Memorandum of Understanding (MOU or MoU)
An MOU is a document that describes a bilateral or multilateral agreement between parties.  It outlines a common understanding between parties indicating an intended course of action.
MOUs are most often is used in cases where a legal commitment is not desired or where the parties cannot create a legally enforceable agreement.

MOUs are formal versions of “gentlemen’s agreements.”  However, MOUs can be legally binding if they contain the correct wording and ingredients of a contract.  In other words, an MOU can be a “contract” if it contains all the elements of a contract, but otherwise, it is not.

Service Level Agreement (SLA)
An SLA is an agreement negotiated between a customer and service provider.  Like MOUs they can be formal (legally binding) or informal.

It is worth pointing out that contracts between service providers (vendors) and their subcontractors are often (incorrectly) called SLAs, because the “level of service” is set by the buyer and communicated to the subcontractors.

SLAs are used to document common understanding regarding services, priorities, responsibilities, guarantees, and warranties.   In theory, each area of service being delivered should have its own defined “level of service.” SLAs may specify:

• levels of availability
• serviceability
• performance
• operation
• other attributes of the service, such as billing.

The “level of service” specified in an SLA is typically defined in terms of “target” or “minimum.”  Setting specific performance standards allows the buyer to know when corrective action is justified.

SLA contracts typically include penalties and defined corrective actions in the case of non-compliance with performance standards.

image from melodi2 at rgbstock.com

A brand-new, Light Rail Transit (LRT) system sprouted where I live this past year. The fantastically efficient, 2-car train passes the main stations every
3 minutes. The stations are smaller here than other LRT/subways that I have had the pleasure of using in other regions, because these trains pass through the stations so often.

In some stations you can see the train coming at high speed over the raised rail system for quite a distance. It smoothly arcs back and forth as it follows the curves so nicely.

There is no driver; the train is automated, and although it accelerates a little faster than I would expect and brakes too hard sometimes, it is otherwise quite smooth…except for the stretch between the middle two stations. This is the longest stretch of track and has two doglegs. The first dogleg turns left as you are going north, that is followed by a short, straight stretch, followed by a dogleg to the right.

A “dogleg” is a paired set of turns–first one direction, then the other. Technically you could say a “dogleg left” in a road would refer to a left turn of up to 90 degrees soon followed by another turn that is roughly equivalent in degrees to the right side.

Our train’s set of doglegs is fine…except for the forced braking that occurs, followed by a prolonged, high-pitched squealing as the train screeches through the turn. Why would the engineers design a set of corners on which the train was unable to make a smooth turn? Why would they not have banked the train more, so it could remain at the same speed as all the other sections of the track that are not in stations? Why did they have to put in these doglegs to go around something that seems to be directly in the path?

Were these missed requirements by the designers? Were these last minute changes to get the project done on time? This 15-17 mile LRT line runs quietly for all but two, 30-second blasts of squealing around the doglegs.
There are lots of other curved sections of the LRT that are silent and smooth. Why this mid-point anomaly?

It was a major surprise to have to suddenly sit through this cacophony of noise in a brand new system. The noise reminded me of the old trains I rode in many a foreign country, but they are totally out of place for a system built in 2009. I wonder how they explained this oddity to whoever was in-charge of the project.

Have you ever had a situation where requirements were missed or omitted?

Image courtesy of Adrian van Leen; rgbstock.com

I assumed there would be others who felt the same, who wanted to add something to the body of knowledge related to these types of projects within the organization. What a dreamer I was!

Our gathering of minds, for what was supposed to be a project closure and lessons learned, went like this: hand in any artifacts, and now let’s celebrate…and that was about it. Our fearless leader did voice accolades for various people and groups, but the meeting fell well short of my expectations, which consisted of a deep, introspective analysis of the good, bad and ugly.

I was sorely disappointed. I am still mulling the lack of event over.

I realized Lessons Learned meetings may be something that drives me but few others, and I have to respect the personas of the rest of the team. I ended up sending in a revised document on all that I wanted to be archived, but I did not feel the release that I had expected.

The reason I do retrospectives is to ensure everyone has spoken out about their concerns, human resource issues and accolades for any and all parties. I want people to get ‘it’–whatever it is–off their chests. This is a surprisingly good way to release stress. Let your staff talk about the project, the bad first and then the good.

My team is happy, but my sponsor missed that golden opportunity to shine as a leader who has the vision to see the long term benefits.

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Procurement Team Players

• procurement department
• project team
• legal
• finance
• marketing (optional)
• IT (optional)
• manufacturing (optional)
• Others?

Contract Manager
The person assigned by the procurement office to take management responsibility for specific procurements is called a ‘contract manager’ or, in PMI terminology, a ‘procurement administrator.’

The contract manager is the team captain.  He or she provides administrative oversight for the steps and stages of ‘conducting’ procurement.  The contract manager controls ‘official’ communications with vendors based on feedback from members of the procurement team.

Promoting Bids
After procurement documents (bid packages) have been prepared in the planning stages, the procurement team take responsibility for the distribution of those documents to potential vendors.

Initial interest is generated by advertising in newspapers, industry publications, and/or on internet sites.

For complex procurements, advertising generally leads to a bidder or vendor conference.  At these conferences the buyer makes a presentation about what is being procured and why, and then remains available for questions.

The object of bidder conferences is to quickly and efficiently make vendors aware of requirements and conditions.

The managers of bidder conferences are obligated to ensure that questions are not answered in confidence.  The answer to every question that is asked, before and after the conference, must be made available to all bidders.

The next submission will discuss proposal evaluation techniques.

The time for Lessons Learned is as close after the lesson is discovered as possible. In many cases, this review is when any important phase or aspect of the project is completed. Reviewing and updating the Lessons Learned should be ongoing and is especially beneficial at the end of the project to ensure a clear account is maintained while it is fresh in everyone’s mind.

As the leader of this endeavor, you should plan a get together of key stakeholders and your team to review the ‘good, bad, and ugly’ items at every phase of the project – and after completion, too. It doesn’t matter whether the items were successful or dismal failures; allowing everyone to bare their souls and tell it like they saw it can alleviate the burdens heaped on their lives during the crux of the deadlines.

During the meeting, everyone should be able to voice their opinions about any and all topics. Everyone needs to be comfortable with what they are saying, who they are saying it to, and when they are saying it (which is, hopefully, not too late).

Anonymous surveys are one way to ensure everyone has the opportunity. Whether they respond or not is usually directly related to the perceived value or benefit. See if you can make doing the survey worth their while. Offer something tangible as the benefit, something that you would want if you were to do a survey for someone else or another department.

There is obvious benefit to the corporation from these Lessons Learned, but what about the benefit to your participants? What can they take away from this event? How about a clear conscience? How about a feeling of being heard? How about a message that they are important, are being listened to, and even more importantly, that their requests are being acted on.

This is a leadership event. You get to listen to your team as well as the clients, sponsors, and stakeholders. This is a great opportunity for building rapport and firing-up the team. Find out what each individual thought about the project to this point and what suggestions they can make for improvements, as well as ask them whether they witnessed any MVPs, specific accolades, and/or any outstanding efforts.

Another approach to consider is getting praise from the outside world and sharing it with your team. It will be beneficial for you and them.

Do not put a Lessons Learned opportunity off until it is too late! You will be surprised at how much of a relief your team will feel with being given a forum to voice their concerns as well as heap their praise on others.

Image from Microsoft Clip Art

Planning produces ‘bid packages.’  Conduct procurements takes these packages, publicizes and distributes them to potential vendors, and then manages the responses (bids).

Conduct procurements is complete when contracts have been awarded to vendors.

Multiple Rounds
It is not uncommon for there to be more than one round of bid documents distributed for the same procurement. Multiple rounds of bidding will occur if the preliminary documents were ‘research oriented’ (EOI, RFI) or if the buyers are surprised by bidder responses (e.g., price too high) and are  forced to revise their procurement plans.

Enter the Procurement Department
Most organizations have a procurement department of some form.  The role of this department is to protect the organization from the outside world.  Procurement professionals manage procurement risk.  They manage and monitor commitments being made to outside organizations.

Normally, projects are effectively separated from direct contact with the outside world (from a procurement perspective) by the procurement department.  Most project managers do not have the authority to spend their budget directly; instead, the procurement department acts as the intermediary between the project and outside vendors.  The objective is to ensure that the organization (and the project, indirectly) is treated fairly and does not create any unnecessary liabilities or obligations.

Even though there is a separation between project and vendor, project staff are encouraged to communicate directly with the vendor delivery teams. However, these communications are on a casual basis and do not result in legally binding commitments.  Discussions between the project team and vendor team are therefore ‘unofficial.’

When it comes down to the creation of legally enforceable commitments (contracts), the procurement department takes responsibility for managing the communications.

The procurement department’s role is to ensure that legally binding commitments are structured so as to serve the interests of the organization in terms of minimizing risk, sharing responsibility, and reducing liabilities.

Liabilities
A liability is a financial obligation, debt, claim, or potential loss.  It is an obligation to pay to another party an amount in money, goods, or services.

In my next submission I will discuss the ‘procurement team.’

Our local newspaper today reports that a large, well-known company that has its US headquarters here will consolidate all employees (+ or – 4,000) to one of its campuses, which is undergoing renovations. In a plan to cut costs, the company will vacate other buildings it currently leases or owns, and have everyone in a single location.

Doesn’t sound like a bad idea, right?

What struck me about this plan is that the renovated building will consist of “work stations.” According to the company spokesperson, there won’t be assigned desks or offices. Instead, “Basically, employees will just come in and choose where they work based on what they need to do,” says the spokesperson.

So, where you sit one day may be different from where you sit the next. Assuming I’m interpreting this plan correctly, I can see where it would create many challenges for a manager. If you have a group that needs to sit close to one another for easier communication and sharing of information, how would you ensure their seats would be in proximity to each other every day? Where would you store your projects’ documents and other artifacts when there’s no permanent file cabinet for you?

There’s also the problem of employee morale. I can’t imagine not being able to have a picture of my kids sitting next to my computer monitor, or the snacks I keep in my drawer for when I get hungry after lunch, or the important documents I have pinned to the walls of my cubicle where I can easily glance at them for certain information.

I may not love working in a cubicle, but at least it’s my own and I can carve out a little space for myself and my identity. I’m not sure I would feel very valued by my employer if every day had a temporary feel to it and I couldn’t establish myself in the physical sense.

What do you think of this idea? As a project manager, how would this arrangement make things better or worse for you and your team?

Concept source

The end requires a process; a set of procedures that close out all the elements of the project. If there is software for example, there must be some way for the client to acknowledge that the product meets the requirements. So, an acceptance test plan needs to be created.

The closure process also requires a formal meeting that specifies the end is near and establishes a processes to finalize the handover or ‘go live’ of the software. At this point, you also obtain the final authorization signatures that signify the project is closed.

There is still more work to be done, however. In software, you or your team may have to hand over the source code, decouple your team members from the client office systems, hand off the documentation and maybe clean out your desks in some cases. Closure is when some of us get paid…or have to wait if there is some surprise ending.

If the product is not quite right, the testing is not acceptable, the development requires more tear down or there are support or service level agreements to maintain, follow-up must be defined, clarified and finalized with the client signatures. Done is when everyone thinks it is done. Clearly establish all stakeholder expectations for ‘done.’

What comes next depends on long term commitments, if any, and/or new projects waiting to be started. Do not let an old project keep rearing an ugly head because someone does not think it is ‘done;’ get it all finalized and approved, and disconnect as needed. Moving on requires focus on new projects, so don’t let old projects drag you back in. Closure is very important.

Whatever their name, bid packages must all contain a few vital components if they are to be effective.

Cover Letter
The cover letter provides a brief overview of information that is available to vendors and explains how and when vendors are expected to respond to the request for bids.

The cover letter is only meant to explain what the bid package contains, how to learn more, and how to submit bids or proposals. It is not meant to serve as an elaborate introduction; all details regarding the procurement are contained in the attachments.

SOW
The scope of work statement is long and detailed.  This is what the vendor studies in order to learn what is being procured, how and when.  Details provided in the SOW drive price and schedule calculations.

Source Selection Criteria
It is important for bidders to know how their bid will be compared to others and what the buyers consider to be of most importance when evaluating bids (such as low price versus delivery date).

Organization of Response
It is common to provide a detailed explanation of how bids are to be structured (presented). These instructions help vendors know how to submit a bid and what to emphasize.

A consistent bid structure or layout of proposals is very important to the purchasing organization.  Consistency between proposals makes it much easier to compare bids.

Image source

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If you are like me, you are always keeping your finger on the pulse of your team and the project – checking for red flags, looking for trouble brewing, watching for bumps and potholes that might be forthcoming, following the plan laid out and checking off the mileposts as they go by.

Today, I was in a facility where customer service was…how to say this elegantly…substandard. They ignored us!

They got around to us as if we were a bother in their presence. “Oh, darn, another one got through the door.”

Customer service is about the customer. Find out what the need is, and do your best to fulfil it. Don’t leave them out in the dark – talk to them, smile and make them feel welcome. Make them feel like you are there for them. Be cheerful about it, and leave them in no doubt as to your commitment to see them through their presence in your business.

Our society loves self service. We are now scanning our own groceries and lumber. But there are certain service companies that are just not quite “on my side.” They are providing a service with a grudge against me…and I am loathe to use them because of my utter dissatisfaction.

How long would they, if they were a customer, want to wait at the grocery store checkout before they were serviced by some grumpy person who just walks past them a few times before finally acknowledging them. What a surprise that would be if we turned the tide on them!

As a project manager or a business analyst, always think “customer service first,” and be there to meet the customer’s needs.

Have you had a positive or negative experience with customer service?