The Money Files

I know that project cost is an issue for most businesses. Here are some ways that you might be unwittingly making your project cost more than necessary.

1. Excess Inventory

Inventory is the equipment or stock that you use on your project. If you are building a hotel, your inventory will include bathroom tiles, carpets, bricks, pipes and so on. Having too much capital tied up in stock is a problem for any business, and can give you a problem on your project with cash flow.

Equally, you have to have somewhere to put it all, and you don’t want to be paying for warehouse space unless you really need it.

Here’s a bonus tip on this point: Holding too little stock is also a problem because you’ll have to buy at short notice if ever you need some extra. Buying at short notice is generally more expensive, because you’ll have to add priority shipping or expedited processing. It’s better to give yourself some time to plan your purchases so that you can avoid those costs.

2. Wasting Resources

This is similar, but wasting resources is more about using equipment that isn’t the right size for your business. Think: buying a server that’s too big for your business needs, or scaling up to the super-advanced mobile phone options for all staff when really the basic model would do.

All that does is add extra cost and you won’t get the benefit. It’s different if you think you will use all that extra capacity or those extra features in the next few months, but make sure you are confident in your timings or you’ve built something that you won’t be benefiting from.

3. Excess Process

Too much admin! This costs money in terms of time, and human resource effort to process it (that you pay for in salaries for your project team). Plus there’s the cost of maintaining admin processes, printing pages for sign off or whatever your process is (you don’t still print paper copies for sign off, do you?).

You might not have any specific project-related processes that you can trim, but you can certainly talk to your Project Management Office team and make sure that they are aware of your frustrations with any processes that are a little bit too unwieldly for their own good.

4. Cost of Waiting

I hate waiting.

If you schedule a task to finish and then the deliverable isn’t ready, the person next in the queue to do their work has nothing to work on.

OK, in reality they aren’t going to be sitting around and doing nothing, but they won’t be working on your tasks as scheduled because your project isn’t ready.

So you’ve wasted a resource day – maybe even one that you had to pay for in advance if they are a contractor or other third party.

Try to plan handoffs carefully so you don’t end up with problems like this.

5. Staff Turnover

Onboarding staff is something I have talked about before on this blog. It costs money to bring people on tot the project – hiring costs, admin costs, upskilling and then the cost in lack of productivity as they work out how to get on in the team and find their feet with their new role.

You might not be able to do much to influence the choice of someone who has been headhunted to a much more lucrative job elsewhere, but you can do your best to lead authentically and make the workplace as fun as it can be so that you don’t encourage your project team to go looking for other work.

Do you routinely look for these 5 ways that you might be adding cost to your project? I don’t think most people do, and it might be outside your responsibility to truly control these costs, but being aware of them is the first step to thinking like a business owner and showing your management team that you understand the business context enough to be asking the right questions.

If you prefer videos to reading lists like this, pop over to here to watch a video about this topic. https://www.projectmanagement.com/blog-post/24616/5-Costs-That-Could-Cost-Your-Project--Video-

How do you track the KPIs for your project? If it’s a short project with only a handful of metrics, maybe you don’t.

But for larger projects, or those with many moving parts, it’s handy to be able to monitor progress against a selection of measures that you have agreed with your sponsor or PMO.

While many project management tools offer dashboards built in, these can only track the measures that are included in the system. So if you want your project scorecard to be part of your wider project dashboard, then you’ll need to find a way to get that data in somehow.

Bear that in mind as you work out what to include in your scorecard.

Here’s how to get a project scorecard set up for your project.

Step 1: Define what to track

A scorecard should include a number of metrics for your project, but only those that are going to be relevant for the whole project lifecycle. Otherwise for large chunks of your project you’ll be reporting 0%.

Equally, make sure you can get the data. If you can’t actually access end user customer satisfaction scores month on month, then there’s no point including it as a measure. If it’s genuinely important, you’ll have to find a way to get access to the data – your sponsor is the person to tap for information here.

So what can you use? Here are some generic scorecard metrics which will work for most projects:

• Internal and external audit results
• Achievement against quality targets
• Benefits (only if these are going to be realised incrementally, otherwise your scorecard is going to be blank for a lot of your project)
• Achievements against milestones
• Customer (internal and external) satisfaction
• Staff/team satisfaction
• Measures relating to earned value calculations
• Budget figures such as running costs, estimate at completion
• Resource allocation or staffing levels against target

You can probably see how these could fit into nice groups: quality, project team, project costs/benefits, project delivery. It helps to group your measures because then you can compare progress in rolled up categories month on month.

Whatever you choose, remember that your project stakeholders will probably ask for 25% more information to be added at some point and that you have to keep this up to date. Automate as much as possible!

Step 2: Set targets

It’s fine to have your measures defined, but what does good look like? A quality result of 80% might be good or bad, depending on whether you’re building an aeroplane or something that’s going to be thrown away in a few months and is a quick and dirty solution to a small problem.

Work with your sponsor and team to work out what acceptable targets are for each of the measures and then establish how these are going to be incorporated into your scorecard.

For an online project dashboard, you might have this set up already. If you are using a spreadsheet, Red, Amber/Yellow, Green makes a handy and commonly-used (so easy to understand) distinction between what’s on target and what’s not.

Make a note somewhere of how you are calculating the metric. This has caught me out before. Last month’s score was 35% but I had no idea what went in to make up that number so I couldn’t easily replicate it. It took a little while of fiddling with last month’s figures to work out how I had arrived at 35%!

Save yourself some time and write it down.

Step 3: Populate the measures

Yep, now it’s time to do the work.

Run the formulae, pull the data, populate the tables. Get your information into the scorecard.

Now sense-check it to ensure it’s not wildly off before anyone else sees it.

Step 4: Communicate the results

You’ve got something to share, so it’s time to share it.

Be prepared for your sponsor to want to tweak how things appear, maybe changing the targets or how they are reported. This is normal… and will probably happen a lot!

Work with your senior team and executives until you have a version that works for you all.

Step 5: Watch for trends

Build in a way to archive old results or present a ‘last month/this month’ view so that you can track trends. That’s the disadvantage of ‘real-time’ project dashboards in project management tools: you often don’t get the ability to capture what the report looked like last month to give you that comparison, which is so important with KPIs. Ideally, everything should be tracking upwards.

Finally, remember that the data is there to inform what you do in your job and the decisions you make. It’s interesting, but really it’s most helpful to prompt action. So your quality scores are low? What are you going to do about it? Plan some time each month to dig into your data and plan out how best to respond as a team.

Craig Kilford (pictured below), the brains behind CourseConductor.com, published an infographic recently that shows how social project management training companies are.

The research team (I’m guessing Craig didn’t visit 1793 websites by himself) found that Facebook is far and away the place that most training companies do their customer outreach.

This is interesting for me as I’ve done my own mini survey in the last few weeks asking if people would use Facebook as a tool to support them during a training course, and the answer has been a resounding ‘meh’. People don’t seem bothered about using Facebook groups as a training support aid – some do, some don’t and a few people responded to me saying they’d rather use LinkedIn.

LinkedIn does garner some 2.6m followers in the project management training space, so it isn’t an insignificant platform.

The CourseConductor survey highlights some other interesting facts too.

• There are more people in the USA following training providers on social media than anywhere else.
• 44% of training providers don’t use social media as a tool to engage customers or potential customers (why on earth not? This was a massive question raised to me when I read the results. It’s not like it’s hard or anything…).
• There’s hardly anyone on G+ in Peru.
• France, Italy, Switzerland and the Netherlands all have communities that engage more on LinkedIn than Facebook or other platforms.

Image snapped from the main infographic available here. I had trouble viewing it on Slideshare but you can click download and the PDF version works perfectly.

Craig’s LinkedIn article also points out that in a world where bite-sized learning is on the rise, video is a hugely under-utilised resource. Only 20% of training providers have a presence on YouTube and generally people aren’t following YouTube channels for training providers.

I’m not massively surprised by that: in many workplaces social media sites like YouTube are blocked, so if you want to watch videos for training, you’d be doing that outside of work when we’ve all got better things to do!

Also, it’s hard work to come up with video content. A training company can’t get away with a poorly shot video. The branding work and set up that goes into video production is much more significant than managing a Facebook page.

Finally, in my experience video is being cross-posted to Facebook anyway. I don’t need to follow a YouTube channel because I will see the video naturally in the other ways I choose to follow a company.

These are just my thoughts on the research results. Let’s think about what it means for project managers.

Does It Matter To Project Managers?

I think the way training companies reach out to potential customers does matter to us as project managers. It helps shape our perception of their company. It helps us test their wares and develop a view of their teaching style.

I also think it’s interesting that Facebook is the tool of choice – perhaps this shows that training companies are angling their courses more at entry-level and junior project management personnel. At the risk of stereotyping: the Millennials in your team are likely to be very confident using Facebook and any good marketer wants to be where their target audience is hanging out.

Social media does matter to project managers because it’s more and more the way we review courses, share views about courses, comment on learning experiences and tell our friends and colleagues about what we have been up to. That includes the good, the bad and the ugly about our project management training. Even I did a course review on video for my APMP prep course last year (which you can watch here).

I’m sure that whether or not the company has a good Facebook page or an active Twitter feed isn’t the only consideration you pay attention to when choosing where to invest money in staff training. However, it might start to change your investment decisions over the next few years.

What do you think?

Here are 5 quick tips to help you with project estimating.

For a more in-depth look at some of these points, check out this article on project estimating.

A recent survey by GetApp, an online research company, sheds a bit of light on what’s really going on with project management software tools – which regular readers will know is a topic close to my heart.

I found the results interesting and here I’ve picked out a few to comment on. Starting with…

More than half of respondents (57 percent) work at organisations with annual budgets of $2k or more for project management software.

12 percent of respondents said their company had $25k or more to spend on software annually. My thoughts here are that the survey doesn’t correlate this to company size. You’d imagine that the cost of cloud software goes up with the number of users, so knowing the budget without knowing what they get for it in terms of project management population signed up isn’t very helpful.

However, this next point is interesting…

91 percent of project managers are willing to spend more for project management software that includes the missing features they need.

I’ve looked at a lot of tools and I have to say that there are similarities between what project management software does. After all, there are only so many ways to record tasks and mark them as complete. What extra bells and whistles you get for dashboards, resource management and so on are all good, but a Gantt chart is a Gantt chart at the end of the day.

So paying more for software that differentiates itself by having something “extra” – well, for many companies I think that is a hard sell.

However, this survey looks like customers will pay for what’s missing. The things they report as missing from the products they are using currently are:

• Task management
• Collaboration
• Budget management
• Integrations
• Idea management
• Chat tool
• And some others

No individual feature was reported missing by more than 12 percent of people, so there wasn’t a clear winner – if that’s the right term – for what is lacking in PM software. Rather, it’s a broad range of features that might not be in the tool you happen to be using.

The researchers draw an interesting conclusion from this, and I tend to agree: software hasn’t caught up with what project managers are actually expected to do these days.

It has been a while since the formal project manager was handed a fully-specified requirements document, and spent their days doing project scheduling, monitoring and control. Today we’re expected to handle a wide range of tasks from budgets to change management and everything in between.

And we need the tools that can deliver.

The amount people are prepared to spend on getting the features that matter to them is set out in the chart below. Most people don’t want to go more than 15 percent more and nearly 10 percent wouldn’t pay any more even if they got the extra features.

The challenge for software vendors is that every PM seems to have a slightly different set of requirements for what they need, at least in my experience. Even within my own business we use multiple tools because it’s easier and there isn’t one integrated product that does everything.

I’m used to it now, so I don’t see it as a problem. In itself that’s a problem! You can’t improve or look for efficiencies if you aren’t open to the idea that there might be some somewhere.

I’m not alone in using more than one tool, as the next survey result shows.

Almost three quarters (74 percent) of project managers surveyed use between two and five total tools for project management.

5 percent of survey respondents say they use over 10! I can’t imagine what they would be unless they have included software like Microsoft Word and email in their list. Perhaps they work with clients who use different products and as freelancers or contractors have to use multiple tools by default as every client has their own in-house specification.

Conclusions

This study seems to show that the situation for project managers today is that they don’t seem to be happy with the tools that are out there. With over 90 percent saying they’d pay for missing features and struggling along using multiple tools there sounds like plenty of demand for project management software vendors to step up.

However, I think that’s a sweeping conclusion to come to from this set of data points. I agree with the researchers that unless project managers have the right tools that help them do the job they are paid to do, we risk project failure (or at least not 100 percent success). But in my experience people are happy to talk about the things that aren’t going so great – and without access to the questions it’s hard to see if they were asked if there was nothing they felt was missing.

I’m naturally sceptical about surveys and I do think the data here is interesting. What do you think?

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The survey was conducted with around 200 project managers in the US who use project management software for their day jobs. They came from a wide spread of industries but with a focus on IT and 49 percent of them had the job title Project Manager, with the others being slightly more junior or senior but still in PM-related roles. You can read the whole survey and see all the results here.