This podcast episode discusses the differences between managing internal projects and projects for paying customers (projects as profit centers). The speakers explore the challenges project managers face when working on customer projects, highlighting the need for different skill sets and approaches compared to internal projects.
The transcript illustrates differing business interests between internal and customer projects in several ways:
Internal Projects: The primary goal is benefit realization for the organization, typically in the future (e.g., launching a new product or service). Benefits are often not immediately monetary but rather contribute to long-term strategic goals. There's a single delivery moment, marking the project's end.
Customer Projects: The contractor's primary interest is profitability and timely payment. Benefit realization is immediate, focused on receiving payments from the customer. The project ends when the contract is closed, not necessarily when the customer realizes all benefits. This difference in timeframe and focus creates conflicting priorities and potential tension between the contractor and the customer. The contractor must balance customer satisfaction with their own financial needs, whereas the customer is primarily concerned with project outcomes and long-term strategic gains.
The transcript indicates that in June 2020, 80% of respondents to a survey conducted in cooperation with PMI reported that their project business was affected by COVID-19, to varying degrees. While the exact impact on supply networks isn't detailed, the high percentage suggests a significant effect. The speaker notes that a follow-up survey is needed to determine if the trend toward project business accelerated, slowed down, or remained unaffected by the pandemic.
The transcript doesn't directly address this scenario with a single, prescribed solution. However, it implies that open communication with the customer is crucial. The example given involves a fixed-price project where the customer's constant change requests put the contractor at risk. The recommended solution was to:
This demonstrates a proactive, communicative approach to managing risk by transparently negotiating a revised agreement with the customer to mitigate the organization's exposure. The key takeaway is that it is necessary to assess the risks, communicate them to the client, and propose solutions that protect the organization while still striving to maintain a positive client relationship.
