Points of View

Don’t be bullied by your procurement department—choose the correct engagement model with your service provider to give your next big IT software project the best chance of success

IT development projects are complex affairs. They are prone to budget overruns and delivering fewer benefits than anticipated. With so much money at stake, it is important that you, the CEOs and stakeholders of these major company initiatives, choose the right contract and approach with your third-party service provider.

 

Executives have a raft of contracting methods available to them, in some cases such as consulting engagements, time and materials might yield the best results, and for really clear and well-defined projects such as IT Infrastructure commodity projects, fixed price may be ideal. But for Agile Project Management, the right approach is rarely fixed-price unless it is linked to small, discrete, well-defined pieces of work. It simply doesn’t incentivize the right behaviors and outcomes, and executives would do well to ensure they have the right contracting model in place to support their project.

 

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