- System development
- System implementation
- Teaming agreements
- Outsourcing contracts
Governance is an important part of large IT projects and is part of standard contracts.
Governance clauses in contracts typically include:
- Change control
- Internal escalation
- Project steering committee
- Executive steering committee
- Mediation and/or arbitration
Governance clauses may also include:
- Partnering workshops
- Neutral evaluation
- Expedited arbitration (e.g. limited time or scope; final offer selection – “baseball” arbitration)
But there are frequent problems with existing governance processes. Parties often don’t follow the contract terms.
Some typical scenarios:
The change control process takes too long or is too complicated, so changes are made on the fly; project managers intend to document them later, but never get to it; change orders prepared by one side don’t reflect a mutual understanding.
Senior people stop attending committee meetings or send delegates. Often its because the executives are too busy. But that just means the committee isn’t working properly — not making decisions in a timely way; not following through on decisions that have been made.
Minutes taken by one side or other don’t accurately reflect the decision taken (tendency to spin things in one’s favour, omit details, etc.)
Parties are reluctant to invoke mediation or arbitration for a variety of reasons – cost, time, loss of control over decision-making, etc. Or the process in the contract is not appropriate for the particular dispute.
We are proposing the use of a neutral, independent facilitator to help parties improve the governance process. The facilitator’s main role would be to assist with timely and effective communications and decision-making.
This could include:
- Working with project managers to identify and communicate issues that are affecting the project.
- Facilitating stakeholder meetings to define or clarify expectations, requirements, specifications, etc.
- Working with project executives to manage agendas for committee meetings, to help them make more effective use of the committee to manage and resolve problems.
- Keeping minutes and recording decisions.
- Following up on decisions, to assist with implementation (e.g. if decisions need to be clarified, new questions come up, etc.)
Both parties would benefit from using a neutral facilitator.
One immediate benefit is to save executive and manager time, by making the governance process more efficient. Where executives now complain that committee meetings are a waste of time, facilitator can work with all participants to ensure that time is spent efficiently and effectively.
The facilitator can work with parties together or separately, as needed, to ensure that everyone has a clear understanding of each other’s issues and underlying interests. Better understanding of the causes of problems will help them develop better solutions.
The facilitator can have confidential discussions with the parties and assist them in identifying, understanding and presenting issues. The facilitator can confidentially assist both parties to identify and evaluate options for resolving issues.
Ground rules for facilitation should also include an agreement that all discussions are “without prejudice”. This allows parties to discuss problems openly and suggest alternatives, without worrying that things they say will be held against them later if the problem is not resolved.
Other benefits include:
- Improved lines of communication
- Clarification of unresolved issues
- Participation and “buy-in” by stakeholders (user group, delivery team, etc.)
- Timely, impartial documentation of decisions
- Assistance with implementation of the decisions
Making the facilitator part of the governance process will also ensure continuity.
In addition to providing a “secretariat” function, the facilitator can act as an independent repository of information about the project. Personnel may change on both sides, particularly in long-term projects, so an independent institutional memory may be very important.
The cost to engage an independent facilitator is not significant, in relation to the overall cost of the project or the potential cost of disputes and delays.
It is important for the perception and reality of facilitator neutrality that the parties share the cost of the facilitator. A facilitator that works for just one side won’t have the same credibility as one that works for everyone.
In some situations, as a practical matter, the facilitator’s fees and expenses can be part of the project cost. The customer pays the facilitator our of the project budget, but it still needs to be clear that the facilitator is neutral and independent.
The scope of the facilitator’s engagement will vary depending on the size and complexity of the project.
It might be one or two days per month, to keep a project running smoothly. Meet with project managers to talk about emerging issues; preparing steering committee agenda and attending committee meeting; routine follow up. This can be done with a fixed fee retainer.
The facilitator’s role can be expanded as necessary to deal with more serious problems or conflicts. The scope of this expanded engagement should be agreed in advance, so parties have a clear understanding of cost.
Per diem rates are $1500 to $2500, depending on the complexity of the project and number of parties (e.g. multi-vendor situations, where costs are split more ways).
The facilitator may charge for some work on an hourly basis. $200 to $350 an hour.