>At the Outset

Posted: February 19, 2011 in Uncategorized

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The beginning of the project, at inception, when objectives are defined and contracts signed, is probably the most critical single point in the whole project. A number of questions should be addressed very clearly:

i) What have you agreed to do?

Are the objectives clear? Do they cover each of the bases of time, quality and cost? Do all parties have the same understanding of the objectives? Is it clear what each parties’ role is within the project? Are there no overlaps? Are all tasks covered and costed?

ii) What is unclear?

Are there aspects of the objectives which are unclear? If so, is it because of present uncertainties (e.g. design specifications yet to be worked through). Great care should be taken to eliminate all unnecessary uncertainties. Necessary uncertainties should still be expected to cause problems in future.

iii) Who carries the risks and for what?

Projects have many types of risk: risk of poor performance by any party, risk of non-performance, risk of overspend, risk of late performance, risk of using technology which becomes redundant during the development period, risk of setting poor objectives, risk of failure by third parties, etc.

It is very important to identify which party carries each of these risks. Each risk must be borne somewhere. For consultancy work it is common for work to be charged on a time basis, with agreed ceilings. This virtually absolves the consultants of all responsibility if additional, unforeseen work is required. In such a situation there are two impacts: additional time required to complete the task, and additional payments to consultants to carry out the additional work.

iv) What are the consequences of non performance?

If a party fails to deliver, what impact does this have upon the project? Can alternative parties be found? What is the impact upon cost and upon the timetable? Who ultimately carries the loss if the project is never completed?

v) What are the sanctions against non performance?

What sanctions are there against a party who either delivers late or completely fails to perform? Refusing to pay any agreed fees in such a situation is no real solution: the objective was to get the task completed, and this has not been done.

http://ibis.nott.ac.uk/guidelines/ch8/chap8.html

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