Our industry, IT Consulting, has a longtime reputation for over promising and under delivering. When I worked at Andersen Consulting (now Accenture) in the early ‘90’s, I was on a project that delivered two years late. When I worked at Solo Cup company (now Dart), I watched as our hired IT consulting company promised launch date after launch date and finally launched our new Customer Management System 21 months late. This reputation is so prevalent that seasoned executives have learned to always apply buffers to the dates (and costs) that consultants promise. When my brother and I started our boutique IT Consulting firm in 1998, we made a few key promises to ourselves. First, we promised that our company would have a culture that empowered people to enjoyably reach their highest potential. Secondly, we promised that we would challenge the reputation of our industry and prove that IT Consultants can and do deliver high quality products on time. Surprisingly, both promises were fairly easy to achieve. So much so, that I often forget that these achievements are unusual. This morning I was reminded of the unusual nature of the Delivery On Time achievement. After a 12 month engagement, we’re about to launch a business automation system for one of our national association clients, on time. This morning I received the following email from our client:
“…we have a minor issue that we hope you can help us with. It seems “Jeff” didn’t put the maintenance contract in this year’s budget– thinking at the time that we probably wouldn’t launch on time.”
Even though we’ve hit each delivery date during the course of this project and confirmed again and again that the system will launch on time, “Jeff” is a seasoned executive and his past experience outweighed the proof at hand. He was sure that, with a July 15th expected launch, he would be more than safe to budget for executing the maintenance contract on or after September 1st – a full month and a half later than scheduled. Before I describe our secret sauce, I want to admit that we haven’t delivered everything on time. But in our 16 years in business, the majority of our projects have hit their delivery dates. So how do we do it? There are two main “tricks” we apply. The first is measuring REAL full time equivalents. The second is telling the truth.
Measuring REAL Full Time Equivalents (FTEs)
Typically in our industry, a full time equivalent (an employee available to work full time) is expected to contribute 40 hours per week to a project. If a project is estimated to require 6400 hours of staff time, and the complexity, skills needed, and structure of the project warrants a team of 5 people, the typical IT Consulting firm will schedule 5 employees and promise the client that they’ll deliver in 8 months.
6400 hours / (5 people x 40hrs/wk) = 32 weeks = 8 months
But the fact is that full time employees do not produce 40 hours of productive work – unless they’re working 50-60 hours per week. And then what if something unexpected happens in the project (which always happens) and there are delays or hurdles that require more effort or slow down progress? You’re left with exhausted employees who don’t have additional capacity or calendar days to accommodate the unexpecteds, and the project delivers late – usually very late. The client’s hands are tied, their business is hanging in suspended animation, and everyone feels deflated. So what’s a consulting firm to do? Estimate FTE’s accurately. When we’re calculating timelines for a project, we assume that a FTE contributes 25-30 hours per week. So for a project that is estimated to require 6400 hours of development and is structured to accommodate 5 staff members, we will estimate that the project will deliver in 12 months.
6400 hours / (5 people x 25hrs/wk) = 51 weeks = 12 months
But how do you tell a client that the project is going to take 12 months when your competition is telling them that the project will take 8 months? Answer: You tell the truth.
Telling the Truth
Clients want their project completed for the least amount of investment in the shortest amount of time. Right? Well, sort of. But what they also want, and hold as even more important, is to know what to expect, plan for that expectation, and then get what they expected (or more). When we explain to our clients how we estimate the project duration, they understand that we’ve accounted for the inevitable rather than crossing our fingers and hoping that everything will go exactly as planned. From our experience, clients prefer to be able to rely on the project schedule rather than juggling new expectations with their stakeholders when the finish line inevitably moves. Of course, correctly calculating FTE’s and telling the truth are not tricks at all. The IT Consulting industry has simply bought in to the belief that the next project won’t have the same unexpecteds as the last 1000 projects. And we’re also scared that if we tell the client the truth from the beginning (that employees won’t actually produce 40 hours of deliverables each week and that unexpected complexities will arise) that the client will get cold feet. But after 16 years in business I can assure you that clients do not get cold feet when they’re told the truth and they understand why its the truth. So the moral is that IT Consultants can and should challenge the way our industry has historically estimated projects and made promises to our clients. The truth empowers us and it works. Almost every time.