The Money Files

A blog that looks at all aspects of project and program finances from budgets and accounting to getting a pay rise and managing contracts.

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Recent Posts

Struggle With Stats? You’re Not Alone

Considerations for Choosing a PM Training Provider [video]

Business Cases: Resource Round Up

Earned Value: 5 Things To Have In Place Before You Get Started

4 Reasons Why People Need Estimates

Struggle With Stats? You’re Not Alone

Categories: success factors, tips

Wyzant (say: Wise Ant, I think), a marketplace that matches up tutors and students for in-person and online study sessions, has done some research into how people feel about working with numbers.

They surveyed 235 students who recently struggled with statistics. Only 5.5% of these students were pursuing a career in a maths-related field, and many called out business or project management as a potential career path.

That’s a lot of people who don’t intend to use maths as their ‘full time’ day job who are using statistics as part of their course and possibly their future job. Nearly 45% of the students said, “I’m not a maths person,” which is the answer I would have given too. If you hold that view about yourself, you’re creating more stress, anxiety and mystery around the basics of statistics.

What People Struggle With

70% of all the students struggled with the same two statistics concepts, hypothesis testing and probability. 

Personally I don’t use hypothesis testing in my project management work, but I’m sure understanding it is essential in some industries. It hasn’t been since university that I’ve had to think about hypotheses, thankfully. My days of having to understand T-tests and ANOVA are hopefully long gone… if I ever truly understood them at all.

Probability, though – we’re all exposed to that as a function of risk management. It’s often so simplified though that risk assessments are subjective: “I think that my risk is not likely, likely, quite likely, almost definitely going to happen.”

Understanding Probability

Wyzant worked with expert tutors in the field of statistics to identify the concepts and break them down in ways we can all understand. The article quotes PhD candidate, Brian, who tutors university students in stats:

“Typically, when students are introduced to the normal distribution, they’re given a curve and told probability is the area under the curve. But this is still confusing.”

He says it’s easier to think of probability if you break up the area under the curve into 100 squares, each equal in size.

“If you can look at the distribution and say each of these squares is equal to 1% probability, you can just count the squares to develop good intuition about what the normal distribution is and what it means.”

Image credit: Wyzant

I can see how thinking about probability in this way would make it clearer. The bell curve of a normal distribution is all well and good but blocks really call out the way that the 100% is made up and how it spreads out across the distribution.

What do you think?

The website has some helpful guides for common statistics and probability concepts as well.

You might also find this book interesting: Math for Grownups. I certainly found it helpful!

Posted on: July 18, 2017 07:59 AM | Permalink | Comments (3)

Considerations for Choosing a PM Training Provider [video]

Categories: training, video

What should you take into account before you make the investment in project management training? Here's a quick video on the 5 things you consider.



You can get more detail on the points raised in this video in this article.

Posted on: July 10, 2017 11:59 PM | Permalink | Comments (5)

Business Cases: Resource Round Up

Categories: business case

One of the things I get asked the most is, “Can you help me with my business case?” It wasn’t always like that, but I think these days project managers are getting more and more involved with writing business cases. We’re taking in part in the project from an earlier point, which often means before the project is even really a project.

I’ve written quite a lot about business cases over the years so here’s a round up of resources that can help you put together a fantastic business case.

Business Case Basics

To get started on a business case you need to know the purpose of a business case, who is going to read it and the 7 essential elements that go into a standard business case. If you’re starting from scratch, these two articles have got you covered:

As with all things in project management, understanding the ‘why’ is a huge benefit for understanding the ‘how’. The 3 reasons why business cases are essential are:

  1. They specify the problem that has to be solved
  2. They justify why it’s worth spending time fixing the problem
  3. They provide information on the solution that helps decision makers prioritise the work and the investment required.

These reasons apply whether or not your company cares much about paperwork and bureaucracy. As a project manager it’s still important to understand why your project has value to the business. If you’re struggling to get your management team to even the shortest business case, keep pushing! It will massively help your project management maturity levels.

And you can watch a short video all about those in more detail below.


Business Cases for Program Management

Programs need a slightly different approach to justifying a project through a business case, although there are many common elements, and the reasons why you would do a business case (to specify the problem, justify the work and explain the solution) are still relevant.

There’s a whole stack of information on preparing a program-level business case in this summary I put together from Program Management (Gower, 2010), by Michel Thiry: What goes into a preliminary program business case?

You’ll see that there is still a great deal of detail required from a benefits realisation plan to resource requirements, and a statement of achievability. It’s a significant amount of work even to get to this  position of having a preliminary business case.

Once you’ve got approval in principle to continue with your program, you’ll be able to put together a more detailed program business case. You could argue that this document (again, I’ve pulled together a high level view of some of the ideas outlined in the Program Management book) borders on being a Project Charter, because by this point you’ve had approval for the concepts and solution so you aren’t spending too much effort thinking about options appraisal any longer.

However, there’s also an argument for saying that options appraisals are more suited for solutioning at project level, and at program level you’re really approving the transformative change.

I wrote a recipe for a program business case as well.

 More Resources for Business Case Preparation

If you are writing a business case you’ll find this book interesting: Business Case Essentials.

Finally, here are some tips for preparing a business case when your project is all about implementing online collaboration tools. There are some specific things to consider that will help make your proposal more appealing, and it’s especially worth thinking about non-financial elements and how to justify those.

I hope these resources are helpful for you!

Posted on: July 07, 2017 04:46 AM | Permalink | Comments (5)

Earned Value: 5 Things To Have In Place Before You Get Started

Categories: budget, success factors

So you want to go with Earned Value as a way of tracking time and cost performance? Good for you. Here are 5 pre-requisites that you’ll need to consider before you really get into the detail of doing the work.

Oh, and this assumes that you’ve already ticked the pre-requisite that is ‘team and manager on board for a major change in how we track project performance’ because EV is quite a culture shock to the uninitiated.

With that out the way, let’s dive in!

Pre-req #1. Detailed Scope

You’ll need to have a work breakdown structure in place, with a degree of detail you perhaps haven’t had to focus on before.

In order to track your progress against your scope you have to know what the scope is. Without that, you’re going to struggle to get any degree of accuracy in your reporting. Break down your tasks to a decent level as well, so that you aren’t struggling to report progress on a task that’s gigantic.

Pre-req #2. A Timetable

Armed with your breakdown of tasks you can then start adding dates to them. Again, if you want to track whether you are hitting your milestones and working ahead or behind schedule, you need to start from somewhere. This is your baseline schedule.

Build out your dates for each element on the work breakdown structure. Make sure they take into account the fact that your estimates are realistic and that you’ve got the agreement of the team member involved before committing them to anything.

This is the point to layer over your resourcing and capacity planning, so that you aren’t scheduling work in a vacuum. Take into account holidays and other absences so your schedule is as accurate as it can be.

Pre-req #3. A Breakdown of Costs

Earned Value is only good for tracking time and cost performance. It’s very good at that, but it’s not going to give you the context for changes or a feeling for how quality is being achieved (or not). The timetable gives you the info you need to start thinking about tracking time; a cost breakdown structure gives you the info for tracking cost.

Take your work breakdown structure and cost it out. Whether you do this top down, bottom  up or some other method of applying costs to work packages – it doesn’t really matter. However you get there, the end result is the same. You should be able to apply a fixed cost to a piece of work that has a scheduled completion date.

Pre-req #4. A Plan for Reporting Progress

Next, you need to establish an approach for reporting progress with the team. This sounds more straightforward than it is because you’ll need to be able to say what % complete through a task is, and some tasks don’t breakdown nicely.

For example, if part of your task involves ordering kit and then you have to wait until it’s delivered and then you do something with it to set it up, your work and expenses aren’t going to be evenly spread across all the days allocated to that task. It would be better to split the work into two tasks: Order Kit (which finishes at the time that the kit is delivered and costs as much as the kit costs) and then Do Something With Kit (which takes as long as it takes and costs the amount you bill for resources).

Generally you’ll report whether a task is not yet started, in flight or complete, so you should to agree whether the % complete targets of 0%, 50% and 100% are adequate for your needs. And, for each task, what 50% looks like. That could be quite easy with some tasks, especially where the work is spread evenly over the time – it’s where work isn’t spread evenly that makes it a bit harder to predict.

You can go as granular as you like but don’t get so hung up on working this out that you never get started tracking EV in earnest.

Pre-req #5. A Plan for Collecting The Data

When you’ve got agreement on how progress is going to be measured, you should agree with your team how they are going to get that progress to you. This is likely to be in the same way that they do now, in your non-EV world, either through checking in with you during the task formally or informally, completing a status report or giving an update at your regular team progress meeting.

It simply sets expectations so that everyone knows what they should be doing and when.

With those 5 pre-requisites in place you should be good to start monitoring time and cost performance with your EV spreadsheets and tools.

I found a good (short) video from Simon Harris introducing EV so if this article has given you the appetite to take it further, watch this.

Posted on: June 27, 2017 08:59 AM | Permalink | Comments (11)

4 Reasons Why People Need Estimates

4 Reasons Why People Need Estimates

Estimating take up far too much time and are, as my 3-year old says about everything right now, ‘a bit boring’. I have no idea where he picked that up from. Don’t judge me!

I digress. We need to do estimates. And if you are one of those strange people who LOVE doing estimates, then skip this article and go and read this one instead!

Take a deep breath, and think for a moment about why we bother to do estimates. In his book, Project Management for Humans, which is soon to be released, Brett Harned provides 4 reasons why estimates are important for people on the team.

1. Estimates help you cost the project

“Estimates are based on a level of effort and times,” Brett writes. “Typically, the cost of a project is based on the time spent on a project. Your estimate helps calculate a rough determination of that cost and sometimes whether or not the project is worth the investment.”

A giant estimate normally comes with a giant price tag, and that might mean you don’t go ahead with the project. Or you scale down the scope significantly so you still get some benefit and don’t have to spend half your annual budget on this one project.

Either way, knowing how long things are going to take gives you valuable information to make informed decisions about your project and whether or not it should go ahead in the current form.

2. Estimates help you staff the project

Estimates are created around specific tasks and the skills required to complete those tasks.

Your estimate therefore gives you clues about who you need to do the work. And in turn, that gives you a good idea about how long the work will take.

For example, a senior developer might take a week to complete a task, but your apprentice developer would take a month, and need someone else working alongside them to help check the work and support them during the coding. Knowing this you can then decide what’s more important: having the work done quickly or upskilling the apprentice. Or maybe you won’t have a choice, if the skilled developer is working on something else and isn’t available.

Either way, estimating the work and thinking of who is involved in doing it will give you invaluable information for your plan.

3. Estimates help you plan dependencies

If you know how long a task will take you can better plan for the impact it is going to have on other tasks or on other projects. The duration of a task can help you schedule the next set of tasks, or tell another project manager when they’ll be able to start work on their project (or task).

For example, if you are tying up your senior developer for 4 weeks, in a business that only has one developer with those skills, the next project to use that person will have to wait until they are free. That’s a dependency on that skilled person.

You have a number of options to deal with that dependency including changing the project priorities so the other project gets the resource before you if that project is ‘more important’, buying in external skilled resource if you want to do both at the same time, or even having someone else with less ability work on it so you can at least make a start. But you need to know that you have a problem with resourcing and dependencies before you can start to come up with solutions to address it.

Here’s an introduction to dependencies and constraints on projects. Even knowing that your project doesn’t have dependencies on any other work is a big help with your planning because it frees you up to get on with things safe in the knowledge that your team isn’t messing anything up for anyone else. (Of course, that might change if a new project is approved – so don’t take it for granted.)

4. Estimating creates agreement and buy in

“Working with a team can often be a challenge, particularly when no one is in agreement on the project,” Brett writes. “Working together to produce an estimate can be a great way to pull the team together to talk about staffing, responsibilities, process, and timing. And guess what, that all helps produce a solid estimate.”

I covered this in my book too, Shortcuts to Success: Project Management in the Real World. I highly recommend that you share all your budget information with your team, from the moment you start to work on estimates through to the budget spreadsheet and forecast rates.

Working together will help you gain collective responsibility for the dates and scope of the work. You can hold each other accountable and no one can turn around and say that they weren’t aware of the deadlines or their responsibilities. That’s huge, especially on projects with tight deadlines and remote teams.

So, estimates benefit you and your team in lots of ways, and they are a part of your project to just get on with, get done and then start using. They can feel like the start of the real detailed work, the prelude to the fun part of building, but they help set you up for success and a smooth delivery. What do you feel about estimates? Let us know in the comments below!

Posted on: June 21, 2017 09:59 AM | Permalink | Comments (6)

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