Forced To Do Useless Things?

 

A few weeks ago I wrote about the main corollary stemming from the Triple Constraint/Iron Triangle (the familiar PM concept that Scope = Cost = Schedule, and you can’t change one without changing the other two). This corollary asserts that among the product/service characteristics of affordability, availability, and quality, the customer should expect/pick any two. In other words,

• High-quality, affordable goods or services will require a wait;
• High-quality goods available immediately will be expensive, and
• Readily available, affordable goods won’t be of the highest quality.

This corollary is axiomatic among seasoned practitioners; in fact, ignorance of this effect is a “tell” that the person you’re dealing with isn’t very advanced in the PM sciences.

I want to combine this axiom with another established theory from economics, and I believe the combination will reveal some rather interesting insights. The combine-ee is the notion of how first, second, and third-hand purchasers change the nature of the industry supplying any given good or service. A first-hand purchaser is a person who is buying something for themselves. They seek out the vendor who matches most or all of their parameters, and perform the purchase themselves. A second-hand purchaser is someone who is buying something for another person, as in a gift. They often don’t know all of the intended recipients’ expectations in-depth, and will usually have a budget figure in mind that the intended recipient may or may not have been willing to spend.

Here's where it gets interesting. A third-party purchaser is buying something for another person, but not using their own money. Nassim Taleb’s recent book Skin In The Game addresses this phenomena, and is worth reading. An essential take-away is that, if you don’t have a direct interest in, this case, the way a management information system (MIS) should be designed and implemented, you shouldn’t weigh in. At all. My take is that such ones are so removed from the first-party purchasers’ model that any assertion or decision they make is bound to be flawed, and lead to poor management decisions.

Now, let’s combine these two truisms of affordability-availability-quality, and third-person purchaser limitations, and see what they yield in Project Management space. Let’s say you are the director of a PMO of a medium-to-large company, and the PM for a recently-won project comes to you for project management-type support. The canny PMO Director will ascertain the PM’s inclinations with regards to the availability, affordability, and relative quality of the support sought, and seek to accommodate these parameters. Conversely, the moribund PMO Director will have already decided the level of “quality” that the PM ought to have requested, leaving the only negotiating points the price and availability. Since most PMs will need their Critical Path and Earned Value systems in-place at the project’s start date, these PMO Directors will assume that their erstwhile clients will be compelled to purchase such support at whatever price point the PMO Director stipulates. This is how PM is sent backwards within industry, and at warp speed.

Consider what happens in second-party PM support scenarios. The PM of the new work goes to the PMO Director for support, but the level of PM rigor has already been established by the organization, usually through procedures. Hopefully, this level of rigor was placed into the Basis of Estimate in the project’s proposal, which means that the level of affordability, availability, and quality has already been established. So, no issues here, unless the new work isn’t entirely consistent with the other projects within the portfolio. Presumably, if the pre-determined level of rigor was too expensive, the proposal would not have won in the first place.

Now we come to the third-party option, and it’s not pretty. In those instances where some “stakeholder” places themselves into a position where they can demand a higher level of PM information system rigor, while they neither pay for such an increase, nor are they the ultimate recipients of the successful completion of the scope of the project, the opportunities for quackery increase exponentially. Assuming a position of PM authority or expertise, these people are in a position to damage both the suppliers’ ability to meet the clients’ expectations, and the latitude that the clients have in selecting contractors who meet their specific mix of availability, affordability, and quality. Since most contractors work on a Cost Plus Fixed Fee/Award Fee, or even Firm Fixed Price basis, the Affordability parameter has already been fixed. The Availability issue has already been established as well, since the cost and schedule baselines are typically fixed at the point of contract award. This leaves only the level of PM rigor which, if we are to observe the Triple Constraint, must remain consistent with the other particulars of the project. “Not so!”, say those “guidance”-generating organizations that like to assert their “expertise” in the PM industry. All major projects must perform analyses that the contractor PMs did not originally intend to provide, nor which their customers wanted in the first place. To do otherwise is to commit some inchoate sin against the purity of Project Management!

I find it fascinating that these guidance-generating organizations against whom I often rail never seem to publish documents calling for more affordable, or more available PM information systems. It’s always the same old thing, about how everyone needs to slather on the irrelevant Management Information System lard, like comparing basis of estimate to actual costs at the line-item level, time-phasing the Estimate to Complete, or performing Monte Carlo risk assessments. In fact, if you are involved in having to provide any of these analyses, I already know something about your project. It was either not competitively let, or else there are third-party stakeholders asserting some level of control over the PM information systems.

Forced to do useless things in PM space? Blame the Processors entrenched in the guidance-generating industry.