What PM tools tell us about today’s project management

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Research for the update to my course on choosing the right project management tool was enlightening: it offers an interesting perspective on what’s happening in project management today. 

  • Collaboration and communication are the focus. Today’s automated tools place significant emphasis on communication and team synergy. Tools can tag team members, integrate with email systems to alert people to upcoming tasks and status changes, and provide links to reports. This is a promising indicator for project management with communication always at the heart of successful project delivery. And this trend is perhaps due to more people work remotely or on hybrid remote/on-site hours.
  • There is power in visibility. Graphical representations of project status, task status, and work queued up for team members are visible to all. This transparency helps management and team members respond early to project issues and backlogs, improving overall project delivery and helping balance workload across team members.
  • Agile is the go-to approach. Agile methods are suited to businesses’ expectations for speed and developing solutions collaboratively. The benefits and popularity of agile are easy to see in the project management tool market. Compared with four years ago when the initial PM tool comparison course came out, project management tools almost unanimously embrace agile principles and deliver Kanban and Scrum capabilities.
  • Scheduling isn’t where it needs to be. While agile is dominant, not all projects are suitable for agile methods. My recent research shows little progress in managing traditional waterfall schedules. Gantt charts are commonplace, but the logic for predecessor-successor dependencies is often lacking along with the absence of displaying critical path and managing baselines. These features are available in well-established PM tools like Microsoft Project Online and Primavera. For other tools, do your research if you require Waterfall-style schedule management. 
  • Cost tracking isn’t mainstream! The most surprising thing from the research is that cost management is rarely included as a basic feature. Some tools offer ways to add a fixed cost or a cost forecast to tasks. Seldom do you find the ability to estimate effort, enter an hourly cost rate per team member, and track the time team members spend on tasks. As a result, cost management is essentially a manual effort involving optional features or product integrations.

If you’re searching for a project management tool for your organization, keep an eye out for my updated course on PM tools.

Coming Up
Join Angela Wick and me on Tuesday, August 13, 2024 at 12:00pm MT for our live broadcast PMs and BAs: We need to talk…about AI…and how it’s impacting our roles!

Everyone’s talking about AI these days. But is anyone listening? The focus is usually on how AI can make people more productive. Productivity boils down to doing the same old stuff faster. Our teammates and stakeholders use AI too! We will explore the benefits of focusing on using AI to make our deliverables more valuable to the people we work with and also how our roles impact our stakeholders who use AI!

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This article belongs to the Bonnie’s Project Pointers newsletter series, which has more than 74,000 subscribers. This newsletter is 100% written by a human (no aliens or AIs involved). If you like this article, you can subscribe to receive notifications when a new article posts.

Want to learn more about the topics I talk about in these newsletters? Watch my courses in the LinkedIn Learning Library and tune into my LinkedIn Office Hours live broadcasts.

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The Value of a Project Manager’s Perspectives

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Success managing projects relies on accurate and timely information, which is needed by both the project manager and the sponsor. Project managers bring unique perspectives that sponsors and other senior stakeholders often lack. Be sure to share these perspectives with the management team, underscoring their role in the project’s success.

  • How workload volume affects operational teams. Projects are rarely delivered by team members dedicated to the project. Team members from operational areas serve important roles in most projects. These project assignments can create challenges for operational department managers and their key personnel. Project managers need to understand those challenges and schedule assignments to minimize the impact on the operational team. Project managers can add workload risks to project plans. To achieve the best balance between operational and project work, project managers can communicate the challenges to senior leaders and recommend how to prioritize project and operational work to best serve the business and the project.
  • How competing workloads interfere with project progress. Managers often launch projects and operational initiatives without recognizing how those efforts might conflict. Some conflicts stem from pulling a critical project resource to handle operational matters. Senior leaders need to be aware of these resource conflicts and decide on prioritization for the organization’s best interest. Project managers often have the clearest view of these resource prioritization issues and can make recommendations to senior leaders, so project delivery expectations are realistic.
  • The state of team morale. Senior leaders typically deal with their management colleagues and high-level customers. Project managers interact with first-level managers and team members. As a result, they have a view of the dynamics and attitudes of the organization’s rank-and-file population that they can share with senior leaders to head off serious morale issues that can hurt project performance.
  • Insight into levels of collaboration. Pressures and expectations on departments in an organization can affect the degree of collaboration within a project team. These expectations can come from management direction and sometimes, from perceptions that don’t align with management expectations. Project managers can investigate the source of reduced collaboration and share this with management, who can take action to motivate department members to collaborate more.
  • How management can support organizational change. Consider this story: An organization prides itself on its face-to-face interaction with its customers. A project is launched to create an automated self-service model for customers to obtain some services. Reasonable project and objectives. However, the project would challenge a deeply-held element of the organization’s culture, the one-on-one interaction with customers. The senior leaders think all is well, because they communicated the project’s intent. The project manager might perceive that employees wonder whether this is the start of erosion of the organization’s culture of personal interaction with customers. This insight is vital for senior leaders to know. The PM can communicate the insight to the senior leaders. The PM can also suggest that the senior leaders communicate and reassure the team that the organization will continue to embrace a face-to-face culture. This would help ensure that the project is a success, and that the organization embraces the self-service model for customers (if they wish to) to interact with the organization.

Take a moment to think about the projects you’ve managed. Have you ever seen things that the senior leaders missed? How would you present your perceptions now to help executives see their value?

Coming Up

I am busy updating two of my courses. Later in the year, you’ll be seeing new and improved versions of Learning Microsoft Project and Project Management Foundations: Choosing the Right Online Tool. The latter course will review more tools than the original using a different format.

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This article belongs to the Bonnie’s Project Pointers newsletter series, which has more than 73,000 subscribers. This newsletter is 100% written by a human (no aliens or AIs involved). If you like this article, you can subscribe to receive notifications when a new article posts.

Want to learn more about the topics I talk about in these newsletters? Watch my courses in the LinkedIn Learning Library and tune into my LinkedIn Office Hours live broadcasts.

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When to Defer Decision-Making

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Timely decision-making is a valuable skill for project managers. There are times when deferring a decision is the best way to respond to project situations. Here are some situations when delaying a decision make sense.

  • Your vendor has product upgrade plans. What if the release date for an updated product isn’t finalized yet? Rather than sticking with the current version or gambling on the new one, set the software decision as late as possible in your plan. When your decision time arrives, you can evaluate up-to-date information about the release to decide on what to do.
  • Stakeholders are debating the project’s value. It’s risky (and perhaps costly) to continue when key stakeholders are debating the value of your project or a part of it. can be risky — even if deadlines are looming. Continuing might alienate a stakeholder, leading them to withdraw their support. Wait until the stakeholders’ debate is over before making your decision. If deadline pressure becomes overwhelming, work with your sponsor to expedite the stakeholder’s discussion.
  • Regulatory changes are under consideration. With regulated outcomes, project solutions must conform to legislation. Regulations might apply to the methods for creating outcomes, like the highly-legislated process for testing new drugs. If regulations are under debate or are being revised by government agencies, wait until the changes are confirmed before deciding on how to produce project deliverables. Note: Speed to market that conforms with new regulation can be a valuable business strategy. So you might decide to speculate on the implementation of a regulatory change and move forward with a solution  — or produce multiple deliverables to accommodate regulatory options. Even in this case, wait as late as possible to understand the potential regulatory changes.
  • Cross-project dependencies are delayed. When deliverables from another project are prerequisites to your project and they are late, you might have to delay decisions in the successor project. Be sure you understand the prerequisite’s makeup and outcome before making a decision about how to use the full capabilities of that deliverable. As with regulatory changes, you might speculate about the deliverable, but you should wait on that so you know as much as possible about the deliverable.
  • Resource availability is unclear or undetermined. An appropriate level of technical and business process expertise is important on project teams. It can be beneficial to wait to see if the management team can make a knowledgeable staff member available. If that expertise isn’t available, you’ll have to hire skilled contractors or allow more time for lesser-skilled people to get up to speed and perform work. These options cost time and money, often much more than you’d spend on that expert staff member.
  • Stakeholder requirements are unconfirmed or delayed. Project failures can be caused by project teams designing and producing deliverables without getting accurate requirements from stakeholders. They move forward assuming they know what stakeholders want. This alienates stakeholders and reduces their confidence in project deliverables. That could result in deliverables being partially implemented or not at all. Bottom line: wait until key stakeholders confirm the project deliverables before moving forward.

If you have a decision coming up, think about whether there is an advantage to delaying it. If you can think of other times when a delay is beneficial, share them with us in the comments section.

For more about decision-making, check out Becky Saltzman’s Critical Thinking for Better Judgment and Decision-Making course.

Coming Up

I am busy updating two of my courses. Later in the year, you’ll be seeing new and improved versions of Learning Microsoft Project and Project Management Foundations: Choosing the Right Online Tool. The latter course will review more tools than the original using a different format.

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This article belongs to the Bonnie’s Project Pointers newsletter series, which has more than 73,000 subscribers. This newsletter is 100% written by a human (no aliens or AIs involved). If you like this article, you can subscribe to receive notifications when a new article posts.

Want to learn more about the topics I talk about in these newsletters? Watch my courses in the LinkedIn Learning Library and tune into my LinkedIn Office Hours live broadcasts.

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Beyond SMART Requirements

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Making sure business requirements are suitable is a valuable practice. Using SMART requirements (Specific, Measurable, Achievable, Relevant, and Time-bound) is a great start, but it isn’t always enough. Here are other requirement characteristics that help keep projects out of trouble.

  • Will the requirement cause conflict? Requirements can benefit one part of the business and cause difficulties for another. For example, creating a streamlined approach for selling a product might help sales while creating problems for the finance department in collecting client payments. Identify potential conflicts and try to adjust requirements to benefit all business areas.
  • Prioritize the requirements. Prioritizing requirements accomplishes two important things. First, in the event of budget cuts, you can remove requirements that have the least impact on the delivered solution. This strategic approach to prioritization simplifies scope management. Second, the discussions around prioritizing requirements are an educational process for the project team. The more the team understands stakeholders’ needs and business rationale, the more effective the project deliverables can be.
  • Are stated requirements “the tip of the iceberg.” Stakeholders sometimes think about their immediate needs and overlook the big picture. For example, a sales team presents a requirement to enable customers to select product color on the company website rather than talking to a sales agent. This could trigger an avalanche of requests for choosing different product options via the web. In this situation, the project team might proactively ask whether product options beyond color are desirable. That way, the development team could design and build a more comprehensive set of product options, which might be cheaper and more efficient in the long run.
  • Does this requirement impact regulatory processes? Businesses consider process or tool enhancements to increase productivity. What if enhancements affect outcomes that are needed by regulatory requirements. The process to create a regulated outcome might also be regulated. Make sure requirements don’t violate regulatory standards for processes and outcomes.
  • Are test cases available and feasible to create? Complex projects can involve multi-faceted requirements. Test cases assess a solution help determine whether the project solution satisfies a requirement. There’s a risk when test cases can’t be derived or are extremely expensive. The next logical step is to assess that risk to determine if you should accept the requirement. Commercial Off the Shelf Software (COTS) provides an example. Some COTS components are not validated via test cases because non-functional requirements, like usability or real-world performance, might not be adequately testable during development (due to lack of access to client production environments and so on).

Add these characteristics to your requirements checklist. If you have other items on your checklist, share them with us in the comments section.

For more about requirements, check out Angela Wick’s Requirements Elicitation and Analysis course.

Coming Up

I am busy updating two of my courses. Later in the year, you’ll be seeing new and improved versions of Learning Microsoft Project and Project Management Foundations: Choosing the Right Online Tool. The latter course will review more tools than the original using a different format.

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This article belongs to the Bonnie’s Project Pointers newsletter series, which has more than 72,000 subscribers. This newsletter is 100% written by a human (no aliens or AIs involved). If you like this article, you can subscribe to receive notifications when a new article posts.

Want to learn more about the topics I talk about in these newsletters? Watch my courses in the LinkedIn Learning Library and tune into my LinkedIn Office Hours live broadcasts.

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Creating Meaningful Learning Moments

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Project setbacks are inevitable. The savvy project manager turns these challenges into learning opportunities. It takes finesse to add value in these situations, so here are approaches to turn setbacks into constructive learning moments.

  • Focus on psychological safety. The phrase “focus on the problem, not the person” is only the beginning. To create constructive learning moments, focus on how the problem is described, what triggered actions, what actions were taken, and what outcomes resulted. It’s important to use neutral, non-judgmental, fact-based language. This helps create an environment of psychological safety where people can discuss setbacks openly and truthfully.
  • Root causes are critical. Consider whether the team discusses symptoms or potential root causes. The “5 Whys” approach works well here. Asking “why” at least five times drives deeper discussions which helps identify the root causes of problems. Areas to focus on include processes and procedures (and what inspired their creation), unexpected actions by automated systems, unexpected or unusual reactions from stakeholders, and lack of education on project management techniques.
  • Use learning-related language. I like the phrase “fail forward.” It conveys that failing can be positive. Making discoveries and pushing the envelope of how things are done are two examples of setbacks being positive: you learn something you can use in the future. For example, you can try speeding up quality assurance processes by using knowledgeable stakeholders who haven’t been part of your project development process instead of performing user acceptance testing. In some cases, this might work well. In others, you might find shortcomings to that approach. The lesson you learn is which projects benefit from the new QA approach and which ones don’t.
  • Update lessons learned frequently. You need to update lessons learned as the project progresses (like other PM deliverables. As you implement improvements, update your documentation of root causes and ways to recover from setbacks. Include whether improvements worked as expected or further adjustments were required. Note: If you apply lessons learned from earlier projects, you might need to update those as well to ensure you get the most out of your learning moments.
  • Don’t gloss over repeated errors. Attention to psychological safety and root causes doesn’t mean you disregard repeated setbacks caused by team members who ignored lessons learned. In 1 on 1 conversations, work to understand why the team member ignored a lesson learned and address any shortcomings that arise from the conversation.

Think about a recent setback you experienced on a project. Take a few minutes to write up a description of the problem using neutral, non-judgmental, fact-based language. Recall whether your team described symptoms or root causes. Did they focus on the failure, or did they identify things they learned? If this setback wasn’t handled with a positive mindset, ask your most learning-focused team member to use this setback to practice these approaches.

For more about lessons learned, check out my Project Management Foundations course.

Coming Up

I am busy updating two of my courses. Later in the year, you’ll be seeing new and improved versions of Learning Microsoft Project and Project Management Foundations: Choosing the Right Online Tool. The latter course will review more tools than the original using a different format.

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This article belongs to the Bonnie’s Project Pointers newsletter series, which has more than 72,000 subscribers. This newsletter is 100% written by a human (no aliens or AIs involved). If you like this article, you can subscribe to receive notifications when a new article posts.

Want to learn more about the topics I talk about in these newsletters? Watch my courses in the LinkedIn Learning Library and tune into my LinkedIn Office Hours live broadcasts.

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How to Handle Fearful Stakeholders

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Stakeholders who fear bad project outcomes are tough to manage. It’s important to address these fears. Left unmanaged, your project could be delayed or even cancelled. Here are a few approaches to manage project fears.

  • Listen to fearful stakeholders. Their past experiences may have tainted their perceptions. You need to understand their concerns. Actively listen to these people: make eye contact, ask questions, paraphrase their points, use the terminology they use. Stakeholders will feel heard when you refer to the business implications at the source of their fears. When stakeholders feel their concerns have been heard and are taken seriously (that is, the project team is committed to addressing their concerns), their comfort level with the project increases.
  • Share your plans. Your project plan talks about how you will accomplish things and what you do to ensure obstacles don’t prevent you from achieving project objectives. Stakeholders become concerned when there is a lack of communication, unexplained changes, or drawn-out decision-making. So don’t be shy about communicating how your project plan will help avoid obstacles to successful project delivery.
  • Add risk items to your plan that directly address stakeholder fears. Add items to your risk management plan related to your stakeholders’ fears. Ask them to help look for trigger events and implement risk responses. This way, the project team will partner with these stakeholders to ensure their fears don’t come to fruition. Even if the risks occur, they will be addressed directly with pre-determined actions the fearful stakeholders have already agreed to.
  • Address areas of concern in status reports. In your status reports, address the status of stakeholder’s concerns. This reinforces that the stakeholders were heard and that the team is focusing on those concerns as the project progresses.
  • Highlight quick wins. Identify and communicate completed milestones as the project unfolds. Celebrating these wins helps stakeholders visualize progress and builds confidence in the project’s ultimate success.
  • ALWAYS support views with data. Trying to reassure fearful stakeholders with past experiences doesn’t work. They don’t relate to projects they weren’t involved in.  Objectives information is more reassuring than subjective opinions. Support your assertions and decisions with data, metrics, and evidence from industry best practices and actual progress with the current project. Stakeholders are more likely to feel reassured.

Have someone with a concern about your project? Of course you do! Take 15 minutes to plan how you will use these approaches to address their concern. And then, try it! Let us know how it goes in the comments section.

Coming Up

I am busy updating two of my courses. Later in the year, you’ll be seeing new and improved versions of Learning Microsoft Project and Project Management Foundations: Choosing the Right Online Tool. The latter course will review more tools than the original using a different format.

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This article belongs to the Bonnie’s Project Pointers newsletter series, which has more than 71,000 subscribers. This newsletter is 100% written by a human (no aliens or AIs involved). If you like this article, you can subscribe to receive notifications when a new article posts.

Want to learn more about the topics I talk about in these newsletters? Watch my courses in the LinkedIn Learning Library and tune into my LinkedIn Office Hours live broadcasts.

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Project methodology considerations

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Choosing the right methodology for your project is crucial for success. Agile methods are effective when iterative development is suitable for the product, capable technical team members are available, and access to client stakeholders is assured. But other considerations may affect which methodology you choose.

  • Do specific milestones have to be met? Consider a project’s date-driven key process indicators (KPIs) when selecting a methodology. The flexibility and adaptability of Agile projects is meant to support iterative KPIs to measure progress, focusing on incremental improvements. On the other hand, structured waterfall projects are more suitable for milestone-based KPIs, when an agreed set of pre-defined objectives must be achieved by a specific date. Agile can be used to deliver milestone-based KPIs. However, when specific and detailed requirements are in place, stakeholders are less likely to want to participate in project development to the degree that agile requires. If stakeholders aren’t committed, waterfall is the best approach, especially in larger organizations that often are reluctant to assign key operational personnel to longer-term projects. Waterfall methodology is also a better approach for industries or projects that have specific regulatory or compliance milestone requirements that require a more structured and documented approach. 
  • Is the project complex? Complex projects benefit from a waterfall approach, especially those with interdependencies between numerous internal groups or external entities. Planning interactions and timeframe commitments must be carefully structured and agreed upon beforehand. The fluid nature of agile can make these inter-organizational interactions challenging. Less complex projects, with few internal interactions, are more suited to agile, given its flexibility and short-term delivery mindset.
  • Are there many assumptions associated with the project? Project justifications that rely on many assumptions — or assumptions tied to crucial aspects of the business –are more suitable for agile because it promotes learning and iterative improvement. Risks are reduced via quick prototype features built to validate assumptions, diminish risks, and confirm suitability for business processes and outcome generation. A waterfall approach when many assumptions go into a project justification introduces risks that aren’t likely to be resolved in the short-term.
  • Is the project aligned with strategic or shorter team goals? Projects aligned with long-term strategic plans might favor a waterfall approach, because they must produce more extensive, non-flexible objectives. In contrast, agile is ideal for addressing shorter-term changing market conditions and achieving quick wins from a cost or productivity standpoint.

 

Have you used other considerations to choose between methodologies? What happens if the company wants to force a methodology that doesn’t suit your project? Share your experiences with us in the comments section.

For more about methodologies, check out my Project Management Foundations course.

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This article belongs to the Bonnie’s Project Pointers newsletter series, which has more than 71,000 subscribers. This newsletter is 100% written by a human (no aliens or AIs involved). If you like this article, you can subscribe to receive notifications when a new article posts.

Want to learn more about the topics I talk about in these newsletters? Watch my courses in the LinkedIn Learning Library and tune into my LinkedIn Office Hours live broadcasts.

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How to prepare a project idea for primetime

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Project ideas are what support careers in project management — and present possibilities for moving your organization forward. Sometimes, project ideas need more work before they should or would be accepted. Here are indicators that a project idea isn’t ready and how to improve it:

  • The sponsorship prospects aren’t clear. A great question about a project idea is, “Who would be an appropriate sponsor for this initiative?” If the answer isn’t clear or several sponsors might be needed to fulfill sponsorship responsibilities, that’s a problem. A project is doomed without sponsor commitment. The fix: restructure the project idea to align with a potential sponsor’s scope of responsibility. 
  • Unclear benefits. For a valid project idea, 1 – who will benefit? and 2 – how will those benefits be realized and measured? If you can’t answer those questions, the idea might still be valid, but more work is needed before proceeding. Look for benefits resulting from changes to business processes, technology solutions, or customer support approaches. Then, document the answers to the questions above.
  • Unclear funding sources. For every project idea, it’s essential to ask, “How will we pay for this?” If the answer is not clear, more work is needed to determine where the project’s benefits will be realized. Analyze the project benefits to identify the business area that will benefit from improvements – that’s your candidate for funding.
  • Technology challenges exist. Some valid project ideas face technology platforms that struggle to handle change. Either the systems are too old or fragile, or the backlog of changes for the technology team is too large. In this case, you can consider two approaches. First, can benefits be obtained without extensive technology changes. Alternatively, if the benefits are large enough, consider contracting specialized technical or supplementary resources to address the technological changes needed to implement the project idea.
  • Lack of strategic alignment. Resources and/or funding shortages often constrain organizations. Project ideas that don’t support the organization’s strategic direction aren’t a good idea. If necessary, restructure the project idea to support the organization’s strategy — or dismiss it as one that doesn’t fit current business priorities.

If you’re a project manager who doesn’t hear about project ideas early on, the points in this article are great topics to discuss as you finalize your project charter. If the project rushes ahead before the points are resolved, incorporate them as risks in your project planning. That way, you can discuss risk response activities with your key stakeholders.

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This article belongs to the Bonnie’s Project Pointers newsletter series, which has more than 70,000 subscribers. This newsletter is 100% written by a human (no aliens or AIs involved). If you like this article, you can subscribe to receive notifications when a new article posts.

Want to learn more about the topics I talk about in these newsletters? Watch my courses in the LinkedIn Learning Library and tune into my LinkedIn Office Hours live broadcasts.

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How to Validate Project Assumptions

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Validating the assumptions included in the project justification is key to minimizing project risk. Sometimes, straightforward research is enough. For assumptions that aren’t easily validated, here are other approaches to validate or, at least, reduce the probability of an assumption being wrong.  

  • Consult experts. Reach outside your organization. Seek the opinions of LinkedIn contacts, peers in project management associations, or prominent individuals in industry bodies. Ideally, get multiple perspectives so you can analyze the results to identify project situations that could render an assumption invalid. If you get differing opinions, use the Delphi approach. Send the differing opinions to your expert panel and ask them to comment on the rationale for dissenting views. Use the results of that exercise to figure out if the assumptions present a significant risk to the project.
  • Perform an audit. Find situations where you can directly test the validity of the assumption. Then, test the assumption via a manual process, querying a customer, or performing any other action that might provide a “sample result” you can use for validation purposes. For example, altering the directions you provide to clients to solve a product issue, publishing an advertisement with a different angle to a small set of clients, or changing the parameters of a system function to see if the subsequent system or user action is expected. Note: this approach has risks. You don’t want to frustrate a client or have an advertisement yield an adverse reaction to your product. To minimize risk of adverse outcomes, select the clients and situations carefully, and if feasible, alert a trusted client that you are trying something new.
  • Build a prototype. Designing a prototype process or I/T system is an effective way of validating assumptions. When it works, it triggers enthusiasm for the project and its potential business results. Depending on the situation, the prototype can be a small, standalone project or a set of features in an agile project environment. With this approach, be prepared for the project to take an unanticipated direction — your stakeholders might create additional requirements. No worries, the result is often more effective than the original plan, so keep an open mind.
  • Conduct a survey. Query individuals who aren’t familiar with the project’s justification and current assumptions. Why? Because stakeholders who know the assumptions can answer the survey questions to confirm or invalidate them based on their views about the project. Also, don’t make the mistake of taking a casual approach to designing survey questions. Use people with experience designing survey questions: the wording of survey questions is vital to ensure you get valid results.

Have you come up with other approaches for validating assumptions? Or have tips for managing the nagging feeling that you haven’t even identified all the assumptions? If so, share with us in the comments section.

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This article belongs to the Bonnie’s Project Pointers newsletter series, which has more than 70,000 subscribers. This newsletter is 100% written by a human (no aliens or AIs involved). If you like this article, you can subscribe to receive notifications when a new article posts.

Want to learn more about the topics I talk about in these newsletters? Watch my courses in the LinkedIn Learning Library and tune into my LinkedIn Office Hours live broadcasts.

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Lesser-Known Benefits of Contract Management

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Contract management makes sure that you and your project vendors agree on costs, terms, deliverables, and conditions. Dig a little deeper, and contract management can help your projects in other ways: 

  • Enhanced vendor relationships. Time spent negotiating vendor contracts helps vendors understand project goals and your organization’s culture. This effort also helps set expectations that smooth the process when the vendor’s resources are needed in future projects. In longer-term relationships, the vendor will be able to anticipate future needs and train their staff to support your organization’s future initiatives.
  • Expanded risk mitigation. Contract management helps identify and mitigate potential risks by defining terms, obligations, and liabilities for everyone involved. By identifying and planning for these risks, you reduce the probability of issues occurring when vendor resources work on tasks. In longer-term relationships, vendors can develop skills that position them to work on more and broader tasks. Skilled vendor resources help in several ways. If skilled resources within your organization aren’t available, you can turn to a vendor – thereby reducing the risk of using less skilled people within your organization. Skilled vendor resources also lighten your internal peoples’ loads so they have time for cross-training. That way, you reduce future risks related to skills shortages.
  • Compliance support. Vendor resources can help ensure your organization complies with government regulations or industry standards. When you include compliance in the terms and conditions of a vendor contract, the burden of creating compliant tools and processes shifts to the vendor. That reduces your organization’s compliance risk. Note: Even though that responsibility is shifted to the vendor, the contracting organization (that is, your organization) is ultimately responsible for compliance. Be sure to review all deliverables to ensure that the vendor has maintained compliance.
  • Long-term cost savings. Contract management helps current and future projects. Contracts on file simplify the renegotiation of favorable terms during renewals and can identify opportunities benefiting both the contracting organization and the vendor. This can yield longer-term deals at reduced cost, shorter ramp-up times for vendor personnel who return to the same client, and increased efficiencies.

Because contract management provides so many benefits, it’s a good idea for project managers to be involved even if another department does the bulk of the work. If you don’t already know the contracts people in your organization, make a point of introducing yourself!

For more about contract management and procurement, check out Steven Brown’s Purchasing Foundations course.

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This article belongs to the Bonnie’s Project Pointers newsletter series, which has more than 69,000 subscribers. This newsletter is 100% written by a human (no aliens or AIs involved). If you like this article, you can subscribe to receive notifications when a new article posts.

Want to learn more about the topics I talk about in these newsletters? Watch my courses in the LinkedIn Learning Library and tune into my LinkedIn Office Hours live broadcasts.

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