ON THE EDGE
The Mail Must Go Through
by Carl Pritchard, Pritchard Management Associates
I received a package this week that I had purchased on eBay. Nothing exciting. Just a 1950's ice crusher for my somewhat retro kitchen. As I unwrapped my prize, I began to consider how amazing it was that it had made the journey safely from its owner to me. I also considered how it was truly a "project" to get it from point A to point B. There was a specific objective, an approach, a unique set of environmental circumstances, and a (perceived) limit on time. The project models apply well, but the delivery organizations have their own considerations that might teach project managers a thing or two.
Consider the delivery model for any of the major carriers. They have a relatively consistent set of metrics that project managers might be prudent to consider. Specifically, when it comes to building the ultimate in parametric cost models, each carrier has one set of metrics that are consistently applied—size, weight, and distance. Those three dimensions can actually help us as project managers as we strive to establish ballpark estimates for our organization, if we can "morph" them into our cultures.
Size
How does this fit with other work that the organization normally does? What range of costs are associated with projects of that scale? If the project is enormous, ask what percentage of the organization's total effort will be expended on the project in the year ahead. In small organizations, a major project may consume as much as a fourth of their total level of effort. As such, consider the annual expenses of the company as the model for a starting point on cost. If the organization is a billion-dollar enterprise, then an effort that takes as much as a tenth of the resource pool better be at least a $100-million proposition. If the organization does $250K annually, then an effort that consumes a month of the organization's time starts in the $20K-30K range.
Weight
Sometimes, even large projects will carry themselves on their own momentum. Others need to be pushed. Hard. The more intervention and oversight a project requires, the more it will cost. Consider a percentage premium for each time management has to "touch" the project in a given month. Think about the organizational capital that's involved. Lighter projects don't require much senior level intervention; they can be handled by middle management or individuals at the task level. But some projects involve bigger clients, or clients who believe they merit special attention. For those efforts, we put on weight. We bring in "heavier" personnel. Vice-presidents. Supervisors. Managers. If you have a general idea of how much the project should cost, start increasing that value every time you envision it putting on weight.
Distance
How far does this project reach? The reach of a painted room is pretty limited. The reach of a new production line is significant. Distance relates to how long the project will be expected to last and how many different corners of the organization might be involved. All too often, ballpark estimates fall short because we consider only the deliverable, not the distance that has to be covered to deliver it. If we can learn from the carriers, we'll recognize that, particularly for the projects of significant size and weight, there's a premium on distance as well.
The Point
When it comes to establishing our own personal cost models, think very carefully about how the major carriers do it. If it's small, compact, normal business (a #10 envelope or a standard Express Letter), we should have some standard fees in mind. Weight and distance won't be a big issue. We know what we're capable of, and what it costs. Be we should be wary of those clients who try to overstuff that envelope. As they increase the weight or the distance, we need to take pause and review whether or not they've stepped over the line. Federal Express has an interesting note on their envelope: "If the gross weight of the contents, FedEx Envelope, and airbill exceeds eight ounces, the next higher rate will apply." For customers who try to nudge us into "lighter" estimates, the more we can do to standardize like our peers in the delivery industries, the more ready we'll be to serve with a better, more honest and accurate estimate.
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