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Practical Resolutions Inc.

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Presentation on theme: "Practical Resolutions Inc."— Presentation transcript:

1 Practical Resolutions Inc.
Your Project World in 2012 Practical Resolutions Inc. Toronto, Canada Norman Schutz T: (416) C: (416)

2 AGENDA Today IT Dispute Resolution-Options Available
Early Dispute Resolution The Road Ahead-Moving Forward

3 Today ...In the “new” economy, all work is project work. And you are your projects!...... -Tom Peters Enhanced corporate transparency and accountability by senior management to their various stakeholders be they shareholders, regulators, fund managers etc no longer allow technology initiatives to be done in isolation-since their impact at times of failure can be far reaching in today’s financial and global media world. The challenge that today’s leadership faces is the identification and mitigation of these issues and their associated risks-before they escalate. Failure is not an option for the today’s business and technology executives who sponsor a variety of technology investments with little tolerance for financial waste or lost productivity. The realities of our global economy, no longer allow for technology projects not to achieve their stated objectives. While some organizations are looking at new software product offerings such as Software as a Service (SaaS) to resolve their issues, others have chose instead to re-evaluate the alignment of their operational project practices to the needs of the various stakeholders involve. T his assessment process has resulted in some organizations adopting new measurement metrics and project communication processes. A key change adapted by some has been the implementation of various methodologies to deal more pro-actively with the “chief culprits” of project misses. Taking a page from the lessons learned in other industries they have implemented various alternative dispute resolution (ADR) processes to resolve issues sooner enabling the collaborative nature of the business relationship to remain intact and to move forward. Our discussion this evening will focus on this process

4 Today Current Operating Environment & Expectations
Rise of IT Consumerism: End User Influence on Corporate IT Game Changing expectations... IT investments & project approvals require clear ROI Involvement of CFO &/CEO in budget approvals up 15% -past year Gartner 2011 Rise of IT Consumerism Power Shifting to End User increasing influence on IT Corporate Decisions i.e. bring own device to work vs corporate issued, Strategic IT Projects need to be “Game Changers” for the Business to fund with shorter payback periods ,fixed price options and less tolerance for financial write-offs from project missteps Movement from single service provider model to Multi-source ICT operating models taking advantage of best of class industry deliverables and competitive service providers behaviours

5 IT Dispute Resolution Current Dispute Resolution Practices
Escalation Process-Contract/SOW Risk of dispute escalates exponentially with increase in project duration, business scope, cost, number of stakeholders, solution complexity, ability of new team to gel quickly Influence over solution outcomes of Day to Day Stakeholders decreases over time Current Dispute Resolution Practices Escalation Process-Generally laid out in Contract/SOW Number of parties involved increases with escalation process Influence over solution outcomes decreases over time Risk of dispute escalates exponentially with increase in project duration, business scope, cost, number of stakeholders, solution complexity, ability of new team to gel quickly Project stakeholders especially Day to Day group fearful of losing control over project if escalated..political risks etc...so often deferral is the route taken...risky

6 Key Challenge: of Current Practices
IT Dispute Resolution Key Challenge: of Current Practices . Many risks not identifiable or predictable at the outset of an IT engagement ability to mitigate risks through standard conventional means i.e. due diligence or contract negotiation limited.. this inevitably-sets the stage for conflicts and disputes arising with no predetermined options available to resolve these issues ..so contract escalation process kicks in...... Key Challenge: Many risks not identifiable or predictable at the outset of an IT engagement thus ability to mitigate risks through standard conventional means i.e. due diligence or contract negotiation often negligible...this inevitably..sets the stage for conflicts and disputes arising with no predetermined options available to resolve these issues as they occur..so contract escalation process kicks in

7 Most Frequently Used Solutions. In IT Today ...
IT Dispute Resolution Most Frequently Used Solutions. In IT Today ... Binding Arbitration: Outcome unpredictable..costs vary depending on prep work...process itself can be done quickly vs litigation option Litigation..”Winner takes all” Average costs start at $ 000’s Prep work time consuming, disruptive to day to day business....?? over 70% of litigation usually settle before trial Are These The Best Options? What can we learn ?? Most Frequently Used Solutions.... Binding Arbitration: Outcome unpredictable..costs vary depending on prep work...process itself can be done quickly less impact on business partnership than litigation option... Litigation..”Winner takes all” roll the dice scenario as far as predicting outcomes...Average costs start at $ 000’s .no confidentiality of information exchanged very public all can be out there..internal s.. Price margins.. Meeting notes etc... Risky ..... Prep work very time consuming, disruptive to day to day business many not directly involved in the initial project now called upon and finally ....?? over 70% of litigation actions never make it to the court room..usually settle before often at the court house steps.. What can we learn ??

8 There are three truths my truth, your truth, and the truth
There are three truths my truth, your truth, and the truth...Chinese Proverb Best describes how Mediation and Facilitation process works.....

9 Facilitation and Mediation Facilitation and Mediation
IT Dispute Resolution Resolving IT Conflicts & Disputes via ADR-Key Differences Facilitation and Mediation Interest based focused on disputant’s underlying interests and immediate needs Established process led by independent Mediator appointed by all participants Participants create and agree on solution true win/win “Without Prejudice” IMPORTANT guarantees confidentiality of information exchanged in negotiations can not be disclosed elsewhere including future legal actions etc Resolving IT Conflicts & Disputes through ADR Facilitation and Mediation Interest based focused on disputant’s underlying interests and immediate needs vs the deal with it deferral to later or somebody else's headache scenario Established process and methodology led by independent Mediator appointed and compensated for by all participants Participants create and agree on solution through a predefined process which balances interests of all involved..Facilitation more collaborative..Mediation somewhat more structured.. true win/win 3rd option I know it’s an overused term but best descriptor ...best of both solutions proposed “Without Prejudice” IMPORTANT this is one of the benefits that I personally found most appealing about the process ..it guarantees confidentiality of information exchanged in negotiations can not be disclosed elsewhere including future legal actions etc....

10 Facilitation and Mediation
IT Dispute Resolution Resolving IT Conflicts & Disputes through ADR Facilitation and Mediation Cost effective:.. Mediation: $x,000’s Litigation: $x00,000 Effort: Mediation: Day(s) Litigation: Months- /Year(s) Higher degree of predictability of outcome: 80% of mediation and facilitations reach a resolution of issues.... “Measurable ROI” for decision process Facilitation and Mediation Cost effective:.. Mediation: $x,000’s Litigation: $x00,000 Effort: Mediation: Day(s) Litigation: Months-/Year(s) Higher degree of predictability of outcome: 80% of mediation and facilitations reach a resolution of issues.... “Measurable ROI” for decision process

11 IT Dispute Resolution Facilitation-Key Benefits & Uses
Facilitator engages team in identifying root causes of project disputes and the collaborative design and implementation of solutions to them Can be made available at the outset of a vendor project to streamline contract negotiation process to enable start and deployment of resources in a timely manner Project Management Captures and deals with potential issues ..Dispute Avoidance..Reduce Rework risk Facilitation-Key Benefits & Uses Facilitator engages team in identifying root causes of project disputes and the collaborative design and implementation of solutions to them Can be made available at the outset of a project to streamline contract negotiation process Captures and deals with potential issues early on reducing probability of rework or issues developing into disputes thus used frequently at project inception stage

12 IT Dispute Resolution Facilitation
Ideal solution for identifying gaps between multi-sourced vendor arrangements before they become issues Complements ITIL and IT Service Management processes Facilitator should be independent party with process and subject matter expertise in issues at hand for optimal results “Insurance Policy” coverage in place to use when needed Claimed to provide the Highest return for time invested of all dispute resolution processes....proviso need the right team chemistry– all driving to same outcome---- Ideal solution for providing guidance and identifying gaps between multi-sourced vendor arrangements before they become issues As a risk management tool complements ITIL and IT Service Management processes Facilitator should be independent party and have process and subject matter expertise in issues at hand for optimal results “Insurance Policy” coverage in place to use when needed Claimed to provide the Highest return for time invested of all dispute resolution processes....proviso need the right team chemistry– all driving to same outcome----

13 IT Dispute Resolution Mediation Benefits similar to Facilitation
Usually used whenc onflict has escalated into formal dispute Mediator works with all parties in developing a solution to the dispute at hand Mediator should have process training industry expertise for maximum benefit (time and $) Some courts now mandating Mediation before litigation (Europe/US/Ontario-Toronto..) Benefits similar to Facilitation Usually used when conflict has escalated into formal dispute More formalized approach Mediator works with all parties in developing a solution to the dispute at hand Mediator should have process training industry expertise for maximum benefit (time and $) Some courts now mandating Mediation before litigation (Europe/US/Ontario-Toronto..)

14 IT Dispute Resolution Arbitration
“Remedy Based” focused on legal rights Each side presents their position... decision then made by arbitrator based on merits of case legal remedy etc Can be more cost and time effective than other legal options Binding and non Binding options

15 Change It is not the strongest of the species that survives nor the most intelligent but the one most responsive to change. -Charles Darwin

16 Early Dispute Resolution Benefits Based on the Following Assumptions
A majority of ICT projects will experience conflicts at some point during their duration Risk increases with complexity, size, number of participants and duration ...minimize risk by identifying issues early and start to resolve them in a timely manner..(when key decision makers still available) Creative solutions not driven by $ restitution A majority of ICT projects will experience conflicts at some point during their duration. Sources of disputes include scope, cost, performance issues, rework, acceptance criteria, change control, project management. Risk increases with complexity ,size, number of participants and duration ...minimize risk by identifying issues early and start to resolve them in a timely manner..(when key decision makers still available) Creative solution options available not driven by $ remedy restitution .. Risk of disputes increases with project size, duration, number of parties, solution complexity. Current trends toward multi-sourcing, business defined deliverables and managed services are increasing risks. Many risks are not predictable and unknown and cannot be eliminated through due diligence or contract negotiations. There is a need to streamline the contract negotiation process to reduce transaction costs, while continuing to mitigate unforeseen risks. Existing legal dispute resolution processes – including formal mediation, arbitration – are not cost effective for many IT disputes. Litigation costs can easily exceed the original project cost. Time is a significant cost factor for project disputes (delays cost thousands of dollars per day). Opportunity costs increase the longer a dispute continues. Project delays and changes in technology and the original business requirements often reduce the value realized from a project over time, even if the dispute is ultimately resolved. Public litigation can also causes damage to reputation (of all parties) and puts confidential business information at risk.

17 Early Dispute Resolution
Early Dispute Resolution Solutions Concept evolved from desire to pro-actively deal with issues earlier reducing project dispute costs ($ & time) Range of Options available... Best choice dependent on size, complexity and budget...pre contract negotiation stage best time to decide Stakeholder “buy-in” is key- Early Dispute Resolution Solutions Concept evolved from desire to pro-actively deal with issues earlier reducing project dispute costs ($ & time). Also there is a need to streamline the contract negotiation process to reduce transaction costs, while continuing to mitigate unforeseen risks. Range of Options available... Best choice dependent on size, complexity and budget of engagement and issue under review...pre contract negotiation stage best option. Existing legal dispute resolution processes – including formal mediation, arbitration – are not cost effective for some IT disputes. Litigation costs can easily exceed the original project cost. Time is a significant cost factor for project disputes (delays cost thousands of dollars per day). Opportunity costs increase the longer a dispute continues. Project delays and changes in technology and the original business requirements often reduce the value realized from a project over time, even if the dispute is ultimately resolved. All of these factors are drivers to consider early implementation of an early dispute resolution mechanism...even if not called upon.... Stakeholder “buy-in” is key---Regulatory environment need for open communication transparency key drivers

18 Early Dispute Resolution
Facilitated Work Sessions None of us is as smart as all of us Ken Blanchard Facilitation Used to engage the project team in collaborative efforts to identify root causes of project disputes, brainstorm options for resolution and implement solutions. Facilitation models can be adapted to resolve large complex problems by breaking them down into discrete elements. Facilitator(s) should have combination of process and subject matter expertise for maximum value

19 Early Dispute Resolution
Case Study: IT Development Project Project Challenges Project participants lack a common project vision and do not agree roles and responsibilities Project loses momentum shortly after start key staff distracted by other events Change management weak in process and frequent in occurrence

20 Facilitated Work Sessions
Solution: Facilitated Work Shop Format Structured meetings with specific goals and objectives Participatory meeting focused on discussion and decisions All those vested in project in attendance-no rain checks!

21 Early Dispute Resolution
Benefits: Facilitated Work Session Measurable Benefits to costs average is 5:1 Ratio Common Benefits: Reduced effort and scope creep % Initial project plan phases more productive total time saved 30-40% more traditional method PRI Evolve methodology enhances group collaboration

22 Early Dispute Resolution
Partnering –Facilitated Work Sessions Not the sales-oriented “partnering” commonly found in IT project plans and proposals...but a formal partnering relationship.. PRI Facilitator using Evolve creates mutual agreement and commitment transparency. Best use: Strategic projects, multi party and dependencies Partnering This is not the sales-oriented “partnering” found in many current IT project plans. This requires a formal partnering workshop and project charter; ongoing commitment from all parties to engage in open communication and problem-solving; ongoing project management. Independent Facilitator manages process to ensure mutual agreement and commitment. Particularly useful for projects with: Multiple contractors or subcontractors (vendor side) Multiple user groups or other stakeholders (customer side) Multiple project dependencies (functional, technical, change management, etc.)

23 Avoid Distractions & Focus on what is Important

24 The Road Ahead Creative Leaders embrace the ambiguity of change and the challenge of adapting their organizations to the new realities of their marketplace

25 The Road Ahead Facilitated Work Sessions Best Results obtained in:
Change Management Disputes (Internal/External) Value Proposition Fall-out Risk Management Issues (Delivery Performance/Solution Relevance/Lifespan

26 The Road Ahead Project Management (Working Sessions, Communication/Capability Issues) Contract Negotiations( New /Early Re-Negotiation) Partnering Initiatives (not the “sales "version of this) ) .

27 ..”Sooner...Faster..Smarter”...
The Road Ahead ..”Sooner...Faster..Smarter”... ... Considering the expectations of your business partners, suppliers and customers ...Is this the right time for a different approach in avoiding technology conflicts and resolving disputes? Today’s government and corporate leadership recognize that technology innovations implemented in the current economic climate must be built on robust and strong foundations in order for break through ideas to succeed. They must also be delivered quickly and efficiently with a measurable ROI taking into account the risks that may arise from disrupting existing legacy business models and the natural tendency to wait for clarity and stability. Technology development projects of today do not have the luxury of previous years where IT project failure rates well above other industry norms were anticipated and in some cases accepted as a cost of doing business. The mantra for many technology organizations today is sooner faster and smarter...

28 Questions Questions Case Study Examples Questions...


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