Every MS consultancy with which you do business is going to ask you to sign two contracts related to services. They go by various names but are usually called Master Services Agreement and Scope (or Statement) of Work.
The Master Services Agreement defines the on-going business relationship with the consultancy. Specifically, it will address billing policies, intellectual property ownership, non-disclosure rules, travel policies, payment terms, etc. In essence, it will usually address everything that normally does NOT change from project to project (or engagement to engagement).
The Scope (or Statement) of Work (sometimes also called a Service Order) defines the scope of work to be delivered in the current engagement. If well written, it should clearly define the deliverables (dates and content), the personnel (level and rate) and the list of services being provided by those personnel to reach those deliverables. In addition, it will provide a time and charge estimate (for time and materials) or the fixed fee terms (amount and milestone schedule). Where conditions in the MSA are changed, they should also be specifically listed in the SOW.
On the surface, this seems pretty straightforward: one document tells you the business rules, the other one tells you what we are going to do, when we are going to do it, who is going to do it and how much its going to cost.
And yet, for all its simplicity, it’s in this process that so many expectations are improperly set leading to later problems and relationship challenges. In no particular order, here’s the three top areas where I often see less than perfect contract clarity:
- Travel Expenses: If a consultant is coming in from a another location (define that as more than about 75-100 miles away), expect to pay the travel expenses UNLESS the contract explicitly says differently. If the contracts are silent as to travel expenses both parties should insist on language being included that outlines a policy to which you both agree.
2. Travel Time: A consultant that is sitting on a plane is not billing. So, expect most consultancies to charge you for some degree of travel time. The most often used methods are 1/2 rate/both ways or full rate/one way. Another method I’ve seen is flat rate per trip. Sometimes you can get this waived if a) the overall project is large enough, b) the consultancy is desperate enough (not a good sign, by the way) or c) you commit to a certain minimum number of hours of billed time per trip (usually its 32 minimum).
3. Data Migration: Especially for CRM and ERP, who is responsible for pulling the data out of the legacy system and validating it before it’s migrated? Who has to format the data into an acceptable input format? If an error occurs on import, who is responsible for fixing it? When the import is complete, how much validation work is the consultancy and how much is the client supposed to do? Lastly, specifically what data is being migrated? It’s not enough to say “Customer Records”. In AX, a customer record is completely different than that in CRM and I guarantee you a client may think a customer record includes all transactions where the consultancy just thinks of it as the customer name and address data. The best solution I’ve seen is to include a data mapping diagram as an attachment to the contract that shows the data points as mapped between the old and new system. Even better, do the data mapping diagram based on the GUI’s of the legacy and new system so its completely clear to the business folks signing the contract. If this is not possible, the contract language should be clear about the assumptions inherent in the data migration so that both parties can agree if conditions change later.
I’ve also had problems around testing (both unit and system) and training (project team vs end user vs content in both), but by and large, the above has caused far more confusion than anything else.
Next to last, a note to consultants: read your contracts with an unbiased eye, like you’ve never done an engagement like this before. Is it clear? Can it be understood by a laymen? More importantly (even more important than its legal enforceability), can you manage to it? If not, assume you will have several negative conversations with your clients along the way.
Lastly, a note to clients: Read the contract, esp. the statement of work. Everything you discussed in sales meetings for the last 6 months is boiled down into a set of rules in the contract to which the services team will manage the engagement. If you don’t understand it, and you sign it, you are inevitably going to be disappointed the first time someone says “change order”. Insist on clarity (in the contract, not verbally or in side agreements) and then manage to the agreement as written, not as promised during a sales cycle.
That’s a pretty rough title, but, in this case, true. Just saw this (Five Great Ways to Drive Your Best Workers Out the Door – CIO.com) CIO.com and thought it applies very, very nicely to an MS consultancy.
If I had to summarize, the article says “Pay attention to the impact of your actions on those around you”. Truly, most of our best management skills may have been taught in kindergarten.
Over the last several years, I’ve noticed something interesting that supports what some of the best business writers (like Jim Collins) have discussed for years: companies with clear missions work better.
In the context of this blog, “better” means works more smoothly and effectively with partners.
I’ll site a very specific example for this posting:
Upward Unlimited (www.upward.org) is a business and ministry located in South Carolina. Their business is providing services and products to churches that wish to run sports leagues. Their mission, though, is related to them as a ministry and is:
“To introduce children to Jesus Christ by creating opportunities to serve through sports.”
That’s about as perfect an expression of mission as it gets. Its tight, clear, specific and easy to understand. But is it effective? Put another way, does the organization align behind it? Yes it is, and yes they do.
What I find fascinating about Upward is that in every meeting, and in every discussion, this mission is pre-eminent in their comments, thoughts and actions and every decision they make is geared towards “how does this help us serve our mission”. As a Microsoft partner serving some of their IT needs, their selection process of us as a vendor was based on how we would serve this mission. Our first meeting after the selection was primarily designed to help us understand that the mission isn’t part of the company – it is the company. Our planning meetings with them (which occur quarterly) focus on how to improve their ability to focus on the mission through effective use of information technology.
This clearly expressed mission, and high degree of alignment around it, improves our partnership because every recommendation we make and every proposed project we suggest is evaluated first by us, then by Upward, on the basis of how well it serves the mission – not how it serves the ego of the CIO, or the comp plan of the CFO, or the personality of the VP of Sales.
One last point specific to Upward: their faith-based mission helps alignment because it creates a common set of values and vocabulary. However, its their focus on the mission that creates their success. This is possible to achieve for any company not just faith-based organizations.
As a partner, how can you best work with this kind of mission driven client?
- Initially (during the sales or evaluation cycle), take the time to understand the culture and the alignment around mission. More importantly, make certain alignment exists between your culture and their mission.
- Evaluate your work (proposed and completed) based on its ability to support the mission
- Make certain any team members that work with the client are informed and clear about the client’s mission, can articulate it, and can express how their work aligns with it
- Finally, spend planning time with the client (that may be non-billable) in order to refresh yourselves at the fountain of the client’s culture.
Love to hear your opinions on this and your experience with other highly aligned clients.
A rather dramatic title for a blog on managing an IT consultancy, I admit. So, why use it?
As a career consultant and professional services manager since the late 80′s, I see a pattern of behavior that repeats itself time and time again: for all the benefit Microsoft technologies can provide a client, and all the strengths a skilled Microsoft partner can provide the same client, at the end of the day most clients and partners find themselves rather dissatisfied with the experience. And yet, I see very little changes in the behavior of most clients or partners to address this issue.
Sure, as an industry we talk (a lot) about client retention, satisfaction and being trusted business advisors so as to create better, stickier clients. And, as clients, we talk (a lot) about vendor management, software selection, RFP processes, etc to better engage and work with a Microsoft partners. And yet such talk culminates in the same behavior each time: a client hires a vendor to do a specific job, expectations are usually different on each side, scope is defined on such mis-set expectations and, when the contracted project is done, the client feels they didn’t get full value and the partners feels they did the job well but are not appreciated.
If the definition of insanity is doing the same thing each time and expecting a different result, than clearly this constantly repeated behavior indicates a death of reason in the approach to Microsoft Client/Partner relationships.
The purpose behind this blog, then, is two-fold: to provide advice to partners and clients on how to better manage themselves and their relationships, and to engage open discussion and commentary around same. Our contributing authors will come from Microsoft, the Microsoft ecosystem (Partners and ISV’s) and Microsoft clients spanning all industries and all departments (accounting, ops, IT, marketing, sales). The goal is the development of a broad viewpoint on how to improve our ability to manage, and engage, Microsoft consultancies.