The Money Files

You’ve got a new project… and new sponsor asking for input into the business case. This video gives you a quick refresher on the top 7 things that you should include in the business case. Include these elements to help you business case sail through the approval process!

When you’re managing a project budget, there are some key dates you should know! These general accounting dates can be laid over your project schedule so you don’t miss any major financial milestones.

1. Year End

Financial year end could be any time in the calendar year. I’ve worked with businesses that align their financial year end to the tax year, to the end of the calendar year (i.e. December) or to the date of incorporation (in the case of my business, that’s May).

It doesn’t matter when year end falls for you, as long as you know when it is!

Year end is important because it marks the close of one financial period and the start of another. You may have to get involved with accrual calculations and budget carry overs. If you miss the deadlines, you might not get your project budget in the next financial year!

2. Project Phase Dates

Some businesses work by releasing project funds according to the stage of the project. In other words, you don’t get the full amount of the project budget on Day 1. As the project moves through the lifecycle, funding is released in chunks.

Normally the dates align to stage gates or project reviews, where the steering group will approve the project to move to the next phase. That then triggers the release of the funding required to do the next phase of work. Be ready! Especially if you need to change your original forecasted budget request based on what you have learned during the current phase.

3. Reporting

Reporting dates relate to so many different areas of your project. They are important for project budgeting because you will need to prepare a short budget summary to go into the report. As you approach the reporting deadline day, make sure your financials are up to date so you can drop the most recent figures into your report template.

4. Tax Dates

Tax rates don’t change often, but I did once work on a project where the rate of VAT changed halfway through the work we were doing. It made budgeting very confusing!

If you know of upcoming changes to tax (typically linked to government announcements and budget cycles), then watch out for whatever impact that might have on your project and make sure you note the date the changes come in!

5. Project Closure

Yes, you surely know the project closure date – the target milestone you are working to for everything to be done!

It’s important for budgeting purposes because you may have to calculate budget at completion, or staff run rates, all of which need you to know when the final expenses on the project will be accounted for.

What other dates should project budget holders know about? Let us know in the comments below!

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Staying on top of your project expenses is really important if you want to bring the project in on budget. However, how you actually do that changes as you go through the project. You’ll want to take a different approach to cost control depending on where you are in the project and how you need to respond to the project budget situation.

The graphic below shows four tools for cost control at each point in the project lifecycle. You can pick and choose from these to select a way to manage expenses on your project, wherever you are in the lifecycle.

For more on this idea, check out this article.

http://www.projectmanagement.com/blog/The-Money-Files/19000/

It’s time to look at another project management Knowledge Area from the PMBOK Guide®-- Sixth Edition. This time, we’re diving into Project Scope Management. I’m going to be looking in detail at the major changes between the Fifth Edition and the current version. It feels like the Fifth Edition came out of circulation a while ago, but I know (anecdotally) that some people are still yet to update their internal processes to align to the Sixth Edition.

In practice, I don’t think that matters much. The changes aren’t radical – and while it’s good for new people being certified to work in an environment where the language and expectations align to what they studied as part of their PMP® prep, no one is going to find it difficult to work in a v5 environment.

So, onwards to this Knowledge Area. Let’s dive in!

Plan Scope Management Process

This is the first process in the Knowledge Area, and it makes sure you are setting yourself up for success. As with many Knowledge Areas, we start by planning out what we are going to do in this domain before getting on with the work.

Inputs

The inputs haven’t changed from the Fifth Edition. They are still:

• Project management plan
• Project charter
• Enterprise environmental factors (of course)
• Organisational process assets (of course).

The objective of this process is to consider how you are going to get to an understanding of what the project scope is, so you need all of those things.

Tools & Techniques

There isn’t much change here either. Expert judgment and meetings remain as they were before, and there is the addition of data analysis.

You might recall that data analysis was added in as a tool and technique to schedule management too.

Data analysis is a lovely catch all for the kinds of things you might be looking at during your planning. For example, you will probably do some alternatives evaluation to decide which requirements and specific functionality or solutions you want to move forward with.

Outputs

Nothing has changed here either.

At the end of working through this process, you’ll have the scope management plan and the requirements management plan.

I’d say that if you have a repeatable process in place with solid templates and expectations for managing scope, you should be able to complete the work required here quite quickly. You might not need to write a detailed document for requirements management and scope management, if you can include a paragraph in your main project management plan. There’s nothing in the PMBOK Guide®-- Sixth Edition that specifies you have to have separate documents, so go light on paperwork where you can!

Next time I’ll be looking at the second process in this Knowledge Area: Collect Requirements.

Insurance is something we think about naturally for our homes, cars and even our lives. But should you be considering it on your project too?

Insurance is a risk response strategy to help you mitigate the impact of what might go wrong on your project. Typically, we do talk about positive and negative risk, and while I’m sure you could probably find a firm to insure you against positive risk, you are far more likely to consider insurance as a support strategy for negative risk.

What could you insure?

Through a broker, you can pretty much insure against anything. However, organising specialist, one-off insurance for a very specific, unique, circumstance is potentially a lot of work (and expense) so you would only want to do that if your project was large enough to support that effort.

However, you can more easily insure a range of other, more ‘regular’ things on your project. For example, event cancellation due to poor weather or low attendance rates. In this situation, you’d get a pay out from the insurance if you had to cancel the cycle race you’d organised (for example). This would help you offset the costs you had incurred organising the cycle race, like catering vans, first aid teams, water for the cyclists, security and so on – all costs you’d still have to pay because you’ve booked them and probably can’t cancel them with such short notice.

Travel insurance

Another type of insurance to consider for your project team is travel insurance. If your team is travelling a lot for work, it would be worth checking that your company offers insurance for employees travelling for business.

This would cover them if they lost their laptop or other work items while away for business. It could also help cover the costs of travel arrangements if their flights were cancelled, or they were unable to travel.

Other insurance for staff

If you are a sole proprietor or a small business owner – and many project managers do work independently as contractors or in small consulting firms – then it’s also worth considering other types of insurance that cover you and your team as individuals.

For example, in the UK you can get director’s insurance, that covers the business in the case that the director is unable to carry out their duties, say, due to illness.

You can also organise health insurance for the team. Depending on where you are in the world, healthcare costs can be really expensive. Insurance will help offset those costs, and help an employee get back on their feet (and back to work) more quickly.

I should add that I am not a financial advisor, and the points above are given simply to give you ideas of how to consider the part insurance could play in your business and on your project. If you don’t have anything set up yet for your team, it’s worth asking the question of your Finance team or Director. Get some proper advice from a financial advisor.

Think about whether insurance is a viable option for your risk mitigation strategies and if so, you may be grateful one day for having it set up!

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