to determine if the client company needs, and is ready, to implement project management. Selecting and combining their concepts for the purpose of qualifying the opportunity results in the following:

Has the client ever attempted a project of this size and complexity? Was it considered a success? If the client believes they know what they are doing, they probably will not buy help. If they failed miserably and feel they are at risk, they will probably value the advice of an expert. The naive, inexperienced client may need a basic presentation on the benefits of project management.

Does the client adhere to a project methodology? Look for signs of a documented step-by-step approach. Determine if they are accustomed to estimating, planning, and scheduling. Any indication that they feel time spent planning and designing is wasted should be cause for concern. Some clients may welcome a better approach. Others may be steadfast in their resistance. You need to determine if you will be able to overcome this resistance before continuing to invest in this opportunity.

Does it appear that the company will support the development of a project team? An inflexible functional or hierarchical structure could make it difficult to pull together the resources and support necessary for success. A project that crosses many disciplinary and organizational boundaries, including outside subcontracting, needs project management. A clear, formal charter from top management as well as support from all levels of management is essential.

Will the project manager be given the authority, responsibility, and control necessary for success? As an outsider, without direct authority and control over resources, it will be very difficult to meet project objectives without proper support. Top management must require a single point of information, responsibility and control, and give this formally to you if you are to be the project manager. Otherwise, your role will merely be to provide assistance and advice.

Is the scope of the project well defined, and is management committed to responsible change control? A poorly defined project is doomed almost from the start. Continuous scope changes will make success impossible. “Off-the-cuff” budgets and schedules increase the risk of failure even further. Commitment to a firm (but reasonable) completion date is essential.

Note that to a large extent, you maybe able to help your client shape the opportunity so that the company's success, and yours, is more likely. You need to determine how much effort will be required, as well as assess the timing, size, and probability of winning the consulting opportunity.

PMs

DELIVERY OPTIONS

It is important that you determine how you will work with your client. Block [2, p.18-22] defines three basic consulting roles. Interpreted in the context of project management consulting, they are:

Pair of hands. Your involvement is only as directed by your client. You are working within close guidelines and under the scrutiny of your client. The client makes most of the decisions about the project, which you then implement.

Expert. You have greater autonomy to manage the project, with low involvement by your client. You make most of the decisions about the project. Your client's role is to set up scope, schedule, and limitations. The client will judge and evaluate the project after it is done.

Collaborator. You become interdependent with the client, working closely together. Issues are discussed and decisions made together. Responsibility for success of the project is shared.

As you establish your role or relationship with your client, you can begin to shape your formal involvement. Depending on the opportunity, your involvement could develop into one of two roles:

Project management advisory consulting. In this case you are providing assistance and advice to the client-designated project manager. Your authority, responsibility, and control are limited. You are simply providing assistance, advice, and expertise to someone else who has the formal power. It will be important that you limit your liability and carefully document your recommendations. You cannot accept responsibility for the success of the project if your assistance and advice are ignored. A “pair of hands” role tends to be consistent with consulting that is mostly assistance, as directed by the client's project manager. A “collaborator” role would suggest consulting that has a large advisory component.

Acting project manager. In this case you are the project manager. The success of the project rests squarely on your shoulders. It will be important that you have clear, explicit support from top management. You must have the authority, responsibility, and control you need for success. You should carefully document your requirements for success. You must accept responsibility for the overall success of the project. The “expert” role is most commensurate with the formal project manager title.

FACING CONTRACTUAL ISSUES

There are important differences between an “outside” project management consultant and a project manager who is an employee of the company.

The employee typically works for a salary, and is expected to put forth whatever effort is necessary for success. The salary is viewed as a normal, ongoing expense, and is not subject to interruption except in extreme cases. Performance is taken in the context of the employee's history with the company. The criteria for success of the project may be somewhat softer, and more subject to negotiation and interpretation.

In the case of the consultant, “real” money leaves the company and is accounted for against an approved budget. A satisfaction problem could result in interruption of the revenue flow. Success is often defined as meeting both the letter and intent of the contractual obligation, which could include specific results for a set price. A misunderstanding or disagreement could result in financial, even legal hassles. As a consultant, you will generally be successful if you set expectations you can meet and meet the expectations you set. The contract should clearly and simply document your agreement with your client. “Fine print” may provide some protection in a court of law, but does not contribute to increased understanding or ensure satisfaction.

Depending on the situation, you may wish to consider a contract based on one of the following:

Time and materials. In this case you are selling your time and expertise only. This should be explicitly stated in your contract. It is not appropriate to commit to specific deliverables and results. Your client should understand that the company (not you) owns the risk of an overrun. Focus on describing the expertise you are providing and the duration and intensity of the effort (for example, 30 hours a week for 10 months). Do not guess at some number of hours and suggest results as you will create a situation where your client expects those results on a “not to exceed” basis.

Fixed price. In order to quote a fixed price for your services, you need to have a precise definition of the scope and duration of the effort. Your contract must address how you and the client will address scope changes. You must consider risk and contingency, and build it into your price. Your contract should focus on deliverables and results. You are responsible for producing the deliverables and results for the stated price. You own the risk of an overrun. A common pitfall here is to allow the scope of your consulting to expand, but fail to apply appropriate change control.

Block [2, p.41-103] also has excellent advice on contracting. Briefly, your contracting discussions and documentation should be clear and direct. You must be able to uncover your client's expectations as well as clearly and simply state what you want from the client. Be willing to probe directly for underlying concerns. Important elements of the contract you develop, based on Block's checklist [2, p.52] are:

  • Scope and objectives of your consulting
  • Your role and responsibilities
  • Deliverables and results you will produce, with acceptance criteria
  • Resources and information you need to be successful
  • Client's responsibilities, support, and involvement
  • Time schedule with milestones

DEVELOPING A COMPETITIVE STRATEGY

Your competitive strategy must consider the strengths and weaknesses of your competition, along with an honest assessment of your capabilities and limitations. Find out who your competition is. It is fair to ask about the competition, and how a decision will be made. Determine if you are a good fit for the opportunity. Discover if your client has a particular bias that will factor into the decision. When sizing up the competitive situation, consider the following:

Client staff. The client always has the option of naming a project manager from his or her own staff. These individuals have a career at stake at the client company. They best understand the goals, politics, and constraints of the company. If they also have training, credentials, and demonstrated competence at managing projects, then they are your most formidable competition. If the client project manager has little experience, this may be an opportunity for advisory project management consulting. Generally it is not a good idea to compete with the client's staff or imply that they are not competent. Rather, you should attempt to structure your involvement to complement and support the client project manager.

Consulting firm. Project managers from a consulting firm tend to be more costly due to greater overhead and profit margins. They also come with better support and access to other resources. If performance is unsatisfactory the client has some recourse other than termination. Many firms will provide a complete “turn key” project with guaranteed satisfaction, thereby freeing the client from most of the hassle and risk (at commensurate higher cost). Many clients value a single source to solve their business problem. Others cannot afford this luxury, or want and need a higher degree of involvement. If you are a consultant with a consulting firm, your best strategy is to stress the reputation of your company and the support and resources it provides.

Independent consultant. The independent consultant has several advantages over other options. Because of very low overhead, the independent consultant will usually be the least expensive option. An independent consultant is likely to be very flexible and responsive during contract negotiations. Sometimes an independent consultant is valued for an “unbiased” viewpoint. The down side is the independent consultant will have limited support and resources. There is almost no recourse, other than termination, if performance is unsatisfactory. As an independent consultant, your best strategy is to stress your lower cost, personal credentials, training, and experience.

OVERCOMING OBJECTIONS

A client's objections are not a set of reasons why you will not get the business. They are an important source of information you need to better serve your client. You need to perceive each objection as an opportunity to better understand your client's needs. Your skill at recognizing and addressing objections, with competence and integrity, will strengthen your position with your client. Here are a few common objections:

Need. Sometimes clients are unconvinced that they really need project management consulting. You should explain and illustrate the risks associated with a poorly managed project. If the client has a project manager in mind, discuss that individual's training, experience, and skills relative to the project at hand.

Control. A client may believe there will be some loss of control over a consultant that is not an employee. Stress how your client will be kept involved and informed through regular status meetings and status reports. Assure your client that your goal is to solve the defined business problem. The client will make the business decisions and you will manage the project in support of those business decisions.

Cost. The client may have difficulty justifying your rates. Get your client to focus on the value (ROI) of the project. Discuss the potential costs of an out-of-control or failing project. Give specific examples of how you can save money through better scheduling, higher quality, and more effective use of resources. Position project management as effectiveness, and cost saving—not an unnecessary or optional expense.

Qualifications. Consulting is somewhat intangible, and your client may question your qualifications to handle the project. Discuss your experience and training. Provide references. If you are a Project Management Professional (PMP), provide information about your professional certification. While there is no such thing as a perfect fit, you should be able to show how your skills and knowledge compare to your client's needs.

SUMMARY AND CONCLUSION

As a project management consultant, you typically have some responsibility for winning as well as delivering project management consulting. It is quite possible to determine if a project management consulting opportunity exists based on a few interviews with key decision makers. An informed decision to pursue the opportunity or walk away from it can be made early, and with minimal investment. Once you have established that there is an opportunity worth pursuing, you can shape your involvement to be commensurate with your client's needs, and position your services against competitors. You can therefore anticipate and address common objections. The results of your qualifying efforts will be better defined projects and more satisfied clients.

1. Easton, J.L., and Day, R.L. 1988. The Need for Project Management. In The Implementation of Project Management: The Professional's Handbook, edited by Linn C. Stuckenbruck, Ph.D. Addison-Wesley Publishing Company.

2. Block, P. 1981. Flawless Consulting: A Guide to Getting your Expertise Used. San Diego: University Associates.

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David M. Goodling is a consultant at Digital Equipment Corporation. He has 16 years of experience in software development and consulting, including many project-related assignments. He was a software services manager for four years and completed Digital's management certification program. For the past four years his primary focus has been project management consulting, both internal to Digital and with Digital clients. Mr. Goodling has a bachelor of science degree in computer science from North Carolina State University. He is a member of the Project Management Institute, and is a certified Project Management Professional.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

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