CXO

Gain common understanding before managing customer expectations

The sales department expects major enhancements from the IT department. How can the project manager add a dose of reality to their lofty goals? Project mentor Tom Mochal describes the best way to reach an agreement prior to beginning a project.


Each week, project management veteran Tom Mochal provides valuable advice about how to plan and manage projects. Tom first describes a common problem scenario, based on real-life situations. He then offers a solution, using practical project management practices and techniques.

Lindsay is responsible for supervising the project team that will enhance IT services for a sales division. She asked to see me because of a problem she was experiencing trying to manage customer expectations.

“Our business customers aren’t being realistic,” Lindsay said. “For the application changes, they want to completely automate the commission-payment process and allow the sales people to view information through the Web. We can’t do everything they want. We are dealing with enhancing a legacy system. I need your advice on how to better manage their expectations.”

“Managing expectations can be tough,” I said. “But the place to start is the project definition. Did you do one for this project?”

“No we didn’t,” Lindsay said. “We didn’t think we needed one for an enhancement.”

“How about business requirements?” I asked. “Do you have anything that was formally approved coming out of your analysis?”

“We met with the customers to gather their requirements, but we don’t have much that was formally documented.”

I paused for a few seconds. “The problem is that you and your customer have never come to an agreement on what your project was going to produce. You can’t manage expectations effectively unless you had a common expectation to begin with.”

Mentor advice
It may be obvious, but the first, and most important, step to managing expectations is to establish a common understanding of the solution that is to be delivered. Normally this is done through the customer approval of the project definition and the business requirements. Having the customer approve these documents signifies that they understand what is to be delivered and are in agreement with it.

Once you have a common expectation of the work, you then need to communicate proactively regarding the status, issues, and risks associated with the work. This task can be completed several ways, including:
  • Status reports
  • Status meetings
  • E-mail updates
  • Informal meetings

The next step is the most difficult: Perform against the expectations and get the work done as agreed. Later on, if it is determined that the expectations cannot be met, the customer should already be aware of it through your proactive communication. At that point, it is time to gain a new common understanding of the work based on the current circumstances. This will require updating the project definition, business requirement, and/or any other documentation that spells out what the expectations of the project are.

In Lindsay’s case above, she has never had a formal agreement with the customer on the definition of the work (scope, objectives, risk, deliverables, etc.). She also did not set a common expectation as to the features and functions that would be delivered (business requirements).

It’s no wonder that the project is in progress and the customer has “unrealistic” expectations as to what will be delivered. Lindsay will not be able to effectively manage expectations until she gains a common understanding of the work with her customer.

Since the project is well under way, it’s probably too late to go all the way back to the project definition. However, she should document the business requirements. Once the requirements are on the table, she can discuss what will be delivered and, just as importantly, what will not be delivered. Misperceptions need to be cleared up first. Then, when the customer approves the document, Lindsay will have a better chance to manage their expectations in the future.
What about customer expectations that are unrealistic? Are there situations when you can’t agree on a project definition? Post a comment to this article or send us a letter.

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