Michael MoffettContracting Officer| Department of Veteran AffairsNampa, Id, United States
After developing an estimate to complete a project, I was questioned as to why about 15% of the cost and labor went towards project management vs. the cost and effort associated with project execution. I know it will very from industry to industry and complexity, but is there some basic guiding thought on what may be a rough guideline or some way to help folks to understand the need for that much project management time? Saving Changes...
Product Operations Program ManagerBarcelona, Cataluña, Spain
Interesting thread. If we take 15% as a rule of thumb, does that mean that a PM can handle up to 6 projects at the same time, and use the remainder 10% as overhead?
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1 reply by Keith Novak
Apr 22, 2019 12:51 PM
Keith Novak
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It's just a proportion, so the PM can theoretically work any number of projects. I've managed over a dozen at once where most turned into repeats of completed projects, didn't require much work, and so my own involvement was minimal.
20% is a generally accepted standard for overhead. If you have people assigned full time, expect that 80% of their time is charged to the project. The other 20% is general administrative such as training, performance reviews, routine emails, office birthday parties, 5S, etc. There are ways to "game" the numbers such as charging overhead to the projects, but the reality is that distractions exist in the workplace.
Saving Changes...
Michael DelaneyPartner| Delaney Management LLCWest Chester, Pa, United States
I've typically used 15% as well and agree when you show the PM activities of the PM and team the estimate can be more easily justified Saving Changes...
Interesting thread. If we take 15% as a rule of thumb, does that mean that a PM can handle up to 6 projects at the same time, and use the remainder 10% as overhead?
It's just a proportion, so the PM can theoretically work any number of projects. I've managed over a dozen at once where most turned into repeats of completed projects, didn't require much work, and so my own involvement was minimal.
20% is a generally accepted standard for overhead. If you have people assigned full time, expect that 80% of their time is charged to the project. The other 20% is general administrative such as training, performance reviews, routine emails, office birthday parties, 5S, etc. There are ways to "game" the numbers such as charging overhead to the projects, but the reality is that distractions exist in the workplace. Saving Changes...
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