Added Value of Project Management – Customer’s Perspective

Why should a customer pay for Project Management? If they have no Project Managers, the reason is quite obvious, but in the case they do, why add an extra billable layer?

I tried to show in the previous article how a company can benefit from having a structured approach that using Project Management provides. Now, is this only an internal matter? And again, why should a customer (who is in charge of the project) pay for a Project Manager when they probably already have one in their company?

Let’s take a look at the classic project structure:

Project Hierarchy

There is only one Project Manager answering to the board. This is usually the in-house Project Manager, but it could also be an external Project Manager or the one from the supplier. The important thing is that there should always be an accountable Project Manager. You can find out more about Project Management hierarchy and relations here.

Then, there are teams. On simple projects, you can expect to have only one team working, but on complex projects, you may end up having several teams working on specific aspects of the project. This may require specific knowledge as well as the involvement of different parties.¬†In these cases, customer’s Project Manager is just managing the different aspects of the projects and not the team itself.

In fact, the supplier’s Project Manager has the same role as the customer’s Project Manager. However, they will not address the board directly (since it is being coordinated by you), and as we will see, you cannot expect to have full access to their team and organisation.

Based on these assumptions, I will try to bring the role of the supplier’s Project Manager a bit closer to you. Project Managers (and Team Leaders) play a significant role in delivering successful projects. At first, it may look like an extra cost but here is a couple of arguments which make hiring them a sound investment.

Costs

costsWhen a customer already has a Project Manager, they could manage all the suppliers. But is it a good call? Let’s take a look at it from the costs point of view.

Handling a complex project means working with multiple parties (this may go from layers to specialised workers, from developers to media experts). They are your suppliers. Someone needs to manage suppliers.

This is where you decide between two options:

a) hire a Project Manager to manage all of the suppliers

b) let your in-house Project Manager handle them

True, not hiring an external Project Manager will save you some money but eventually, you will have to spend it because someone will have to handle the team. You will be just internalising these costs.

Keep in mind that suppliers (usually) do not bill 100% of the time spent on managing the project based on the fact that some of their work falls under “internal stuff” (like time reporting, team meetings, resource handling). This way, in the case of a big project, you may also be able to obtain a better price. On the other side, the internal costs are fixed, meaning you would lose money if you chose DIY approach.

Time

How much time can you commit to the project? Even when the Project Manager is 100% dedicated to the project, there is still a physical limit of the time they can spend working on the project.

Will the Project Manager be able to follow all aspects of the project and focus on all the issues? This doesn’t include only the technical aspects of the project, but also the personal issues, contingencies, resource allocation, handover to new employees, and so on.

Complex projects tend to involve many different organisational parts of the company. The more complex the project is, the more parts are involved and the more evident it is that one person will not be able to address everything alone.

Team Management

teamManaging a project is not only about assigning tasks. You must keep in mind team objectives and the time they spend on the tasks. Even though you can delegate tasks to external team members, most of the time you will not be present to watch them work. You will not be able to assess the time they spend working on the project or any related quality aspects. Also, someone needs to manage the supplier’s team (holidays, internal meeting, personal issues, and so on). To do this, you need someone on the customer’s side who is informed about all aspects of the project.

Changes

All projects face changes at some point. It could be anything – a new feature, a new deadline, or an unexpected event. Those cases always end with cost-related discussions, resources allocation and new planning. To fully answer those requests, one needs to balance the project with all involved parties’ plans and deadlines. If no common ground is reached, an escalation will occur.

If you have someone in the same rank as you who’s aware not only of the practical aspects but also of the strategic ones, that someone may understand the needs of the project and help you get what you need. If you don’t, your project will probably be considered a low priority and you may end up handling an escalation that could have been avoided.

Single Point of Contact

You will always need a counterpart to discuss all project aspects with you. This is usually called an SPOC (Single Point of Contact). Regardless of the nature of your relationship with the client, you should always ask to have just one interface or at least a main one.

During the project, several discussions will take place leading to one course of action or another. As you will have the full picture, you need someone on the other side to be on the same level as you – a counterpart.

customerIf you look at all of the above points only from a Project Manager’s perspective, you may end up speaking with several actors (managers, technical, sales, human resources, billing) from the supplier’s side.

Most of them will have no real insight of the project, and each of them will see it in a different way and have their priorities. This may lead to long meetings and many discussions. In short – more internal costs!

Also, they may not have the same structured approach do. A developer may not be interested in reporting or planning, while a Sales or a Top Manager may not give the needed attention to technical details.

The more complex the project is, the more valuable it is for your company. It is only natural you want to avoid problems. Having a counterpart will make your job easier and reduce the internal costs. It is beneficial for the supplier because they as well benefit from the added value.

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