Founder in Eleven

Typically, every IT client has a story of an IT services firm that did “this or that” wrong.  When building a long-term client relationship, it is critical to establish a level of mutual trust given this industry perspective.  For Steven Covey fans, the term “emotional bank account” is often used to describe how to proactively work toward building trust in a relationship.  As IT services projects and relationships each come with their own struggles, having those “emotional bank account deposits” to pull from helps in successfully navigating any issues that may arise.

Weekly Status – The Best Emotional Bank Account Deposit

The key to understanding a client’s trust requires the understanding of a client’s reason as to why they hired an IT services firm.  In most cases, the client has brought in their own capacities and skills into the organization.  As such, the client has organized their resources, often based on a business case, in respect to what the IT services firm will accomplish and how much it will cost.  Proactively sending an accurate weekly status report allows the client to feel comfortable about how the project is progressing and whether they are getting value for their money.

Other benefits of the proactive weekly status report include:

• Less surprises for the client
• Less write-offs
• More accurate invoices
• Timely collections
• Additional sales and projects

Sending out a weekly status report via email, whether the client requests it or not, establishes good managerial habits and is the foundation for a successful long-term client relationship.

Weekly Status – What Are the Components?

At minimum, the weekly status report should contain obvious wording as to whether the project is on track and include the following components:

• This week’s costs
• Weekly activities/accomplishments
• Issues or any outstanding items that remain unresolved
• Costs before last week
• Total costs to date
• Estimated cost and variance to budgeted numbers

IT professionals will often support these numbers on a spreadsheet with additional detail and attach the spreadsheet to the weekly status report.  It is critical to understand that most clients will rarely open the spreadsheet if the wording in the email gives them a level of confidence that all things are going well.  Therefore, the body of the email should also summarize easy-to-see key numbers outside the spreadsheet.  Remember, the client just wants to make sure things are on schedule and on budget.   

At TSG our best practice was to come up with an email template that contained the essential components of giving that client the information.  If there are significant issues, the email should contain follow-up actions.

Weekly Status – Addressing the Optimistic or Calculated Estimate-to-Complete Issue

Many times, managers or architects will too often base their estimate-to-complete on what remains of the budget.  For example:

• The project is budgeted for 100
• We have spent 40
• Estimate to complete is 60

For a variety of reasons, managers wish to postpone the fact that the project estimates might have been low or that issues have arisen which might affect the project budget.  Service Firms must do everything to push project managers to send accurate statuses, including estimates-to-complete.  Clients do not like surprises.  It is critical that a weekly status report not include a big surprise, such as that the project is forecasted to be 20-50+ percent over budget when the previous week’s status report said that the project was on schedule. 

Plan the Work – Work the Plan

In educating managers about generating accurate and detailed status reports, mentors must emphasize the importance of accurate estimates-to-complete so that the team has time to adjust scope, resources, delivery dates, or other inputs to achieve the clients’ goal. Managers want to be held accountable for their estimates, but too often fail to realize that hiding bad news (say, that the project timelines or cost might be negatively trending) hurts the possibility of readjusting the project to meet the timeline or budget. Clients want and value an IT services firm that understands their needs and can be trusted to prioritize their priorities.  In order to make an IT services firm successful in the long run, managers need to be motivated to be fully transparent to the client to bring success to the project.

In communicating bad news, managers must understand that bad news is best in small amounts and as soon as possible. Clients appreciate a status that includes “this might be going long/over and we should meet” rather than “this is way over and there is nothing we can do about it”. A good client relationship involves both good and bad news, and building good managers requires good client communication skills, especially when there is bad news.

Weekly Status – Addressing the Pessimistic Estimate

The opposite issue with status is a pessimistic manager that thinks the project was under-estimated from the beginning and feels the need to let the client know their thoughts early on in the project.  To illustrate, take a common example:

• Project A was proposed as a million-dollar+ engagement as part of a competitive bid.
• Multiple managers were brought it to come up with the estimate.
• One manager was brought in to manage the work and was not comfortable with how the estimate was developed.

This is where it is very important to “Work the Plan”.  Some suggestions:

• Work to understand the managers’ concerns
• Have the managers that developed the estimate work with the project manager
• Get yourself or other managers involved in the first couple of weeks of status.

It is important to understand and embrace that the client project manager might be right (or wrong) as estimates are just that: estimates.  Walking that fine line with the client as the project is starting to “work the plan” to bring the effort in line with budget or timeline requires subtle finesse that is not always the strength of technical resources.

Weekly Status – CYA

The last benefit in both client relationship and write-offs is the historical archive of the status reports from the previous weeks.  At TSG, I had managers include me in all weekly status reports for the following reasons.

• It showed the client that I was interested in keeping tabs on the project
• It let me see at a snapshot of how the project was progressing so I could give input into staffing and forecasting
• It provided an audit trail that both myself and the client could reference in discussing difficult client issues.

Combined with a risk mitigation plan, weekly status can protect IT services firms from stress and litigation while fostering productive long-term client relationships.