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Project Contracts – A Vital Legal Binding

One of the key knowledge areas discussed in the Project Management Professional (PMP®) certification is Procurements Management. As part of project procurements management a project manager is mainly expected to be able to initiate, execute and manage projects based on the project contracts. This article is an attempt to discuss about project contracts, to discuss the importance of such contracts and to give an introduction to types of contracts as a precursor to subsequent articles. Everything you ever wanted to know about contract digital project management. New blog post #dpm #digital #digitalagency #pmo https://t.co/WO7CAbwbHR pic.twitter.com/bWmeCfGbFr — ProjectManagementOD (@ProjectMOD) 22 December 2017 The PMBOK® defines a contract as follows. “Contract represents a mutually binding agreement that obligates the seller to provide the specified products, services or results, and obligates the buyer to provide the monetary or other valuable consideration in return. A contract can also be called an agreement, understanding, undertaking or a purchase order.” (PMBOK® 5.0) Any project involves two or more parties. One main party that is the buyer and the other the seller. In addition to these there can be other 3rd party elements that are not directly involved in the contract but are interested in or are impacted by the same. The contract between the buyer and the seller happens to protect the interests of the two parties entering into the agreement. The seller provides goods or services to the buyer for which the buyer compensates the seller monetarily or through other financial or non-financial means.   A contract is a formal agreement between the two parties and it is a legal binding amongst the two entities. A formal contract must be in written format and can be used even in court of law in the case of either party failing to honour their commitment or in the case of an appeal against any misdeeds. Dishonouring contracts may actually lead to settlements even in court but should ideally be settled mutually among the disagreeing parties, most probably through a mediator called an ‘arbitrator’. Normally in large organizations contracts are managed by a separate contract manager or a procurements manager. The management of contracts are done in 2 separate ways namely; centralized contracting and decentralized contracting. In centralized contracting, one contract manager manages all the contract related matters for multiple projects. This requires expertise in contracting, standardization of contracting practices across the organization and more focused management of contracts. In decentralized contracting, separate contract managers are allocated to manage the procurements for individual projects. This results in full time management of contracts and the contract manager must report progress to the project manager. This results in more focused management of project contracts and with time creates specialized expertise in contracting. However, this may result in duplication of contracting expertise and less standardization of contracting practices across multiple projects in the company. #Passivehouse builder @AdamJCohen discusses the "gold standard" of Integrated Project Delivery contract typeshttps://t.co/rpk6GXV87W — Passive Buildings (@PassiveBldgsCan) 2 November 2017   There are three main types of contracts. They are Cost Reimbursable OR Cost Plus, Time and Material or Unit Price and Fixed Price or Lump Sum contracts.  The applicability and use of these contract types based on the type of project, complexity and the parties involved may decide on variations based on the charges involved in order to ensure that the contract terms are mutually beneficial for the two parties. Hence, these contracts vary based on the cost, time and price.  A cost plus or cost reimbursement contract is a contract in which the contractor is reimbursed or paid all the actual expenses they incur when carrying out the work. In addition to this they are also allowed to charge an extra fee allowing them to obtain a profit. For example a contractor taking up building a contract may claim resource costs as well as any miscellaneous expenses incurred for travel, food, purchases as well as charge an additional amount from the customer in order to make a profit from the tasks carried out. A fixed price contract on the other hand does not depend on the resources utilized or time expended. A fixed amount is agreed upon between the contractor and the customer where the amount is paid to the contractor even if the resources expended is lower or higher than the agreed upon amount. Time & material contract is where the contracting party is paid only for the amount of time or resources spent. For example if there is a software development firm which assigns 4 resources for a project on a T&M basis the company will be paid an hourly rate for each resource based on the amount of time they spend on tasks in the project.  Each contract type has its own pros and cons for both the contracting and implementation party. For example a fixed price contract is suitable for an organization as they would know the amount due before hand and know that they won’t end up paying extra if the triple project constraints are not met. Similarly, a time and material project may be suitable for both parties, as amount will be charged only based on the amount of work done in the project and for the time spent. Advantages and disadvantages of each contract type depend on the context. Thus, it is important for stakeholders involved in projects to negotiate on contracts wisely.
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Project Contracts – A Vital Legal Binding

387
Project Contracts – A Vital Legal Binding

One of the key knowledge areas discussed in the Project Management Professional (PMP®) certification is Procurements Management. As part of project procurements management a project manager is mainly expected to be able to initiate, execute and manage projects based on the project contracts. This article is an attempt to discuss about project contracts, to discuss the importance of such contracts and to give an introduction to types of contracts as a precursor to subsequent articles.


The PMBOK® defines a contract as follows.
“Contract represents a mutually binding agreement that obligates the seller to provide the specified products, services or results, and obligates the buyer to provide the monetary or other valuable consideration in return. A contract can also be called an agreement, understanding, undertaking or a purchase order.” (PMBOK® 5.0)

Any project involves two or more parties. One main party that is the buyer and the other the seller. In addition to these there can be other 3rd party elements that are not directly involved in the contract but are interested in or are impacted by the same. The contract between the buyer and the seller happens to protect the interests of the two parties entering into the agreement. The seller provides goods or services to the buyer for which the buyer compensates the seller monetarily or through other financial or non-financial means.
 



A contract is a formal agreement between the two parties and it is a legal binding amongst the two entities. A formal contract must be in written format and can be used even in court of law in the case of either party failing to honour their commitment or in the case of an appeal against any misdeeds. Dishonouring contracts may actually lead to settlements even in court but should ideally be settled mutually among the disagreeing parties, most probably through a mediator called an ‘arbitrator’.

Normally in large organizations contracts are managed by a separate contract manager or a procurements manager. The management of contracts are done in 2 separate ways namely; centralized contracting and decentralized contracting.

In centralized contracting, one contract manager manages all the contract related matters for multiple projects. This requires expertise in contracting, standardization of contracting practices across the organization and more focused management of contracts. In decentralized contracting, separate contract managers are allocated to manage the procurements for individual projects. This results in full time management of contracts and the contract manager must report progress to the project manager. This results in more focused management of project contracts and with time creates specialized expertise in contracting. However, this may result in duplication of contracting expertise and less standardization of contracting practices across multiple projects in the company.

There are three main types of contracts. They are Cost Reimbursable OR Cost Plus, Time and Material or Unit Price and Fixed Price or Lump Sum contracts.  The applicability and use of these contract types based on the type of project, complexity and the parties involved may decide on variations based on the charges involved in order to ensure that the contract terms are mutually beneficial for the two parties. Hence, these contracts vary based on the cost, time and price. 

A cost plus or cost reimbursement contract is a contract in which the contractor is reimbursed or paid all the actual expenses they incur when carrying out the work. In addition to this they are also allowed to charge an extra fee allowing them to obtain a profit. For example a contractor taking up building a contract may claim resource costs as well as any miscellaneous expenses incurred for travel, food, purchases as well as charge an additional amount from the customer in order to make a profit from the tasks carried out.

A fixed price contract on the other hand does not depend on the resources utilized or time expended. A fixed amount is agreed upon between the contractor and the customer where the amount is paid to the contractor even if the resources expended is lower or higher than the agreed upon amount.

Time & material contract is where the contracting party is paid only for the amount of time or resources spent. For example if there is a software development firm which assigns 4 resources for a project on a T&M basis the company will be paid an hourly rate for each resource based on the amount of time they spend on tasks in the project. 

Each contract type has its own pros and cons for both the contracting and implementation party. For example a fixed price contract is suitable for an organization as they would know the amount due before hand and know that they won’t end up paying extra if the triple project constraints are not met. Similarly, a time and material project may be suitable for both parties, as amount will be charged only based on the amount of work done in the project and for the time spent. Advantages and disadvantages of each contract type depend on the context. Thus, it is important for stakeholders involved in projects to negotiate on contracts wisely.

Rumesh

Rumesh Wijetunge

Chief Innovation Officer - Zaizi Limited, Chief Operating Officer - LearntIn (Pvt) Ltd., Director /

Rumesh is an IT business leader with over 12 years of industry experience as a business analyst and project manager. He is currently the CIO of Zaizi Limited, a UK based data management company heading the operations in Sri Lanka, the COO of LearntIn, a global training institute based in Sri Lanka and is also a lecturer / trainer at multiple private universities on management, IT, business analysis and project management subjects. He is the current president of the IIBA Sri Lanka chapter and is one of the most qualified and sought after trainers in Sri Lanka. Refer his LinkedIn profile for more details and to see more articles he has written on linkedin

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Top 5 certifications for project manager

A project manager handles many responsibilities and takes vital decisions that are necessary to complete the project in a smooth manner. At times, a project manager might feel the need of a formal certification in order to learn new techniques that could improve his/her productivity and also help them climb the corporate ladder. Once the project manager has taken the decision to enrol in a project management classroom training program or an online course, the next question arises as to which training program to pursue. There are a significant number of courses in the market and the best way to choose the one that suits you the best is to understand the principles of the course in a concise manner. Let’s look at 5 such courses that have high demand in the market at present. 1) Project Management Professional (PMP) Project Management Professional is a reputed certification for project managers. It is a widely accepted certification and popular all over the globe. PMP certification is offered by Project Management Institute (PMI). In order to pass the PMP certification training examination, you will need to be well-versed with the various techniques to schedule, plan, monitor, and control a project from start to finish. The 8th edition of the Project Management Salary Survey announced that project managers who possess a PMP certification have monetary benefits of over 17% than their uncertified colleagues. 2) PRINCE2 Practitioner PRINCE2 stands for PRojects IN Controlled Environments. This project management methodology was first introduced in the government offices of the United Kingdom. Following its huge success, it was introduced in the corporate world and now it is used in many organisations around the world. The certification for PRINCE2 is divided into 3 components – PRINCE2 Foundation, PRINCE2 Practitioner, and PRINCE2 Professional. Project managers who have prior experience working in the industry, generally opt for the PRINCE2 Practitioner certification directly. ‘PayScale’ had conducted a survey according to which the highest salary for a PRINCE2 Practitioner was $100,000 depending on their experience. PRINCE2 has its own project management methodology whereas PMP follows a general project management technique. 3) Certified Scrum Master (CSM) Agile and Scrum are popular project management methodologies that help to get more work done in a shorter period of time. It is a methodical process and follows certain principles to successfully complete the project. These methodologies are showing significant growth every year. Hence, pursuing a Certified Scrum Master certification could help you get better job prospects in companies around the world. Even if you’re new to the Scrum methodology, this certification will show that you have knowledge of the various concepts involved in Scrum and that you’re capable of handling projects. At present, there are approximately 400,000 Certified Scrum Masters worldwide which shows the importance and reach of this methodology. 4) CompTIA Project+ CompTIA Project+ has techniques that are similar to PMI’s CAPM. This certification is for entry-level professionals and follows a general project management model. CompTIA was founded back in 1993 and provides various certifications around the world. Though this certification does not require any prerequisites, you will be able to grasp the concepts easily if you have worked on small-scale or medium-scale projects before. The concepts involved in Project+ are not as rigorous as the concept taught in CAPM. Once you complete the certification, you will be able to apply for roles such as project analysts, project coordinators, junior project managers etc. The Project+ certification will also demonstrate the business and communication skills of the individual. 5) Certified Project Manager (CPM) This is a reputed project management certification provided by IAPPM (International Association of Project and Program Management). The main principle followed in this methodology is as to how resources such as money, people, and time can be judiciously utilized in the duration of the project. The other areas of focus of this certification are marketing, communications, HR, risk management, IT, project management and quality management. Regardless of which certification you choose, ensure that you are well-versed with all the concepts of the methodology and that you’re capable of handling the various aspects of a project successfully. Now that you are aware of the principles of each certification, it will be easier to choose the one apt for you. Prepare well before writing the certification examination.
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Top 5 certifications for project manager

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Project Manager - An Ultimate Guide

Project management is a fast-paced and profitable career path. This explains the reason younger people are choosing project management as their first career. Businesses are realizing the importance of project management. Companies that are committed to Project management practices waste 28x less money because more of their strategic moves are carried out successfully. Also, 97% of organizations believe that project management is critical to business performance and organizational success. Hence, the reason more companies are hiring Project Managers.  According to PMI, 15.7 million project management roles will be created through 2020.Are you aspiring to be a Project Manager, but don’t know where to start? Are you a Project Manager that is looking for how to take the career to the next level? Whatever your level, this extensive guide will show you the right way to become a Project Manager.Table of Content 1.0 What is a Project Manager?    1.1 What does a Project Manager do?    1.2 Direct responsibility of the Project Manager2.0 Why do you want to be a Project Manager?3.0 How to become a Project Manager    3.1 How to become a certified Project Manager4.0 How much does a Project Manager make?5.0  Types of Project Manager       5.1.1 Construction Project Manager       5.1.2 How to become a construction Project Manager       5.1.3 What does a construction Project Manager do?       5.1.4 How much does a construction Project Manager make?5.2 IT Project Managers       5.2.1 How to become an IT Project Manager       5.2.2 What does an IT Project Manager do?5.3 Technical Project Manager    5.3.1 What does a technical Project Manager do?    5.3.2 How much does a technical Project Manager make?5.4 Digital Project Manager:    5.4.1 How to become a digital Project Manager    5.4.2 What does a digital Project Manager do?6.0 How to become a good Project Manager    6.1 What is the difference between the Project Manager and program manager?    6.2 How to be a successful Project Manager7.0 How to get a Project Manager jobConclusion1.0 Who is a Project Manager?A Project Manager is anybody who is responsible for leading a project through all its phases from conceptualization to closure. According to the Project Management Institute (PMI), the 5 phases in the life cycle of project management are - project initiation/conception, project planning, project execution, project monitoring, and project closure. The design of each phase is such that it meets the particular project's needs.Project Managers exist in every organization. They are the essential change agents, perform greatly under pressure, and are comfortable with the complex nature of dynamic environments. Project Managers are highly motivated and effective leaders, great communicators, excellent time managers, good organizers, reliable, and trustworthy. They are responsible for the whole scope of the project, resources, team, and the success or failure of the project lies on their shoulders. The following statistics show the importance of Project Managers.Companies that are committed to Project management practices waste 28x less money because more of their strategic moves are carried out successfully.80% of “high-performing” projects are directed by a certified Project Manager65% of organizations have a high alignment to strategic goals.83% of executive leaders report that their organizations continue to fully understand the value of project management.The upsides of having certified Project Managers came to light much later, after the organizations realized that they were wasting 9.9% of every dollar due to poor project performance. The main reason behind such project catastrophes was the stark shortage of project management skills. Henceforth, the demand for a go-to resource bundle for project management professionals (PMP®) grew steadily. To understand how such courseware helped the project management professionals to spread across various industries, you can access every detail here in the PMP® Certification Course page.1.1 What does a Project Manager do? Although the Project Managers rarely take part in the direct actions that produce the project's objectives, they occupy an oversight position of managing the human and material resources of a project. This helps in building a healthy communication and trust among the team members and strives to ensure good practices for the success of the project.A Project Manager works on well-defined projects, which are based on fixed schedules, timelines, and budget.1.2 Direct responsibility of the Project ManagerProject planning: This is where the Project Manager plans and defines the project and its objectives, develop a detailed work plan with attention to any possible risks and determines the responsibility of each team member with defined timelines. Project management: Here, the Project Manager strives to have all works executed to the correct standards within the acceptable timeline, while sticking to the approved budget. The motivation of team members is essential here for optimum commitment,  and the Project Manager ensures that there is proper coordination among work done by different teams/groups for the elimination of all obstacles to productivity.Delivery and closure: The Project Manager has the responsibility of maintaining the project budget through to closure. He/she ensures that the Stakeholders receive project status in addition to delivering their expectations. Moreover, the Project Manager aligns the project to business goals and hands over a project that is on schedule and has delivered on all expected outcomes.  2.0 Why do you want to be a Project Manager?Certain needs and/or skills drive the desire to be a Project Manager. You would want to be a Project Manager if you already possess or willing to develop certain traits/skills such as great interpersonal relationship, organizational ability, open to keep learning/improving, etc. If you prefer to have not just a job, but also a career that is challenging, rewarding, and has job security, a career in project management may just be what you want. Demand: There is a great demand for project management in different organizations because of the risks associated with the ever-changing business environment. Businesses are rapidly expanding and positioning themselves for the future, and these create a huge demand for Project Managers to keep everything under control. Salary: Project management salaries are highly competitive because of the multitasking nature of each project - where the Project Manager needs to manage a team, handle clients, and ensure that everything is running on a budget. The average annual salary of a Project Manager in the United States is $131,822 US Dollars as of September 28, 2018 (Salary.com). With the steady year-to-year increase in the demand for Project Managers, salaries of PM roles increase correspondingly, offering more attraction for you to want to be a Project Manager.Teamwork: If you are naturally a people person, good at working with teams, and have great communication skills, you may want to pursue a career in project management. The ability to manage human relationships effectively is necessary for the success of any project. Each project has many moving parts and a Project Manager is essential to keep everything working towards the project's objectives.Industry: Although many Project Managers can fit into many industries, only professionals handle projects in specialized industries such as construction or IT.  Therefore, if you are a professional in any of these specialized sectors, and want to build your career in it, you can be a Project Manager and still be in your career path. Management and Leadership: Are you the type of person that naturally finds yourself in leadership and management roles in a group? These are great skills, and project management can help you develop them more because you will have the responsibility to drive and motivate team members for optimum performance. Responsibility: Do you crave responsibility? Are you comfortable taking ownership of any assignment given to you? Do you enjoy the pressures that often come with deadlines and timelines? Then you would succeed as a Project Manager. CEO Position: The exposure and demands of both a CEO and a Project Manager are much similar. They set objectives and communicate expectations to team members. They both manage people, use leadership skills to produce results, and have a clear focus on financial goals. Therefore, a Project Manager position can be a preparation towards becoming a CEO in the future. 3.0 How to become a Project ManagerEducation: You need a minimum of a bachelor's degree in business management. A bachelor's degree in other specialized areas such as computer science or engineering  (depending on the type of Project Manager you wish to be), will also be sufficient. Experience: With the necessary education qualification, you then need to gain some feel in an environment that exposes you to what project management is all about. Get involved in any organization/club/group that aligns with your project management career goals. For instance, if your desire is to be a construction Project Manager, you can take up an internship in a construction company. You would be amazed at the quality of project management skills you can acquire from this.Personal skills: While acquiring some project management skills and techniques, you need to develop the right human relationship skills to succeed as a Project Manager. People make up projects. Without understanding, training, and communicating effectively with the project team, it will be impossible to be successful as a Project Manager. It is also important you have a mentor at this stage. This should be an expert in your career path. Tools of the trade: Riding on only the knowledge of soft skills in project management such as processes, techniques, etc., may not be enough to make you the complete Project Manager you aspire to be. Organizations tend to complete projects on time, within budget, and with better quality when incorporating project management software. Budgeting, scheduling, risk management, contract management etc., are all essential skills a Project Manager needs to acquire. Do not neglect them.  Certification: The project management industry is highly competitive and certification may be the key to get ahead in your career and land bigger contracts. In addition, if the company implements some type of project management framework, then you need certification that is in line with such a framework. The point is to determine your career path and expectations, decide if a project management certification will help you achieve them, then get the appropriate certification.  An end-to-end training on project management techniques serves a complete package if you want to take your project management career a few notches higher. 3.1 How to become a certified Project ManagerGetting a certification in Project Management Professional (PMP®) can be difficult, but the rewards are great. Follow the steps below to become a certified Project Manager. Eligibility: The Project Management Institute (PMI) stipulates that to be eligible for the PMP certification you must possess the followings:   (i) A four-year degree and 4500 hours of leading and directing projects or a secondary degree (high school diploma, associate’s degree or the equivalent) and 7500 hours of leading and directing projects.   (ii) 35 contact hours of project management education.Membership: Once you are certain of your eligibility, register as a paid member of PMI. This is not compulsory but recommended because it qualifies you for discounts on a variety of purchases including exam fee. You also get a free downloadable current edition of PMBOK®Guide (Project Management Book of Knowledge), which helps you prepare for the exam.  Application: Apply for the exam on the PMI website by filling the online application form. Then pay the examination fee ($405 for members and $555 for non-members).Exam schedule: At the approval of your application, you will get the PMI eligibility ID.  Choose an exam date that will give you enough time to study. A minimum of 3 Months is ideal. Also, choose a test location suitable for you. Prepare: You need to study and understand everything in the PMBOK® Guide to stand any chance of passing the CAPM® or PMP® exams. You can either take paid preparatory classes that will equip you with exam-focused tips, or study the materials on your own.Exam: You will appear in person for the exam which is a 4-hour test that consists of 200 multiple-choice questions. You need to pass 175 questions out of the 200 multiple-choice questions in the PMP exam. At the end of the exam, you will take a short survey, after which you will have access to your result.Result: Pass or fail, you will know immediately after the short survey. If you passed, you will see your name in the PMI's certification registry in less than a day. Your certificate will come in the mail within a month. You are now a certified Project Manager. 4.0 How much does a Project Manager make?According to Salary.com, the annual average salary for a Project Manager in the United States as of September 28, 2018, is $131,822 US Dollars. However, because of certain variables such as education, a number of years of work experience, level of certification, additional skills etc., salary ranges from $117,345 to $147,570 US Dollars. Apart from the salary, Project Managers in the U.S. can also earn compensations that include bonuses, retirement, and healthcare benefits, up to an average total of $139,926, with the range falling between $122,589 and $160,280 US Dollars.Below are the Average salaries of a PMP in different countries of the world, According to the survey released by the Project Management Institute based on survey collected from 26,000 project management professionals in 34 countries.Annualized salary (in USD) by CountryMedian Salary Exchange rateSwitzerland$130,000Australia$108,546United States$108,200United Kingdom$92,221New Zealand$90,442Netherlands$89,482Belgium$88,364Germany$87,245Qatar$82,314United Arab Emirates$81,6635.0  Types of Project Manager5.1.1 Construction Project ManagerA construction Project Manager is a Project Manager who works in the construction industry. Fundamentally, a construction Project Manager takes charge of the planning, coordination, and execution of any construction project. The project could be civil, residential, commercial, agricultural, industrial, environmental, or institutional. This field consists of complex tasks and needs a Project Manager with great knowledge of construction processes, problem-solving skills, and strong communication skills. Due to the complex nature of the construction industry, a construction Project Manager should have knowledge of different areas which are associated with the construction industry, such as law, finance, mediation, etc. 5.1.2 How to become a construction Project ManagerEducation: Having a minimum of a bachelor's degree seems to be the natural way to go. This could be a degree in building science, engineering, or construction science. Whatever degree path you choose, it is important that your coursework includes classes in construction methods and materials, building standards and codes, project management and control, and any other similar classes. These courses will build the foundation for you to become a Project Manager in construction.Work experience: During or after you have gotten your degree, you should find opportunities that offer on-the-job training for those without construction work experience. Some organizations employ Project Manager assistants. These assistant roles are often very practical and hands-on. The Project Manager concentrates on the big picture while leaving most of the project implementation responsibilities for the assistants. If you do not have any type of degree, then work experience is very important. With lots of experience and years spent in the construction industry, you can easily get selected as an Assistant Project Manager even without having any educational background in the respective field.Certification: Although many companies may not demand that you have a  certification as a prerequisite for giving you a job, a certification can give you a better advantage over other candidates that do not have any certification in construction project management. The Construction Management Association of America (CMAA) and the American Institute of Contractors (AIC) are some bodies that offer certification courses in construction project management. The AIC issues the Certified Professional Constructor and the Associate Constructor certificates while the CMAA offers a course in Certified Construction Manager.Soft skills: Construction projects have many moving parts. These include people,  tools, finance, weather, machines, time etc., and a Project Manager must have certain skills to be able to keep all these parts running smoothly. You need to develop effective communication and time management skills in order to become a Construction Project Manager. The management of human relations is a complex one and the success or failure of any project depends largely on how motivated and committed a team is. As a Project Manager, you need to be a problem solver and able to quickly adapt to change. For instance, the weather is a huge factor in construction because it is beyond human control. When the challenges of poor weather come up, a Project Manager needs to improvise in order to complete the project on time. 5.1.3 What does a construction Project Manager do?Construction Project Managers are also known as general contractors or simply, Project Managers. Their duties will largely depend on the type and scope of projects. Big projects will often have several Project Managers where each Project Manager will handle a specific part of the project. For instance, in some large building projects, there could be a Project Manager in charge of all electrical works, while another Project Manager handles all HVAC responsibilities. These different Project Managers will be under the supervision of one Project Manager. However, generally, a construction Project Manager will have the following roles:Preparation of budgets, timelines, and cost estimatesDetermination of the relevant construction techniques and methods to useClearly communicate technical and contract details to the teamPromptly communicate budget issues and project progress to clientsSelect and hire laborers and subcontractorsSupervise on-site activities and personnelRespond and provide solutions to emergencies, problems, and challengesCollaborate with engineers, architects, and other building and construction expertsAdhere to legal provisions, safety and building codes, and other building regulations5.1.4 How much does a construction Project Manager make?Factors that determine the salary of a construction Project Manager include education, level of experience, location, the scope of projects, certification, etc. In the United States, the average annual salary for a construction Project Manager as at September 28, 2018, is $101,022 and depending on the factors stated above, this could be as high as $113,839 and as low as $88,049 (Salary.com).Below are the salaries of construction managers in different parts of the world.Construction Manager (Country)Average salary per yearUnited States$101,022United Kingdom£41,740CanadaC$77,632AustraliaAus$98,673IndiaRs 966,397United Arab EmiratesAED 312,397ChinaCNY 744,000Source: Payscale & Glassdoor (October 2018)5.2 IT Project ManagersAn Information Technology (IT) Project Manager is an expert that has the duty of managing all the processes of planning, delegation, and execution responsibilities, in fulfillment of an organization's IT goals and objectives. The IT Project Manager has a firm knowledge about the objectives of the business with respect to specific demands and allocates resources in with respect to these goals. Some IT projects are; data management, hardware installation, software development and implementation, system upgrades etc.   5.2.1 How to become an IT Project Manager Education: Most employers demand that their IT Project Managers have a  minimum of a bachelor's degree in fields such as information technology, computer science etc. A master's degree will be an advantage.Experience: Most information and computer system managers have many years of work experience in information technology. If you have experience in managing any project or supervising people in an IT department, you are already on your way to fit into an IT Project Manager role. Skills: To be an IT Project Manager, it is important to acquire relevant skills such as human management, critical thinking, strong communication, time management, decision making, system analysis, use of relevant software (project management/  enterprise resource planning/query/database user interface), leadership skills, etc.Certification: A certification in an IT area relevant to your career path would distinguish you from others. You will have a deeper understanding of your specialization by being current with the latest techniques, technology, and trends in the field.5.2.2 What does an IT Project Manager do?Fast changes occur in the IT industry, and this creates the need for constant improvements and upgrades in systems and technology. The IT Project Manager has the role to supervise a team of IT experts and manage the budgets and timelines of an IT project to ensure smooth execution. These roles include:Ensures communication is effective among all stakeholder throughout the projectMonitor project milestones and modify project plans to meet business needsAssign and delegate duties to team members according to skill setsEnsures that everybody understands the project deliverablesCreate good working relationships among all key stakeholdersEffectively manages budgets and timelines5.2.3How much does an IT Project Manager make?The salary/total pay of an IT Project Manager will always depend on certain variables such as the number of years of experience, education/certification level, location, and additional skills.  In the United States, annual average salaries in this field are $81,697 (IT Project Manager I), $101,961 (IT Project Manager II), and $120,098 (IT Project Manager III) as at September 28, 2018. However, the range falls between $71,897 and $131,846 US Dollars (Salary.com).Below is a table showing average salaries of IT Project Managers across the world.Construction Manager (Country)Average salary per yearUnited States$101,022United Kingdom£41,740CanadaC$77,632AustraliaAus$98,673IndiaRs 966,397United Arab EmiratesAED 312,397ChinaCNY 744,000Source: Payscale & Glassdoor (October 2018)5.3 Technical Project ManagerA technical Project Manager is anyone that oversees and manages the development and delivery of an IT or technology initiative. Technical Project Managers manage either a wholly technical project or the technical side of a project. They are professionals that grew from technical backgrounds, can solve technical issues, evaluate technical risks, and accurately estimate project timelines based on their many years of technical experience. In essence, technical Project Managers come with the combined wealth of organizational skill and technical experience. 5.3.1 How to become a technical Project ManagerEducation: To become a technical Project Manager, you need to have a minimum of a   bachelor's degree in computer science, engineering or other related fields.Experience: You need adequate direct work experience (differs across companies) in a project management role, which has given you sufficient opportunities in process creation and execution.Skill set: To become a technical Project Manager, you need to have strong organizational skills, prioritizing skills, and excellent time management skill. Project management generally is fast-paced with an ever-changing project environment;  therefore, you need to be able to work under the pressure of deadlines. A can-do attitude is compulsory, as well as effective communication.Certification: A specialized certification in technical project management will widen the skills, knowledge, and experiences you have acquired as a working professional, and help you transit faster into a managerial role.5.3.2 What does a technical Project Manager do?The core reason of choosing technical Project Manager for a project is to have someone that can evaluate the project, resources, schedule, and control, through a more technical perspective than the conventional Project Manager can. Responsibilities of a technical Project Manager include:Manage projects with total oversight, in line with budget, scope, and timeline, to ensure project success.Develop detailed project plans that combine a client's requirements with the organization's goals.Coordinate and motivate different technical teams from project conception to completion. Constantly track project progress and create scheduled reports on quantifiable indices such as deliverables and milestones. Evaluate changes in project plans and discuss with stakeholders in order to adopt the beneficial ones.Supervises the acquisition of materials and resources needed for projects and negotiates prices with vendors and suppliers. 5.3.3 How much does a technical Project Manager make?In the U.S., the annual average salary for a technical Project Manager as of October 05, 2018 is $109,071 US Dollars. Average additional compensation is $9,721. Factors that determine the total pay for a technical Project Manager are location, experience, employer, skills/qualifications, etc. These factors cause the annual average to range from $83,000 to $144,000 US Dollars and the annual average compensation from $2,304 to $23,084 US Dollars (GlassDoor.com).Below are the salaries of construction managers in different parts of the world.Technical Project Manager (Country)Average salary per yearUnited States$83,000United Kingdom£40,659CanadaC$81,210AustraliaAus$99,392IndiaRs 1,433,957United Arab EmiratesAED 267,401China¥300,000Source: Payscale & Glassdoor (October 2018)5.4 Digital Project Manager: A digital Project Manager is someone that has the responsibility of fine-tuning the processes involved in the management of online projects from conceptualization to closure, within budget, and using a specific amount of resources. Examples of digital projects are social media, games, advertising, videos, mobile apps, search engine optimization, events, websites, content development, etc.5.4.1 How to become a digital Project ManagerThere is no straightforward route to becoming a digital Project Manager. You will see no specific university degrees or courses that will teach you digital project management, and you cannot assume a role here without any previous experience. Nevertheless, as a guide, the path to becoming a digital Project Manager can be broken down into a few steps as follows:Skill building: One of the most certain ways you can advance your career is by developing skills highly sought after by companies you admire. Search for these companies to see if any of them has an open or recently closed vacancy for a manager. You can as well search on job boards. Once you find any suitable company, make a list of all the skills, certifications, etc. they demand as requirements for the position and improve yourself by acquiring same skill set. Shadowing: The best way to get anything done is by following those that have successfully done those same things. LinkedIn is a great place to search out professionals in various industries. Search for Project Managers in companies you admire and check what they have listed in their career path/timeline. Look at their educational background, skills they possess, and jobs they handled before becoming Project Managers. You would often notice that these Project Managers have already specialized in one core digital areas or the other (development, design etc.) before climbing up the managerial ladder. You stand a better chance of becoming a digital Project Manager if you first learn and specialize in one of the core digital areas. Certification: A project management certification alone is not the key to getting a  project management job. It only makes it easier when it comes down to an employer having to make a choice between two qualified candidates where the one with certification has better chances of securing the job. Apart from getting a certification that is relevant to your industry needs and career path, a management degree such an MBA will also give you good chances of getting a digital project management job. Responsibilities: It is a prerequisite for a digital Project Manager to be an expert in your core digital specialization. Depending on your present company, and your desire to take on more responsibilities, this can take anywhere from a few months to years. If you show willingness in assisting your Project Manager, and you are proficient when taking on project management focused roles, your boss will naturally give you more work to do. More work means more experience, and more experience means a quicker climb into a full Project Manager role.5.4.2 What does a digital Project Manager do?The digital Project Manager has the role of making sure that all the required deliverables for a project are properly completed and handed over within the project timeline and on budget. Digital Project Managers ensure that all the different parts of the project are streamlined and running smoothly. These roles include - assigning duties and deadlines, clearing obstacles, defining and managing the scope of the project, developing and communicating the project plan/timeline/budget, monitoring and evaluation of project progress/success, etc. 5.4.3 How much does a digital Project Manager make?The salary of a digital Project Manager varies and is dependent on factors that include experience, location, and the level of responsibility the digital Project Manager handles. Salaries in the United States come at an annual average of $90,337 US Dollars as of October 04, 2018 and ranges from $59,000 to $134,000 US Dollars. The average compensation ranges from $1,703 to $22,564 US Dollars (GlassDoor.com).Below are the salaries of construction managers in different parts of the world.Digital Project Manager (Country)Average salary per yearUnited States$90,337United Kingdom£33,673CanadaC$58,429AustraliaAus $115,000India₹420502United Arab EmiratesAED 208,425ChinaCNY 285,766Source: Payscale & Glassdoor (October 2018) 6.0 How to become a good Project ManagerIn the professional environment of today, Project Managers are required to multi-task, switching promptly between the daily duties of managing a team to not losing sight of the big picture. The environment is high-pressured and needs great skills and dedication to be successful.Build positive relationships: Create the right attitude and interaction among all parties to the project. This establishes effortless communication and understanding.The big picture: Focus on the big picture but do not neglect the details. The ability to see both perspectives is a skill that makes you a good Project Manager.Lead: You can neither be everywhere nor do everything. Provide enough guidance for your team and do not micromanage them. Trust makes the workspace runs smoothly.Be firm: Projects veer off course when people start focusing on themselves and neglecting common goals. This creates friction and lack of respect and cooperation. Setting some ground rules from the onset with clear consequences will limit disruptions.Influence: Identify each team member's strength and influence each person to give their best irrespective of conflicts, personal opinions, and challenges. 6.1 What is the difference between the Project Manager and Program Manager?Project Managers and program managers use similar techniques and tools, but they have different roles because of their different job descriptions. While a Project Manager is in charge of the team responsible for executing the project and producing expected results, program managers have a broader role. Program managers manage several projects, and sometimes, several programs. The key roles that differentiate the Project Manager from the program manager are:a) Program manager: Manages several projectsManages several project teams that sometimes may include the Project ManagersEnsures successful program deliverablesb) Project Manager:Manages a particular project with the associated schedule, scope, and resourcesCoordinates and manages the project's team's activitiesEnsures project deliverables are successful, timely, and within budget 6.2 How to be a successful Project ManagerIn the highly competitive project management industry, simply being a good Project Manager may not set you apart from the rest. In order to take your career to the next level, you must transit to being a successful Project Manager, whose approach has some uniqueness and produces amazing results.Get involved: To be successful, you need to be wholly involved, especially in team building. A study, understand and know how to get the best out of your team. Know each team member's skill and the way to utilize it effectively. Be informed. Be agile. Be flexible. Change is inevitable. Have a firm grasp of the project and know when and how to adapt to any sudden change that occurs.Be proactive: A successful Project Manager knows that unexpected curves do appear along the project management track. As long as you have the big picture in focus, anticipate these curves in your planning and scheduling, and be ready to provide real-time solutions. Successful Project Managers create alternatives.Bargaining power: You may never have everybody agree with you all the time.  However, if you have great bargaining skills, can negotiate and collaborate effectively with all stakeholders to achieve your organization's objectives, you are already on your way to being a successful Project Manager. Time, Budget, and Quality: Projects are successful when completed on time, within budget, and with high-quality deliverables. A successful Project Manager will make the team aware of these three essential factors to a project's success.7.0 How to get a Project Manager jobA Project Manager's role is very demanding. It needs someone that is flexible with strong leadership skills. The role spans across several industries such as construction, IT, human resources, etc. You will need to plan, organize, delegate, budget, and document all aspects of a new project. This profession is also highly rewarding. To get a Project Manager job, the following steps will guide you.Employer requirements: Research the qualities employers desire in a Project Manager. Some favorite important traits common among employers include strong leadership, effective communication, integrity, initiative, and foresight.Evaluation: Assess yourself and your experiences. Compare your skills with those required by employers, determine where they overlap, and where there are gaps. Deepen and reinforce all current skills that are project management focused and improve to fill the gaps identified. Get qualified: It is becoming very difficult finding entry-level roles in project management. Having some sort of degree qualification, which can be different from one industry to another, is often the first essential step to securing a job. Even without a degree, there are now many online platforms where you can get project management courses without going through a university.Keep improving: The career path in project management is far-reaching. Whether you are looking to secure your first job in project management or aspiring towards higher roles in your career, you can succeed as long as you have a positive attitude and stay motivated. Keep updated on the trend within your industry, and regularly add to your skills, qualifications, and knowledge accordingly. If you are an Agile professional looking to make it big as a Project Manager as well, being the best fit for a project management job can be challenging. Industry experts, however, recommend an exhaustive Agile PMP® Training Program to make you industry-fit and enhance your earning potential. ConclusionThe demand by companies for accomplished Project Managers that are technical savvy, and with great leadership skills is on the increase. The business environment is constantly changing and becoming more complex by the day. The need for a leader that can hold it all together, yet produce fantastic results has become a major priority of business owners. Therefore, any Project Manager with the necessary training, in addition to relevant core soft skills can stand out in his or her chosen field, achieve great results, and attain unimaginable heights.  
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Project Manager - An Ultimate Guide

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The Business Case – A Key Artifact of A Project Managed As Per PRINCE2

One of the key deliverables in the process of initiating a project managed using the PRINCE2 methodology is to create the business case document. A project in PRINCE2 is defined as ‘A management environment that is created for the purpose of delivering one or more business products according to a specified business case’. What is a business case document? Why is it important to create one? What are the key decisions made using the business case document when initiating a project? How will the business case help in managing and controlling a project and in ensuring that the project continues to deliver business value? This article aims to address above questions.   Why create a Business Case document? A business case is mainly used to document the justification for undertaking the project, based on the estimated cost of development and implementation against the risks and anticipated business benefits and savings to be gained. It is a justification for an investment based on the costs versus the anticipated business benefits of the solution option selected for implementation.  The business case is a primary mechanism of project decision-making and is a means of assessing alternative and competing investment / solution options.  When should you create the Business Case document? For organizations following PRINCE2, to get to the point of creating a business case document itself involves a big process. Requirement for projects arise from different sources. For example strategic level stakeholders may have strategic objectives that they wish to fulfill which may result in projects. Similarly tactical managers, functional managers and even operational staff may have problems that need to be resolved or business opportunities that they want to take advantage of which may result in projects. The context or the environment that they operate in and the stakeholders involved too may have an impact in creating requirements for new projects. A project mandate would first of all be generated once a business need such as above is identified. The scope inclusions and exclusions of the project should be identified and will help identify solution options to meet such requirements. The initial group of individuals would then be generating solution options to solve the identified problems or opportunities. For each solution option a detailed feasibility study should be done along the four main feasibility study dimensions of operational feasibility, technical feasibility, time feasibility and cost-benefit feasibility. This would help the team identify the advantages and disadvantages of each solution option and help select the most suitable solution option. This analysis must also include an initial assessment of the cost, potential timelines and the risks involved. Creating the Business Case and sections of the document The business case documents the justification for undertaking the project, based on the estimated cost of development and implementation against the risks and anticipated business benefits and savings to be gained. The content for the document is based on the analysis explained above. The sections of a properly formulated business case are as listed below. Executive Summary – Summary of the content of the business case document including details about the organization, business problem  / opportunity, key stakeholders, solution options evaluated and the solution option selected. Reasons for the project – Reasons as to why the project is needed including analysis of the current state, the future state and an identification of the gap. Solution options – The different solution options evaluated outlining the rejected solution options and detailing out the preferred solution option. Feasibility analysis – A summary of the feasibility analysis done on the identified solution options. Expected benefits for the selected solution option with explanations and assumptions. Expected disbenefits for the selected solution option with explanations. Summary of project costs taken from the project plan. If the project plan is not created yet it would be good to have an outline cost for the selected solution option. Investment appraisal – The organization may do an ROI, NPV, IRR analysis to ascertain the potential viability and benefits from the project. Risk analysis listing out a risk log with positive and negative risks along with risk mitigation strategies. Timescales – Outline execution plan that will be detailed out in the Project Initiation Document (PID). Continual assessment of project progress using the Business Case The business case document provides a blueprint based on which project progress can be monitored by the project manager and the project board. It provides a means for continuing to assess the viability of the project. In PRINCE2, the Project Board normally reviews the business case at the project initiation stage, end of each project stage, when any exceptions arise and at stage or project closure. The business case would be the main input to create the Project Initiation Document (PID) for the selected solution option. Some teams put a summary of the business case findings as a section in the PID document itself and use it to make an elevator pitch to the business sponsor and other senior executives of the project board. Once the project is approved, the project manager is assigned and he would create the project charter document with key inputs from the business case. The Project Manager and the Project Board will monitor the ongoing viability of the project against the business case. At the end of each stage or iteration the relevant stakeholders will sit together, evaluate the deliverables related to both the product and the process against the expected benefits identified in the business case to ascertain whether the business value set out to achieve is being met. Decisions to get the project back on track would thus be based on the baseline intentions defined in the business case. Finally, the business case is used to assess whether benefits are achieved when the project is delivered through a post implementation review.  The business case is not a constant. It may change multiple times during the lifetime of the project. Evaluation at the end of each iteration or stage will help the project team and the project board realizes that changes are required in terms of objectives, expected business value, scope or even timelines. Hence, the initial business case may become invalid and thus be required to be updated with the consensus of the key stakeholders.  The discussion above is just an introduction to the ocean of creating business case documents. Hope this will inspire you to further dive into this ocean.
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The Business Case – A Key Artifact of A Project ...

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