Joy IyerBusiness Leader in the Hydrocarbons Sector, Engineering Manager, Project Manager| Paton Engineers and ConstructorsMississauga, Ontario, Canada
Recently I encountered a situation where a Customer strongly suggested not assigning a PM to our project (in order to drive down costs), and instead assigning PM related tasks to the Technical Lead.
While I have a great deal of respect for the capabilities of our technical resources, I've generally observed that Technical Specialists are very good at focusing on technical specifications and tend to overlook budget and schedule variance.
In the present instance we managed to go down the path suggested by maintaining that the team composition is not solely decided by Customers and our company business controls have certain minimum requirements, one of which requires a PM to be assigned.
I am wondering if there are others in the community who have faced a similar situation? What are the arguments made in favor of not having a dedicated PM? How have you managed to avoid going down this rabbit hole?
Love to hear what others have to share... Saving Changes...
If you deliver a fixed priced project having a good PM is vital, but not to help the customer but instead to help you make a profit. Also in a fixed priced project you would try to do everything you can to reduce the number of the team members so you can reduce your costs and make more money.
On a Time and Material contract where your staff is paid on a daily rate you would do everything to put more people on the project in order to get more money even if they are not needed. Consultancies are good on inventing all sort of roles so that the customers pay more. On a project I have seen a program manager a project manager, a project management officer, a project coordinator and a project planner. I know for sure that most of these roles were not really needed.
Some customers however are smart and realize when they are extorted and reject some roles. Other times the customer may simply have not enough budget and they may get rid of some of the roles and PMs are more exposed to this then the technical experts. You can complete a project without the PM but you can't without the technical staff.
My recommendation is to propose to the customer a very low rate for the PM or agree to charge only one maximum two days per week. Maybe this would work.
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2 replies by David Portas and Peter Rapin
Feb 28, 2020 7:46 PM
Peter Rapin
...
With all due respect I cannot accept the statement provided in your second paragraph. Consultants do not as a rule gouge their clients - that's a good way of avoiding further assignments. Most consultant's have to keep clients and attract new clients. Dishonesty is not a preferred marketing model. I am not saying it never happens and when it does the client most likely contributes to the problem by micro-managing, poor monitoring, undefined scope and failure to enforce the contract. Good project management protects all parties with the effective delivery of the project regardless of the procurement model.
Feb 29, 2020 3:31 AM
David Portas
...
Hi Adrian,
I tend to agree with Peter that most consultancies in my experience will not try to "game" projects in that way because it doesn't usually make commercial sense to do so. Right-sizing the team (neither too large nor too small) is important for maximising productivity but adding more people to the team on a T&M project won't necessarily increase the person/days billed to the client. Having a team too large so that productivity suffers *will* increase client costs but doesn't necessarily improve profitability (assuming there is an opportunity cost to the consulting firm also).
There are of course fixed priced projects delivered successfully without a PM. It seems that many customers do value a PO/agile team dynamic as a way of managing delivery risk and maximising the chances of delivering on target.
Saving Changes...
Peter RapinSubject Matter Expect; Project Delivery| Independent ConsultantOntario, Canada
Feb 28, 2020 4:50 PM
Replying to Adrian Carlogea
...
If you deliver a fixed priced project having a good PM is vital, but not to help the customer but instead to help you make a profit. Also in a fixed priced project you would try to do everything you can to reduce the number of the team members so you can reduce your costs and make more money.
On a Time and Material contract where your staff is paid on a daily rate you would do everything to put more people on the project in order to get more money even if they are not needed. Consultancies are good on inventing all sort of roles so that the customers pay more. On a project I have seen a program manager a project manager, a project management officer, a project coordinator and a project planner. I know for sure that most of these roles were not really needed.
Some customers however are smart and realize when they are extorted and reject some roles. Other times the customer may simply have not enough budget and they may get rid of some of the roles and PMs are more exposed to this then the technical experts. You can complete a project without the PM but you can't without the technical staff.
My recommendation is to propose to the customer a very low rate for the PM or agree to charge only one maximum two days per week. Maybe this would work.
With all due respect I cannot accept the statement provided in your second paragraph. Consultants do not as a rule gouge their clients - that's a good way of avoiding further assignments. Most consultant's have to keep clients and attract new clients. Dishonesty is not a preferred marketing model. I am not saying it never happens and when it does the client most likely contributes to the problem by micro-managing, poor monitoring, undefined scope and failure to enforce the contract. Good project management protects all parties with the effective delivery of the project regardless of the procurement model.
...
1 reply by Adrian Carlogea
Feb 29, 2020 7:20 AM
Adrian Carlogea
...
On the Time and Material projects that I have seen there were always a lot of Project Management roles. On one project I saw both a program manager and a project manager despite the fact that the "program" only had a single project. Then I can always see project coordinators, project planers and project management officers on this kind of projects.
On the fixed price projects that I have seen there was always a single PM often working on several projects at a time with no PMOs, planners and coordinators. I find it hard to believe that this is just coincidence.
I am not saying the consultancies don't want to provide a good service to their customers but I think they design their delivery frameworks accordingly to the type of the project that they are delivering.
This is business we are talking about and companies would try to exploit every opportunity they have to make money. The key aspect here is to be able to convince the customer that the large number of roles and people is needed for a successful project even if you know that you can do the same job with less resources. If the project is a success then the customer would be happy and would not try to figure out if all those people were really needed.
As a business you must balance between the best service you can offer to your customers with the need to make profit. If you focus too much on the customer needs you may not be making too much money, if you focus too much on profit you may loose customers and in some cases, such as the Boeing 737 Max, you could cause fatalities.
If you deliver a fixed priced project having a good PM is vital, but not to help the customer but instead to help you make a profit. Also in a fixed priced project you would try to do everything you can to reduce the number of the team members so you can reduce your costs and make more money.
On a Time and Material contract where your staff is paid on a daily rate you would do everything to put more people on the project in order to get more money even if they are not needed. Consultancies are good on inventing all sort of roles so that the customers pay more. On a project I have seen a program manager a project manager, a project management officer, a project coordinator and a project planner. I know for sure that most of these roles were not really needed.
Some customers however are smart and realize when they are extorted and reject some roles. Other times the customer may simply have not enough budget and they may get rid of some of the roles and PMs are more exposed to this then the technical experts. You can complete a project without the PM but you can't without the technical staff.
My recommendation is to propose to the customer a very low rate for the PM or agree to charge only one maximum two days per week. Maybe this would work.
Hi Adrian,
I tend to agree with Peter that most consultancies in my experience will not try to "game" projects in that way because it doesn't usually make commercial sense to do so. Right-sizing the team (neither too large nor too small) is important for maximising productivity but adding more people to the team on a T&M project won't necessarily increase the person/days billed to the client. Having a team too large so that productivity suffers *will* increase client costs but doesn't necessarily improve profitability (assuming there is an opportunity cost to the consulting firm also).
There are of course fixed priced projects delivered successfully without a PM. It seems that many customers do value a PO/agile team dynamic as a way of managing delivery risk and maximising the chances of delivering on target.
...
1 reply by Adrian Carlogea
Mar 02, 2020 5:53 PM
Adrian Carlogea
...
Hi David,
The fixed priced projects that I have seen not having a good PM endied up in financial disasters. In one of the projects the team did a very good job on delivering what the customer had asked but the projected ended up in being a major loss for the company.
In my opinion the primary role of a PM in fixed price project is not to manage the team members or to offer the best service to the customer but to deliver good value to the client while also ensuring the company makes money.
In my opinion you can have a super team that delivers super value to the customer, but in order to make a profit you must have a good PM. :)
With all due respect I cannot accept the statement provided in your second paragraph. Consultants do not as a rule gouge their clients - that's a good way of avoiding further assignments. Most consultant's have to keep clients and attract new clients. Dishonesty is not a preferred marketing model. I am not saying it never happens and when it does the client most likely contributes to the problem by micro-managing, poor monitoring, undefined scope and failure to enforce the contract. Good project management protects all parties with the effective delivery of the project regardless of the procurement model.
On the Time and Material projects that I have seen there were always a lot of Project Management roles. On one project I saw both a program manager and a project manager despite the fact that the "program" only had a single project. Then I can always see project coordinators, project planers and project management officers on this kind of projects.
On the fixed price projects that I have seen there was always a single PM often working on several projects at a time with no PMOs, planners and coordinators. I find it hard to believe that this is just coincidence.
I am not saying the consultancies don't want to provide a good service to their customers but I think they design their delivery frameworks accordingly to the type of the project that they are delivering.
This is business we are talking about and companies would try to exploit every opportunity they have to make money. The key aspect here is to be able to convince the customer that the large number of roles and people is needed for a successful project even if you know that you can do the same job with less resources. If the project is a success then the customer would be happy and would not try to figure out if all those people were really needed.
As a business you must balance between the best service you can offer to your customers with the need to make profit. If you focus too much on the customer needs you may not be making too much money, if you focus too much on profit you may loose customers and in some cases, such as the Boeing 737 Max, you could cause fatalities.
...
1 reply by Peter Rapin
Feb 29, 2020 9:25 AM
Peter Rapin
...
Keep in mind that lump sum assignments are typically simpler than T&M as the reason they can be fixed price is that the scope and constraints are well defined. The client knows what they want and can clearly specify the deliverable. In my experience clients are much more difficult to please on T&M assignments with an attitude that - "I'm paying for service and I want service as I define it". T&M requires more management to achieve the objectives which tend to move as the project advances.
Consultants need profit to pay the bills and meet immediate requirements but need repeat business to survive. There was an old saying - "focus on service and the financials will look after themselves". I recognize that the culture in the professional services industry has changed but the majority of service providers still recognize the value of a satisfied client.
Saving Changes...
Peter RapinSubject Matter Expect; Project Delivery| Independent ConsultantOntario, Canada
Feb 29, 2020 7:20 AM
Replying to Adrian Carlogea
...
On the Time and Material projects that I have seen there were always a lot of Project Management roles. On one project I saw both a program manager and a project manager despite the fact that the "program" only had a single project. Then I can always see project coordinators, project planers and project management officers on this kind of projects.
On the fixed price projects that I have seen there was always a single PM often working on several projects at a time with no PMOs, planners and coordinators. I find it hard to believe that this is just coincidence.
I am not saying the consultancies don't want to provide a good service to their customers but I think they design their delivery frameworks accordingly to the type of the project that they are delivering.
This is business we are talking about and companies would try to exploit every opportunity they have to make money. The key aspect here is to be able to convince the customer that the large number of roles and people is needed for a successful project even if you know that you can do the same job with less resources. If the project is a success then the customer would be happy and would not try to figure out if all those people were really needed.
As a business you must balance between the best service you can offer to your customers with the need to make profit. If you focus too much on the customer needs you may not be making too much money, if you focus too much on profit you may loose customers and in some cases, such as the Boeing 737 Max, you could cause fatalities.
Keep in mind that lump sum assignments are typically simpler than T&M as the reason they can be fixed price is that the scope and constraints are well defined. The client knows what they want and can clearly specify the deliverable. In my experience clients are much more difficult to please on T&M assignments with an attitude that - "I'm paying for service and I want service as I define it". T&M requires more management to achieve the objectives which tend to move as the project advances.
Consultants need profit to pay the bills and meet immediate requirements but need repeat business to survive. There was an old saying - "focus on service and the financials will look after themselves". I recognize that the culture in the professional services industry has changed but the majority of service providers still recognize the value of a satisfied client.
...
1 reply by Adrian Carlogea
Mar 02, 2020 6:02 PM
Adrian Carlogea
...
I am not saying that the T&M contracts are easier as you still have to bring value to the customer in order to stay in business but the incentive for bringing more people on the project is there. I don't think a business manager would ignore this.
As Joy has admitted the customer in this case does not want a PM for cost reasons which means that most likely the PM is on daily rate.
Saving Changes...
Deepesh RammoorthyICT Project Manager ( PMP®AgilePM®Certified ScrumMaster® (CSM®))| Australian Red Cross Blood ServiceTarneit, Vic, Australia
Feb 28, 2020 12:48 PM
Replying to Scott Theus
...
Kiron,
I agree with the ability of a well established Scrum team with a good PO to run a product life cycle independent of a PM.
One of the main issues I run into when setting up a new customer project is where, within the Scrum framework, does a PM fit? The Scrum Master leads and coordinates the team, the team controls the sprint backlog, and the PO maintains the product backlog. In Joy's case if he were to use Scrum to develop the customer's product then I would suggest that the Project Manager fits as part Project Coordinator (budgeting, scheduling, sourcing, etc.) and part Product Owner and liaison with the Business Partner or Customer for requirements. Meanwhile, a tech lead would serve as Scrum Master to ensure that the product backlog is sufficiently broken down into workable user stories that fit into the sprints.
That's how I would probably structure it to start and adjust as needed once the project kicks off. I'm looking forward to hearing your thoughts.
-Scott
" The Scrum Master leads and coordinates the team, the team controls the sprint backlog, and the PO maintains the product backlog. "
Correct so far .....
"In Joy's case if he were to use Scrum to develop the customer's product then I would suggest that the Project Manager fits as part Project Coordinator (budgeting, scheduling, sourcing, etc.) and part Product Owner and liaison with the Business Partner or Customer for requirements.
"
Agreed if the PM has experience with agile then they can be PM/PO . On many projects , the PM does not have a luxury of having a Project Coordinator to help with deliverable and I am sorry that Scheduling , budgeting and Sourcing require a far more advanced skill set than a Project coordinator brings to the tables. It does require PM skills , again if a Product Owner has those skills , then they can be the PM/PO
" Meanwhile, a tech lead would serve as Scrum Master to ensure that the product backlog is sufficiently broken down into workable user stories that fit into the sprints"
No No No ....this is the Product Owner function . Scrum Master is a facilitator , Servant leader , guides the team on ceremonies , removes impediments , keeps the flow going. If you are running an Agile project , you need a separate Scrum Master to the Product Owner. A Tech Lead cannot be a Scrum Master Saving Changes...
I think it depends on what methodology the project is using. If it's Scrum there's no role of a project manager and a tech lead can very well serve as a ScrumMaster with the right education and training.
I think it also depends on what the tech lead's workload is like - if they're doing full on development work, doing full on project management on top of it will let something fall to the wayside. Usually the PM stuff in my experience.
Even if the team is doing Scrum, that framework says it's still important to have a Product Owner which does a lot of PM tasks. There's many ways to successfully run a project but at the end of the day there has to be someone with the devoted time and skill to make sure everything gets done and liase with whatever stakeholders. Saving Changes...
I tend to agree with Peter that most consultancies in my experience will not try to "game" projects in that way because it doesn't usually make commercial sense to do so. Right-sizing the team (neither too large nor too small) is important for maximising productivity but adding more people to the team on a T&M project won't necessarily increase the person/days billed to the client. Having a team too large so that productivity suffers *will* increase client costs but doesn't necessarily improve profitability (assuming there is an opportunity cost to the consulting firm also).
There are of course fixed priced projects delivered successfully without a PM. It seems that many customers do value a PO/agile team dynamic as a way of managing delivery risk and maximising the chances of delivering on target.
Hi David,
The fixed priced projects that I have seen not having a good PM endied up in financial disasters. In one of the projects the team did a very good job on delivering what the customer had asked but the projected ended up in being a major loss for the company.
In my opinion the primary role of a PM in fixed price project is not to manage the team members or to offer the best service to the customer but to deliver good value to the client while also ensuring the company makes money.
In my opinion you can have a super team that delivers super value to the customer, but in order to make a profit you must have a good PM. :) Saving Changes...
Keep in mind that lump sum assignments are typically simpler than T&M as the reason they can be fixed price is that the scope and constraints are well defined. The client knows what they want and can clearly specify the deliverable. In my experience clients are much more difficult to please on T&M assignments with an attitude that - "I'm paying for service and I want service as I define it". T&M requires more management to achieve the objectives which tend to move as the project advances.
Consultants need profit to pay the bills and meet immediate requirements but need repeat business to survive. There was an old saying - "focus on service and the financials will look after themselves". I recognize that the culture in the professional services industry has changed but the majority of service providers still recognize the value of a satisfied client.
I am not saying that the T&M contracts are easier as you still have to bring value to the customer in order to stay in business but the incentive for bringing more people on the project is there. I don't think a business manager would ignore this.
As Joy has admitted the customer in this case does not want a PM for cost reasons which means that most likely the PM is on daily rate. Saving Changes...
In my experience, those owners/sponsors who are signing T&M contracts often don’t have their act together, requiring even more coordination, scope control and value engineering. Saving Changes...
