This document discusses engagement models and managing customer expectations in contracts and projects. It provides examples of how fixed price, time and materials (T&M), and on-demand team (ODT) models can lead to misaligned expectations if not set up properly. It also discusses how the COVID-19 pandemic impacted many businesses and projects in 2020, with some clients pushing for contract renegotiations, discounts, or trying to terminate projects due to financial difficulties caused by the pandemic. The document emphasizes the importance of clear communication around budgets, responsibilities, and engagement terms to avoid disputes down the road.

2. GOOD CONTRACT VS
CUSTOMER EXPECTATIONS
What will save you if a storm strikes

3. 13+ YEARS IN IT INDUSTRY
▪ Experience in Project Management, Product Management,
Business Development, Operations Management, Business
Insights
▪ Account Management: 4+ Years
▪ Working In Sigma: 6+ years
▪ Success Story: Account Growth from Scratch: 5 FTE -> 50 FTE
in 3 years
WORKING WITH WORLD KNOWN BRANDS:
ABOUT ME
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3

4. PART 1 PART 2
Engagement Models
Fixed Price / T&M / ODT
Sales Negotiations vs Delivery
Expectations vs Reality
Communication Levels
Collaboration Types
New Reality 2020
COVID-19 Impact on Businesses
Which projects remained?
Crisis Management
Contract Enforcement
4

5. ENGAGEMENT MODELS
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6. COMPARISON
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7. ▪ Nobody likes Fixed Price Projects
▪ ODT with “Agile” approach is often sold to the clients
▪ Numerous ODT Projects are in reality not ODT.
▪ Most major client complains are due to model not
agreed clear enough.
▪ Tremendous mental effort and overtime hours spent
for crisis resolution.
▪ $XX K– cost of “we are not responsible for anything”
motto in ODT (not counting affected relations and no
new business)
WHY TALK ABOUT IT?
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8. QUESTIONS TO ASK YOURSELVES
▪ Is the client looking for People or is the client
looking to get a Project done? (be honest with
your answer)
▪ How long does the client envision the
collaboration lasting?
▪ Who is in charge of the budget?
▪ How long is the project?
▪ How does the client see the division of
responsibilities?
WHAT THE CLIENT REALLY
NEEDS
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9. CASE # 1

10. SALES PHASE WORK START
• Client (PO): new request to develop an Mobile App from
scratch
• Vendor (Sales): Proposal for known technologies. T&M
Model
• Client (PO) : Use new technology + Scope Changes
• Vendor (Sales): Cannot Estimate. Let’s switch to ODT
Model
• Client (PO): OK! Let’s start with ODT
• Vendor (Sales): Provides ODT Contract
• Client: Contract Legal Review Starts…
• Vendor (Sales): Invoices for Pre-Payment
• Client: Pre-Payment Made
• Vendor: ODT Work Starts
10

11. ▪ … in 1 month
▪ Client: Contract Legal Review still underway…
▪ Vendor (AM): Meets stakeholders. Checks budget
expectations
▪ Client (CTO): still has the first Budget in Mind…
▪ Vendor (AM): Sends Budget Forecast, explains ODT
▪ Client (CFO & legal): sends Contract Changes… with
Fixed Price
REALITY STRIKES
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12. MISTAKES MADE
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• Ballpark proposal, non precise
estimate
• Original expectations set by the
proposal were kept in mind
• Offering unsuitable ODT approach
• Not defining who is approving
budget and responsibilities
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13. ▪ Defined the Budget Owner(s)
▪ Found out the Budget Expectations
▪ Delivered Fixed Price Proposal (as client asked)
▪ Explained how price is formed
▪ Explained responsibility division
▪ Jointly agreed on T&M Project and continuation in ODT
format
HOW WE SOLVED THEM
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14. COLLABORATION TYPES

15. COLLABORATION LEVELS
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15
AM
PO
PM/
Architect
Development
Team, QAs
Development
team
Business
contact

16. PROJECT BASED
ODT BASED
Team Type (ODT):
▪ Development of existing systems
▪ Adding forces to an ongoing project
▪ More than one team working on the project
▪ Support Team
▪ Long Term (6+ months)
Project Type:
▪ Software (platform) built from
scratch
▪ Software (platform) built by one
team
▪ Proof of Concept, Pre-Study,
MVP
16

17. ▪ Estimates in T&M projects don’t count
▪ T&M estimate is less than Fix Cost
▪ ODT means less responsibility than T&M
▪ Who cares? We still have good contract!
COMMON MYTHS
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18. ▪ Signing ODT Contract is easier and faster
▪ Avoiding commitments on the budget
▪ Limiting responsibility
▪ Managing expectations and client
satisfaction if ODT is hidden T&M is hard.
CONTRACT VS EXPECTATIONS
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19. CASE # 2

20. ▪ New Client Comes. The company is a Start Up.
▪ There is no defined scope or product vision.
▪ We start with the designs and agree to assign the ODT team and
work following Agile approach
▪ We do not perform Due Diligence on Client’s Company
▪ We send Budget Forecast every month and the client accepts it
▪ We do not know how much budget the client has…
▪ All goes well and the clients are super happy with the team’s
performance and delivery…
▪ … until the client runs out of Money.
▪ … end of story
▪ … not quite! We get sued by customer’s Ex-Vendor!
Hiring ODT team, while
having fixed budget
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21. ▪ Don’t run away from budget discussions. Be very clear
▪ Pick the right Collaboration Model
▪ Identify Budget Owners. Perform Due Diligence.
▪ Secure yourself with pre-payments
▪ Set proper expectations about the budget. If it’s a new project
– don’t hide under ODT.
▪ Send Budget Forecast in $ for the next quarter
▪ Make it easy to perceive budget.
▪ Keep constant contact with Client Management (Budget
Owners)
▪ Do not be tolerant towards payment delays
WHAT TO DO
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22. Talking about storm…

23. ▪ COVID-19 pandemic had a drastic impact on the
economy
▪ A lot of businesses experienced severe losses
▪ The industries that were affected most had to
enforce extreme measures
▪ The stability of IT companies was greatly dependent
on the diversification of their portfolio
2020 – year full of surprises
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24. Which domain do you work with?
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25. ▪ During spring time – there was chaos and panic.
▪ Only Business Critical Systems had budget remaining
▪ Most of R&D Projects were put on hold
▪ Companies in the sectors hit worst enforced job cuts:
▪ Airbnb cuts 1,900 jobs, or around 25% of its global workforce.
Link
▪ Volvo axes more than 4,000 jobs as corona crisis hits demand.
Link
▪ Airline SAS cuts up to 5,000 jobs due to pandemic. The
company said last month it would temporarily lay off up to
10,000 employees, or 90% of the total workforce. Link
Cutting Costs
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26. ▪ Requesting to stop the development immediately.
▪ Example: company with physical operations in NY. No
revenue streams.
▪ Proposing their interpretation of the contract terms
▪ Asking for discounts. Even big Enterprise companies, not
directly affected by Covid-19
▪ Some companies asking to “compete” for keeping their
projects going
How did clients react?
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27. CONTRACT
TERMS
REALITY
• Cancellation Terms –3 months.
Cutting team by x% on a monthly
basis
• Hourly Rates agreed upon
Drop the Team ASAP
We need discounts!
We need new terms!
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28. Long term business is built on trust, not a
contract.
“Looking at the agreement, there is a Force Majeure clause. I would say the COVID-19 is an act of God. With
that said, we will need to terminate the team by end of week” ©

29. THANK YOU!
https://www.linkedin.com/in/annaboiko