Transparency and trust

Quite recently I returned from a regular working meeting with a respected Customer, where we had a long and extremely fascinating discussion about the necessary costs and, accordingly, the cost of a small subproject. At the meeting, there were about six people with fairly high grades, developed skills of communication, negotiation and extensive experience in arguing their position. The meeting was delayed, the parties were persistent and as a result agreed on a compromise result - the Customer received a discount comparable to the cost of time spent on its knocking out. That is, in financial terms, the result of the meeting is close to zero, the time spent is never to be replenished, but at the same time we managed to get closer to the completion and transfer to the Customer of the required value. And all the way back I wondered if it would be possible to solve the problem more effectively? Could it have been possible to save time and resources, its own and the customer, but at the same time achieve the same result? Where is the growth point that allows you to solve problems faster and spend less?



And here I would like to talk about trust between the Contractor and the Customer. There is a widespread opinion that in conditions of high trust between the parties, the project team works easier, projects are more successful, the result for the Customer is more significant, and the revenue (profit, etc) of the Contractor is higher.



I began to deliberately reflect on the topic after acquaintance with the article by dear A. Orlov when I was a student of Stratoplan. In short, the article describes the evolution of trust with increasing transparency. The main task was to build long-term relationships with the customer and to ensure a small but steady stream of work. Unlike projects with specific deadlines and results, after which the team disbanded and the next project could be organized after a long time, with one of the Customers a scheme was built with regular orders for the development of functionality. At the same time, the coordination of each order took up to 1 month, during which time the functionality was not created, the team stood, the business customer was sad waiting. As a result of the coordination, the project was launched, the team began its work and, as often happens, the customer began to make changes, which entailed a review of conditions, a delay in time and all the resulting difficult situations. In general, the ideal candidate for the experiment in the field of trust. The purpose of the experiment was defined as to reduce costs while maintaining the level of revenue.



As recommended in the article, I started by increasing the level of transparency. To do this, all the proposed estimates for services were as detailed as possible in terms of the set of tasks, the rates are open, the results and restrictions are strictly formalized. The second action was the proposal to enter into contracts after the work was completed, taking into account the real costs of the time sheets plus the analysis of the implemented changes that appeared during the execution of the task. At the same time, the customer did not risk anything, since they agreed that the cost would not be higher than that announced. Due to this exercise, we have demonstrated the adequacy of the estimates and the impact of fuzzy statements on the final results. The second plus is that the customer is very closely acquainted with the team and the specifics of the work. Already at this stage, as a project manager, I benefited from reducing the cost of coordination, because the Customer no longer had reasons to analyze the estimate in detail, but there was a real interest to formalize the task as clearly as possible, and here the IT colleagues worked independently with the business customer over clarifying requirements. And in this scheme we lived for about 9 months, after which it turned out that the Customer’s costs remained at the same level, the team spent 20% more time, while the speed of functional conclusions and customer satisfaction grew subjectively due to the rejection of numerous discussions of CRs and who is to blame. The increase in costs was due to an early start and differences in staging from the final implementation.

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Having discussed the current situation with the Customer (openness - remember?), We came to the hypothesis that if:

1. Determine the minimum required team size and specific team members.
2. Give the customer the opportunity to independently prioritize tasks and make changes
3. Reduce rates by switching to 100% involvement of the minimum required team
4. To enable the team to grow, when necessary,

you can get more functionality for less money, retaining the interest and confidence of the Contractor, which makes it possible to quickly increase the volume without long contractual procedures. At the same time, I agree - part of the risks the Customer took upon himself, but received more flexibility in the implementation.



Currently, the estimates are forgotten, one contract is concluded for a year with an easy renewal procedure, the stable and fully satisfactory team constantly gives the result to the operation, creating complex and poorly formalized components at the beginning of the work. I, as a Contractor, received a steady income in a competitive market with minimal risk and easily predictable returns. In this case, 95% of the effort goes on creating value instead of dancing around the estimate.



I will try to increase the level of trust with other customers, let's see where it will lead.