8 Tips for Managing Project Costs

1.  Produce an estimate. Compile a realistic estimate with your team. Make sure it covers all the project’s phases and activities and that it contains sufficient contingency. Account for all people costs as well as materials, hardware and software

2. Achieve a baseline budget. Formally get the estimate signed off by the sponsor and steering committee and ensure that the actual funds get released and allocated to the project. You now have a baseline budget to work from.

3. Establish monthly budget. Determine what you expect the project’s monthly running costs to be based on your knowledge of the project’s resource plan and schedule. Document the monthly expected expenditure in a spreadsheet encompassing the entire project.

4. Establish cost controls. Set up clear cost controls and sign-off responsibilities for the different types of expenditure. Consider who will be approving and signing off on timesheets, materials, hardware, software and vendor invoices. This part is crucial as this is where you control the actual costs that will be booked to your project.

5. Record actual costs. Check the actual amount of money accounted to your project at the end of each month. This figure will normally be provided to you by the finance department.  Record this amount in your spreadsheet so that you can directly compare it to your budget.

6. Calculate metrics. Calculate and update your cost metrics at the end of each reporting period. Measure how much money the project has spent of the total budget compared to how much money you had expected it to spend at this point in time. Include your cost metrics into your project reports and steering committee presentations.

7. Update forecasts. Adjust your forecasts on a monthly basis to cater for any changes that have taken place. Changes could stem from the actual running costs being higher (or lower) than forecast or estimates being
higher (or lower) than forecast. 

8. Communicate. Create transparency to senior management around the project’s costs by including your cost metrics and key numbers into your project reports and steering committee presentations. If for some reason your costs are not on track, treat it as an urgent issue which must be analysed, resolved and discussed with the steering committee.

How to write the perfect progress report – dos and don’ts

Susanne Madsen 
Developing Project Leaders

If you work as a project manager, chances are that you have completed dozens of progress reports during your career – if not hundreds! But how effective have they been? Have you had a clear purpose when writing the reports, for instance by wanting your stakeholders to take certain action as a result of them? Or did you fill them in because it was one of those routine tasks that had to be done?

You may have been very conscientious and particular when filling in your reports, but unfortunately not everyone is, and as a result the weekly status report becomes one of those artifacts that is part of the process without adding much value.

Top mistakes
Some of the classic mistakes that project managers make is that they include too much static information and not enough about what the real project issues are. In that way the report is not a true reflection of what is really going on. If you just write about what happened during the last reporting period and what you will do during the next reporting period, without mentioning how that compares to plan and what the real risks and issues are, there is no incentive for executives to pay attention to it. In many cases the report is even attached in an email without any context or description, meaning that executives who rely on smartphones are unlikely to ever get to the information.

The perfect progress report
So, what does a perfect status report look like? Well, first and foremost it’s a simple report, preferably on one page, which adds real value by providing an overview of milestones, risks, issues and budgetary information at a minimum. Here are some guiding dos and don’ts:

Don’t include too much static information about the background of the project.
Do include the name of the sponsor and the project manager.
Do keep the information to one page.
Do include the top 5 risks and issues, including owner and mitigating action.
Do include information about the budget and how you are tracking to it.
Do include an overview of the major milestones, their planned dates and a RAG status of each.
Do list key successes and achievements from last period.
Do list any earned value metrics you may have, but keep it simple and graphical.
Do make it clear what action you want people to take; is this report just for information or do you require a decision from anyone?
Don’t send out the report via email without providing any context in the body of the mail. Executives may never read the report, so provide a summary in the email itself.
Don’t send out bad news in a project report with out speaking to people first. You don’t want your sponsor to read about a major issue without being there to explain the situation.

20 Essential Tips for Project Leaders

1. Spend your time pro-actively – the number ONE project leadership tip is to focus your attention on the long term as opposed to being reactive and firefight in the present moment. The more time you spend planning and building relationships, the fewer issues you will encounter later in the project. 

2. Deliver on your promises – it’s essential that what you say is credible and that your stakeholders trust your opinion. Always be conservative in your estimates and never promise a delivery you are not sure you can meet. To be safe, produce a detailed plan and remember to build in contingency.

3. Focus on business benefits – to be of ultimate value, you must focus on the delivery of business benefits to your client; not just the tangible outcomes of your project. This requires you to have a good understanding of the business domain, to challenge the status quo, and to fully embrace the project’s end goal and vision.
 
4. Listen with your heart – one of the keys to project success is to build strong relationships – and to do that you must be able to really listen. Listen to your team members and to your stakeholders. Forget your own agenda and listen from the heart. Then great relationships will be built.

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5. Focus on customer needs – focus on what your customers really need rather than what they think they wantGet into their heads and involve the end users as much as possible whengathering requirements. Demonstrate and prototype the product and constantly check that what the team is building matches the requirements and customer needs.

6. Act as an inspirational mentor and a guide – be an inspiration to the team and share the project’s vision and end goal whenever you can. Don’t tell your people what to do but coach them to find the right solutions and to make decisions on their own. Let your vision and engagement be the prime motivator for the team. 

7. Take a big picture view – step back from the project on a regular basis and take a balcony view. Observe what is going on.  What is working and what is not? Examine ways in which the project could operate more effectively and take action to implement your ideas and risk mitigating actions.

8. Utilise the strengths of your team – in order to build a truly motivated and high performing team, you must understand what drives each individual. Listen to each team member and understand what their strengths and  aspirations are. Then take action to utilise them in the best possible way. 
 
9. Delegate  administrative tasks – if you are to add maximum value, you must focus on those tasks that matter the most to the success of your project. That means that you must learn todelegate. Get a project administrator on board to help with tasks such as documentation, timesheet tracking, financial tracking and low level task tracking.  
 
10.  Establish a solid foundation – before the project kicks off in earnest, spend time fullydefining it, estimating it and planning it. Document your findings in a project initiation document and get it signed off by the steering committee before you proceed. This becomes the contract you deliver to.

11. Take control of risks – effective project leaders consistently manage risks by asking “what could go wrong” and “what have we not yet thought about”. Brainstorm risks with your team on a regular basis and ask them what they worry about. Then take action to mitigate them or put in place contingency plans. 

12. Ask for help and guidance – have the courage to talk openly about  project issues and to ask for help when required. It is a sign of strength to seek guidance when you are faced with a major decision. Your team and stakeholders will respect you for being honest and will appreciate that you ask for advice. 

13. Draw on the steering committee – gather the most important stakeholders on a monthly basis to make decisions about the project’s risks, issues and deliverables and to report on financials. Prepare a flawless presentation and take the opportunity to showcase the team’s good work. Summarise decisions and distribute meeting minutes within 24 hours. 
 
14. Get close to your stakeholders – to build great relationships with your stakeholders, set up regular one-to-one meetings with those who have the most power and influence over your project. Listen to their concerns and suggestions and act upon their feedback. Pay special attention to those who are opposed to the project and seek to win them over.

15. Know your numbers – stay in control of your project by tracking the project’s key performance indicators. Know how much money the project is burning per month, and how much scope you have delivered to date compared to plan and budget. Include these key metrics in your project reporting.

16. Get the best people involved – a large part of your success as a project leader will depend on how skilled you are at recruiting and retaining the right kind of people. Never compromise when building your team and go to great lengths to reward and motivate people who do a good job.

17.  Adapt your leadership style – all good leaders adapt their style to the individual they are interacting with. You can do this by providing more guidance to those team members who are inexperienced, by giving more moral support to those who lack confidence and by delegating to those who are both experienced and confident.

18. Stay calm in stressful situations – set a great example for others by managing your state of mind and appearing calm under pressure. Maintain a balanced perspective and think of solutions rather than placing blame. Take on the role of a mediator whenever you can and convey both sides of the argument. 

19. Stand up for the project – be confident enough to stand up for yourself and your project when required. Protect your team from unnecessary noise and from unreasonable demands. Never accept an increase in scope without further funding or time allowance – and never accept a shortened timeframe without reducing scope.
 
20. Ask for feedback – one of the most rewarding actions you can take for your career and for your project, is to ask for feedback. Ask the following three questions to your boss, peers and project staff: What should I continue doing?, What should I start doing? and What should I stop doing?

What are the differences between management and leadership? .. and how does it relate to project managers?

Susanne Madsen 
Developing Project Leaders

What are the differences between management and leadership?

.. and how does it relate to project managers?

Management is said to be the discipline that specializes on maintaining the status quo, conforming to standards and organizing and directing individuals around the boundaries (time, money, quality criteria etc.) that have been set to achieve the task. If you are a good manager it means that you are good at producing a set of products and services in a predictable way, day after day, on budget and to consistent quality. It is a discipline, which requires you to be rational and logical and make use of certain skills and methods.

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Leadership on the other hand is concerned with setting goals, making improvement to existing ways of working and motivating and leading the team to reaching this new direction. It is characterized by certain behaviors such as sharing an inspiring vision, producing useful change, leading by example, empowering others and creating the most conducive environment for team success. Leadership is not about the specific skills you possess but about how you approach an assignment and how you relate to others.

Managers rely on authority; leaders on influence
One of the main differences between management and leadership is the way in which the two disciplines motivate people and teams to achieve objectives. Managers rely on their authority to get work done. They allocate tasks to team members based on what needs to get done and expect them to carry out their job, by and large because they receive a salary for it. Leaders, on the other hand, influence, inspire and appeal to people at an individual level. They strive to get the best out of people by aligning each person’s individual objectives to those of the project and organization.

As a project manager you must make use of both disciplines, but as you grow and develop in your career you will likely come to rely on leadership over and above management.

Can project managers learn to lead?
Many project managers come from a technical background and have a rational, logical and analytical way of thinking. It means that they are good at analyzing facts, calculating duration, coordinating activities and making rational decisions. They are task-focused and concerned with how to get things done. They see their primary role as delivering what the customer has asked for within the agreed parameters of time, cost and quality. They are less concerned with why their customers need the product and in which ways it affects their business and the people who develop it and use it. Their strength is in executing and following someone else’s vision and specification – rather than helping to define it.

There is nothing wrong with being logical and task-oriented. As project managers we need those skills, especially when planning and estimating a large project. The issue arises when this is the only style in the toolbox, which is then being used to also manage people and communicate with customers. Building high performing teams, great customer relationships and ensuring that the project actually delivers what the customer needs cannot be achieved solely through logic. It requires creativity, empathy, risk-taking, vision and most importantly the ability to connect with people at a very personal level.

Leadership can be learnt, but it requires conscious effort and a desire to collaborate with clients and team members in a deeper and more responsible way.

It is so true that the best project managers have both management-type skills and also leadership-type skills, as you describe. And, of course, with determination you can learn leadership skills but in reality how many project managers possess all of those skills or can even learn all of them?

Some are a natural part (or not) of our personalities and it is hard to change who we are, no matter how determined we are. And, in fact, if we did change in order to become more inspirational and risk-taking would we still be the same person and what attributes would we lose in the process?

HOW TO RECRUIT AN IT PROJECT MANAGER

~ By Duncan Haughey

Door sign reading: Interview in Progress
Many job roles have claimed the title project manager, but in reality, are a far cry from the traditional role with overall responsibility for the planning and execution of a project. So when recruiting a project manager, how can you be sure you are hiring the right person?

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First, you need to profile the kind of person for whom you are looking. Below are the behavioural competencies and technical skills typically required by an IT Project Manager.

Behavioural Competencies:

Energetic, passionate and driven

Delivery focused and not easily distracted

Proven ability to work independently and with initiative to tight deadlines

Excellent interpersonal, communication and negotiation skills
High-level of creativity, adaptability and persistence to find the best solutions
The ability to plan, organise, schedule and co-ordinate multiple tasks to achieve objectives
Risk taker
A need to develop self-and-others

Technical Skills
General

General Business processes knowledege
Good people skills, able to develop and mentor staff
Good influencing skills
Master data

Project Management
Understanding of project management methods such as Pmbok5th, PRINCE2
Understanding trade-offs between time, cost, quality and scope
Ability to produce and review business cases
Sound knowledge of project planning
Good knowledge of risk and issue management
Good knowledge of change management techniques
Ability to establish quality management systems
Ability to manage resources
Sound knowledge of budgeting and cost control
Produce reporting
Project governance
Customer satisfaction

IT Skills
Good knowledge of IT development methods
Understanding of testing methods, processes and tools
Knowledge of business analysis and process redesign
Ability to develop Service Level Agreements
This list is not exhaustive but covers the major competencies and skills needed for the role.

Now you know the kind of person needed for the job, it’s time to advertise and get the CVs rolling in.

When reviewing the CVs be ruthless and discard those that don’t meet your needs until you reach a shortlist of potential candidates.

The Interview
Now you have narrowed down the CVs to a shortlist; it’s time to carry out the interviews.

Start by spending a few minutes on the CV and finding out why the candidate is leaving their current job. Ask why they feel they would be the right person for the job.

Ask the candidate to bring examples of their work. You can tell a lot from reading a project plan, status report, risk log or project contract.

If they have performed satisfactorily to this point, then it’s time to carry out some role-play. Provide a project management case study in which a project is failing. As the role-play unfolds, the person needs to explain what they would do to turn the project around and make it a success. You can gauge their approach to problem solving, people skills, planning and influencing during this exercise.

Below are some questions designed to help you find out more about the candidate.

Questions That Examine Leadership Potential
How do you handle non-productive team members?
How do you motivate team members who are burned out, or bored?
How do you handle team members who come to you with their personal problems?
What are your career goals? How do you see this job affecting your goals?
Explain how you operate interdepartmentally.
Tell me how you would react to a situation where there was more than one way to accomplish the same task, and there were very strong feelings by others on each position.
Consider that you are in a diverse environment, out of your comfort zone. How would you rate your situational leadership style?
Give me an example of your leadership involvement where teamwork played an important role.
Questions That Examine Trustworthiness
Tell me about a situation where your loyalty was challenged. What did you do? Why?
In what types of situations is it best to abandon loyalty to your manager?
In today’s business environment, when is loyalty to your manager particularly important?
Questions That Examine Personal Strengths and Weaknesses
Why are you interested in this position?
Describe what you think it would be like to do this job every day.
What do you believe qualifies you for this position?
What have you learned from your failures?
Of your previous jobs, which one did you enjoy the most? What did you like the most/least? Why? What was your major accomplishment? What was your biggest frustration?
Tell me about special projects or training you have had that would be relevant to this job.
What are some things that you would not like your job to include?
What are your current work plans? Why are you thinking about leaving your present job?
Describe an ideal job for you.
Questions That Examine Judgment
What would you do if you found out that a contractor was in a conflict of interest situation?
If I were to contact your former employee, what would he say about your decision-making abilities?
Give me an example of a win-win situation you have negotiated.
Tell me about your verbal and written communication ability. How well do you represent yourself to others? What makes you think so?
Give me an example of a stressful situation in which you have been. How well did you handle it? If you had to do it again, would you do it differently? How do you deal with stress, pressure, and unreasonable demands?
Tell me about a tough decision you had to make?
Questions That Examine General Experience
Describe what you did at your workplace yesterday.
How would you solve the following technical problem? (Describe a typical scenario that could occur in the new position.)
What strengths did you bring to your last position?
Describe how those contributions impacted results?
Questions That Examine Project Management Experience
What are the necessary steps to successful project management?
How do you plan for a project?
What is important to consider when planning a (your type of project)?
What are things that you have found to be a low priority when planning for (your type of project)?
What distinguishes a project from routine operations?
What are the three constraints on a project?
What are the five control components of a project?
What qualifications are required to be an effective project manager?
What experience have you had in project management?
Name five signs that indicate your project may fail.
Tell us about a project in which you participated and your role in that project.
When you get assigned a project, what steps do you take to complete the project?
As you begin your assignment as a project manager, you quickly realise the corporate sponsor for the project no longer supports the project. What will you do?
Your three-month project is about to exceed the projected budget after the first month. What steps will you take to address the potential cost overrun?
Tell us about a successful project in which you participated and how you contributed to the success of that project.
You are given the assignment of project manager, and the team members have already been identified. To increase the effectiveness of your project team, what steps will you take?
You have been assigned as the project manager for a team comprised of new employees just out of college and entry-level consulting staff. What steps can you take to ensure the project is completed against a very tight time deadline?
What is a project milestone?
What is project float?
Your project is beginning to exceed budget and to fall behind schedule due to almost daily user change orders and increasing conflicts in user requirements. How will you address the user issues?
You’ve encountered a delay in an early phase of your project. What actions can you take to counter the delay? Which actions will have the most effect on the result?
Describe what you did in a challenging project environment to get the job done on time and budget.
What actions are required for successful executive sponsorship of a project?
Questions That Examine Past Consulting Services
How did you get your last project?
What were your specific responsibilities?
What did you like about the project and dislike about the project?
What did you learn from the project?
Tell me about a time when you ran into any difficult situations. How did you handle them?
Tell me about the types of interaction you had with other employees.
Tell me about an accomplishment you are especially proud of and what it entailed.
Do you have people from your past consulting services who would provide a professional reference?
What other similar consulting or independent contractor services have you rendered?
Discuss how you would envision working as an independent contractor or consultant for us.
What conflicting responsibilities will you have?
Questions That Examine the New Assignment
What would be your specific goals for this new role as a consultant or independent contractor?
What experience do you have that you think will be helpful?
This assignment will require a lot of [describe]. Will that be a problem for you?
This assignment will require interacting with [describe the types of people]. What experience do you have working with such people?
What would you like to get from this new assignment?
What are two common but major obstacles for a project like this? What would you do in the face of these obstacles to keep your team on schedule?