IT Project Management; negotiating to win

When you’re starting out in IT project management, you don’t realize that good negotiation skills will be such a key to your success. For example:

  • Out-of-scope work that needs to be included in the current timeline
  • A customer request for a different resource or skill set
  • Budget issue vs. timeline issue
  • Functionality needed earlier than expected
  • Integrations issues that we not originally identified
  • Data management issues and who handles them
  • Additional funding needed internally from your senior management
  • Key resources needed from internal department managers

Project issues that require negotiation usually fall into four categories: scope, resources, timeline, and budget. Let’s examine each category in more detail and look at strategies for working each negotiation.

1/ Scope negotiations are almost a given for any project. One reason why scope negotiations may be necessary is because loose ends weren’t properly tied up during the sales process; this is why I encourage someone from the project management side to be an active participant in the sales process.  When a customer says, “but I thought that was included in the project,” you should investigate why such a disconnect in undersatnding has happened. For instance, perhaps Sales may have told them it was included, or maybe the details about agreed-upon requirements were a little gray. For most scope issues, you’ll draw up a change order. If the supplier balks, there may be some room for negotiation. You might be able to re-price the implementation of a new functionality but get more training thrown in for free. Remember, you always have some negotiating power and influence, even after you’ve bought the solution; remind the Supplier’s senior managers about customer satisfaction, retention, referrals, and possibly your vision for some bigger add-on work in the future.

 

2/ Resource negotiations. There may be times when you need to buy a different project resource; this is usually because a resource or a skill set that was promised to you isn’t available or new elements have devloped since the project started. You may not be able to do anything about the resource issue, but don’t give up right away. You should meet with your resource’s direct supervisor and discuss their overall availability and your project schedule. A key negotiation strategy is to guarantee that you’ll free up the resource if he or she needs to work on essential other work for limited periods of time. This may require shifting your schedule and more negotiations, but it will likely be worth it because getting the right resource at the right time is critical.

 

3/ Timeline negotiations. These usually involve you asking for functionality to appear earlier than previously expected. Depending on the project, this can be a major issue, so you could negotiate with the supplier on implementing functionality in phases if that is an appropriate approach. Here is a process for handling timeline negotiations:

  • Review the request for functionality
  • Discuss with project team experts
  • Rework an alternate project plan to move the requested functionality to earlier in the timeline
  • Document a narrative for the supplier outlining what needs to be pushed to later in the project to make it happen
  • Conduct a formal meeting with both teams to present the proposal

This restructuring may impact the budget, so be aware of that as a trade off for getting the functionality when they need it.

4/ Budget negotiations. The most common budget issue I deal with is the need for higher-priced resources for specific project tasks. Budget negotiations also come up when the project starts to run out of funding, and you  have to get more money internally from senior management.

In the case of the resources, if it is warranted by the project due to some undocumented or new needs, then you can usually sell your management on the higher-priced resource. This process does necessitate a change order to document the change in resource and price.

If the delivery organization wrongly assessed the resource needs, then they’ll need to convince their senior management to agree to give your project the more skilled resource and bill you at the same rate.

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