Prioritizing Project Cost and Schedule
All project managers are familiar with the project triangle; cost, schedule and quality. For the majority of work in North America, the industries we work in are highly regulated and companies stress the importance of high quality work in order to maintain their social license to operate. Quality is non negotiable. This usually leaves a push and pull between the other 2 sides of the triangle: cost and schedule. How do we prioritize the two? What’s the best way to manage a project and keep all your stakeholders happy?
Communication is key. Asking the right questions and being armed with knowledge will make this balance a breeze. Project circumstances are ever-changing, but understanding the project driver, risks, and costs to schedule changes as well as communicating with complete transparency will help immensely in successful execution.
Understand the Driver
Why is the work you are doing important? What are the key deliverables required?
Understanding the driver for work will help you make key decisions in your work when finding the compromise between time and budget. Stakeholders can put a lot of pressure on project managers to attain the project goal. Without understanding the driver behind the project, its impossible to know just how hard you need to push. To ensure understanding, you can have the project leadership team relate back the vision, objectives and purpose of the project; a scope playback session.
Recently, I had a project that was deemed “immediate” work; it had high visibility internally as it was required to satisfy regulatory requirements. The scope was identical to regular projects, but the schedule was accelerated. The real driver for the project was some data collected midway through execution. Understanding this, it was possible to accelerate key milestones to deliver the data required quickly. The remainder of the work was completed at a regular pace. This satisfied the stakeholders’ needs while curbing extra spending to only what was absolutely necessary.
Know the Risk - Make a Plan B, C, D….
What if...?
The environment in which we plan our projects is always evolving and changing. The single greatest asset a project manager has to respond to these changes is the ability to draw on their background knowledge and develop a strategy. Responding to change is even easier if you already have a backup plan in place. On large projects, the challenge of implementing new plans lies with getting all stakeholders on the same page, and understating the far reaching impacts a seemingly small change can have.
Work to understand the risks of your projects and play out different scenarios. Having the forethought to plan for these ahead of time will help you stay flexible to change by understanding your stakeholders’ needs without having to engage them for every new evolution in the project. Ask your stakeholders “What if…?” for every scenario you can come up with.
Put a dollar value to schedule change
How much will it cost if we are late? How much do we save if early?
Putting a dollar value to your schedule helps keep discussions fact based and keeps everyone on the same page with respect to your project driver. Knowing the costs of extra resources or manpower to complete your schedule earlier will help you make decisions on how much you want to spend, or how hard you need to push to accomplish key milestones. Stakeholders that are looking to drive your schedule faster are not always aware of the impact schedule changes make to project cost.
As an example, some of the project work I have completed impacts our ability to deliver value to our customers. Putting a dollar value to a schedule change can be compared to the amount of value we are providing our customers by completing the project early and can thus be easily understood by all stakeholders. This makes the decision process much easier, as everyone is looking at hard numbers.
Factual Presentation of the Situation - Be Transparent
Make sure you’ve got all the facts to justify your schedule and budget. The drivers behind every dollar spent to accelerate the schedule need to be well understood by all the parties involved. It’s essential to make sure you have management support for your decisions, especially as the project manager accountable for schedule and cost. The structure of every company is different, and it is not uncommon to have scope and project execution being driven by different departments. This creates a push and pull between groups, and at the end of the project, the PM will be accountable for all costs incurred.
Make sure decision justification is well documented and you run things by your manager so that there are no surprises later on.
Understanding a project’s drivers, the risks involved, and putting a dollar value to schedule changes will help you keep communication clear and fact based. Communicating all this with transparency and having the muscle of your superiors to back you up will help immensely if anyone questions your judgment. Ask the right people the right questions, because nothing beats good communication when prioritizing cost and schedule.
Note:
There are a large amount of resources and training a PM has access to for project management and accreditation: Project Management Institute (PMI), Six Sigma, and Prince2 (popular in EU). I've outlined a couple tips, but this technical knowledge-base will help a lot. Communication is at the heart of PMing, and there is nothing better than the advice Dale Carnegie gives. There is a course structured around his "How to Win Friends and Influence People" book. Take the course, you won't be disappointed.