Money Manages Itself?

No, don’t worry, I haven’t gone crazy.  I obviously don’t think that money manages itself and you don’t have to plan, control and monitor where the project is spending it.  So then why did I choose this title?

The reason is that not long ago, a friend of mine was talking to someone who stated that “money manages itself”.  You would think that it would be someone who just left school and has no experience, especially no experience in project management.  You couldn’t be further away from the truth!  The person saying that has worked for the company for over 20 years, and he has been managing projects and programs for over 15.  And he is now a director of operations, managing a yearly budget which is probably over 50M€.  It’s hard to believe, isn’t it?

No matter how crazy this looks, it has an explanation.  This person works for a company where projects last a minimum of 2-3 years, sometimes even 5 or 6.  The company has grown very fast in the past few years.  And we all know that when you run multi-year projects, you can be “creative” when you measure progress on a project.  Using Earned Value Management on a very long project it is very easy to achieve the numbers the company requests by the end of the year.  That will cause, if the project wasn’t properly controlled, that by the end of the project there will be a lot of cost with minimum or no earned value. But that can be “solved” if there are new projects that can help you achieve your financial goals. (more…)