It’s great to see how over a decade of research looking at project failure, overruns and benefit shortfalls is slowly making its way into the mainstream. Jump across to this blog post to see a great animation from APM discussing why we need to talk more about how we manage projects.
|Quality reporting is one of the fundamentals to a successful delivery and without it the wheels of your project will come off.||
However there is no one size fits all solution. Every Project Manager and every project develops its own style, some like to keep it loose and vague taking the approach that “you can’t be hit if you can’t be seen”, while others see real benefit in tailoring and controlling messages sent outside of the project team. Whatever your approach, project stakeholders, particularly the ones paying the bills will insist on seeing regular reports.
In PRINCE2 this is the Highlight Report. The report facilitates the regular communication between the Project Manager and the Project Board and is used to monitor progress and track issues / risks. It draws heavily from the internal checkpoint reports and the project logs and its an important perception management tool for the Project Manager.
HINT: project teams usually find reporting painful as they are usually focused on what their believe they were recruited for – delivery of products – however a little bit of regular reporting can set the stage for a strong defence if and when the project comes under fire – if an environment where profit is at stake – these PRINCE2 Highlight Reports, when done correctly, are usually worth more than their weight in gold.
I only carry one professional development book in my briefcase…
…and its not a book on project management lore. It’s looking a little tatty these days but it’s been around the world with me, in airports, planes, trains, trams and taxis. I don’t read it all the time, just occasionally when i’m in a reflective mood and feel the need to reflect on my professional work.
The full title of the book is “The Six Fundamentals of Success: The Rules for Getting It Right for Yourself and Your Organization”, by Stuart Levine. It’s a small, notebook-sized, common sense book with short, sharp and targeted rules to remind you of the professional fundamentals you needs to get right on a daily basis to achieve the bigger picture.
I love the structure of the book, each rule (there are about 20 per fundamental) is presented in a short 2-3 page brief, which is the perfect format for the time-poor, thoughtful project manager. One of my personal favorite take-away is “Stop Financial Hemorrhaging” which is under “Fundamental #1: Make Sure You Add Value”, golden advice for project managers and a worthy reminder when you have some spare time on the plane.
If you’re not currently toting a book like this around and in the market for one, I can recommend this one.
- Publisher: Doubleday Business; Rev Upd edition (February 21, 2006)
- Language: English
- Cost: USD $13.57
- Available from amazon.com – The Six Fundamentals of Success
|The PRINCE2 stage plan plays a key role in the Project Manager’s OODA loop (decision making) cycle by allowing for continual refinement of the project plan.||
The OODA Loop is a concept originated by military strategist Col. John Boyd of the United States Air Force and has become an important concept in both business and military strategy. According to Boyd, decision-making occurs in a cycle of observe-orient-decide-act. An individual or an organization can process this cycle quickly, observing and reacting to unfolding events more rapidly than an opponent, can thereby “get inside” the opponent’s decision cycle and gain a military or business advantage.
In terms of project delivery, the OODA loop can be applied to keep the project flexible and responsive to a ever-changing environment by ensuring that planning occurs throughout the project lifecycle. While detailed planning prior to starting stage 1 is always a good idea, the plan needs to remain flexible in order to remain adaptable to changing or new requirements that appear mid-project or from lessons learned from the previous stage.
By using stage plans in your project, this allows the PM to review previous planning, Observe the current environment, Orient the project team, Decide on the best course of action and finally Act (thereby returning to observe the new environment created by the previous action).
This constant refining on the project plan through the stages enables a more controlled outcome.
Have I been blogging for over a year now? sheesh times flys! In following up my previous post, Online Project Management Software Players – 2007, the good people at SIIA have announced the 2008 winners of the annual Codie Awards earlier this year. There were a couple of project related categories and products worth taking a look at:
Best Project Management Solution
Awards the software solution that best automates the management of project-based business activities.
Best Collaboration Solution
Awards the software solution that best facilitates group interaction via the Internet, this includes groupware, real-time conferencing and collaboration over the Internet.
- Winner: Adobe Acrobat Connect Professional
- Runner Up: Central Desktop
- Runner Up: Citrix GoToMeeting
- Runner Up: Clearspace
- Runner Up: SightSpeed 6.0
I had a good response from readers and vendors alike to my previous 2007 post, so please feel free to let us know what you’re using currently, or if you’ve had experience with the software solutions above, let us know what you think!
Are you selling yourself short in your contracting rate? Have you factored in the risk of contracting verses the relative safety of being a staff member? Then read on!
There are many ways to derive your consulting rate. Usually during times of high demand it’s a gut decision based on the number of offers you receive and who wants you more. However this article is less about using bravado and ego to set your rate and more about using logical market-driven concepts to derive a minimum rate that ensures you keep ahead of where you would be if you were ‘staff’ and are sufficiently rewarded for taking the plunge.
Project contractors will proudly extol the many and varied reasons for why contractors rates are different to staff salaries but the discussion usually boils down to one simple concept – risk & reward. The more risk you take, the more you should earn to offset the downside not to mention a little reward for all this hard work!
Where to start?
The opportunity cost of contracting is the baseline for this calculation – What can you earn as a staff member in the same position? Staff members generally enjoy a significantly less stressful work life. Aside from the occasional paper-cut, job longevity is generally measured in years rather than months and priority is usual given to staff when new opportunities come around. So the staff salary level is usually a sound baseline from which to derive your rate. After all why would you work as a full time contractor earning less than as full time staff member?
So let’s begin by assuming you’re a senior project manager earning 100,000 (currency units) ‘in the hand’ (that’s cash after tax). Obviously the figures below will change with the country, industry and organisation but its a good rough guide for our purposes:
- Add 25% marginal tax (25,000)
- Add 9% pension contribution (9,000)
- Add 4 weeks leave (7,700)
- Add 7 days sick leave (2,000)
- Add provision for long service leave (1,666)
- Add health insurance (1,500)
The cost to the business for that staff member, not including operations costs such as floor space etc is approximately 147,000. This figure also doesn’t include any access to company bonus schemes or other entitlements such as maternity/paternity leave and training allowance.
Now factor in the cost of contracting risk
Contractors, by their very nature, may only work 50% of the time. If they are busy then this may rise from 70%-80% of the time, the rest of the time is spent “on the beach” unemployed or looking for new work.
At a micro level, contracts are generally measured in months with very short termination clauses (ranging from 1 day to 1 month) so depending on market conditions it would be safe to say that a consultant isn’t going to be working the full year. However the risk premium doesn’t stop there.
At a macro-level, over a period of 5-10 years, it would be safe to also factor in a major down turn in the employment market (we’re going through one now) which usually hit the contractors first. The reality of this could mean being out of work for 6 to 12 months while the market recovers. So let’s assume a 10 year cycle, working 60% per year and spending 1 year out of work. All these costs need to be factored into the rate to ensure you aren’t penalised for changing from a staff position to a contractor/consultant.
- $147,000 * 40% (annual unemployment premium) = 205,612
- $205,612 * 10% (10 year cycle unemployment premium) = 226,173
Here is your baseline income required for a consultant to be on par with a staff member earning $100,000 in the hand per annum after working for a 10 year period (not including inflation of course). At this level you’re consulting rate would be $135/hr (or $942 per day) based on a 7 hour day of productive work (you don’t get paid for lunch) over a 48 week year (you don’t get paid for holidays).
Obviously at this rate there is no real financial benefit to being a contractor as your salary, benefits and risks balance out. While there are still many other benefits to being a contractor, if you’re just after a paying job, you might as well be a staff member and not have to worry about your next gig.
So the next step is to calculate the “get-of-out-bed” factor, you’ve managed to calculate your equivalent rate, now ask yourself, how much more do you need to be paid to make this all worth while?
To answer this question let’s now look at the HR or management consulting markets who typically use profit margins of 10% to 150% ranging from HR body hire to expert consulting. This obviously depends on your industry, demand and skill level but you get the picture.
So the big question is.. are you selling yourself short?