How it works
Finance management plays an important role in the success of project. A thorough investigation and time should be invested in planning the finance of the project. The crucial signs of project ambiguity can be analyzed in the very early phase of project management while designing the project charter. Conflicts over the project goals and objectives can be guessed as initial signs of drifting. Development approach and scope of the project should be clear, so that the growing problems can be addressed effectively.
If approach and scope are clear, then everyone working on project is well versed with the goals of the project and solutions offered to any initial problems will be accurate as they know the exact cause of the issues that have triggered during the execution phase. Software and other appropriate materials and services required should be thoroughly discussed and identified before implementing the project. Major IT projects turns to have 25 % unused delivered outputs.
Type of financing used for the project also matters in deriving the estimated costs. It can be majorly categorized into four types- financed internally by organization, financed by borrowing from bank, mixed financing of debt and equity, entirely financed by external organization. Each kind of financing affects the budget and affects the decision making on turning out the project. Dashboard reporting is a very useful means of tracking the project progress. Different colors (Red, Green, Blue) indication of project deliverables gives an insight to track the target and health of the project. Its easy to track the budget being utilized on the project is in the right direction or not. Frequent checkpoints at every level of the project will ensure to avoid any kind of actions need to be taken at threshold situations. At follow up meetings the cost alternatives should be revised.
The financial cost can be strategized into two categories- variable costs and labor cost. Time factor is directly proportional to cost factor in project management. Longer the duration of the project is-greater the cost of project. Delayed execution schedules will result in the increase cost estimates of the project which if not controlled at right time can adversely affect the success of the project. The time and cost factors include the time spent by human resources, services and infrastructure available to execute the project. The main factor of the project success is the expertise of human resource which affects the finance of the project. Investing in the appropriate skillset and expertise of human resource will be a key factor in reaching project goals.
As we know, in this project, the Project Sponsor is the IT department and the HR department. So once the IT department has installed all the necessary software in all the existing computer devices and all the new devices are preinstalled with all those software, that way the IT department can approve the completion of the project. And the HR department can approve the completion of the project once the training has been provided for all the employees.