High ROI with Structured Facilitation -
A Rationale for Detailed Requirements for Outsourced Projects

We speak with many facilitators in a variety of industries and situations. They often share how important their skill and discipline have become for their companies and clients. Structured facilitation has become more important now than ever before, perhaps because the standards for performance have increased. Some of the important applications of FAST now include (among the many other traditional uses!):

• Business area analysis
• Process optimization
• Business performance management
• TIQM

Of these, one of the most current and useful applications of FAST structured facilitation is providing requirements for outsourced projects.

A House Built Without Plans?

Would anyone hire a contractor to build a house without detailed plans? Would anyone let the contractor make design or materials decisions without guidance from you, the client?

Sounds far-fetched, but in the IT world thousands of projects are left in the hands of the outsourced development contractor to decide small and large details -- not all details but enough to threaten the success of the project. Most of these detail omisisons are unintentional but avoidable.

The stories of failed and incomplete projects arising from outsourcing litter the IT press (and there are many more that aren't revealed). The untold, but newsworthy story, is how structured facilitation -- as applied to the initial stages of the project -- can save millions of dollars, months of time, help create satisfied internal clients, and help your firm compete more effectively.

Six Steps To Success

Well-managed outsourcing typically consists of six steps (of which your impact is greatest at the start):

1. Specify: Specifying the requirements in detail
2. Decide: Making an explicit decision to outsource
3. Resource: Obtaining resources, including development of a work scope, a contract(s), and selecting a vendor(s)
4. Manage: Building an in-house management team to govern the project
5. Process and proficiency: Applying proven processes to manage quality, the project trinity, and acceptance
6. Measure: Measurements throughout (and comprehensive post-mortem at the completion of) each project phase

For extremely large projects (such as enterprise-wide), it is useful to recognize activities embedded in the above as sub-steps within these steps.

In building construction and in fine architecture, it is said that cost management and excellence (respectively) are in the detail. That is, cost control during construction starts with well thought-out construction plans -- down to the tiniest detail. The job of the building contractor is to assemble the building, not to design it as s/he goes. As with IT projects, cost control starts with detailed design.

Sourcing: "In" vs "Out" (vs "Way Out")

In a traditional internally developed project, questions about performance that arise during development are (somewhat) easily handled by polling the internal client about requirements while the project is underway. While this approach can be expensive due to scope creep, it helps assure that the end product meets the (internal) client's needs.

The enablers for this (and increasingly rare) behavior are:

• Common goals of developer and client
• Common culture
• Shared consequences of outcomes
• Similar "power" within the organization and in their dealings

In an externally developed project, questions that would normally be iteratively resolved via close communication between "client" and development team are often ignored, are delayed in treatment, or "glossed over."

In an externally developed project the social, political, and economic "contract" is much different than an internally-developed project. Values, priorities, and "costs" are different in ways that can lead to opposing goals and outcomes.

Why Development Is Different Now

The situation is typically much worse when the external developer is overseas. While there are many success stories, the disasters are numerous and have ended many a career. Overseas developers differ from internal development (and from local but external development) by these factors (one or more apply to most every situation):

• Language and linguistic differences
• Lack of "context" about the product and its intended application
• Literal interpretation of design (including unrecognized gaps)
• Ignorance of the end-users of the application (the developer is easily three or four "degrees of separation" away from the intended user)
• Significantly different work ethic
• Different attitudes towards errors, remedies, and their consequences
• Different sense of timing - either faster or slower but not the same
• Different and possibly inferior quality processes
• Important differences in motivation - a different balance to the project trinity - that can lead to compromises in the quality of the application

One example is of an embedded software project (for a government contractor located in New England) where the requirements were "loosely" specified but project cost was an important goal. To add important new features and keep the development cost within budget, the project was sourced overseas. After numerous delays and much rework due to poor requirement specifications, the project was brought back to the States for completion. Ultimately, the cost was double (nearly triple) the original estimate with a doubling of time to completion. The lesson was less about going overseas than it was about the absolute need for detailed, unambiguous, and high quality requirements.

Had the original requirements been accurate and detailed, the overseas developer would have completed the project on-time and on-budget. The difficulties of effectively managing across many time zones, across different languages, values, and with a different social, political, and economic "contract" led to an avoidable disaster.

Success Starts With Facilitation Of Detailed Design

Structured Facilitation is the key to developing the skills and process for accurate and detailed design, functional, and test requirements. Structured facilitation is an important method in good software engineering, and particularly when applied early in the SDLC (software development life cycle).

Increasingly, we are experiencing high demand for facilitation because of the overseas outsourcing phenomenon. Developers and project managers are learning the high value of investing early in the development project.

200:1 Payoff

Every hour spent in effective and efficient requirements gathering, using our structured facilitation technique, will save many times (10x to 100s of times) the investment in facilitation of requirements. PMI (Project Management Institute) reports that for each one hour spent in early detection and prevention of errors during requirements definition, 200 hours can be saved from detecting and repairing errors by the time the project is implemented.

A 200:1 benefit!! The benefit of our structured facilitation approach is minimization of errors during requirements gathering, definition, and design -- particularly when compared to less-disciplined requirements gathering techniques, or alternative methods. The savings in rework hours is exceeded by the consequential cost of poor requirements including poor customer satisfaction, liability, damage to careers, and implementation delays.

According to PMI, cost overruns and lost value comprised $55 billion in wasted spending on IT projects (in 2002, and just for US projects). The cost of correcting defects in software projects is estimated to account for 70% of all project rework costs.

Expert Facilitation Is A Great Start

Obviously, structured facilitation and detailed requirements are not all that is necessary for a satisfactory outcome when using outsourced development, but it is a great start and economically justified. Having detailed requirements is, of course, not a rationale for "throwing the specification over the wall" and expecting the project to come back the way you envision it. Communication, effective project management, tools, and a qualified team working in harmony are important elements, too.

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