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It’s not too late to start thinking about financial planning for the year. If you didn’t get a chance to catch your breath in January, make this the month that you sit down and think strategically about the year ahead. Here are 5 themes to consider – all things that your C-suite executives will be thinking about as the calendar year starts and financial years come to an end about now.
1. Staffing
Yes, everyone is concerned with staffing levels. How many people do you need on your project, and could you manage with a few less? This will be the question everyone is asking this year. Despite the economic situation looking a little bit better than it did a while ago, cost saving is still the watchword.
Look out for project sponsors, PMO Directors and other senior managers asking you about what you can achieve with fewer people. Be prepared to have a few reasons why you can’t manage with a smaller project team (if you believe that you can’t – of course, if you do feel that the team is a bit bloated, this could be a great reason to get rid of some of the dead weight!).
Equally, if you need to recruit, start putting together plans for why your project team needs additional people. Pull together a person specification and start thinking about interview questions.
2. Capital
Strategic planning has to include money. Capital costs are those that are part of the initial outlay for the project and are the main part of any investment. Capital is hard to come by in some companies and may have to be borrowed. Borrowing money always comes at a cost, so you may have to factor in debt repayment into your business case (it’s more likely that this will be managed at a corporate level by the treasury team, and you won’t need to bother about this at all).
3. Operating Costs
Operating costs are the costs of running the project. They include staffing, but also things like meeting room hire. This is how much it costs to run your project team or department and to deliver what you have been tasked to do this year. Essentially, all these costs are overheads. As such, senior executives are always looking for ways to reduce them. This could mean cutting the level of staff (see above) but will also include things like cancelling away days.
Cost savings can come in various different forms. The UK government recently issued a document highlighting 50 ways that local councils could make savings including improving procurement. It gives the example of Birmingham City Council, which adopted a collaborative approach to all energy procurement in partnership with local energy providers, and has saved £4.7 million per year.
4. Benefits
High on the list of things to consider for strategic plans is project benefits. Which projects in the company are set to deliver the most benefit? Do we even know? Be resourceful and if you can, offer information to decision makers about the projects that you have on the go at the moment and the benefits that they will deliver. This helps show that you are aware of strategic priorities but also points out that you aware of what you are working on and how it will help the company overall. It also highlights that you are working on benefit-producing work (aren’t you?) and therefore are a key player in the department or company.
5. Forecasting
Finally, strategic plans also need an element of forecasting. You should be able to look backwards and use that data to forecast forward. Forecasting includes all elements of resource planning from how many people you will need in which department when to when big bills will be paid so that the company can make sure its cash reserves are available at the right times.
You can use project management software to forecast your resource utilisation and cost predictions, and then these can be fed into the overall model for the department or PMO. At a company level, you may have to provide some very high level figures to contribute to corporate planning.
Even if you are not asked to forecast, it is a sensible idea to have a go – this is a good time of year to be thinking ahead about what you will need to complete your project, so why not set up your own spreadsheets and turn your hand to forecasting?
Strategic planning in your company may involve lots of other elements, but starting with these 5 things will certainly give you enough to talk about if you meet a C-suite executive or are asked to contribute to the strategic plan for your area.
About the author: Elizabeth Harrin is Director of The Otobos Group, a project management communications consultancy. Find her on Google+ and Facebook.
Posted on: February 01, 2013 07:30 AM |
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