The financial management of projects – 10 key steps to optimize the business
Over the past ten years we have been constantly bombarded with new projects on private and public, which is delivered far exceeded the budget and had to reduce its scope to come even close to the original budget. Reflections in the project management methodology addresses only the financial aspects of a high-level design, leaving the "student" and there's no real way of working to increase awareness of the consequences of their decisions on the financial situationprogram results. In turn, the development of business cases is usually given a minimum of time and a place to work quickly to end. Investing in people and time to correct before examining the feasibility and, secondly, the business case is a must to ensure the total to target delivery of a project.
In the financial climate in which we are, where budgets and costs are reduced, the time is now to ensure that the financing company has at its disposal, invest wisely – as you needensure that the project completion – the budget, the costs and benefits are analyzed in depth.
With this in mind – using the Pathfinder project management methodology as a basis, are below the 10 key steps to good project management, financial
(1) on new projects – to invest time to create detailed feasibility studies and business case, is a work of race – the final results will be delivered overruns.
(2) Check your portfolio – itproper implementation of the project, are good for the rich, are made to internal policies – ensuring that each business case is robust and adds value to the company's future – to spend time with a history of experts to examine and review the Business Case.
(3) Comments Concentrate as hard on the benefits of its cost. In 80% of the projects once they are, nobody wants to go back and consider whether they have delivered as promised. To ensure the smooth commencement of the projectto maintain control, and the costs are on budget, that changes to the project have not changed the performance.
(4) Cost reduction is not always the answer – to allocate resources to "value added" projects – in today's world is one of the cutting heads an easy short-term, not do not throw the baby out with the bathwater and leave the company, with projects in flight without experience to provide them. Instead of reviewing the project and, as in (2) focusing on value added.
(5)Development of hand – to improve their knowledge of financial management to develop personal leadership, health and safety, etc. reasons – so that when you insert a non-financial director in charge of a major project, n 'Is not time that they were familiar with the responsibilities of Finance. Do not leave to chance the financial management – to develop your workforce.
(6) Divide the project into sections to handle financially. Too many projects to work on the basis of a pot "cash" – has spent so muchthe budget and if luck is with them, great! Instead of taking the pot and break it down into manageable chunks – mapped the structure of the project, so you can see where the financial statements "Workstream" and that those over / under-utilization.
(7) "a point of contact for Accounting Directives" – too many managers will lead to budget overruns – a continuation (6) above – The program director is responsible for the overall, at the same time each head project documents should thereforeresponsible for the management of their share of the budget. This leads to an operator of finance on a project manager, ensuring a constant ratio.
(8) Providing targeted and meaningful financial information to enable appropriate decision-making. More is less – agree on this report is required from the initial design and continuously improve until it is what the project needs to manage the work program. Because an accountant can provide 20 pages of analysis per month for eachProject manager does not mean it is correct – Save the trees – to minimize the communication and improve decision making.
(9) Communication – have a strong relationship between the project and CFO. Funding may be back office, must be part of the project team and to be perceived, and therefore the channels of communication open and honest lead to surprises.
(10) Funding should be made aware of all potential risks and issues and costs that – if something goes wronghas or may arise warn first funding, the funding will be limited to what can be done to help "after the event.
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