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How do you handle iterative funding based on lifecycle stage?

  • 1.  How do you handle iterative funding based on lifecycle stage?

    Posted 08-19-2016 04:39 PM

    We are changing our lifecycle model to approve funding by lifecycle stage (initiation, plan/analyze/design,build/test/deploy/transition.  Is anyone else doing something similar and how are you handling budgets, actuals and metrics?  We want to be able to track estimate accuracy based on stage as well as overall project. Thoughts?



  • 2.  Re: How do you handle iterative funding based on lifecycle stage?

    Posted 09-09-2016 04:45 PM

    We approve our funding in two stages generally: Planning Stage, then Executing to Closing. Here's how we do it:

     

    1. During the initiation of a project we have our users create two cost plans, one that represents the total overall project cost (this becomes the first plan of record) and the other that represents what they need ONLY for the Planning Stage. The Planning stage cost plan must use a specific prefix in the cost plan code field (we use "PLN") to identify it. This is a training issue, mostly, but we don't have too many problems with compliance.
    2. When a project is approved to start the Planning Stage plan is submitted and approved as the first budget plan. (You have to temporarily change the Planning plan to the plan of record to do this, then change it back to the total cost plan afterwards.) So as an example the total project cost might be $1M, coming from the cost plan of record, but the "approved" cost is only $50K which is indicated in the budget plan.
    3. When the project nears the end of the Planning Stage the project manager creates a new cost plan of record and revises it to show the latest version of total project costs. This will tell us how much money they will need to have approved to finish the remainder of the project.
      Cost plan of record minus budget plan of record equals remaining funds to be approved
    4. When the project is approved to start Executing we approve that latest cost plan as the new budget plan which essentially "releases" the remaining funds and the entire project budget is now approved.
    5. We handle change requests in a similar manner. When a change request is submitted that has a cost implication the project manager creates one cost plan that represents JUST the change amount and another cost plan that shows what the total project costs would be AFTER the change request is approved. This second plan is approved as the new budget plan when the change request is approved.

     

    We use queries behind the scenes to slice and dice our cost data stored in cost plans so that we can extract the metrics that we need: budgeted cost, approved cost, remaining cost, etc.

     

    For accuracy reporting we decided not to hold the project managers to the original cost estimates done during the Initiating stage, since this is really prior to real scoping and requirements gathering. We do hold them to the costs that were approved at the time the project entered the Executing Stage. I added a custom attribute yes/no field to the cost plans that allows us to flag which cost plan represented the cost plan at this particular stage gate. Yes, it's POSSIBLE for people to go back and change the cost plans after the fact but our users don't really know about this flag field and don't edit it themselves. We haven't had a problem. So once a project has completed we can go back and compare their final cost plan to the cost plan flagged as their "Executing" plan.

     

    I hope this helps!