Project Management Costs

Scott Rosa Norwood, Ma, United States

Is there a general guideline on the amount of time needed to be spent by a project manager on a project. I assume it is some mix of project hours and complexity. Is there a recognized esimtated standard someone could point me to.

Thanks,

Scott

Posted: Nov 8, 2004 11:12 AM

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David Kester PMP Bothell, Wa, United States

Scott,

In general is a tough order. It depends on the work being performed, the management style needed for the team and how much technical or industry experience you personally bring to a project. In the software and hardware development projects I've managed, I've found a safe number is 15% of the "work." If you are spending less than that on project management activities projects tend to get in trouble. For better organized and process driven teams this number goes down. If you find yourself spending more than 15% of the "work" time running the project and things are still out of control or having problems than I assert you have a project in trouble.

"work" time is the effort spent non management activities.

Posted: Nov 9, 2004 11:15 PM

Scott Rosa Norwood, Ma, United States

Thanks for the reply. I have seen several threads on the %, most which put it between 10 and 30%. I can understand the project size dependency because both large and small projects require the same core project management. One question, when people talk %, are they adding in the project management costs to the total and then dividing. (ie. (PM work = 10K + development work = 90K) /10k) = 10%)

Posted: Nov 10, 2004 10:23 AM

David Kester PMP Bothell, Wa, United States

Scott,

When I talk % I'm talking only of the non-project management work.

PM Work = Development Work * .15

Dave

Posted: Nov 16, 2004 9:59 AM

Anand Kumar Bangalore, India

Generally all the project cost are driven by effort; the general rule in industry today is to have 10% to 30% effort for project management. As David mentioned this could depends on the type/complexity of the project. In our current project, we have considered 10% of overall project effort.

Posted: Aug 7, 2006 5:29 AM

Alexandr Bratchik Moscow, Russian Federation

15% doesn't work sometimes because of Parkinson's effect "work tends to expand to fill all the available volume". If you assign PM on a project, the PM cost (in-man-days) typically cannot be less than the project duration.

I would recommend to calculate PM cost (or management overhead, to be more accurate) using formula:

Number of mgmt resources (PM, TM, AM) * Project Duration + Development Cost * 15%

Posted: Aug 18, 2006 5:56 PM

sunshine bernabe Singapore, Singapore

Very interesting topic. I am currently working on 3 simultaneous projects in Japan. Well, we're package solution provider hence our PMs or any staff should be 100% billable, but during estimation of project cost, we bill the PM only as 80%. And our company still runs out of $ or man-days!

Posted: Aug 24, 2006 12:14 AM

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