Project Managers vs. Bean Counters: A Radical Approach To Developing Budgets

Mark Mullaly is president of Interthink Consulting Incorporated, an organizational development and change firm specializing in the creation of effective organizational project management solutions. Since 1990, it has worked with companies throughout North America to develop, enhance and implement effective project management tools, processes, structures and capabilities. Mark was most recently co-lead investigator of the Value of Project Management research project sponsored by PMI. You can read more of his writing at markmullaly.com.

  Estimating  

Accountants and project managers have had a love-hate relationship since the dawn of time. And with little wonder. The bean counters prize the precision and implied accuracy of their budgets above all else. The project manager is responsible for creating order out of chaos--which by its very nature implies that projects start out in a wildly uncertain and speculative fashion and only become comprehensible over time.

Not that we as project managers go out of our way to antagonize the bean counters (okay, some do, but you know that it's not nice), but the uncertainty with which most projects begin is in direct conflict with their ingrained need to budget to the penny what every department and division will spend in a year.

As I discussed in last month's column ("The Good, The Bad & The Ugly: Communicating Estimates To Your Customers"), communicating the confidence associated with a project estimate is a far better strategy than simply providing a fixed number. A budget of $1,250,000, plus or minus 100 percent, gives us an understanding of both what we think the project will cost today and also what it might cost based upon the large number of questions that still remain unanswered. Customers know what they are likely to pay, but also what the costs might escalate to as the project proceeds. As the project progresses through the subsequent phases of the lifecycle, the …

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