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Many project managers face situations where they are asked to meet fixed dates with very little, if any, margin for slippage. It is hard enough to manage that situation, but sometimes the customers do not meet their commitments. You have a big challenge already trying to hit a fixed date from the customer. Then the customer introduces additional challenges – for instance, not being able to define requirements fully. This can lead to inevitable delays and changing requirements.

There is a good solution to this problem from a project management perspective, but that does not mean you may not have to struggle to make it work. The key is to proactively utilize risk management, issues management, scope management, and proactive communication to your best advantage.

Manage Risks

When you start a project, the first thing you need to do is planning, including creating a Project Charter and a schedule. The planning process includes identifying risks and putting plans into place to mitigate those risks. If you do not think you can hit the imposed end-date, now is the time to say something. When you do, management starts to hear that the end-date is at risk before the project even begins. As part of the risk identification, you can ask the project team and your management for their ideas on how to mitigate the risk. Ideas might include extra staff, leaning heavily on users to get their requirements in on time, etc. Again, there is value in identifying the project risks and working with others on risk resolution. This process also helps from a communication standpoint to better manage expectations.

Manage Communication

The schedule and proactive communications also help the users better understand their role. For instance, do they really understand the need for timely feedback on requirements and the impact to the project if they are late? Do they understand the dates that they will be needed so that they can better plan their time? You can raise this as a risk and start to manage expectations for what will happen if the requirements come in late. It also gives you more foundation for the follow-up communications that may be required if the user’s dates start to slip.

Manage Issues and Scope

As the project progresses, continue to manage risks, issues, and communication proactively. For instance, if the users end up not meeting their dates in spite of your risk management plans, then you have an issue that needs to be addressed. Issues management (problem identification and resolution) needs to be performed. Again, get your team, management, and stakeholders involved. Ask your manager for input in resolving the problem that is now impacting your completion date. You do not have direct authority over the users. Get more accountability from your management and the business managers to help resolve project resource problems. Your managers and sponsors are also the ones in a position to manage priorities to get the work done. Again, if the problem cannot be resolved perfectly, at least you are continuing to manage expectations.

Continue this proactive project management in other areas as well. For instance, if a person leaves, you have an issue that could impact the end date. Communicate the problem and its consequences, and ask for help in determining the best options for going forward. If the users add more requirements, invoke scope change management and make sure everyone knows the impact to budget and schedule. Don't proceed with the changes unless the sponsor has approved the extra time and budget necessary.

Summary

Although it appears that you are being held accountable for events and circumstances that are not within your control, you do have control over the processes you use to manage the project. Manage risk, issues, and scope proactively, and utilize your manager and your sponsor to try to get everyone focused on meeting the aggressive deadlines.

You also have the ability to manage expectations through proactive communication. You should especially point out cause-and-effect relationships. For instance, you can describe the impact to the project if requirements gathering dates are not met.

When it is all said and done, you may, in fact, not be able to hit your imposed deadlines and budget. However, by utilizing disciplined and proactive project management processes, you at least have a shot of success, and you do a much better job of managing expectations and getting management to be a part of the solution, not just the problem.

At TenStep we are dedicated to helping organizations achieve their goals and strategies through the successful execution of critical business projects. We provide training, consulting and products for organizations to help them set up an environment where projects are successful. This includes help with strategic planning, portfolio management, program / project management, Project Management Offices (PMOs) and project lifecycles. For more information, visit www.TenStep.com or contact us at admin@TenStep.com.
Published in Blogs
When the idea for a project first comes up, you rarely know exactly all the resources you will need. As the project initially progresses, however, you start to define the scope, assumptions, deliverables, approach, etc. This gives you enough information to put together an initial estimate of the effort and other resources required for the project. From there you estimate the duration and cost of the project, gain approval and begin the work.

As you know, the estimates that you prepare up-front are just that – estimates. The only time you know for sure what the effort, cost and duration of the project are is when the project is over. Up to that point, you are dealing with some level of estimating uncertainty and risk.

Estimating Contingency

So far, this is nothing new. All projects have some level of uncertainty. If possible, you account for the estimating uncertainty through the use of a contingency budget. If you believe your estimates are 80% accurate, you could request a 20% contingency budget. For example, if your project was estimated to cost $100,000, you would request an additional $20,000 contingency budget to cover some level of estimating inaccuracy and account for activities that are clearly in-scope but that you may have missed in the original estimate. Any money remaining in the contingency budget is returned to the client at the end of the project.

Planned Reserves

The nature of some projects requires that the project manager take this contingency even further. On some projects, you must actually plan for what the contingency resources look like and how you will get them when needed. You need a strategy and plan for having reserve resources available when needed. These could be labor or non-labor resources, such as hardware, equipment or supplies.

There are a few scenarios where you need to plan ahead for reserve resources.

Time is of the Essence

In a typical project, if you find that work is taking longer than you anticipated, you would ask for additional time and budget. However, if the deadline date is critical and cannot be moved, you may not have time to look for new resources when you first realize you need them. You may need to have a plan already in place for where the resources are and how to acquire them. For example, let’s look at the YR2K projects of the 1990s. If you were entering the final six months of 1999 and had a lot of work remaining, chances are you would have had a game plan for completing on time, plus a plan on how to acquire additional people if necessary. Having internal employees identified and in reserve would allow you to move quickly if you determined more resources were necessary.

High Incremental Costs of Obtaining Resources

You may have resources that are less expensive when purchased in bulk, but very expensive when purchased incrementally. For instance, if the solution you are building requires new hardware, you may find that the price per unit is less as you purchase more units. Let’s say that you estimate you will need 100 units. Depending on your estimating uncertainty, you may choose to purchase 110 instead, and have ten units in reserve. You would do this because the price to purchase the extra ten units now (as a part of the bulk order) is much less expensive that having to purchase ten units later, when the incremental cost would be much higher.  

Long Lead Times for Specialty Resources

Sometimes there is a long lead-time to acquire hard-to-find specialty resources. You may need to have them in reserve if needed. For example, you may work with consulting firms ahead of time to find specialty resources, such as experts in some obscure tool, with the understanding that the requirement is not 100% firm. The firms can work ahead of time to locate these people and try to have someone available on short notice in case you need them later on the project.

Creating a Reserve Plan as a Part of the Risk Plan

Use the following steps to identify the need for reserves and have them ready when needed.

Recognize the need. The first critical step is simply to understand that you have a need for reserves. If you do not recognize that you are in this situation until the need arises, it will already be too late to react. The need for reserve resources will typically come out as part of your risk management strategy. You may have identified a certain project risk and determined that the way to mitigate the risk is to have certain resources in reserve.

Determine the costs and benefits. There is obviously a benefit to having potentially necessary resources in reserve. There is usually a cost as well. For instance, there is the project management time required to put together and execute the Risk Plan. However, many times there are also additional project costs. Let’s look at the three prior examples.

In the YR2K example, there may not have been an incremental cost associated with identifying additional resources if they were internal to the company. The cost would have only been incurred if the resources were needed.

In the second example, you purchase an extra ten hardware units and have them in reserve. The cost to the project is increased by those additional ten units. If you end up needing the units, there is no additional cost. (In fact you probably saved some money.) However, if you don’t use them all, the remaining units may be unused and would be an extra cost that the project would not have had to spend otherwise.

In the third example, you ask consulting firms to look for a specialty resource. You would typically not have an incremental cost up front, unless you paid a consulting firm to have people available and in reserve. However, if you ended up needing an additional resource, the billing rate will probably be higher to reflect the additional work that the consulting firm invested.

Gain approval. The risk, cost and benefit information should be taken to the sponsor for approval. You want to be sure that the sponsor agrees that your reserve plan is rigorous enough to reduce the risk to the project. You also want to make sure the sponsor approves any cost to the project and is aware of any incremental costs if the reserve resources need to be acquired.

Manage the Risk Plan. The activities associated with the Risk Plan need to be moved to the schedule and managed proactively. The project manager should also re-evaluate the risks on a scheduled basis, probably monthly or at the end of major milestones, to ensure that the reserves are still necessary and provide proper risk protection to the project

Summary

On most projects, if you find that you need more resources, you talk to your sponsor and revise the budget and schedule if necessary. However, on some projects you do not have the luxury of additional time. In those cases, the project manager must identify where the project may be at risk and have a plan in place to make sure resources are in reserve if needed. Sometimes you actually need to have the resources physically available. Other times, you just need to know that you could acquire them on short notice if necessary. The need for project reserves would typically be identified and managed through the risk management process, with reserve resources being a response to a specifically identified project risk.

At TenStep we are dedicated to helping organizations achieve their goals and strategies through the successful execution of critical business projects. We provide training, consulting and products for organizations to help them set up an environment where projects are successful. This includes help with strategic planning, portfolio management, program / project management, Project Management Offices (PMOs) and project lifecycles. For more information, visit www.TenStep.com or contact us at admin@TenStep.com.
Published in Blogs

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