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Your next project: Managing by projects

Dallon Christensen | March 21, 2011
The company project approach has come a long way. Here are some keys to strengthening the role of finance in it.

If you feel like you are overburdened by projects, you probably are not alone. During my 13 years in the finance profession, cross-functional teams have evolved from a major change initiative to a part of everyday working life. I still remember my first major project team: My company's lawn care division was establishing a sales relationship with a national home improvement chain, and we were charged with implementing an order fulfillment system to fit our new way of doing business. At age 23, I enjoyed the interaction with people from different disciplines.

Fast forward to 2011, and projects are standard fare in companies. In fact, projects are becoming the backbone of many organizations. If your company is involved in manufacturing, technology, or professional services, projects may be the biggest part of your job responsibilities. As I've studied management trends and the role of finance in those trends, I am convinced that we must think of our companies as a collection of projects. Manage those projects profitably, and you will have a profitable enterprise.

This mindset will be hard for many of us focused on process improvement. Many of our job responsibilities -- month-end closing, budgeting, standard costing, treasury management -- are ongoing processes that we improve incrementally. When I was in charge of my factory's forecast process, I was always looking for ongoing improvements and new ways of completing my job. Managing by projects requires us to understand a defined scope, manage short-term resources, and manage competing agendas and expectations. In other words, managing by projects more closely resembles general management.

My career has moved between process work and project work on a consistent basis. Here are some key things learned about shifting your mindset from process to project.

* Understand the project's scope. Since projects are short-term in nature, any increase in scope will place a very large strain on resources. Even if your idea is good, it may not fit in a short-term, defined scope.

* Observe how finance's role in projects is more like coaching than counting. You will not be in your cubicle crunching numbers all day. Project team members do not have your experience in finance, but they are responsible for "hitting the numbers". You must be able to understand the entire project and explain financial matters quickly and clearly.


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