Links to previous articles at the end
of this article
my previous article in this thread I outlined some key factors
in developing a robust procurement model and contract for
business information systems. That article addressed Strategic Facilitation and
Governance, the need for a robust and legally sound "Request for Proposal"
document and the need to base the "Business Requirement Specification" on the
strategic essence of the business.
recent report "BBC
was 'complacent' over failed £100m IT
" highlights the importance of a robust procurement approach resulting
in an enforceable contract. Write-offs such as this are entirely
This article continues the discussion and looks at the importance of
a detailed "Bill of Services", the importance of
"Precision Configuration", the role of the "Business Simulation Laboratory",
the need for a formal contractually based "Go-live" Certificate, the use
of legally sound Certificates generally and the importance of a
"Client Compact" as the reciprocal contractual terms for a client to underpin a
4. Detailed Bill of Services
the construction industry
the "Bill of Quantities" is central to quoting for the work
and to executing the work. In the case of business systems related procurement
the Bill of Quantities is replaced with a "Bill of
Services", a detailed schedule of all the work that it is expected that the
contractor will undertake in order to execute the project.
The blank schedule should be compiled by the Strategic Advisor in
partnership with the Contract Manager and the Business Team
Leader. This is the client's best estimate of the work to be
undertaken at a detailed level and may run to a hundred A3 pages or more
in an Excel spreadsheet.
There are techniques that can be
used to produce such a concept plan relatively quickly
-- the role of a highly experienced solution architect, in the role of Strategic Advisor, is critical.
are free to ignore items in the schedule and to add
as many of their own items as they choose, but are prevented from adding items
back after the contract has been awarded. The refinement by the
contractor is done with the understanding that the resulting schedule will
form the basis of the final project plan. This schedule
of services results in budget line items on a deliverable
basis, structured in terms of "allowables" -- agreed budget
items for which payment will be made.
All activities are required to be costed
against a full range of personnel categories.
An "allowable" is a budget provision for a particular activity or item
and is fixed unless it can be clearly shown that the nature of the
client's business changed after award of the contract. Interim
payments are based on allowable items that have been completed and
accepted -- tied in to clearly measurable deliverables.
Milestones for partial and complete release of retention are also tied to this plan.
The Bill of Services clearly defines the work to be performed and
during the project highlights work to be performed that was not
envisaged by either party at the time the contract was signed.
A key element of this procurement approach is the third stage of detailed discovery and contracting.
During this process the preferred bidder can "go anywhere they want in
the business and talk to anyone they want to talk to in order to fully
discover the business and the requirement" -- this takes place against a fixed fee budget in stage three of the procurement process.
Key Implementer personnel must be bound to the offer and the Bill of
Services and only Implementer personnel who will actively be involved in
the project should be introduced to the client.
5. Precision Configuration and Validation Data
The two enduring elements of a Business Information Systems project are
the configuration (including validation data) and the knowledge and
experience of the people who use the system. Of these, the most
enduring is the configuration.
is commonplace for
the configuration of systems to be left to mid-level operational personnel from
both the client and the Implementer. In other words,
to people who do not have a strategic long term view of
where the business is going and who lack information cataloguing and
The configuration is, in fact, the most important element of any
business information systems project. This should be driven from
the executive suite, facilitated by the Strategic Facilitator in close
consultation with executive management, in conjunction with highly
experienced information management specialists from the Implementer.
I have coined the term "Precision Configuration" to describe this
component of a project. It entails highly organized
information, strategically determined taking account of the essence of
the business to high standards of precision that accurately measure the
series of articles on "Strategically
Enriching your Business Systems" discusses this
in more detail, there is also information relating to
this on my website under the "Configure
6. Business Simulation Laboratory
A further element of the Request for Proposal is that it prescribes
testing of the entire configuration in a Business Simulation
Laboratory. The Laboratory is a test environment where the
configuration and customization is tested to destruction by the most
experienced members of the client's staff. This goes WAY beyond
the concept of "User Acceptance Testing".
senior staff who drive the Laboratory must set out with a full selection of representative
data to introduce the most obscure situations into the
operation of the software. This should be done with the express intention
of causing the system and configuration to fail.
Once this has been carried out exhaustively and all weaknesses
identified and resolved, such that they are no longer able to cause
failure, the resulting small data sample is used to test reports and
business intelligence models, to ensure that they are working correctly
and reliably. Workflow automation is prescribed from the executive
suite, developed and tested, also to destruction. Once all these
elements are in place and working reliably, operational standards and
policies are finalized and training material is developed, preferably
including high quality computer based training material.
Only then are all staff trained up in the laboratory, until they reach a
level of comfort that they can run the system effectively and
Once this point has been reached a final review takes place by
the executive management of both the client and the Implementer and,
subject to a clean bill of health, the final "Go-live" Certificate is
issued. There are contractual penalties associated with premature
issue of a "Go-Live Certificate".
7. Formal "Go-Live" Certification
Building on the Business Simulation Laboratory the
"Go-Live Certificate" is the final output of the configuration, customization and
testing stage of the project. As mentioned above this is issued
at the executive level once the Business Team and the Implementer Team
have signed the Certificate.
The certificate contains a clear warranty that those signing have fully
satisfied themselves as to the robustness of the configuration.
The tough wording and the presence of a lawyer on the project team are
both vital elements of ensuring that all parties to the project think
very carefully before they put their signature on the Certificate.
This is the final safeguard against a failed or sub-optimal
implementation and is the final step before commencing to deploy and
commission the system.
that in the case of a badly run project, attempts to
issue this certificate will give rise to substantial and
valid delays until the quality of the work reaches a
level where commissioning can take place with certainty
that there will be NO damage to the business.
Penalties for premature acceptance should be built into
the contract. This approach would have ensured
that BMW and
did NOT experience the dramatic losses that were encountered
on their projects.
8. Prescribed Certificates
procurement pack should also include a set of prescribed
certificates to be used for all aspects of the project.
This pack of certificates should be designed such that NO element of significance is
accepted and NO interim payments are made without the issue of a
formal certificate. These certificates should be signed by the Business and Implementer
team leaders and team members as applicable. Exact wording of
these certificates is to be agreed during stage 3 of the procurement
with legal input and their issue is to be built into the project plan
and is the joint responsibility of the Client Contract Manager and the
Implementer Project Leader.
9. Client Compact
Inherent in the approach outlined above is a very tough and robust
contract that will hold the successful bidder to very onerous
Since the system is to be implemented in the client
organization, based on information supplied by client personnel, the performance
of the client must, of necessity, also be subject to
tough conditions. This is handled in the RFP by a "Client Compact" in which the
client undertakes to ensure that the right personnel are "in the room" for all
workshops and that the required review and input takes place on time, in
accordance with the project plan.
Here too there are penalties such that the Implementer can
claim standing time for workshops that are cancelled at the last
minute because key client personnel are not available.
Disciplinary action may also be taken with regard to client personnel who fail
to apply themselves during workshops or in reviewing
specifications, etc. Further, once a certificate has been issued any changes
to specifications take the form of formal "Variation Orders" for which the
client will pay. Of necessity, these terms require due performance
by the Implementer.
10. Executive Engagement
11. Facilitation of Change
12. Bid Compliance Checklist
13. Bid Adjudication Schedule
14. Prescribed Bid Table of Contents
15. Comprehensive Pack of Reference Documents
16. Data Warehouse and Business Intelligence
17. Three Stage Procurement Process
a. Stage 1: Narrowing the Field
b. Stage 2: Select Preferred Bidder
c. Stage 3: Detailed Discovery, Finalization of Project Plan and Contracting
d. Configuration, Customization, Testing and Commissioning
I have used this approach successfully to conduct fixed price fixed
business outcome projects, and hope that you will find it of value.
If you are embarking on any form of business systems procurement, large
or small, this approach can be adapted appropriately. It also has
application to procurement of other soft business improvement
services. Some of these principles can also be applied when
entering into negotiations to renew contracts with existing suppliers.
I offer advisory services with regard to the application of these
principles and would be delighted to discuss how I might be of
also offer sets of electronic template documents for the
above, one set suitable for small to medium size
projects and another suited to larger projects, these
are available for purchase, email
me for details
Please forward this to anyone you think may find it of interest.
Dr James Robertson PrEng
James A Robertson and Associates Limited
Assisting clients to thrive through effective and efficient application of Business Information Systems
to serve the Almighty Creator in all things
Mobile: +44 (0) 776-862-2875
Landline: +44 (0) 207-059-0007
Strategic Essence -- The Missing Link in Business Information Systems
A discussion of how strategic essence should inform all business
improvement projects and particularly business information system
projects. This thread is intended to discuss the analysis of
strategy, the planning of strategy and feeding strategy through into
business system specifications and the management of projects.
Articles to date include:
The Essence IS Different
The Real Issues in Business Information Systems
A discussion as to why business information system (and other business
improvement projects) fail to deliver on expectations or fail outright,
together with discussion of the critical factors that must be taken into
account in order to achieve successful outcomes. This thread is
intended to progressively discuss more hands-on specifics of achieving
high value outcomes and builds on the Strategic Essence series.
Articles to date include:
The Real Issues -- Mythology and Lack of Executive
Strategically Enriching your Business Information Systems
Discussion of practical specific
measures that can be taken in order to greatly improve
the information yield of business information systems at
both the operational and executive strategic
level. A number of simple steps that can be taken
immediately and more complex measures that can be taken
over time. This thread is intended to discuss
increasing business system and data warehouse value
yield using techniques that lead to significantly
improved business intelligence capability, including
support for the ability to obtain "answers to
questions we had not previously thought to
". This builds on
the content in the Strategic Essence and Real Issues threads.
Articles to date include:
Principles of Data Engineering
Robust Business Information Systems Procurement
In order to fully apply the methods and principles discussed in the
threads above with regard to new systems it is vital that a robust and
effective approach to procurement is applied. This requires a
tough procurement approach directed at achieving a tough business
outcomes orientated project that ensures a high value outcome.
This thread is intended to discuss the components of such a procurement
approach, including the individual documents and process that make up
the approach. Thereafter the components will be discussed in more
detail. Articles to date include: