Sunday, March 6, 2011

Cost-schedule v Value

Most of the time, I call myself a program manager, and if occasion demands: a project manager. In this post my mantle is 'Value Manager'.

Is there a difference?

To some, yes. Project managers put cost and schedule on the front burner, whereas value managers may turn that burner down a bit. Whether value or project, scope and performance, the other two legs of the four-legged 'iron triangle' are priorities regardless of labels.

Most of my experience over a life-long career has been managing value. Ten years ago, I wrote a book about it, just after my first ERP program--a portfolio of about 10 projects, including PeopleSoft.

Here's the way it's gone for me:

Mission first: As a DoD engineer in the Vietnam and cold war era, I was instructed that mission trumped all else.  In fact, a 2-star general once told me: "If it's not in the plan, then I will personally change the plan!".  Posted to the 'outpost of freedom', Berlin, during the cold war, I arranged for a C-5 to put a sensitive cargo down in Templehof.  C-5--the largest cargo plan in the world--into Templehof?  Wasn't that built in the '30s for the DC-3 era? If'd you've stood on the tarmac at Templehof, you know what I mean.  Was this in the plan? NO, but...

Contractual commitment: I moved on to the aeropace and defense industry.  There, I signed onto contracts pledging to meet cost-schedule-scope in about as much of an iron triangle as you can get.  And our team moved heaven and earth to meet those commitments, cost-schedule-and scope.

Cost/Benefit: Having won the cold war, I took on back-office IT with my first ERP project.  The sponsor made it clear: I could have whatever money I needed so long as it was paid for.  Cost/Benefit was the metric.  Obviously, there's no benefit if you don't deliver on the scope, the performance, and the value for the user.  It's a complex dynamic, more complex than just meeting a cost or a schedule because you hold business value in your hands.

P&L: I took on executive responsibility for a business unit having IT, application development, and business operations.  We produced documents from an electronic database under court order for discovery.  My imperative from my boss: never blow a court-mandated schedule, but make a profit--or else!  My project managers were given two orders:  never blow a schedule; keep expenses under control, but deliver all the documents.  Expense control is the secret to profit on the bottom line of a P&L.

The WEB: I managed an agile, or agile-like shop for 18 months.  Our shop reflected the sponsor's sense of value: Be quick!  Don't fall behind the competion.  And  don't let the vision of the future get in the way of the present--thus, be incremental.  And so we were.  Our backlog was constantly changing; we met and bettered the competition with quick strikes targeted to maintain our market lead, and kept ahead of customer expectation.  Fortunately, ours was a business-to-business shop, so we had very sophisticated customers who were enormously helpful.

So, is value manager different from project manager? (GoTo TOP)

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