uGovernIT

A Practical Approach for IT Governance

Posts Tagged ‘Fixed Fee Projects

A Lesson in IT Management – A Confession (Part 1)

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As a consultant CIO and a CEO/Investor of a company producing the next generation IT Governance tool, I am going to make a confession. Eventually I will produce a You Tube Video as well, but for now this confession blog  is in three parts as the results of my mistake are still unraveling.

Context

The story resolves around my backyard.  I purchased a new home about an year and a half back, and the Home Owners Association was after me to complete the backyard – a covenant that I had unwillingly signed when I purchased the home.  Like all CIOs, I went through the RFI/RFP process (proudly displaying my procurement skills to my wife). Estimates came in, but the range was not in my reach, at least not with the market uncertainties.  So I decided to manage it myself .  I request the reader not to jump to conclusions yet.

Approach

I sought help from the builder and gained access to a landscape guy they knew – of course, the builder would not give their names officially.  The miracles of networking worked and I had this unlicensed contractor start work (again do not jump to conclusions as yet).  The proposed cost structure was fixed price with 25% advance and payment for materials on-demand.  The process was going smoothly till I decided to save further by sourcing directly from the contractor who knew the manufacturing centers as opposed to distributors.  To make a long story short, the materials were delivered at half the price and I was gleefully bragging about it to my wife, when I discovered they were the wrong colors (wives do not forgive such mistakes), so I paid for reshipping the right product – a small price to pay for the huge savings I had reaped.  But disaster struck. Before the right product arrived my landscape guy disappeared from the scene. I was now stuck with a partially done backyard and a non-trivial loss.  How did I recover from this? How many mistakes did I commit?  Am I the first CIO to make a mistake in sourcing?  What would you do?  Running away for a month on a business trip to avoid my wife is not the right answer.   Please wait for Part 2.

Written by Subbu Murthy

May 1, 2011 at 8:53 am