Calculator, Money, calculation, manMan-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.

1 man hour = work completed in an hour of uninterrupted effort by an average worker.

Calculating man hours is the basis for being able to measure the cost per project of each type of expert and his contribution to the result.

Start calculating the costs of all your resources by professional categories with ITM Platform


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.

ITM Platform Standard costs: Global and Specific for Professional Categories

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.

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phone, dollar, manifying glass, balance, credit card, calculatorOne of the main functions of the CIO is to estimate and plan projects that will take place in the near future. And this, for some management positions requires pure reflection and strategic vision, from the CIO. Which represents an extra capacity of creating consensus and balance among the C level.

Let’s suppose that the organization where you work is proactive and start budgeting for the following year a few months before it begins. Say that the CIO has the task of drawing up a list of projects that will be implemented next year. In addition, of course, to value that list economically, plan the resources available, align it with the overall company strategy, etc.

"For the CIO it becomes a test of ability to search for consensus and balances"

The demand will have to be considered, which shall consist of the ideas and needs of all other organizational units.

Many of you will agree with me that the demand for business units do not usually come in an orderly manner.

This scenario, repeated year after year, can be relieved or hindered depending on organizational culture factors: the more mature ones will have orderly processes tabulated that will make this process, in theory, a path of roses. But this is not always the case, right?

The proposal we are making in this article to survive the planning and budgeting processes, which is to link the rest of the management team with the criteria for project evaluation and selection in order to find consensus in the early stages of the process.

Basically, it is articulated through a weighting system in stages, trying to isolate each one of them until it reaches a stage of selection. Let's look at it in more detail.

Phase 1. Assess business objectives in the planning and budgeting

Nothing to do with the projects. Simply extract the objectives and criteria of the strategic plan and assign values.

There are several methods to do this. In this case we have chosen the "pairwise comparison". Although we might have used the "ask the boss" or any other more orthodox methods.

planning and budgeting

With this method (either executed in an application or in a spreadsheet) we will obtain an assessment of the objectives, putting one over another, which is what we want at the end.

This is an example resulting from the previous comparison between pairs.

planning and budgeting

The key to this process is not so much the correction from the point of view of content, but rather the composition of the people who made this assessment: for a CIO concerned about the alignment of IT with the business and the subsequent support of the organization projects, it would be essential that this step is performed by the steering committee. This will be allow him to be personally detached of the foundation of future decisions.

In large organizations, this process can be repeated by business units which will not necessarily prioritize objectives in the same way.

Phase 2. Assess projects against these targets

The next step is to make comparisons of the value contribution of each project to each of the business goals.

In this case, we decided to use a qualitative method with Harvey Balls, where projects are rows and columns objectives. Here we say if the project adds value to the goal or not so much.

planning and budgeting

As in the previous case, these evaluations provide a "base 100" scoring for projects. But the key here is that the projects are not valued in relation to themselves, but are weighted by the prior evaluation of the objectives.

The result would be something like this:

planning and budgeting

Phase 3. Selected projects

Now it will be easier to select projects that may or may not be undertaken, with budget constraints according to value creation criteria.

planning and budgeting

In conclusion:

The work life of the CIO could be greatly simplified:

  • Because it has implied other directors in valuations, especially the one related with objectives and criteria.
  • Because it provides a scientific and professional decision-making support system.
  • Because it encourages the rest of the organization to have a cross-company and objective view of the initiatives

This short article aims to offer a proposal to focus strategic planning of projects in a solid form and strengthen the role of the CIO in organizations. We encourage you to leave any thoughts in the comment box below.


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