The contract management skills every project manager needs

Managing a framework requires a very different set of management skills to a more traditional waterfall-based project, writes Romy Hughes

Managing the delivery of ‘as-a-Service’ contracts requires a very different set of skills than managing a traditional waterfall projects. Unfortunately, these skills are rarely prioritised in the public sector, leaving many project managers out of their depth, projects going over budget, deadlines being missed, and projects deviating from their original objectives. How exactly has the role of project management changed in light of the more agile, post-waterfall approach to project delivery, and which skillsets are required for project managers going forward?  

The new management approach
Prior to the introduction of the framework agreements, the public sector relied on the expertise of procurement specialists to protect its interests when buying products or services. Once the procurement manager was happy with the terms, a project manager would take over to ensure the successful delivery of those terms over the course of the contract, while the procurement manager would move on to another project.

The public sector has now largely shifted away from this up-front capex approach to a more operational, opex model (e.g. traditional IT has moved to cloud services which are often, but not exclusively, procured through frameworks). Since the frameworks have done most of the up-front contractual work already, less procurement expertise is required at the start of a project. Instead, the focus has shifted to the continuous management of the contract to ensure the best continual result.  

In-life management of a contract vs. waterfall
The skillsets required for the ‘in life’ management of a multi-year contract vs procuring it in the first place are generally not the same as each other, yet the staffing of these projects has not changed to reflect this. All too often, project managers, whose skills, training and careers have evolved around traditional waterfall project delivery, must now combine their existing project management role with ongoing contract management too.

What do project managers need to do to keep their projects on track?
Work more strategically with suppliers – The shift away from a capex funding model which is laser focused on delivering one, very specific outcome is a world away from delivering a framework, which typically involves the delivery of continually evolving business outcomes. This more agile, opex approach requires a very different relationship with your suppliers. You need to work more strategically. You can’t be transactional anymore.

Get out of your silo and manage your stakeholders – It is not uncommon to have more than 100 stakeholders involved in a project who need continual, not occasional, engagement. As the de facto contract manager you must now go out and build the necessary relationships with suppliers and internal stakeholders. Working this way will also help to move your organisations away from waterfall project delivery and towards a more service management approach.

Work closely with commercial – since you are no longer facing big contractual changes every few years, but ongoing little tweaks, commercial and project management must work together throughout the delivery of the project.

Agility is key – Rigid procurement rules in the public sector often prevent projects from being as agile as they should be. For example, if an existing software vendor launches new features which could greatly benefit the public sector, the public sector cannot simply raise a PO for these new features due to the way procurement is still largely about fixed outcomes. Instead, they are encouraged towards a full tender process just to add these features to their service which is a waste of the organisation’s and its supplier’s time.

Hire dedicated contract managers! As the above points have hopefully demonstrated, contract management alone is a full-time job. It is therefore unfair to expect project managers to take this on by themselves. This is because project managers are focused on delivery, while contract managers are focused on outcomes. A contract manager will understand the scope and legalities of the framework, leaving the project manager free to focus on technicalities of delivery. Since the focus of each roles are a little different but complementary, it is important that they work in tandem to achieve a successful outcome. Project managers need a the full-time support of a contract manager, although it is worth recognising that a good contract manager may be able to resource several projects or programmes simultaneously.

The shift to service management
Beyond the employment of dedicated contract managers, there needs to be a recognition that successfully delivering agile projects requires a change in project management approach. It is about more than simply distinguishing between the project and contract management roles, but about adopting a service management approach in order to deliver the outcomes your organisation needs. Yes, you need to have the right roles in place with the appropriate skillsets, but you also need the right governance in place. You need to define an operational model that delivers service management at its core.

Romy Hughes is director at Brightman.