PROJECT MANAGEMENT A FINANCE & MANAGEMENT SPECIAL REPORT BUSINESS WITH CONFIDENCE

PROJECT MANAGEMENT
A FINANCE & MANAGEMENT SPECIAL REPORT
SR33 | JUNE 2011
BUSINESS WITH CONFIDENCE
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PROJECT MANAGEMENT
A special report published by:
Finance and Management Faculty
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London EC2R 6EA
T +44 (0)20 7920 8508
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Chris Jackson
Head of faculty
T +44 (0)20 7920 8525
E [email protected]
Emma Riddell
Technical manager
T +44 (0)20 7920 8749
E [email protected]
Rick Payne
Finance direction programme
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E [email protected]
Caroline Wigham
Services manager
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E [email protected]
The aim of this series of special reports is
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of a topical theme within the subject areas
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ISBN 978-0-85760-268-8
FOREWORD
SUCCESSFUL PROJECTS
Projects are a key way of working in businesses across all sectors these days. In
fact, I imagine that there are very few of us that have not contributed to a
project at some point in our careers.
There are myriad roles that you may perform in a project, such as sponsor,
champion, steering group member, project lead, project member, project
accountant and more. Since this report is intended to be an overview of the
key aspects of project management it should provide a great starting point for
any professional accountant about to perform any of these functions.
The report also contains details of recent developments, current issues and
suggestions for further reading, so hopefully there will be something for the
more seasoned project team member too.
This report specifically addresses formal projects; however much of the
information may also be useful in informing other, less formal, assignments.
The tools and techniques simply need to be tailored to the ‘project’ in hand.
The ICAEW chartered accountants that I spoke to when scoping and
reviewing this report provided some words of warning that you might like to
heed when embarking on your first project:
• human factors are key. Poor stakeholder management, lack of a project
sponsor and/or failure to secure buy-in across the business are all quick
routes to failure. (Human aspects are discussed throughout the report, but
for further reading on this important issue see the faculty references on page
20, particularly the Finance & Management special report on managing
change);
• be warned, project management is about a lot more than using software to
plan and coordinate activities. IT is a useful tool, but can’t do the entire job
for you; and
• project management is a professional discipline and major projects will
require a degree of expertise and experience.
If this report has whet your appetite for more detailed coverage of any area of
project management then please let me know and we can look at producing
further guidance on this topic.
EMMA RIDDELL
Chris Jackson is head
of faculty, Finance &
Management
Faculty, ICAEW.
Emma Riddell is
technical manager,
Finance &
Management
Faculty, ICAEW.
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PROJECT MANAGEMENT
CONTENTS
02 INTRODUCTION
AIMS OF THE REPORT
The rationale, aims and format of the report.
03 BACKGROUND
OVERVIEW AND ISSUES
This section gives an overview of the different theories
behind project management, providing a basis for the key
areas dealt with by this report.
05 GETTING STARTED
PROJECT INITIATION
When choosing how to tackle a project, it is useful to make
an initial choice between a ‘top-down’ and a ‘bottom-up’
approach. This section outlines the key differences between
these processes.
07 PREPARING A PROJECT
PROJECT ANALYSIS TOOLS
Projects need to be justified in order to go ahead. Here,
several tools are discussed that can help to analyse project
viability.
12 ORGANISATION
PLANNING AND SCHEDULING
This section analyses different methods for planning a
project to help ensure each stage is completed adequately
and on time.
14 MANAGEMENT
TEAMS AND ORGANISATION
Communication and motivation are essential to good project
delivery. This section outlines the impact of individual goals,
organisational culture and management approach on project
management.
15 KEEPING TRACK
MANAGEMENT AND CONTROL
Projects frequently encounter problems. This section offers
methods of monitoring project performance and dealing
with any issues that may arise.
17 IMPROVING THE PROCESS
BETTER PROJECT MANAGEMENT
This report has taken you on a whistle-stop tour of the
process, challenges and tools of project management. This
section offers some ideas for making your projects even
more successful.
18 AUTHOR’S RESOURCES
REFERENCES
19 ICAEW RESOURCES
BOOKS, JOURNAL ARTICLES AND MORE
20 FACULTY RESOURCES
FACULTY PUBLICATIONS
21 SPECIAL REPORTS
PREVIOUS SPECIAL REPORTS
FINANCE & MANAGEMENT SPECIAL REPORT June 2011
01
INTRODUCTION
AIMS OF THE REPORT
This introduction summarises the aims, approach and intended readership
of this report.
Rationale for the report
Project management was once regarded as a special
form of operations management for project-based
industries such as construction and civil engineering,
where all business was defined in terms of projects.
These days all organisations undertake a growing
amount of activity that is defined in terms of projects,
such as change management, systems development,
business acquisitions and corporate events, to name
but a few. They also have more traditional projects
like buildings and site development, new locations
and relocations from time to time. Often projects
involve setting up cross-functional teams outside the
normal organisational structure of the enterprise.
Such teams may have specialist members or
representatives from outside the organisation either
working in occasional advisory roles or fully assigned
to the project team.
Thus all business professionals now need a grasp of
the principles of project management and a
familiarity with the key tools and techniques designed
to manage projects successfully.
Aims
This report is aimed at finance professionals and
provides both an overview of project management
and a discussion of current issues. These are the areas
that project management practitioners deal with on a
day to day basis and include problems and challenges
that most project teams face.
The finance professional may interact with project
teams and managers in different ways and at
different levels in the organisation. This report aims
to demystify some of the terms commonly used in
project management and provide a list of resources
for further reference for those who require a more
detailed account of the problems, tools, techniques
and professional standards.
Format of the report
The report starts with an overview of the context,
characteristics, concepts and challenges of projects.
This may be familiar to many readers who have either
studied project management formally or experienced
it at first hand. Current issues are identified from
both a practitioner and academic perspective,
recognising that while we now have quite a large
body of knowledge in this area, there remain major
gaps in our knowledge that researchers in the field
continue to work on.
The report then summarises knowledge and deals
with the issues identified in the overview under five
sequential headings, from the initiation of project
proposals, through project analysis, planning and
scheduling, to project teams and organisation and
managing and controlling projects. These five
sections will draw on case examples to illustrate tools
and techniques and best practice. A final section
draws conclusions aimed at helping finance
professionals and their organisations to improve their
project management practice.
NB Numbered references given throughout the
report are listed in full on page 18. The resources
section on pages 19 and 20 offers further sources of
information, help and guidance on project
management.
ABOUT THE AUTHOR
Elaine Harris is a professor of accounting and management and director of
Roehampton University Business School.
She previously taught project management at De Montfort University, where she
was Head of Leicester Business School’s Graduate Centre. Elaine has a track record of
innovative project management and department growth under her supervision.
Her expertise focuses on strategic decision making and project risk assessment
using group-based cognitive mapping techniques, with recent publications, singly:
Strategic Project Risk Appraisal and Management (Harris, E., Farnham: Gower) and
jointly: Managerial Judgement and Strategic Investment Decisions (Harris, E, Emmanuel,
CR, and Komakech, S, Oxford: Elsevier), published in 2009.
02
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BACKGROUND
OVERVIEW AND ISSUES
Project management has been theorised in different ways by nine schools of
thought. This section gives an overview of the concepts and issues that these
schools offer, providing a basis for the key areas dealt with by this report.
Context and characteristics of projects
There are many ways of defining what we mean by a
project, from a broad definition of any activity with a
start and a finish to an Oxford English Dictionary
definition, ‘an enterprise that is carefully planned to
achieve a particular aim’.
When we consider the incidence of apparent
project failure and the reasons why projects may not
succeed, it is clear that they are not all ‘carefully
planned’. However, less disputable is having ‘a
particular aim’ which is often required by a particular
time for some benefit. This may be a product or
service for a client (internal or external) or customer,
or it may be a solution to a problem, the staging of
an event or organisational or cultural change.
Even when we start with the broadest definition of
an activity with a start and a finish, this still causes
problems where the end of the activity is hard to
ascertain. Sometimes the ‘end’ is simply the end for
this project team, when it hands over the ‘product’ to
another party, for example when a new product is
developed and handed over to an operating unit for
commercialisation.
To further complicate matters something we might
think of as a project, like staging the Olympic Games,
may actually be a large number of separately
identifiable projects, eg, building a stadium, building
an Olympic village for athletes to stay in during the
competition, local transport infrastructure, promotion
and ticket sales etc. All of these activities need to be
coordinated, which may be called programme
management.
This example also highlights a key feature of
projects and project co-ordination, one of multiple
stakeholders or clients, where a number of different
groups of people will participate in the project or
event, each with different levels of power and
influence and different expectations. In short, it is
often people that both complicate projects and
determine how successful a project might be.
So if you thought project management was all
about using software to plan and schedule activities
and monitor progress using critical path analysis,
which can be undertaken from a project office, then
think again!
Programme management is the co-ordination of a
portfolio of related projects, which has a more
strategic and long-term focus than individual projects
within the portfolio might have. Examples can be
found in IT services, change management and
relocation, where the projects often share resources
and/or stakeholders.
Projects are often thought of as a sequence of
activities with a life cycle from start to finish. One of
the biggest problems at or before the start is being
able to foresee the end, at some time in the future.
Uncertainty poses a range of issues for project
planning and risk assessment. If we think of projects
as temporary endeavours, not all outcomes may be
measurable by the end, where lasting benefits may
be desirable.
This provides the problem of how we judge
projects to be successful. Performance of projects has
typically been measured by the three constraints of
time, money and quality. While it may be easy to
ascertain whether a project is delivered on time and
within budget, it is harder to assess quality, especially
when a project is first delivered. Many projects, even
those that were famously late and well over budget
like the Sydney Opera House, can become icons in
society and be perceived as very successful after a
longer period of time.
Figure 1 ALTERNATIVE SCHOOLS OF THOUGHT ON PROJECT MANAGEMENT
SET
SCHOOL OF THOUGHT
CONCEPT
Performance
Optimisation
Modelling
Contingency
The project as a machine.
The project as a mirror.
The project as a chameleon.
Business
objective
Success
Governance
Marketing
The project as a business objective.
The project as a legal entity.
The project as a billboard.
People
Behaviour
The project as a social system.
Solution
Process
Decision
The project as an algorithm.
The project as a computer.
Source: Turner, Huemann, Anbari and Bredillet, 2010, p8. See reference 1 on page 18.
FINANCE & MANAGEMENT SPECIAL REPORT June 2011
03
‘Many projects, even those that were
famously late and well over budget, can
become icons in society and be perceived as
very successful after a longer period of time’
The classic issue in project management is that
only a small minority of projects achieve success in all
three measures, so academics have been searching
for better ways to measure the success of projects,
which involves unpicking ‘quality’ and establishing in
whose eyes projects are perceived to succeed or fail.
Concepts
How we perceive projects may influence how we manage
them. Turner et al identify nine perspectives or schools of
thought on project management, grouped into four sets
(see Figure 1, previous page, ‘Alternative schools of
thought on project management’).1 These perspectives
are not necessarily mutually exclusive and each may be
more suited to a particular type of project.
Project typology
Whilst the definition of a project as a temporary activity
with a start and finish implies that each project will be
different in some way from previous projects, there are
many which share common characteristics. Figure 2
(below) shows the most commonly experienced projects,
informed by finance professionals in a recent survey. Each
is marked with a suit from a pack of cards which attempts
to classify projects as follows:
• hearts – need to engage participants’ hearts and minds
to succeed;
• clubs – need to work to a fixed schedule of events;
• diamonds – products need to capture the imagination
and look attractive in the marketplace; and
• spades – physical structures, eg buildings and roads.
Challenges
The key issues in managing projects are identified here
and dealt with in the remaining sections of the report as
indicated:
• project definition and selection;
• complexity, ambiguity and risk;
• planning and budgeting;
• interdisciplinary teams and organisational behaviour;
• stakeholder relationship management; and
• performance measurement, governance and audit.
Project goals
It is important to identify clear project goals and
objectives, that answer the why and how questions, not
just the what. For example ‘relocation’ is the what or
type of project, but the business goal or project rationale
could be cost reduction, shifting production nearer
customers or new market entry. It is worth spending
time at the outset on thinking through the rationale and
then emphasising this message throughout.
(For more information on the human factors involved in
project management see the further reading materials on
pages 19 and 20).
Figure 2 TYPES OF PROJECT
04
TYPE OF PROJECT
CHARACTERISTICS
IT/systems development
Advanced technology manufacturing or new information systems
♦
Site or relocation
New building or site, relocation or site development
♠
Business acquisition
Takeovers and mergers of all or part of another business
♥
New product development
Innovation, R&D, new products or services in established markets
♦
Change, eg closure
Decommissioning, reorganisation or business process redesign
♥
Business development
New customers or markets, may be defined by invitation to tender
♥
Compliance
New legislation or professional standards, eg health and safety
♣
Events
Cultural, performing arts or sporting events, eg Olympics
♣
SUIT
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GETTING STARTED
PROJECT INITIATION
Projects can be initiated at different levels in the organisation using a ‘top-down’ or
‘bottom-up’ approach. This section outlines the key differences between these
processes.
Projects as strategy implementation
In project-based organisations, traditionally for
example in construction and civil engineering and
more recently in software development and logistics,
all new business will be defined as projects.
Increasingly other organisations that have continuing
operations in manufacturing or services also use
projects to implement strategy, for example business
acquisitions, new product or site development or
process change.
Some of the ideas for these projects will be
generated by senior management and some by
customer-facing employees at varying levels in the
organisation, so project initiation can be top-down or
bottom-up. Whichever they are, they should be
properly defined before they are approved. As most
projects of any significance require an allocation of
resources, both human and financial, it is usual for
organisations to use a standard investment appraisal
procedure for this purpose. (See SR27 on investment
appraisal).2
Project appraisal and selection
To generate a suitable project proposal for this
purpose, the project needs to be scoped and
alternative options may need to be developed from
which the most suitable option may be selected. The
way the project is defined and described in
presenting a business case for investment can
influence decision makers. It is important for senior
managers, both financial and non-financial to
understand the underlying psychological issues in
managerial judgement, such as:
• heuristics (using mental models and personal bias);
• framing (use of positive, negative or emotive
language in the presentation of data); and
• consensus (use of political lobbying and social
practice to build support for a case).
‘The way the project is defined
and described in presenting a
business case for investment
can influence decision makers’
These behaviours can be positively encouraged to
draw on the valuable knowledge and experience of
organisational members, or impact negatively, for
example status quo bias creating barriers to change.3
Bottom up
In many organisations bottom-up ideas are translated
into approved projects by a team at business unit level
working up a business case using standard capital
budgeting templates and procedures for group board
approval. There are feedback loops and projects may
be delayed while sufficient information is gathered,
analysed and presented. This process can take days
(for example corporate events), months (for example
new client or business development) or even years
(for example new products where health and safety
features in approval such as drugs or aeroplanes).
Where delay is feasible, where the opportunity will
not be lost in competitive market situations, a ‘real
options’ approach is possible. The use of the term real
options here is an approach or way of thinking, not a
calculable risk as in derivatives. It simply means that
Figure 3 STRATEGIC INVESTMENT APPRAISAL PROCESS
STAGES
ANALYSIS/DECISION
ACTIVITY
1. Ideas and
opportunities
Project
generation
2. Preliminary
assumptions
Project outline
(business case)
3. Divisional
executive
team views
Decision to
proceed or not
(early screening)
4. Detailed
assumptions
DCF analysis
and evaluation
5. Divisional
executive team
judgement
Project appraisal
paper presented
to group board?
6. Group board
criteria (including
hurdle rate)
Group board
decide whether
to fund or not
7. Measured
outcome
Post-audit
review
FEEDBACK
(executive knowledge
adjustment)
Source: Harris (1999)
FINANCE & MANAGEMENT SPECIAL REPORT June 2011
05
‘Where projects are initiated by senior
management, the usual appraisal process may
not be carried out as there may be external
pressure brought to bear on a chief executive
or finance director’
there is an option to delay, disaggregate or redefine the
project decision to maximise the benefit of options, for
example to build in ways of gaining further business
with the same client. This may be more important in
difficult economic times as capital may be rationed.
Project selection may be difficult where capital is
rationed and projects competing for funding do not
have directly measurable results in profit terms, such as
IT or infrastructure projects. Where projects need to be
ranked according to non-financial priorities, clear criteria
need to be established against which projects can be
evaluated. Methods from operations research such as
multiple criteria decision analysis (MCDA) or analytic
hierarchy process (AHP) may be used to model benefits
and priorities.4
06
Top down
However, where projects are initiated by senior
management in a top-down process, the usual steps in
capital investment appraisal may not be followed, as
there may be external pressure brought to bear on a
chief executive or finance director, for example in
business acquisitions, strategic alliances etc. Appraisal
procedures may be over-ridden or hijacked in such
cases, with often negative consequences in terms of
shareholder value (see Figure 3, previous page).
The justification for such projects is often argued on a
financial basis, but evidence shows that the target
company shareholders make more money out of these
than those in the bidding company. This is a key risk that
may be picked up by internal audit.
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PREPARING A PROJECT
PROJECT ANALYSIS TOOLS
Projects need to be justified in order to go ahead. Here, several tools are discussed
that can help to analyse project viability.
Project life cycle
There are differences in project management
literature in terms of the precise number and
labelling of the stages that a typical project goes
through. As with the investment appraisal process
shown in Figure 3 (page 5), this can depend upon
the nature or type of project. It can be a simple
define, plan, execute and deliver or, using the PMI®
Body of Knowledge (PMBoK®), plan, organise,
implement and control.5
One problem with the latter is that it largely
ignores what happens before a project gains board
approval to go ahead. The other is that it implies
implementation and control are two separate steps,
when control should actually be a continuous process
throughout implementation.
The five-step life-cycle used in Figure 4 (right)
overcomes these problems and recognises both the
pre-project stage, where the initial idea is developed
sufficiently from a concept to a project proposal or
business case, and a post-project stage where
learning is derived from a post-project review. There
are a number of analytical techniques that may be
used at various stages in the life cycle. Here we deal
with the analysis that is most beneficial at the
initiation and planning stages, before significant
resources are committed to the project or contracts
are signed.
SWOT analysis
Most readers will be familiar with this form of
strategic analysis, identifying key strengths and
weaknesses internal to the organisation and the
opportunities and threats in the external
environment. The latter can be informed by a PESTLE
analysis, identifying key political, economic, social,
technical, legal and environmental factors. This can
be applied at a project level to help justify a project
and contribute to the business case, or to identify
significant risks that need to be managed or may not
be acceptable, thus saving further expense by
rejecting the idea or referring it back for redefinition.
An example of a project SWOT is shown in Figure 5
(right).
Other supplementary analysis that may be useful
input to the SWOT includes capability analysis
(especially where specialist skills are required), value
or supply chain analysis (especially for new product
development projects) and constraint analysis (for
example use of linear programming models where
resources are in scarce supply; see page 16). The
constraints most often identified in project
management are time, money and quality (especially
where health and safety are important). The third
area can be a major issue, so quality will be
considered further in this report.
FINANCE & MANAGEMENT SPECIAL REPORT June 2011
Figure 4 PROJECT LIFE CYCLE
STAGE
ACTIVITY
Initiation
An idea or concept for a possible project is
identified and developed (this may involve a
feasibility study or generation of alternative options
for project selection).
Plan
A project is designed, resources and requirements
specified and approved.
Execution
The project is organised and the work required to
deliver the project is undertaken (progress is
monitored and controlled throughout this stage).
Completion
The project is delivered or handed over to the client
and final accounts settled.
Review
A post-project review is undertaken to learn from
project experience (whether viewed as success or
failure).
Figure 5 SWOT ANALYSIS FOR ACQUISITION-TYPE PROJECT
STRENGTHS
• Good strategic fit.
• Reasonable familiarity with
territory.
• Existing customers known to be
expanding into target
geographic areas (supports need
for presence in region).
• Cash available to fund
acquisition.
• Support from institutional
investors.
OPPORTUNITIES
• Established/attractive customer
base.
• Brand strength in local markets.
• Economies of scale.
• Reduced delivery distances from
UK base.
• Greener profile.
WEAKNESSES
• Lack of business acquisition and
relevant due diligence
experience.
• Limited working knowledge of
culture and language.
• Lack of change management
expertise.
• Exposure to currency risks.
THREATS
• Key local knowledge resides
with outgoing owner/managers.
• Outdated information systems.
• Lack of investment in innovative
product development.
• Challenging employment law
and practice.
07
‘Many projects have several groups of people
who are interested in some way, some of
whom can exert influence over it and even
prevent it from achieving its aims’
Complexity analysis
Shenhar and Dvir use a diamond-shaped diagram to
analyse four dimensions of a project:
• novelty (upgrade or derivative, new or
breakthrough);
• complexity (assembly, systems or array);
• technology (low-, medium-, high- or super-hightech); and
• pace (regular, fast, time-critical or ‘blitz’).6
Each dimension is mapped on a scale of low to high,
resulting in a diamond shape as shown in Figure 6
(below). This is most applicable to new product
development projects, but can be applied to any
project with a little adaptation. The analysis works
best when it captures the judgement of those with
the best knowledge of a proposed project and other
projects of a similar type.
While it appears to use mathematical measures
plotted on a graph, the inputs may be derived from
group discussion or individual perceptions, so it is
akin to other qualitative techniques that result in a
map or graph using nominal or ordinal scales. This
diamond analysis can help to scope a project at the
early stages of project definition and can later be
used to develop appropriate risk management
strategies.
For high novelty projects such as the shift to digital
broadcasting there is a need for TV companies to
educate and inform customers. For high-tech projects
such as London Heathrow Airport Terminal 5, there is
a need to prototype or pilot test new systems. For
highly complex projects such as the Channel Tunnel,
there is a need for advanced systems and
communications. For time-critical projects such as the
2012 Olympics, there is a need for accurate time
estimations and critical path management. Thus
identifying the diamond pattern at an early stage can
lead to risk management strategies that will directly
impact on project success.
Stakeholder analysis
Most projects will have a main client, whether an
external customer, user or consumer, or an internal
client. However, many projects have several groups of
people who are interested in the project in some way,
some of whom can exert influence over it and even
prevent it from achieving its aims.
Managing and communicating with these groups is
a key part of project management, dealt with in the
stakeholder relationship management section of this
report (page 16). Identifying their level of interest
and influence should be done before the project is
approved and should be used to inform project
planning.
Figure 7 (below) provides a checklist of possible
project stakeholders and Figure 8 (opposite) shows an
example of stakeholder analysis using the two
dimensions of interest and power. This can be applied
to most types of projects, but where stakeholder
relationship management is both challenging and
critical to the success of the project a multidimensional model may be used, for example the
stakeholder wheel.7 Strategies for dealing with the
most influential stakeholders should be decided at
the planning stage (see page 16).
Figure 7 PROJECT STAKEHOLDER CHECKLIST
Figure 6 DIAMOND ANALYSIS
• Employees (skills, security, pay, conditions)
Complexity
• Managers (achieving results/bonus/promotion)
• Support departments (HR, training/development)
• Investors (shareholders, banks and lenders)
Novelty
Technology
• Suppliers (internal and external)
• Consultants (advisors and facilitators)
• Customers (internal and external)
• Consumers (end of the value chain)
• Community (neighbours or society generally)
Pace
Source: adapted from Shenhar and Dvir (2007: p14)
08
• Government (local, national, regional)
• Others (eg, media, special interest groups)
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‘Identifying the diamond pattern at an early
stage can lead to risk management strategies
that will directly impact on project success’
Figure 9 GOALS AND METHODS MATRIX
Figure 8 STAKEHOLDER ANALYSIS
High
Methods well defined?
• Employees in
sales and service
Manage closely
Keep satisfied
POWER
• Government
• Operations
• Existing
• Suppliers
Monitor minimum
effort
Keep informed
No
Yes
Type 2 projects
Type 4 projects
Product
development
Research
Change
WATER
AIR
Type 1 projects
Type 3 projects
Engineering
Systems
development
EARTH
FIRE
Yes
No
• Competitors
• Local community
Low
INTEREST
High
Goals well defined?
Source: Turner et al (2010: p27)
Financial analysis
The main tools of financial analysis applicable to
projects at the initial stage will be cost, volume, profit
(CVP) analysis, break-even analysis, marginal cost or
‘relevant’ cost for decision making, discounted cash
flow (DCF) and scenario or what if? analysis. These
are well understood by most finance professionals
and explained in finance texts so are not illustrated in
this report.8 The key challenge is for project
managers to have access to this analysis and a project
accountant to help them interpret it.
Ambiguity analysis
Turner and Cochrane proposed a two-dimensional
matrix for analysing the ambiguity in project goals
and project methods.9 They labelled the four
quadrants according to the type of project and
related them to the elements, earth, water, fire and
air (Figure 9, above right).
Engineering or construction projects were
categorised as type 1 as the goals could be well
defined and the methods of achieving them may also
be well-defined. This may assume a low level of
novelty in the design. If we think about bridges or
tunnels using new materials or methods, they could
be more type 2, and new civic buildings or urban
development could be more of a type 3.
New product development (NPD) projects were
categorised as type 2 with clear goals but the means
of production or delivery not well defined. Systems
development projects were categorised as type 3
with well defined methods but unclear goals. Many
FINANCE & MANAGEMENT SPECIAL REPORT June 2011
IT projects have been found to fail due to clients
being unclear about their needs or the system
specification.
Research projects or change management were
categorised as type 4 as goals were not always clear
from the outset and methods might be untested
within the organisation or project team’s experience.
This matrix excludes events management, but they
might be analysed as type 1. Relocation projects may
be seen as a cross between type 1 engineering
projects if new buildings are commissioned and type
4 change if people are expected to move as part of a
re-organisation project.
Risk analysis
There is a common risk management framework in
business organisations that can be applied to projects
as well as continuing operations. The number and
labelling of steps might differ, but the process usually
involves:
1. identifying risks (where will the risk come from?);
2. assessing or evaluating risks (quantify and/or
prioritise);
3. responding to risks (take decisions, eg avoid,
mitigate or limit effect);
4. taking action to manage risks (adopt risk
management strategies); and
5. monitoring and reviewing risks (update risk
assessment and evaluate risk strategies).
Linking these to the project life cycle in Figure 4
(page 7), steps 1 and 2 form the risk analysis that
09
‘In analysing a project, the questions of what
it aims to achieve, for whose benefit and at
what cost we are doing it should be
addressed before deciding to proceed’
should be undertaken during the project initiation
stage, step 3 links to the planning stage, and steps 4
and 5 should occur during project execution. Risks
should also be reviewed as part of the project review
stage to improve project risk management knowledge
and skills for the future. Evidence from practice
suggests that steps 1 and 2 are rarely carried out
early enough in the project life cycle, step 5
monitoring is often undertaken in a fairly mechanical
way, and comprehensive review at project level is
hardly found to occur at all after the project has
ended, especially in non-project based organisations.
The difficulty in identifying the risks relating to
projects, especially at an early stage when the project
may not be well defined, is that no two projects are
exactly the same. However, using the project
typology in Figure 2 (page 4) it can be seen that
headline or strategic risks are likely to be similar for
projects of a similar type. Harris presents a range of
qualitative methods for project risk identification,
including cognitive mapping, and examples are given
for seven types of project.10
The main risk attributes for several types of projects
are summarised in Figure 10 (opposite).
Force field analysis
Where co-operation from employees or other key
stakeholders is required (the hearts and minds
projects), for example in change management or
restructuring projects, it can be beneficial to
undertake a force field analysis, first developed by
Kurt Lewin.
This involves identification of the driving forces for
the project (supporting factors) and the barriers or
resisting forces against change.11 Action can then be
planned to reduce the barriers and strengthen the
support, to move from the existing to a more
desirable state. Lewin’s three-step process of
10
unfreezing and removal of barriers and changing
mindsets of those involved is well-documented in
texts on change management.12
Other analytical tools
Other analytical tools applied to project management
at the initiation stage include fishbone analysis
(contributory factors in problem identification), six
sigma (used to reduce error rates in total quality
management) and decision trees (probability-based
outcomes modelling for projects with multiple decision
points). Most finance professionals will be familiar with
decision trees, but perhaps less so with six sigma,
which is also probability-based.
Six sigma relates specifically to quality improvement
projects, so is not a general project management tool.
The name comes from the tail in a probability
distribution, where there is a minute percentage of
observations that are six standard deviations from the
mean. The aim of this methodology, first developed in
Motorola, is zero tolerance of defects in production.
The reality is that higher tolerance is acceptable for all
but the most life-critical products, eg, aeroplane
engines, medical equipment and parachutes. Whilst six
sigma implies a tolerance of six standard deviations, in
fact 4.5 is often used, allowing a shift of 1.5 in the
mean, resulting in 3.4 defects per million.13 Critics
argue that six sigma can stifle innovation and does not
necessarily improve firm performance, though evidence
is still sought.14
In analysing a project, the questions of what it aims
to achieve, for whose benefit, at what cost and why we
are doing it should be addressed before a decision is
made. The next section, on project planning and
scheduling, deals with the detail of how the project will
be completed and when. The section following this, on
project teams and organisation, deals with who will
complete the work and how it will be co-ordinated.
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‘The difficulty in identifying the risks relating
to projects, especially at an early stage, is
that no two projects are exactly the same’
Figure 10 SUMMARY OF TYPICAL PROJECT RISKS
IT/SYSTEMS
DEVELOPMENT
RELOCATION
BUSINESS
ACQUISITION
NEW PRODUCT
DEVELOPMENT
Sponsorship/ownership
Management:
• Leadership
Management:
• Ability (target business)
• Familiarity with territory
Management:
• Capacity and availability
Personnel and staffing:
• Insufficient human resources
• Lack of skills/expertise
Employees:
• Loss of staff
• Loss of expertise
• Effect on morale
• Poor local labour market
Client requirements:
• Incomplete/unreliable
information
• Scope and complexity
• Unclear or unrealistic
expectations
• Changes in specification
Continuity:
• Current projects
Supplier:
• Quality of software supplier
• Product oversold
• Reliability (late delivery)
Infrastructure:
• Office equipment
• Capacity
Employees:
• Researcher/designer know-how
• Technical expertise
• Operations expertise
• Selling expertise
Customer profile:
• Quality/continuity
• Market position/competition
rules
Supplier:
• Production location
Scheduling and funding:
• Timescale (to reap rewards)
• Share/asset valuations and
likely bid price
Scheduling and funding
• Insufficient time for
implementation
Organisational impact:
• Culture
• Business procedures
Market response:
• Distributors/retailers
• Customers/end users
• Competitors
• Regulators
Scheduling and funding:
• Product life cycle
• Costing and pricing
• Timing/readiness for launch
Organisational impact:
• Scale of target company
relative to existing operations
• Strategic location
• Integration (with existing
operations)
• State of IT systems in target
company
• Compatibility (of business
culture)
Legal:
Legal:
• Protection of information (IP)
• Acquisition type and terms
• Stock exchange rules
• Reliability, validity, sufficiency
of base data for due diligence
FINANCE & MANAGEMENT SPECIAL REPORT June 2011
11
ORGANISATION
PLANNING AND SCHEDULING
This section discusses techniques for planning a project to help ensure each stage is
completed adequately and on time.
Work breakdown structure (WBS)
Before using any project planning and scheduling
systems, the project is normally broken down into the
component activities required. Where there have been
many similar projects completed before in a project-based
organisation, there may be a standard WBS template. In
other cases, this is often the hardest task, as it is not
always easy to predict what actually needs to be done to
complete a project at the outset, especially if there is a
high degree of novelty about the project.
However, if insufficient time and effort is spent thinking
through what work will be needed, the project risk is
likely to be far greater. It may be easier to define ‘bundles’
of work or groups of tasks, but they rarely fit into neat
stages as most text books on the subject suggest. When
addressing the question of work breakdown, many
project managers think of the functions or disciplines
required instead of the activities or tasks.
A typical WBS diagram is shown in Figure 11 (below)
for an event type project. This can follow a before, during
and after pattern, which may also fit projects like
relocation, where the actual move is seen as the event.
There are also typical stages in research and new product
development projects, but the stages in change
management or compliance projects may be less well
defined. Once activities have been identified they are
numbered as in Figures 11 and 12 (below and opposite)
to help facilitate planning, scheduling and budgeting.
Complex projects may be sub-divided into areas of work
that each has its own WBS.
Gantt charts
Once the work required has been identified through the
WBS, the duration and timing of activities is estimated
and can be displayed in a time chart made famous by
Henry Gantt. The example in Figure 12 shows that there
are many concurrent activities, even within what appears
from a WBS to be sequential. Such charts can provide a
useful visual overview of a project, and actual timings can
be superimposed to show progress, but the charts soon
become too busy and complicated for many complex
projects, so they have limitations in practice.
Networks and critical path analysis
Most finance professionals will be familiar with network
diagrams and the concept of a critical path. The critical
path is the route through the project activities where
there is no float or slack between earliest and latest
Figure 11 WORK BREAKDOWN STRUCTURE
International
conference
1 Plan
1.1 Select venue
1.2 Plan themes
and design
logo
1.3 Invite
speakers
1.4 Send out call
for papers
2 Prepare
3 Event
4 Review
2.1 Book venue
and catering
3.1 Registration
and delegate
services
4.1 Pay venue
and do
accounts
2.2 Set fee and
prepare
budget
3.2 Run sessions
4.2 Draft report
3.3 Social events
4.3 Obtain
feedback
3.4 Thank
speakers
4.4 Plan next
event
2.3 Collect and
review
papers
2.4 Promote
event on
web
2.5 Take
bookings
online
12
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‘When addressing the question of work
breakdown, many project managers think of
the functions or disciplines required instead
of the activities or tasks’
completion times, such that a delay in a prior activity on
this pathway will cause a delay in project completion.15
Network diagrams can be produced easily from any
project management software, such as Microsoft Project,
having input the data on activities, durations, prerequisite activities, showing earliest and latest start and
finish times and highlighting the critical path. The benefit
is that it allows what if analysis on activity timings, which
helps financial planning and budgeting. However, it may
be that personnel in a project management office (with
more technical and IT knowledge) undertake this analysis
without appreciating the human factors involved in coordinating the project and without communicating the
implications of the analysis to personnel on the ground.
Project management methodologies
There are a number of patented project management
methodologies, based on a prescriptive process model.
The most well known is PRINCE2™, developed by the UK
government’s Office of Government Commerce.16 There
are eight key processes in the PRINCE2 methodology,
with defined documentation including a project initiation
document (PID). The processes are:
• directing a project;
• planning a project;
• starting up a project;
• initiating a project;
• controlling a stage;
• managing product delivery;
• managing the stage boundaries; and
• closing a project.
The advantages of this methodology are that stages and
terminology are well-defined, with project milestones.
This fits the process perspective defined by Turner et al
discussed above, and introduces the notion of stage-gates
whereby interim deliverables can be measured and
reviewed.17 This provides review points at which to
decide whether to proceed, interrupt or abandon the
project. At review points, one of the main supporting
documents is the issues log, which records any queries,
concerns, client requests and agreed changes.
Figure 12 GANTT CHART FOR INTERNATIONAL CONFERENCE
MONTH Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Jan Jan Jan Feb Mar Apr
1-28 29 30 31
CODE
ACTIVITY
1
1.1
1.2
Plan
Select venue
Plan themes and design
logo
Invite speakers
Send out call for papers
1.3
1.4
2
2.1
2.2
2.3
2.4
2.5
Prepare
Book venue and catering
Set fee and prepare
budget
Collect and review papers
Promote event online
Take bookings online
3
3.1
3.2
3.3
3.4
Event
Registration and services
Run sessions
Social events
Thank speakers
4
4.1
4.2
4.3
4.4
Review
Pay venue; do accounts
Draft report
Obtain feedback
Plan next event
FINANCE & MANAGEMENT SPECIAL REPORT June 2011
EVENT
13
MANAGING TEAMS
TEAMS AND ORGANISATION
Communication and motivation are essential to good project delivery. This section
outlines the impact of individual goals, organisational culture and management
approach on project management.
Organisational structure and governance
The structure in a project-based organisation (PBO) is
likely to reflect the hierarchy of projects within
programmes within portfolios. A portfolio may be defined
as a group of projects sharing common resources, such as
capital equipment, systems, materials, know-how and
personnel. There may be a project management office
(PMO) at any or all levels which takes responsibility for
organising projects and project teams. So whilst projects
may be seen as temporary organisations, the PMO may
be a permanent structure.18
This is unlikely to be the case in other organisations,
where projects are seen as additional to rather than part
of continuing operations. Here the projects will cut across
the permanent structure, so drawing people in from a
number of functional or discipline based areas, such as
marketing, finance and operations, or from productbased divisions. The implication for members of project
teams working within such a non-project based structure
is that they may have both permanent reporting lines and
temporary or ‘dotted line’ reporting. In such cases there is
obviously scope for conflicting loyalties, which needs to
be taken into account in the performance management
system.
Individual project team members should agree personal
objectives designed to complete their part of the project
successfully with the project manager, which are then
incorporated into their annual objectives agreed with
their line manager. Project progress reports are then used
as evidence at staff appraisal meetings. Where there is a
performance related pay scheme these project outcomes
will become part of the overall performance evaluation
for that staff member. Where there is a group
performance scheme, eg in consultancy projects, there
may be a group event at which project success can be
celebrated and learning can be shared.
Organisational culture and management style
In long-established organisations the culture, defined as a
common set of values and beliefs, may be entrenched in
history, custom and practice, thus presenting barriers to
the very notion of change and innovation that projects
seek to bring about. The preference that organisational
members may have for the status quo will be challenged
by special projects, so projects will need strong support
from top management to enable project teams to cut
through these perceived barriers.
Thus project managers in traditional rule-bound
organisations, called Apollo by Handy, require a high level
of political awareness and excellent communication skills
to manage internal relationships.19 Project managers in
PBOs, which may fit Handy’s idea of Athena
organisations, may also need such skills to manage
external relationships, especially where clients or
customers come from organisations with a very different
corporate culture.20 Project managers in organisations
with autocratic leaders, named Zeus by Handy will
normally be aware that only projects seen to be
supported by the Zeus figure personally will have a good
chance of success.21
Interdisciplinary project teams and behaviour
Disciplines such as marketing, finance, engineering, IT etc
may have their own culture based on the dominant
philosophy or theoretical underpinning embedded in
relevant professional practice and qualifications. This may
be harnessed to advantage during group brainstorming
sessions, but can still present potential conflict and
threaten consensus, so requires astute leadership to keep
the project team focussed on the common goal.
Choosing an appropriate leadership style will depend
on the type of project, the organisational- and disciplinebased cultures or sub-cultures, the project manager’s
experience and personal role models, team members’
motivations and expectations and the geographical
dispersion of the team. Time pressure and performance
measures may intervene to prevent the preferred
leadership style being fully adopted. Management style
may be directive, facilitative or a balance between the
two and might change over the life of the project.
One of the most useful vehicles for managing project
teams and involving key stakeholders (or their
representatives) in stage-gate reviews is through a
steering committee. This will include the project
manager, project sponsor and possibly a project
accountant or representative of the finance function.
‘Choosing an appropriate leadership style
will depend on the type of project, the
organisational sub-cultures, the project
manager’s experience and team members’
expectations’
14
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KEEPING TRACK
MANAGEMENT AND CONTROL
Projects frequently encounter problems. This section offers methods of monitoring
project performance and dealing with any issues that may arise.
Routine monitoring
Project management requires continuous progress
monitoring of activities and involves:
• activities started and due but not started on time
(daily or weekly activity schedules);
• activities completed, slippage on activities and
estimated completion times;
• costs incurred, committed or likely to be incurred,
including additional costs as a result of accelerating
or ‘crashing’ late or critical activities (budget
reports);
• revisions to plans and cost estimates (project outturn);
• testing of project output, safety checks, regulatory
and client feedback;
• project risk registers; and
• periodic progress reports to senior management and
other key stakeholders.
Whilst measurement of percentage completion is
standard practice in construction projects, it is
obviously much harder to ascertain in IT or change
management projects. However, the same tools that
are used in planning, such as Gantt charts or critical
path analysis, may be used to record actual durations
and timing of activities, thus becoming more dynamic
control techniques.
Types of project control
Project control may be broadly categorised as:
• schedule control;
• budgetary control;
• quality control;
• risk monitoring; and
• performance measurement.
Finance professionals will no doubt be aware of the
challenges that budgetary control brings, especially in
non-project based organisations where management
accounting is departmentally based and costs may not
be easily identified to specific projects. However,
modern management accounting software has made
multiple coding levels, to departments, cost lines and
projects more feasible. Universities for example are
not PBOs as such, but have to cost research and other
income generating projects at full economic cost and
report on actual expenditure to funding providers.
Governance structures vary widely in project based
and project oriented organisations, depending on size,
ownership, industry, regulation and history.
Government owned enterprises may adopt
bureaucratic project controls using PRINCE2™
methodologies and report through committee
structures. Use of PRINCE2™ has also become
common practice in IT projects and other sectors,
especially where the organisation has dealings with
FINANCE & MANAGEMENT SPECIAL REPORT June 2011
public sector bodies and has invested in PRINCE2™
accredited training. There is a standard review process
known as the OGC Gateway™ review, again
developed for the public sector (Figure 13, below).
This formal approach lends itself to scrutiny by
internal audit, but there is no conclusive evidence that
it actually improves firm performance.
Problem-solving
Problems commonly experienced in project
management in addition to general uncertainty
include:
• timing (project behind schedule, risking late delivery
penalties);
• technical (specification or installation);
• financial (overspending, funding cuts or bankruptcy
of contractors);
• crisis or emergency (unforeseen circumstances, eg
accidents);
• emerging problems (including opportunities which
can be just as problematic if unforeseen); and
• behavioural problems (people not performing as
expected or desired).
Figure 13 OGC GATEWAY REVIEW PROCESS
RISK POTENTIAL ASSESSMENT
ASSESSMENT MEETING
SET UP REVIEW TEAM LOGISTICS
PREPARE REVIEW
PLANNING MEETING
UNDERTAKE REVIEW AND DRAFT REPORT
FINAL REPORT
Adapted from: The Office of Government Commerce,
www.ogc.gov.uk. Accessed 10/01/2011.
15
‘The formal approach to review lends itself to
scrutiny by internal audit, but there is no
conclusive evidence that it actually
improves firm performance’
The project management response to problems might
follow a three-step process:
1. problem definition (diagnosis);
2. solution generation and evaluation (analysis); and
3. decision making and implementation (action).
Techniques for problem-solving might include:
• brainstorming (with or without the nominal group
technique;22
• cognitive mapping (a diagrammatic representation
of the problem;23
• modelling:
- simulation (computer based replication of a
business process or product);
- linear programming (mathematical algorithm
for optimisation of financial results with
multiple constraints such as scarce resources);
- network analysis (sequencing diagram showing
activities that can be worked on concurrently
and those that have prerequisites or
dependencies in a chain of events – shows the
critical path described above);
- programme evaluation and review technique
(PERT, a more sophisticated form of network
analysis, designed by the US Navy for its Polaris
nuclear submarine project in the 1950s);
- decision trees (shows the branches or routes
possible from each of a number of decision
points, with each assigned a probability and
outcome, used to assess the expected overall
outcome from a sequence of decisions); and
- what if? analysis (testing the result of changes in
assumptions on an uncertain future outcome, eg
project cash flow, before making a decision);
Figure 14 AUDIT VERSUS PROJECT REVIEW
16
AUDIT PROCESS
PROJECT REVIEW
PROCESS
• Were the correct
procedures followed (a
compliance issue)?
• Is the documentation
adequate (to show an
audit trail)?
• Has negative feel to it.
• Not using a blame
culture, but emphasis
on learning
• What can be done
differently/better next
time (problem-solving
approach)?
• More positive feel to it.
• fishbone analysis (based on cause and effect); and
• decision support systems (including expert systems).
The first two are qualitative and suit issues of risk and
uncertainty, lending themselves to behavioural or
people problems, where the others are more
quantitative and suit more technical and scheduling
problems.
Stakeholder relationship management
Stakeholder analysis was introduced above, with
typical project stakeholders identified in Figure 7
(page 8). Strategies for stakeholder relationship
management are designed to gain commitment to
project goals and might include:
• consultation (especially key where employees are
affected, eg relocation and restructuring);
• awareness-raising, eg through briefings,
newsletters;
• focus groups, discussions, road-shows (especially for
new product development);
• involvement (gaining commitment by negotiation
or inclusion in the core or wider project team);
• feedback (to and from customer groups);
• compromise (where consensus is not achievable);
• information, training and support (eg, user guides
for new systems);
• help-line or help-desk (eg, IT projects); and
• mentoring (eg, for people taking on new roles in
restructuring or change management projects).
Project closure
The activities to be carried out at the end of the
project are:
• final meeting with project team and client;
• formal agreement or acceptance of deliverables by
client;
• post-project review meeting (including celebration
of success if appropriate);
• final project report or other project documentation
including user guides, eg for IT projects;
• disposal, return or relocation of project assets, eg
plant and equipment;
• appraisal and reallocation of project team and
associated staff; and
• final payments from client and to suppliers and
account closures.
(NB client and project team may both be internal to
the organisation). Post-project review and audit
processes should be different (see Figure 14, left).
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IMPROVING THE PROCESS
BETTER PROJECT MANAGEMENT
This report has taken you on a whistle-stop tour of the process, challenges and tools of
project management. This section offers some ideas for making your projects even more
successful.
Performance measurement
The principles of performance measurement, with the
setting and monitoring of key performance measures,
both financial and non-financial, should be well
understood by finance professionals. The concepts of
the balanced scorecard framework with its financial,
customer, process and learning perspectives is well
suited for application to project performance.24 It can
be used at the start of a project to set milestones or
interim deliverables, then at the review stage to keep
the project on track. The scorecard captures the three
classic dimensions of project management, time
(process and scheduling), money and quality
(customer), with an added emphasis on learning,
which forms a useful fourth dimension. Indeed it is
this dimension at the project review stage which is
often neglected in project management. The
importance of learning from past project successes
and failures cannot be stressed enough.
Pillars of change
Maylor identifies three pillars or prerequisites for
process change management projects that can
arguably be applied to many types of project:
• strategy (a coherent process of strategy
development that recognises the drivers for
change);
• knowledge management (an explicit structure for
generating and exchanging ideas in an
organisational learning culture); and
• implementation (a clear methodology for making
change happen and monitoring impact).25
Tips for improving project management practice
There are many lessons to be learnt from project
management practice, for while each project may be
Figure 15 PROJECT MANAGEMENT LESSONS
1.
Understand the context of project
management.
2.
Recognise project team conflict as progress.
3.
Understand who the stakeholders are and
what they want.
4.
Accept and use the political nature of
organisations.
5.
Lead from the front.
6.
Understand what ‘success’ means.
7.
Build and maintain a cohesive team.
8.
Enthusiasm and despair are both infectious.
9. One look forward is worth two looks back.
10. Remember what you are trying to do.
11. Use time carefully or it will use you.
12. Above all, plan, plan, plan.
Source: Adapted from Pinto and Kharbinder (1995: p43)
unique, there are always common characteristics and
similar problems that have been experienced before
which give opportunities for learning and
improvement. Pinto and Kharbander summarise some
useful lessons for project managers (Figure 15,
above).26
Finally, it may sound obvious but the best advice
for better project management is communication,
communication, communication!
Further reading and guidance is identified on the
following pages.
‘The importance of learning from past project
successes and failures cannot be stressed
enough’
FINANCE & MANAGEMENT SPECIAL REPORT June 2011
17
AUTHOR’S RESOURCES
REFERENCES
1. JR Turner, M Huemann, F
Anbari and C Bredillet,
Perspectives on Projects,
Routledge, 2010.
2. ‘Investment appraisal’, SR27,
December 2009.
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3. E Harris, CR Emmanuel and S
Komakech, Managerial
Judgement and Strategic
Investment Decisions, Elsevier,
2009.
4. LA Vidal, F Marle and JC
Bocquet, ‘Measuring project
complexity using the
Analytic Hierarchy Process’,
International Journal of Project
Management, 2010, DOI:
10.1016/j.ijproman.2010.07.
005.
5. Project Management
Institute, A Guide to the
Project Management Body of
Knowledge, 2008.
6. AJ Shenhar and D Dvir,
Reinventing Project
Management: The Diamond
Approach to Successful
Growth and Innovation,
Harvard Business School
Press, 2007.
7. L Bourne and DHT Walker,
‘Project relationship
management and the
stakeholder circle’,
International Journal of
Managing Projects in Business,
No.1(1), 2008, pp.125-130.
18
8.
9.
10.
11.
12.
13.
14.
See for example RA Brealey
and SC Myers, Principles of
Corporate Finance,
McGraw-Hill, 2000.
JR Turner and RA Cochrane,
‘The goals and methods
matrix: coping with
projects with ill-defined
goals and/or methods of
achieving them’,
International Journal of
Project Management,
No.11(2), 1993, pp.93102.
E Harris, Strategic Project
Risk Appraisal and
Management, Gower, 2009.
B Senior and J Fleming,
Organizational Change,
Prentice Hall, 2006,
pp.286-288.
B Senior and J Fleming,
Organizational Change,
Prentice Hall, 2006,
pp.349-351.
See G Tennant, SPC and
TQM in Manufacturing and
Services, Gower, 2001.
See for example MM
Parast, ‘The effect of six
sigma projects on
innovation and firm
performance’, International
Journal of Project
Management, No.29(1),
2011, pp.45-55.
15. See for example Turner et
al, 2010.
16. Office of Government
Commerce, Managing
Successful Projects with
PRINCE2, The Stationery
Office, 2009.
17. Turner et al, 2010.
18. Turner et al, 2010, pp.105147.
19. C Handy, Understanding
Organizations, Penguin,
1993, p.185.
20. Handy, 1993, p.188.
21. Handy, 1993, p.183.
22. See E Harris, CR Emmanuel
and S Komakech,
Managerial Judgement and
Strategic Investment
Decisions, Elsevier, 2009,
p.18.
23. See Harris et al, 2009, p.20.
24. See RS Kaplan and DP
Norton, The Balanced
Scorecard: Translating
Strategy into Action, Harvard
Business School Press,
1996.
25. H Maylor, Project
Management, Prentice Hall,
2003.
26. JK Pinto and OP Kharbanda,
‘Lessons for an accidental
profession’, Business
Horizons, March-April 1995,
pp.41-50.
icaew.com/fmfac
ICAEW RESOURCES
BOOKS, JOURNAL ARTICLES AND MORE
The following resources are available to ICAEW members from the library and information service at
icaew.com/library
WEBSITES
Association for Project
Management
www.apm.org.uk
Project Management Institute
www.pmi.org
ELECTRONIC RESOURCES
Available online 24/7 for ICAEW
members at icaew.com/library.
Use the Subject Gateways tab,
select Strategy and Planning then
Project Management OR go to
icaew.com/en/library/subjectgateways/career-and-personaldevelopment/project-management
‘Got talent?’
by S Kent, PM Network, Vol.24,
No.12, December 2010, pp.32-37.
‘Making projects behave’
by R W Scott, Accounting
Technology, Vol.23, No.11,
December 2007, pp.30-33.
‘Air of authority’
by M P Smart, PM Network,
Vol.24, No.6, June 2010, pp.4650.
‘Project management: a means to
efficiency’
by J Stimpson, Practical
Accountant, Vol.41, No.6, June
2008, pp.16-21.
eBooks
Manage projects successfully: how
to make things happen on time and
on budget
by Bloomsbury, 2005, 90pp
ISBN: 9780747577362
‘Controlling your project’
by A Watt, Human Resources
Magazine, Vol.14, No.6, Feb/Mar
2010, pp.8-10.
Making the business case: proposals
that succeed for projects that work
by I Gambles, Gower, 2009,
183pp.
ISBN: 9780566087455
Books
eJournal articles
‘Inside track’
by M Bowles, PM Network, Vol.25,
No.1, January 2011, pp.52-57.
‘5 ways to make or break your
team’
by C Hollingsworth, PM Network,
Vol.23, No.4, April 2009, pp.5257.
‘Go, team, go!’
by S Kent, PM Network, Vol.21,
No.11, November 2007, pp.3843.
OTHER RESOURCES
Books can be posted out free of
charge to your work or home
address. Journal articles can be
supplied for a small charge.
Contact the library on 020 7920
8620 or [email protected]
Project management
by D Lock, Gower, 2007, xxii,
520pp.
ISBN: 9780566087721
For successful project management:
think PRINCE2
by Office of Government
Commerce, Stationery Office,
2007, vii, 114pp.
ISBN: 9780113310289
Articles
‘Project management for
accountants’
by E Kless, Journal of Accountancy,
Vol.209, No.4, April 2010, pp.3842.
‘Enterprise management’
by D Rochford, Financial
Management, November 2010,
pp.36-37.
Further information and resources
on project management are
available via the Library &
Information Service’s website at
icaew.com/library
For details of Faculty publications
dealing with project management,
please see page 20.
Leading project teams: an
introduction to the basics of project
management and project team
leadership
by A T Cobb, Sage, 2006, 178pp.
ISBN: 9781412909471
Project planning, scheduling and
control: a hands-on guide to bringing
projects in on time and on budget
by J P Lewis, McGraw-Hill, 2008,
300pp.
ISBN: 9780071460378
FINANCE & MANAGEMENT SPECIAL REPORT June 2011
19
FACULTY RESOURCES
FACULTY PUBLICATIONS
The following articles and reports, published by the Finance and Management Faculty, offer further guidance on
project management. icaew.com/fmfac
20
SR27: INVESTMENT APPRAISAL
Investment appraisal is a key area in most
businesses. Decisions concerning capital
expenditure, coupled with strategic
planning, marketing and organisational
design are frequently critical in determining
the future success of the business. This
report explains the issues that finance
departments should consider and offers
advice to managers on how they can
contribute effectively to decision making
and control during this process.
SR27, Dec 2009
‘THE KEYS TO SUCCESSFUL PROJECT
MANAGEMENT’
Project management is increasingly
becoming the practical choice for
implementing change and for the
development of products and services
within a myriad of different global industries
and functions. In this article, Gareth Monks
explains the crucial factors that come into
play when implementing a plan. As any
project is by its nature unique, appreciating
not just the processes involved but the
‘softer’ factors, such as communication and
teamwork is essential for a project to be
successful.
F&M, Issue 160, Nov 2008, p10
SR21: MANAGING CHANGE
There are many reasons why an organisation
might wish to change. It may be to try to
reduce cost or increase revenue; alternatively
it could be a response to external factors.
This report presents examples of how change
really works, including the restructuring of
Reuters, D-I-Y integration and an example of
huge VAT savings. To ensure long-term
success, it is also necessary to manage the
softer skills that build commitment to a
change programme, as well as the hard facts
and figures on which finance professionals
tend to focus.
SR21, April 2008
SR16: MANAGING TEAMS
While our professional training equips us
with the technical knowledge we need,
some skills – such as management of teams
– can only be acquired from experience.
This special report aims to give you an
insight into the theory behind managing
financial teams and the changing nature of
teams, as well as providing you with some
practical guidance and tools. The report
also includes a question-and-answer section
that draws on six faculty committee
members’ first-hand experience of the
practicalities of managing teams.
SR16, June 2007
‘PROJECT MANAGEMENT: CONTEXT AND
PROCESS’
Project management skills are essential to
many aspects of business life. This article
looks at the basic role of project
management and the time/cost/quality
trade-off that is so often faced in projects.
The processes of project management are
considered, as are the organisational issues
and the steps that need to be taken for
success.
MQ, Part 4, July 1999, p22
‘SPOTTING THE SIGNS OF AN AILING
PROJECT’
A stagnant project can be prevented if we can
learn to spot the early signs of derailment. A
main concern can be lack of regular reporting
and the failure of the team to update key
documents. The solution is to insist on
frequent reporting and establish clear
accountability for actions. Complaints within
the team should be met with a listening ear
and resolved. The interest of stakeholders and
project sponsors should be maintained to
keep the project moving.
F&M, Issue 183, December 2010, p18
icaew.com/fmfac
SPECIAL REPORTS
PREVIOUS SPECIAL REPORTS
The faculty special reports summarised here were published over the past 15 months and, along with many
others, are available to members at icaew.com/specialreports. They comprise a range of in-depth reports on a
single topic, sometimes by a single author, sometimes by a range of experts. They are a vital source of expertise
on a variety of subjects.
Personal development
PERSONAL DEVELOPMENT FOR
ACCOUNTANTS IN BUSINESS
Technical excellence and practical
experience can only take you so far as a
chartered accountant in business. Once
these are established, we become
managers, then directors and leaders. This
special report pulls together a selection of
March 2011 (SR32)
our best articles showing how to develop
the ‘softer’ skills necessary in such roles. It
covers the areas of leadership, networking,
planning, saying ‘no’, delegating and
negotiating to provide a practical guide to
improving yourself and, as a result, your
career.
December 2010 (SR31)
Outsourcing
FINANCE TRANSFORMATION –
THE OUTSOURCING PERSPECTIVE
This report by offers a full overview of
finance and accounting outsourcing
solutions in line with the most recent trends
in pricing, location and the level of
outsourcing that businesses currently benefit
from.
Strategic planning
DEVELOPING A VISION FOR YOUR
BUSINESS
This report, by a range of authors, including
academics and consultants, aims to offer
practical advice on developing a vision for
your business, dealing with how to define a
vision, the role of the FD and how to tell a
vision story. You will also find suggestions on
Financial management
IFRSs – A BRIEFING FOR CEOs
As a chartered accountant in business you
need to keep up to date with the standards
that apply to financial reporting. You also
need to have a thorough understanding of
their business implications. This special report
provides exactly that, in a practical and
accessible format. These concise and easy to
Entrepreneurial issues
STARTING A BUSINESS
This report aims to provide accountants with
a realistic and motivational overview of what
to consider when starting a business. The
report focuses on areas that accountants
may find more difficult, such as making
sales, or that may be overlooked, including
researching and testing ideas before
FINANCE & MANAGEMENT SPECIAL REPORT June 2011
A comprehensive guide to all matters
surrounding outsourcing, this special report
provides clear guidance on the subtleties and
the practicalities faced by a business planning
to engage in any level of finance and
accounting outsourcing.
September 2010 (SR30)
how to run workshops with employees to
develop a vision that successfully
encapsulates the ethos of your business. A
key message is that vision statements are
critical, and need time spent on them if they
are to be really effective.
June 2010 (SR29)
use briefing notes, produced by the
International Accounting Standards
Committee Foundation, provide summaries of
all the consolidated versions of International
Financial Reporting Standards (IFRSs) issued at
1 January 2009, in non-technical language.
March 2010 (SR28)
jumping in with detailed forecasts. It also
features several case studies of successful
finance professionals who have made their
ventures a success. They share their
experiences as well as the pitfalls they have
encountered along the way.
21
TECPLM10307