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Sharyl butler

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Sharyl butler

  1. 1. Resource Management Technical vs. Financial – Making the ConnectionSharyl Butler Kenesha StarlingTechnical Manager Financial Manager
  2. 2. Introduction Projects begin as a box of puzzle pieces with several team members using their expertise to fit the pieces together Two of the most critical pieces are the technical requirements and the resources needed to meet those requirements Traditionally, the link between the Technical and Financial manager is not very strong  Changes to traditional behaviors are needed to strengthen this link 2
  3. 3. Behaviors (Traditional)Technical Manager Provides work requirements Determines skill mix required to meet requirements Determines work done by contractor vs. civil servant Manages travel requirements Manages performance of contractor/civil servant Major focus is on technical requirements Fully dependent on Financial Manager for financials 3
  4. 4. Behaviors (Traditional)Financial Manager Manages all phases of budget; formulation and implementation Recommends resource allocations based on funding, priorities and needs Designs, develops and interprets financial statements for Technical Managers Interprets agency and center financial regulations and policies Assures that financial accounting practices are maintained Major focus is on funding requirements Fully dependent on Technical Manager for task knowledge 4
  5. 5. Why change what we are doing today? 5
  6. 6. Shortcomings of Traditional Behaviors: Problems Encountered Scenario A: Technical Manager (TM) directs COTR to authorize additional hours for contract X in order to incorporate additional high priority requirements from program Y but fails to communicate this to the Financial Manager (FM) Problem: Contract overruns because TM failed to communicate new requirements to FM and no additional funding was available Problem: Unplanned workforce reductions and other planned tasks were cut in order to get the task back on plan 6
  7. 7. Shortcomings of Traditional Behaviors: Problems Encountered Scenario B: Program Y informs the TM that the schedule for task Z slipped to the right because of necessary redesigns. Therefore, the TM tells the COTR to direct contractor X to focus on several other high priority task for program Y causing them to burn available hours and overtime thus increasing costs. On the other hand, the FM asks the COTR to direct contractor X’ s business manager that the slip is unfortunate but timely because of overrun trends so they should use this time to focus on other areas. Problem: Because there was a lack of communication between the FM and TM and conflicting/inconsistent direction given either an unplanned request for additional funds will be needed or unplanned layoffs will be necessary. 7
  8. 8. Shortcomings of Traditional Behaviors: Problems Encountered Scenario C: FM receives monthly financial statement for contract X and notices they have been burning at a higher hourly rate than planned. The FM decides they will observe this a few months longer before bringing it to the attention of the TM. Six months go by and the FM finally mentions this to the TM. Problem: In order to complete tasks originally agreed upon, the TM must make an unplanned request for funding increases because of the FM’s lack of communication about financial issues and forecasting 8
  9. 9. Shortcomings of Traditional Behaviors: Problems Encountered Scenario D: During a technical, cost and schedule review (TCSR) the TM recommends to Program Manager Y that additional funds be provided to cover costs for additional hours needed to complete task X on time. Program manager Y questions the TM because earlier that morning, the FM briefed him that task X was under running and if no additional tasks were needed $100K would be returned to the program. Problem: Because the TM and FM didn’t tag-up prior to the TCSR, Program Manager Y begins to question the integrity of the data received from both because of the inconsistency. They are sent away to create a cohesive story and provide a combined recommendation in a week. This leads to conflict between the TM and FM as they both feel the other “threw them under the bus”. 9
  10. 10. These are serious problems!How do we overcome them? 10
  11. 11. Changes to Traditional Behaviors That Work Transparent and timely communication between Technical and Financial manager is required Develop a trusting relationship between technical and financial managers Open dialogue Sharing of confidential information Technical manager shares technical requirements and priorities with Financial manager Financial manager analyzes cost impacts and recommends options to maintain funding levels Both managers assure that approved changes to the baseline requirements are reviewed and assessed for budgetary impacts 11
  12. 12. Changes to Traditional Behaviors That Work (con’t) Managers work together to develop options for addressing budget and resource issues Research cost saving methods Use “yes, if…” terminology, instead of “no” Joint development of regular project Technical, Cost and Schedule Reviews Basic knowledge transfer Terminology (NOA, WADs, etc.) Schedules (PPBE, milestones, etc) 12
  13. 13. Final Words The link between Technical and Financial management is critical to a project’s success Frequent communication between the Technical and Financial manager is crucial throughout the project’s lifecycle as technical and funding requirements are often dynamic 13
  14. 14. Suggested Training Crossing Department Lines Finance for Non-Financial Managers Essentials of Project Management for non-Project Managers Project Control: Fundamentals of Overhead and Other Indirect Cost Appropriations Law Business Education Program JSC CFO University courses Mentoring from technical/financial experts 14

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