How To Projects Management

How much investment is spent on project management when the economy is falling? At some companies have made cost-cutting for the survival of the company. Which one you choose, cut investment or management project should you increase the investment project management? Is it reasonable to conduct a review of project management skills?

I reviewed several books on the business value of Project Management, including "Quality Value Project Management" by Ibbs and Reginato and Researching "The value of Project Management" by Thomas, PhD, and Mullaly, PMP. The goal is to create a framework for businesses to see how much they should spend on project management. I have a simple framework for a company that can be used to build a business to invest in project management.

Every company has a project or program where they need to invest to achieve the company's business strategy. Both the high project cost and the expected benefits (increased revenue, reduce costs, improve customer retention, risk reduction, etc.) can be measured to the expected profit for the company.

Risks arising from lack of cost or inability to perform in a Project Management company. These risks include the project schedule, risk to the project scope and quality, and risks to project costs and risks the success of the project itself. For example, delays in the project could generate greater cost than anticipated costs and lost business opportunities (business benefit is lower). low quality or scope of a small can lead to the realization of business benefits is lower. Costs result from the failure of similar projects with total project costs and all benefits lost business. Based on the number of Project Management which will be applied to any project of this risk can be measured at high levels by estimating the likelihood of occurrence and impact (cost) of the event.

Improved Project Management to provide additional benefits - improved financial results, better governance, better assurance, and improved organizational coordination. These benefits can be measured by estimating the likelihood of them if you have increased the practice of project management and assign a financial gain. Identify specific skills that need improvement exists to achieve specific benefits and then measure the benefits.

You can determine the benefits of project management by combining the amount of risk reduced plus the added benefit of improved project management. This is a gross profit of project management. These benefits will be different for every business and for each project.

Project Management comes from fees. These costs include the cost to do project management and cost of your project to improve management capabilities. Identify specific skills that need to be there or be improved and estimates the cost to provide such capabilities. What is the cost for the project manager? How prices and costs to improve a specific process to, in order to achieve the benefits and reduce costs? This figure shows the cost of managing the project.

Subtract these expenses from gross profit project management and you have a net profit of project management.

Every project is different and every company is different. It makes sense to invest in project management in which the capabilities and number of project benefits realization be improved more than the cost of managing the project. If project management does not increase the value of your project, should be reduced. Almost no one needs any project management capabilities to be increased to be deployed. But almost all projects benefit from some level of project management. The following graph shows the relationship between investment into the premier and benefit from PM.

The curve of investment Project Management

Remember, each project undertaken to provide several advantages for the company. Project management can help reduce the risk of failure in achieving the benefits and really enhance the potential benefits. But it always comes from the project management costs. When the project value + (the benefits of project management - the cost of providing project management) is greater than the value of project - the cost of poor project management, you should invest in PM. Business case approach to determing how much that must be present PM should be done as part of your budget process for each project. The aim of the project management is to improve the ability of the company and deliver value to its stakeholders. The main point of Project Management is doing it. And it is a good investment.

I want to convey to you, thinking about how to approach and practical way to calculate this equation in the company or on your project.