Wednesday, March 30, 2011

The 5 Goals of a Project Manager

These goals are generic to all industries and all types of projects. Regardless of your level of experience in project management, set these 5 goals for every project you manage.

Goal 1: To finish on time

This is the oldest but trickiest goal in the book. It's the most difficult because the requirements often change during the project and the schedule was probably optimistic in the first place.

To succeed, you need to manage your scope very carefully. Implement a change control process so that any changes to the scope are properly managed.

Always keep your plan up to date, recording actual vs. planned progress. Identify any deviations from plan and fix them quickly.

Goal 2: To finish under budget

To make sure that your project costs don't spiral, you need to set a project budget at the start to compare against. Include in this budget, all of the types of project costs that will accrue, whether they are to do with people, equipment, suppliers or materials. Then work out how much each task in your plan is going to cost to complete and track any deviations from this plan.

Make sure that if you over-spend on some tasks, that you under-spend on others. In this way, you can control your spend and deliver under budget.

Goal 3: To meet the requirements

The goal here is to meet the requirements that were set for the project at the start. Whether the requirements were to install a new IT system, build a bridge or implement new processes, your project needs to produce solutions which meet these requirements 100%.

The trick here is to make sure that you have a detailed enough set of requirements at the beginning. If they are ambiguous in any way, then what was initially seen as a small piece of work could become huge, taking up valuable time and resources to complete.

Goal 4: To keep customers happy

You could finish your project on time, under budget and have met 100% of the requirements—but still have unhappy customers. This is usually because their expectations have changed since the project started and have not been properly managed.

To ensure that your project sponsor, customer and other stakeholders are happy at the end of your project, you need to manage their expectations carefully. Make sure you always keep them properly informed of progress. "Keep it real" by giving them a crystal clear view of progress to date. Let them voice their concerns or ideas regularly. Tell them upfront when you can't deliver on time, or when a change needs to be made. Openness and honesty are always the best tools for setting customer expectations.

Goal 5: To ensure a happy team

If you can do all of this with a happy team, then you'll be more than willing to do it all again for the next project. And that's how your staff will feel also. Staff satisfaction is critical to your project's success.

So keep your team happy by rewarding and recognizing them for their successes. Assign them work that complements their strengths and conduct team building exercises to boost morale. With a happy motivated team, you can achieve anything!

Wednesday, March 02, 2011

How to Manage Your Project Finances

Every project needs to deliver "under budget". But when you have to oversee people, contractors, equipment and materials on a daily basis, how can you track the cost of all of this easily?

Step 1: Set the Budget

The first step towards managing your project finances is to set a budget. This isn't as easy as it sounds. You need to forecast the total amount of people, equipment, materials and other expenses, needed to deliver the project. You then need to work out when in the project plan, these expenses will take place. By doing this, you can get a picture of your "project cashflow" which tells you the amount of money you need for every week in the project.

Step 2: Backup Funding

Before you need it, find backup funding in the business. This is additional funding that can be used to deliver your project, if you need it. Few Project Managers actually do this in advance, but if you have almost completed a major deliverable and you suddenly run out of money, then that backup funding might "make or break" the project. You are always in a better position to get backup funding before you need it, rather than asking for more cash when you've already overspent. Get backup funding as early in the Project Life Cycle as possible. It will be sure to reduce your stress.

Step 3: Weekly Tracking

The next step after setting your budget and securing backup funding is to start tracking your daily spend on the project. You need to track every expense that occurs. Ask your team to complete expense forms and submit them to you for approval. If you can get your team to wait until you have approved an expense before it is incurred, then you can more easily control expenditure on the project. Next, you need to track your people expenses. The total cost of the hours undertaken by those people is automatically shown on the Project Dashboard, so you can see whether your people cost is under or over budget.

Step 4: Realignment

When you start spending more than your budget, you have 3 options available to help you stay within budget:

  1. Re-forecast your expenses and present a new budget to your Sponsor for approval.
  2. Start reducing costs immediately. This means spending less to get the same job done. Or alternatively, see if your Sponsor will agree to a reduced scope, so that you have less to produce for them.
  3. Start using your backup funding to get you through the crux of the project.

Step 5: Cashflow Management

Make sure you always have enough funds available to cover your spending over the months ahead. Cashflow management is about managing the cash needed to deliver your project. So make sure your Sponsor has approved the next 1-2 months of work ahead of time, and that the funds needed to manage the project have been made available. Then track the spending of that funding every week.