crankfrog specializes in healthcare technology implementation and vendor management. We have seen what it takes to design and build a successful product and can guide your investment or development decisions toward solutions proven to deliver sustainable results. Based on our experience, the following recommendations are critical to engaging in a successful partnership with development vendors (vendor).
For well-defined solutions, insist on a fixed bid proposal
Fixed-bid implementations are attractive because they allow both the vendor and internal team to focus on the hard work of launching a solution, rather than the tedious work of tallying hours & dollars on a contract. With a fixed-bid contract, most of the risk is shifted to the vendor to implement on-time and within budget.
To negotiate a fixed-bid proposal, your solution should have well-defined business requirements without a significant number of technical unknowns, otherwise the bid will be inaccurately low. Vendors with substantial expertise will understand your requirements and develop a bid that is competitive and relatively accurate.
Select a vendor with experience implementing similar solutions, even if they are outside your industry
Even though your solution idea is unique, you should be able to identify whether the vendor’s proven capabilities match the characteristics of your solution. While experience in your specific industry sector can be an advantage, be open to the possibility that experiences in other sectors can bring in new strategies, capabilities, and innovative approaches to the implementation.
Budget 25% for cost and timeline overage
Despite securing a fixed bid and selecting a qualified vendor, both the timeline and the cost are bound to exceed your best estimates. You should expect that you will go beyond your estimated project cost and timeline by 25%, even for the most well-defined solutions.
These overages are most often caused by:
- The time lost through communication gaps between you and your vendor that cannot be overcome with traditional and advanced project management techniques.
- Additional business requirements that your team may have overlooked in the initial stages.
- Additional user interface requirements discovered through a journey map or user feedback process.
- Technical infrastructure upgrades needed to support scale and speed of response.
Pressure-test the vendor’s project plan in detail during the contracting stage
There are several indications of structural weakness in a vendor contract and/or plan:
- Timeline or cost that is significantly different from other vendor proposals.
- The project plan relies on methodologies and skill sets for which the vendor has not demonstrated execution maturity.
- Phases of the project include an influx of new resources as the means to meet deadlines.
- Project tracks running in parallel without detailed explanation about how coordination will occur across these tracks of work, or how they will be integrated into a final solution.
Allow the vendor one opportunity to re-estimate their fixed bid and timeline
After the initial contract and fixed bid has been accepted by your team, build in time to allow the vendor one opportunity to re-estimate the cost and timeline. This lends itself to creating a more accurate estimate before any development begins. A few suggested options for when to do this re-estimation include:
- Just before the completion of the contracting phase, when you have already vetted the project plan, shared additional details of the solution, and clearly discussed expectations about service levels.
- At the end of the discovery phase, when you trust that the vendor fully understands your vision.
Based on the vendor’s new understanding and context, they should have generally identified if or how much additional time or budget is needed to accomplish the solution implementation successfully. If there are going to be overages on either front, you will want to know about it earlier in the process so you can make appropriate decisions about the solution, rather than first learning of these changes at the launch phase.
Insist on interviewing your vendor’s core team members
As with any organization, vendors have resources who may have limited experience in a specific role but are being asked to play that role as a growth opportunity. While this is a necessary risk for firm development on the vendor side, you should attempt to protect the project from being staffed with too many inexperienced resources. Resources in these roles do not bring mature thinking and often take time to learn at the expense of your project. If, after interviewing members of the proposed team, you feel the resources do not match the needs of your project, do not hesitate to ask for replacements.
Plan to spend the first third of the implementation co-located with your implementation partner
During the initial stages of product development, generally referred to as discovery and design, require the vendor’s entire team to co-locate with your internal team. Make sure the vendor contract requires they spend at least the first third of the implementation timeline co-located with your team. Co-location results in better communication and fosters the rapport needed to act as one team and to coalesce around a common goal.
If you are in the process of vetting vendor partnerships, or are looking to develop a new product, crankfrog has extensive experience managing and collaborating with development vendors of all sizes. We have successfully coordinated several large-scale, multi-million-dollar solution implementations. For more information, please email us at email@example.com.