Today we continue with our series on “_________ Life Cycle” with a focus on the Service Provider perspective.
The following text is from our upcoming Redefining the Basics of Project Management book.
Project Life Cycle – Service Provider Perspective
In response to the previous section, a colleague offered a challenging question (refer to the Reviewer Question box) and since we know that many will have a similar question, we offer the answer here.
Based on the intent of CAM2P™, and on our ability to customize and adapt the methodology, we assert that service providers can, and should follow this systematic approach but not necessarily every stage and every gate. Let us discuss in detail.
The Discussion Basis
Mr. Provider, keep in mind the following is from your side of the fence when you wear the service provider hat!
Readers, in the text below we are using the design/build contract for the water bottling plant scenario, as our example. What we discuss here is the Project Owner’s implementation stage and the Service Provider’s project.
How Many Stages
From the perspective of the service provider,
- Is this a one-stage project?
- Is it two, design and construction?
- Are there more than two stages?
In other words, how many stages do we have here?
It must be clear by now that from the owner perspective this is only one stage.
From the service provider perspective, it is a project. Since this is a project then it has its own project life span … like all projects.
“How could this be, a project life span within a project stage?”
The explanation below demonstrates this from the service provider’s perspective.
The CAM2P™ concept phase sequence is Idea à SG1 à Feasibility à SG2 à PAD.
Let us translate it to the example at hand.
As a provider of a service, the idea is simply an external request for proposal (RFP) from the client (Project Owner); in other words, the idea source is external to the provider organization.
Per CAM2P™, the idea must pass through stage gate one (SG1), in this case, SG1 of the provider’s organization. Yes, providers should have a gate since they can reject work. At this provider gate, the provider management decides whether to accept this project or decline it for whatever business reasons they have.
With a yes at SG1, then the provider should do its own feasibility study. Otherwise, the provider might accept a project beyond what they are capable of handling.
Once the study is complete, it is time for the second gate: the final decision on whether the provider will respond to the RFP or not. In some cases, a Service Provider might not respond at SG1 and only respond to the RFP at SG2. In other words, the provider eliminates SG1 and delay the response until they have an opportunity to study the feasibility of the project.
All is smooth so far and matches the logic of CAM2P™. Now the trick question: after stage gate two (SG2); can the Service Provider issue a project authorization document?
The answer is:
- For the overall project, the project by the Project Owner, the answer is no. There is one project authorization document per project, written from the perspective of a given organization. In other words, the Project Owner has its own PAD that is independent of any Service Provider.
- “OK, we hear you, but I am not the Project Owner, I am the Service Provider, do I not have my own authorization document?”
- Of course! At the end of stage gate two (SG2) and if the service provider’s management decides to respond to the RFP, then the provider executive management must issue a PAD for its own organization.
- “But – how can we authorize the project where we do not have a contract yet?”
- As far as the Service Provider is concerned, the internal PAD is necessary to authorize the commercial and/or technical teams to start working on a response to the RFP. In other words, the project is being launched within the provider organization and no need a contract for that since this is work ‘at own risk’.
Other possible names for this stage are pre-sales, prospect stage, or anything else that fits the type of project. Regardless of what you call it, it is in total alignment with the pre-launch stage as prescribed by CAM2P™ in this Series.
The project launch stage calls for defining the basic requirements à SG3 à project management plan à SG4.
“OK – relate this to the example; what are the steps?”
- Understand the Service Provider role as an essential part of the big picture – the big picture being the project from the perspective of the client.
- Then understand the output of the project: what the Project Owner wants.
- Learn about needs and expectations, define the requirements, and ensure alignment with the client (Project Owner).
- Develop the basic requirement document and project management plan for the proposal activities.
“When we are done with the basic requirements and project management plan, then we have a proposal.”
No – not yet.
“What do you mean not yet, you already said that we have project management plan, cost …”
Yes, the BRD and PM Plan that you just did is for your organization to develop the proposal – remember ‘how to define, manage, and control’ …? So far, your focus has been on how to manage the development of the proposal, the actual proposal development takes place in the definition stage.
The project definition stage calls for developing the project detailed plan à approval à SG5.
From the Service Provider perspective, the project definition stage contains the necessary detailed planning activities leading up to submitting the proposal. It may be the case that for large or complex projects, the development of a ‘solution’ is required as part of the proposal. To do this, the Service Provider will have to go through this stage and develop the detailed scope, schedule, cost estimate, human resource requirements, risk management, subcontracting strategy, and other functions.
Based on all of the above, the Service Provider will determine its costs, and decide on the offer price for the proposal, as a final step before submission.
Once the proposal is in the hands of the client (Project Owner), there is the evaluation and possibly negotiation period – which we will call the approval period. If at SG5 there is an approval – award – then the provider will have the opportunity to move into implementation. If not – the opportunity is lost – then the provider will move to project closure without passing through the implementation stage.
Generically, once the client awards a design/build contract to the Service Provider, the provider will proceed and implement the scope of the contract – whatever that scope is; in this case implementation.
Operation Readiness Stage
As mentioned earlier, operation readiness is likely led by the Project Owner directly, with support from the Service Provider if necessary. In other words, the Service Provider will not have an operation readiness stage since for them there is nothing to operate.
Project Close Stage
The Service Provider will perform its own project close stage, independent of the Project Owner project closure.
An Alternate Approach
See the image below for an alternate approach – until another day!