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Engage PMO before Contract is Signed to Minimize Cost and Schedule Overruns

Before stating my case, I invite you to read the following conversation between Polly the Project Manager and Steven Sales.

Steven Sales: I want you to create a project schedule for the build of Jane Client Website. As you know, they’re an A-list client, so I gave them a 20% discount.

Polly PM: OK. You are aware that our minimum rate for a standard site is $500K, right?

Steven Sales: Yes. But the client does not need to know that.  Besides, we’ve been able to build sites for less than that before, so I don’t see it being a problem for Jane Client.

Polly PM: Did you gather requirements and acquire specs?  And, is Jane Client aware that it takes anywhere from six to nine months to build a standard website?

Steven Sales: Well, I was counting on you to gather specs for the site…isn’t that part of your job? Oh, and I’ve already promised that we’ll have the project completed in three months.

Fast forward two and a half months…the project is over budget and the go-live date has been delayed.  Jane Client is furious, Steven Sales is frustrated and the person taking the heat is Polly the Project Manager.

Unfortunately for project managers, the situation described above occurs all too often; and it creates a high-stress environment for the client and the project team.  The project manager is held to scope and timeline constraints without ever having been consulted before the contract was signed.

In a perfect world, project managers are sought out for their scope, cost, and timeline estimation expertise long before clients sign the dotted line.

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As stated on page two in The Value of Project Management, “Being able to deliver projects on time and within budget often determines whether a company will get the next job or whether its new product hits the market”.

To ensure all details are taken into consideration when defining costs and establishing timelines, engage project managers as early as possible in scope of work creation.  Not only does this practice prevent stress and frustration in the planning and execution phases of the project, it also improves overall profitability and stakeholder trust.

If one takes into account the following numbers from PMI’s whitepaper on The Value of Project Management  (as cited in State of the PMO 2010), involving PMs at the onset of a project should be common sense.  And for teams that work without project managers, I think your foreheads may hurt after a good face palm upon reading the numbers below:

  • PMOs decreased failed projects by 31 percent
  • PMOs demonstrated a 21 percent improvement in productivity
  • PMOs delivered 30 percent of projects under budget
  • PMOs saved companies an average of $567,700 per project (p. 5)

I can only imagine the reaction after having read the above points. If you’re one of the lucky ones employed by a company that has a Project Management Office, then I encourage you to take advantage and request its expertise in the scoping and statement of work writing processes. Then, watch as your project comes to fruition on time and (even better) at or below budget.