Salesforce Partner - Order In The House

What’s your real gross margin and the cost of your bench?

What every Salesforce Partner should know

Most SIs calculate project profitability and have a minimum gross margin set for projects. And if the margin isn’t at or above the figure, it has to go through several approvals, or back to the drawing board to make it financially sound. Getting the Sales and Delivery teams on the same page of gross margin is key to the foundation of a successful project, and the details count.

There are so many reasons for a minimum gross margin. The obvious is profitability, but the not so obvious factors are: keeping utilization metrics high for both the individual and their cohort, company month over month profitability and the downstream decisions of whether to hire or not.

In a former position, my team and I reviewed the scope and resource plans of all SoWs. One thing we pushed back on were “roller coaster” resource plans. The reason being is that it affected the bench and therefore monthly profitability of the company. (It also stressed out the consultants because they knew they would not make their utilization number and therefore it would affect their bonus). Enforcing this didn’t make me popular with my sales colleagues. A more balanced scorecard would have put us on the same footing.

In retrospect I wish we had implemented a “probable bench time” calculation (a scorecard of sorts) from the resource plan and arrived at an adjusted gross margin number. The example below shows a project 9 weeks in duration. It also shows calculations of total hours, client rates, internal rates and totals to both. The gross margin is 38.18%.

If we look at the probable bench time for the various roles, the items marked in pink below notate where the consultants would not be able to take on another project because they’ll quickly return full time to this project. My PMO colleagues usually called this “roller coaster” resource plans. The pink boxes total 240 billable hours that are wasted. Meaning, it will be impossible to staff the affected consultants on other projects.

To calculate the effect of the 240 hours on the inability to staff these consultants, you can do the following calculations. See diagram below, also to follow along.

Sum the total hours of the consultants that will remain unbillable. This is short periods of time squeezed in either between FT (40 hours/wk) or PT (20 hours/wk).
Calculate the average rate of the affected consultants.
Multiply the total non-billable hours by the average rate. This is the Cost of the Bench.
Subtract the Cost of the Bench from the project’s Gross Profit (in dollars).
Divide the Project Profit/Cost of the Bench from the Project Cost to the client.
The result of this last calculation will be the Adjusted Gross Margin.

In the illustration below the Gross Profit decreased by 10%, and is now 29.8%. So how do you address this?

Ensure you have an outside SME review the resource plan (not the scoper) and the project scope. When roller coaster resource plans exist, it’s usually an indicator of trying to back into a number for a client. And while sometimes that needs to be done, in the illustration above, the team will end up working beyond their billable hours to get the project done. And consultants who do that, and then don’t get their bonus, quit.

Trim the scope or reduce your rates.

Starting with a standard in how project profitability is calculated, will give confidence to your delivery teams in what was sold and their ability to deliver on it. And Sales can be more effective during the sales cycle in describing the work, how the teams work, and creating proposals.

5 Ways to Avoid The Illusion of Agreement

What every Salesforce Partner should know

Illusion: Macmillan Dictionary: “an appearance or effect that is different from the way that things really are”.

Finding out a project team had the illusion of agreement for a core portion of scope can be devastating for the team, client and project. It breaks trust immediately, like a resounding door slam.

Oftentimes this starts with interpretations of certain words. Most often it occurs because assumptions are made and insidious change occurs. The illustration below humorously shows how different stakeholders understand a swing (as a metaphor for a software implementation).

The conflicting assumptions, expectations and interpretations are the core to the illusion of agreement.

In my twenty-five years of project experience, I’ve learned to stay in front of potential assumptions. Additionally, when I managed a consulting PMO, I made it a point to counsel the project managers to do the same. Because the alternative, when the project turns red, erodes trust between the client and the consulting company. And people spend days and days working through the issues.

Below are the top 5 areas where I’ve seen the “illusion of agreement” in my own career. And what to do to lessen the potential for different interpretations between your company and the client.

1 The illusion: Key stakeholder’s opinion of the project scope

SCENARIO: Early in my consulting career a new key stakeholder (new hire) was introduced to the project at midpoint. She didn’t attend discovery sessions (despite escalations), and when she finally showed up for a large meeting, she found the project’s scope did not include some of her department’s goals. Let’s just say it was not a fun meeting after that realization. And there were a couple of weeks of challenges.

HOW TO AVOID: Map the client’s business outcomes/goals to project goals. These should come from the project sponsor and/or key stakeholders. Must be documented and signed off. Then review them in detail with any new stakeholders as the project continues.

2. The illusion: All client documents are in scope

SCENARIO: I’ve seen client project team members share a boatload of documentation into a shared drive. They assumed everything they gave us was in scope, even if stated in the SOW that something was out of scope and was also outlined as out of scope in the kickoff meeting.

HOW TO AVOID: Maintain a client document log, and map them to the scope (simple spreadsheet) If out of scope, state that. Review this document with the project team.

3 The illusion: User Stories are locked down vs User Stories can evolve

SCENARIO: I’ve seen this occur when the consultants assume the user stories are not being edited after approval. And the client team assumes it’s okay to edit stories throughout the project so they meet their needs.

HOW TO AVOID: Establish the Definition of Ready and Definition of Done for User Stories early in your project.

4. The illusion: A complex technical specification is misunderstood by a client

SCENARIO: A client signs off on a Tech Spec, the solution is delivered and they’re very unhappy with the result.

HOW TO AVOID: Every Technical Specification should include a description of what is being coded in layman’s terms. The spec should also include diagrams (wireframes are good). And always Include assumptions and and out of scope sections. Finally obtain a sign-off on the document.

5 The Illusion: How functionality should look and work

SCENARIO: Something most consultants notice is many of their clients need to see a visual of the functionality to understand it. I’ve seen sprint demos save the day to obtain alignment or if not aligned, you’re at an earlier stage to address it more quickly.

HOW TO AVOID: Do demos in every sprint. Record the demos and share the recording.

I hope these items help you and your team to proactively stay in front of project assumptions.

If you’re interested in learning more, please contact me at [email protected]

What Every Salesforce Partner Should Know:

Project management certifications don’t always equal high quality projects.

Project Management certifications don’t always equal high quality projects

A PMP, CSM or even a SA certification don’t necessarily make you a good project manager in consulting. It is a criteria recruiters screen for, and can eliminate some very good candidates. Don’t get me wrong, these certifications enable project managers to use a common language and employ standards recognized worldwide.

If you google “Project Manager traits”, you’ll find 100s of articles, stating roughly the same qualities (strategic, organized, change agent, etc). Generally speaking, I’ve found the descriptions of these qualities general. In this blog, I’ll describe in detail and with examples what a good project manager does in consulting.

In a prior blog post, I wrote about the need for Project Managers with proven Salesforce expertise because in the Salesforce ecosystem every project is highly customized. Two other core traits that I look for in a great project manager are proven technical experience, a high EQ and intuitive foresight.

Over the course of my career, I have counseled project managers to step beyond the traditional PM role, determine what is the question behind the question from the client. And stays very close to the project architects and asks them throughout the project what are the risks and, what keeps them up at night.

When coaching PMs, I’ve come across the following:

Example 1: A very involved client IT team.
Before security testing, I counseled the PM to have the TA create a document describing false positives. It detailed what may occur, why it occurs, and why the system is safe. This allowed the project to stay in front of the “defects” that might be logged, and gave the IT team the confidence that we were one step ahead.
Examples 2 & 3: Proactively prevented UAT Scope Creep.
2. Always use a Traceability Matrix. I counsel PMs to always use a traceability matrix. It maps the User Stories (with Acceptance Criteria) to the Test Scripts, which are in turn mapped to the Test Results. Using this, the PM and Architects can quickly identify new requests disguised as defects, and as an added plus, you ensure everything is tested. This makes testing so much smoother, and again gives the client confidence in the team.

3. Establish Test Triage Process. When using a Traceability Matrix, you must also implement a Test Triage process. At one unhappy client, we found during testing there an immense amount of duplicate defects. And therefore, it made the bug count higher than the actual. Managing the project sponsor became a full time job because they were so upset with testing. Once the PM implemented a strict test triage review process (and detailed test reporting that I knew would give the project sponsor confidence), the defect count dwindled to a very manageable level.

When I interview PMs, below are some of the characteristics I look for in consulting Project Managers. I craft questions or scenarios to gauge their breadth and depth. And most importantly, you have to phrase the question so you don’t give away the “typical best answer”.

Flesh out the EQ of Project Managers
This is about behavioral questions, and be extremely careful how you word the questions, so that the answer isn’t obvious. Ask how they learn the political landscape at the client. And the answer should be more than a debrief from Sales. In a post on the The Project Management Academy website, they write: “project managers with strong emotional intelligence understanding handle larger projects successfully with more people better than those with less emotional intelligence knowledge.” I could not agree more.

Determine the breadth and depth of their technical knowledge
A PM who states they have been on projects with data migration, integration or code, is not enough. All PMs have been on these projects. But not all projects are successful. Ask them what must be established to keep risks in these areas to a minimum. And expect an experienced somewhat technical answer. Then you’ll know they know.

Great PMs have foresight
They are always 10 moves ahead in the project. Most PMs will say the project plan keeps them on track and keeps them ahead of tasks. But your question.needs to be about the nuances of foresight. For example are they volunteering the following information:

Always has daily internal stand ups, not to discuss user stories, to work through who is doing what, who needs help, alignment to forecast, concerns, etc
Has a weekly forecast discussion with the team and updates the forecast by discussing the work and realistic hours.
IDs the riskiest elements of the project, and start working on them immediately in collaboration with the architects.
They read every project document, no matter how technical and work with the team to ensure it aligns with the timeline, scope and budget and it is clear and of high quality.

When hiring or promoting staff into a PM role, consider the above. And don’t let the lack of project management certifications eliminate good candidates.

What is your client’s ROI of Dreamforce, and how do they prove it?

If your client is attending Dreamforce, they need to justify the cost of attendance. This year Salesforce provided a template to help customers justify their expense when putting in the request to their management team. That is not enough. The people approving their expenses are expecting a briefing AFTER the event demonstrating the ROI.

Dreamforce attendees need to connect the dots between ideas and information learned at Dreamforce with their company’s initiatives and goals.

Order in the House has created a template, you can download and modify for your prospects and clients, free of charge. Make it easy for your prospects and customers to write up their briefing. Better yet, pre-populate it with sessions or meetings they had with your company.

To obtain the form, fill out the fields below.

WHAT EVERY SALESFORCE PARTNER SHOULD KNOW:

Are there issues lurking in your templates that could affect project profit?

What lies below the surface could result in red and unprofitable projects.

Have you had a red project because a deliverable wasn’t comprehensive enough? Did you lose money or profitability on this project?

Now ask yourself these questions:
-Where are your templates?
-Does everyone use the same ones?
-Is there a consistency for repeatable elements of them (i.e. version control section, approval section, summary, table of contents, definitions and out of scope).
-Are they consistently branded and is the client’s name and logo on the main page?

Most consultancies have a mixture of strong templates and those needing improvement.

Here’s a real life example I experienced with a fortune 500 company. It illustrates when hidden “issues lurk in your templates”. I was called in to help fix a red project. Here’s what I found, and the impact on our company.

User Stories

WHAT: The user stories did not contain acceptance criteria.
WHY: A duplicate was made from a prior document the consultant was given. it was lacking in the acceptance criteria and several other key elements that help manage scope.
THE RESULT: Never ending user stories. The client pushed back on what was delivered stating that it wasn’t what was in the user story and they wouldn’t accept what was built. The team kept building and rebuilding.

Test Strategy document

WHAT: A very basic template was used, stating they’d do UAT, but no definitions or processes were outlined.
WHY: Staff used what they had locally. They did not use the template from the central repository.
THE RESULT: Client decided to do whatever testing they wanted when they wanted. They tested items out of scope and reported “defects”. In addition any new feature they wanted was labeled a defect-because there was no clear definition of it.

The Overall Result

Several highly expensive delivery team members and myself were put on the project to turn it around and close it. Our work was all non-billable. The value of the senior staff placed on this project in a non billable capacity was worth more than $700,000. It also meant they could not be put on other projects in a billable capacity.

Comprehensive templates drive consistency throughout your entire practice. This is especially important when you have remote and dispersed teams. Less experienced consultants will see what is expected in a deliverable, and everyone in your practice will deliver consistently. And most important, your clients experience a well delivered project of high quality.

Below are some core elements, every template must include::

Correct branding
Version control log
Approval log
Table of contents
A non technical overview of what the intent of the document is and what is being documented and how it will be used in the project.
Definitions
Diagrams (as needed)
Out of scope section
Detailed specifics for each template type

For qualified consulting executives, Order in the House is offering a free health check of your templates. Contact me at [email protected].

WHAT EVERY SALESFORCE PARTNER SHOULD KNOW:

If your project methodology is a 1 pager, expect red projects

Ask yourself how much depth is there in your company’s project methodology.

A one pager is perfect for Sales decks, but your Delivery team needs more comprehensive material. All team members need to know what is expected of them, what quality looks like and aids in the access of related material.

I worked with a large firm where there was a 1 page Project Methodology. Each partner could interpret what was done within each sub phase. The firm was growing and increasingly staffers from different areas were assigned to projects. Each of the team members had divergent expectations of what should be done. As a result there were misunderstandings as to who does what, what a deliverable should include and what meetings should take place. Clients began to see the disarray. And projects began to creep into the red territory.

In a PMI white paper, Sean Whitaker writes, “a project management methodology is a defined, documented and discoverable set of policies, practices, processes, tools, techniques and templates that provide guidance on how projects are run within an organization”. It is not a one pager.

Salesforce partners must invest in a document and in depth methodology. It will drive consistency throughout your entire practice. Staff members will have more confidence as new teams form for each new project. They will know what to expect of their colleagues and the methods. And most importantly, your clients experience a smoother project of high quality.

A project methodology should include the following:

Details of each sub phase
Meetings
Deliverables
Specific workstream information
Links to templates
Describes how quality is baked into the methodology
And finally, there is a formal training program

The materials for the elements above must be well organized. Each echoing what other areas have already established. Your sales literature should also echo what is established, this includes your SOW templates.

In closing, an in depth methodology is a crucial tool in ensuring the success of your delivery practice.

If you are interested in a free health check of your project methodology, contact me at [email protected]