Incorporating Project Management Tasks into Your Project Estimate
Someone asked me recently what percentage of time (and pricing) should be allocated to ongoing project management tasks when devising a website development estimate. This is a tough question to answer for two reasons:
- Not all project management tasks can be planned
- The frequency you plan to carry them out has a bearing
For example, you can plan when and how often you will submit status reports to stakeholders but you cannot plan for issues that may arise and how long it may take to resolve them.
Still, it helps to have a ballpark percentage, based on a mathematical formula, so you can quickly provide a range estimate for your project when creating proposals.
It is NOT a good idea, EVER, to use the “crystal ball” method and simply guess.
First, make a list of all the project management tasks you will carry out that can be planned. Here is a common list.
Project Management Tasks You Can Plan
- Status reports
- Reviewing progress against the project plan and making any necessary adjustments.
- Conducting team meetings
- Monitoring budget and resource utilization and making any necessary adjustments.
- Reviewing project documentation to ensure it is up-to-date and accurate.
- Reviewing and approving project-related expenses and invoices.
- Managing approvals
Then, make a list of those tasks that cannot be planned in advance. Here are the most common of those.
Project Management Tasks That Can't Be Planned
- Managing Issues
- Mitigating Risk
- Managing Change
- Unplanned Communication with stakeholders
The next step is to plot the “plannable” project management tasks on your standard “boilerplate” project plan at the frequency you intend to carry them out whether that be weekly, bi-weekly, monthly, quarterly, etc. Then, estimate each of these tasks using hours x hourly rate.
HOURS X HOURLY RATE
To determine what percentage of your total estimate should be devoted to project management, you will also need to estimate all the other tasks using this method.
Add up the hours and cost estimate associated with the project management tasks and then do the same for the other tasks. After that, you can determine what percentage of the total project time estimate is associated with project management.
The final step is the tricky part because you need to allow some time for those project management tasks that are not “plannable.”
To do that, consider the following:
- How well you typically get the requirements “right” the first time
- How often you typically invoke your change procedure
To allow for these tasks, you will form a “guesstimate” based on the above considerations and add that amount to your “plannable” percentage.
Please note when creating an actual estimate, you may need to increase the amount of time allotted for unplannable tasks based on your history with the client and the complexity of the project.
While this method for determining a baseline percentage may seem a bit complicated, it’s something you only need to do once followed by updates when your processes change or you automate and streamline for efficiency.
At any rate, it is always best to have a “defendable” and consistent method for devising an estimate. Otherwise, it is very difficult to continue to improve.
Let’s review. The steps to determine the baseline for the percentage of your estimate typically devoted to project management tasks are:
- Make a list of all the plannable project management tasks.
- Make a list of those tasks that cannot be planned in advance.
- Plot the plannable tasks on your standard project plan.
- Create an estimate for each project management task as well as all other tasks. (hours x hourly rate)
- Add up the estimated time and cost for all the project management tasks.
- Add up the estimated time and cost for the entire project.
- Calculate the percentage of the total that is devoted to project management tasks.
- Add a skosh (little bit) for unplannable tasks based on past projects.
- Use the final percentage as a ballpark for future estimates until processes change or are automated.
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