Sun, Sep 20, 2009 15:34 EDT

Project Management is NOT overhead!

Project management adds value to your projects and your company.

Posted by: Jim Vaughan in Best Practices

Topic: IT Organization Management

Current Rating: Comments: 7

I often hear people say, especially while budgeting, that project management is overhead. I also hear this about other organizations such as human resources and even finance. However project management adds value to your projects, to your organization and to your company as a whole.

Let’s start with portfolio management which is one part of project management. Good portfolio management will reduce waste by weeding out projects that should never be started. Often we start these projects and later cancel them after wasting effort and money.

Practicing good project management in the area of initiation, planning and execution will increase the performance of your project execution. Resources will be better utilized and the team will be more motivated and organized. This will reduce any duplication of effort and ensure that dependencies are dealt with in an optimal manor.

Performing proper project closure, and learning from our past successes and mistakes, will improve the performance of future projects.

Finally we need to monitor and control our projects. We learn in six sigma that you do not improve what you do not measure. Taking metrics during each phase of your product development process is key to learning and improving your future performance. You can start taking these measurements at any time. As you improve your implementation of project management you will also see an improvement in the performance of your projects. These project improvements will far outweigh the amount of effort that you put in to project management.

In everything you do you should follow Vaughan’s Equation: VO > EI. That is “Value Out is greater than Effort In.” You will find that project management follows this equation and therefore is well worth your time and effort. No, project management is not overhead. Project management adds value by reducing waste and improving performance. Therefore project management is a value add.

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Tue, Sep 22, 2009 10:02 EDT

Project Management

Posted by: Anonymous
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Overly general and lacks specifics. Nothing more than a generalized statement. There are definitely times where the level of PM far exceeds its benefit.

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Tue, Sep 22, 2009 10:26 EDT

So "overhead" is waste?

Posted by: Alan S Koch
Rating:

Your logic (because it adds value it is not overhead) translates to "Overhead is waste". That is a totally fallacious argument!

Anything that violates Vaughan’s Equation should be *eliminated*. Period!

"Overhead" is any valuable activity that is *not* directly profit producing. Program Management definitely falls into that category. Managing a project that produces a marketable product or service *might* fall into it, depending on how you split hairs.

My PMO is definitely overhead. The effort expended managing my non-overhead projects is classified as overhead because the Project Manager does not produce anything. (That is how *I* split the hairs.)

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Wed, Sep 23, 2009 5:20 EDT

Response to Alan

Posted by: Anonymous
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Alan,

Project management can actually save a company money through effective use of quality and risk management. Why don't you outsource your PMO if you think they are so costly? Or you could even reduce headcount.

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Thu, Sep 24, 2009 11:58 EDT

Maybe you should look up the definition for overhead

Posted by: Anonymous
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Why do you and the original author assume overhead equals no value and waste? I agree with Alan. The person who set up the computer that you are using to view this website is overhead, but clearly having a computer to use provides value. Their is significant value to both project management and many other overhead costs.

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Sun, Sep 27, 2009 12:07 EDT

Project Management Articles

Posted by: Anonymous
Rating:

Project Management definitely adds value, but even you subtly admit, in your first paragraph, that it is an overhead. Everything that is good practice though creates a certain overhead, but the benefits far outweighs the overhead created. Imagine a project being executed with a formal project plan in place... Sometimes, when it comes to very small projects, the overhead created is not worth it.

This article on managing small projects has an excellent sentence that sums it all: "Let’s consider the best practices in turn and see whether or not the overhead lost in applying best practices is worth the benefits which can be gained".

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