Dick has more than 25 years of project and program management experience throughout the US and overseas. Dick was a partner in the 4th largest professional firm and a VP in a Fortune 200 company. He trained and developed 100's of project managers using his methodology.
Dick is the author of 14 books, over 300 articles and director/producer of 90 short project management training videos. He and a team of 25 project managers work with client companies & students across the US and in Europe, South America, Asia and the Middle East. They have assisted over 300 organizations in improving their project performance. Books by Dick Billows, PMP are on Amazon.com
Change Control does good things for you and your projects. It documents who requested the each change, what the cost and benefit was and who approved/disapproved the change. So if you wind up finishing late and over budget, you have documentation of what happened. Most important It also let’s you manage your users, clients and stakeholders and build good relationships while controlling project scope.
Stopping Scope Creep
A manager walks into your cube and says, “You need to add Chinese classes to the project a requirement that you missed when you were building your plan.”
You let the acqusation slide and say, “Oh what did we miss in our plan and the requirements list you signed?”
“Manderin language training for our phone reps, the number of Chinese customers is skyrocketing. I need you to squeeze it in.”
“Do you need all the reps to learn Manderin? You asked, scribbling on the change request form.”
“No, Just 20 of them.”
“How long a class do you require? I need that for this change request
The sales manager jerked his head up “5 days. But stop writing. This is your change.”
You shook you head, “You’re the one requesting a change that will increase both cost and duration. Not me.”
The sales manager pleaded, “I just want you to squeeze it in right before the reps go live with the new system, Not make a big deal of it.”
You answered, “I can’t just add it without the sponsor’s sign-off, we need to go through change control.”
“I know the VP will approve it, we discussed it over lunch. This is a no brainer.”
“Good, looked at the chang order. The university will give us a student trainer but for 5 days. its $5,000 which includes materials. Then once he signs this $5000 increase in cost and a 5-day delay in the finish date, we will be good to go.”
What’s important here is:
The PM is not evaluating the benefits of the change, he is just quantifying the impact on schedule and cost.
He used the stockholders cost and time estimates
No president was established about making changes without an approved change request
No Conflict with the stakeholder. PM was just following procedure.
Now let’s look at a project with no change control
No Change Control Process
Let’s consider what can happened if you don’t have a Change Control Process. A stakeholder boss asks you to squeeze in a requirement. On the surface, the requirement looks simple and should not take much time. You do not want to disappoint your boss, so you agree. You decide to have Janet work on this since she has time before her next task starts. Janet explains that she is working on another project during her slack time between tasks on your project. She could not possibly work on this new requirement. Gosh, that is right. The project team is only being loaned to you. You don’t “own” all their time.
Well maybe Bob could slip this into his schedule. Bob is amenable. He can start work on the change and try to complete it in the time that will allow you to stay on schedule. One week later, the day before the due date, Bob comes to you and says he’s sorry but he cannot finish the task. His manager is pulling him back because Bob has used all the hours his boss agreed to for this project.
Now you must find someone to finish Bob’s task by tomorrow. What are you going to do? The schedule is slipping since Bob is not available to work on the task. Your brain starts rushing, thinking about who could fill-in for Bob. Then your thoughts turn to dread. How are you going to explain the slip to the sponsor? You accepted the change from your boss without going through the Change Control Process. Where are you going to get the additional resource to finish Bob’s work without disrupting something else? What following work is affected by slipping Bob’s task?
Change Control Process
You know that any change comes with a cost or an effect on the project baseline. To support an additional requirement, a company manager or stakeholder must follow the Change Control Process or they must create another project. Changes and additional requirements add to some aspect of a project; the time, cost, quality, resources, scope, or risks. If the additional requirement can be handled on a non-critical path task, it may be possible to support the manager’s or stakeholder’s request. Nevertheless, you should follow your Change Control Process and ask the manager to help you complete the appropriate change request form. You will review the change with the team to assess the effect on the current schedule and other aspects of the project. The change request and the estimated impact will be presented to the project sponsor for their consideration. The project sponsor will make the determination if the change is important enough to modify the current, approved project plan and baseline.
Having and following an established project plan and Change Control Process coordinates everyone’s work to achieve successful project completion. Changes are often necessary and change requires the stakeholders, project manager and the team to follow the Change Control Process to successfully continue the project work and meet the objective.
Projects are very often broken into phases. Each phase is a sequence of steps that must be completed. This is not to say that there aren’t surprises and it certainly doesn’t mean there’s only one thing happening at a time. But there are identifiable project phases that are planned, executed and tracked. Building a department store might have these phases:
Inspections and Certificate of Occupancy
Each of those phases might be done by different people with their individual schedules, budget and contract. Work on some of these phases might happen at the same time. Other phases would proceed in sequnce.
The project manager and sponsor reach agreement on how to divide a project into phases. As an example, an information systems project might have the following phases. They moves from design to development to. programming testing and installation. There is usually overlap between the phases.
The project manager and team would estimate the hours of work, cost and duration of each phase. One size of project management does not fit all projects. As we discuss the project phases, we’ll talk about what phases you can do for two types of projects: a small project done within a department and a larger project done for a customer or client.
Real-world Project Management: Assessment and Feasibility
Project Phases – Initiation Steps: SOW and Charter
When we initiate a project, we begin the planning process. That’s where we identify what the project should produce. The project sponsor usually initiates the project with a document called a statement of work or SOW. That document gives the project manager information about what end result the sponsor wants from the project. Then the project manager will meet with the sponsor and talk about the deliverables the project has to produce. They will also discuss what phases they will use.
The major deliverable is the project scope and that’s the business result the project sponsor wants. Even on a small project, during the initiation phase the sponsor and the project manager will identify the major deliverables that will lead them from where they are now to the major deliverable, the project scope.
Let’s start the discussion with a small project example. All the work may be done within one department where the project manager works for the department manager who is the project sponsor and the boss of all the project team members. The sponsor will create the SOW and then work with the project manager to define the major deliverables. Then they might go straight to developing the project charter which is the final step of the initiation phase. The charter lays out the scope and deliverables, the resources required and the risks that have to be managed. It also gives rough estimates of the project’s budget and duration. That might be all that’s needed to initiate a small project.
On a larger project, one done for a client for example, there may be many more steps in the initiation phase. The organization in which the project is being performed may require a feasibility study to document the likelihood of success and the costs and resources required. Before granting initial project approval, the organization may require a formal business case which documents the return on investment, the cost/benefit analysis and the payback of the proposed project. The project manager might begin the process of identifying stakeholders and their requirements during initiation. They will use that information to analyze the project’s scope as well as the high-level risks. As the scale and importance of the project increases, the initiation phase changes to an effort that may require weeks of effort by a team of people. Even on a large project the initiation phase ends with the charter, just like the small project. The charter is going to be longer and contain a lot more data but it is the document that, when approved, authorizes the sponsor and project manager to begin detailed planning of the project.
After the charter is approved by the sponsor or by the organization, the project planning phase begins. It includes two kinds of plans. The project manager prepares project management plans. These plans tell the team and the sponsor how they will manage the project scope, schedule, cost and budgets, procurement, risk, human resources, quality, stakeholders and change control.
On small projects, some of these management plans may only state, “We are not going to track costs and budgets on this project because the costs are included in the department budget.” That is a totally adequate small project management plan for costs. The management plans specify what specific techniques we will use to manage each of the above areas, who will be accountable for the management and control process and how much resource we will use. The reason this approach is a best practice is because when we start executing the project plan, all the decisions have been made and we can focus on executing as efficiently as possible. The overall project management plan includes specific plans like the project schedule and also the project management plans for schedule which tells us how were going to manage the schedule. The project planning phase tells everyone what they are supposed to do, how they are supposed to do it and when we will begin to execute the plan.
Project Phases – Executing the Plan Steps
The executing phase of a project is where all the work gets done, all the money gets spent and all the tasks get completed to produce the deliverables. If the project manager has done his or her job correctly, it is a fairly straightforward process because people follow the plans and execute them. The risks that the project faces have been mitigated or avoided and other problems have been corrected as they occurred. The executing phase should be boring.
Project Phases – Monitoring, Controlling and Managing Change Request Steps
The monitoring phase of the project happens at the same time as the executing phase. Every week the project manager compares what the project team produced versus what was planned. Any differences between the plan and actual results are variances. The project manager reports the variances between plan and actual in a weekly status report to the project sponsor. In that report, the project manager details what is happening on the project and provides a sponsor with forecasts of when the project will be finished and what the actual costs will be. If things are not going according to plan, the project manager will also prepare plans to fix the problems and bring the project back into alignment with its plan. Hopefully the sponsor approves these corrective actions and the project manager implements them. The goal is to deliver what was planned; no more and no less.
Controlling the project is the second half of this phase or project step. The project manager is handling requests for changes to the promised deliverables and the project plan. The purpose of change control is not to prevent all changes. The project manager must carefully analyze every change request and its impact on the project budget, duration, risk, quality and resources. The project manager analyzes every requested change and quantifies the impact on the project budget and duration. They should make a specific recommendation for every change request and then forward it to the sponsor. The project manager wants to get the sponsor’s approval of the budget and time required to complete the project including the requested changes. When this process is not in place, the project suffers from scope creep. That’s where the deliverables expand and change over time without any adjustment in the project budget or duration. Scope creep causes significant variances to the plan because of changes to the scope and deliverables. It is a major source of project failure.
Project Phases – Closing Steps
When the last deliverable is produced and accepted by the project sponsor and stakeholders, the final step is project closeout. The project manager makes sure all the vendors are paid and all deliverables are formally accepted by the appropriate stakeholders. But the primary purpose of closeout is to make future projects more successful. As part of the closing routine, the project manager conducts a lessons learned meeting with the sponsor, stakeholders and team members. They discuss what went well and what did not as well as how problems should be handled differently next time. The project manager archives those lessons learned meeting notes so that project managers who start a similar project have the benefit of the lessons that were learned from the current project. The archive for a completed project should include the management plans that were developed for the project as well as the schedule, budget, change requests, plus the estimated and the actual costs and hours worth of work. This latter data makes the estimating of a new project much much easier. With all that work completed, the project manager is ready for a new assignment.
Project tradeoffs are the best technique to use when you’re dealing with executives who want to make changes to the plan. Knowledgeable project executives understand the concept of balances or trade-offs when they want to add or delete something. They know that if they ask you to squeeze the duration by one month it will affect the scope, cost or risk. Those are the 4-corners of a project and strong executives understand tradeoffs between them.
Unfortunately, there are other executives who think they can magically shorten the duration of the project by a month without impacting the other three corners. In this project fantasyland, they believe they can increase the scope and the deliverables without affecting the duration (schedule), cost or risk. They think any changes they want to make to the project are “free.”
Project managers who allow project executives to live in this fantasy world are doomed to repeated project failures. Once you give the executives free changes to the project, they will continue to request (or demand) more and more changes.
That’s why skilled project managers always talk to executives about trade-offs between the project’s 4-corners: scope, duration, cost and risk. They make the point that there are no “free” changes. Every change to the project impacts the other corners and requires a trade-off. But tactically, the PMs never say “no” to a change. That never gets them anywhere. What they say is, “Yes, I can change the schedule to finish two weeks earlier. But that will increase the project cost by $14,000 to pay for overtime and hiring several consultants. Do you want to do that, sir? Do you want to trade off a two week earlier finish for a $14,000 increase in the budget?”
Project managers should talk trade-offs with executives during the initial planning and in the approval presentation. They should continue this discussion every week when change requests are submitted and as variances appear. They also always have the data on the 4-corners and always carry an iPad or small PC so they can generate tradeoff data in a minute or two from their MS Project schedule. You need to quantify the scope, budget, rick and duration. We teach this tradeoff technique in all our beginner and more advanced approach in our advanced classes. You can also read more on quantifying the 4-corners in our articles of risk management, scope definition, budgeting and scheduling.
The point of the project change management process is not to prevent changes. PMs who try and stop all changes to the project plan have short careers. Rather, we want to ensure that changes to the baseline project plan are carefully analyzed and are necessary to produce the approved project scope and deliverables. If a change does not meet that criteria the PM calculates the cost and impact on scope and schedule and risk. Then he ask the submitting executive to agree to the consequences of the change.
Change order requests are a central element in the project’s change management process. All changes to the project baselines for scope, budget, schedule, quality and risk are documented and analyzed as part of the project change management process. It’s the project manager’s job to gather the information about each change request and analyze the effect of the change on the entire project. This information, along with the project manager’s recommendation, goes to the project sponsor, the change control board or the configuration management committee for final approval or disapproval of the request. Change Control Main Page
The project manager’s responsibility in the project change management process is important from several perspectives. First, you need to ensure your stakeholders and team members submit change order requests and go through the change management process. You should never allow stakeholders to make changes to team members’ assignments, the specifications of deliverables, or to add new deliverables or tasks without going through the change management process. By adhering to this requirement, you prevent scope creep. That’s where the project plan changes without explicit analysis, approval and control.
Second, your job is not to prevent changes to the project. You should encourage people to come up with new ideas and better ways of doing things because that improves the project. By encouraging change requests, you maintain good relationships with the project stakeholders.
Third, a consistent project change management process built around change order requests ensures that all ideas are treated the same. Requiring change order requests whenever someone wants to alter the scope, duration, or budget is a best practice. It allows you and the sponsor to consider the consequences of that change on the rest of the project. Without change order requests, seemingly inconsequential changes to the scope can cause substantial increases in the duration and/or the budget that no one anticipated.
Fourth, a little bit of thought about consequences, especially unintended consequences, is worth the time invested in the analysis. Many people can request a change to a project but you, the project manager, should always assess the impact of that change on the project’s scope, duration, cost, risk, quality, and resources. You should also include your recommendation on whether the sponsor should accept or reject the change order request.
Project Change Management Process
It’s very easy to go too far with paperwork in the project change management process. The point is not to make change control a bureaucratic jungle of forms and procedures. You want to make it easy and straightforward so you can promptly process change order requests and give decision-makers the data they need. As importantly, the change management process should not aim at reducing everything to a single piece of paper. It’s wise for you, or others engaged in evaluating change order requests, to actually talk with the people who submitted it. Stakeholder management is most effective when people feel that you are listening to their ideas or the problems they have identified.
Below is a bare bones change order request with the key elements you and sponsor need. A stakeholder does not have to fill out this form. An effective processes is for you to use it as a guide in your discussion with the stakeholder about a change.
Project Change Management: Minimum Change Order Request Elements
The dates of each step and the identity of the people should be included in the change control process.
DESCRIPTION of the change. The focus should be on the specifics of how a change order request will alter a deliverable’s specification or the process used to produce it.
REASON the project plan should change. Include specifications of the problems this change order request will solve.
SCOPE- Impact of the change order request on the project scope. The project plan is a pyramid of deliverables with the scope at the top. The deliverables throughout this pyramid support the higher-level deliverables above them. You need to analyze changes to lower-level deliverables in relation to the impact the changes will have on the higher-level deliverables.
RESOURCES & WORK – You need to assess, and usually re-estimate, the work required in the tasks affected by the change order request. That should include a description of changes required in the skill sets of the people working on the tasks affected by the change.
COST – You should estimate the cost impact of the change request in terms of materials, equipment and supplies as well as changes to existing contracts and the cost of the people assigned to the task.
DURATION & SCHEDULE – You should use project software to model the impact the change order request will have on the duration of the affected tasks. The software will determine if the change will affect tasks on the critical path and how the change will ripple through the project and affect the overall completion date.
RISK – You should review the list of identified risks and determine if the change request affects any of the existing risks or creates new risks.
QUALITY – You should assess whether the change order request will affect the quality or specifications of any of the project deliverables.
It is a useful stakeholder management tactic to include the person making the change request in the analysis. At the very least, you should review the analysis with them before passing it on to the project sponsor. It’s best if the requester can agree with your analysis. But it’s also important that you know where you disagree before passing the change request on to the decision-maker(s).
Project Change Management Process Steps
Step 1: As the project manager, you receive a change order request. The first step is always to see if the situation can be resolved with corrective action that would not change the project plan or any of its components.
Step 2: If corrective action fails or is not an option, you analyze the change orderrequest. You document each of the items listed above and make your recommendation for approval or rejection of the request. You should complete the analysis in a timely manner and include quantification of the impact of the change on the project scope, budget, duration, etc. as detailed above.
Step 3: You forward your analysis of the change order request to the project sponsor with your recommendation for approval or rejection of the request.
Step 4: The sponsor decides whether to approve or reject the change order request and the consequences. You document the result.
Step 5: If the sponsor approves the change request, you implement it by changing the project budget, schedule and scope as necessary. Then you alter the team member assignments to reflect the changes. You follow these same steps for all change order requests.
Step 6: You should archive the change order request and all supporting documentation. This information is invaluable for handling future requests.
Project tracking is the key to consistent project success and to earning the stakeholder’s confidence that you are in control of the project. It’s the way successful project managers update executives and stakeholders on the status of the project. Last its where PMs avoid bad surprises at the end of the project.
Project Tracking Based on Estimates to Complete
A status report is where the PM reports on how the actual results compare to the original plan. These reports are from hard data. Every project team member should reports the hours of worked on each task and estimate how many hours of work remain to complete that task. Good project tracking is based on numbers, not opinions or guesses. So we estimate the hours of work on each task during planning and then track the hours actually used as we execute. When we update those estimates with actual data we have the information to avoid bad surprises at the end.
Project tracking informs the sponsor about any variances to plan that exist. It also includes well formulated corrective action plans to fix the variances to the project’s plan and schedule. Presenting those options reassures the executives and stakeholders that you are in control of the project. Project Tracking Reports Main Page
Causes of Bad Project Tracking
You can easily erode your credibility with poor project management tracking. Most time project tracking problems come from lack of good data. a weak project plan an schedule is the primary problem. If the project manager does not carefully define each deliverable and then estimate, with the team member, the hours of work it will require, it will be impossible to accurately track progress. That’s what leads to those, “Uhh Boss, we’re going to finish 4 moths later than planned.”
This is especially true if one project after another has a bad surprise when it is too late to recover. Project sponsors soon think your projects are out of control and question everything you tell them. The solution is to present hard-edged data, not guesses, in your status reports. This allows you to spot problems early when they are small and easier to fix.
Project Management Tracking: Metrics
Project managers and executives too often use tracking data that hides big problems. They eventually surface when it’s too late to fix the delays and overruns they have caused. Bad surprises late in a project make executives crazy and ruin your credibility. Why does this happen? It’s a combination of the following:
Inability to precisely measure progress
Mushy project checkpoints
Team members not reporting bad news when they first see it
Too much status report optimism.
The first step to correct the situation is to use metrics to quantify the scope and major deliverables for every task in the work breakdown structure. Those metrics provide unambiguous check points against which to measure progress and show any slippage. The next thing you need to do is work with your team to develop estimates of the required hours of work. Do not use only finish dates in your schedule. Tracking actual work versus the estimated hours of work gives you another measure of how far along each task is. In combination, those two metrics will let you spot problems early. Solving them early is a real credibility builder with executives, stakeholders and team members.
Project Management Tracking: Mushy Check Points
Project managers and executives should build a firm foundation for project management tracking in the planning process. Unfortunately, the planning often doesn’t force stakeholders to decide exactly what they want. So the project’s foundation is built on vague wishes that can’t be measured. Those wishes don’t give you tracking metrics to measure progress. They only give you due dates. And it’s impossible to decide what is in the project and what it not. Those mushy definitions of scope and deliverables let people avoid hard decisions and conflict. Plans and work breakdown structures that are merely “To Do lists” let everyone think they are getting everything they want from the project.
The lack of clearly defined deliverables makes it difficult to decompose them into their parts. It’s impossible to decide what is in the project and what is not. It also makes project management tracking a highly subjective and judgmental process. You’re left to track the progress of vague tasks that everyone defines in their own way. People often have to work with mission statement mush like “Deliver world-class customer service” and “Improve system response time.” What are the components of “Deliver world-class customer service?” No one knows. This vague high-level deliverable saves the project manager from committing to exactly what they expect from each team member. The due date is the only measure of the task’s performance. So the team members start work based on a guess of what is expected. Very predictably, they spend lots of time doing the wrong things and trying to avoid blame.
You can’t be successful managing projects that have scopes like this. Projects must have measurable deliverables like, “Less than 5% of customers are on hold for more than 30 seconds.” Then you can break down the scope into component parts, the deliverables, and tell the team members exactly what you expect from them. These deliverables, must be objectively defined. You won’t give them just a due date as the only performance measure.
Project Management Tracking: Gathering Status Data From the Team
Each week project managers must gather status information to give project management tracking updates to the sponsor. Some PMs conduct status meetings with the aim to report that NOTHING bad happened during the week. If a team member expresses confusion on their assignment or says that finishing by the due date is impossible, the PM becomes angry. They blame the team member for not asking the right questions, for slacking off or letting down the team. Isn’t is funny how the PM doesn’t hear any bad news after that? Well, at least not until the finish date draws near. How to Write a Weekly Status Report
In this environment, the team members have to guess about what is expected or run to the PM daily to ask what they should do. Most people do both. But because the PM doesn’t know exactly what the project should produce, their answers are vague. Soon no one admits any problems and everyone says they’re on schedule. That’s because they quickly learned that to report anything else brings down the wrath of the gods.
The PM’s experience when reporting to the sponsor is similar. Everything besides good news triggers a snarl. The PM soon resorts to saying, “Everything is going according to plan,” or “Every task is in ‘green light’ status.” No one is solving problems early. As the due date draws closer, the team members make a wild guess at what they should produce and they frantically slap some junk together.
This is a bad, but common, example of project management tracking. Everyone on the project is wearing blindfolds. No one actually knows what the project is supposed to deliver. The project team members are trying to guess what’s expected of them. When they ask questions, they just hear the project due date repeated at louder and louder volume. And the project manager doesn’t know how the project is doing.
Project Management Tracking: Doing It the Right Way
How should you and project executives build a plan that lets you do effective project management tracking and solve problems early? First, you and the executives must define the scope as a deliverable with acceptance criteria that are measurable. Then you must build a high-level framework of deliverables that lead to that end result. And you must define each of those deliverables with a metric.
Next you break the high level deliverables down into smaller tasks. You stop at the level of deliverables that each team members will produce. These deliverables tell the team members what’s expected of them. So they know what a good job is before they even start work.
With these project management tracking metrics, you and executives can measure progress against unambiguous and measurable checkpoints. You can also spot problems early. That’s possible as long as your behavior when you receive bad news encourages team members to report problems as soon as they occur. They mustn’t hold back bad news out of fear of incurring your anger.
These steps allow the project management tracking to show things like this:
“Achievement #47 – “The customer history screen lets our service reps answer 85 percent of customer inquiries in less than 60 seconds without referring a question to another department.”
Status: “As of last Friday, this task was 23% complete and not the planned 26% complete. That is due to a snowstorm which caused absenteeism among user personnel. Without corrective action, we will finish this task 5 days late. That will cause three successor tasks to start late and postpone the project completion by 4 days and exceed the budget by $10,000. I propose the following corrective action…”
This project management tracking status report has several good features. First, the PM is reporting status on an objectively measurable business achievement. They’re not going to need a meeting or long debate to decide whether they have reached the goal. Second, it quantitatively compares “where we are as of last Friday” to “where we should be as of last Friday.” Third, our progress assessment is based on the hours of work completed as of last Friday and it estimates the hours of work remaining. Fourth, the executive is receiving data on 3 quantified dimensions of status tracking (the level of achievement, the duration and the budget), not just the due date.
These project management tracking elements set up the second half of the status report. In it the PM presents data about alternatives for solving the problem. Having three quantified dimensions for each assignment lets the PM develop quantified options for executive decision-making. These alternatives might continue the status report as follows:“
We have three options for recovery. First, we can hire an outside programmer to work on the coding. This option would allow us to recapture the lost days of duration but will increase the budget by $3,000. Second,…”
The PM proposes alternatives that involve trade-offs between the level of achievement, duration and budget. The executive can make a decision from the options because the PM has seen this problem coming and has plotted corrective action. The most important feature is that all this is happening before the task is actually late.
Project Management Tracking Summary
The foundation for effective project management tracking and status reporting is laid during project planning. That’s where the project manager and executives define unambiguous deliverables and checkpoints for measuring progress. See also our Project Manager Skills Main Page
This process is the heart of the methodology we teach in our private, online instructor-led Project Management Basics course. We can also design a customized program for your organization and deliver it at your site or in online webinars.
Let’s talk about the project management role. What do landing people on the moon and cleaning up your department’s supply room have in common? They are both projects. Project management is about producing deliverables, like new payroll software, a bridge over I-95, reorganizing the file room, hiring a new marketing director, producing a new personnel manual or taking a 20 minute moonwalk.
Organizations need deliverables like these that cannot be produced by an individual as part of their regular job. In fact, many deliverables require work from a number of people working as a team. Larger projects may require the efforts of people from several different departments within the organization. Coordinating all the people, assigning them tasks and integrating their results is a challenging effort. It requires different tools and techniques than those used by a department manager. Organizations discovered this fact when they encountered difficulty producing the deliverables they needed on time and within budget. Modern project management gained many of its tools from the space program, specifically from the Apollo program to land men on the moon.
Today all kinds of organizations use the tools of project management for efforts that take as little as a few days. A project manager, who may have a regular job in addition to managing projects, leads a team of people in producing those deliverables. Projects are a one-time effort. They are unique, which is why there is a special way of managing them. These tools and techniques are detailed in a project management encyclopedia called the Project Management Body of Knowledge (PMBOK)® that is published by the Project Management Institute (PMI)®. It includes hundreds of tools and techniques that project managers and organizations have developed from years of experience. Project managers don’t use all of them on every project. Instead, they learn what each of the tools and techniques does and how to select the right ones for each project.
Let’s say you are managing a very small project. You will use simple techniques to define the scope which is the project’s objective or goal. You must get this information from the project sponsor. They are the manager or executive who wants the project to be done. The scope of a project should be defined as a deliverable, that is a statement of what the project will produce. The scope statement should also include a metric, a measurement that tells everyone how success will be measured.
The next step in the project management process is to gather requirements. That means you identify all the things that have to be done to produce the scope of the project. Then you would write the charter which is a summary of the project’s scope and requirements. You should also identify the risks the project faces, the resources that will be required to deliver the scope, and how changes can be made to the scope and requirements.
After the project charter is approved by the sponsor, you work with the project team, assigning them tasks, estimating the work and duration for those tasks and then developing the project schedule and budget. When the project sponsor approves the schedule and budget, you and team begin to execute the plan. The team members have their task assignments and report their progress to you on a regular basis, preferably each week. From that data, you prepare status reports and deliver them to the project sponsor. You also deal with changes that people request to the project plan and schedule. Your role as the project manager is to analyze each change and make a recommendation to the sponsor about whether or not the change should be implemented.
Finally, when the last of the project deliverables have been produced, you close the project and archive the data. Having archives of past projects provides valuable information that makes managing future projects easier.
You learn all of those skills in our project management basics courses. Take a look at the basics course in your specialty.
There are five distinct project management career steps.
Getting into the Profession as an untrained PM
The process starts with becoming a project manager and getting into the profession. This can be as simple as being in the right place at the right time. What I mean is that you’re an effective contributor in your organization and someone in management may tap you to run a project. When you do well, your project management career is launched.
Getting a beginner certification and basic skills
Other people carefully prepare themselves with training in the tools and techniques of project management. They use their credential to gain entry as an assistant or associate project manager. Once they have the job, good performance drives their career. They will be actively involved in planning projects, gathering requirements, developing schedules and tracking actual performance against the plan. On-the-job training can teach you a lot of that, but it’s also wise to take a course in the fundamentals of project management. You’ll learn techniques and a proven methodology that you can repeat on every project.
Steps in a Project Manager Career
The next project management career step is moving up to a full-fledged project manager position. A functional or specialty certification is very valuable during your first or second year in project management. That certification gives you proven techniques for doing the things you may have been doing by guess work. These functional or specialty certifications also teach you some of the unique project management techniques required in information technology, construction, healthcare, consulting and general business projects.
With your industry specialty certification, you are positioned for the next career step which is getting a higher-paying position to manage larger projects. After three years working in your profession, you probably have sufficient project manager hours to qualify for the Project Management Professional (PMP)® certification. To earn that certification from the Project Management Institute (PMI), you need to document your project manager work experience and project management training classes and then pass a difficult 4-hour examination.
The top run on the ladder is positions and certifications for managing multiple projects and programs which can also include managing all the projects and programs in the organization which puts you into the executive ranks with appropriate compensation.
Project status reports are the major determinant of a project manager’s credibility. PMs who regularly surprise executives with bad news late in the project quickly erode whatever credibility they had. Here are two errors that can leave your reputation in tatters.
1. Project Status Report Error #1: Over Optimism in Forecasts
Beginning PMs are often afraid of the sponsor, particularly if that executive gets angry whenever he hears bad news. It is easy to be overly optimistic when estimating how quickly you and the team can fix a problem or recover from a harmful risk. It is wise to pad the recovery estimate by 25% to protect yourself from bad luck or team mistakes. For example, if you’ve calculated it should take 8 days to fix a problem you say, “We’ll be back on schedule in 10 days.” The sponsor will still be angry but will calm down when you actually achieve the recovery in 8 days. Making the bad news worse than it is protects you and the team from over optimism in forecasts.
2. Project Status Report Error #2: Hiding Problems
It is very easy to convince yourself that a problem is so minor its not worth reporting. Unfortunately, problems rarely go away. When you sit on a small problem and it grows until everyone knows about it, you look like a liar and a fraud. People stop believing your status reports. They may openly question them in public. Don’t be surprised by open distrust and the question, “Is there anything else that could spring up and bite us?”
Those blows to your credibility are impossible to erase. Here are solutions.
1. Project Status Report Solution #1: “Things I Am Watching” List
Each status report should include a “Things I Am Watching” list. These are not variances…yet. But you note them and ask your stakeholders for their help. Here are some examples.
Attendance of the senior Customer Service reps at the system training sessions is less than 50%. I need help from the stakeholders in that division to increase the reps’ attendance.
The systems engineers are worried about late hardware deliveries which may cause them to overrun their estimates. Does any stakeholder do business with vendor XYZ? If so, I need to talk to you.
You are alerting people to potential problems. You are also getting out in front of your team and stakeholders on these problems so they can be resolved. That is the image you want of the “plan ahead” and “take charge” project manager.
2. Project Status Report Solution #2: Estimate to Complete
There are a few project sponsors who simply will not listen to bad news about the project being late and/or over budget. Many project managers let themselves be intimidated by this behavior. The easy answer is to say, “Sir my professional standards require that I alert you, the project sponsor, and the stakeholders to any problems we have. I would not be doing my job if I stopped.” This may get you reassigned but hiding problems will get you fired when they come out.
The most powerful tool to improve your status reports is including Estimates to Complete (ETC). Each week you ask your team members and vendors (those who are billing by the hour) to report two things:
How many hours they spent on each of their tasks during the past week
How many hours it will take them to finish their tasks.
There is no need to ask them for a status narrative. You only need to know these two pieces of information. The ETC lets you operate in front of your team – you’re discovering problems early when they are small and more easily solved. If a team member or vendor is forecasting finishing late or over budget you meet with them to craft a solution.
As importantly, the ETC also lets you provide the sponsor with a forecasted completion date and an estimate of the budget at completion. That enhances your credibility with the sponsor and stakeholders.
Bottom-up estimating is a project management technique in which the people who are going to do the work take part in the estimating process. Typically those people are the employees, vendors and other project team members. They work with you, the project manager, to develop estimates for tasks in the work breakdown structure (WBS). Setting the estimates of the amount of work, duration and cost at the task level lets you combine them into estimates of higher-level deliverables and the project as a whole.
Bottom-up estimating is the most accurate approach to estimating the cost and duration of project tasks. It also requires the most time. This estimating technique gives the entire project team the opportunity to take part in developing the estimates used to measure their work. As a result, bottom-up estimating tends to develop a higher level of project team commitment than other types of estimates (like parametric and analogous). The drawback of the bottom-up approach, however, is that it takes more time than other estimating techniques. A second issue is that you must wait until you know who will be on your team before you can do the bottom-up estimating.
In this video, Dick Billows, PMP, discusses how to make accurate estimates for small to medium size projects.
Making Accurate Estimates of Time and Cost
Bottom-up Estimating: Working Your Way Up
In bottom-up estimating, you follow a three-step process, working from the lowest level of detail in the work breakdown structure (WBS). You begin bottom-up estimating by developing a detailed work package to go with the WBS. In the work package, you detail the scope and major deliverable that each team member will produce. You describe its cost and duration as well as the risks that affect the task.
This work package is like a contract between you and the team member for their task. You need this contract to make the bottom-up estimating process work effectively with as little padding of the estimates as possible. Team members pad their estimates because they’re concerned about the scope of their work expanding without any adjustment to the estimates. They foresee finishing late on the expanded scope and being blamed for missing their commitment. A similar result can happen when external events affect their ability to get the task done within the estimated timeframe. Because of these factors, work packages are an effective tool for clearly explaining to the team member that any changes to the work package are going to reopen the estimating process. In that sense, it gives them protection from scope changes on their task(s). That is why the work package documents the deliverables, the risks and the approach to the task. You record the team member’s estimates and you both sign the document. This removes a lot of the anxiety from team members who have previously been burned by the estimating process.
Bottom-up Estimating: From the Work Package
Once the work package is complete and the team member is comfortable with it, you can go on to develop the cost and duration estimates. In bottom-up estimating, you must be careful not to force an estimate on the project team members. If you force the estimate on the team member, you cannot expect to earn much commitment from them. That commitment is dependent on a free and open negotiation where the team member feels the estimate is fair and reasonable. You may use the team member’s pessimistic, optimistic and best guess estimates developed in the 3-point estimating process. That technique allows the estimates to show the task’s uncertainty.
Alternatively, you can use an analogous estimating technique with the team member. You will look at the actual amount of work that similar tasks required on completed projects. If you have several projects and tasks to draw information from, you can quickly reach a consensus on how the current task compares to the other tasks. Then you can adjust the estimated work number to show that difference. The team member needs to actively participate in this discussion and in determining the work number that you will use.
Last, you aggregate the estimates for each activity in the lowest level of the WBS and roll the numbers up to develop estimates for the major deliverables and the project as a whole.
You can use a number of mathematical techniques with bottom-up estimating. The most popular and most accurate is 3-point estimating where each team member provides their pessimistic, optimistic and best guess estimates for the calculations. Which is the Best Estimation Technique?
To learn more about how to do bottom-up estimating, consider our online project management courses. You work privately with an expert project manager. You control the schedule and pace and have as many phone calls and live video conferences as you wish. Take a look at the courses in your specialty.
Project managers use trade offs to provide decision-makers with data on the impact of a change on scope, time, cost, quality and risks. Then the sponsor understands the full impact whenever they have a variance or a change request. Trade offs maintain the project’s feasibility. Project Manager Skills Main Page
Here is an example of a project trade off.
The sponsor says to the project manager, “I want to move up the finish date from June 30 to May 30. Make it happen.” The sponsor starts to leave the meeting.
The project manager says, “Yes, I can shorten the duration of the project by four weeks. Your assistant told me about that and I modeled it. To cut a month off the duration, I will need to have two additional engineers for the month of April and the budget will increase by $10,000 for extra consultants.”
A trade off has two sides. First, there’s the positive side where the PM shortens the duration of the project. Second, there’s the negative side where the project manager says they need added budget for two additional engineers for the month and additional consultants.
The sponsor says,”No all I want is to cut the duration. No additional people or money.”
The PM says, “If I told you I could do that it would be lie. To shorten the date there will be other changes. It is not possible without consequences.”
The sponsor responds, “A good PM would be able to do whatever I want!”
Then the project manager replies, “But it would be a lie.”
Requirements for Trade offs
Trade offs are part of the toolset good project managers use. You must build the project plan with quantified measurable outcomes for every deliverable. And the schedule must have work estimates and accurate precedence relationships. Then you can model every change with its compensating trade offs. Risk Management
When project sponsors want to make a change, successful project managers never say, “Oh no, we can’t add that to the project.” What they say is, “Certainly I can add that to the project, but I will need three more people full time.” Other negative sides of the trade off could be, “We will have to increase the budget by $10,000” or “We’ll have to reduce the savings in our scope by $6,000.” This is the language of trade offs. The project manager is not saying no. Instead, they are telling the sponsor or stakeholder what it will “cost” to bring about the change they want. Trade offs maintain the feasibility of the project. Merely shortening the duration does not.
Project Trade off Language
You should do what successful project managers do and use trade offs between the scope, schedule, cost, risk and quality when assessing problems and changes to the project plan. When anyone wants to add or change something in an existing project plan, you should always assess the impact on all of the project’s dimensions. If the change is significant enough to require a change order, you should document the trade offs. That information allows the sponsor or customer to decide if the change is worth making. You should also use trade offs when proposing corrective action for a variance to the plan. The variance should be documented in a status report. Status Report Template
Here’s a detailed example of using project trade offs.
Let’s say the schedule has a task that was originally underestimated by the consultant hired to produce the deliverable. Now that consultant says it’s going to take an additional 160 hours of work. The PM agrees with the new estimate and quantifies the impact of that increased time on the project budget. The 160 hours of remaining work will take 4 weeks at the rate of 40 hours a week with the one consultant. Because the task is on the critical path, this will cause a 4 week delay of the project completion date.
The project manager then develops alternative trade offs for dealing with the situation. First, the PM looks at the trade off that comes from adding one more contractor to the task. In that scenario, the original consultant would do 80 hours of work and the second consultant would do the other 80. If each worked 40 hours a week, they could finish the task in two weeks rather than four weeks. The cost of hiring the consultant is $100 an hour. How much would the project budget increase? The answer is there is no no increase. The addition of the second consultant allows the work to be spread over two people and the duration reduced. But the hours of work remains the same no matter how many people work on it.
There are many other types of trade offs the project manager could use. They might reduce the scope of the project, which usually reduces the amount of work and the duration. They might also consider trade offs for quality and risk. With this explanation of how trade offs work, let’s talk about how you can use the trade off technique in managing your projects.
Project Trade off – 4 Corners
Think of a project as having 4-Corners:
project scope (including quality of deliverables)
cost (human resources and materials).
The project is like a tube of toothpaste. When an executive squeezes on a project’s duration corner by cutting the due date by a month, the toothpaste compensates by oozing out from one of the other corners. When the sponsor squeezes the duration, it will deliver less scope, cost more, or have a higher risk of failure. Changes in one corner always impact at least one other corner. That fact exists whether people recognize or not. It’s not realistic to assume that making arbitrary changes to one corner of the project, like the duration, can happen without any compensating effects through the rest of the project.
Why don’t sponsors recognize this impact? Because in most projects only one, or at most two, of these corners is measurable. The completion date is always measurable and is often rock solid. In some situations, the project budget is also measurable. But most internal projects have no other measurable dimensions. Even with the two measured dimensions of duration and budget, the business value of the project (the scope) and the risk of not delivering that scope on time are usually unmeasurable. So executives continue to make arbitrary changes to the duration and the budget and think that it will have no impact on the project’s scope, quality or risk.
Just think about what happens when a project manager goes back to his team and says, “We have to finish two weeks earlier.” What will the team members do? They will look for shortcuts. The quality may go down and the level of deliverables produced may suffer as a result. Team members also take shortcuts that increase the risk of the project failing. But the project sponsors don’t know this and they therefore assume there’s no risk from their arbitrary reductions in duration or budget. They are 100 percent confident in delivering the scope within the duration and/or budget. Now every project manager knows that 100 percent confidence is ridiculous. Particularly because most organizations have a project failure rate above 50 percent. Yet few project managers give their sponsors the opportunity to make decisions about the level of confidence they want.
Project Trade off – Using the 4 Corners™ Trade off Approach
This is a better approach. If you have a quantified measure of the project’s scope (the business value) and you follow best practices when building the project schedule and budget, you can present your sponsor with quantified trade-offs between the 4-Corners™ of the project plan. This data-based decision-making and fine-tuning is a good platform for the sponsors’ approval. It is far better than arbitrary changes to one or more of the 4-Corners™ without any offsetting changes to the others. You will also use these quantified trade offs every time there is a variance to the plan. Your status reports should include analysis of the trade offs between the “4-Corners.”™ That gives the executives data to evaluate the alternatives for taking advantage of opportunities and recovering from problems.
This project trade-offs approach is inconvenient for executives who want to make a change to just one corner. If they do that, you will have projects that aren’t feasible, are late, over budget and achieve less than planned. Arguing with the project sponsor doesn’t work, particularly when they are your superior or your customer. What does work is using decision-making data. That’s the benefit of using project trade offs.
Project Trade off Foundation for Scope, Budget and Duration
Here are the foundations of trade offs:
You must develop alternative combinations of scope, budget and duration by building a project plan and schedule using best practices. The requirements are that you define every deliverable and every task in the work breakdown structure (WBS) with acceptance criteria. That way there’s no ambiguity about the progress or the completion. You base the project plan and schedule on estimates of the amount of work required. You cannot use just start and finish dates. With those components in place, you can offer the sponsor and decision-makers alternatives and trade offs between scope, budget and duration.
During the initial presentation of the project plan, you should model at least three project trade-offs or alternative ways of doing the project. Starting from the project’s base design, you construct three trade offs to finish at least 20% earlier than the base design. You also construct three alternatives that collectively lower the cost of the project by 20%. Having these options available during the project presentation gives you the ability to answer the question that executives often ask, “How can we do this cheaper and faster?”
When your weekly status report shows variances from the plan, you should use project trade offs to model alternative corrective actions to address the variances.
When you have change requests, you should assess the impact of the change on the project scope, duration, risk and cost. Then you present the trade offs between those constraints.
Project Trade off Summary
It is a project management best practice to assess the impact of a change or variance on the project’s scope, cost, duration and risk. Then you model project trade offs between those “4-Corners” ™ and give the decision-makers alternative ways to deal with the opportunities and problems.
To learn the specific techniques for framing your projects and developing these “4-Corners”™ trade-offs, look at our project management bookstore or consider taking one of our project management training courses. We offer them in-person at your site or as online courses where you work privately with your instructor according to your schedule. More on Decision Making Data,
To master these techniques and the way to present them to the project sponsor, take a look at our advanced techniques courses in your specialty.