clipped from Information, ideas and tools for Project Managers
How to create a Project Financial Plan
Tuesday, March 24th, 2009
Step 1: List the Financial Expenses
The first step taken when defining a Financial Plan and setting a project budget, is to identify all of the types of expenses that are likely to be incurred throughout the Project Lifecycle.
Typically, most projects spend the majority of their budget on purchasing, leasing, renting or contracting the resources to the project (e.g. labour, equipment and materials). However other types of expenses incurred may include those related to the:
- Procurement of resources from suppliers
- Establishment of a Project Office
- Administration of the project
Once you have identified a detailed list of expenses to be incurred throughout the project, the next step is to forecast the unit cost of each expense type listed. The unit cost is simply the cost of a single unit of a particular expense item. For instance, the unit cost for:
- labour may be calculated as the cost per hour supplied
- equipment may be calculated as the rental cost per day
- materials may be calculated as the purchase cost per quantity
- Identify the number of roles required
- Quantify the items of equipment needed
- Determine the amount of materials required
- Quantify the procurement items to be sourced from suppliers
- Calculate the administration costs the project
You have now collated all the information needed to build a detailed expense schedule. This schedule enables the Project Manager to calculate the total cost of undertaking the project on a daily, weekly or monthly basis.
To create an Expense Schedule, build a table which lists all of the expense types down the left hand side of page, and all of the weeks in the year across the page. Then identify for each week and for each expense type, the amount of financial expenditure to budget. Once complete, you can sum up all of the expenses for any particular week to gain a weekly budget for the entire project.
Of course you may wish to calculate a daily, monthly or yearly view, based on your particular project need. Also don't forget to list any assumptions made during the creation of this Financial Plan. For example, it may be assumed that:
- "The project delivery dates will not change during this project."
- "The unit costs forecast are accurate to within 5%."
- "The funds listed by this plan will be available as required."
- "Limited information was available when identifying costs"
- "A market shortage has resulted in a high labour costs"
Now that you have created your Expense Schedule, you need to define the process for monitoring and controlling expenses (i.e. costs) throughout the Project Lifecycle. Define the Cost Management Process for your project by documenting the:
- Purpose of the process
- Steps involved in undertaking the process
- Roles and responsibilities involved in undertaking the process
- Templates used to support the process
To save time creating a Financial Plan, and help you manage your project finances, download the Project Management Kit of templates.
How to create a "Project Charter"
Thursday, March 19th, 2009The Project Charter describes the project vision, objectives, scope, organization and implementation plan. It helps you to set the direction for the project and gain buy in from your stakeholders as to how the project will be organized and implemented. It will also help you to control the scope of your project, by defining exactly what it is that you have to achieve. To define a Project Charter, take these steps:
Step 1: Identify the Project Vision
Vision: The first step taken when defining a Project Charter is to identify the project vision. The vision encapsulates the purpose of the project and is the defined end goal for the project team.
Objectives: Then based on the vision, list three to five objectives to be achieved by the project. Each objective should be Specific, Measurable, Achievable, Realistic and Time-bound (SMART).
Scope: With a clear view of the Vision and Objectives of the project, it's time to define the project scope. The scope defines the formal boundaries of the project by describing how the business will be changed or altered by the project delivery. Deliverables: Then you need to describe each of the deliverables that the project will produce.
Step 2: Describe the Project Organization
The next step is to identify how the project will be structured by listing the customers, stakeholders, roles, responsibilities and reporting lines.
Customers: First, identify the project customers. A customer is a person or entity that is responsible for accepting the deliverables when the project is complete.
Stakeholders: Then identify the project stakeholders. A stakeholder is a person or entity within or outside of the project with a specific key interest or stake in the project. For example, a Financial Controller will be interested in the cost of the project, and a CEO will be interested in whether the project helps to achieve the company vision.
Roles: Now list the key roles involved in delivering the project. Examples of roles include the Project Sponsor, Project Board and Project Manager. Then summarize each of the primary responsibilities of each role identified.
Structure: Once you have a clear view of the roles needed to undertake the project, you can depict the reporting lines between those roles within a Project Organization Chart.
Step 3: Plan the Approach to Implementation
You now have a solid definition of what the project needs to achieve and how it will be organized to achieve it. The next step is to describe the implementation approach as follows:
Implementation Plan: To provide the Customer and Stakeholders with confidence that the project implementation has been well thought through, create an Implementation Plan listing the phases, activities and timeframes involved in undertaking the project.
Milestones: In addition, list any important milestones and describe why they are critical to the project. A milestone is typically an important project event, such as the achievement of a key deliverable.
Dependencies: List any key dependencies and their criticality to the project. A dependency is defined as an activity that is likely to impact on the project during its life cycle.
Resource Plan: Create a plan which summarizes the resources involved in undertaking the project by listing the labor, equipment and materials needed. Then budget the financial resources needed.
Step 4: List the Risks and Issues
The final step taken to complete your Project Charter is to identify any project risks, issues, assumptions and constraints related to the project.
And that's it. If you complete each of the steps above, then you will create a solid Project Charter for your project, helping you to manage scope and deliver consistently on time and within budget.
Download a Project Charter template to save you time and effort.
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Step 1: Identify the Project Vision
Vision: The first step taken when defining a Project Charter is to identify the project vision. The vision encapsulates the purpose of the project and is the defined end goal for the project team.
Objectives: Then based on the vision, list three to five objectives to be achieved by the project. Each objective should be Specific, Measurable, Achievable, Realistic and Time-bound (SMART).
Scope: With a clear view of the Vision and Objectives of the project, it's time to define the project scope. The scope defines the formal boundaries of the project by describing how the business will be changed or altered by the project delivery. Deliverables: Then you need to describe each of the deliverables that the project will produce.
Step 2: Describe the Project Organization
The next step is to identify how the project will be structured by listing the customers, stakeholders, roles, responsibilities and reporting lines.
Customers: First, identify the project customers. A customer is a person or entity that is responsible for accepting the deliverables when the project is complete.
Stakeholders: Then identify the project stakeholders. A stakeholder is a person or entity within or outside of the project with a specific key interest or stake in the project. For example, a Financial Controller will be interested in the cost of the project, and a CEO will be interested in whether the project helps to achieve the company vision.
Roles: Now list the key roles involved in delivering the project. Examples of roles include the Project Sponsor, Project Board and Project Manager. Then summarize each of the primary responsibilities of each role identified.
Structure: Once you have a clear view of the roles needed to undertake the project, you can depict the reporting lines between those roles within a Project Organization Chart.
Step 3: Plan the Approach to Implementation
You now have a solid definition of what the project needs to achieve and how it will be organized to achieve it. The next step is to describe the implementation approach as follows:
Implementation Plan: To provide the Customer and Stakeholders with confidence that the project implementation has been well thought through, create an Implementation Plan listing the phases, activities and timeframes involved in undertaking the project.
Milestones: In addition, list any important milestones and describe why they are critical to the project. A milestone is typically an important project event, such as the achievement of a key deliverable.
Dependencies: List any key dependencies and their criticality to the project. A dependency is defined as an activity that is likely to impact on the project during its life cycle.
Resource Plan: Create a plan which summarizes the resources involved in undertaking the project by listing the labor, equipment and materials needed. Then budget the financial resources needed.
Step 4: List the Risks and Issues
The final step taken to complete your Project Charter is to identify any project risks, issues, assumptions and constraints related to the project.
And that's it. If you complete each of the steps above, then you will create a solid Project Charter for your project, helping you to manage scope and deliver consistently on time and within budget.
Download a Project Charter template to save you time and effort.
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How to Scope your Projects
Tuesday, March 10th, 2009Project Scope is everything that must be produced to complete a project. These 'things' are called deliverables and you need to describe them in depth as early in the project as possible, so everyone knows what needs to be produced. Take these 5 Steps to scope your projects:
Step 1: Set the Direction
Start off by setting the direction for the project. Do you have an agreed Project Vision, Objectives and Timeframes? Are they specified in depth and has your customer agreed to them? Does everyone in the project team truly understand them and why they are important? Only by fixing the project direction can you truly fix the project scope.
Step 2: Scope Workshops
The best way to get buy-in to your project scope is to get all of the relevant stakeholders to help you define it. So get your project sponsor, customer and other stakeholders in a room and run a workshop to identify the scope. What you want from them is an agreed set of major deliverables to be produced by the project. You also want to know "what's out of scope".
Run the workshop by asking each stakeholder for a list of the deliverables they expect the project team to deliver. Take the full list of deliverables generated in the workshop and get them to agree on what's mandatory and what's optional. Then ask them to prioritize the list, so you know what has to be delivered first.
Step 3: Fleshing it out
You now have an agreed list of deliverables. But it's still not enough. You need to define each deliverable in depth. Work with the relevant people in your business to describe how each deliverable will look and feel, how it would operate and how it would be supported etc. Your goal here is to make it so specific that your customer cannot state later in the project that "when they said this, they really meant that".
Step 4: Assessing Feasibility
So you now have a detailed list and description of every deliverable to be produced by your project, in priority order and separated as mandatory / optional. Great! But is it feasible to achieve within the project end date? Before you confirm the scope, you need to review every deliverable in the list and get a general indication from your team as to whether they can all be completed before your project end date. If they can't, then which deliverables can you remove from the list to make your end date more achievable?
Step 5: Get the thumbs up
Present the prioritized set of deliverables to your Project Sponsor and ask them to approve the list as your project scope. Ask them to agree to the priorities, the deliverable descriptions and the items out of scope.
By getting formal sign-off, you're in a great position to be able to manage the project scope down the track. So when your Sponsor says to you in a few weeks time "Can you please add these deliverables to the list?", you can respond by saying "Yes, but I'll either have to remove some items from the list to do it, or extend the project end date. Which is it to be?". You can easily manage your Sponsors expectations with a detailed scope document at your side.
The scope document is the Project Manager's armor. It protects them from changes and makes them feel invincible!
And there you have it - 5 steps to defining the scope for your project. If you want document templates to help you define and manage scope for your project, then download the Project Management Kit today.
Slash your travelling costs and save time - Try GotoMeeting for Free
Step 1: Set the Direction
Start off by setting the direction for the project. Do you have an agreed Project Vision, Objectives and Timeframes? Are they specified in depth and has your customer agreed to them? Does everyone in the project team truly understand them and why they are important? Only by fixing the project direction can you truly fix the project scope.
Step 2: Scope Workshops
The best way to get buy-in to your project scope is to get all of the relevant stakeholders to help you define it. So get your project sponsor, customer and other stakeholders in a room and run a workshop to identify the scope. What you want from them is an agreed set of major deliverables to be produced by the project. You also want to know "what's out of scope".
Run the workshop by asking each stakeholder for a list of the deliverables they expect the project team to deliver. Take the full list of deliverables generated in the workshop and get them to agree on what's mandatory and what's optional. Then ask them to prioritize the list, so you know what has to be delivered first.
Step 3: Fleshing it out
You now have an agreed list of deliverables. But it's still not enough. You need to define each deliverable in depth. Work with the relevant people in your business to describe how each deliverable will look and feel, how it would operate and how it would be supported etc. Your goal here is to make it so specific that your customer cannot state later in the project that "when they said this, they really meant that".
Step 4: Assessing Feasibility
So you now have a detailed list and description of every deliverable to be produced by your project, in priority order and separated as mandatory / optional. Great! But is it feasible to achieve within the project end date? Before you confirm the scope, you need to review every deliverable in the list and get a general indication from your team as to whether they can all be completed before your project end date. If they can't, then which deliverables can you remove from the list to make your end date more achievable?
Step 5: Get the thumbs up
Present the prioritized set of deliverables to your Project Sponsor and ask them to approve the list as your project scope. Ask them to agree to the priorities, the deliverable descriptions and the items out of scope.
By getting formal sign-off, you're in a great position to be able to manage the project scope down the track. So when your Sponsor says to you in a few weeks time "Can you please add these deliverables to the list?", you can respond by saying "Yes, but I'll either have to remove some items from the list to do it, or extend the project end date. Which is it to be?". You can easily manage your Sponsors expectations with a detailed scope document at your side.
The scope document is the Project Manager's armor. It protects them from changes and makes them feel invincible!
And there you have it - 5 steps to defining the scope for your project. If you want document templates to help you define and manage scope for your project, then download the Project Management Kit today.
Slash your travelling costs and save time - Try GotoMeeting for Free
Creating a Project Business Case
Tuesday, March 3rd, 2009The purpose of a Business Case is to justify the project expenditure by identifying the business benefits you're going to deliver. Here's how to create a Business Case in 4 simple steps:
Step 1: Identify the Business Problem
Usually, projects are undertaken to solve a particular business problem or opportunity. So you need to investigate that business problem or opportunity and describe what it is, how it's come about and the timeframes in which it needs to be addressed.
Only with this knowledge, will you truly understand the purpose of the project and the timeframes for delivery. Without this knowledge, it's like building a house without a solid foundation.
Step 2: Identify the Alternative Solutions
Now that you understand the business problem/opportunity in depth, it's time to identify a solution to address it. To ensure that you choose the right solution, take these steps:
Before you rank the solutions, set out the criteria for ranking them and choose a scoring mechanism as well. For instance, you may decide to:
Step 4: Describe the Implementation Approach
By now, you have selected a solution and you have confirmed its benefits and costs. The next step is to convince your Project Sponsors that you have thought through the approach for implementing it. So document the steps you're going to take to build the solution for your client. Remember, only with a clearly defined Business Case will you ensure you deliver the business benefits expected by your customer.
Documenting the Business Case is one of the most critical steps in the Project Life Cycle. If you want templates to help you do this as well as all of the other steps in the Project Life Cycle, then download the Project Management Kit today.
Slash your travelling costs and save time - Try GotoMeeting for Free
Step 1: Identify the Business Problem
Usually, projects are undertaken to solve a particular business problem or opportunity. So you need to investigate that business problem or opportunity and describe what it is, how it's come about and the timeframes in which it needs to be addressed.
Only with this knowledge, will you truly understand the purpose of the project and the timeframes for delivery. Without this knowledge, it's like building a house without a solid foundation.
Step 2: Identify the Alternative Solutions
Now that you understand the business problem/opportunity in depth, it's time to identify a solution to address it. To ensure that you choose the right solution, take these steps:
- Identify the alternative solutions
- Quantify the benefits of implementing each solution
- Forecast the costs of implementing each solution
- Assess the feasibility of implementing each solution
- Identify the risks and issues associated with each solution
- Document all of this, in your Business Case
Before you rank the solutions, set out the criteria for ranking them and choose a scoring mechanism as well. For instance, you may decide to:
- score each solution from 1-10, based on their costs and benefits
- weight each based on criteria which are important to you
- use a more complicated scoring mechanism
Step 4: Describe the Implementation Approach
By now, you have selected a solution and you have confirmed its benefits and costs. The next step is to convince your Project Sponsors that you have thought through the approach for implementing it. So document the steps you're going to take to build the solution for your client. Remember, only with a clearly defined Business Case will you ensure you deliver the business benefits expected by your customer.
Documenting the Business Case is one of the most critical steps in the Project Life Cycle. If you want templates to help you do this as well as all of the other steps in the Project Life Cycle, then download the Project Management Kit today.
Slash your travelling costs and save time - Try GotoMeeting for Free
Project 2003 file formats blocked after installing Project 2003 Service Pack 3
Friday, June 13th, 2008Microsoft have issued a bulleting explaining the file formats that are blocked by default after installing Project 2003 Service Pack 3.
By default, the following file formats are blocked in Project 2003 SP3:
By default, the following file formats are blocked in Project 2003 SP3:
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By default, the following file formats are blocked in Project 2003 SP3:
By default, the following file formats are blocked in Project 2003 SP3:
- MS Project 98 versions of .mpp
- .mpx
- .xls
- .txt
- .csv
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A Good Reason to Upgrade to Project 2007
Wednesday, June 11th, 2008Change Highlighting may be all the reason you need to upgrade to Project 2007 as it wasn't available in earlier versions. If you make many changes to your project plans and struggle to identify the effects of those changes on your project, this simple but effective feature is for you.
Projects don't realise business benefits through lack of objective reviews
Tuesday, June 10th, 2008How often have you carried out regular, systemmatic reviews to re-evaluate the value of a project throughout its lifecycle?
There is a natural reticence to challenge the business value of a project and most managers instead focus on delivery. So there is a tendency to avoid decisions being made on potential cancellation or rationalisation once it becomes clear that a project is unlikely to deliver the benefits including the ROI originally proposed in the business case.
Generally this is because the project manager has no awareness that the assumptions about the business case have been materially changed. Frequently it is through an unwillingness of the Project Manager to take action, even though the changed circumstances may be known, because of a major stakeholder's emotional attachment to the project (how many major ERP projects fall into this category?).
So make a point of periodically blowing the dust off the Business Case you spent hours creating and establishing if it is still on target to deliver the ROI originally forecast.
There is a natural reticence to challenge the business value of a project and most managers instead focus on delivery. So there is a tendency to avoid decisions being made on potential cancellation or rationalisation once it becomes clear that a project is unlikely to deliver the benefits including the ROI originally proposed in the business case.
Generally this is because the project manager has no awareness that the assumptions about the business case have been materially changed. Frequently it is through an unwillingness of the Project Manager to take action, even though the changed circumstances may be known, because of a major stakeholder's emotional attachment to the project (how many major ERP projects fall into this category?).
So make a point of periodically blowing the dust off the Business Case you spent hours creating and establishing if it is still on target to deliver the ROI originally forecast.
Improve your project communication and save on travel costs
Monday, June 9th, 2008GotoMeeting is an invaluable tool for communicating with your project teams wherever they are.
Ideal for:
You can try it for 30 days for FREE just by clicking the link below.
Ideal for:
- Multi-site briefings
- Discussing project plans with shareholders
- Collaborative working
You can try it for 30 days for FREE just by clicking the link below.
Create a Project Charter to improve Project Success
Wednesday, July 4th, 2007Most Project Managers will tell you that the best way to ensure success is to define your project clearly from the outset. That way, all of your team members, stakeholders and customers will have a single view of what the project needs to achieve. So the best way to define you project clearly is to:
Create a Project Charter
A Project Charter is a document that is completed at the very start of the project life cycle. It sets out the project vision, objectives and scope, so that you can gain a clear picture of what it is that the project must achieve.
It also describes the deliverables, the people involved in producing them and the timeframes for delivery.
To create a Charter for your project, take these 5 steps:
Step 1: Set the Vision
Every team needs a "Vision". By clarifying the vision for the project and the goals that must be met, your team will gain a single collective understanding of what it is expected of them. When setting out your vision, make sure that you:
Step 2: Define the Scope
With a clear vision, the next most important step is to define the project scope. The scope lists the activities and deliverables that must be completed, in order to achieve the vision.
Having a detailed scope helps you to plan your project effectively. It also helps you to prevent "scope creep" which is when unplanned deliverables and activities are added to your To Do list by your customer.
Only by clarifying the project scope at the outset, can you manage your customers needs, by telling them for instance that a request is "out of scope" and therefore requires additional time or money to complete it.
Step 3: Structure the Project Team
So you know your end target (i.e. your vision) and deliverables to be produced (i.e. your scope), you now need to identify the people who are going to do the work.
Create a Project Organizational Structure chart which show all of the customers, stakeholders, team members and other people involved with your project. Depict the reporting lines between each, and where possible, add lines of communication as well.
Documenting the organization structure is important, as it clarifies the number of people needed to complete your project and the responsibilities of each member in your team. It also helps you to create Job Descriptions for each member of your team.
Step 4: Create a Roadmap
Then create a project roadmap. This is a high level project plan that lists the phases, activities and tasks that your project will pass through, to complete the entire project management life cycle.
As well as setting out the activities needed to complete the project from start to finish, you need to identify the resources needed for each project phase. And finally, identify the overall budget required to complete the project, so that you gain financial approval to undertake the project, as early as possible in the project life cycle.
Step 5: Identify Risks and Issues
The last step to take when creating a Project Charter is to list the risks and issues that are currently apparent. By listing these items, you can make your Project Sponsor aware of the overall level of risk of the project and enlist their support to resolve them early.
By taking these 5 steps, you're ready to create a Project Charter to initiate projects more successfully. If you would to implement these 5 steps for your projects, then get the Project Charter template now.
Create a Project Charter
A Project Charter is a document that is completed at the very start of the project life cycle. It sets out the project vision, objectives and scope, so that you can gain a clear picture of what it is that the project must achieve.
It also describes the deliverables, the people involved in producing them and the timeframes for delivery.
To create a Charter for your project, take these 5 steps:
Step 1: Set the Vision
Every team needs a "Vision". By clarifying the vision for the project and the goals that must be met, your team will gain a single collective understanding of what it is expected of them. When setting out your vision, make sure that you:
- Gain agreement from the Sponsor first
- Write it using clear, meaningful words
- Communicate it to all team members
Step 2: Define the Scope
With a clear vision, the next most important step is to define the project scope. The scope lists the activities and deliverables that must be completed, in order to achieve the vision.
Having a detailed scope helps you to plan your project effectively. It also helps you to prevent "scope creep" which is when unplanned deliverables and activities are added to your To Do list by your customer.
Only by clarifying the project scope at the outset, can you manage your customers needs, by telling them for instance that a request is "out of scope" and therefore requires additional time or money to complete it.
Step 3: Structure the Project Team
So you know your end target (i.e. your vision) and deliverables to be produced (i.e. your scope), you now need to identify the people who are going to do the work.
Create a Project Organizational Structure chart which show all of the customers, stakeholders, team members and other people involved with your project. Depict the reporting lines between each, and where possible, add lines of communication as well.
Documenting the organization structure is important, as it clarifies the number of people needed to complete your project and the responsibilities of each member in your team. It also helps you to create Job Descriptions for each member of your team.
Step 4: Create a Roadmap
Then create a project roadmap. This is a high level project plan that lists the phases, activities and tasks that your project will pass through, to complete the entire project management life cycle.
As well as setting out the activities needed to complete the project from start to finish, you need to identify the resources needed for each project phase. And finally, identify the overall budget required to complete the project, so that you gain financial approval to undertake the project, as early as possible in the project life cycle.
Step 5: Identify Risks and Issues
The last step to take when creating a Project Charter is to list the risks and issues that are currently apparent. By listing these items, you can make your Project Sponsor aware of the overall level of risk of the project and enlist their support to resolve them early.
By taking these 5 steps, you're ready to create a Project Charter to initiate projects more successfully. If you would to implement these 5 steps for your projects, then get the Project Charter template now.
Manage 'Virtual' Project Meetings
Monday, June 11th, 2007Increasingly, project teams are spread over many sites making it difficult to effectively present updates and discuss issues.
A low-cost solution is now available using online technology so that project teams can meet to discuss and share ideas without the cost and time overhead of onsite meetings.
GoToMeeting is designed to show whatever is on the presenter's screen to the meeting participants, control can be passed to any participant at any time. In a project review, for example, a manager could present the latest revisions to a project Plan in MS Project enabling the participants to understand and comment.
GoToMeeting incoprorates an Instant Messenger 'chat' facility but is better supplemented by traditional teleconference facilities to bring live audio to the visuals.
Despite the wealth of functionality, GoToMeeting is incredibly low-cost to run with a flat monthly fee - enabling you to hold as many online conferences as you want without hitting extra charges
A low-cost solution is now available using online technology so that project teams can meet to discuss and share ideas without the cost and time overhead of onsite meetings.
GoToMeeting is designed to show whatever is on the presenter's screen to the meeting participants, control can be passed to any participant at any time. In a project review, for example, a manager could present the latest revisions to a project Plan in MS Project enabling the participants to understand and comment.
GoToMeeting incoprorates an Instant Messenger 'chat' facility but is better supplemented by traditional teleconference facilities to bring live audio to the visuals.
Despite the wealth of functionality, GoToMeeting is incredibly low-cost to run with a flat monthly fee - enabling you to hold as many online conferences as you want without hitting extra charges
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