Estimating when things are out of your control

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So one of the big challenges in successful project delivery is that while you might be able to influence resourcing for your own team, you have limited to no control over what happens at your client. 

When the success of your work depends on adoption of the new way of working, or technology, that’s a hearts and minds problem, obviously. 

But it also impacts simple implementation of technical change.  If the client doesn’t have a technology team ready and willing to work with you, you can be sure that the work won’t go quickly, if it all. After all, if you want things to change, you need to have all sorts of people including the incumbent IT team at the table, otherwise it won’t go anywhere.

Crystal ball
Forecasting can be challenging

So what’s the best way of covering yourself for clients who just plainly can’t get themselves aligned and organised? 

Three key protections

For me, there are three key protections here.

  1. Break your price down into key deliverables, sometimes at the level of a couple of thousand pounds.  This way, if something happens in terms of the big picture, you still get paid.  For instance, one way to structure a project is to break it down into Discovery, Design, Delivery and Done.  Done is project closure and transition to the Business as Usual Team.  
  2. Make the trigger point for invoice issue be the initiation or start of work on these key deliverables – not the actual delivery itself.  Remember that there is often a 30 to 50 day lag between your invoice being submitted and you actually being paid.  This way, you start that clock early. 
  3. Pad your estimate out with legitimate contingency funding.  The standard here is to arrive at your price, and then find another 20% and then redistribute that back again through the milestones.  

I prefer doing that rather than creating a separate risk budget because there can be problems with releasing the funding you need from a risk budget.  For example, unless you have managed to structure your project so you have total control over the risk budget spend, the chances are you’ll need some kind of authority or governance to spend that risk pot.  Particularly in enterprises, you’ll have people at the table responsible for a number of projects and they will be looking for under-spends to cover other projects which are over-running.  They won’t be overly keen on releasing risk pot monies and so the rainy day money you might have set aside may turn out to be unavailable when the skies darken!

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