The Money Files

You might be lucky enough to be working with contract managers on your project. This is normally the case if you have a massive procurement to do, or there are lots of high-value contracts relating to what you are building. Think civil engineering projects, construction, oil and gas – that kind of thing.

However, contract management is also a skill that many of us have to have by default, because we don’t have contract management personnel available to our projects. If you aren’t working on the country’s biggest IT project supporting the national infrastructure, perhaps you will have to manage the contracts and relationships with suppliers yourself.

So what does that mean for you? Here are 5 of the essential skills a good contract manager needs. Can you see the overlap with project management?

1.  Communication Skills

I can’t actually think of many jobs that don’t need decent communication skills, so this one should be a given.

2. Contract Awareness

You need to understand the contract. That might sound obvious, but it’s amazing how difficult some contracts are to read and understand. You’ll have to explain parts of the contract to people who have no idea what any of the legal speak means.

If you think this is something you’ll have to do a lot, it would be worth preparing a short, easy to understand executive summary of the contract to use. You’re trying to highlight the key provisions, and what each party has signed up to.

3. Negotiation

You’d expect this as well, and there is normally a fair amount of negotiation to do in all areas on projects. This is a huge part of the day to day work of a full-time contract manager because they will be talking to suppliers all the time.

Negotiation with third parties involves preparation work, and looking for points of mutual interest from which to craft solutions that work for everyone. You’re trying to be proactive but get the best outcome for your own side of the discussions. It’s also important to be fair and respectful, because that’s the tone you want to set for your relationship.

4. Risk Management

Another key project management area that is useful in the contracting environment.

A contract manager – or a project manager fulfilling the role of a contract manager – should be looking for the risks in the relationships.

These could be:

• New vendors whom you haven’t worked with before – there’s a risk they won’t be very good
• Vendors who are struggling financially – there’s a risk they might tip over into insolvency or financial difficulties
• Risks related to specific areas of the contract, such as contract terms about liability or indemnity
• Risks related to specific deliverables from the contract, that you have asked the vendor to track and manage or mitigate on your behalf

And I’m sure you can think of others. The point is to make sure that contract and vendor risks are managed in the same way as your other areas of project risk.

5. Conflict Resolution

When negotiation and risk management don’t go to plan, you could find yourself in a conflict situation. Being able to successful deal with that is another important skill for contract managers.

You’re looking for an outcome that supports the relationship, assuming that it is worth saving. Conflict resolution includes a range of different options from sitting down and talking together through to the more formally defined options like alternative dispute resolution or ending up in court for litigation. Which, for the avoidance of doubt, I would suggest you strongly avoid!

Ideally, you should be sorting out any conflicts in an agreeable and professional way. As well as being generally nicer to do it that way, you will save your company a lot of money in legal costs.

Whether you have a contract manager doing the contract discussions for you, or you are being your own procurement expert, these are the skills that will help you get the best out of the contract.

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When decision making falls on your shoulders, you need to be able to step up and make the decision quickly! Here are 5 tips for making better decisions.

You can read more about some of the ideas on this infographic in this article.

Hello again, and welcome to another column in what has now become a regular-ish feature: What’s New In the PMBOK Guide®-- Sixth Edition. Last month I took my first look at Project Resource Management (read Part 1 here). Now it’s the turn of the second process in this knowledge area: Estimate Activity Resources.

Does this process name seem familiar?

If it does, it’s probably because you would have come across this topic previously in the Time Management knowledge area. In the new updated Guide, Estimate Activity Resources has been moved to Project Resource Management.

Estimate Activity Resources Process

This is the first process in the Knowledge Area. We’re still in the Planning process group.

This process is where you work out what resources you need to deliver the tasks you have to get done.

Inputs

There are two new inputs, which are:

Project Charter: Project management plan. That makes sense, doesn’t it? The project management plan contains the sub-plans that can be helpful for working out how long activities are going to take. The resource management plan and the scope baseline in particular will give you information for your task estimating.

Project documents: The vaguest of inputs is now used in this process as well. It covers a range of possible documentation including:

• The activity list (because otherwise you wouldn’t know what you were trying to estimate for)
• Activity attributes
• The assumptions log – there might be things in here relating to how tasks need to be carried out
• Cost estimates
• Resource calendars, although I’m not 100% clear why. At this point you are only estimating how much time an activity will take, not allocating a person to it. Tell me if I have got that wrong. As the next process is to acquire the team, I’m not sure that you’ll get a lot of useful information out of resource calendars as you don’t know who is on the team yet. Anyway, for the people you already know will be allocated to this project, including yourself, there could be some value in looking at resource calendars at this point.
• The risk register – there might be some risks relating to resourcing or the approach to tasks that will help you establish how long the work will take.

Tools and Techniques

There are 7 tools and techniques for this process. Expert judgement and bottom-up estimating came from the old version of the process. These are the new tools and techniques:

Technique: Analogous estimating. Watch a quick video on what analogous estimating is.

Technique: Parametric estimating. Watch a quick video on parametric estimating.

Technique: Data analysis. This actually covers a range of techniques and different ways of doing data analysis including looking at the resource capability and skills of individuals, considering different option for tools such as whether the project would be best served with a manual or automated tools, and make or buy decisions. Here’s a video on the 5 steps for a make or buy analysis.

Tool: Project management information system. This was just known as the project management system in the last version.

Tool: Meetings. Are these a tool or a technique? I think they are a tool. When you are working out how much effort it takes to do a certain activity, you’re going to have a lot of meetings. This is time where you’ll talk about the level of effort involved, the quantity of materials or resources needed, and of course come up with the actual estimates themselves which is the whole point of this process.

Outputs

There are two new outputs, and they are the obvious ones.

Resource requirements are what you get when you work out how much effort an activity is going to take. These can be prepared in various forms like a list of dates a resource has to be available for, a person spec, a table of types of role and then % availability for a period of time, and so on.

This output was called Activity Resource Requirements in the previous version. I imagine it was changed to make it broader, as the whole focus on this area has now moved to more clearly encompass types of resources that are not people.

Second, we have basis of estimates. This is the background and the ‘workings’ that show how you got to your resource requirements. You may have a lot of detail here, like all the calculations for your detailed estimating, and methodologies. Or you may have basically just guessed like a lot of us do, drawing on your past experience.

In which case, you’ll be noting down assumptions and confidence levels, but there won’t be much in the way of calculations!

However you have arrived at your estimates, it will be good to consider the risks identified that influence the success or otherwise of the estimate. Stick these on your risk log so your resource risks can be tracked along with everything else.

That’s the end of this process. The Knowledge Area has 4 more processes to work through, so next time I’ll take a look at Acquire Resources.

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In this quick video I introduce three alternatives to prototyping. Prototypes on projects can be almost a mini-project by themselves. They are time consuming and can be expensive. There are alternatives if you are prepared to consider them.

If you’d like more information on the options in this video, or to find out more about pretotyping (which I decided not to include in the video but is another valid alternative) then check out this article: Alternatives to Prototyping.

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It’s time for another instalment of What’s New In the PMBOK Guide®-- Sixth Edition. Following on from my look at the Procurement Management knowledge area (Part 1, Part 2, Part 3), I’m now taking a look Project Resource Management.

I got so many comments and messages saying that you found it helpful to have a breakdown of the major changes in the new version that I thought I’d do another Knowledge Area. You know that in this column I try to focus on things related to project budgeting, financial management and accounting. Resource management is an area that has a huge impact on the overall cost of a project. If you can use your resources effectively, you can get the most out of them – and I don’t mean making people work overtime because their workloads are so heavy. I mean making sure that you don’t have resources sitting around waiting for work, and equipment in a warehouse taking up space for weeks before you actually need.

As before, I have to thank the authors of a free pdf including Asad Naveed, Varun Anand and others, for their comprehensive guide to what is new in the latest version. I have my own electronic version of the PMBOK Guide®-- Sixth Edition, and I’ve drawn on that too. However, I can recommend their 130-page guidance document as it is helpful for pointing out the headlines of where things are different.

Ready? Let’s dive into resource management and see how things in the project management world are different with this latest update.

We’re starting with the first process: Plan Resource Management

The headlines are:

• The name of this process has changed, as might be immediately apparent if you’ve memorised the process names. It’s no longer Plan Human Resource Management but Plan Resource Management.
• Other changes are much in line with what we’ve seen in other processes – making the process broader and relying more on professional judgement for exactly what needs to be included.
• There’s one very interesting new output – more on that in a moment.

Plan Resource Management Process

This is the first process in the Knowledge Area. We’re in the Planning process group (as if you couldn’t work that out!).

Inputs

There’s nothing major changed for the inputs to this process although Activity resource requirements has been dropped. I think this is to do with the fact the whole process seems to be more aligned to not simply dealing with people any longer. By dropping the ‘Human’ from the Knowledge Area name, you can use the same processes to deal with other types of resources. And you might not need activity resource estimates in the same way for those. Having said that, we’ll see more about activity resource estimates next time. Watch this space…

The two new inputs are:

Project Charter: No real surprise there as this should include any pre-approved financial resources (i.e. budget) and a list of key stakeholders who are likely to be your main (human) resources.

Project documents: Again, this vague input turns up here. Project documents could include your schedule, from which you can derive what is needed when, requirements documentation, which also helps you determine what skills and resources you need, the stakeholder register for your people planning and the risk register.

Tools and Techniques

Organisation charts and position descriptions are out. I quite liked having org charts to rely on, but I can see that they aren’t the most brilliant source of information about people. Especially as now so many teams are flatter or self-organising. I would still recommend having an org chart for your project team though.

Read next: How to create a project organisation chart

Networking is also out. That tells me that the whole process is losing the ‘human’ element and focusing more on being about generic resources, which may or may not include people.

That’s evident in what has been brought in as well.

Data representation is the new technique. It’s a nice vague term but it includes things like:

• Hierarchical charts – all the breakdown structures (work breakdown, organisational breakdown, resource breakdown)
• Matrices – RACI would be a good one to include in here because it relates to what people are doing on the project and ties in neatly with resource planning and management.
• Pretty much anything else you want to include. Even writing things down in long blocks of text is a representation of data (not a very interesting one, but it could be interpreted that way).

Outputs

So what is that output I thought was so interesting?

It’s a Team Charter.

Team Charters are the kind of thing you do as an icebreaker exercise with a new project team. They talk about the values for the team, ground rules, agreements and guidelines for how you are going to work together such as any standards for communication.

The PMBOK Guide®-- Sixth Edition says your Team Charter could also cover conflict resolution processes, meeting guidelines and decision making criteria. In other words, your Charter can become the guidebook for social interaction on the team.

The Human Resource Management Plan output has been renamed as Resource Management Plan, in line with the rest of the process.

Finally, project documents updates is a new output. We’ve seen this in other processes too. Depending on what you update, the project document updates we are talking about cold include the assumption log and risk register, but could in reality be any number of documents that get an update once you have done your resource planning.

That’s the end of this process. The Knowledge Area has a whopping 6 processes, so next time I’ll take a look at Estimate Activity Resources. Doesn’t sound familiar? It’s new to Project Resource Management. See you next time!