The Procurement Process for Web Projects: Ignore at Your Own Peril

Doug Sisko // January 2017

Let’s be clear, all web development projects need funding in some form. If you partner with a vendor, you will most often need to obtain funding through the often dreaded…  procurement process. We all know most projects can’t start without funding in place. However, as obvious as that sounds, an understanding of your organization’s procurement process is critical to overall project success.

What Are We Overlooking?

Understanding procurement (how you will acquire services and source your funding) is a process that involves communicating expectations and also forcing business decisions.

Has this ever happened to you?

  • You are tasked with a website redesign. Your procurement group or boss has asked you, “How much is it going to cost?”
  • You have discovered your project is going over the “estimate,” and now need to obtain more funding. What is your process?
  • You waited on communicating a project setback, then realized there were a whole host of other non-technical, political issues that surrounded the project?

How Much Is It Going to Cost?

Talking to my colleagues at Isovera (see Jason Pamental spot on post, “Broke-Down Process: Web Projects’ Fatal Flaw” ), we know the first question we consistently get is how much is it going to cost? The truth is we are unable to give you a real analysis without talking to you in-depth about what you need. To do this, we need to provide you with a roadmap, or what we typically call Discovery. As my colleague, Kellie Walton, succinctly articulated, this process helps uncover three crucial questions:

  1. What are we delivering?

  2. How long will it take?

  3. What are the estimated costs based on the current knowledge?

This process begins to uncover your needs, goals, and motivations, and also allows our developers to identify an appropriate strategy for how they will architect and build your site. Which, in turn, guides cost.

What is missed by ignoring this step fundamentally alters the success of your project. It is imperative to have grounded and measured cost expectations to obtain feasible funding and furthermore, be able to accurately forecast and gauge the project cost throughout the lifespan of your project. Similar to a house, without this foundation, your project will be crumbling from the beginning, so we advise as soon as possible in your budgeting cycle, you champion including a discovery process before you even ask the question “how much?”

Real World Tip: For any client thinking of taking on a large project, we recommend you ask - How much money can I spend without being forced to engage in the RFP (request-for-proposal) process. For example, you may have a $20K max amount that does not require an RFP. Knowing your ceilings allows you to start thinking about your budget strategically by structuring it in manageable ”chunks” of budget/time and may expedite the process. 

How Is Funding Obtained?

Funding is not obtained through hope. Funding is not obtained by a smile. Funding is not obtained by good luck. Funding is typically obtained through methodical (and at times tedious) processes controlled by administrators who do not understand a thing about the web design/development process. I am sure all of you have dealt with special project approvals, yearly budgets justifications, and for non-profits, the grant application process.

Real World Tip: There are times when you can avoid the RFP process by identifying your vendor as “sole source.” Fast-track your process if your vendor can be designated as sole source, meaning they have unique knowledge and/or expertise of a product, service, or process. 

Fixed Bid vs. Time and Materials Estimate

Most of you know there are differences between a proposal presented as a “fixed bid” (one theoretical unwavering price for a project) and one presented as an “estimate” (a best guess at the cost based on the information at hand). However, when it comes to the procurement process, in most cases they view both concepts as one and the same. A bucket of funding is approved in both cases, a PO may be created, and all work is put against that dollar amount.

At Isovera, we present almost all projects as an estimate since, the reality of web projects (as discussed previously) is that things change. Ideally, you have two separate budgets, one for a Discovery engagement and then one for the actual development project that was formulated from Discovery. As mentioned earlier, this two-tiered approach helps ward off scope creep, change orders, and the real issue - budget risk. That said, as viewed by Procurement, the estimated proposal approach is not much different than fixed price (a budgeted amount), so communication will be key between both project teams to work together based on the budget.

Real World Tip: If you are working from a budget approved based on approved up-front estimates, be sure to include a contingency budget.  The majority of project budgets severely underestimate the iterative back-and-forth that is necessary through your project. Treat this time as your “buffer,” as you will quickly learn that this “extra” time is crucial to transforming your good or almost-there platform into an excellent one. 

Address Financial Issues Early and Head On

Dealing with money for most of us is inherently stressful. When dealing with funding, procurement, and interacting with financial decision-makers, remember their job is to assess the numbers. Acknowledging that they are not concerned about Drupal modules or project methodology helps focus the discussion for all parties: the financial health of the project.

Telling bad news is hard, but the earlier you can recognize budget issues as it relates to the project, the easier (and less stressful) it will be to adjust. Unless there is an exceptional circumstance,  your “bad news” debt will compound over time. In most cases a direct discussion early on can level-set the options all stakeholders have in a project. This does not mean there will no difficult conversations, but you can maximize your chances of making them less difficult.

If you have any tips or stories of your own, I’m always happy to talk to folks, so feel free to drop me a line.

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