Monday, June 2, 2014

Dear PM Advisor. Jun 2, 2014

Dear PM Advisor,

I wrote my Project Objective Statement to include the words: “Final product must cost < $2 per pound.” I was told by one of my team members that this was not the correct cost to put in the Objective. My response was that this was extremely important and should be reflected in the headlines of the project: The Objective Statement which appears on every project document.

Who is right?
Concerned in Connecticut

Dear Concerned,

From your question I imply that the ONLY cost you show in your Objective is this cost per pound of your final product. While that is indeed an important measure of the success of your project, management still needs to know how much your project will cost to complete in order to determine whether or not to do your project. If it costs $10 million to complete and brings in revenues of only $1 million a year, it doesn’t matter if you can make the product for $1 a pound, the project will never pay for itself.

You are correct that this important measure needs to be elevated to the Project Objective and appear in the ‘headlines’ of the project. It is OK to have two cost values in your Objective. So your Objective should read somewhere along these lines:

To develop the XYZ product, produce it reliably for < $2 per pound and market it by Dec 21, 2015 for a cost not to exceed $250,000.

Now you have the three elements of a good Project Objective: Cost, Schedule and Performance, along with the most important measure.

Good luck,

PM Advisor

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