Let Future Projects Pay Future Project Costs

• byDr. Donald Kennedy

Scope Management is a big part of project management success. A few

decades ago, I went around trying to make money giving Tom Peters

style presentations to big companies but charging around 1% of what

Tom charges. I was able to get a few nibbles. One presentation I gave

was called Don’s Rules of Thumb for Project Management Success. I

could probably still find the material but I do remember one of the

rules: Let Future Projects Pay Future Project Costs.

There is a lot of pressure when running a sizable project for various

stakeholders to come forward with scope change requests for things

they cannot currently get approved. There is often a fallacy they

propose that says that since you are there anyway, it would not cost

much to add this thing or dig this hole. The ideas often make sense

from any sort of payback calculation but in my experience more often

than not, unintended consequences show the extra work was basically a

mistake. I know a few project managers who were grilled for exceeding

the original budget even when they had all the proper paper work

completed to add the scope to their job. The original budget is often

fixed in the minds of the observers.

Scope Change Examples

Here are a few examples to illustrate this.

a) In one case, a Project Manager was doing some piping installation in a

new building. A stakeholder came along and said there was a potential

plan to change the use that would require installing some rather large

valves where the main pipes entered and exited the building. The Project Manager (PM)

spent a few $100,000 to extend the building to accommodate the

proposed future valves. The PM was fired a short time later. A few

years pass and the PM met the same stakeholder in a social setting.

The PM asked about the piping change. The stakeholder was a bit

annoyed and said that they had to spend a lot of money modifying the

piping outside the building to accommodate the new valves. The former

PM explained how there was room inside to complete the planned work,

but since he was not there, the extra work was done. In this case the

money was spent for the future work and was wasted.

b) In another case when I was the PM, another stakeholder wanted me to

spend a few million dollars to install some infrastructure to test the

facility after 5 years of use. Since 5 years is longer than I ever

worked anywhere, I decided to put in some connections to allow the

infrastructure to be connected in 5 years time and saved the few

million dollars. After I had been fired, I went back in 5 years just

to ask the stakeholder about the proposed infrastructure. He stated

that the advances in electronic equipment had been unforeseen and if

we had spent the millions, it would have been obsolete for what they

wanted.

Of course, there will always be exceptions to a rule of thumb. But in

general, this one has served me well.

About the Author

Dr. Donald Kennedy, Ph.D., P.Eng., IntPE, CPEM, FASEM is a regular contributor to the ASEM Practice Periodical. He has celebrated a lengthy career in heavy industrial operations and construction.