Project Management

The Money Files

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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 GirlsGuideToPM.com.

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The Planning Performance Domain & Cost Planning

Mergers and acquisitions: The basics

5 Reasons why your project needs a business case

How to Prepare for a Project Manager Job Interview

4 Ways to Mitigate Risk

The Planning Performance Domain & Cost Planning

The Planning performance domain in PMBOK 7 covers all things relevant to making sure the project is adequately planned. We want to address all the work required to deliver whatever the project is delivering, and to do so in an organised, thought-through way.

Planning for the financial aspects of your project is covered by this domain.

Budgeting

Budgeting is the obvious one: as part of putting together the early steps of getting our project off the ground, we need an idea of how much it is going to cost. That means taking info from the task and work estimates and using that to create a cost estimate.

Building out the cost baseline forms part of the project planning activity and then it’s used to track against. Project performance can be measured against the baseline, in the same way you do for tracking schedule activities. In fact, combine cost and time schedules help you phase the spending. Even if you don’t go ‘full EVM’, a phased budget is helpful for the finance team to manage cash flow and for the project team to track whether work is broadly happening at the expected pace.

Financial management

Knowing how you are going to manage the finances is also useful and worth working out at this point. For example, how often are costs going to be reviewed? What contingency reserves are going to be put aside and how will the team access those? What’s the process for getting purchase orders raised and invoices approved for payment? Do you have access to a management reserve and if so, who is going to approve using that funding?

Procurement planning

Most of my projects involve buying things from suppliers. Whether it’s something small or a multi-million pound deal, procurement activities are a big part of what we do.

It’s important to spend time in the project planning phase thinking through how procurements will be managed. Will you have a dedicated procurement professional to manage the contracts and run point with suppliers? Who is going to manage supplier relationships? What’s the process from choosing a supplier and negotiating a price to actually getting the contract signed off and the order raised? I know from personal experience that this process is easier said than done!

If you have someone managing the contracts on your projects, they will need to know what the project needs to buy, when the team needs it for, what the lead times are likely to be and a lot more. Given that at the moment the lead times on all kinds of equipment and building materials seems to be extending – our own build project at home has been delayed – and the price of materials is rising – it’s really important to be all over the numbers, process and plan for this aspect of your project.

There’s more to the Planning domain than simply thinking about the money and contractor relationships, but these aspects are essential if your project involves procurement work. It’s all too easy to get sucked into scope discussions and deadlines and milestones – because executives want to know when the project will get delivered, not who in Finance is going to be processing the requisitions.

So this is just your friendly reminder to make sure you allow adequate time in the planning stages of your project to factor in the finance planning – and that it’s an ongoing activity for each stage, and as your project evolves.

Posted on: November 15, 2022 08:00 AM | Permalink | Comments (5)

What to check with your project supplier (before you start working together) [Video]

How much do you really know about that supplier you are thinking of using on your project? They’ve sent you a quote, and you’ve got a nice glossy presentation with photos of their account managers, but what’s it really going to be like?

In this video I share some of the things I’ve found important when starting a relationship with a new third party – in fact, before the relationship even gets going it’s important to ask these questions.

If you prefer to read, there’s an article here on what to check before you sign on the dotted line: What you need to know about your supplier.

If you’re a video kind of person, and you want to hear my personal experience, then click Play on the video below! Let me know in the comments under the video what else you consider when you are assessing what organisations to partner with for project delivery. I’m sure you’ve got some great stories too!

Posted on: January 11, 2022 04:00 AM | Permalink | Comments (3)

7 Procurement Terms You Should Know

Categories: procurement

We need to measure project performance to see if the project is on track.

The graphic below shares some ideas on the different ways you can measure work performance. None of these suggestions is better than any other – they are all appropriate for different projects, environments and levels of project management maturity.

procurement terms infographic

Do you use any of these approaches to measure progress on your projects? Why (or why not)? Let us know in the comments section below!

If infographics aren’t you thing, you can get almost the same information (with perhaps a teeny bit more detail) over at this article:

7 Contract Terms You Should Know

Posted on: September 18, 2019 08:59 AM | Permalink | Comments (9)

Make or Buy Decisions [Video]

Categories: procurement

make or buy decisions

Your project needs things. But should you buy them, or make them yourself?

It’s a big decision, and one that affects lots of industries and deliverables. My experience has mainly been make or buy in the software world. Should we develop our own software, or buy a tool that is known to be best in class?

With software particularly, there are a lot of considerations. Cost. How easy it will be to interface any off the shelf product with your existing architecture. Supporting it once it’s built and installed. Managing upgrades. So many questions!

While this video doesn’t have all the answers, it might help clarify the big picture for you so you can start a confident conversation with your management team about the things you need to procure for your project.

For more information on project procurement and what you should be considering, check out this article.

Pin for later reading:

make or buy project management decisions

Posted on: September 06, 2019 01:24 PM | Permalink | Comments (2)

5 Steps of the Procurement Lifecycle [Video]

Categories: procurement

There are 5 steps in the procurement lifecycle:

  1. Requirements
  2. Vendor selection
  3. Negotiation and contracting
  4. Service delivery and performance monitoring
  5. Renewal/contract closure.

This video outlines the steps and talks specifically about the requirements and getting the procurement off to a good start by understanding what you need from the exercise.

Read more articles about procurement.

Posted on: April 24, 2019 09:00 AM | Permalink | Comments (8)
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