Project Management

The 10 Secrets of Customer Dispute Management: 'Compromise'

In business, disputes happen. They are an unfortunate, but inevitable, consequence of the financial interests of the supplier and the customer. Obviously, we do everything we can to avoid disputes. A Guide to the Project Management Body of Knowledge (PMBOK® Guide) (PMI, 2013) guides us in making sure projects deliver value to customers—so that we understand the customer’s needs and set their expectations. If we follow that guidance, disputes will be minimized—but anyone who thinks that a methodology will stop all disputes with customers is not aware of the practical reality of the business world.

What happens when we, as project managers, are faced with a customer who says they are not happy, who refuses to pay, or who threatens legal action? What steps can we take to address this challenge? The PMBOK® Guide is light on the subject; the word “dispute” is not included in the glossary or index. However, there is some guidance under Project Procurement Management around Procurement Negotiations that tells us:

…the final equitable settlement of all outstanding issues, claims, and disputes by negotiation is a primary goal. Whenever settlement cannot be achieved through direct negotiation, some form of alternative dispute resolution (ADR) including mediation or arbitration may be explored. When all else fails, litigation in the …

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