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Topics: Benefits Realization, Cost Management, Strategy
Financial modelling or financial management will likely lead to project success?
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Everything matters for project’s success and mostly are subjective of course, but I guess those veteran PMs and experts out there may likely find this quite straight forward! Which one of the two had been your higher priority that had brought to your projects’ success? Thank you for your thoughts!
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Suzi,

I’m not completely positive on the context of your question. If you are addressing the financial planning and budgeting responsibilities of a project manager, then I would view "Financial Modeling" (e.g. Earned Value Analysis) as a subset of "Financial Management" and therefore NOT a mutually exclusive element for comparing pro’s/con’s – as your question suggests.

However, if you are stating "Financial Modeling" in the context of a Project’s Financial Value Proposition then they are different animals, but still not something that should be compared apple-to-apple. If this is your context, then I view both "Financial Modeling for the purpose of the value proposition of the project" as important as the "project managers responsibility to financially manage the project". Without the financial value proposition, you will not likely have a project; and without financial management, you will likely have a failed or distressed project.

Hope this helps.
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1 reply by Suzi Shah
Apr 10, 2019 4:18 AM
Suzi Shah
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Thank you George, appreciate your advice, couldnt agree more, the context differs for various reasons, technically they are (supposed to be) different subjects but again functionally they are/may be intertwined in many organisations depending on industry, size etc.
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Financial modeling (in my very limited experience), was all about NPV. That helps select the right projects, understand the most sensitive variables when deciding what/how to change things, and to understand the impact of risk scenarios. The best planning in the world however will not ensure success unless the project outcome is well managed.
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1 reply by Suzi Shah
Apr 10, 2019 4:21 AM
Suzi Shah
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Thank you Keith, appreciate your thoughts!
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In My experience as a PM , Financial Management has been the one that I have done .
creating and managing budgets, forecasting and accruals are generally what I do, along with approaching the board for approval of Business Proposals.

So yes , if you efficiently manage your project's finances including contingencies, you can tick off your cost management side of things.

I haven't been lucky or unlucky to be involved in Modelling as yet . So I only hold basic knowledge that i gained in my PMP studies with regards to NPV or Earned Value Management. no practical experience
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1 reply by Suzi Shah
Apr 10, 2019 4:53 AM
Suzi Shah
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Thank you Deepesh, appreciate your views!
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Apr 09, 2019 4:44 PM
Replying to George Freeman
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Suzi,

I’m not completely positive on the context of your question. If you are addressing the financial planning and budgeting responsibilities of a project manager, then I would view "Financial Modeling" (e.g. Earned Value Analysis) as a subset of "Financial Management" and therefore NOT a mutually exclusive element for comparing pro’s/con’s – as your question suggests.

However, if you are stating "Financial Modeling" in the context of a Project’s Financial Value Proposition then they are different animals, but still not something that should be compared apple-to-apple. If this is your context, then I view both "Financial Modeling for the purpose of the value proposition of the project" as important as the "project managers responsibility to financially manage the project". Without the financial value proposition, you will not likely have a project; and without financial management, you will likely have a failed or distressed project.

Hope this helps.
Thank you George, appreciate your advice, couldnt agree more, the context differs for various reasons, technically they are (supposed to be) different subjects but again functionally they are/may be intertwined in many organisations depending on industry, size etc.
Network:1614



Apr 09, 2019 6:08 PM
Replying to Keith Novak
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Financial modeling (in my very limited experience), was all about NPV. That helps select the right projects, understand the most sensitive variables when deciding what/how to change things, and to understand the impact of risk scenarios. The best planning in the world however will not ensure success unless the project outcome is well managed.
Thank you Keith, appreciate your thoughts!
Network:1614



Apr 09, 2019 11:51 PM
Replying to Deepesh Rammoorthy, PMP®AgilePM®
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In My experience as a PM , Financial Management has been the one that I have done .
creating and managing budgets, forecasting and accruals are generally what I do, along with approaching the board for approval of Business Proposals.

So yes , if you efficiently manage your project's finances including contingencies, you can tick off your cost management side of things.

I haven't been lucky or unlucky to be involved in Modelling as yet . So I only hold basic knowledge that i gained in my PMP studies with regards to NPV or Earned Value Management. no practical experience
Thank you Deepesh, appreciate your views!
Network:1796



I hope you are not using "veteran" as synonim of "old man"....jejejeje. Financial has no sense in isolation. What are we creating with a project?. A solution for a business need. Solution benefits is what determines the success of the project, where benefit it does not mean money only. I can put here my personal experience in project where financial it does not matter at all due to, for example, the solution was intended to capture the market share.
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1 reply by Suzi Shah
Apr 10, 2019 7:22 AM
Suzi Shah
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Open to own interpretation, I guess whichever suits (you), respect is definitely the intended meaning in most context I use. (But, hang on, if you think that way yeah I guess suits you very well!! ;-) ) Thanks Sergio for your views!
Network:1614



Apr 10, 2019 5:41 AM
Replying to Sergio Luis Conte
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I hope you are not using "veteran" as synonim of "old man"....jejejeje. Financial has no sense in isolation. What are we creating with a project?. A solution for a business need. Solution benefits is what determines the success of the project, where benefit it does not mean money only. I can put here my personal experience in project where financial it does not matter at all due to, for example, the solution was intended to capture the market share.
Open to own interpretation, I guess whichever suits (you), respect is definitely the intended meaning in most context I use. (But, hang on, if you think that way yeah I guess suits you very well!! ;-) ) Thanks Sergio for your views!
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1 reply by Sergio Luis Conte
Apr 10, 2019 8:00 AM
Sergio Luis Conte
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Suzi, just to comment, now I read your answer, I did not take it as a lack of respect.
Network:1796



Apr 10, 2019 7:22 AM
Replying to Suzi Shah
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Open to own interpretation, I guess whichever suits (you), respect is definitely the intended meaning in most context I use. (But, hang on, if you think that way yeah I guess suits you very well!! ;-) ) Thanks Sergio for your views!
Suzi, just to comment, now I read your answer, I did not take it as a lack of respect.
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1 reply by Suzi Shah
Apr 10, 2019 9:58 AM
Suzi Shah
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Ok great, thanks Sergio, please excuse my sarcastic response too. Like others with connections/born in generations of public servants meant my respect also especially goes to the deserved ex-special forces. :-)
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Apr 10, 2019 8:00 AM
Replying to Sergio Luis Conte
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Suzi, just to comment, now I read your answer, I did not take it as a lack of respect.
Ok great, thanks Sergio, please excuse my sarcastic response too. Like others with connections/born in generations of public servants meant my respect also especially goes to the deserved ex-special forces. :-)
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1 reply by Sergio Luis Conte
Apr 10, 2019 10:10 AM
Sergio Luis Conte
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Please do not apologize. I understood your point. My clarification was just because as you know "a cold letter can be misinterpreted".
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