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Managing Clients

A large number of IT projects end in failure. This has an adverse effect on both the service provider and their clients. One of the root causes of these failures is that the service provider does not have a good enough understanding of what the client expects, which can lead to long-term problems. To varying degrees a project failure will impact a client’s business and the revenue stream of a service provider.

Several strategies have been suggested to help improve and better manage client expectations. These include:

Managing client expectations is vital when it comes to successfully meeting the requirements of clients and making it more likely that a project will succeed in meeting its objectives. As project success rates rise, the service provider will then be more likely to maintain a consistent revenue stream and more opportunities for growth are likely to present themselves.

In South Africa, just over half of all software projects end in failure (Smith, 2002). The top three reasons for projects failing are:

It thus becomes important to better understand and address the root causes of project failures.

Managing client expectations is a way of ensuring greater success for both the client and service provider.

Explicit vs Implicit Expectations

Client expectations can broadly be split into two categories:

Explicit expectations are usually verbalized by the client in the form of specific figures and outcomes that they expect the service provider to meet. In cases where the client does not provide the relevant information, the service provider should make every effort to acquire this information (Modi, 2009). Explicit expectations may be stated in the form of:

  • Time lines (e.g. this project needs to be completed by 28 February 2014)
  • Budgets (e.g. you have a budget of R 200 000 to complete this project)
  • Growth percentages (e.g. 10 % growth by the end of the first quarter)
  • Project deliverables (e.g. provide a report on all reconciled bank statement entries)
  • Implicit expectations are usually not stated or presented in any formal manner; they are “expectations the client holds without telling you” (Modi, 2009). Several factors may influence these:

    A good way to also understand implicit client expectations is to think deeply from the perspective of the client. Sometimes the client might communicate implicit expectations indirectly through another statement, for example:

    (Hastings, 2013)

    Risk of not Meeting Expectations

    Service providers that do not have a good enough understanding of what the client wants are unlikely to maintain a positive and healthy working relationship with that client. This in turn impacts the productivity of a service provider working on client projects (Scranton, 2013). In the short run these misunderstandings and mistakes might be manageable but, if no corrective measures are taken in the long run, the service provider is likely to run into a number of problems.

    The service provider may suffer reputational damage if their perceived level of service is not matching client expectations. The situation becomes worse when this perception is communicated to other clients and prospective clients in the industry (Scranton, 2013). For a small to mid-level service provider, a key part of their initial growth will come from building successful relationships with their clients. These positive relationships help create greater awareness of the company’s products and hence new clients are more likely to trust the service provider to deliver solutions. Reputational damage would stifle potential new revenue streams and existing clients will be less inclined to provide new pieces of work.

    Figure 1: Client Expectations
    Figure 1: Client Expectations

    Guidelines for Success

    Considering what is at stake, service providers need to actively think about how best they can understand and manage client expectations. Research suggests that there are several strategies that a service provider can make use of when it comes to ensuring that client expectations are proactively managed.

    1. Building a deeper relationship

    It’s of great value to take an interest in developing a relationship with a client that goes beyond a business relationship. Most clients would like to do business with someone they like and feel who cares for their needs (Hopkins, 2006). Getting to know the “client’s family situation, how they spend their free time, where their interests lie and, most importantly, what motivates them on a daily basis” (Olguin, 2012) can all help deepen the personal relationship between a service provider and client. Based on this, a client is more likely to trust the service provider and provide a much better description of what they expect. At the same time, the service provider is able to better understand the implicit expectations of the client.

    2. Regular communication

    A key part of building a deeper relationship with a client is to maintain a good communication channel. Delivering both good and bad news in a proactive manner makes it easier for a client to deal with problems (Olguin, 2012). At the same time, the clients’ expectation of what is happening or what still needs to be done stays realistic. While a healthy communication channel is important, boundaries also need to be established in terms of when the client can gain access to the service provider (Scranton, 2013). Spending excessive time on client projects may have a negative effect on the personal lives of individuals and lead to increasingly unrealistic client expectations.

    3. Making the Right Promises

    When communicating with the client, situations will often arise where the client expects an outcome that may not be possible or realistically achievable given the capability of the service provider. At this point the service provider needs to be “clear, open and honest” about what they can and cannot provide (Riviere, 2010). Making promises that cannot be delivered upon may lead to reputational damage. While the client may be disappointed in the short run, in the long run the service provider will build a reputation for “trustworthiness and honesty” (Modi, 2009) and this will ultimately lead to a better working relationship.

    4. Managing Project Timelines

    Often a service provider will need to go a step further than simply telling the client what can and cannot be done. Whether it’s something as simple as an email or an SLA document, it’s important to be clear in writing about what is expected (Riviere, 2010). Such an agreement should at the very least cover the explicit expectations of the client. Items on this document may cover:

    In a situation where the client wants to modify an agreement, the service provider needs to be clear on two points:

    (Olguin, 2012)

    Conclusion

    Many service providers spend a significant amount of resources on winning a piece of client business. However, all that time and effort will be wasted if the same amount of energy is not put into “managing the client’s expectations after the business is won” (Olguin, 2012).

    Managing client expectations is vital when it comes to successfully meeting the requirements of clients and thus making it more likely that a project will succeed in meeting its objectives. As project success rates rise, the service provider will be more likely to maintain a consistent revenue stream and more opportunities for growth are likely to present themselves.

    References

    Hastings, C. (2013, September). What Clients Really Want: Client Relationships and Implicit versus Explicit Expectations. Retrieved from www.rhstrategic.com

    Hopkins, T. (2006, September). Building Client Relationships. Retrieved from www.entrepreneur.com

    Modi, R. (2009, December). How to Effectively Manage Client Expectations. Retrieved from www.strategyexpert.com

    Olguin, A. M. (2012, May 07). 6 Tips to Managing Client Expectations. Retrieved from Inc.

    Riviere, A. S. (2010, November). 5 Ways to Manage Client Expectations. Retrieved from gigaom.com

    Scranton, A. P. (2013, July). The Top Five Tips For Managing Client Expectations. Retrieved from www.forbes.com

    Smith, J. (2002, August). Why information technology software projects fail in South Africa. Retrieved from UJ Library and Information Centre.

    Sneed, V. (2009, December). Proving Your Worth: Managing Client Expectations. Retrieved from KRC Research.

    Indresh Singh

    Indresh Singh BBus Sc IS(Hons)

    Senior Systems Analyst(CPT)

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