Contingency Planning for Professional Services Projects

Author: Categories: Professional Services, Project Management

Contingency Planning Professional Services

Contingency Planning for Professional ServicesOne of the greatest risks to a professional services project is starting it without dedicating any time to contingency planning. Sure you’ve delivered this type of project a thousand times. Of course, you have an excellent relationship with the client. Without a doubt, your team has the right skills to deliver under budget and on time. But things change, and without spending a little time planning for contingencies, these advantages can quickly erode.

Contingency planning for professional services projects, or people-centric work, is more nuanced than it can be for other types of work. Professional services projects often revolve around assumptions, expectations, and emotions that are inherently hard to predict. Project managers need to identify risks early and make sure their plans, and proposals, account for those risks from the beginning. As such, the contingency planning process really should start before a project is even pitched to a prospect.

How to Build Contingencies into a Project Plan

The biggest mistake a project manager can make when planning a project is adding extra time to risky tasks in the task plan. Although it seems reasonable, what the PM is actually doing is communicating to the team that it’s ok to take some extra time on a given task. Aggregating and representing contingency time in a single task is a better approach. When individual tasks don’t go according to plan, the amount of extra time it takes to complete them should be logged to the initial task. This will highlight where deficiencies in the planning or delivery process exist and hopefully prevent them from occurring again in the future.

In addition to building contingencies into a plan at the high level, project managers should also carefully identify task dependencies, non-dependent tasks that are more flexible, and non-critical tasks. Knowing up front where the flex in a task plan is will help PMs respond faster to issues. Whether it is shifting workloads around or negotiating with the client to reduce scope, not knowing which tasks are on the critical path will cause further delays and frustration.

Utilizing Project Budgets for Contingency Planning

Budgets suffer from the same issues that project plans do when it comes to managing contingencies. If a project manager adds a “float” to a budget, they will be more likely to use it. Instead, it is better to manage budgets on different levels: task, project, and engagement. Multi-level budgets enable contingency management at a higher level, such as an engagement budget, while lower level budgets represent the actual amount of work estimated to complete the project.

In addition to properly structured budgets, project managers should also be aware of resources external to their project that could help reduce the risk of going over budget. These external resources could be subject matter experts, third-party contractors, or off the shelf solutions that may satisfy a segment of the client’s needs. Regardless of how well a project is going, it is important to know what resources are available and when it would make sense to deploy them. If a project is beginning to turn south, an external resource may just be able to save it.

Leveraging Project Schedules for Contingency Planning

When it comes to scheduling contingencies, the focus tends to be less about the total amount of work, and more about when the project team will be able to do the work. There is nothing worse than approaching a deadline and realizing that there simply are not enough hours in the day to get the job done.

A good place to start is setting expectations with the project team. Loosely communicated deadlines are rarely achieved. Be clear up front about delivery goals to ensure everyone is on the same page.

In addition to setting proper expectations, it is also essential to keep a complete and up-to-date project schedule. While we have covered the importance of scheduling in quite a few other posts—including how it relates to revenue forecasts, fixed price projects, and improving profitability. As it relates to contingency planning, an up-to-date schedule provides the best chance for identifying projects that will be over budget or behind their targeted delivery date.

Building Contingencies into Project Teams

Project managers are continuously trying to eliminate uncertainty. At every stage of a project, managers are building plans, checking progress, and communicating what will happen next all in an effort to bring clarity to the health of an engagement. While the actions taken during a project are essential to its success, experienced project managers know that the makeup of the project team can be equally as important.

Before a project even gets started, managers need to have a clear understanding of the skills needed to deliver the work, and the available capacity of the people in the organization with those skills. Depending on the complexity of the project, a good proficiency mix among the skills needed can also be an asset. Not only will a combination of junior and senior resources provide good professional development opportunities for everyone involved, but it also allows managers to funnel work to the right person if the project is starting to slip.

While having the right project team is important, knowing whom to call if you are in a pinch is also valuable. Sometimes bringing in fresh talent can energize the existing team, provide new perspectives, or push a project past a roadblock. Doing a skill analysis before kicking off a project can help with this. Looking across your resource pool to identify not only who is the best match for the project team, but also who might be able to jump in if necessary is a good ace to have up your sleeve.

Knowing your Client and what is Important to Them

The one big piece missing from many contingency plans is the role of the client. Knowing what is most important to your client can help shape the type of flexibility you build into a project. If you know that on-time delivery is essential to your client, then focus on building contingencies into the project’s schedule. If you know that budget is a major concern, then focusing your planning towards that goal is essential. If you know that quality of work paramount, then identifying the right skilled resources upfront will pay off.

In reality, it will likely be a combination of quality, timeliness, and cost that are important to your client, but they may not all be weighted evenly. Knowing which levers to pull will make that awkward conversation around re-scoping a project a little easier. But let’s hope you don’t get to that point. With a little bit of contingency planning, focusing on the right aspects of the project, everything should go according to plan.

A Common Theme Among all Contingency Plans

Regardless of which approach you take for your next project, the common thread among all contingency plans is that they are data driven. Task dependencies, budget floats, schedule leveling, and skill and ability analysis all require information about your people, your projects, and your progress. Some professional services firms will have multiple tools that address each of these different areas. A holistic approach to contingency planning will give project managers a consolidated view of the entire delivery process. Professional services automation software specifically designed for project-centric service firms can stretch across the entire delivery process. Having access to project plans, schedules, project performance analytics, and resource skill matrices in a single system enables managers to leverage the different components of contingency planning in an integrated manner.

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