The total man hours per task is obtained by multiplying the number of people assigned to a task by the total time it takes to complete it.
Let's say, for example, that 15 workers at a metal plant and devote 10 workdays to complete an order of 800 product units.
Estimating 6 working hours per day, the total man hours is obtained from multiplying the following:
15 x 10 x 6 = 900 hours
Therefore, productivity is equal to 800/900 = 0.89 units per hour. As we know with the cost of man-hours, it is easy to calculate how the labor force contributes to the unit cost and the profitability of the product line.
In addition, this ratio can be taken as a starting point for measuring productivity improvements, introducing new processes and cutting costs.
However, in a more complex project it would also be necessary to consider that the cost of man-hours is variable, depending on the professional category to which it corresponds.
Not all team members cost the same
A requirement to be able to calculate the total labor cost of the project is to consider different hourly rates for each professional category. In an IT project, for example, it will not cost the same for one hour of a junior programmer as a senior one.
Therefore, when calculating the cost of the project from man hours, you must take into account that the multiplication of the cost must be factorized by each category:
Total cost = (CH1 x HH1) + … + (CHn x HHn)
Where CH1 is equal to the hourly cost of the professional category 1 and HH1 is the total of man hours estimated by the professional category 1.
Cost per project calculation with ITM Platform
ITM Platform allows you to calculate the costs of tasks and projects with man hours. For this you only have to define the values of 3 variables:
The professional profiles of your organization
The fees associated with each professional profile
Standard costs, which will be calculated when a generic worker is assigned.
See in this tutorial how to define professional profiles, rates and standard costs in order to calculate the cost of all your tasks and projects.
One of the greatest challenges of a PMO is to ensure that the experiences generated within a project are extended to the rest of the organization and not lost when the project team dissolves. Even within each project, reaching a knowledge baseline explicitly shared by all key team members can be tricky.
This process of knowledge transfer is specific to project-based organizations and encounters different obstacles to those that characterize the transfer and application of knowledge in the field of R & D, for example.
Unfortunately, Project Management Offices can either leave the functions of knowledge transfer in the background or, when they recognize their importance, often do not take an in depth approaPreviewch. To address the problem in its complexity, we recommend starting from the recognition of the main obstacles that prevent the linear flow of knowledge.
According to B. H. Reich, there are 9 obstacles to knowledge transfer between projects:
1. Lessons Not Learned
The difficulties organizations have in managing their day-to-day projects, starts and ends with this issue. It is true that beyond the records of previous experiences and the guidelines for the project in question, a new and unrepeatable path is undertaken that is not possible to predict, but the lessons learned allow the team to compare and analyze the possible scenarios, as well as Learn from previous situations that made it difficult to achieve the desired results.
Unfortunately, the unrepeatable characteristic of the projects complicates the application of these lessons, which are often transferred through the personal experience of a team member. In order to scale the learning beyond the personal components, it is advisable to:
- work on document repositories that allow for identification of previous similarities
- share the most relevant lessons of projects with characteristics that are going to be repeated, either because they belong to the same line of business, have the same client, or develop in similar markets.
2. Selecting defective equipment
Even if you have a project team with all the necessary competences to deliver a result of sufficient quality, it is possible that there are competencies that are difficult to identify, especially with regards to the accumulated experience, the Know-how of the company and, in the case of projects abroad, the multicultural dimension. Added to this is the fact that whoever carries out the planning will never be an expert in all the technical aspects that must be covered, which may fail to match the requirements with the technical capacity of the team. In this case, even transfer of knowledge internally to the project can seriously fail.
3. Volatile team governance
On this occasion, this is a problem related to project governance. The loss of a member of the governance structure that has a direct bearing on resource orientation and corporate strategies (eg, executive sponsorship or project management) seriously compromises levels of knowledge and stability within company departments based on projects.
4. Lack of function recognition
Project governance is sustained both by management and project sponsors, who must receive the appropriate training to monitor with more discretion. The difficulty is to incorporate top management into the management of knowledge without taking away the authority and the urgency we perceive it in the danger of taking wrong directions because the sponsors may have some inaccuracy or wrong distinction in relation to the project.
5. Inadequate knowledge integration
Large-scale projects require the intertwining of expertise in a number of areas to solve complex problems, to innovate or to transform that knowledge into something greater, thanks to its correct coupling. As we commonly see, there is not a person with the exact key to fit that diverse knowledge appropriately, so there is a risk that the pieces of the puzzle will come together incorrectly, interfering with the result. Given this scenario, project management requires that the directors ensure that effective communication with and among their work teams is maintained, to achieve a successful integration of multifunctional knowledge.
6. Incomplete transfer of knowledge
Often, for the development of a complex and innovative project, that requires the implementation of resources or specialized technical support, project members must go to the suppliers of the organization or interact with a consultant. In such interactions, knowledge transfer should strive to be as transparent as possible, but fears and conflicts of interest between the project team and their knowledge provider often interfere with the process.
Most of the failures that undermine the completion of a project occur because of incomplete knowledge transfer between the team and external consultants or suppliers during design.
This is because the people from the consultancy have the aspiration to receive higher profits, for their intellectual property and recognition of value, so in the first instance they will refuse to sell their knowledge.
Consequently, during the transfer of knowledge, information that is often crucial for the success of the project is omitted and this is not usually discovered until it has failed, which encourages us to go back and evaluate the failure. It is therefore of paramount importance to ascertain the quality of the documentation received by the knowledge provider and to evaluate its quality so that the project manager can make the most appropriate decisions.
7. Loss of Team Members
The fact that a member of the team may leave due to planned or unforeseen circumstances is an intellectual leak of great value for the project, since the time that person has dedicated to the planning and / or design process involves the accumulation of knowledge and skills related to the project and that are irreplaceable. This knowledge disappears once the person leaves.
In order to protect ourselves from the knowledge gaps created by possible losses of team members who are key players for the project, preventive measures should be taken to document knowledge, in order to continue the project with new members. Of course, there will always be some knowledge that stays with the person, which will be irreplaceable.
8. Lack of a Role Awareness Map
As part of the project management, we highlight the creation of a knowledge map, grouped by role, to serve as a tool so that all members of the team (including the senior positions) can identify who knows what and what skills the team has for the project.
The knowledge map allows us to facilitate the efficient and effective approach to complex problems. Not having one translates into greater difficulties in finding the solution to a given conflict, since it involves the risk of assigning decision making to people whose knowledge is not the most suitable for the type of problem.
Theorists on the subject, such as Crowston and Kammerer, and Faraj and Sproull, have concluded that project teams with a knowledge map can be more effective, focusing mainly on the integration of knowledge.
9. Loss between phases
During the operational processes of the project, the structure and integration of the equipment varies with the passage from one phase to another, so we run the risk of losing valuable knowledge in those changes in composition or transmitting knowledge inadequately. For these cases, traditionally, one uses the techniques of written or graphic documentation, to record the knowledge of a previous phase, useful for the operations of the next phase.
However, in the written record, we often overlook data of great relevance for the optimal development of the new operational phase, such as the rationale of the design or its options. In turn, the interpretations that each team gives to documentation may be altered by the subjective criteria of its members, which leads to errors or delays, while trying to understand why certain decisions were made in the previous phase.
Therefore, as a method of knowledge management within the project management, we recommend integrating multimedia records in the documentation that complementcrucial aspects of the decision making of a phase, as well as manage mining data and networks of experts, so that it is as specific and clear as possible.
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In addition to the "weather station" and the "control tower", Casey and Peck distinguish a third type of Project Management Office: the "pool of resources". Often, this type of PMO is more simply named by its directive capacity.
In fact, the fundamental difference with the previous types of PMO are its managerial features, since it is dedicated to coordinate projects, components and programs of an organization.
Its direction can have two different reaches:
The most ambitious, is where the PMO extends to all projects of an organization.
However, it can also be more targeted, and focus only on transversal projects involving several departments, leaving more routine or restricted projects in the hands of a specific project manager.
How to organize the structure of a directive PMO
In a directive PMO, the project managers work directly for the PMO: the PMO assigns the projects, to which they have to direct the reports, and is the one that supervises their actions. Therefore, the directive PMO must diversify and prioritize its team of project managers: those who work for the PMO will have a more marked profile as supervisors and managers, while the subordinates will be closer to the daily execution.
On the other hand, the employees of the company can be organized in two ways:
One possibility is that they are part of the PMO itself. This system is valid in cases where all or almost all the work carried out by the company is in the form of projects.
The other possibility is that they are formally non-project workers, even if their work contributes to some. This approach is used in companies with a more operational profile and a smaller proportion of the work is devoted to projects.
Functions of a directive PMO
The most characteristic functions have to do with the coordination of talent:
Develop and maintain a sufficient and well-formed project manager template to manage all the company's projects.
Organize contributions from independent workers.
Assign the necessary human resources to each project, prioritizing in case of conflict according to business criteria.
Although these are the most defining functions, the directive PMO shares functions with other, simpler types of PMOs. These include:
Reduce costs by centralizing services.
Ensure adequate communication between team members and the organization of project management through the regular issuance of structured and complete reports.
Encourage the adoption of methodologies, standards, processes and tools that allow the management of projects to be completed efficiently.
How to control the efficiency of a directive PMO
Since the directive PMO is in charge of managing all the projects, it is difficult to evaluate if the work is being carried out properly. If it is the PMO itself that has to evaluate its performance, it is possible that bias will appear in the assessment and, although this is not the case, there can always be doubt about the potential conflict of interest.
There are some solutions that can be adopted in these cases.
Contract the services of an external audit. This way, you are guaranteed to obtain bias exempt reports in which both the positive aspects of project management and the negative ones are evaluated.
Generate an independent audit within the organization itself. To do this, a group of project managers should be set up outside the active projects, that can evaluate their efficiency in management.
Develop a rotating system for project managers. This is a methodology widely used in companies that have adopted the ISO 9000 quality standards. When a director does not take care of the management of a particular project, he can be assigned to the evaluation of the active projects. This is a very complete option, since the rotation of project managers ensures that they keep the two points of view constantly.
Should I incorporate a directive PMO in my company?
There are divided opinions among experts when recommending this type of PMO.
On the one hand, some argue that it is the best solution for the management of a company, since it guarantees maximum efficiency in all departments and projects. In case other systems already exist, a gradual evolution towards a leading PMO is suggested, since it is the most complete management method.
On the other hand, the directive PMO runs the risk of being invasive of existing work systems and appear as a structure that seeks to appropriate all departments or aspects of management within a company.
Therefore, prior to the implementation of a directive PMO in a company, it should be assessed if its profile and that of its employees allow for an appropriate introduction. Otherwise, one solution is to adopt other less demanding type of PMO and progressively evolve towards this type of PMO.
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In this blog series we have already spoken about the different types of PMO following the classification of Casey and Peck in 2001, and the tracking function as a "weather station".
When the PMO acquires authority to establish action guidelines, its function can be compared with that of a control tower that establishes when a project can be placed on the runway, deploy the flight and know what the conditions will be of the environment and competition for airspace (ie equipment time and funding).
The control PMO, however, not only makes decisions to guide projects. If the “weather station” measures, the control tower defines procedures and standards. It then monitors its compliance and seeks improvements.
While it is always important to recognize the differences that each PMO must include to fit its parent organization, these are some of the typical functions of a control project management office:
1. Establishes standards for project management
Every project must meet standards that serve as a reference and which should be adjusted as much as possible from the initiation phase. It is recommended that the standards be flexible and allow a certain adaptation to the circumstances that may be present during the project. Standards can refer to different areas, such as:
Information and nomenclature. PMOs often provide report templates that allow the information to be treated in a homogeneous way, facilitating their comparison and analysis between projects. It is convenient to establish what types of reports are provided, the frequency with which they are issued and the structure they present.
Risks. What can be presented at what time, what is the probability that they will occur and what impact they may have on the project.
Configuration of the project or organization. This entails the establishment of responsibilities for each of the people involved in the project, so that important milestones and decisions are taken by the responsible parties in the shortest possible time and with all relevant information.
It is good practice for standards to strike a balance between structuring and facilitating work: they must be sufficiently elaborate to capture the complexity of the organization without falling into bureaucratic excesses. It is about making things simple, for everyone to be clear about what to do, how to do it, what their responsibilities are, and who to communicate their results, their doubts or the problems that may arise.
2. See how to meet the established standards
This consultation should have two approaches:
External focus. Document techniques for measuring risks, quantifying the progress of a project ... See similar cases in other companies and try to apply them to your specific situation.
Internal focus. Make sure that all team members and staff of your company understand and know how to implement the standards you have established. On the other hand, involve them in the detection of errors and in the suggestion of improvements. Everyone should feel part of the team in which they participate and collaborate in their success. A close view, from within, provided by the workers themselves, is an irreplaceable resource.
3. It promotes the compliance and the elevation of the standards
Organizations with a culture of advanced quality will find it easier to take this step. It is also important to consider incentives for those who strive to do their work to the best of their ability, for example, by including the adoption of standards in staff reviews.
4. Participates actively in the improvement of standards
In addition to rewarding those workers who suggest ideas that allow to improve the established standards, from the own direction of the project office it is necessary to work actively in its improvement. Accumulated management data is a great starting point for improvement. It will be important to consider what programs and areas of activity may suffer most from the adoption of change, to cushion the shock through raising awareness.
Process of implementing a control PMO
As with any other change management process that affects the entire organization, the beginning can be quite difficult.
However, there are some factors that help facilitate the process:
An extended recognition of the shortcomings for which it was decided to create the office
Leadership shared between senior management, middle managers and the management of the new PMO
The adoption of complete but simple software such as ITM Platform, which allows organizing projects in programs and analyzing complex information in a unified way.
If these conditions are not available, or if implementation difficulties are high, it may be advisable to start with a set of more basic functions, related to the centralization of information and the facilitation of decisions.
Being rigorous and exhaustive in the data collection allows you to gain the trust of the clients and the managers, who will later be more likely to adopt the changes proposed by the PMO, that could introduce new management systems for projects gradually.
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One of the most frequent needs facing organizations that are looking to launch a PMO is the centralization of information and knowledge. When your e-mail begins to be used as a repository of documentation, or when there is no homogeneity between the sources of information of different projects, it is possible that the time has come to consider the existence of a structure that supports the operations of the organization.
This type of PMO has been compared to a weather station, since the unification of processes and flows of information allows the increase of data and objective criteria to evaluate in which direction the projects and the equipment are moving.
By serving as a center for unification of knowledge, the PMO begins by assisting the management of the company by providing data and information that assist the company in decision making.
This is achieved in the confidence of the management of the company, the acquisition of new skills and the possibility of direct decision-making. The end result is to convert one support project management into another with a control or manager profile. This other type of PMO will be developed in another article.
Functions developed by the PMO as a support tool
Teaching and training, promotion of attitudes based on adequate project management, under direct supervision.
Transmission of information to the management of the company, so that it is the one that makes the executive decisions.
Search for techniques to reduce costs.
Centralization of management services in the department of project management or PMO, emphasizing the management savings that this entails.
Empowerment of those who have been designated as Project Managers, who must be trained in project management but also allow sufficient freedom to properly develop their skills.
Application and evolution of the support PMO
Supporting PMOs are sometimes geared towards an internal permanent improvement service. This is based on empowerment and the acquisition of responsibilities on the part of heads departments within the company under the instruction and monitoring of the PMO. The objective is that, after a period of training, the managers of the different departments of the company acquire new skills in project management or update the ones they already have, doing their work practically without the help of the PMO. This will allow the PMO to focus on other functional areas and to reorient itself from the mere work support, towards a more strategic integration.
Juan Delgado
Blogger
ITM Platform
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For a project-based organization, setting up a PMO is equivalent to parenthood. It’s just not enough to wake up early to go to work, eat your sandwiches diligently in front of your screen and be a loyal friend. From the moment you embark on this new ship, it’s a whole new level at which you will need to keep ahead of events, create new habits, and be always ready to respond to an emergency. For me, the key to start the process with the right foot forward is to know yourself as well as you can.
Organizations can use the wisdom of self-knowledge in smart ways. Let’s have a look at factors that are helpful indicators of maturity.
Know thy maturity, they say
The degree of maturity of an organization is strongly correlated to the complexity of the PMO model that it is likely to implement
Lack of clear strategy. Projects are not always properly aligned with the objectives of the organization.
Lack of quantitative evaluation. In this scenario it's impossible to obtain clear indicators of the state of each project, identify the causes of any problems and search for areas of improvement. In addition, measures should be taken to improve the efficiency of the company.
Ideas, projects and business areas are not prioritized.
Companies that have a medium level maturity may show the following characteristics:
Ability to prioritize projects.
Some degree of alignment between projects and the overall objectives of the company.
Metrics to quantify the results of high level projects.
Resources are planned prior to implementing a project.
A company with a high degree of maturity has the following features:
Integration of the company’s work and tasks in projects and programs.
All work is goal oriented. Each task or project is working towards the general objectives of the company.
Standardized measures for the results of each project are performed. This way you can monitor both the progress and status of each project and the impact that the various risks and corrective measures may pose to each of them.
There are effective systems in place to allow quick and flexible communication among team members in the various tasks and projects.
Work systems can incorporate agile and classic methodologies that help maximize efforts.
Projects conform to international standards, ensuring quality and allows smooth implementation in all locations the company is present.
Software options combine Specific and advanced solutions with simple and direct tools so that workers can optimize the use of their time and be more productive.
Implementing a PMO
1. Justification and initiation. Once company executives are aware of the benefits, your organization might be in a good place to start setting up a PMO.
A PMO can contribute clear objectives and compliance metrics, identify possible deviations and define corrective measures. Decide how much your PMO will take up, build your information streams and draw up a goal-driven plan.
2. Planning. What are some of the steps needed to implement the new project management policy?
Seamless communication with the board of directors and with customers to establish the scope, objectives of the company and therefore decide the projects to be undertaken. These communication channels should be structured and maintained throughout project implementation.
Choose an organization system for the company, project management methodologies and a governance model.
Recruit your project management staff. Your crew may combine specific project management training with an open mind that allows continuous training throughout the project to meet the needs which may arise during work.
3. Execution. Measurement and monitoring frameworks are an important component of project implementation that can easily benefit from the centralized functions and the homogenization of a PMO. Project managers position will be strongly supported with the enhanced communication between all organization stakeholders.
At ITM Platform we can help in the process of creating your PMO. With our platform, user onboarding and technological deployment are seamless: our customers start using our solution in as little as one week. You will be able to focus on what really matters: defining the internal procedures that allow you to improve your performance.
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Man-hours, also called person-hours, are the unit of measure that is used in project management to measure the efforts needed to complete a task.
One of the greatest challenges of a PMO is to ensure that the experiences generated within a project are extended to the rest of the organization and not lost when the project team dissolves. Even within each project, reaching a knowledge baseline explicitly shared by all key team members can be tricky.
In this blog series we have already spoken about the different types of PMO following the classification of Casey and Peck in 
One of the most frequent needs facing organizations that are looking to launch a PMO is the centralization of information and knowledge. When your e-mail begins to be used as a repository of documentation, or when there is no homogeneity between the sources of information of different projects, it is possible that the time has come to consider the existence of a structure that supports the operations of the organization.
For a project-based organization, setting up a PMO is equivalent to parenthood. It’s just not enough to wake up early to go to work, eat your sandwiches diligently in front of your screen and be a loyal friend. From the moment you embark on this new ship, it’s a whole new level at which you will need to keep ahead of events, create new habits, and be always ready to respond to an emergency. For me, the key to start the process with the right foot forward is to know yourself as well as you can.