Project Financial Management

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Project Financial Management

Module Title: Project Financial Management

Module Code: ES9R7-10(OS)

Module Tutor: Nick Phillips

Module Dates: 4/3/2022 – 13/3/2022

Student ID: 2096878

Table of Contents

TOC o “1-3” h z u Leadership PAGEREF _Toc107059565 h 31 (a) Similarities and Differences with Leadership for Projects, Programmes and Portfolios PAGEREF _Toc107059566 h 31 (b) Management of the Overall Portfolio/Programme and the Associated Projects for Berlin Brandenburg Airport PAGEREF _Toc107059567 h 41 (c) Recommendations for Improvement for Multi-Project Success for Berlin Brandenburg Airport PAGEREF _Toc107059568 h 6Resource Management PAGEREF _Toc107059569 h 82 (a) Similarities and Differences with Resource Management for Projects, Programmes and Portfolios PAGEREF _Toc107059570 h 82 (b) Resource Management of the Overall Portfolio/Programme and the Associated Projects for Berlin Brandenburg Airport PAGEREF _Toc107059571 h 92 (c) Recommendations for Improvement for Multi-Project Success for Berlin Brandenburg Airport Regarding Resource Management PAGEREF _Toc107059572 h 10References PAGEREF _Toc107059573 h 13

Leadership1 (a) Similarities and Differences with Leadership for Projects, Programmes and PortfoliosFor those inexperienced with the discipline, project management may seem to be a blanket term that may be used to any kind of management work, from the simplest to the most complicated. Projects, programs, and portfolios are the main elements of project management. Although one is unique from the others, they all work together. A project is a short-term undertaking by a business or organization, such as the development of a new product (Kissi, Dainty and Tuuli, 2013). To effectively show how these elements are related, the Berlin Brandenburg Airport multi-project/program environment will be analysed. A program is a set of linked or interconnected efforts that are managed and arranged collectively rather than individually. A portfolio is a collection of activities and/or initiatives associated with the same company that may or may not be linked. As a consequence, initiatives are grouped together into larger projects, which are subsequently grouped together into portfolios.

Leading a project, program, or portfolio may be done in a variety of ways. The project manager manages and supervises the project’s operations and deliverables in project monitoring and control. The project manager is part of a team whose leaders are mainly concerned with completing tasks. For example, in the case of Berlin Brandenburg Airport, project managers were mandated to find a balance between the scope of work (deliverables) necessary to meet project goals and the resources available within each project’s schedule and budget constraints in order to show leadership. Leaders in this position must also guarantee that the project meets the customer’s quality criteria (Pretorius, Steyn and Bond-Barnard, 2017). Project management is the process of bringing value to a project by the use of the necessary tools, processes, and procedures in order for it to be finished effectively. It’s critical that you understand the project’s goals and objectives, as well as the problems it faces. Then you may pick and choose which project management tools to utilize.

When it comes to program monitoring and control, the program manager uses the program governance mechanism. In the Berlin Brandenburg Airport multi-project, the program manager was a visionary leader whose main job was to help people manage their relationships and conflicts. Leaders ensure that a variety of projects are coordinated to optimize productivity. Leadership, in this sense, is the use of knowledge and talents to accomplish program goals and gain benefits and control that would not be possible if related program components were handled separately (Papadaki, et al., 2014). Program management is more than just keeping track of several projects; it’s a strategic undertaking. Furthermore, the program manager does not work on each project individually. Instead, he or she makes sure that the right work is moved between the right projects at the right time. Throughout the program, the program manager focuses on the business benefits. They start by identifying possible benefits and then put them into action. The program manager is in charge of keeping track of project interdependencies and establishing program-level methods to do so.

The portfolio manager analyzes the whole collection of performance and value indicators while monitoring and controlling the portfolio. Portfolio managers who raise the value of portfolio choices are referred to as leaders in this context. The need for leadership derives from the fact that people must prioritize their responsibilities. The number of projects a portfolio manager may handle is sometimes limited by organizational capabilities. Portfolio management is more than deciding which projects and programs to implement and prioritizing them like in the case with Berlin Brandenburg Airport (Sedlin, Beckmann and Tan, 2020). It also entails portfolio balancing to ensure that the right projects and programs are chosen and implemented. Because portfolio composition is not a one-time decision, it is critical to track and manage the process. Leaders are expected to examine their environment on a regular basis.

1 (b) Management of the Overall Portfolio/Programme and the Associated Projects for Berlin Brandenburg AirportManaging and leading multiple projects and programs require a fine balance. It was difficult for Berlin Brandenburg Airport to keep track of all the projects that were interconnected. Fabricius and Büttgen (2015) found that the capacity to manage many projects at once is one of the most crucial talents a project manager should possess. This is, nevertheless, one of the most difficult tasks they must do. The most essential thing to accomplish when managing a large number of projects is to properly set up the environment before the activity begins.

Because the multi-project management environment is more intricate and difficult to regulate, multi-project management analogies are more likely to be incorrect than single-project management analogies. The coordination of resources from various sectors, the changing of project priorities and strategic goals in programs, the interdependence of key projects and programs, the short time frame for the project’s completion, and the need for accurate project data were some of the most important factors in the case of Berlin Brandenburg Airport. Wagner and Radujkovic (2022) reported that leadership issues plagued the Berlin Brandenburg Airport multi-project. For example, there was no clear image of all the projects and resources, the project was not properly prioritized, and resource disputes arose as a result of resource distribution at random. The multi-project also discovered that the project’s progress could not be followed and that it was not being managed professionally.

Inter-project dependencies were one of the most significant issues that hampered the operation of Berlin Brandenburg Airport. People in charge of several projects in this circumstance must concentrate on how the initiatives interact rather than on the success of each project independently. Multi-project managers and the rest of the leadership team must employ an inter-project process as well as a process for managing project dependencies in addition to an individual project process (Fiedler and Wendler, 2016). Managers of many projects might use inter-project procedures to bring all of their work together. Inter-project dependency management was missing at the Berlin Brandenburg Airport. Having a framework like this in place would have made it simpler for personnel in charge of several projects with similar milestones, resources, and technology to manage interactions and dependencies.

According to studies, project managers that oversee many projects need specialized abilities to accomplish their tasks effectively. To design and operate these kind of initiatives effectively, a rigid process is required (Wagner, 2017). Managers of several projects should be able to multitask so that they can move rapidly from one project to the next. Managers of several projects are also more likely to be stressed since they are leading and forming multiple teams at the same time (Nekoufar, 2011). Managers of many projects must also be able to resolve disagreements that arise because project links aren’t always solid (for example, changes in priority and unsustainable resources). Business, technical, interpersonal, and administrative abilities were lacking among those in charge of the Berlin Brandenburg Airport project. As a consequence, the initiative failed. It would have been more likely to succeed if the project had been managed using management abilities.

Project managers need a set of abilities that enable them to lead each project and coordinate the work of the projects they are in charge of in order to be effective at managing a large number of projects. The project, program, and general portfolio management at Berlin Brandenburg Airport lacked the competent leadership that would have ensured that all of the diverse efforts functioned together. Collaboration on projects is simpler if the portfolio manager has skills like multitasking, managing many teams at the same time, and coordinating across projects (Wagner and Radujkovic, 2022). Managers of several projects who have mastered multitasking can assess their own resource capacity, select priorities, and seamlessly transition between occupations. The project management at Berlin Brandenburg Airport couldn’t handle how interconnected and interdependent the many projects were. They couldn’t manage shared milestones, resources, or technology, for example. The capacity to handle many teams at the same time was also insufficient. It would have been necessary to swiftly assemble a team and assign duties to everyone on the team. It would also have to be able to manage the teams individually, including the ability to pick and employ various leadership styles for each team, as well as communicate with them in a formal manner.

1 (c) Recommendations for Improvement for Multi-Project Success for Berlin Brandenburg Airport

The failure of Berlin Brandenburg Airport has harmed everyone’s image, from the architects and planners to the engineers, the multi-project managers, leadership, the legislators, and Germany’s image. Even while failure was not entirely anticipated, it was also not a foregone conclusion, since large airport passenger terminals may be constructed and completed successfully. Temporary organizational structures often fail to achieve their objectives, which is an ongoing issue (Sedlin, Beckmann and Tan, 2020). In terms of how well activities are completed, this becomes rather obvious and straightforward to quantify. Projects are often designed to be completed on schedule, on budget, and within the scope that was defined, regardless of the firm or industry involved. Projects fail when they fail to fulfill their schedule, cost, and scope targets, as well as their quality criteria. The Berlin Brandenburg Airport multi-governance project’s arrangements were inadequate.

The most essential idea is to include the public in future large-scale initiatives so that everyone is aware of the key objectives and has access to a broader variety of data from which to make judgments. Pretorius, Steyn and Bond-Barnard (2017) assert that public engagement is a method for decision-makers to get the authority they need to act, based on the information presented to them regarding a project. A choice must be based on more than simply how well it will operate technically and how well it will fit into the budget to be successful. It also requires widespread public backing. As a result, project managers for the Berlin Brandenburg Airport should have the skills necessary to successfully engage the public and make choices based on popular preferences (Fiedler and Wendler, 2016). The general public must be allowed to participate in decision-making. As a result, the public must understand why they are being asked to speak out, have trust that their concerns are being heard and discussed, and understand that their input influences the choices that are made. Programs are designed to ensure that all stakeholders who believe they may be impacted are included. This is because if individuals feel unrepresented or excluded from the public involvement process, they will reject the decision and seek other remedies, such as going to court or speaking with their elected authorities. Public consultation may assist clarify a project’s or policy’s aims or needs, uncover the best answers or new possibilities, and provide crucial information about the existing situation and how the decision should be implemented. Even though making a choice on your own is the quickest method to get things done in the short term, including the public in decision-making does not turn off interested individuals and organizations, and hence does not generate long-term opposition.

Resource Management2 (a) Similarities and Differences with Resource Management for Projects, Programmes and PortfoliosResource management in project management and portfolio management have some important distinctions. A program manager is in charge of coordinating across related projects within a program to determine which projects are pursuing the same or similar objectives and which efforts are dependent on others. Portfolio managers, on the other hand, are in charge of all (or some) of a company’s efforts (Hope and Moehler, 2014). They ensure that all programs contribute to the firm’s strategic objectives. Initiatives are one-time and transitory, while portfolios are continuing projects with strategic objectives. After the deadline has passed, the project will be completed. Portfolios, on the other hand, have been around for a long time. A project manager focuses on a single goal, but a portfolio manager assesses all projects and programs, works to prioritize tasks, and makes new decisions. A project manager assesses a project’s overall scope while balancing restrictions and managing stakeholders. On the other hand, a portfolio manager considers the larger picture. A project manager will be able to assess the outcomes of a specific target, such as a new product line or service, at the end of the day. Portfolio managers seek organizational advantages like cost reductions and higher returns on investment.

The success with which tasks are completed, as well as the management of time, money, and quality restrictions, are all aspects of project resource management. Resource management is the part of project management that plans, organizes, manages, and analyzes people’s work. Its goal is to employ planning, assignment, and scheduling to make the most efficient use of project resources (Young, Young, and Zapata, 2014). This is accomplished by making the most of each resource. The goal of project resource management is to make the most of the company’s resources. Ensure that all aspects of your efforts are running smoothly and efficiently. It explains what has to be done to complete a project on schedule, on budget, and with the required level of quality. Money, people, space and rooms, tools, and technology are all available resources for a project.

The efficiency of projects, how they interact with one another, and how they interfere with one another are all aspects of resource management in programs. To ensure that the right work is transferred from one project to the next, all that is necessary is to keep track of the work in each project (Beringer, Jonas and Kock, 2013). The process of collecting, assigning, and managing the resources required for a project, such as people and their skills, money, technology, materials, machinery, and natural resources, is known as resource management. The process of ensuring that internal and external resources are utilized effectively, on schedule, and within budget is known as resource management. The host organization’s resources may originate from inside or outside the organization.

Portfolio resource management focuses on overall performance and program management in order to achieve a strategy’s goals. The management of one or more portfolios, as well as the return on individual assets, help a corporation achieve its strategic objectives. More employees, more inventory, accurate resource allocations, resource planning, resource scheduling, project prioritization, project requirements, and frequent performance reviews are all required for many projects and programs (Unger, Gemünden and Aubry, 2012). Resources include people, money, tools, materials, technology, property, and everything else required to complete a project, program, or portfolio. The host organization’s resources may originate from inside or outside the organization. They may also be used just once or several times.

2 (b) Resource Management of the Overall Portfolio/Programme and the Associated Projects for Berlin Brandenburg AirportIt’s possible that inefficient management of the available resources was a major contributor to the collapse of the megaproject to build an airport in Brandenburg, Berlin. After doing a comprehensive review of the project as a whole, it was found that the quality control, cost control, schedule control, and integration control were all lacking (Wagner, 2017). Due to a lack of clarity in the charter and an insufficient identification of stakeholders, the initiative was not well-executed from the moment it was first conceived. As a direct consequence of this, none of the planning stages were carried out in the appropriate manner. Ineffective stakeholder management and communication, for instance, led to the establishment of an erroneous scope baseline, which placed the management of future schedules and costs in jeopardy. There was insufficient management of the project’s risks and resources, which may have contributed to the emergence of problems, in particular with regard to quality management. The failure of the fire system was the one that was most obvious to the public. If more careful preparation had been done, it’s possible that none of these problems would have arisen. Because of the recurrence of these problems, Hinterleitner (2019) highlights that the forecasts made about the project’s scope, duration, and cost were inaccurate. Throughout the whole of these methods for project management, the characteristic for controlling alterations in the integration area was noticeably absent. In view of the many and varied facets of knowledge management, the next part will take a more in-depth look at these difficulties and study them in further detail.

The act of resource management refers to the process of planning, putting together, and keeping track of the persons, resources, and supplies that are needed for the project. Because this is such a massive undertaking, there will be many distinct places, each of which will have its own collection of resources to use in order to finish the job (Jenner and Kilford, 2011). At the airport in Brandenburg, one of the causes for the shortage of resources was that they had used an excessive number of subcontractors. Even if they had the resources available in the form of teams, the amount of effort required to manage, lead, and keep track of all of the different groups that were working on the project would have been significant (Chen, Agapiou and Li, 2020). Since of the large number and variety of different work teams, it is more difficult to keep track of these resources because preparations had to be made for them. The lack of any other competitors was one of the factors that contributed to the delays. The fact that they obtained the different components from a wide array of sources was the primary reason for this result. As a consequence, it became much more challenging to keep everything in sync, which led to problems in delivery. This suggests that the planning of the resources may have been quite random. Although there were resources accessible, it was difficult to manage and regulate the work of such a large variety of resources since there were so many of them. Engaging fewer distinct groups would have produced a more concentrated pool of resources that would have been easier to administer (Wagner, 2016). This would have been another alternative that may have been considered. There is a possibility that this is a cost problem; in that case, making requests for help to a number of different companies might be a cost-cutting tactic. On the other hand, as a consequence of the many complexities and delays that were brought about by the situation, it led to increased costs in this particular case.

2 (c) Recommendations for Improvement for Multi-Project Success for Berlin Brandenburg Airport Regarding Resource ManagementWhen there is uncertainty, the Berlin Brandenburg Airport is a fantastic illustration of how not to manage resources, establish plans, and make judgments. When there is a lack of clarity, individuals tend to exaggerate the advantages of planned actions while significantly underestimating the expenses, time required to complete, and hazards involved (Gerrits, Chang and Pagliarin, 2022). The planning fallacy occurs when individuals adopt an inside view and concentrate on the components of a planned action rather than the outcomes of comparable acts in the past (Lovrinčević and Vukomanović, 2022). Several initiatives linked to the Berlin Brandenburg Airport have collapsed, owing to their insecurity. The cost as well as the manner in which the many diverse persons were treated were both open to change. As further issues arose, the project’s objectives shifted to incorporate them. Without a clear understanding of what has to be done, resource management will fail. Negligence on the environmental and social fronts made it more difficult to forecast the outcome of the project, causing it to take longer to complete.

To begin with, the person in charge of the Berlin Brandenburg Airport’s project portfolio should have realized that one of the most difficult aspects of the problem is recognizing that high resource utilization is not necessarily a sign of effective resource management. The most critical thing is to ensure that the portfolio and program resources are working on projects that are aligned with the strategic objectives, suit their skill sets, and have sufficient bandwidth (Chen, Agapiou and Li, 2020). In reality, project managers were continually taking on more than they could handle with the people, money, and resources available to them. They also failed to adequately include the program’s stakeholders, limiting the program’s potential to develop and evolve. Both capacity and demand management should be included in the Berlin Brandenburg Airport multi-project, it is highly proposed. As a result, the project would be able to make the most of the money and time it had by prioritizing tasks that had a better possibility of generating revenue.

The second point is that the Berlin Brandenburg Airport multi-project should make maximum use of all available resources. This will ensure that you have simple access to the resources you need to achieve your strategic objectives. It would be simple to keep track of both time and progress if these two concepts were implemented (Hinterleitner, 2019). The multi-project would have improved resource management, allowing for better tracking of progress. This is very handy when using time tracking. This is one of the potential advantages of keeping track of time. To enhance estimates and gain a better picture of where the project’s money is truly being spent, compare the projected work to the actual effort.

If a multi-project like the Berlin Brandenburg Airport had been focused on resources that are in low supply and in high demand, it may have had better resource management. The portfolio manager should have planned around the limited resources available to avoid bottlenecks and extended wait times (Wagner, 2016). It would also have been beneficial for everyone involved in the project to agree on a single approach for prioritizing work across all shared resources. Rather of giving in to the challenge, management should have planned ahead and devised a scoring and evaluation system that everyone could agree on. It would have been easy to make a fair decision if this had been the case. Finally, the Airport project would have fared better if the portfolio managers had been more willing to experiment with alternative methods of doing their duties inside the firm and with the resources available to them (Gerrits, Chang and Pagliarin, 2022). A more consistent roll-up at higher levels may provide the measurements required to gain a complete picture of the project. This would have allowed the whole multi-program to plan, manage, and deliver work using a number of approaches, including conventional or milestone-driven planning, iterative, Agile, and even collaborative resource management. This may have been accomplished in a number of ways.

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