Can Companies Ever Save Money by Eliminating a PM?

Andy Jordan is President of Roffensian Consulting S.A., a Roatan, Honduras-based management consulting firm with a comprehensive project management practice. Andy always appreciates feedback and discussion on the issues raised in his articles and can be reached at [email protected]. Andy's new book Risk Management for Project Driven Organizations is now available.

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Topics: Leadership, Organizational Culture, Organizational Project Management, Talent Management

While it doesn’t happen as frequently as it did a few years ago, I still hear from organizations every now and then who are looking to reduce costs and think that eliminating one or more project manager is the best way to go about it.

I thought that was crazy 20-plus years ago when I worked for a company that got acquired by another that announced, “We don’t believe in project management”…and I still think it’s crazy now.

But perhaps what is even crazier is that with very little effort, you can show how ridiculous it is. So, being a big fan of putting in very little effort, that’s what I’m going to do here…

Project manager benefits
I’m not going to get into all the intangibles (at least not yet), though I’ll touch on that before the end. Instead, I want to focus on very practical, very realistic benefits that can readily be identified on every project.

Let’s suppose that our hypothetical project has a team of eight people (not including the project manager), and is scheduled to last for six months. Considering the fully loaded costs of an employee, a budget for that project of around $700,000 is probably a reasonable assumption. Let’s therefore assume that it is expected to deliver a cost saving of $1,000,000 a year, starting as soon as it is implemented. Again, a reasonable (and …

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