Why engage a project manager? A client’s perspective

Mithra V Rampersad, MBA B.Eng C.Eng. MICE R.Eng. DipLaw Dip.F.M.

Abstract: The use of project management as a tool for execution is quickly becoming globally accepted across many industries. While being increasingly accepted within the local and regional context, there is still a tendency for clients to adopt the traditional hands-on role for the execution of their projects in lieu of the engagement of a specialized project manager. This article seeks to highlight the various factors influencing the need for project management services.

Project management has been gaining momentum in Trinidad and Tobago over the past 15 – 20 years having been adopted by some client organisations (both private and public sector) in the execution of their projects. It is considered that signals of this gain include:

• Buy-in by client organisations – evidenced by recent advertisements for project management services.
• Post-academic qualifications sought by potential employers now include the PMP (Project Management Professional) designation.
• Increased professional support by organizations such as the PMI (Project Management Institute) and its local chapter the PMISCC (Project Management Institute Southern Caribbean Chapter).
• Recognition as a specialist field –verified by new academic programmes being offered at both the Diploma and Masters levels.
• Availability of a number of (international) standard conditions of engagement for the appointment of project managers.

The typical local or regional client organization therefore has a relatively robust infrastructure upon which to base a decision on the engagement of a project manager and does not necessarily have to start afresh on any such initiative. Influencing Factors In the development of capital projects, the client typically has three fundamental choices to make:

• Should the management of the project be vested with existing operational staff?
• Should a new manager or team be employed formally and specifically by the organisation?
• Should external project management expertise be procured under a service agreement? All three approaches have features that define their advantages and disadvantages. On the client’s side, this decision is primarily influenced by:
• The complexity of the project
• The availability of in-house resources
• The expertise of in-house resources
• The size and duration of the project
• Economic, risk management and feasibility drivers.
• Client organization’s history of executing similar projects

Naturally, within any organisation, some, if not all, of these factors will exist to varying degrees, and therefore the rationale for procurement of project management services will be informed by the degree of confidence which the client has in these factors.

Notably, the client’s assessment on the availability of resources should not be limited to staffing only, as successful project management is also based on the efficient use of physical, financial, time and informational resources. A typical client organisation will possess all of these in some form.

Project Parameters & Resources
Naturally, the more complex a project is by definition, the more likely it is that the client will require project management services. The choice then redounds to the source of the expertise – a previous history of similar projects executed within the client organization would have led to an accumulation of in-house expertise which can then be built upon. This then follows the model of internal project management.

If the project is one where the client organization has had no similar experience, then a case is made for adoption of externally procured project management services.

It should be noted that in theory, internal and external project management define opposite ends of the spectrum within project management procurement. In practice, most projects are executed within these boundaries, i.e. a suitable mix of both in-house and externally sourced resources.

Risk Management
The second consideration that the client organisation should address is risk mitigation.The chosen approach should be tailored to suit the risk appetite of the organisation.

Robust risk assessment and management techniques will satisfy the triad of economic, technical and financial outcomes. Typical avenues available to the client are scenario modeling, contingency planning, and risk allocation. The simple exercise of procuring external project management serves to manage risk by adoption of the risk transfer principle.

A contingent risk factor associated with the appointment of external resources is the issue of corporate confidentiality. Despite client confidentiality arrangements, the possibility exists that competitive business projects in the development stage may be compromised. Economic choices made by the client should consider two levels of comparison:

• Whether the cost of using internal resources exceed the cost of external resources.
• Whether the secondment costs of internal resources to the project team outweighs the opportunity cost of the productivity of those resources in their substantive positions.

In this respect, a full and objective cost-benefit analysis should be carried out, preferably using life-cycle costing techniques.

Further Steps
The client’s objectives will be the ultimate drivers for any project. Therefore, the method of project procurement and execution should be aligned as closely as possible to these objectives.

Engagement of a project manager is a critical step towards project success and it is argued that in making this decision, the client must carefully consider all factors that influence the judgment.

It should be equally appreciated that each project undertaken is different in both scope and approach. Hence, the adoption of one model on one project may not be appropriate for another, regardless of the similarities.

Where the client organisation forecasts an orientation towards several project developments, consideration should be given to the establishment of an in-house project division. Conversely, where projects are sporadic and intermittent, a more appropriate approach may be the procurement of external project management services.

There are many arguments for and against the appointment of a Project Manager. However it is clear that the opportunities to be derived far exceed the economic benefits of utilizing ‘in – house’ resources. Additionally, the risks associated with large projects can affect the overall performance of the organization.