My friend Bob had that lost look on his face again. ‘What is it this time?’ I asked.
‘We’re not tracking project costs’, he started. ‘It just doesn’t make any sense. How can we learn to estimate better in the future if we’re not tracking the cost of existing projects?’ I countered, ‘That’s not what you told me last week. You have your project schedule, the task list, estimates AND actual hours per resource on each task (excellent integration of your time reporting with your schedule, by the way), cost reports by week, and ongoing project costs tracked against planned cost and baseline. What’s missing, Bob?’
He looked up, ‘What’s missing is – I cannot understand why the Business side of the project isn’t tracking their costs just as diligently as I am for IT. Construction projects track all their costs. Military and defense track their project costs like hawks. I see an IT project in support of business monitored very closely, and I don’t see equivalent monitoring on the Business side. I’ve read the book ‘Quality is Free’ am I missing something that Business project costs are somehow ‘free’?
‘Oh that’, I muttered. I had to admit I’d seen the same thing in different organizations. The Steering Committee reports did an excellent job of documenting project costs for IT, but there was nothing on business costs. So, what was the true cost for the project? Nobody really knew. Valuable information is lost, as nothing is finding its way into project archives to help decide whether or not do a similar project in the future – based on TOTAL cost. Why would you decide to do a similar project again strictly on the basis of IT costs only?
I did have an answer for Bob and shared the information I’d gathered when I had asked the question in the past. The cost of business employees is looked upon as ‘sunk’ costs, because those employees are operational. The costs are unavoidable. So, they are not tracked or recorded against specific activities.
But here is the flaw in applying that logic, and I shared with Bob an argument I had often raised in the past when I had Business PM accountability. When the business employees are working on a project, these are no longer operational costs, these are project costs. If their activities take a little longer than planned, i.e., the cost has just gone up, there’s no monitoring. And if these are activities in partnership with IT, IT does have to answer.
I shared some good news with Bob, though. There is change in the wind in some places. I do have one colleague, managing Business PMs, that has started tracking the hours her business staff is spending on projects. So all hope is not lost. Change can happen.
Bob shrugged and opened his menu. ‘Would be nice if everyone did. Let’s eat.’