Project Management

The Money Files

A blog that looks at all aspects of project and program finances from budgets, estimating and accounting to getting a pay rise and managing contracts. Written by Elizabeth Harrin from

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Recent Posts

The State of Project Management Jobs in 2022

Programme Budgeting: Creating Schedules

7 Summer Sustainability Suggestions for Supplier Management

9 Financial Management Tasks for Program Managers

How to Track Program Financial Metrics

The State of Project Management Jobs in 2022

Categories: pmi, success factors, trends

PMI has released a new 2022 jobs report, which provides some insights into how the profession is looking around the globe. It’s not terrible, which chimes with my own experience here in the UK. I often mentor project managers who are looking for jobs and after interview practice or a CV review, and the market feels pretty good.

But anecdotal feedback aside, what do the numbers say about the future of the jobs market? Here are my key takeaways from the situation in Europe according the PMI survey.

Issues with supply chain

I know of projects that are on hold at the moment due to supply chain issues. My projects are being affected by longer lead times. Even buying a sofa is affected by long lead times: we have been told our sofa will arrive in 16 weeks and we can’t order an armchair because there is no fabric in stock.

So project managers might feel like the job situation isn’t too bad at the moment, but projects are certainly not progressing at the pace they used to. According to the PMI study, the supply chain issues have contributed to an inflation spike of 5%, which is going to affect salaries and put people under more pressure as the cost of living rises.

Demand for IT professionals

The report says that IT is the area to focus on if you are job hunting. The talent gap in this sector is huge, and there is a lot of tech funding around. Plus our ways of working since the pandemic began have massively changed – along with our customers’ expectations of what they can do online. That’s changed the requirements for many long-term projects and no doubt boosted the need for more IT project managers.

Hybrid working

If you are a European project manager who wants to live the hybrid life, watch out for what your employer expects. My takeaway from the PMI survey is that employers want more of us back in the office – and we don’t want to go. Only 28% of employers believe that the model of work they are offering is aligned to their employees’ preferences.

Employees want more hybrid and remote; employers want more bums on seats in the office. I’m not sure how we reconcile that to be honest. However, it is worth spending some time thinking about how you can make hybrid work for your project team. Nearly 60% of people report that remote and hybrid work options result in increased job satisfaction, and that has to be good for project team morale.

However, only 34% believe that remote options lead to greater productivity. Perhaps there is a backlash against only seeing your colleagues as a tiny head on MS Teams. I think that hybrid certainly has a place, and I know of project managers who have turned down roles that were not hybrid or remote-friendly.

Overall though, the outlook for work in the project sector in Europe seems optimistic. There is still a lot of concern about job security and the cost of living – although I can only speak for what I see here – but globally money is being made available to reinvent and innovate where we can.

If you want to succeed amidst the current global economic situation and all the uncertainties that brings, it would be good to focus on adaptability, change, flexibility and resilience as there are all the signs that these skills are going to be in demand for many years to come.

Posted on: August 16, 2022 08:00 AM | Permalink | Comments (1)

Programme Budgeting: Creating Schedules

Categories: budget, scheduling

Programmes (as we spell program here in the UK), are made up of various different projects and often BAU elements or non-project components too. The programme budget needs to reflect two things.

First, it should include all the costs relating to the components. These could come from detailed project budgets, contracts and the work involved in costing out the deliverables, outcomes and outputs that make up the programme overall. This aspect is going to make up most of the budget.

Second, it should include the costs involved in running the programme. These are most likely to be resource costs and any other operational support costs such as the fees involved with hiring a location to work from during the programme and things like that. This aspect is a not insignificant amount but in my experience it’s normally less than the costs of the projects.

The exact split of component costs and programme management overheads is going to depend on your exact project and how you account for people’s time.

The two schedules that come out of the cost budgeting for a programme are:

  • The programme payment schedule
  • The component payment schedule.

These two terms sound very similar so let’s briefly look at what they mean.

The programme payment schedule is about money in. It relates to the dates and milestones where funding will be made available. These could be payments from the client, or your internal decision points or gates where funding will be released for the next phase of work.

The component payment schedule is about money out. It relates to when contractors, sub-contractors and suppliers are going to be paid. I see it as a summary of the contractual payment dates as most of my supplier contracts for large projects in the past have a milestone-driven payment schedule. When the milestone is reached and signed off, the payment can be made to the vendor.

The milestones tend to be linked to delivery e.g. completion of design, delivery of functionality etc. When a component is completed, the component-related budget can be closed off.

Both of these schedules provide info to the programme budget baseline. The baseline will need to be revisited regularly if my experience is anything to go by. Prepare a forecast, review the estimates and actuals, and update as and when you need to, with the approval of whatever governance processes you have in place.

Then make sure any changes are trickled through to the relevant budget lines, and any other documentation is updated.

The programme and component schedules might be called schedules, but they aren’t the same as your main programme (or project) schedule. That represents the timeline of work; what we often call the project plan (even though technically speaking it is not the project plan – that’s a separate document made up of lots of plans…).

The budget-related schedules are timelines in their own right, and you could put the milestones or key dates into your main schedule. Personally, I think that’s confusing, but it’s up to you. I prefer to put payment dates in my normal calendar, with a note the week or so before to make sure I have the paperwork in place to get the milestone approved.

I also use that early warning action to let Finance know that a big payment will be due, and the supplier’s sizeable invoice will be coming through for payment. Having once been caught out by trying to get a large invoice paid at short notice, I’ve learned the lesson of giving my colleagues in Finance plenty of time for their approvals and related Treasury tasks. 

Do you have any other tips for managing the different aspects of a programme budget? 

Posted on: August 10, 2022 08:00 AM | Permalink | Comments (1)

7 Summer Sustainability Suggestions for Supplier Management

Categories: supplier management

Here in the UK we’re well into the summer now. It’s hot enough for me to be grateful for the air conditioning unit that was fitted in my garden office a few years back. But air con isn’t exactly the most sustainable of gadgets given the energy that it uses to keep my space cool.

I’ve been thinking of how our projects can be more sustainable through the way we deliver them. Here are 7 suggestions for how we can build sustainable practices into project management through working with suppliers.

  1. Delivery methods

How does the supplier’s product get to you? Consider prioritising suppliers who have low-pollution delivery options.

  1. Packaging

How much plastic is involved in packaging goods? Talk to your vendors about how they ship materials. They might be investing in smart packaging options or using more cardboard to wrap goods.

  1. Sustainable materials

This is quite a simple one: ask vendors how they choose what materials go into their products. This is important for equipment that uses minerals or other materials that have a limited supply. They may be investing in changing up what they use so their products have a lower environmental impact

  1. Manufacturing environment

Find out where the vendor is manufacturing their goods. Many of the manufacturers I work with are investing in their production line and factories to introduce things like motion activated low energy lighting, low water options or recycling waste water, paper recycling and more on their journey to carbon zero. 

  1. Staff engagement

One of the vendors I am working with at the moment puts a lot of effort into engaging staff in environmental awareness, and you may find your vendors do the same. For example, they have recycling on site for staff to bring their personal home recycling, they do awareness weeks and promotions for staff and more.

  1. Training delivery

If your team needs to be trained on how to use the equipment you are buying, consider how that training will be delivered. There is probably a lower carbon footprint for online training delivery than having a trainer fly to your location and deliver in-person training. Consider what your options are and work with your supplier to come up with something that meets your needs.

  1. Compliance

There are several schemes applicable to vendors nationally and internationally, for example in the use of conflict-free minerals. Check out what schemes are relevant to your purchasing and whether your vendors are taking part.

Plenty has been written on this subject already, and I’ve only touched on each of these areas. Hopefully you’ve already got some sustainability approaches baked into the way you consider, select and deliver projects, and have a focus on sustainability in your procurement plans. If you need some ideas, check out PMI’s ESG report. What are your top tips in this area? Let me know in the comments!

Posted on: August 02, 2022 07:00 AM | Permalink | Comments (2)

9 Financial Management Tasks for Program Managers

In this part of my occasional series on program cost management, inspired by The Standard for Program Management (Fourth Edition), I’m talking about 9 financial management tasks that you should expect to do as a program manager.

  1. Identifying changes

First up, be aware of what might be coming over the horizon to influence the budget baseline and what factors are leading to changes. This is basically being aware of what might create a change so you can be on the look out for any changes. It’s proactive listening and always considering what a course of action might do to your budget.

  1. Monitoring for impacts

Part of the daily work of a program manager is keeping your eye out for any environmental factors that might impact the program overall, and budget changes are part of that. These could be environmental factors like changes in regulation, access to skilled resources from the local hiring pool, or access to the right technology – anything that could have an impact on the budget.

  1. Managing changes

What happens after you scout the horizon for things that might change your program budget? You find things. Part of a program manager’s tasks is to manage those changes. The change could be to scope, to the schedule, to the resource profile, procurement plan, or anything else, and we have to play back what impact that is going to have on the budget and build in the changes.

  1. Monitoring cross-project impacts

As I mentioned in my last article, part of my role as a program manager is being able to shift funds between pots to ensure the overall program goals are met. That’s what this task is all about: monitoring the impact of what happens when costs are reallocated and making sure that overall the program components are balanced – or at least as balanced as they can be.

I mentioned cross-project impacts in the heading, but programs often include an element of BAU work and that can just as easily be affected by changes.

  1. Monitoring supplier contracts

Some suppliers might be contracted at a program level, so it’s the program manager’s job to ensure that suppliers get paid in line with their contracts. With one supplier I worked with, we had contractual milestones in place. When each milestone was reached, another stage payment was due.

Part of my work was ensuring Finance was aware that a stage payment was due so they could have the right amount in the bank accounts ready to pay when the time came.

  1. Earned Value Management tasks

If your program uses earned value management, you will work with control account owners, project managers and other experts on the team to make sure EV practices are implemented and adhered to. Part of the role will also be making sure everyone can interpret the outputs of EV reports and manages their part of the schedule accordingly.

  1. Dealing with over and underruns

It’s unlikely that your program will be perfectly on budget every month because that would rely on your estimates being perfect and no ‘real life’ happening during the work. It’s more likely that you’ll be a bit under or a bit over.

Part of the program manager’s role is to manage within that tolerance and to advise and support project managers on the program to do the same.

  1. Working with stakeholders

Another big part of program management is communication and engagement with stakeholders around changes. The sponsor, customer, client and governance groups (including auditors) need to have access to transparent information around the program’s financial measures. You have to provide that.

  1. Managing within tolerance

Finally, the main, most obvious part of the role is to manage the program’s spending within the levels expected. You may have set tolerance at individual component level, or there may be other ways you are managing to within the expected parameters. These should be clear, so everyone knows how the work is being tracked.

And, if you spot that you are not managing within the parameters and boundaries set, then as the program manager it’s your role to take steps to get back on track, whatever those actions might look like.

Posted on: July 19, 2022 08:00 AM | Permalink | Comments (5)

How to Track Program Financial Metrics

The Standard for Program Management (Fourth Edition) talks about how to track program financial metrics once your financial management plan is up and running. I thought it would be worth comparing the guidance to what I’ve done as a program manager to see how I measure up – and you can compare your own practice to what’s in the Standard too.

Program financial management, as a refresher, is defined in the Standard as:

Activities related to identifying the program’s financial sources and resources, integrating the budgets of the program components, developing the overall budget for the program, and controlling costs during the program.

Once you’ve got the program going, your work as a program manager shifts to tracking the money and making sure you are on track.

Spoiler alert: I’ve never used earned value to do this in real life, although I’m well aware of the benefits of doing so on projects and programs.

I think the techniques you use for tracking very much rely on your organisational culture and maturity levels, and I’ve not worked anywhere where EV is considered part of the way things were done. If you’ve got experience working in an EV environment, let me know how that goes in the comments.

The program manager’s role shifts to monitoring spending and controlling spending, ensuring what is being paid out is in line with the budget. In my experience, as a program manager, I’ve had a fair amount of latitude to move money between ‘pots’ (or projects) to ensure the overall goals of the program are met. And I have to say, I’ve enjoyed being able to make those decisions.

What I haven’t enjoyed is the financial scrutiny. I know we need governance on programs, and I’m all for it, but sitting in a meeting having to present the numbers has always been uncomfortable for me. Not because I don’t believe in the numbers, but because I’m normally presenting to people with an accounting background and honestly they could dance rings around me if they wanted to pick holes in my maths. So I have to put extra effort into making sure I can justify how numbers are put together.

My top tip is to make sure you keep detailed records of how you came to land on certain figures. For example, on a program I’m working on at the moment, we track committed spend, forecast and then actual “out-the-door” spend. But there are a couple of other strands within the program that are accounted for separately (don’t ask, it’s just the way it works best) so I have to make sure I’m clear as to what’s in and what’s out of the numbers so I can justify them every month and make sure we are reporting to the PMO on a consistent basis.

Because trust me, if I didn’t, I’d forget from month to month what the basis of calculation was and report something that wasn’t internally consistent and that I couldn’t justify reliably. Which would be bad.

Governance serves a purpose: it makes sure that a program is operating within approved cost limits and challenges programs that are forecasted to go out of those budget targets. Then the organisation can decide if it wants to continue with the program or not.

I’ve luckily never worked on a program that has been cancelled because of financial issues – but I imagine that is largely luck and the kind of programs I have been involved with rather than any skilful cost management on my part.

My experience of program cost management has been very similar to managing large project budgets: the skills are the same, and business acumen comes into play too. I think that having the bigger picture and goals in mind helps. What do you think?

In my next article, I’ll look at some typical financial management activities as outlined in the Standard and talk a bit more about those.

Posted on: July 13, 2022 08:00 AM | Permalink | Comments (2)

"Two roads diverged in a wood, and I... took the one less traveled by, and that has made all the difference."

- Robert Frost