The PMBOK identifies several process areas, all of which make up the job of the project manager. Two recent areas of current discussion within our organization are those of Time Management and Cost Management. In order to manage time and cost, it would seem obvious to many that you need to establish a baseline for these (or budget if you prefer), and then be able to record and contrast what actually happens in order to compare and control. There is a camp within our organization that feels that collecting and tracking actual hours/costs is an administrative burden on the project manager that takes away from the time required to manage the project. The other camp states that without this information, managing the project is not possible. I’d like to find out if other organizations have had to deal with such a debate, and how it was resolved. I’m obviously too close to the issue, and know that this discussion board is more than willing to provide opinions that I had not yet considered. Thoughts?
I'm with the first camp. Unless required by the project contract or charter, tracking details of hours/dollars spent in the past is far less useful to "manage the project" than staying on top of what is left to be done in the future. Performance against expectations, within tasks, is, IMHO, better left to resource managers.
The only exception might be those tasks that have drastic deviations from expectations -- deviations beyond anticipated variation, which should be identified in a range estimation process during planning. These are a major source of "lessons learned" and future process improvements.
Project cost (closely tied to hours spent in white collar projects) is far much more of an outcome than something that can be managed, hence my preference for managing behaviors, and focusing on the speed of the project to move through the schedule to the final ring of the cash register. After all, if the project is worth doing, the value at the end should probably far outweigh the costs incurred getting there.
Saving Changes...
Michael WoodProject Manager / Business Analyst / Business Process Improvement Guru| Independent ContractorGig Harbor, Wa, United States
I am with Frank on this one. During the Post Mortem costs and performance can be analyzed and improvements to the management process identified for future projects. Saving Changes...
Frank WintersPhotographer and ConservationistSandwich, Ma, United States
The debate regarding the collection of metrics during project execution can take on a couple of flavors. One flavor is who should do it and how should it be done; the other flavor is should we do it at all. I've been in organizations that dealt with both flavors and in all cases the decision was to collect the data. In some cases the PM was required to do it and this did reduce his/her effectiveness as a true PM reducing the PM to an administrator, more or less. The solution that I've seen that works best is to figure out how to track the information and provide it to the PM periodically (at least as frequently as monthly and in some cases weekly) rather than expecting the PM to collect the data. I've seen this done by an assistant PM or by a financial administrator or by an automated system. As the methods used to manage projects get more rigorous the need for information goes up. Without timely metrics information the application of many rigorous methods is impossible. A good example of this is earned value coupled with rigorous estimation and planning techniques. Unless the data is collected as the project is being executed reporting on earned value is not possible. Saving Changes...
I'm with Frank on this issue too. PMs rarely have control over costs other than head count, so why bother. I prefer to use a set of metrics that I feel are appropriate for the project than get bogged down in analyzing costs. Checkout page 4 of my Acrobat attachment for some basic metrics a PM can track. Saving Changes...
Frank WintersPhotographer and ConservationistSandwich, Ma, United States
I agree that very often PM's don't control all the elements of cost. However, they usually (and should) control time. They also control work package and deliverable component design or at least are responsible for staying on top of them. One of the principles of the earned value approach is that when a work package or deliverable is complete (100% complete and signed off) the team gets credit for the hours/effort in the original estimate -- these are the "earned hours" -- and a great way to keep track of what is actually being done avoiding estimates of percent complete which is one of the slippriest of slopes in all of project management land. Note that it is not necessary to know the cost associated with the hours using this approach. While hours alone will not give you the complete cost picture of the effort to date it can be used to show a very useful picture of status -- actual progress versus planned -- one of the primary intentions of earned value in the first place, methinks. Saving Changes...
Dr Mike O'CallaghanCoach & Project Manager| Relevant InternationalCape Town, South Africa
This has been a really interesting thus far. A project has three constraints: scope, time and budget. Changing one of these constraints will affect the others. How can we know what this affect might be if we don't measure them?
Consider a company that undertakes project work for a client. A large chunk of the cost to the client is for resource time. The resource time required is estimated by the company and this forms part of the quote to the client. The resource time must be billed against the estimation so as to ensure that the project remains within budget, otherwise the company will go bankrupt. The more effective this time-and-billings procedure, the more accurate will be the time estimations for future projects. In most organisations of which I have experience, time-and-billings is done by the resources. It might be managed by the PM or an administrative assistant. It is often done via a centralised system (e.g. MSP Central) which often interfaces directly with the company's accounting/invoicing system.
I also have some experience in large corporates where neither time nor budget are logged/billed. Under these conditions, the only constraints are scope and delivery time. The major problem with this approach is the lack of consequence management. If resource time is not recorded, there is no way that delivery time can be controlled. It is also difficult to estimate time requirements up front. Most projects will have time extensions. The PM can only control the deliverables, not the delivery thereof. And there is no clue about the actual cost of the project.
Any of the project constraints might be seen as a summarising vector. Remove one of these vectors, not only do the other constraints vary, but many aspects of project management are no longer possible. For example, why should an operational manager accept the outcomes of a project if I cannot convince him of the cost of not doing so?
So, if the success of a project is defined in terms of budget and time, these have to be measured. How this is done is negotiable and variable. If budget and time are not measured, success of the project is only measured in terms of scope. This translates to client satisfaction. This is OK, but will you ever close a project? Saving Changes...
At the start of a project we estimate time and cost. Within this there is uncertainty. As you get further into a project, the uncertainty against these estimates should be reduced.
On of the factors to reducing the uncertainty is to look back over what has has already happened and compare planned and acutals in attempt to learn from the past. Saving Changes...
Frank WintersPhotographer and ConservationistSandwich, Ma, United States
Mark raises an interesting point. The variables of project management change continuously throughout the project. Therefore project managers need to have a way to measure the change continuously. This is the purpose of metrics. While there is an administrative aspect to the use of metrics there is also a strategic aspect. The key to the successful use of metrics is to not get caught up in the admin part, so that the meaning of the metrics can be understood. It's the old forest and trees story. I've found that the only way to do this as a PM is to delegate the metrics gathering and compiling activities. Saving Changes...
Mark, it is always a good idea to recalibrate the project after each phase, a proactive project manager recalibrates his or her project HOURLY...issues, risks, and ship date. Saving Changes...
Anonymous
As always.. a tremendous diversity of opinions!. Thanks!. Here's another perspective to throw on the fire. I've been told that using estimates to build a plan, and then tracking actuals against the plan is "OLD SCHOOL". The new school of thought, especially for the newer, iterative, rapid development methods is the "just do it" approach. It sounds to me like the new school is where we were before the old school. Perhaps pre-school? Saving Changes...
