You Can’t Afford a Project Manager on Your Project?

August 8, 2014 | Author: PM Hut | Filed under: Project Management Advantages

You Can’t Afford a Project Manager on Your Project?
By Steve Hart

Particularly in the world of consulting, you are always getting pressure to make your proposals more competitive. One of the areas that seems to come up frequently in this process is project management. This project is not too large or complex, do you think we really need a project manager on this? I recently ran into a client situation where the CIO stated, “We cannot afford to have project managers in our organization.” I had to bite my tongue real hard to keep from replying, “Can you afford NOT to have a project manager?” I have been involved in more than one project that has become significantly challenged directly or indirectly because of a lack of project management focus on the project.

This post is an attempt at a non-biased look at whether or not it is reasonable to squeeze the project manager hours out of your project budget (or at least significantly reduce them).

What Questions Should You Ask?

There are several questions that you should ask when you are considering reducing or eliminating the project management hours from your project budget. The answers to these questions will give you a good picture of the risk you are introducing by taking this action.

  1. Who is going to create and maintain the schedule? If the project has a target date that is anything over two weeks, you need some semblance of a timeline to ensure that the project is completed on-time. Without a project manager, the team may opt for a task list in SharePoint or Excel or a high level diagram in Word or PowerPoint. However, as the duration, number of tasks, or number of resources increases for the project, the more likely the right tool to create and manage the project is MS Project. Do you have the person with the right skill set to create and manage the project schedule, given the appropriate tool selected? This person also needs to be able to identify and implement the appropriate corrective measures if the project begins to get off track from a schedule perspective.

  2. Who is going to manage the budget? In most cases, some financial constraints or estimates have been established during the project initiation process (possibly in the form of a proposal and/or Statement of Work). Obviously the larger the project (driven primarily by duration and resources), the greater the risk of a material budget overrun, and the need to pay close attention to the actual spend vs. the original budget. At a minimum the actual hours expended vs. planned should be tracked on a regular basis. In addition, as in the case of the project schedule, the person tracking the budget must be able to identify and implement the appropriate corrective measures if the project begins to deviate from the planned budget. Many teams do not have resources with the discipline or attention to detail to properly track/manage the project budget.

  3. Who is going to identify and manage change? The answer to this question could represent the tipping point relating to your decision. How clear cut is the solution you are delivering. What are the areas that change could be introduced? Do you have processes and people in place that can clearly and diplomatically highlight and resolve change related issues with the customer? Given the choice, the team may decide not to escalate change related issues for fear of upsetting the customer.

  4. Who is going to provide status updates to the customer? Failure to communicate with the customer in a clear and consistent manner throughout the project life cycle causes the client to quickly raise a red flag. Technical resources tend to enter the “cone of silence” once they capture the information they need to launch the design and development effort. Someone needs to be on point for regularly providing good quality status reports (in writing) and proactively managing issues as they arise.

  5. Who is going to facilitate core team meetings? Who will provide leadership on the team by facilitating effective team meetings? This function includes the communication of progress and upcoming critical activities to team members. It also includes identification and follow-up on key project issues and action items. Both of these areas should be documented and available to the team (usually in the form of meeting minutes and/or status reports). Again, if left to their own desires, technical resources may vote to eliminate team meetings, and cause angst on the part of the customer due to the limited amount of communication.

What Options Do You Have?

There are several options to the project manager dilemma, if the project budget truly cannot afford the additional hours associated with project management. Again, depending on the gaps identified by asking the questions above, you can decide which option best mitigates the risks introduced.

  1. Technical Lead takes on the PM role – In the absence of a Project manager, the option that is often selected is to have the technical lead on the project assume the project management role/duties. An experienced technical lead generally has the leadership and client relationship skills to effectively facilitate team meetings, provide project status, and possibly control/manage change. However, the technical lead often gets wrapped up in design and delivery of the solution, and the risk increases that the schedule and budget will not receive the appropriate level of attention..

  2. Add a non-billable PM to the team – Based upon the risk associated with not adding project manager hours into the project budget, the organization may choose to assign indirect, non- billable, responsibilities to a project manager to provide oversight for the project. This person would likely provide help with creating and managing the project schedule and budget, and potentially managing changes. However the day-to-day leadership and communication related responsibilities would likely be assigned to other members of the project team. This approach generally falls in the category of “you get what you pay for” (or in this case what you don’t pay for). Given the choice between billable and non-billable activities, the non-billable project manager may not spend the time required to effectively identify and escalate problems associated with the project.

  3. Reduce the PM role to the minimum – Rather than eliminating all of the hours associated with the project manager, the organization may choose to reduce the role of the project manager (and reduce the hours accordingly). Based upon the answers to the questions above, the project manager’s role and time on the project would be limited to the areas that cannot be assigned to other team members. This option introduces a risk similar to option #2, because the project manager will be part-time on the project, and will be dealing with competing demands from multiple projects. For consulting companies maintaining acceptable utilization rates for project managers is always a problem when they are balancing multiple part-time assignments.

  4. Add a PM that can fill multiple roles on the team – This option is similar to option #3 from the perspective that the project manager role is reduced to accommodate the hours that can be included in the proposal. In many cases, the project manager role is limited to specific functions listed above. However, rather than assigning other projects to the part-time project manager, the project manager assumes other roles on the same project. The most common example of the multiple role option is to have the person perform a dual role as a project manager and business analyst. This approach assumes that the person assigned has the skills / knowledge to effectively perform both roles. This approach is often more effective than Option #3 because the project manager is not dealing with competing demands across multiple projects. The project manager and team need to prioritize his/her activities across multiple roles within the same project.

Steve Hart, PMP is the Practice Manager responsible for project leadership & delivery services for the Cardinal Solutions Group in the RTP area. He has 25 years of project management and technical leadership roles, and has developed an extensive practical knowledge that spans a wide variety of industries, and project delivery approaches. Steve recently transferred to the North Carolina Chapter of PMI from the Dayton Ohio PMI Chapter, where he was active as the editor of the chapter newsletter, and PMP certification instructor. You can read more from Steve Hart on his blog.

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2 people have left comments

Good article. I too have noticed that Senior Management (sometimes) does not realize the importance of PM. In my observation, a PM is not cost to the project. A good PM, actually, saves money. I think every project needs a knowledgeable & skillful PM.

BR
Praveen Malik
http://www.pmbypm.com

Praveen Malik wrote on August 10, 2014 - 1:21 am | Visit Link

Steve,

Thanks for an interesting article. You are right that in consulting as well as most other sectors there is a demand to do more with less and the project management always gets squeezed. In my experience this is almost always a false economy.

The first question to help focus attention is what would it cost if the project fails?

As I pointed out in my recent post, what would it cost to be late, to blow the budget or just not deliver the agreed scope with the needed quality? The knock-on costs to other projects, of lost clients, damage to reputation and so on tend to put things in perspective.

Praveen is right - project management saves money and adds value.

All the best.

John Williams wrote on August 11, 2014 - 10:14 am | Visit Link

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