Case Study: Higher Fees at Non-Projectized Firms

In this Case study we will illustrate how Project Management service providers can anticipate higher fees from non-projectized buyers given projects of equal complexity and scope.

The author completed two back to back six month contracts as a project manager doing similar types of systems integration work for two different firms within the same year. Both jobs were obtained through staffing agencies and both were ‘independent’, ‘corp-to-corp’ style contracts in the same city.

Firm A had a highly defined organizational hierarchy and strict process methodology. The project managers in this company were nine management levels beneath the CEO. The company was highly projectized and project managers had explicit authority over defined problems and resources over a the project lifecycle. Projects were assigned to project managers from a system that allocated work to resources across the enterprise based on availability.

Firm B had a much flatter organizational profile. There were only three management layers between the project managers and the CEO. Project managers were expected to negotiate resources and objectives with sponsors and also functional managers. Consultant’s pay rate at firm B was $17.50 per hour higher than firm A, and the staffing agencies rate to firm B was $25.00 higher than to firm A.

It appears from this experience that there is financial benefit to project management sellers to serve customers who have less mature project management processes in non projectized firms with flatter organizational lines of reporting.