"If you have to make the brief, don't take the brief". For outcome-based work, whose responsibility is it to define milestones? Is it the client, the supplier or should there be a collaboration? And what is procurement's role?
Before milestones, the outcome is required
A milestone, as explored in our
guide to milestones, is a key event in a statement of work. They govern and prescribe a sequence of outcomes in a project that keep a project moving in the desired direction.
But before milestones can be crafted, first the project needs clarity on the overall objective of the project. Simply, the business needs to understand why the project needs to happen, what a good outcome looks like, and the value it will bring upon completion.
In the process of defining an overall objective, procurement can add value by helping the business define the measurement of completion, as well as understanding some of the risks. This is especially valuable in services procurement, where the outcome isn't always
tangible.
Once the overall objective is established, milestones can be developed to ensure that the project completes the necessary steps to get there.
As every
statement of work is unique, there's no standard definition of the size, duration or scope of a milestone. It's very dependent on the project itself. However, effective milestones are always SMART.
Milestone responsibility may shift, depending on the nature of the outcome
When it comes time to create a project's milestones, who is best to do this? Should it be the business? Should it be the supplier?
It depends. And procurement can help make this easier by having a deep understanding of the project, the business' skills and experience, and the capability in its suppliers. In practice, this means procurement fulfilling the role of expert negotiators while leveraging the supplier's subject matter expertise.
For projects that have well understood, even repeatable, outcomes and there is a benefit from procurement working with the business to create milestones. This ensures risks are minimal and having standard milestones helps make easier comparisons between supplier proposals.
At the other end of the spectrum, there are projects where the best way to achieve an outcome is undefined or unclear in the business and there is genuine advantage in leveraging the experiences and expertise of external suppliers. In these instances, procurement can work with their suppliers to develop a range of innovative solutions.
Of course, most projects will sit somewhere in the middle of these two extremes, so procurement's role is likely to determine the balance between milestones being defined by the business or the supplier.
The right mix of supplier collaboration when defining good milestones is worth the effort
Including supplier's feedback in when shaping a project's milestones during the bidding process has a number of benefits, including:
- Projects can start faster
- There is a mutual understanding of 'progress' from the start
- Both parties can agree and be held accountable to timings
- Variation orders and changes to budget or scope are reduced
However, there is one considerable caveat before a business can benefit from more effective milestones. First, they need to be working with the right suppliers in the first place. A project, even with the most intelligent milestone planning, will fail to produce an optimal result if the supplier isn't the right fit.
Technology's role in milestone planning
As the previous paragraph alluded to, the first problem technology can solve is matching a project to the right supplier(s). With AI and the right quantitative/qualitative data, technology can help procurement make better resourcing decisions at scale.
Technology can also facilitate (and encourage) communication during the project RFx process, where milestones can be collaborated on in both direct-award and competitive bidding scenarios.
And lastly, technology can also govern milestone completion and provide detailed insights into the best performing suppliers.
In summary, with the right technology, effective milestone management enables procurement to add significant value in delivering business results.
