What We Liked
We liked the idea of focusing on the financial aspects of project management. What we didn't realize until we got into the book is that the author views FFPM as "the next step in the evolution of the project management science". That is, it is a sort of "movement" to a new project management level, or paradigm, by people who believe in it and stand to benefit from it. So the question is, how many people will buy into the idea?
In chapter 2, Project Management Overview, Thomas observes in part:
"Project is both a science and an art. It is the formal application of
principles and techniques to the planning and control of project work. Effective project
management necessitates flexibility within a structure. If the rules are too rigid,
there will not be enough space for the adaptation that performers and managers need
to succeed. If the rules are too loose, there is inefficiency. The goal is to strike
the right balance – no excess, no insufficiency.
Formality without flexibility leads to bureaucracy. Bureaucracy is too costly and
too slow for today's fast moving, fast-changing world. Flexibility without formality
is chaos. It is also too costly and inappropriate given the complexity and impact
Further he suggests that:
"Project management is distinct from execution, which is specific to the project and results in the project's deliverables. Project management is performed to ensure that the project is optimally executed."
"Even a comprehensive set of project management procedures will not solve problems that are rooted in inadequate judgment, interdepartmental warfare, lack of effective communications, illogical problem solving/decision making, fear- and blame-based politics, or any other common causes of project performance ills."
Only someone who has been there, and had personal experience, could come up with an observation like that!
Thomas briefly discusses "adopting 'vision statements' to help focus employees in the same direction." Unfortunately, he quotes the vision statement of the California State University, Monterey Bay, which happens to be a long high-flown and obscure text with sentences over 50 words long. The university's academics may understand it but whether their employees identify with it is quite another matter. His example of McDonald's is much more to the point:
"To satisfy the world's appetite for good food, well served, at a price people can afford."
A project with a vision statement like that has got to be a winner!
Chapter 5 launches into a discussion of the Project Management Office, Portfolio Management, and Partnering and provides some good basic advice on each topic.
Chapter 6 provides a useful discussion of Proposals and Pricing. However, it is essentially limited to the US government's contracting environment, though many of the steps involved are generally applicable to the private sector market when large projects are involved.
The author observes that:
"Organizations are not using cutting-edge project management techniques that could help them focus resources more efficiently. One such technique is the use of the WBS."
While the observation may be true, unfortunately, we would hardly describe the work breakdown structure as cutting edge. It should be very much mainstream and standard practice. But he goes on:
"In many companies, separate offices independently track project costs and schedules. The cost accounting organization collects the data that provide management with budget status, not whether the project is on schedule. The project scheduling organization knows whether the project is on schedule, but is unaware of budgetary performance. By the time leadership discovers that 60% of budget has been spent but only 20% of the work accomplished, it is too late to avoid at least a 40% cost overrun."
If this is indeed the case, it really is a sorry state of affairs.
On the subject of Management Reserve and Undistributed Budget, Thomas says:
"Management reserve is that portion of the total contract budget that is withheld by the contractor (i.e., not distributed) for management control purposes. Contractors normally withhold management reserve for the following reasons:
1. To motivate managers to do the job at a lower cost than negotiated ...
2. To bank a contingency fund ..."
Well, maybe in the US, but not in our experience with UK and Canadian companies. In any case, Reason #1 appears to us to be of questionable strategy, if not downright unethical and Reason #2 should either be in the hands of the project manager to cover productivity variations from the control budget, or the responsibility of the owner/sponsor/funding authority for approved scope changes.
Chapter 10 provides an interesting description of Project Audit, Termination, and Closure as established by a large contracting organization either in the case of project completion or because of premature termination.
3. Ibid, p7
4. Ibid, p252
5. Ibid, p16-17
6. Ibid, p17
7. Ibid, p18
8. Ibid, p31
9. Ibid, p34
10. Ibid, p126
11. Ibid, p128
12. Ibid, p136