GENERATING
VALUE?
Gary R. Heerkens, MBA, CBM, PMP, president of
Management Solutions Group Inc., is a consultant,
trainer, speaker, and author and has 25 years of
project management experience. His latest book is
The Business-Savvy Project Manager.
ing whether a project manager has the authority
to overrun project targets. It was a fairly straightforward business question, but sadly, most respondents (around 75 percent) failed to recognize it as
such, unable to expand and elevate their perspective beyond the realm of the triple constraint.
A BIG CONCERN
To summarize their comments, this group was
saying that nothing could justify a violation of original cost and schedule targets—absolutely nothing.
Many emphatically stated that cost and schedule
compliance is the ultimate project success metric.
This does not bode well for project managers
seeking to function in a project environment that
is increasingly business-focused. In a world where
senior management correctly views projects as
financial investments, metrics such as return on
investment (a measure of project effectiveness)
trump cost and schedule compliance (a measure of
efficiency).
PATH FORWARD
If we wish to increase the respect afforded to
project management, it is vital that today’s project
managers understand the concepts and practices
related to the business side of projects much, much
better than this discussion thread demonstrated. If
you are a project manager, I urge you to heed my
wake-up call. PM
of Projects
W
Project managers must think beyond
the triple constraint.
BY GARY R. HEERKENS, MBA, CBM, PMP, CONTRIBUTING EDITOR
Which is better: a project that runs on time and
budget and meets its objective, or a project that
runs late and is over budget but overachieves on
cost savings that have a “change for life” impact?
When that question was posted on a recent
discussion thread, it generated some controversy.
But I think the question could serve as a wake-up
call for today’s project managers.
This question is really asking whether it’s
acceptable to overrun the original cost and schedule if that would result in a substantial increase
in project benefits. Since this topic is in the sweet
spot of my column, I followed it with great
interest. As I continued to observe and occasionally comment, I became increasingly alarmed by
what was stated in the more than 430 comments.
BREAKING DOWN THE NUMBERS
First let’s dismiss the outliers—about 130 respondents
either didn’t appear to understand the question the
same way the overall group did or they had an experiential bias that seemed to cloud their commentary.
That leaves around 300 responses. From this
group, about 25 percent answered the question in
an appropriate, business-based manner, suggesting
that—in most cases—pursuing the option to cash
a much larger benefits stream will justify exceeding the original cost and schedule targets. Further,
most of those 75 respondents appropriately noted
that a positive cash flow would have to be
confirmed before any change was approved.
It’s critical to note that the original question did
not mention—and made no particular assumption
about—who was making the decision to “
overachieve.” In other words, the question was not ask-
