What Happens When Your IT Project Goes Wrong?

Spend Matters welcomes another guest post from Jon Winsett of NPI, a spend management consultancy focused on eliminating overspending on IT, telecom and shipping.

What happens when your IT vendor takes your project off the rails – not just a little, but way off track?

In most cases, the client has little choice but to continue its relationship with the vendor and see the project through to completion. It’s not exactly an ideal marriage, and one that typically results in problems and finger pointing down the line.

My colleague Jeff Muscarella recently spoke with The Wall Street Journal’s Clint Boulton about this topic. He was doing a story on the technical problems that happen with many of the state health exchanges created under the Affordable Care Act, and why the vendors responsible for fixing those problems were still on the job.

The failures that have happened in these projects – and in thousands of others every day – are not solely the fault of the vendor. Vendor management plays a large role in how these failures can be avoided or handled more effectively and proactively. Here are a few tips shared in the article: 

Project Governance. CIOs must include a set of clauses that define how IT problems will be tracked, managed and resolved. This process should cover problem resolution, typically starting with project managers for the customer and the vendor, and then escalating to the vice presidents of IT, if necessary. Failure to resolve these problems usually spurs the CEOs of each party to meet. If the vendor doesn’t observe this clause to the letter, the client can void the contract…

Service-Level Agreements, and Quality Management. CIOs should include a menu of milestones, including key dates on which they expect certain portions of the IT project to be completed, as well as how they should be completed. Missing many delivery dates, along with quality targets, is grounds for breach of contract… 

Transition Services Agreement. Think of this as investment protection after the client and vendor agree to go their separate ways. In this clause, the vendor must help the client migrate data, code and computer systems to a new vendor. The client must pay for these services, but the vendor can’t pull its resources. Without such a clause, a vendor can hold its client’s data hostage…

The truth is that a major IT project failure typically isn’t a one-sided deal, as both the vendor and the client contribute. Those companies that understand how to protect themselves early in the project engagement through strong vendor management will find themselves in one of two positions – either enjoying a successful project completion or able to switch vendors easily to ensure the job gets done.

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