There’s nothing worse than going over budget or going into debt while working on a project. To prevent this from occurring businesses develop cost management, companies can employ the cost management structure to single projects or their business as a whole.
Cost management is the process of planning and controlling a business’s budget. It starts from the initial planning phase and covers the full project cycle. After applying cost management, all costs will be calculated, recorded and monitored. This allows a business to predict future expenditures in order to reduce their chances of going over budget. Once the project is completed, predicted and actual costs will be compared in order to help calculate future budgets.
To help you develop a stronger understanding of the topic, take a look at the following 4 steps of project cost management which are outlined in the PMBOK:
1. Planning Cost Management
The initial phase of cost management involves defining the resources required for the completion of all project activities. A good way to get this started is by creating Work Breakdown Structures (WBS) or listing previous information and comparable projects that will help you discover which resources will be needed. Make sure you also take into account other resources like labour and required time for task completion. Once you know all the necessary resources and their quantitates, you’ll be able to easily calculate their cost.
2. Estimating Cost
The biggest component of cost management involves predicting how much it will cost you to complete the project. The cost estimating method that you choose to use will depend on the amount of information you have available about the project and project tasks. Naturally, estimates can be altered as more information becomes available. Over time you will have a cost estimate with a very high accuracy. However, until then you should seek assistance from a strong project management software, such as ITM Platform. Project management tools like ITM Platformoffer cost management which will help your business monitor costs, decrease uncertainty and increase profitability.
3. Determining your Budget
Cost estimates will help define the expenditures involved with specific project activities and the overall cost of the project. Whereas the budget allocates project costs over a longer period of time to create a cost baseline which should be the starting point for your current and future projects. Essentially it will provide you with a good idea as to how much money you have to spend on the project.
4. Controlling Cost
Cost control involves measuring any inconsistencies that arise and are different from the set cost baseline. Once you discover them, you will need to take corrective actions to avoid cost overruns. Anything that strays away from the cost baseline needs to be recorded and the forecasted total cost should be altered to include these changes.
Use a cost control tool like the one provided by ITM Platform to help define cost and track, apply and approve all changes. Furthermore, cost accuracy and consistency are more likely to maintain when you have a strong software and great staff guiding you.
It’s no myth that project managers may work on 5 to 25 projects in a single day; and learning to multi-task is no easy job! If not done well you may get overwhelmed, stretch yourself too thin and underperform. However, with the right tactics you’ll be able to meet business goals faster!
Take a look at the following tips which have lead successful project managers to becoming productive project jugglers!
Attitude, attitude and attitude
Have a positive outlook. Don’t tire yourself (or your co-workers) out by constantly mentioning the heavy load of work you have. You have got to clear your mind and start fresh. Think of it as a new challenge, one you must strive to overcome.
Have a plan
This doesn’t simply mean write down all your tasks and deadlines. Planning out how you’ll manage multiple projects requires estimating effort, identifying all of the urgent work needed to be done and prioritizing specific tasks. If you have a strong project planning tool, like ITM Platform, you’ll be one step ahead.
Say no!
You need to know how much you can juggle and say “no” to anything more. It’s absolutely impressive when a juggler can toss around a fair share of balls, but add one more and the whole thing can go toppling down! It’s a common characteristic for project managers to want to take on any work given to them but in many cases it may not fit in with their current schedule. Instead of saying “sure, I’ll do it” and then struggling to stay organized with the rest of your work, find an alternative solution. Maybe suggest a more reasonable date for the completion of the project or a flexible time frame. This will help you to develop a good reputation as a reliable project manager.
Don’t hop from one project to another
You’re not a rabbit. You may find work to be more satisfying if you continuously jump between the projects you’re working on. You might start with one, get bored, move onto the next then go back to the first… all in a given day. Resist this urge! Choose one and stick to it, get a fair share of work done and then go to another. Bouncing back and forth may create confusion, causing you to make simple mistakes or slow down productivity.
Don’t kid yourself!
While you wish to be independent and show you have all it takes to manage multiple projects at once, there’s no shame in getting a bit of help! Oleg Mokhov, a project manager himself said the same; “with a project management app you’ll be able to collaborate, share and stay on top of your project requests much easier”! Simply put, project management softwares like ITM Platform are “to-do lists on steroids”. The cloud-based solution will have you wasting no time; you can get your work done wherever you want and whenever you want. And that’s key when you’ve got multiple things in your hands.
Try out ITM Platform, the PPM software that will help you instantly become an expert project juggler, without the stress and pressure that comes with it. Learn more by visiting http://www.itmplatform.com/en/
Agile methodologies allow proper organization of work, establishing an order of priorities and preventing the realization of accumulation several tasks at the same time.
Once we have clear tasks, we think about how we could organize time to maximize our productivity.
One possible solution is to use the pomodoro method. Besides meaning tomato in Italian, it is a methodology of distribution of working time, it is divided into blocks (which precisely given the name pomodoros), which usually last 30 minutes each. Within each of the blocks, there is a time slice allocated for the work, which usually is 25 minutes, and another dedicated to rest, which is usually 5 minutes.
When you have finished 4 or 5 blocks (or work packages), there is usually a longer break, which lasts for about 15 to 20 minutes.
What is needed to apply the pomodoro method?
It is only necessary to have a list of tasks to perfom and a timer. There are analog timers shaped tomatoes, which are named by this method, but a watch or clock is valid.
Experts in this methodology recommend an analog clock or some kind of physical mechanism, then simply activade it and the user is aware that the time has just begun and realize that they should focus all their attention on making the corresponding task.
How does the cycle of activity in the pomodoro method work?
The user must sit at the desk with a list of tasks, which has to be physically written on paper, and with his pomodoro analog preference. The fact that the list and the stopwatch are physical is part of the ritual, they allow the user to be fully aware about the starts and the ends and receives little satisfaction enable or disable the timer and deleting tasks, which are already completed.
Once you have these two elements, you must activate the timer to 25 minutes later and concentrate all the attention on the task corresponding. The 25 minutes of work must be net, without interruption like answering calls, discussing with colleagues...
All attention should be focused on the task until the timer rings. At that time, you should leave the job as it is, without to try to finish the activity for some more minutes.
Like the 25 minutes of work, there are 5 minutes to do a small break, which has to be dedicated to anything else than the task you are working on.
When you have finished 4 or 5 tasks and breaks you should rest for about 15 or 20 minutes, where you can eat something or do some kind of moderate physical activity, which helps to relax the body and mind. So it will be possible to face the next work cycle fully physical and psychological conditions.
How can I increase my productivity in the Pomodoro method?
The pomodoro method was born in the environment of computer programming. These tasks require high concentration and productivity can be seen very undermined if workers are interrupted with calls, consultations or unnecessary breaks.
How many times have you felt that you have dedicated more time to a task, than necessary? How many times do you think this has been blamed for undue interruption, not only for the time they have taken from you, but also for the way they have affected your concentration? How often have you tried to complete a task and you have taken much longer to finish than it would have cost if you had a clear mind?
The pomodoro method seeks to enhance the concentration of workers when performing tasks. This is how able you are to increase the net time dedicated to work and avoid distractions and time thieves, only lengthen the time spent working but shorten the time actually intended to work.
Is it possible to integrate the Pomodoro Technique in my agile methodologies at work?
Of course it is possible, and it is recommended. In fact, some of them, like Kanban, complement particularly well.
In addition, we recommend it not only for work, but we are confident that it will change the distribution of time in your life. You are getting the master of your time, and therefore of your life.
What do you need to start to be more efficient? You only need paper, a pen and a watch and then you can watch how your results greatly improves.
Ethics is present in all facets of life, also managing projects. In the same way that there are rules of conduct, sometimes unwritten, for everyday life, there are also rules of behaviour, a sort of code of conduct, which must be respected in the project management.
Professionals in project management, do you know the code of ethics of our profession? Do we follow standards of ethical conduct appropriate in the development of our work?
Do we realize ethically inappropriate behaviour?
First, we should consider the magnitude of the problem. Does ethically improper conduct really exist in the field of project management?
In 2002, the website TechRepublic (http: //www.techrepublic.com/) conducted a survey among its readers. Of the 825 people who responded to the questions, 57% said they had received a request from their superiors to do something that felt like it was unethical (http://www.techrepublic.com/article/it-managers-face-ethical-issues-from-piracy-to-privacy / 1054036/). This is not an isolated incident, that same year another survey by IT Consultant obtained as a result that 19% of participants had been set in their work to perform some task that was illegal/incorrect from the point of view of ethics.
What kind of unethical behaviour we are talking about?
According to respondents, in most cases faults relate to ethical behaviour area of piracy or privacy (from piracy to privacy).
An example in which both types of behaviour are combined ethically inadequate would be the case where a software unlicensed is used (which is not only it is unethical, but also illegal) for control activity workers without first informing them that this will be done.
Another very common case is based on the presentation of risks to customers. In Sometimes the Project Manager knows that present risks as they are (which is the ethically correct attitude) can result in a penalty by customers. To avoid this, do the ethically improper conduct by not showing full or hide some of the risks of the project.
A very common ethical misconduct found in the budgeting. These cases, common in the field of construction scandals come to produce media coverage, which represent an important year for the company image.
We refer here to the times when project managers perform an underestimation of the budget, they know from the beginning that it isn’t feasible to achieve that is accepted by customers. Subsequently, before the fear that the work remains unfinished, customers will accept increases budget and longer delivery times.
A good project manager and ethical conduct would show the budgets as they are, both in time and money, although it is exposing your project to potential rejection.
The fact that a body of international relevance in project management it has raised the need to perform a document to address ethics in project management, confirms the extent of the problem.
In short, the ethics of a Project Manager should revolve around following points.
Be responsible. Taking decisions include assuming the consequences from them. Therefore, before taking them, you need to know all legal requirements and reflect on the ethics of behaviours that are to be taken. Knowledge of needed legislations and standards of ethical conduct are essential.
Be respectful to yourself and others. The barrier between legal and illegality is established by the laws, but not so with ethics. Every day we perform behaviours that we know are ethically right or wrong without consulting codes behaviour, we simply rely on our common sense. The job the Project Manager (and any other) should be made with common sense, also from the point of view of ethics. Listen to others, and also within each, will help us to make our work a more ethically correct way.
Be transparent. Transparency, putting all the cards on the table, including conflicts of interest, is another ethically correct attitude and we will talk about our own reliability and our projects.
Be honest with your communication and behaviour. Some think that in the short-term it harms us be honest, since we can deprive some temporary privilege. However, eventually transparency and sincerity lead to confidence and since it’s so difficult find, it will constitute a positive point that will differentiate us from others.
In short, although sometimes daily life seems to show it conversely, long-term truth will eventually come to light and good behaviour is rewarded. Making our work ethical and productive shall lead to us doing better, a happier working environment and customers which are left more satisfied with the results.
Imagine the process of assembling a car, certain steps need to be completed before the car can move onto the next phase. The waterfall methodology is very much the same because it follows a sequential process. Each of the eight steps (conception, initiation, analysis, design, construction, testing, implementation and maintenance) will need to be completed chronologically. Extensive planning needs to be done before the project begins because there is no room for error.
What is the Agile methodology?
The Agile movement was first introduced in 1970 by Dr. Winston Royce who sought out an alternative to the traditional project management approach. Royce didn’t believe that project development should follow an assembly line routine. He thought project management teams could respond better to uncertainty if they first created a project design and then followed incremental work cadences also known as sprints. This allowed each aspect of the project to be reviewed and bugs to be discovered.
How to put the two together
While the two appear to be polar opposites they can very well co-exist in a single environment. The first thing that needs to be done is make sure all project managers, task performers and stakeholders understand their differences and appreciate what they both have to offer. Trying to find fault or prioritize one or the other is only a set back. Strong and continuous collaboration amongst team members will help to maintain calm even when frustration may arise.
Since waterfall methodologies require project planning to be done up front while agile teams prefer doing it progressively, it will be extremely important that synchronization between the two is maintained. Furthermore putting in place a project management office(PMO) will be beneficial. PMOs help maintain governance across all teams and monitor the overall progress of the project, making sure it follows the organization’s vision.
There’s nothing better to help you with managing the two methodologies than a good set of project management tools. PMOs in particular enjoy depending on tools that will quickly and easily provide them with project metrics and report upcoming deadlines, tasks that need to be completed, etc. This allows them to evaluate how well the methodologies are working and what may need to be done to improve. Take the time to find an efficient project management solution, such as ITM Platform, which is capable of gathering information from both agile and waterfall projects and merging the two into a single platform. This is very important because it will create a central repository for all the project data which will be used by all team members.
The biggest challenge companies face isn’t trying to decide whether they wish to use agile or waterfall methodologies but rather it’s their fear of change that holds them back. Forcing employees to change their ways and adopt a new model of work can be difficult and often disastrous. Luckily, it also isn’t necessary. Once again, adopting a flexible project management solutionwill allow team members to ease into changes and learn to adapt and work with both methodologies. This will allow you to achieve a successful union between the two, increasing productivity across all projects and the entire organization.
When implementing a project portfolio management (PPM) model in an organisation, acquiring a project management software is not enough; usually the organization needs to adapt to the new way of working.
One of the first aspects to keep in mind when adopting a project-oriented management style, is to decide what to merge and what to centralize.
Those are some of the most frequent aspects:
Terminology: To accurately communicate internally in a company (or externally with suppliers or clients), you must be able to convey precise feedbacks such as the state of the projects. Vague or ambiguous descriptions like “going well” do not help, because they don’t indicate the real state of a project and do not provide information that the sender or the receiver can truly understand.
Monitoring criteria: projects should be frequently monitored and quantitively measured. It is important to have everyone’s agreement on which criteria to use when measuring the project’s development.
Resources management: Depending on the nature of the project, centralizing the management of resources can be necessary. This decision will affect the organizational structure, the project manager’s work and the way day-to-day work is planned and executed.
These elements are the key to information and quantification. It is advisable for every department of the company to use a common reporting system to be able to rely on the necessary information to make decisions.
Other elements that should be consolidated are the processes (when a project is approved, when a project changes status, who must take those decisions…), standard costs or document formats to be used.
To sum up, you first have to think about what to centralize and afterward decide on how to do it.
2. Agile, predictive or both methodologies
Another critical decision that needs to be taken before starting a project is to decide which management methodology to apply. Each methodology has its advantages and disadvantages and, depending on the nature of the project, you should select the most appropriate.
Agile methodologies: The agile methodology is very good to manage uncertainties. It is ideal for those projects in which the results are not certain, or when you have an idea about the objective, but you do not clearly know how to reach it. It is frequently the case for IT projects, Start-ups and projects with high levels of uncertainty.
Predictive methodologies: Predictive methodologies are good to manage projects with low levels of uncertainty, for example projects in which processes are well known as well as the expected results. An example could be a project to produce a component that was already produced in the past. In this case, given that the processes are known, the objective is to maximize the productivity.
Both methodologies share some common points: tight monitoring, quantifications and measurements.
To fully take advantage of each methodology you should employ project managers that have expertise in both methodologies and who know how to adapt to one or the other depending on circumstances.
If you decide to use both methodologies, these will need to coexist in the same portfolio. Check out this webinar on how to make the 2 methodologies coexist.
3. Responsibilities of a project manager
It is fundamental to clarify the responsibilities of the project manager before the start of a project. That will empower him to properly do his work, focus on the most important tasks and properly report the results of his work.
Here are some of the most common decisions a project manager has to take:
Monitor the project progress
Canalize and encourage communication
Assign resources
Manage risks
Control Purchases and Revenues of the project
4. The Project Management Office (PMO)
Another relevant aspect is to decide whether a project management office is necessary or not. There are companies with high amounts of projects that do not rely on a project management office, while there are cases of less project intensive companies that actually need one.
This difference is motivated by the specific conditions of each business and by other factors. The most relevant are:
The level of maturity of the organization as well as their specific situation. Some companies are in a stable period with little variations in the business while others are in a phase of transition with high level of uncertainty and variability.
The complexity of the organization.
The nature of the business. For example, there are sectors where projects management offices are common because of the intrinsic nature of the business model.
The existence of interdependencies between projects. When such dependencies exist, the project management office is particularly important as it allows to coordinate the projects to take advantage of the interdependencies.
The degree of maturity of the project’s directors. Experienced project managers sometimes can cover the full scope of the project portfolio, thus becoming a one-man project management office. Unfortunately, this is not common, and it will be often necessary to create a dedicated team to constitute the project management office.
Strategic alignment. A project management office is particularly important when projects are not properly aligned with the overall strategy of the company.
To sum up, a project management office provides a strategic focus and allows the organization to reach levels of coordination that would not be possible otherwise.
5. Methodologies and structures in PPM
Another aspect that should be considered is the methodological framework. The guidelines provided by PMI or Prince2, for example, are very helpful. However, our advice is to adopt these guidelines with common sense and without applying them too rigidly. It is advisable to adopt only the aspects that best match with the organization and its needs.
Some key aspects that should be considered:
Process standardization: processes should to be standardized, be as simple as possible and be close to reality.
Inspiration from existing models: There are international associations that facilitate models of standardized project management. You can take inspiration from them, keeping in mind that it is best to adopt the best of each one.
We have explained how to design the organization to make the change possible, but we are still missing a very important part: How to do the transition? ¿Which method should be chosen to be successful?
Change management
To make a successful transition, the organization should fulfil several requirements and follow a series of steps.
1. Definition of the driving force
The initiative of a transition towards project-based management should come from the company’s top management. Directors should promote the use of project management systems and be the ones to lead the change.
It is important also to have the support of the management of the departments most affected by the change.
2. Implementation of change management
The transition can be done using 2 approaches, that we call the “pincer approach “.
On one hand we have a top down approach, where the use of new systems and methodologies is presented as a duty or obligation.
When adopting this approach, control models and reporting systems are key. They permit to verify that the new project management model is being applied correctly while, at the same time, monitoring the added value for the company.
For example, you can decide to use only the data previously registered in the system during follow up meetings.
On the other hand, you can adopt a bottom-up approach, with training and active listening. Employees know the reality of work circumstances and how to translate those into the new way of working.
Furthermore, team members should be persuaded that the change to their way of working adds value to the entire company, from which they are going to beneficiate in the medium and long-term.
Enthusiast employees motivated to adopt the new methods may greatly influence others. This can be an even more effective implementation strategy than having managers or directors forcing the adoption.
To guarantee the final success, it is necessary to start with relatively easy projects where the results should be quantified and compared with the ones pre-adoption. Make sure to successfully achieve the first steps and you will favour success in the next ones.
To sum up, it is advisable to progressively evolve, with clear and feasible objectives, reaching perfection step by step.
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Agile methodologies allow proper organization of work, establishing an order of priorities and preventing the realization of accumulation several tasks at the same time.
