DQR Week 4
After posting your initial response to the prompt above, respond to at least two of your peers by critiquing their plans and offering additional strategies that have worked well for you in your personal or professional experience (e.g., you might describe a project with similar outcomes from a work experience, or a personal experience such as planning a vacation, renovating your home, or planning a party).
Lily Clancy
Hi Class,
No one ever said it would be easy to be a project manager. That is why it’s so important that project managers have a lot of experience and understanding of how to be a good manager. In this scenario, receiving no additional information but being asked to put together a cost estimate is a challenge, but not something that is rare for a project manager to come across. Once the cost estimate is complete for the new project, the project team discovers discrepancies in the cost. Every project is different so when I was putting together the cost estimate I would make sure to add a little bit of wiggle room for potential unknown issues that could occur.
The first step when trying to put together a cost estimate is to understand the full scope of the project. According to the Project Management Institute, “scope is the sum of the products, services, and results to be provided as the project” (Project Management Institute, 2021). When estimating a project all you can do is pull cost from previous projects and experiences to get a rough estimate of how much it will cost in the new project. A smart project manager will always give themselves a contingency budget that can be fully pulled from in the event of added, unforeseen costs. If my team identified these costs I would thank them and work through budgeting the contingency to cover the added cost.
Let me know your thoughts on my method.
Thanks,
Lily
Source
Project Management Institute. (2021). Guide to the Project Management Body of Knowledge (Pmbok® Guide) – seventh edition.
Response –
Joseph LaPadula
Hi Class,
I certainly don’t have to imagine a scenario like the above, but I’ve seen it first hand many times. On relatively recent project I was managing was gifted to me by a previous employee. The budget I inhereted was essentially a result of backing into a price so our bid to our customer was competative. For example, we knew our customer could afford a project that was $2.5M, so our budget was built backwards to arrive at $2.45M or whatever that might be.
Given the stage of the project when I inhereted it, one of the first things I did was update the risk registry and share that with the customer. I took advantage of the change in PM roles, and reset the relationship with the customer to be more transparent. Part of it was being more clear on what technical hurdles the team still had ahead of them, and another aspect was taking into consideration supply chain constraints as Covid-19 was just making a mess of everything.
Many times on this project we found out that items we thought were one price might not only be 10x but also be impossible to have delivered on-time to avoid any delays in critical path work.
When these things arose, I did a few things. Firstly, I was controlling my material costs extermely closely, and anywhere I could come in underbudget, I could use that as slack to cover small bumps in costs. If material costs were significant enough to put me ~5% outside of my target, I would communicate with our Business Development teams and senior leadership. Understanding that relationship building can be just as important or more important than the bottom line, I would seek out how other stakeholders wanted to approach increases in costs. Whether or not we would eat the costs or try to modify the contract, I always wanted to communicate to our customer the shifting outlook of the project financials. If we were eating the costs, I wanted them to understand that we were valuing their relationship and honoring our estimate over seeking out profits. Building that good will helped with things were too high and beyond our ability to control internally.
The other aspect of this was resources had multiple projects, and slippage on one project would trickle to lack of resources on my own. While I do favor transparency, I was always concerned with sharing resource constraints with customers as it could degrade trust in our ability to execute on larger contracts. Often I would scramble to pull out critical path portions of work and make a case as to why I should be able to keep a limited number of resources to prevent major delays. When it was not possible, I would communicate to customers the potential for delays and our preparedness to hire additional external resources, but would also share the possibility of onboarding an external team as being slower than waiting on internal resource bottlenecks. Allowing them to have input on the the decision forward help to continue to build trust and collaboration rather than forcing them to accept whatever decisions I made on their behalf.
Response –
