For most of my career, I have served in financial service organizations. As a project and program manager and PMO director, I’ve had the responsibility of procuring the necessary products and services from sellers. In other words, I was a buyer.
I recently left the corporate world to develop my LLC where I provide consulting services and teach courses to help project managers prepare for their PMP and PMI-RMP exams. Now, I am a seller.
Whether you are or a buyer or seller, good communication and doing what you say is critical to success. What can we do to get everyone on the same page and for the buyer and seller has a mutually beneficial relationship? Allow me to offer three recommendations.
1. Define the Buyer/Seller Relationship
First, healthy buyer/seller relationships require clarity in the roles and responsibilities. Think about a project that requires third-party professional services. Perhaps you need an outside team to develop a new software application.Continue reading
This is a guest post by my twin brother Charles. He is a CPA and a Certified Fraud Examiner. He is a partner in the firm McNair, McLemore, and Middlebrooks & Co. Charles lives in Macon, Georgia, with his wife Kelley. He is the author of The Little Book of Local Government Fraud Prevention and Preparation of Financial Statements & Compilation Engagements. He blogs at cpahalltalk.com.
A bribe is seen as a charm by the one who gives it; they think success will come at every turn. Proverbs 17:8
Last week, Harry and I were running, and he told me about his procurement risk blog series. Since I am a fraud prevention guy, we began discussing the risk of vendor kickbacks to those with the power to purchase.
I have seen vendors provide free liquor, women, trips, cars, boats, and cash–all to guarantee their bid acceptance. One such case provided “hundreds of competitively-bid contracts to favored vendors in exchange for gratuities” including “hot tub parties with strippers.”
If vendors know your employees’ weaknesses, they can exploit them. And if they do, significant harm lies before you. The Association of Certified Fraud Examiners’ fraud survey showed that 35% of the cases were corruption-related with a median loss of $200,000.
As we initiate our projects, we may find that our organization lacks the skills and knowledge to create the project deliverables and meet the project objectives. In other cases, we may need products outside of our organization. Project managers use procurement management to secure these needed products and services.
The Project Management Body of Knowledge (PMBOK) says that Project Procurement Management “includes the processes necessary to purchase or acquire products, services, or results needed from outside the project team.” Our ability to find and procure the right resources at the right time will enhance our chance for success.
So, how can we improve our project procurements? Start by developing a Procurement Management Plan. The plan describes your approach to acquiring the necessary products and services from outside organizations. This plan may include things such as:
I have had the privilege of managing two PMOs, both composed of several project managers. It was always interesting to watch—the best project managers were the ones who had a habit of identifying risks, both threats and opportunities. And these individuals did not perform the risk identification just once at the beginning of their projects. Rather, they had a habit of reevaluating their projects with an eye toward new risks.
Wise project managers know that there are unknown risks lurking in every corner. Each new phase of a project brings uncertainty, some significant, some not. Furthermore, as new stakeholders enter the scene, new interests and concerns can cause our projects to get off track.
If you’ve been burned by risks recently, let’s talk about what you can do to improve your chance for future success.Continue reading
Some portfolio, program, and project managers make a big fuss over risk management. And others use lots of acronyms and big words to impress people. But at the end of the day, all that really matters is getting results.
For eighteen years, I worked for a property and casualty insurance company. Each year, our senior management team would meet with a credit rating agency to share our goals, strategies, and progress. The presentation included what we were doing for enterprise risk management.
One year, the rating analyst said that insurance companies can talk a good game. They have a risk management plan. They regularly identify, analyze, and respond to risks. And yet, some of these companies were floundering.
Then the analyst said, “All that really matters is that you are getting results.”
Project managers can be guilty of talking a good game too. We have a risk management plan. We perform all the risk management processes, but for some reason, we may fail to get the desired results.
So, let’s review the risk management processes, things within each process that may lead to lackluster results, and what we can do about each.Continue reading
Is there a way to improve both project requirements and quality at the same time? Allow me to begin this discussion with an illustration.
I recently needed a television mounted on the wall of my office. A fairly simple requirement, right?
I told the handyman that I wanted the television to be head high. Imagine my surprise when I walked into the room and saw that the television had been installed a foot higher than I expected. The handyman did what I asked him to do but he used his head height, not mine. He was like the Jolly Green Giant – 6 foot 7 inches tall; I was 5 foot 6 inches tall.
Quality management is highly dependent on the clarity of the project requirements. Why?
Quality is the degree to which a project meets the requirements. This definition assumes that the requirements are defined and that there are varying degrees to which the requirements may be met.
If the truth were told, many projects lack SMART requirements: Specific, Measurable, Achievable, Realistic, and Timebound. They’re vague, and there are little to no standards by which to judge whether the requirement has been implemented properly. Furthermore, stakeholders may not be engaged adequately in the requirements process.
Ill-defined requirements — like “install the TV head high” — make it difficult, if not impossible, for designers, developers, and testers to do their jobs. When defining requirements, define the fit criteria: “a quantification of the requirement that demonstrates the standard the product must reach.” For example, I could have specified the precise vertical and horizontal location for the television. With this, we would have had a way to measure whether the requirement was met (and avoid the rework, time, and extra expense).
Want to know more about project requirements and quality management? Check out these additional articles:
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.”
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.Continue reading
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?
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.Continue reading
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.
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:
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.Continue reading
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.
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.