Project Dynamics: Moving Beyond Time, Scope and Budget for Successful Customer Project Management

By Shane Anastasi

DELIGHT CUSTOMERS AND MAKE A PROFIT

 

Though there are millions of certified project managers throughout the world, industry surveys overwhelmingly report that projects are not on time, not on budget and not on scope. But are these results reliable? Are these measures of

• Language: English
• Publisher: Pad B Publishing
• Release date: Apr 25, 2024
• ISBN: 9798987801925

Book preview

Foreword

The Greatest Implementation Company in History

by Erich Rusch

When Shane suggested that we establish our company mission to become the greatest implementation company in history, I knew he was joking–kind of. It was a joke because we never expected to grow large enough for history to know that we’d ever existed. It wasn’t a joke because he was deadly serious about setting perfection as our goal. As the original owner of CirrusOne, I am forever grateful that I accepted Shane’s challenge and offer my experience as a testament to the validity of what you will read hereafter.

My first job out of college in 2008 was at a fledgling startup named BigMachines, which, though it was not a traditional overnight success, had finally found product market fit and was riding a wave of swift growth. I was a Solution Architect on the Professional Services team in charge of the technical design and implementation of Lead-to-Cash systems. Although we were growing at a torrid pace and our bookings and recurring revenue looked phenomenal, I couldn’t shake the sense that something was off.

For me as a consultant, every week had a familiar feel. We would travel across the country, implementing mission-critical revenue systems for large enterprises. It felt good to be a part of high-priority projects with high executive visibility, but this often had a cost. We often found ourselves in the hotel bar late at night, working feverishly to complete yet another beleaguered project. Over time, this took its toll on both me and my colleagues. A long line of unprofitable, highly escalated and late projects had led to low morale.

One night, I recall looking over my project manager’s shoulder as she crunched the latest budgetary figures for a massive enterprise project at a prominent medical diagnostics company. We’re way behind again, she said as we sipped our beers.

We were deep in the red on this project, as we were on every project at BigMachines at the time. I couldn’t help but wonder how we lost money on every project. At that time, every project was a fixed bid and was almost designed to lose money. We would have to compensate for the loss on the services side with the highly profitable SaaS licensing fees. I knew software startups had a history of sacrificing services profit to gain recurring revenue, but this was out of control. There had to be a better way.

Just as I thought about leaving the company, I heard we’d hired a new SVP of Professional Services and Support named Shane Anastasi. I didn’t know what to expect, but I figured I would give it a shot and hear him out. Our first services team all-hands was a revelation. Shane got on the call and laid out the high-level framework for the outcomes he hoped to achieve:

We will be a profitable services team: This division will no longer lose money.

We will get control of our fixed bid projects: We will no longer write a blank check for customers to get us to build whatever they want on a whim. We would have a clear scope, and we would stick to it. If the customer deviated, we would shut down the project and negotiate how to get it back on track.

We will become a world-class services organization. We would embody greatness and strive to deliver world-class industry-leading services to our customers, implementing in a standard, repeatable way according to best practices.

I remember being excited for the first time as a consultant but still apprehensive about the How? I expected that the grandiose promise might peter out to become the trite platitudes we had already heard for years like realistic timelines, better communication protocols, or the customer is always right.

But what Shane went on to teach and develop as a part of BigMachines was much more profound. The tools and techniques we learned that would go on to become the Seven Principles of Professional Services consulting were ultimately about one critical message. Consultants have the power to influence the outcome of every project! It ignited a cultural shift in how we did business.

What I witnessed at BigMachines was nothing short of amazing. We gained control of our projects. We developed standards and practices that would become the basis of our Center of Excellence. Most importantly, we went from losing money to being a key source of profit for the organization. Still, even more importantly, we had turned services from an embarrassment into a competitive differentiator that helped us close deals.

In early 2015, I decided to go all in and start my quote-to-cash consulting firm with a couple of friends. I’d started CirrusOne with a small loan from my in-laws, and we were doing fine. We had developed a policy called risk-free growth. We grew slowly and deliberately by taking subcontracts with large system integrators like Oracle, Accenture and others. This strategy had served its purpose, but similar to the prevent defense in football, it prevented us from winning major deals and restricted growth. I soon realized if we were going to grow, we needed to win end-to-end projects in competition with the global systems integrators and software companies.

I also started to lose patience with the conservative growth model. I didn’t have the time or the patience to watch this slowly grow over five to 10 years and then sell for a multiple of one times revenue once the growth was over. I had other plans (build a software company, raise a family), and wanted an exit in two years and a multiple to be proud of: two times revenue.

So, I reached out to Shane to see if he would act as an advisor. To my surprise, he had much bigger plans. He wanted to join us. He had just launched his highly successful book, The Seven Principles of Professional Services, and was out to prove it was more than just words. Why don’t we do this from the ground up with the Seven Principles at its core? he asked us. At the same time, let’s use the principles to redefine the success rates of projects and not settle for anything less than perfection in our execution. If the principles are real and they work, it will be a spectacular success; if they don’t, we’ll know it’s all bullshit.

The more I thought about it, I realized he was right. Ideally, we wouldn’t be able to explain away the success of the BigMachines services division as a product of having a dominant platform, deep pockets or investors with operational knowledge. To prove these ideas worked, we had to do it alone. The result had to be pure and not diluted by other factors. So, in the spring of 2015, we worked out a deal to bring Shane on as a formal advisor but later make him a full-time executive by the start of 2016. We also added John Pora as our COO to round out our executive team. We were set. While we never publicized it, we all knew this was an experiment. We were shooting for perfection, and while we didn’t expect to achieve it precisely, we were going to do everything within our power to make this a benchmark for success within the industry.

Little did we know our experiment would soon be put to the test. Shortly after bringing Shane on board, I was at an Oracle cocktail party and started chatting with the executive from one of the largest networking companies in the world. Despite exchanging contact information, I thought we were probably too small for such a large enterprise to take seriously. To my surprise, the following week, I woke up to an email inviting us to their Seattle HQ to meet with the team selecting a CPQ implementation partner. With that, John Pora and I were soon on Seattle-bound planes. We were excited about the opportunity, but not everyone was happy. Shane was concerned. I distinctly remember him dressing us down in his Australian accent over the phone. Are you guys crazy? It’s too soon. We do not have the resources for a large project like this, and if we fuck it up, we’re done!

He had a point. We were a 10-person company bidding on a multi-million-dollar, multi-year contract to alter the revenue-generating engine of a multi-billion-dollar company without a single reference. While a win would be spectacular, a failed project would signify a stunning end to our endeavor. But, to some degree, we were crazy. I wanted CirrusOne to grow fast and this was our chance to accelerate growth, but even more importantly, I wanted to prove we could deliver projects on our own without having to lean on a larger player to run the project. It was a risk, but calculated. The scope was solid. The customer was highly engaged. We challenged Shane: Isn’t this the perfect chance for us to prove your principles? From that moment on, the challenge was accepted, and our overarching priority was to master the successful delivery of customer-facing projects.

Shortly before Christmas, we had won the deal, beating out several global system integrators. Now came the challenging part of delivering on our promise. To achieve this, we had to challenge the fundamental lore that a successful project meant delivering it on time, on budget and within scope. Instead, we shifted to focusing on project profitability, minimizing consultant burnout and providing customers with a service of value. This was our first example of breaking the project delivery mold, and it worked.

When the current status quo for project management did not align with our objectives, we would invent something that might. One such invention was the project budget stage gates. While the idea of stage gates is not new, making them a contractual hard and fast rule for every project was. It is difficult to ensure every project achieves a customer design signoff before consuming any of its build budgets. Still, we found ways to negotiate and incentivize customers to follow our lead. At its heart, we were proving the same core theme that Shane had introduced at BigMachines, but to a level that we had never thought was possible.

Consultants can lead customer-facing projects to successful outcomes on almost all occasions, even in the face of fierce customer resistance.

Although our Oracle practice laid the foundation for CirrusOne’s success, market demand meant slower growth than we wanted to achieve. While we were getting started at CirrusOne, our good friends from BigMachines, Godard Abel, Matt Gorniak, John Kim and Joachim Klein, acquired a majority stake in an up-and-coming quote-to-cash company called Steelbrick. We jumped at the chance when they approached us about partnering in the Salesforce ecosystem.

Little did we know that through this partnership, in late 2015, our lives would change. Through their sheer grit and willpower, they managed to grow the company to gain the attention of Marc Benioff and the leadership of Salesforce. Before Christmas of 2015, Salesforce would acquire Steelbrick to become the juggernaut that is now Salesforce Revenue Cloud.

With that acquisition and the incredible sales team at Salesforce, projects rained down upon us. In a short period, we went from being a fledgling firm of 15 people to the preferred CPQ implementer for Oracle and Salesforce CPQ, with more than 50 people around the US. We were known for our success rate even when the situation was grim. We were known for being able to take on a project in any state and quickly determine if it was a dog or if there was a way to make it work. Ultimately, we had a 98 percent success rate in delivering complex quote-to-cash solutions. In comparative discussions with some of our competitors, 50 to 60 percent seemed to be the norm at that stage. Even today, a 70 percent achievement would be considered excellent.

For every project that failed, it failed well and at the margin. When a project was in trouble, our executives moved in. We’d lead the customer to the right decision, even if that decision meant telling the customer that their internal politics, lack of flexibility or culture were dooming them to failure. Take note of this: we never lost money on any project, even our failures, except for one project we started before Shane came on board. That’s 173 profitable projects out of 174 over a two-and-a-half-year period in one of the most complex business solutions you can build. In addition, other than the one where we lost money, only one implementation resulted in an outcome where the customer would not act as a positive reference.

One of our inventions was the idea of provable marketing. We figured that if we wanted to prove how good we were at implementing projects, we should have an open-book policy for customer references. So that is what we did. In one instance, a prospect asked to speak to a stakeholder of our project that had failed. Without hesitation, we connected this customer with a customer who had been unable to go live.

Through discussions, the prospect realized we had shut down the project because the customer needed help coordinating its internal resources to agree on a design for their solution. Rather than just take their money while they floundered, we told the customer to stop the project and align their executive strategy before restarting the project. The prospect called us back and awarded us the business on the spot, knowing that Cirrus-One was the wake-up call that his company desperately needed.

After two-and-a-half years at CirrusOne, we achieved every-thing we set out to do. We went from the low tens of thousands in revenue per month before Shane started to over a million dollars a month in revenue in our final month of operations as an independent company. What we were doing had become very noticeable to the market. The time had come to take the investment and either scale it or sell it and do something else. We chose the latter. In February 2018, we completed our successful sale to Simplus (an Infosys Company).

If you take nothing else from this foreword, take this: what CirrusOne achieved in such a short timeframe, without investment, without a great deal of marketing and in an industry riddled with failed projects, was unheard of. As the major shareholder in CirrusOne, I am here as living proof that this stuff works and is so fundamental to the success of the industry I love. I owe Shane a debt of gratitude, not just for helping me achieve my goals but for leading us through an experience that I’ll never forget (and, potentially, never repeat). And I say that with some benefit of hindsight. I am currently a part owner in several consulting companies, none of which have been able to replicate the feat.

The experience we gained through this experiment is codified in these pages. That is why I am so excited for you to read Project Dynamics. These are the invisible forces you must learn to influence so that you can guide your customers and their projects to success!

Chapter 1:

Are We Failures?

Pick up any industry report on project management and you’ll see the same punchline. As a profession, it looks like we have failed!

If the most optimistic reports tout a 65 percent success rate, then the term "professional services" begins to look oxymoronic. If builders were 65 percent successful at building houses, they would go out of business. If radiologists assessed charts with 65 percent accuracy, they’d get fired. Yet industry bodies use these results to promise improvement through better training, better results, superior community-driven best practices, blah, blah, blah.

Are these really our results? And if they are, why are they so bad? More importantly, why don’t we care?

In 2015, when my friend Erich Rusch approached me about helping him grow a CPQ implementation firm, I saw an opportunity to understand these questions in more detail. At one of our initial meetings, Erich told me he wanted me to bring my previous book, The Seven Principles of Professional Services, into the heart of his new consulting startup, CirrusOne. As many startups do, we sat down to establish our Big Hairy Audacious Goal (BHAG). We wanted it to be a bold statement about our future:

CirrusOne will be the greatest implementer of customer-facing projects in history.

While I was very pleased with this BHAG, it presented an immediate challenge. How would a firm ever measure and then prove that it was the most successful in history? While hundreds of thousands