Project Profitability: Now that you’re a project manager

By Howard Birnberg

First question: Why did you become an engineer or an architect?

Every individual has his or her reason(s) for choosing a career path that led them to becoming an engineer or an architect; however, there are some reasons common to all including:

• an interest in construction whether buildings, water management, waste management, structures or other projects put-in-place through a construction process;
• they are problem solvers seeking solutions to the needs of a client, improving the quality of life or fixing a natural or man-made mishap, or removing an obstacle; or
• they enjoy seeing their work (designs, calculations, solutions, etc.) turned into reality.

Second question: So how did you end up as a project manager?

It is very rare that engineers and architects set out early in their careers to be project managers. Fortunately for their firms and clients, many capable people move into that role and perform well. They become project managers because:

• there was a need;
• they were in “the wrong place at the wrong time” and were picked by senior management; or
• they showed an aptitude to meet the responsibilities of project management.

Project manager responsibilities

There are as many definitions of a project manager’s responsibilities as there are firms. In some organizations, a project manager is anyone who tells someone else what to do. In one extreme case, a 50-person architectural practice claimed that 20 people were project managers.

There is no viable rule of thumb for the number of project managers needed for a certain number of jobs. However, where a full-charge project manager runs the job with the proper tools and staff, a large number of projects can be managed by one individual.

Following is a listing of some of the major responsibilities of project managers. Clearly, this is not a complete list, so firms developing a project manager position description should seek additional resources. Many are specific to design firms while others apply to both owner/facilities managers as well as designers.

Marketing and continued contact — Most experienced clients want to meet with and discuss their project with the individual responsible for the job. Initial contact and discussions should be held with the design firm marketing staff or principal; however, the project manager should be brought into the process as early as possible. The design firm project manager should also function as a source of continuing contact with clients on completed projects. This is to ensure the smooth functioning of the facility and to be aware of further services required by clients.

Proposal preparation/fee determination and negotiation — One of the most important responsibilities of design firm project managers is preparation of a proposed scope of services and the corresponding fee. As the individual responsible for meeting the scope and fee, the project manager must have a major role in their preparation. Scopes and fees imposed on project managers by senior management will not allow for full accountability. With less experienced managers, a thorough review process is essential. While final contract signing must be done by an officer of the design firm, the project manager should lead the fee and scope negotiating process. This allows for a full understanding of these items in the event that adjustments in scope or fees are required.

Staff planning and assembly of the project team — The project manager is closest to the project and the required staff needs and schedule. He or she must provide regular input to senior management to allow planning for overall firm staffing needs. As the project begins, the project manager must suggest names of specific individuals he or she would like to work on the job. This is based on their knowledge of the needs of the project and the specific skills of staff members. Obviously, the suggested list must be adjusted based on staffing needs of other projects and on the availability of various individuals.

Managing the project — The project manager is responsible for supervising all phases of the project, including time charges, meeting budgets (both fee and construction), and handling the many other details of guiding a project. While most project managers should not be making technical or design decisions, in some cases this becomes necessary to ensure compliance with the program.

Quality management — Quality management is a shared responsibility. However, project managers must ensure that quality reviews are budgeted into the project fee and occur at appropriate times. In some organizations, where the project managers have the necessary technical competence, they may actually review drawings themselves, although this is generally not an appropriate use of their time. It is the responsibility of senior management to develop a quality assurance program. The technical staff and the project managers must ensure that the program is instituted.

Team relations — The project manager can best communicate with the various internal and external team members. There must be a regular process of meetings, email distribution, telephone calls, correspondence, etc.

Project status reporting — A project manager must not only prepare an original project budget, he or she must also support the reporting system by providing accurate updated budgets, contract data, and percentages of completion (design firms) on a timely basis. Information, including revised budgets and maximums on change orders, needs to be current. Project status reports must be monitored regularly.

Billing and collection — Although in most design firms invoices are prepared by an accounting office, the project manager should review and approve all invoices prior to issuance to clients. The project manager should not be responsible for collecting outstanding balances, but with his or her close relationship with clients, they may be able to expedite collections. Additionally, project managers must understand a client’s billing requirements (supporting documentation, schedule, etc.) and supply this information to his or her accounting office.

Summary

Now that you’ve become a project manager, you’ve met the test of meeting these responsibilities and performing effectively in the most difficult role for all engineers and architects.

Howard Birnberg is executive director of the Association for Project Managers (https://www.apminfo.com). He may be reached at 312-664-2300 or hbirnberg@gmail.com.