6

I'm facing a challenging situation with one of my clients. We completed the project as planned in 4 months and now the next step is the project deployment at his site. The problem is his site is not ready for the deployment process for lack of equipments, and it's been 3 months like that.

I'm not sure what action I should be taking now, obviously there is the last installment 30% pending on final deployment, also the contract is not covering delays from the client like in the scenario we are currently having, so there is nothing formally I can refer to.

I can be aggressive and tell him that we are not responsible for the delays and give a grace period to pay the last installment, but he is a big client and we have a good relation with him with potential project so don't want to be too aggressive.

What do you think would be the best action to take?

  • Have you been reimbursed for the work performed? – David Espina Oct 15 '15 at 12:07
9

In a similar instance when we were facing delays-

  1. We have clarified client about our organization internal structure. In our organization, resources are taken out from one project and given to another project if billing is not done. We cannot keep hold of resources indefinitely. So resource billing is to be done for the waiting time.

  2. Resource work/utilization is judged by the Resource Manager of the organization.

    If the resources are taken out, the key resources may not be available at the deployment time. You can arrange other resources but they will not have required project knowledge to handle any issues that can come up during deployment time.

    So we need to speedup.

  3. In case their site is not ready because of lack of equipment, if you have any contact with any vendor or your organization provide such services .Can you offer fresh contract for that and then do that?

2

If you have a good relationship, you may agree with your customer to pay some portion of the work now - about 70% - to cover you expenses. In the mean time, you save and plane with some resources to be able to do the installment in 3 months. During negotiations I would always put emphasis on the good relationship, keeping it, and on being ready on time. I won't say much about them being late.

In case you have inventory costs, you can either ask your customer to pay for it, since you did your part, or you can pay for it by yourself. The second may strengthen your good relationship.

Nevertheless, you need a bit different contract for the next assignment which covers cases like this (you can also do so risk mitigation).

2

You don't need to be aggressive, you need to be realist. Your contract wasn't prepared for the current situation, so you guys need to sit together and review the situation. As Dimple mentioned (+1!) you should make sure your client understands how your company work and that there are impacts if there's no contract review / agreement for the end of the project.

Having that said, as a service provider you should offer options (decisions are always up to the clients... we just provide alternatives):

  1. The client pays to keep people 'idle' until their infrastructure is available
  2. The client doesn't pay and you'll resume support with the people you have available at the time the service is resumed

I'd use the grace period as a time the client will have to assess what's the best option. Is important to let the client know at the moment this review is done what's the option you'll follow in case no agreement is done when grace period is overdue.

Example:

Hi dear client, we have a situation X.

Now, we can go 1 or 2.

We can offer you a grace period to decide how to approach until Y.

If we can't have an agreement, then we'll understand you decided to go 1 and you'll receive a bill to pay for people (or you have decided to go 2 and understand the support won't be as smooth as it could, since there's no guarantee the same people will be available).

Is important to ensure you present what's the approach you see as fit after the grace period, otherwise they'll keep rolling things until their environment is ready.

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