I was recently interviewed by the New Zealand editor of CIO Insider (an IDG publication), Divina Paredes, concerning a customised mediation process for SaaS (software as a service) engagement disputes.
You can read the full article here .
I was recently interviewed by the New Zealand editor of CIO Insider (an IDG publication), Divina Paredes, concerning a customised mediation process for SaaS (software as a service) engagement disputes.
You can read the full article here .
How mediation can be an alternative to the fault finding processes of litigation or arbitration
In previous posts I shared some of the findings and recommendations of industry focused research with senior international and domestic IT project stakeholders about the main causes of IT software development & implementation project misalignment and ensuing contract disputes. The research was in collaboration with NZIAC (the New Zealand International Arbitration Centre).
It led to the question “Can customised Mediation or the use of Dispute Review Boards resolve and reset IT Project contract disputes?”
A dominant research finding was that IT project misalignment can often be traced back to the initial exchanges between a customer and supplier in requirements scoping. A customer may not adequately scope its needs (e.g. change scope or resources) and the supplier solution is then selected in this context. Despite commercial efforts and robust mutual contracting, a course may be set for IT project misalignment.
Conversations with senior industry stakeholders, since we issued our research report, have highlighted that the nature of software and its procurement, development and implementation involves a level of exploration. Attributing project outcome to customer behaviour only or supplier behaviour only is not always black and white.
So, is there an engagement path, that once misalignment and a contract dispute ensues, can diffuse conflict and reset a customer and supplier on course for a successful project outcome?
A path that is an alternative to finding fault via the cost intensive processes of litigation or arbitration that are likely to lead to relationship and IT project termination?
We believe there is: IT project mediation.
With NZIAC, I am now designing an IT Mediation process to be part of IT Project Governance (as set out in a contracted IT project delivery statement of work or work order). It will centre on the use of a skilled, industry aware, neutral, credentialed mediator who is available from the commencement of an IT project.
Key elements are:
When busy stakeholders, with significant costs and revenue at risk, have explored commercially a resolution without success, this process offers them another way to solve the contract dispute. By achieving this we hope to improve the current modest success rates for IT projects as surveyed regularly and globally at scale by the Standish Group.
IT Mediation can be a cost-effective and time saving alternative to the fault finding processes of litigation or arbitration and assist in the successful progress of an IT project and the customer and supplier relationship.
I welcome your thoughts on this – please feel free to send your thoughts or get in touch.
Research, results and recommendations
In 2018-2019 I undertook a research project on the causes of IT Project misalignment and contract disputes in collaboration with NZIAC. In this longer article, I am outlining in detail what the research involved and the key outcomes.
To date, successful delivery of IT Projects globally have had average success rates. In fact, software procurement, development, implementation and support and maintenance engagements (referred to herein as an IT Project) have had distinctly mixed success rates over the last 25 years (Success being classified as delivered on time and on Budget, and – regardless of functionality ultimately used – with a satisfactory business and User experience). The credentialed USA based Standish Consultancy Group in its 2015 Global Chaos report surveyed 50000 IT Projects globally and concluded that only 29% of IT Projects were successful, 52% were challenged and 19% failed.
The nature of technology models and the availability of data in the last 10 years are making the need for successful delivery rates ever more critical.
Often IT Project misalignment is discovered and recognised as an IT Project contract dispute when the Delivery phase is well in flight. At this time key stakeholders at all levels usually have multiple demands on their time and turning their minds to conflict and its resolution is not desirable and often fatigue based, with limited understanding of key information, and a range of accountability pressures, all meaning their ability to stand back, unlock and resolve can be challenging .
In these circumstances we propose that IT Project Contract terms, which permit a time out review through early use of the above neutral facilitation methods, offer Customer and Supplier leadership (executive or delivery) an effective alternative involving renegotiating the IT Project Contract and recovering and resetting the delivery of an IT Project.
The research project focused on IT Projects which, fundamentally, involve multifaceted elements, phases and various stakeholders. While procurement methods and project management methodologies continue to evolve, IT Projects are rapidly evolving around the aspects of self-learning Software, big data capture, distributed data centres, high speed networks, multiple device deployment, development methods, integration and cybersecurity complexity, and regulatory frameworks. These all elevate the risks and consequences arising from IT project misalignment and ensuing contractual disputes between Suppliers and Customers.
The following methodology was adopted:
The objective of the research was to use the outcomes to review, assess, explore and develop tailored dispute resolution methods that will best assist Customers and Suppliers in improving IT Project success and maintaining Customer-Supplier relationships (the DR Research).
These are summarised below:
1. Procurement phase:
Various Customer and Supplier actions in the Analysis and scoping of transformational Customer Requirements[1] for a proposed Solution were the dominant inadequacy, as distinct from activities in other IT Project phases (Design, Build, Testing, Deployment and Production (Support and Maintenance). In particular these activities include:
a. Business case preparation – driven by Budget constraints and expeditious target business outcomes of a Sponsor, often there is a lack of time spent in reaching a full understanding of transformational scope (Current State to Future State), User needs, optimal Solution selection and the Business Objectives. In this context, Supplier bid or sales teams respond. The direction of travel then shifts to ensuring successful project progression of the selected Solution rather than a Solution delivering an optimal outcome based on fully understood business Requirements.
b. Internal Requirements scoping – inadequate analysis of User needs and reDesign scope together with deficiencies in internal Customer planning coordination, resourcing and contributory engagement of all relevant stakeholders. This leads to Supplier and Solution selection on this basis, with Suppliers responding to the “factual situation” and mitigating risk via high level Assumptions. Their actions are also often driven by competitive “sales pricing” pressures.
c. Known compared to be discovered requirements – there is also inadequacy in finding a mutual Customer – Supplier understanding or balance between scoping known Requirements and to be discovered transformation and the risk and costs associated with this. There is a call broadly for partnering engagement and a deeper pre-Solution selection due diligence (collaborative discovery based on a Customer’s willingness to pay some Supplier resourcing cost in what is a pre-selection time).
2. Delivery phase:
In relation to the areas of planning, people, development and change management, the following insights were discerned:
a. Project Scheduling – often over-ambitious in its shaping.
b. Resource capacity planning, role scope and performance quality:
c. Agile or Waterfall development method?
d. Change Control Procedure:
3. Governance and measuring success
These are the two main overarching elements in relation to the above specific activities:
a. Governance:
b. Measuring success:
i. IT Project Contract negotiation:
ii. Modified DR Services specifically for IT Projects:
a. Tailored mediation:
b. Dispute review board (DRB):
These dispute resolution methods are recommended as alternatives to often escalating conflict orientated and resource and cost intensive arbitration or litigation processes. The latter leading to a mandatory and enforceable determination imposed on a party found to be at fault.
[i] Please refer to the Final Report Glossary for further information on defined terms used herein.