Finance Project management control
Project management control exists in every organization that delivers supervised projects. The question is therefore not whether to do it, but who does it. Below a certain size, no role carries it: the function is held by the manager or the partner, between two emergencies, on a spreadsheet nobody else knows how to open.
What project management control does.
Four gestures, independent of the size of the organization. What varies is the time you can give them.
The monthly review
Project by project: where the spent amount stands, what remains to do, where the margin is heading. It is the meeting that makes the function exist.
Variance analysis
Not noting that a project is drifting, but understanding through what mechanism, so that the next one does not fall into the same trap.
Reliable figures
Checking that the input data is complete and up to date. A variance computed on incomplete entries is a false signal.
Consolidation
Moving from the project to the portfolio, in order to decide: which project to reinforce, which to stop, where to place scarce people.
Below a certain size, no role carries it.
A large IT services company has a management controller, sometimes a team. An organization of thirty or eighty people has the same projects, the same fixed prices and the same risks of drift, but not the role. The function does not disappear for all that: it is absorbed by someone who already has a job.
That someone is usually the manager, a partner or the operations director. They hold the monthly review on Sunday evening, on a spreadsheet they built themselves, with formulas only they know.
The question that sums it all up is this: what happens when that person leaves? Not when they resign, which is rare, but when they take three weeks of leave, when they spend two months on a major pre-sales effort, or when they change scope. The review is skipped, then skipped again, and nobody notices for a quarter.
The spreadsheet does the calculation very well, and everything else badly.
This is not a trial of the tool: it is an observation of what it cannot carry.
It has a single author
The formulas are in their head as much as in the cells. A third party who opens it sees figures, not a line of reasoning.
Its data is copied over
Time, budgets, progress: everything goes in by hand, from other tools. Each copy is an opportunity for error, and a monthly cost.
It does not keep history
The previous month is overwritten. Six months later, it is impossible to say what was known on a given date, or when a variance appeared.
It ages as soon as you close it
The figure is right at the moment of entry. Between two reviews, nobody knows where projects stand.
Have the tool carry the function, not a person.
The usual solution is to hire, or to outsource. It is an answer, and it has a cost that many organizations cannot commit for a part-time function.
The other way is to have the tool carry what is mechanical in this function: computing the variance, keeping it fresh, preserving it, making it readable by several people. What is a matter of judgment, interpreting a variance and the decision that follows, obviously remains human.
What changes then is not the amount of work: it is that the monthly review starts from a status already built instead of being preceded by a day of reconstruction. And that it survives the absence of the person who held it. This is what we call operational commitment management.
In pylotik.
The management control module and the monthly review are available: see the roadmap.
The margin is computed at entry
Not at month end, and without copying. The monthly review interprets a status already built instead of reconstructing it.
Formulas are shared
The method of calculation is the tool's, readable by everyone, and not that of a personal workbook. It is discussed instead of being believed.
History is kept
Each status is frozen and dated. You can say what was known at the date of a committee, and when a variance opened.
The function survives absences
It no longer depends on a file or on a person. That is the difference between a practice and a system.
The input figures come from project financial tracking, and team workload from the workload plan. The complete tour is on the product page.
What we are asked about management control.
Who does project management control in a mid-sized organization?
The manager, a partner or the operations director, almost always on top of another job. That is why the monthly review is the first thing to be dropped when workload rises, even though that is when it would be most useful.
Should we hire a management controller?
It is a valid answer beyond a certain size. Below that, the question is rather about what can be mechanized: computing, freshness and preservation of variances. Interpretation remains human work whatever the size.
What is a monthly project review?
A supplier-side meeting, without the client, that reviews the projects: spent, remaining to do, projected margin, team workload, risks. It is the third body, the one we forget to name and that looks at what the other two do not.
How do you analyze a variance on a project?
By looking for the mechanism rather than the culprit: untraced scope, an optimistic initial estimate, overestimated capacity, a delayed approval. Each is corrected differently, and only the first calls for an amendment.
Is the module available?
Management control and the monthly review are available, like basic financial tracking. The details are on the roadmap.
Does this replace our chartered accountant?
No, and the two do not answer the same question. Accounting establishes what happened, for outside parties and with the rigor that requires. Project management control sheds light on what is happening, to decide internally.
Going further.
- Project financial tracking: budget, spent, remaining to do.
- The roadmap: what is in service, and what comes next.
- Operational commitment management: the definition of the category.
- The product tour: finance, workload, committees.