Poor Project Management: Why some consider it a Crime

The Sarbanes-Oxley Act makes senior executives criminally liable for misrepresenting financial information and for relaying fraud to shareholders. After several corporate accounting scandals, Congress passed a law referring to the SOX Act of 2002. If the company manages projects, then if projects are mismanaged it could leave your senior management legally exposed.

Keep in mind the stories in the press about companies with large projects facing huge cost overruns. If this kind of cost overrun is not foreseen and anticipated, the financial effects could seriously impact the projected profit for a given period. It is reported that 77 percent of companies will spend more on IT, business process change, governance, and consulting to insure project management compliances. Management Assessment of Internal Controls must be established by CEOs and maintained at an adequate internal control structure of procedures for financial reporting. Companies undertaking large projects will need a process that provides a detailed cost and schedule metrics for all projects with time based cost reporting and continually updated completion estimates. Senior management must have visibility into project performance data at all times along with the confidence that the underlying process is sound.

No methodology or process will suddenly make projects profitable. If a problem is not identified before the budget is depleted, a corrective action cannot be applied to improve the outcome and the profit margin begins to disappear. Management by exception, variance analysis, and the calculation of accurate estimates at completion all help to maintain project profitability and ensure confidence on the part of management and share holders alike. Complying with the many factors of the SOX Act is already an enormous challenge for today’s companies. When it comes to project management, companies can overcome the challenges mandated and adopt practice for project control and further peace of mind.

Trend Watching

One company’s success is not always another company’s success. Many businesses that are quick to follow business trends experience a long line of great initial excitement only to end in frustration and investments lost. The reasons for this is that many businesses are quick to recognize great ideas, but often do not have a plan of how to successfully integrate them into their business model. Not allowing your company to get caught up in following the latest trends and fads will save you from the likelihood of failure. But if in a trend you see real potential for your company, pursue it with some initial analysis to determine its success.
Failed initiatives can cause several severe consequences other than cost. Severe issues like; doubt in management credibility, a negative impact on morale, as well as a variety of other problems. Every business initiative should begin with a strategic plan. Not every strategic plan can be successfully implemented so in order to do so the plan must be measureable against the following elements:
1. The trend should be in alignment with the overall vision and mission of the company
2. If the initiative doesn’t provide a unique competitive advantage it should at least bring you closer to an even playing field.
3. Any new project should preferably add value to existing initiative, and should show a significant enough return on investment to justify the effect of not keeping the original the same.
4. Put the idea through a risk, reward, and cost and benefit analysis.
5. Usability should be easy for the company, customers, vendors, partners etc.
6. Validate proof of concept based upon detailed, credible research.
7. There is always risk so detailed risk management provisions should be outlined
8. Adopting a trend should be based on solid business logic that corresponds with financial engineering and modeling.
9. New initiatives should contain accountability provisions. Every task should be assigned and managed according to plan.
10. Any trend must be measurable. Deliverables, benchmarks, deadlines, and success metrics.
Properly implemented initiatives keep businesses from stagnating and cause growth and development