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I ask the question since I'm a relatively new PM (less than 3 years). Currently, the project budget I deal with are around the $250K mark with a 4-6 month timeline (our hourly rate is $250/hour). Now I see some projects that fall under the $1 million+ mark, so here's the question in a more elaborated form:

With my projects, I have a Project charter, plot out my WBS, create schedules, analyze Budget and resource allocation, and all that other fun stuff (no sarcasm intended, I really do enjoy being a PM). I also work closely with teams and stakeholders to ensure the project's on time and on budget (tons of communication).

Are there any differences in what I'm doing now with my current budgets than what other PMs do with multi-million dollar ones? I'd love to progress to that level, so I'd like to know if there are some additional skills/qualifications I need?

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Related question: pm.stackexchange.com/questions/8532/… –  CodeGnome Feb 19 '13 at 21:57
    
Hmmm... I don't see how. I'm not talking about ROI or controls, but skills and qualifications of a PM that "may" differ between projects of vastly different budget sizes. –  TechWire Feb 19 '13 at 22:05

4 Answers 4

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TL; DR

Big-budget projects aren't about pinching Lincoln until he screams; they're about deliverable high-stakes business value. The frameworks, and most of the controls, will remain the same. It's your perspective that needs to change most.

Impact of Budget on Frameworks

From a framework standpoint, the project's budget has nothing to do directly with the project management process. However, a project's budget will often impact:

  1. Resources that are allocated to the project.
  2. Cost/benefit ratios for specific project controls.
  3. Risk/reward or ROI calculations for the project.
  4. Margins of error, schedule slack, and acceptable cost deviation.

Look at it this way: a single $1,000 cost-overrun on a $9,000 project is a major problem. The same sunk cost on a $20 million project is a rounding error. The controls may be the same, but the business value is different.

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Oh, I see where you're going with the related question. I've heard this point about perspective from a few senior PMs and wanted thoughts from this forum as well. Thanks very much! –  TechWire Feb 19 '13 at 22:16

Yes and no. The controls you put into place are the same no matter the size. A project is a project. However, when you are dealing with more money, you are dealing with more risk, so the rigor and formality will increase. This means your documentation becomes more formal, your processes more explicit and monitored, your inspections formally scheduled.

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An interesting question and the right kind for anyone who wants to build their career to be asking. Every answer you receive will involve some (or many) generalizations. For context, I will keep the discussion to custom software development projects that are an order of magnitude above what you are doing now.

Project Characteristics

The characteristics of the project are going to change:

  • Project growth of this type is going to represent either a longer schedule, more resources, or both.
  • At $250K you are possibly managing enhancements to existing systems or creating simpler ones. As the cost grows it will be more likely that you are building complex systems from the ground up and perhaps including fairly complex migrations.
  • As the customer's investment increases the deliverable is more likely to be enterprise in nature and therefore of interest to a broader segment of IT and business stakeholders. This will introduce parallel and sometimes conflicting interests that may not have been there in the smaller projects.

Adapting to the Growth

You sketched out a minimal list of project activities. It is enough to see that you understand the process and the fact that you are even considering larger projects means you must be succeeding! I don't think that your methodology will (or should) change much with this project size, but there are several things that I think may help you:

  • In terms of growth, if you break longer projects into phases that are close to what you are doing now you may feel more comfortable with the transition. Even if not exposed to the client, having short phases on your own internal documents may help.
  • If the projects involve many more resources as opposed to longer schedules, remember the effect that it will have on productivity and the possible need to improve your risk analysis and mitigation skills.
  • If you already have tons of communication this may multiply to the point of diminishing returns. Sometimes we compensate when learning new skills by communicating more than is actually necessary. You may want to read up on best practices and various opinions on project communications.

Becoming a Trusted Executive Partner

The above items are the easy ones in my opinion. As projects grow larger strategic alignment with the business and stakeholder engagement become increasingly important. I believe that feeling comfortable with your understanding of IT Service Management (ITIL) and Enterprise Architecture is a great asset that allows you to be more effective with business and IT stakeholders of any level. Larger projects involve more risk and earning the executives' respect will be a key to weathering the unavoidable storms. At a minimum this requires reading some books but you might consider adding these certifications as your career moves ahead.

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Thanks for pointing out ITIL. I am currently in the process of reading up for the Foundations exam. –  TechWire Feb 20 '13 at 15:36

The key is that you need to tailor the project management methodology used based on the business value, complexity and criticality of your project.

Typically a higher dollar value translates into a more complex and critical project for you business. In such a case you will want to exert more control over the project, for example through more detailed (and more frequent) formal reporting, more strongly enforced change procedures, more detailed documentation of deliverable acceptance criteria, etc. Basically the same as what you currently do, only "moreso".

As a rough rule of thumb the amount of time/effort put into a project from a PM perspective is going to be roughly proportional to the cost of that project. There are going to be exceptions (for example government contracts require significantly more oversight than run-of-the-mill projects), so your best guide is to understand the business value behind the project and get agreement from the key stakeholders on what level of oversight they think is appropriate.

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