Project Negotiations

Quick reference

• 00:04 In this lesson, we'll talk about project negotiations.
• 00:08 The learning objective for
• 00:09 this course is to learn the elements to consider when negotiating project change.
• 00:16 Very often, projects start with a clear statement of scope.
• 00:19 Unfortunately, not every stakeholder will share the same definition
• 00:23 of project success.
• 00:25 This disparity between various parties typically results in
• 00:29 changes to the scope of your project.
• 00:31 Project managers frequently find themselves with the challenge of
• 00:34 adding new scope to a project with an already tight timeline.
• 00:39 Typically, the job of the project manager is to work with the team to
• 00:43 determine what this new scope will mean and how it will affect the project.
• 00:48 A common practice amongst project managers is to fall back to the triple constraint
• 00:53 method, as you can see in this figure.
• 00:56 This gives you an opportunity to make statements like, well, if you want this
• 01:00 new scope, are you willing to sacrifice time, budget, or resources?
• 01:05 It is easy to point to the triple constraint
• 01:08 as a way to negotiate change on your project.
• 01:11 However, there is much more to a project than these three elements.
• 01:15 In fact, what this negotiation process does not include is questions like,
• 01:20 will adding the new scope increase our revenue, or
• 01:25 how does it affect the return on investment for the project?
• 01:30 As a project manager, you will look at every new change request and
• 01:34 work with your team to determine how to proceed.
• 01:38 As you can see in the figure,
• 01:39 change requests can affect much more than three elements of a project.
• 01:45 As a project manager, you will use your unique personality, authority, and
• 01:50 influence to negotiate project change.
• 01:53 You will need objective data to back up your change requests, so
• 01:56 Microsoft Project is an invaluable tool to help you.
• 02:00 For example, you can use Microsoft Project to estimate how
• 02:03 a change will affect the schedule and resources of a project.
• 02:07 Using advanced features of Microsoft Project,
• 02:09 you can even use it to help you determine potential cost overruns.
• 02:14 If you use Microsoft Project Server, which I'll talk about in a later lesson,
• 02:18 you can also track the return on investment, issues, risks, and
• 02:23 change management plans.
• 02:26 In conclusion, remember there will always be changes to your project.
• 02:31 When change requests do occur, remember to keep them in the context of the relative
• 02:36 importance to the strategy of the project.
• 02:40 I have seen small projects that will take three months with a budget of
• 02:45 $200,000 change into 16-month projects with budgets of $2 million.
• 02:52 The reason for change may be an opportunity to greatly increase the return
• 02:57 on investment, or to maybe capitalize on a market change.
• 03:03 If you negotiate, or probably more importantly,
• 03:07 push back on a change request just because it will increase the time,
• 03:12 budget, and resources, you may be missing the strategic importance of your project.
• 03:20 Instead, keep an open mind and
• 03:22 work with your team to determine how you can accept that change request.
• 03:27 Then offer up alternatives to your sponsors and stakeholders.

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