3 Team Techniques to Improve Cost Estimates

Improve buy-in and support for your project budgets

Do you ever feel like the Lone Ranger when trying to improve cost estimates? You’re not alone. Actually, you have a team.

3 Team Techniques to Improve Cost Estimates

Many project managers are left to their own devices when estimating projects. This can be rather challenging. So, how can we improve our cost estimates?

I’d like to suggest something different — engage your project team and key stakeholders. Not only will you improve your cost estimates, but you’ll also get better buy-in and support in keeping the project within budget.

What kinds of projects would benefit from this approach? Large complex projects. And alien projects that are different projects than previously undertaken.

6 Practical Ways to Actually Improve Your Cost Management

PMP Exam Series - Cost Management

Think about it for a minute – what have you done in the last six months to improve your cost management?

Review the projects you’ve completed in the last year. How many of those projects came in over budget?

6 Practical Ways to Actually Improve Your Cost Management

Consider John, a savvy project manager, who was asked to manage a project to replace a dated network system. The project sponsor told him that he had $100,000 for the project. When John asked the project sponsor how the $100,000 was estimated, but he never got a clear answer.

As John started the project, he checked the historical records of similar projects as well as some other companies. His early estimate — an analogous estimate — was $125,000 with a range of accuracy between -25 percent to +50 percent. John shared the estimate with the sponsor and said that he would provide a more detailed estimate after completing a work breakdown structure (WBS) with the project team.

The team used the WBS to complete a bottom-up estimate, estimating each project activity and rolling the individual estimates up to higher levels and ultimately to a project total. John reported the revised estimate of $120,000 with a range of accuracy of -5 percent to +10 percent. The sponsor increased the budget to $110,000.

John worked with the sponsor and the team to find ways to further decrease cost. What could be excluded? How could the team get discounts when purchasing the equipment, software, and wiring?

Cost management is rarely a straight shot. We zigzag, don’t we? We give and we take, and we attempt to find ways to deal with the budget constraints we face each day. (If you have a spouse and children, you probably already understand these principles, huh?) Let’s look at some ways to improve your cost management.

My Top 10 Most Popular Blog Posts of 2016

Wow! It’s been a great year. So much so, I’ve decided to leave the corporate world to help more project managers than ever. Thank you for making this possible.

most-popular-blog-posts-of-2016

Approximately 42,000 visitors came to The Project Risk Coach in 2016, up from 33,000 visitors in 2015. Also up from 21,000 in 2014. As you can see, the visitors have doubled in two years.

Visitors spent an average of 4 minutes and 19 seconds per visit.

The top countries were:

  • The United States
  • The United Kingdom
  • Canada
  • India
  • Australia

Top Blog Posts for 2016

Here were the top 10 posts and the number of visits:

  1. How to Develop a Project Charter – 4,184
  2. The What, Why, and How of Projects – 3,229
  3. How to Determine Project Budget Reserves – 3,091
  4. Evaluating Risks Using Qualitative Risk Analysis – 1,993
  5. 7 Things You Ought to Know About Identifying Risks – 1,786
  6. 10 Surprising Ways to Make Your Project Customers Happy – 1,224
  7. How to Build a Risk Register – 1,060
  8. 7 Sharp Ways to Improve Project Quality – 849
  9. How to Break Down Your Project – 833
  10. Free Stuff – 813

Focus for 2017

As I’ve thought about 2017, one word continues to come to mind – ENGAGEMENT. While I enjoy sharing with thousands of people around the world, I want to engage more with individuals and small groups, both online and face-to-face.

I see my primary audience as practicing project managers in the United States with a college education, a large percentage with either a Bachelor’s or Master’s Degree. Most are between the ages of 30 and 60. I plan to focus more on project managers working in the financial industry.

Irrespective of where you live or what you do, I hope you will always find The Project Risk Coach as a reliable resource of project management information.

Please Take My Reader Survey for 2016

Reader Survey 2016. Please help me help YOU. It is my sincere desire to provide as much value as possible in 2017. Click here to complete a quick survey.

PLEASE TAKE MY 2016 READER SURVEY

Help Me Help YOU!

I want to ensure my platform does the best possible job of answering your needs and interests. And that means I need to know more about you. To do that, I’ve created my 2016 Reader Survey.

Feedback

Would you please take a few minutes to fill out the survey? By doing so, you will ultimately be helping yourself. Why? Because you will be helping me create content even more interesting and relevant to you.

Your input is important to me. The survey is easy to fill out. And you can finish in three to four minutes.

Yes, I’m Happy to Help. Take Me to the Survey!

Thanks in advance for your help!

Regards,

Harry Hall

The Project Risk Coach

5 Ways You May Unintentionally Create Schedule Risks

The Problems with Crashing, Fast Tracking, and other Schedule Compression Techniques

How do project managers unintentionally create schedule risks? As a result, perhaps you feel a cloud of uncertainty about your schedule.

5 Ways You May Unintentionally Create Schedule Risks

Image courtesy of Adobe Stock.

Many times, it starts with pressure from a sponsor to deliver the goods early. For sure, project managers have a responsibility to work with their sponsors to understand the requirements and to complete the projects within the sponsor-imposed deadlines. Rather than wasting our time complaining about the deadlines, how can we work with our sponsors and team members to find solutions to schedule issues?

My friend Colin Gautrey has some wise advice on 8 Ways You Can Better Respond to Unrealistic Demands.

As we work to develop and compress our schedules, let’s be aware of the common causes of risk. We will be in a better position to manage the risk and deliver our projects on schedule.

5 Causes of Schedule Risk

  1. Crashing the schedule. It’s always been funny to me that the Project Management Body of We have too many cooks in the kitchenKnowledge uses the word “crashing” as a schedule compression technique. The term makes me think of an uninvited guest crashing a party, but with schedule management, the individuals are actually invited to the party. Project managers use crashing to shorten the schedule for the least incremental cost by adding resources, typically to the critical path. It can be a great technique — just be aware — crashing may increase your risk. Too many cooks in the kitchen spoil the broth.
  2. Fast tracking. Here’s a technique to shorten the schedule by performing activities in parallel for at least a portion of their duration. For example, we might start work on a software design while the team is working on the requirements. Consequently, this technique may increase your risk and requires good communication and coordination; otherwise, it may be anything but fast.
  3. Assigning the wrong resources. You ask a manager for a resource for your project. In return, you get the person who is least busy, not the skilled resource you need. Rather, Susan, an experienced project manager describes specific skills needed and uses her influencing skills to persuade the manager, greatly improving her chance for securing the queen resource. What’s a project manager to do when resources are preassigned?
  4. Making sequence mistakes. John, an inexperienced project manager, failed to work with his team to sequence the project activities properly, resulting in issues which were discovered after the schedule was approved. As a result, John has learned to engage his team members when identifying and sequencing future project activities.
  5. Failure to baseline your schedules. The project manager and team did a great job in breaking down the project, identifying activities, and creating the project schedule. However, the project manager failed to get approval for the schedule. What happened? Yes, the schedule changed. The team did not have a baseline for comparison resulting in significant uncertainty about the health of the project. Like building a house without a plumb line, who knows if the walls are straight?

Question: What other ways have you seen project managers unintentionally create schedule risks?

How to Take Care of Poinsettias (and Project Teams)

Knowing what your teams really need

I recently had a friend ask me — since I have an agricultural background — how to take care of her Christmas poinsettia. She said, “The leaves have been turning yellow and falling off. I think I’m killing it.”

How to Take Care of Your Poinsettias (and Project Teams)

Poinsettias have a reputation for being hard to maintain. I asked a few questions such as:

  • How many hours of sunlight has the plant been getting?
  • What’s the temperature in your house?
  • When and how are you watering the plant?
  • Are you fertilizing the plant? If so, how much?

Based on her answers, I knew the primary problem was insufficient light. Poinsettias like six to eight hours of filtered sunlight and temperatures between 65 and 75 degrees Fahrenheit. Furthermore, water the plants when dry to touch, and drain the saucer. What about fertilization? No fertilizer is required when the plant is in bloom. Want to know more?

Are Your Team’s Leaves Turning Yellow?

You may have the best intentions, but you may be over managing and killing your team. How can we revive and maintain a healthy team?

First, it would be helpful if you knew your team’s thoughts of your leadership and management. Ask and listen carefully. You might ask a few team members one-on-one, “Hey, I’m looking for ways to lead more effectively. Would you mind answering a few quick questions?”

  • What should I do more of?
  • What should I do less of?
  • What should I continue?

Ultimately, you’ll have to determine your actions going forward, but you may be missing some simple things that could make a big impact. Just the fact that you would ask these questions would speak volumes. Leaders are intentional in creating a vibrant culture and involve others in that culture.

“What most people want in a leader is something that’s very difficult to find: we want someone who listens.” –Seth Godin

Second, consider what the team needs to do their jobs and how well they are working together. Here are some additional questions you may ask:

  • Do you understand the goals of the project?
  • Do you have the tools you need?
  • Do you clearly understand your role and responsibilities?
  • How’s the chemistry of the team? What could make it better?
  • How can I improve the communication?

Taking Action

After carefully considering the needs of your team, develop a simple plan to put in action. You may find yourself doing less and getting better results. And keep in mind — teams, like plants, need consistent care to flourish. Best wishes!

Are you an Intentional Project Manager? Many project managers possess good technical skills, but some lack interpersonal skills such as leadership, influence, conflict management, decision making, and facilitation skills. That’s why I wrote The Intentional Project Manager and created the FREE Companion Course. I hope you’ll check it out.

Last week, I shared my blog post How to Break Down Your Projects. This week, I’m going into more detail as we look at:

  • What’s the difference between deliverables and activities?
  • How to break down a project using a mindmap

 

What tips do you have for breaking down your project into deliverables and activities?

I asked this question on LinkedIn: What tips do you have for breaking down your project into deliverables and activities? Bill Duncan responded with the following tips (which I thought were great):

  1. Recognize that “work packages” are only the lowest level of the WBS from the buyer’s perspective in a contracting environment.

  2. Recognize that any deliverable can be described as an activity (by adding a verb) and any activity can be described as a deliverable (by removing a verb). Don’t worry about the distinction until you have the decomposition done.

  3. Decomposition happens phase-by-phase. You can’t develop a complete WBS for a non-trivial project at the start.

  4. When you are confident that you can estimate cost and duration, you have enough detail.

  5. Every lower level must be both necessary and sufficient for the item above it.

  6. Every item occurs once and only once.

What else would YOU add?

Check out my article on How to Break Down Your Projects.

How to Break Down Your Project

Scope and Schedule Management

How should you break down your project?

Steven Pressfield said, “A great trick that I learned having worked as a screenwriter for many years, the way screenwriters work, is they break the project down into three-act structure: Act 1, Act 2, Act 3. I think that is a great way to break down any project, whether it’s a new business or anything at all.”

How to Break Down Your Project

Image courtesy of Adobe Stock

Whether we are creating a Pixar movie, a building, a highway, or a service center, wise project managers break down their projects into pieces. As we do, we create a structure for the project that helps stakeholders understand the project.

Some people struggle with the challenges of creating large, complex systems, highways, and companies. How can we do this? The answer: one bite at a time. Breaking projects into pieces makes the impossible possible. In addition, the break down creates the vision.

New Exciting Chapter in My Life

What’s your life calling? Frederich Buechner wrote that calling is “the place where your deep gladness meets the world’s deep need.”

My greatest joy is teaching.

Exciting New Chapter in LIfe

Photo courtesy of Adobe Stock

I got it honest, as we’d say in the South. My father taught farmers how to farm and my mother taught students high school chemistry. As a result, farmers put food on our tables, and students went on to be doctors, engineers, and to perform research all around the world. I remember students returning to my small hometown — Donalsonville, Georgia — years later to thank my mother.

While I’d never say our family was wealthy, daddy and mama lived rich lives. They found their joy in serving and teaching others. Some of the world’s deep needs were met. I know mine were.

2015-07-09-03-37-13My career has included work in the financial, healthcare, and agricultural industries. Each part of my career journey has afforded me the opportunity to perform and teach project management.

Five years ago, I followed in my twin brother’s footsteps who blogs at CPA-Scribo. I started blogging at the Project Risk Coach. I could not imagine what would happen in the following years.

My blog traffic has grown from 100 people to about 5,000 visitors per month, and my mail list has grown to more than 1,000 people. I’ve had the pleasure of connecting and teaching people from all over the world. For a guy who grew up pulling weeds in peanut fields, I’ve been in high cotton.

Opening a New Chapter in My Life

I’ve had a growing sense that it was time for me to transition from my job as an Enterprise Risk Manager at the Georgia Farm Bureau Mutual Insurance Company to invest my full time and energy in my LLC – the Project Risk Coach. And January 1, 2017, that’s exactly what I’ll be doing.