About Dave Gordon

Dave Gordon is a project manager with over twenty years of experience in implementing human capital management and payroll systems, including premises-based ERP solutions, like PeopleSoft and ADP Enterprise, and SaaS solutions, like Workday. He has an MS in IT with a concentration in project management, and a BS in Business. He also holds the project management professional (PMP) designation, as well as professional designations in human resources (GPHR and SPHR) and in benefits administration (CEBS).

Managing Time and Materials Contracts

Time and ExpensesTime and materials contracts are frequently used for staff augmentation, when an organization needs labor types that they don’t have on staff, in order to complete some project or task. Generally, these contracts are based on an imprecise statement of work, with relatively few specific deliverables. Cost is calculated from an estimated number of hours at the specified price per hour for each labor type, with some estimate for expenses, to be passed along without markup. The schedule is usually not very detailed, although there is almost always an “end” date in there somewhere. In short, it’s a vehicle for quickly getting contingent workers on board, rather than a plan. And as a project manager, whether you are managing that labor or supplying it, there are some things you need to consider.

Find the Flexible Dimension

Consider the three fundamental dimensions of the project: scope, cost, and schedule. Of the three, which is the most important? Before you start work under such a contract, try to rank-order them. In some cases, there is an unmovable date that must be met, and every other consideration is secondary. For example: replacing an old financial accounting system so that it goes into operation on the first day of a fiscal year. In other cases, there is no “minimum viable product,” and the contract will provide the specialty skills required to deliver key elements of the required scope. In still other cases, the business case is very cost-sensitive. Understand which of these dimensions is least flexible in order to understand your options for the other two.

Define Quality

If you were contracting with someone to excavate, build forms, place rebar, and pour concrete for the foundation of a building, there would be extensive specifications, plans, drawings, quality standards, and so on. There would be no doubt what “good enough” and “done” looked like. Under a T&M contract, the deliverables are labor hours, rather than tangible products. Consequently, quality must be specified at the task level. For example: if you request a training plan to prepare some group of workers to use a new process, specify that you want a draft plan, so that it can be reviewed and specific changes requested. Otherwise, your specialized labor might end up doing commodity labor editing, which is not very cost-efficient. Similarly, if you get a contract programmer to create some custom process, consider whether every possible condition must be automated. It might be more cost effective to have the corner cases and once-a-year events handled manually.

Manage the Expenses

In a typical staff augmentation contract, travel expenses are part of the “materials.” I’ve seen contracts where the travel estimate was as much as 25% of the labor estimate. But, the 90’s are over; consider the possibility for some of the work to be completed off-site. Why incur travel costs in order to have someone sit down the hall in a cube, huddled over a laptop, for forty hours a week? We have collaboration tools that allow us to manage projects with a globally distributed team, from conference calls and Webex to document sharing tools like SharePoint and Central Desktop. Also, it’s common these days for very specialized knowledge workers to be on several projects at once, billing a few hours each week to each of them. Why pay for a “work week” of travel in order to get a “work day” of labor? And if you are the vendor, why lose all of that high-value productivity in travel time?

Under a T&M contract, the customer retains most of the risk. It’s not uncommon for contingent labor costs to expand to the point where it makes the overall project a failure. The sponsor expects the project manager to understand and manage that contract, as a source of labor as well as an expense. The key is to understand the cost drivers of that contingent labor, and keep them under control.

New PM Articles for the Week of August 18 – 24

Balloon BeyondNew project management articles published on the web during the week of August 18 – 24. We give you a high-level view so you can read what interests you. And yes, I took all of these hot air balloon photos right in my own neighborhood. Privacy? Well, they seemed friendly enough. Recommended:

PM Best Practices

  • Glen Alleman imagines a conversation between a project manager, a team of software developers, and an iceberg.
  • Brad Egeland starts a new series with a look at customer satisfaction, and why it’s the most important success metric.
  • Jim Anderson speculates on the root causes of Avon’s recent SAP implementation failure. The users left the company, rather than switch? Wow …
  • Emanuele Passera applies the tenets of “locus of control” theory to project management.
  • Bruce Benson tells of the New Manager who wanted to help.
  • Ian Whittingham continues his look at project management applications for Leavitt and Dubner’s new book “Think Like a Freak.”
  • Christopher Merryman demonstrates ways that we can add visual presentation to our project reporting communications.
  • Dan Patterson makes the case for consensus-based planning.
  • Ron Rosenhead tells of the great new Projects web site at the University of Edinburgh, and asks us how much project information do we share?
  • Nick Pisano is perplexed by the academic community’s apparent lack of interest in Big Data.
  • Jen Skrabak maps Tim Ogilvie’s “design thinking” to project portfolio management.

Agile Methods

  • Mike Cohn explains his approach to massaging the backlog for a three-month vision of where the product is going.
  • John Carroll explains the Taoist basis for Agile methods. Or at least, anti-rigidity.
  • Craig Brown and Tony Ponton interview a few attendees / thought leaders at Agile Australia in Melbourne. Just 25 minutes, safe for work.

Professional Development

  • Elizabeth Harrin Interviews Terry Okoro, Chair of the APM’s Women in Project Management SIP on their 21st anniversary conference in London.
  • Dave Prior advocates for experiential learning, also known as “getting a bunch of adults to play a game together.”
  • Robert Wysocki and Joseph Matthews continue their series on methods for the Occasional PM. This episode: team structure.

Enjoy!

New PM Articles for the Week of August 11 – 17

Balloon Above the TreesNew project management articles published on the web during the week of August 11 – 17. We give you a high-level view so you can read what interests you. Recommended:

PM Best Practices

  • Pawel Brodzinski expands on Jerry Weinberg’s definition, as “a process of creating an environment where people become empowered.”
  • Mike Griffiths considers the limitations of graphical depictions of data, when the information we should be consuming doesn’t graph so well.
  • Ammar Mango plots alternative routes through conflict.
  • Bryan Barrow explains his alternative to Post-It Notes for facilitating a project planning exercise.
  • Michael Girdler extols the virtues of a good scope statement.
  • Roberto Toledo lists his guidelines for fostering innovation.
  • Bruce Harpham begins a series on regulatory project management.
  • Dovilė Misevičiūtė notes that most attempts to institute time tracking fail within the first few months, usually for the same reasons.
  • Rachel Burger spoils “Guardians of the Galaxy,” pointing out the project management lessons. You could have at least waited until the DVD came out …

Agile Methods

  • Kevin Aguanno compares use cases and user stories, and how each can be the right tool for the job.
  • Bart Gerardi explores Bill Wake’s acronym, INVEST, on how to improve the quality of user stories.
  • Mike Cohn reflects on the balance of specialists and generalists in that most Agile team, the sandwich shop.
  • John Goodpasture explores the need for a release sign-off when applying Agile methods. Because it’s not just about software developers.
  • Chuck Morton continues his series of comments on Peter Morris’ article in the October PM Journal. This episode: Agile is not a project management discipline.

Following the Trends

  • Albert Barron explains [whatever] as a service, using pizza. Yes, even your grandmother will understand this one. Admirable, Albert!
  • Marco Visibelli shares recent lessons learned that tell us how companies make (and lose) money on Big Data projects.
  • Rich Maltzman interviews Kim Marotta on how MillerCoors is applying a sustainability strategy to improve performance.
  • Matthew Kosinski interviews Workday’s Liz Dietz on their upcoming Higher Education product.

Podcasts and Videos

  • Cesar Abeid interviews Rich Maltzman of EarthPM on applying sustainability practices to project management and the PMBOK. Just 49 minutes, safe for work.
  • Cornelius Fichtner interviews Thomas Juli about integrating personal happiness and focus with project success. Just 32 minutes, safe for work.
  • Glen Alleman links us to seven podcasts from Mary Ann Lapham and Suzanne Miller of the Software Engineering Institute on the principles of Agile development.

New Books

  • Elizabeth Harrin reviews “Project Management Workflow: A Business Process Approach,” by Dan Epstein and Rich Maltzman.
  • Henny Portman reviews Alan Ferguson’s new book, “Integrating Prince2.”

Enjoy!