How to Minimize the Risk of Delaying Your Project by a Customer
When it comes to project delays there are several factors that can lead to such situation. The customer is one of them and there are two issues that can be discussed: what to do when the delay already happened and the other how to minimize the risk of happening such a delay.
Customer delaying the project is a major risk that should not be overlooked in any project. Minimizing this risk is not easy to be accomplished and its probability differs from client to client. But in case it happens mitigation actions must be performed.
Write clear specifications
In order to keep things clear and avoid misunderstandings it is important to create a solid project plan with clear specifications regarding possible project delays and the measures and penalties that apply. When it happens communicate clear factual evidence of the cost and timescale impact of delays caused by the customer. This is very important to keep things clear and to avoid the situation when the customers may argue that it is his fault and the contractor is suspected for hiding other delays behind those caused directly by them. Issues need to be resolved in a timely fashion to minimize risk and loss on both sides.
When dealing with external clients and when creating a contract it is advisable to add a clause that states that the client is responsible for prompt responses to ensure the project is not delayed. If the client provides delayed responses, actions etc. that lead to project delays then it nullifies timeline clauses in the contract. If the contract doesn’t have this kind of specifications then it is preferred to get a lawyer, or a better one in case a lawyer already exists.
In return when dealing with internal team the project manager has to take the same actions. Although there are no contractual terms that can generate a direct financial penalty, it will get noted at review time and possibly no raise…
Know the customer management
Avoiding the project delay problem is not a healthy thing to do. Escalation might reveal there are issues on the customer side where their project manager is not communicating clearly enough internally. This is why when contracting a new project it is good to know the customer and almost a must to know his management team. Knowing what to expect from them can decide whether to accept the new contract or to reject it. And even if the project is accepted contractual terms can be added to compensate the lack of professionalism on the customer management side.
The hard way
The ideal would be for all project delays to be solved with minor losses. However there are cases when it isn’t like that and there are two scenarios that can be used: accept the loss and keep the client or don’t accept it take measures. For the latter case communicate to the customer the consequences of their action, and internally agree when to set the project aside to move on to other things. Document well and communicate honestly and often and have an exit strategy established from the beginning. It is the same principle as the stop-loss used on financial trading markets. It is hard and costly but it is healthy.
Mostly its not the customer interest to delay the project, but when it happens, the main questions is WHY. And possible answers are: there was no foresight of the business case, or the value of the project has reduced and it is no more on high priority, or the business users are not aware of the reason of delay. In all the above cases it is needed a steering committee meeting to explain the delay and setup a new realistic deadline. It is important to know the reason for delay from customer side and then look at all possible mitigation plan to avert the negative impact of delay.
Sometimes there may be strategic reasons why a customer may delay a project and they do not necessarily have to share the reasons with the contractor. However to protect the project, the contractor just has to document the obvious delay and its impact on the project, then present it to the client’s responsible lead. Letting the client know that the delay may jeopardize the project and the project team may lose valuable human assets or client work resulting in even more loss of time and costs may get their attention.
It is important to know what to do when the customer is delaying the project but it is even more important to know how to minimize the risk of delaying the project by a customer. It is better and easier to avoid reaching into problems rather than solving them.