I use PRINCE2 as the guiding framework for most of my work. My project management background has been exclusively from a supplier background, delivering services to an organisations implementing projects. One of the strong points of the Cabinet Office products is the importance given to including the suppliers in the project governance at both programme and project level. At the same time, the processes and principles are geared towards achieving the outcome from a customer’s point of view. I have been thinking about how the same principles can be applied from the supplier end.
Let us review the reality of the project organisation in PRINCE2. Once an organisation has decided to implement a project, it creates a project team. In many cases, there are gaps in the required skills and suppliers are engaged to fill them. There are two models for engaging the suppliers. One is where the suppliers provide the required skills and it is up to the customer to utilise their skills to deliver the outputs – in effect body shopping. Another model is where the supplier is contracted to deliver a specific set of outputs that the project team will utilise. In most cases it is a hybrid that is used.
The first scenario is well covered by PRINCE2 organisation and processes. Once the required resources are secured, there is no difference between those and the resources acquired from various in-house teams. The Project Manager can utilise the resources as required. It is the second model where I see applying PRINCE2 sometimes becomes a challenge. In many cases what is considered a project being delivered by the supplier, is only part of a project for the customer. The contracting process is one that places the supplier and the customer is somewhat adversarial roles.
In a typical scenario, once a supplier is engaged, someone at an account management role would be expected to sit in the Project Board in a PRINCE2 organisation. The supplier will provide some resources, that will be working under the customer’s Project Manager. The supplier’s Project Manager is really acting as a Team Leader in the larger PRINCE2 organisation. From the customer’s point of view, all the resources provided are really a single team, that is tasked with delivering a set of outputs.
However, providing this set of outputs is a project for the Supplier. Can they also run the project as a PRINCE2 project? My view is yes. The Account Manager sitting in the customer’s Project Board can act as the Project Executive internally. They are aware of the strategic direction of the project and are in the best position to judge the tolerance levels. The team delivering services can be augmented with a Business Analyst, who can act as the senior user representative. The teams providing the technical resources can act as senior suppliers.
This however, still does not allow for some of the PRINCE2 principles to translate equitably. For example, continuous business justification is totally different for the customer and the supplier. Once a contract is entered into, tolerances are usually set in stone. A fixed deliverable is required, at a fixed price, at a fixed date. If you think from the supplier’s point of view, this does not match PRINCE2 doctrine.
There is an element of risk that the suppliers do tack on to the price they charge. However, those are usually set against a series of assumptions. At the time of entering into the contract, the customer may agree to mitigate some of those. In reality it is a challenge to hold the customer to those agreements. This is the adversarial nature I referred to earlier. One particular challenge I have seen is the access to subject matter experts from the customer, which adds risks to the delivery. The internal cost at from a customer’s point of view is simply delayed delivery. From the supplier, it is additional time spent on a project that they could have serviced another customer – lost revenue.
Typically the way suppliers have dealt with this scenario is through change control to recover costs. That is still an adversarial approach. It still builds an us and them wall between the customer and the supplier. I would like to see project teams work more in cooperation, where the team working from the supplier too has a stake in the success of the overall project. Procurement methods do not always make it a realistic option.
Have you successfully implemented PRINCE2 at a supplier organisation? I would like to hear from you about the challenges and success stories.