Chapter 5. Good Project Management Can Cost Less

The title of this section is good news to both project managers and senior executives. The only problem is that companies often have to expend a lot of effort and resources to create a great project management practice. By segregating companies by project management maturity (PMM) and the percentage of project costs consumed by project management, clear trends come to light.

As the trend line in Figure 5-1 displays, the project management cost ratio increases as PMM increases until PMM reaches approximately Level 3. From there the project management cost ratio steadily decreases with increasing PMM. This signifies that investments in project management are necessary to establish a functional level of PMM (approximately PMM = 3.00). However, once that level of PMM is achieved, the costs necessary to maintain it decrease as a firm’s project management competency improves.