The parallel "Real Issues" series of articles will discuss the factors that give rise to the problems experienced and specific measures to prevent the problems.  The series commencing with this article will address the question of how to go about procuring systems and initiating the implementation of new systems in a way that takes account of the Real Issues principles.

This article is directed at informing executives and senior managers with regard to methods that are really important in order to be able to manage the procurement and implementation of new systems effectively.  These same methods have application in the procurement of general business improvement services as well, and some of them can be applied to contract renewal with regard to ongoing support contracts.

In this series of articles I will set out to explain a robust business systems procurement approach, which is directed at achieving robust and enforceable contracted outcomes for a truly fixed price.  This approach is based on the manner in which large construction projects are contracted, something that I term "the engineering approach".  Inherent in this approach is a requirement that the entire procurement, configuration, customization, testing and commissioning process is undertaken to standards that permit effective litigation by the client in the event of non-performance.

Fundamental to the engineering approach is the reality that engineering construction takes place within the framework of tried and tested procurement methods with tough, enforceable contracts.  There is also a clear understanding by all parties that litigation will follow negligence, non-compliance or default.  Because litigation is entirely practical in such situations litigation is virtually never required.

The approach to business systems procurement outlined in this article is directed at achieving this same level of robust contracting such that successful litigation is entirely possible and therefore not required.  This will be discussed in more detail in subsequent articles.

Fundamental to this engineering approach to business systems procurement is an emphasis on requiring the implementation contractor to accept responsibility as the expert in the implementation of their software.  This is done in such a way as to transfer all appropriate risk to the contractor while clearly delineating the responsibilities of the client organization.  This is achieved through a robust procurement process with clearly defined governance and results in a tough and robust contract, leading to an effective implementation (configure, customize, test, deploy, commission) which delivers the agreed realistic business outcome.

The approach comprises the following major components, which will be discussed in more detail in subsequent articles.  The discussion focuses on major projects but can be down-scaled to even the most basic business systems or even business services procurement:

For large projects which operate across operational divisions in the organization, the Executive Sponsor of the project must be the Chief Executive.  The Chief Executive is the custodian of the integrated view and function of the business and is therefore the only person with the perspective and authority to perform this role.

In order to ensure that the Chief Executive can perform this role effectively and with limited time commitment there are a number of other roles that are critical:

An expert in the field of business systems procurement and implementation, with the ability to serve as an advisor to the sponsoring executive and guide the project.  NO alliances or allegiance to any product or contractor organization.  This person must be able to operate at the executive level.

Analogous to the senior architect on a prestige building construction project.  This person must interpret the requirements of the business, express these with a far-reaching long term view of where the business is going and ensure that the new business solution is geared to this future" view.  This person should not have any line responsibility in the business.  They should monitor the "Factors Causing Failure" and "The Critical Factors for Success" that are discussed in the separate series of articles on "The Real Issues in Business Systems".

This will generally be an independent specialist advisor.  It is sometimes challenging to plan their time since they are largely dependent on the rest of the people working on the project for day to day workload.  It is therefore generally best on larger projects to appoint them on a full time basis for a fixed monthly fee for the duration of the project.

It is generally not practical for the CIO to play this role, they are too caught up in the day to day pressures of the business.

A member of the executive team who is responsible for ensuring that the right people in the business are consulted at the right time.  Also ensures that the right people are in the room for workshops, testing sessions, etc.  This person carries the ultimate responsibility for ensuring that the business is fully consulted and engaged in all stages of the project.

Also an executive or at least a senior manager one level down from the executive suite.  Responsible for all the logistical and contractual arrangements with regard to the procurement, assisted by the procurement department as necessary.  Also responsible for all contractual matters during the implementation.

This can be the CIO.

Note that there is nobody on the client side who carries the title "Project Manager" or "Project Leader" -- there should be one Project Leader and they should be supplied by the successful contractor as part of the package of services.

The Request for Proposal document is the heart of the procurement process.  It should be a well proven document that contains all necessary clauses to manage both the procurement process and lay the foundation for the project.

It should set out the stages of the procurement process and the specific contractual requirements for the configuration, customization, testing, deployment and commissioning of the system.  The RFP should form the basis of the final contract.

Note that it is pre-requisite that the Client will define the contract with amendments to accommodate the contractor, using the contractor's preferred contract is not an option.

One of the objectives of the RFP is to scare off fly-by-night operators.  Another is to allow as many different bidders as possible in the first stage of the tender process in order to ensure that the best possible combination of software and Implementer is selected.

By way of example, the RFP document that I typically use runs to over 60 pages. This is available as a template to purchase together with templates and instructions for the full set of documents referred to in this article.  Email me for information .

A key objective of the RFP is to make it clear that the client is purchasing services from the successful bidder on the basis that they are experts in implementing their software and will be held fully accountable for the project outcome.

Refer the separate thread on "Strategic Essence: The Missing Link in Business Information Systems " for more information on this point.

The Business Requirement Specification should be drawn up by the Strategic Advisor to the CEO (Strategic Project Facilitator) in close consultation with the executive team and operational management.

This strategically focused requirements document focusses on documenting the essence of the business, the "right things done well" that have caused the organization to prosper.  This should be done within the context of clearly stating a twenty year view of what is required from the system in terms of business outcome.

Components of the requirement should be prioritized on a percentage weight basis over not more than about nine primary categories.

This is not a technology document, it is a strategic business outcome orientated document -- based on what is required from the investment in order for the organization to prosper.  This document is the heart and the art of the final outcome.

It must be worded in such a way that the onus for the outcome rests with the contractor (Implementer), subject to close cooperation by the business.

In this regard it is vital to understand that operational business personnel lack the long term perspective to define a long term solution.  They must be consulted but they must not dictate the solution.

4. Detailed Bill of Services

5. Precision Configuration

6. Business Simulation Laboratory

7. Formal "Go-Live" Certification

8. Prescribed Certificates

9. Client Compact

10. Executive Engagement

11. Facilitation of Change

12. Bid Compliance Checklist

13. Bid Adjudication Schedule

14. Prescribed Bid Table of Contents

15. Comprehensive Pack of Reference Documents

16. Data Warehouse and Business Intelligence

17. Three Stage Procurement Process

a. Stage 1: Narrowing the Field

b. Stage 2: Select Preferred Bidder

c. Stage 3: Detailed Discovery, Finalization of Project Plan and Contracting

d. Configuration, Customization, Testing and Commissioning

I have used this approach successfully to conduct fixed price fixed business outcome projects, and hope that you will find it of value.

If you are embarking on any form of business systems procurement, large or small, this approach can be adapted appropriately.  It also has application to procurement of other soft business improvement services.  Some of these principles can also be applied when entering into negotiations to renew contracts with existing suppliers.

I offer advisory services with regard to the application of these principles and would be delighted to discuss how I might be of assistance.

I also offer sets of electronic template documents for the above, one set suitable for small to medium size projects and another suited to larger projects, these are available for purchase, email me for details .

Yours faithfully

Dr James Robertson PrEng

James A Robertson and Associates Limited
Assisting clients to thrive through effective and efficient application of Business Information Systems

Mobile: +44 (0) 776-862-2875
Landline: +44 (0) 207-059-0007

Strategic Essence -- The Missing Link in Business Information Systems
Summary
Part 1: Strategy Defined
Part 2: Differentiation
Determining Strategic Essence

The Real Issues in Business Systems
Introduction

Strategically Enriching your Business Systems
Introduction