When the SI does not perform!

The SI contract has been awarded to one party and the agreement has been split into design and build phases with a potential breakpoint at the end of the design.

The SI has not performed as well as desired during the design phase. This could be for a number of reasons but essentially the criteria for completion of the design phase products have not been met. Now what?

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What action can and should be taken?

I see the potential courses of action and the arguments for and against each approach like this:

1. Move into implementation, award the original SI the work and performance manage the SI to meet required standards

Pros

•Don’t need to go to market and save time/cost

•Performance management of SI may work and improve quality of implementation

Cons

•Lost time on projects is rarely ever clawed back – delay likely

•Implementation quality may not improve and project could fail to deliver

2. Give the SI more time to complete design phase to the required standard and start mobilisation for implementation

Pros

•Don’t need to go to market

•Performance management of SI may work and improve quality of implementation

Cons

•Extra time and costs (even assuming SI covers its design rework costs)

•Implementation quality?

3. Go back to the market for an Implementation Phase Partner include the original SI in the process

Pros

•The market test may act as an effective jolt to the original SI

•Other bidders may have better implementation proposals

Cons

•Lost time and project momentum/Cost of re-letting

•Original design phase bidders may decline to bid implementation

•The new SI partner will want to re-do the design

•The new SI partner may be more of the same

•Questions raised over original selection decision

The rub is – vendors know that most client programme management teams will not want to go to market between design and implementation phases either because of the time and momentum lost, the extra costs or simply to avoid questions over their original SI selection decision!

Is there a real and useful breakpoint between design and implementation phases? I believe there is, but client vendor management needs to continually remind the SI of the possibility that they may exercise the option to go back to the market for an implementation phase partner. Client vendor management also needs to be honest where the situation is not retrievable with the original SI since performance rarely improves. It's never an easy call.

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