Professional Project Management as a Service

In the first two parts of this series I made the case for why companies should view professional project managers in the same way they view certified public accountants.  I dealt with the unique capabilities a professional PM can bring to an organization and I dealt with some of the common objections to using professional PMs. 

In this last part I am putting forth a concept for providing professional project management services in a way that is analogous to how CPAs are engaged for their services.  I am calling this new model Project Management as a Service. 

CPA firms typically enter into yearly contracts with their clients to perform very specific services.  Some will only engage them for tax preparation services but many will also engage them for other services as well.  These contracts will clearly state what services they will perform and how much they will cost.  They may not use a fixed price contract but the cost will be clearly delineated by a number of hours at a specific rate.  That rate will be scaled based upon the resources required to perform each service.

The number of hours is based on very objective criteria.  A CPA firm can give a very accurate estimate for an audit based on the number of accounts and the number of transactions.  The resources required will be based on the activity.  A staff accountant will do the detail review of the accounts and write the initial report, a senior accountant will write the final report and a partner will review the report to make sure everything is covered and nothing was overlooked.

The yearly nature of the CPA contract establishes a relationship with the client that is critical to successfully providing the final delivery of their services.  It is important for the CPA firm to have touch points with their clients to make sure the client is doing the things they need to be doing to enable the CPA to do their job.  It is important to understand the nature of the clients business and goals so the CPA can tailor their services to support those goals.

This model for doing business with CPAs has grown up over the years so that the CPAs are able to offer their services to businesses of all sizes at a price that is affordable by businesses of all sizes.

There is no reason professional project management services cannot be offered in the same way.  There is no reason a company must hire a professional PM at a cost per hour with a very open and general statement of work.  Often the scope of work is no more than “Provide project management services for X project for N months”.

The common view of project management is that it is too difficult to match the fluid and unknown activities to a specific number of hours. There are no objective parameters to determine exactly how many hours a project will require.  Even if you could do this, as soon as the first change order comes in the project will have new parameters so the number of hours required will change.

I am going to challenge that view.  There are several objective parameters that could be used to size a project;  the number of team members, number of stakeholders, number of suppliers, number of activities, budget, project length and risk factors.  A large portion of a PM’s time is spent in communication.  It is well known that the amount of communication is directly proportional to the number of team members and stakeholders that are involved in a project.

If you break a project down into its various phases, you can then estimate the activities by phase.  During the initiation phase a Professional PM could offer stakeholder analyses services based on the number of stakeholders.  During the planning phase they could offer WBS and schedule development services based on the project charter and preliminary project plan.  During execution the services would be for managing and controlling the project based on number of team members, communication requirements, activities and risks.

When a change order occurs in the project, the parameters will change but since the services have been contracted based on a formula utilizing those parameters; the client and PM know exactly how the cost of their services will change.  One could even create a price schedule that included a cost for processing a project change order.

Even Portfolio Management services could be contracted out at a specific rate per service.  There are project-attribution and selection services that could be offered based upon the number of projects.  There could be project auditing services based on the specific metrics to be measured.  There could be stage gate review services, project archiving and lessons learned services.  It would be like having a PMO in a box.

Once professional project management services are broken down into more manageable chunks it becomes possible to start offering these services at price points that even the smallest businesses can afford.  The professional project manager can specialize around specific services and allocate resources accordingly.  It may even be possible to offer certain services at a fixed price per month.

The ideal situation would be to engage a professional project management firm for a year at a time.  This has all the same benefits as engaging a CPA firm.  An important part of effective project management is understanding the culture and history of the sponsoring business as well as their policies that would impact project management.  This kind of engagement would have many benefits.

• The professional PM be able to respond more rapidly to those emergency projects, the ones that are the most likely to need their services
• This eliminates the search time to find a qualified PM for you have already identified your vendor and an SLA can dictate the time they have to respond to resource needs
• This eliminates the time to review terms and conditions and the statement of work for these have all been dealt with in the general services agreement
• Committing to a minimum level of services up front enables volume pricing and better rates
• The professional PM firm could bring their systems and tools to the engagement to increase efficiencies

In summary, businesses should look at engaging a professional project manager just as they do a CPA.   There are many similarities in the reasons to use them to supplement your full time staff.  And, just like with CPAs, it is possible to engage a professional project manager at the right price point if you take a services oriented approach. 

Part 1 - The Case for Professional Project Management
Part 2 - Overcoming the Professional PM Objections