How to Keep Your Projects Financially Fit

I received a Fitbit as a gift. “Fitbit tracks every part of your day — including activity, exercise, food, weight, and sleep — to help you find your fit, stay motivated, and see how small steps make a big impact.”

Keep Your Projects Financially Fit

Keep Your Projects Financially Fit

After using the Fitbit for about three weeks, I’ve discovered it works. How?

First, I see my performance — the number of steps, activity levels, and sleep — throughout the day. Fitbit even offers notifications for when I’m not active for long periods of time. This alone keeps me motivated.

Second, the Fitbit syncs to my iPhone Fitbit app where I can monitor trends. I can see if I’m going to bed and getting up at a consistent time, how many calories I’m burning, and how many days in a row that I’ve exercised.

Third, I can track my progress against my personal goals (e.g., run three days per week and walk three days per week).

Fourth, you can (I haven’t yet) even add friends into your circle to track progress, receive encouragement, and have a friendly competition.

Let’s look for ways to monitor and control our cost more intentionally.

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.

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

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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 Attack the Enemies of Scope Management

Why is scope management so difficult? What enemies cause us scope issues?

Let’s first consider the essence of scope management: “to ensure that the project includes all the work required, and only the work required, to complete the project successfully,” according to the Project Management Body of Knowledge (PMBOK). Let’s take a look at each part of this statement.

How to Attack the Enemies of Scope Management

Enemy #1 – Not Including All the Work

Some project managers have a bad habit – they create their project plans with little input from the stakeholders. What’s the result? The project manager may miss key deliverables. They do not have ALL the work required in their project plan.

Who Approves Your Project Change Requests?

Some organizations lack clarity about who approves the project change requests. On one project, the sponsor tells the project manager to make the decisions. On other projects, the sponsor makes the decisions. And yet, in other cases, senior management gets involved.

Who Approves Your Project Change Requests?

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Your project may morph into a two-headed monster without an integrated change control process, resulting in adverse impacts to schedule, cost, and scope. It’s critical that you define how change requests will be reviewed, approved or declined.

So, who should approve project change requests? There’s no one right answer.

Several variables should be considered when determining who will approve change requests such as:

  • Size of project
  • Complexity of project
  • Number of external parties
  • Contract requirements
  • Enterprise environmental factors

If your organization has a Project Management Office (PMO), consult this group for standards and change control processes. If not, you basically have three options.

What is the Management Reserve for Project Budgets?

How to budget for the unknown unknown risks

Have you ever had a budget crisis due to the lack of a management reserve? Unforeseen work comes knocking at your door. You look at your budget, but you don’t have the funds to handle this work.

What is the Management Reserve for Project Budgets?

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There is a better way to handle the unexpected. You can — assuming that your organization supports the concept of reserves — create a management reserve when estimating the cost of your project. Let’s dig a little deeper.

Get Ahead of Your Risks

How to use key risk indicators

Which would you prefer? To respond to risks after they occur or to see the risks early and take steps to prevent or reduce your risks?

I’ll take the latter, thank you!

Get ahead of your risks

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Project managers can get ahead of their risks by thinking differently. Rather than focusing on past performance only, consider how you can anticipate when future threats and opportunities may occur. If you do, you will stand out from other project managers.

How to Identify, Evaluate, and Respond to Sneaky Risks

How do you know when to respond to sneaky risks? Sometimes it’s obvious; other times you may experience a slow death march into ultimate ruin.

How to Identify, Evaluate, and Respond to Sneaky Risks

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Part of our problem is unknown risks; these risks silently steal and kill over time. Even if we are aware of certain risks, we may be unsure of when to respond. Allow me to share a personal story to illustrate.

What to Do When a Bad Moon is Arising on Your Project

Ever have this sinking feeling that a bad moon is arising on your project? You’re not sure what the problem is, but you know things are out of control.

What to Do When a Bad Moon is Arising on Your Project

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One of the strongest telltale signs of project trouble is increasing numbers of project issues. The negative events that you were concerned about have occurred. Increasingly, your attention is being diverted from managing your project activities to putting out fires.

So, what can we do to stem the tide of project issues? How do we keep events in the potential category rather than in the realized category? Let’s start with a better understanding of threats and issues and how to identify them.

How to Look Backward and Forward at Your Risks

Project managers may fail to achieve their project objectives because they don’t know how to take a look backward and forward at their risks.

How to Look Backward and Forward at Your Risks

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Some project managers only look backward.

If we only look backward, we will miss opportunities that lie before us, and we will likely be blindsided by threats. Not a good thing, eh?

Think about it — we don’t drive by keeping our eyes on the rear view mirror only, do we?

Some project managers only look forward.

Project managers who only look forward fail to learn from their past successes and mistakes. These individuals show their insanity, doing the same things and expecting better results.

Project managers can use risk audits to look backward and risk reviews to look forward. Let’s explore how to perform these two powerful techniques.

“Risk is like fire: If controlled it will help you; if uncontrolled it will rise up and destroy you.” Theodore Roosevelt”