Tuesday, June 19, 2012

Establishing Project Management Capacity

I work with many organizations that really want to understand the capacity of their IT organization.  Rarely do the ask about the capacity of their project managers.  Building on the theme that not everyone can do project management, then maybe capacity to do projects starts at that level.  What if the organization limited the number of projects they can truly accomplish by the capacity of their project management staff?

I had a chance to build a PMO based on a very valid model.  They had a consultant perform a study about the type and length of projects and the demand that is required to handle what the organization wanted to complete.  It was determined that roughly 35 projects per year was the maximum for the company and a PM could run up to 5 of those projects during the year.  Therefore, the staffing model was set to 7 project managers.  We ended up completing 47 projects in the first year, but the expectation was set and the management of the company recognized the value that true project management can deliver.  So how do you determine the capacity or number of projects?

The best way to determine the capacity of your project management practice is to first establish tiers.  Projects should be classified in 3-4 tiers.  Tier 1 being the most strategic projects or the projects with the most risk.  Tier 2 is still a highly strategic project, but it is shorter in duration or is not as risky.  Tier 3 can be single unit or department initiatives and tier 4 can be internal initiatives or projects that can be run by team leads.  Based on the governance models of the organization, an estimate of a percentage of a PM's time can be assigned to each tier.  For instance, a tier one may take up 50% of a project managers time where a tier two may take 35%.  Once this has been established, then the capacity can be determined.  As an example:

If Tier 1 = 50%, Tier 2 = 35%, Tier 3 = 15% and I have 5 project managers, then the project capacity could be:

10 Tier 1 projects (500%)


5 Tier 1 (250%)

5 Tier 2 (175%)

5 Tier 3 (75%)


Any makeup that equals 500%.

This allows you to determine a quick capacity of project management.  It also creates an algebra problem that must be solved.  In most cases, when an organization applies this math, it is uncovered that 15 project managers are needed and 5 are on staff.  It is amazing that most organizations do not understand the capacity of their own project management staff.

This math at least will help start the conversation.

1 comment:

sarah nelson said...

More and more companies are trying to get nimble to enable them to respond to change with agility. Over the years, there has been a clear shift in momentum about the ways how companies manage projects. So, the project manager should be a PMP certified, who can better handle the planning, execution, and closing of any project. To get yourself prepared for PMP Certification , http://www.pmstudy.com is the best source.