Development of Common Project Financial Status Reporting Process and Formats

EXAMPLE 5121 PROPOSAL Submitted ByFritha Watts Ohlson

February 27, 2002

1.0 IntroductionThis proposal is for the development of a new common project financial status reporting process for FWO Airline Applications (Tulsa).1 The organization has experienced recent structural and customer contractual changes that call for at least a significant update to the current financial status reporting process/system. There are also changes in management and customer wants and needs in financial status reporting, which furthers the cause for an extensive evaluation and overhaul of the process/system. This proposal first summarizes the problem, the objectives of the project, and the specific deliverables of the project. Next the proposal describes the three alternatives to be considered, including a discussion of the technology, successful use, feasibility, and known preconceived biases of each. Then the proposal outlines the project approach, which includes the method by which the alternatives will be evaluated. The project approach will follow FWO Airline Applications’ project management methodology. Finally the proposal includes the high level plan for the project, and a brief discussion on how Engineering and Technology Management (ETM) courses will have an impact upon the success of the project.

2.0 Problem StatementAt FWO Airline Applications (Tulsa), recent substantial organizational and contractual changes have rendered current various internal and customer project financial status reporting processes incompatible, inconsistent, and uninformative. Although change to processes is required due to contractual changes in customer billing procedures, organizational change and more demanding customer requirements constitute the need for a full scale analysis of current practices and development of better alternatives for a common, repeatable, and maintainable report generating process that meets or exceeds the needs of management and the customers. This is in alignment with organizational objectives towards achieving a higher standard of quality through utilizing best practices that are repeatable and sustainable, which includes achievement of Level 3 standing in the Capability Maturity Model (CMM) from the Software Engineering Institute (SEI). CMM Level 3 emphasis on consistent processes maintains an environment where the process, instead of the individual, defines the work, which creates a foundation on which major progress through process improvement and innovation can be achieved [3].

The new project financial status reporting process must support 300+ projects, worked by an organization recently merged from two previously separate departments (Departments A and B), for three major airline customers consisting of over 25 separate customer groups. Eight delivery managers and over 30 project managers manage the projects. In this environment, currently

1 To preserve confidentiality, the real company name is not used here. Any performance data shown have been scaled so that the relative magnitude expressed by the numbers remains intact. Some data have been omitted completely or left vague per request of management.

there are three different processes, eight internal reporting formats, and at least 10 customer reporting formats for conveying project financial status. The financial data essential to status is actual billed amount, customer approved funding, and forecast. Currently only actual billed amounts are provided at a corporate level from the FWO Airline Solutions financial department. Reports are required at the project level as well as rolled-up delivery manager, customer, and organization levels. Maintainer, as used in this proposal, is defined as a person responsible for maintaining the project financial status reporting process/system, including responsibility for rolling up reporting to the different higher levels.

3.0 Measures of the ProblemThe new common project financial status reporting process and formats should demonstrate significant improvement in the following identified areas:

Reduction in the number of different financial status reporting processes and formats. Currently there are three different processes, eight internal reporting formats, and at least 10 customer reporting formats for conveying project financial status. The objective is to have one process, one internal reporting format for each level required, and as few customer reporting formats as possible, dependent upon specific customer requirements.

Decreased time spent on generating project financial status reports. Currently delivery managers, project managers, and the maintainers all spend time generating project financial status reports. Currently the maintainers spend 240 hours/month and each delivery/project manager spends from 4-16 hours/month. Presumably, a common, centralized process should reduce or eliminate the time spent by project and delivery managers and could reduce the maintainers time to around 160 hours/month.

Increased customer satisfaction with project financial status reports by meeting or exceeding requirements. At least one major airline customer is requesting detailed phase financial information on new development projects that is not obtainable on the current financial status reports. All three airline customers would like to see a common format on all of their projects' financial status reports. The current process is not meeting either of these two major requirements, so adherence to those as well as meeting or exceeding other customer requirements would increase the customers’ satisfaction. This is measured through customer feedback on specific requirements, rated on a scale from 1-5, where 1 = Below Expectations, 2 = Somewhat Below Expectations, 3 = Meets Expectations, 4 = Somewhat Above Expectations, 5 = Exceeds Expectations.

Increased management satisfaction with internal project financial status reports by meeting or exceeding requirements. The new organizational leader of the two merged departments is seeking consistency in reporting format and the ability to roll-up project financial status reports to high level by customer and delivery manager views. Currently with the eight different formats the roll-ups are not available, so adherence to this requirement as well as meeting or exceeding other management requirements would increase managements’ satisfaction. This is measured through management feedback on specific requirements, rated on a scale from 1-5, where 1 = Below Expectations, 2 = Somewhat Below Expectations, 3 = Meets Expectations, 4 = Somewhat Above Expectations, 5 = Exceeds Expectations.

4.0 Project ObjectivesThe objective of this project is to develop a common project financial status reporting process, including internal and customer report formats, which: Is compatible with changes in contractual billing procedures; Provides a centralized source of information (including actual billed amount, customer

approved funding, and forecast) and common processes for all projects supporting all customers;

Is in alignment with organizational quality objectives for repeatable, sustainable processes towards the goal of CMM Level 3 standing;

And meets or exceeds management and customer requirements.

5.0 Specific DeliverablesThe specific deliverables that address the problem statement and achieve the objectives stated for developing a common project financial status reporting process and formats are: A centralized data repository that contains the project and financial data (actual billed

amount, customer approved funding, and forecast) required for reporting or a common method for retrieving such data from other central sources.

A common process for maintaining the project and financial data, including a process flow chart and description of the process.

A common process for retrieving the project and financial data for internal and customer reporting purposes, including a process flow chart and description of the process.

Common standard reporting formats that use the project and financial data to display project financial status as required by management and customers, including process flow charts and instructions for updating and maintaining the reporting formats.

Training for maintainers and users of the process/system. Assessment of ongoing support needs for the new process/system, including skill sets and

time estimates. Assessment of improvement factors including number of different project financial status

reporting processes/formats, time spent on project financial status reporting, meeting or exceeding customer requirements, and meeting or exceeding management requirements.

Project documentation as required by FWO Airline Applications project management methodology.

6.0 Alternatives to be ConsideredIn order to develop a common project financial status reporting process and formats, meet the objectives and ultimately provide the deliverables listed above, the following alternatives will be considered.

6.1 Provide common process for obtaining financial data from existing sources, and standard templates for reporting.

Description: Develop a common process for obtaining financial data from existing sources by supplying standard instructions on downloading actual billed amounts from the customer billing web site. Provide standard templates and instructions for obtaining and maintaining customer approved funding and forecasts. Develop standard templates and instructions for internal and customer reporting for delivery/project managers

supporting project-level reporting. Develop standard templates and instructions for the maintainer(s) supporting rolling up the project-level reports to delivery manager level, customer level, and organization level reporting.

Technology: Project actual billed amounts, customer approved funding, and forecasts are kept in Microsoft Excel workbooks (a standard template). The actual billed data is downloaded from the customer billing web site to an Excel format. Visual Basic (VB) macros are used for formatting reports in Excel, as well as for rolling the data to the different required higher-level views.

Successful Use: Microsoft Excel workbooks are in common use among the users and maintainers of the project financial status process. However, most are not familiar with the customer billing web site.

Feasibility: Feasibility is considered medium-high due to familiarity and industry-wide use of Excel and available skill sets for developing Excel templates with VB macros. Training is required for all users on the customer billing web site. Management of the data, for rolling up to the different required higher-level views, is most likely the most difficult hurdle; managing hundreds of Excel workbooks is challenging. One specific threat to this working is random customizations to the Excel workbooks, which could hinder the macros from working.

Known Preconceived Biases: Delivery/Project managers may be partial to being in control of updating and maintaining their projects' data. Most people are also familiar and therefore comfortable with Excel. However, the maintainers that would be responsible for rolling up the data to the different required higher-level views are apprehensive towards working with hundreds of Excel workbooks.

6.2 Use Department B project financial status reporting process/system as a base.

Description: Utilize current financial database, web site, and automated reports developed for and in use at Department B prior to the current merged organization. The database acts as a central location for all financial data, including customer approved funding, actual billed amounts, and forecasts. Actual billed amounts are updated by downloading invoice data from the customer billing web site, and running modules. Customer approved funding and forecasts are updated either by delivery/project managers via a password secured web site or by the maintainers using update queries in the database. The database, web site, and automated reports need to be expanded and enhanced to accommodate the larger organization, be compatible with the new contractual billing procedures, and to meet or exceed the new management and customer requirements.

Technology: The data is structured in a Microsoft SQL (Sequel or Structured Query Language) Server database with a Microsoft Access database interface used by the maintainers. Updates and maintenance are currently handled via Access queries and modules coded in VB and SQL. Reports are created using Seagate Crystal Reports

(linked to the Microsoft Access database) which are then exported to Word and posted on a web site. The web site acts as a user interface to the financial data and provides access to the reports. The web site is built using ASP (Active Server Pages) with VBScript and JavaScript.

Successful Use: This project financial status reporting system and process has been used successfully for approximately three years in Department B. That equates to successful use by four of eight delivery managers and 16 of 30 project managers in support of over 150 projects for two of the three major airline customers consisting of approximately 12 separate customer groups. However a long list of enhancements and improvements have already been identified.

Feasibility: Feasibility is considered high due to factors such as partial customer and management familiarity with the process and reports, available skill sets for expansion and enhancements, and past successful use. However, careful consideration for the compatibility with and needs of the projects, customers, and managers that have not been using this process should be given.

Known Preconceived Biases: The author of this project proposal may have a preconceived bias towards using this alternative as she led the charge of developing the process(es)/system for Department B. Although she is most familiar with it, she is also very aware of its shortcomings and weaknesses. Further pro bias towards this process/system may also come from the delivery/project managers and customers that currently use it, although they as well have had suggestions and needs for improvement.

6.3 Lobby FWO Airline Solutions financial department to expand the customer billing system to include project financial status reporting required data and report generating capabilities.

Description: The current customer billing system provides only actual billed data on its web site, but it provides that data for all of FWO Airline Solutions' regional organizations (Tulsa, Dallas, Pittsburgh, Washington DC, etc.) and all of its customers. Lobby and champion for the financial department to expand and enhance the billing system so that it contains project customer approved funding and forecast data, as well as the ability to pull that data in the form of reports at different level views as required by management and customers.

Technology: The customer billing system draws data from different databases into SAP, and the invoice data is then made available via a web site. The actual languages and database hosts are unknown at this time.

Successful Use: The customer billing web site has been used successfully for over two years by internal and customer financial analysts. Therefore financial analysts are very familiar with the data's structure. Management does not use and therefore is not familiar with the customer billing web site.

Feasibility: Feasibility would be considered medium-low due to factors such as unknown availability of resources of the right skill set and issues with delivery/project managers having the ability to update customer approved funding and forecasts. However, the concept of having a centralized mechanism for all regional organizations in FWO Airline Solutions to maintain and update project financial data could be important enough to overcome those obstacles.

Known Preconceived Biases: Delivery/project managers may be apprehensive to using the customer billing system, as historically mainly financial analysts have used it.

7.0 Project Approach and Criteria for Evaluating AlternativesThe FWO Airline Solutions (Tulsa) organizational leader is the sponsor of this project. The author will perform analysis, present recommendations, and manage (and perform) the construction and implementation for the project. Other resources will include a business/financial analyst, programmers as they are available between customer billable projects, and delivery/project managers and customer representatives for input on their needs and wants. The overall approach for this project will follow the FWO Airline Applications project management methodology [3]:

7.1 Start-Up

Gather RequirementsAlthough the general requirements are understood and stated in the objectives and deliverables provided in this proposal, it is necessary to document those requirements so that they can be reviewed and understood by management. Gathering the requirements involves interviewing the users, maintainers, and customers to understand their needs and wants. This can include providing sample templates/reports, and further information about possible alternatives, in order to acquire good feedback on what would be preferred.

Collect Data- Determine exact technology involved (format of data, database formats,

accessibility of data, programming languages used) by interviewing those people that maintain the data and the current processes/systems, and other experts in those technology areas.

- Assess availability of resources having skill sets required to work with the technology involved by querying resource management.

- Appraise the sustainability of each alternative by interviewing current management of the existing processes/systems on the outlook of those processes/ systems, their expected longevity, and any known/foreseen future changes.

- Determine approximate length of time and amount of people hours required for full implementation of each alternative by interviewing construction resources and current maintainers of similar systems/processes.

- Determine approximate length of time and amount of people hours required for maintenance of data and report generation using each alternative by interviewing maintainers, construction resources, and users.

Evaluate Alternatives

- Develop prototype templates to assess capabilities of reporting formats of each alternative (Excel, Crystal Reports, etc.) and obtain feedback from management and customers per their requirements.

- Examine feasibility of each alternative, based upon the data gathered, using the Kepner Tregoe decision analysis method [1]. This involves identifying specific objectives, assigning “must” or “want” status to each objective, placing weights on each “want” objective, and then evaluating the three alternatives against those objectives by assigning scores.

- Perform a high-level risk assessment on each alternative to determine the extent of possible risk that would affect the project outcome.

Develop and Present Recommendation- Based upon the results of the Kepner Tregoe decision analysis, the risk

assessment, and the feedback on the prototype templates, establish a recommendation on the best alternative.

- Present alternatives and recommendation to organizational leader for decision on which alternative to proceed. The presentation would include the results of the Kepner Tregoe decision analysis, the risk assessment, and the prototype templates with the feedback obtained.

7.2 Planning

Document ScopeIn order to bound the project and be clear about what the project is and is not to accomplish, it is important to document the scope. Documenting the vision, goals and purposes, objectives, critical success factors, business benefits, and other necessary descriptions of the project helps to accomplish this, ensuring that there is a clear understanding as to the intent of the project.

Establish Project TeamResources will need to be obtained once an alternative is chosen to go forward with construction and implementation.

Construct Project PlanOnce those resources are assigned, more detailed planning of the activities and tasks to be accomplished can be done. Those activities must include construction of the actual process/system, documentation of the process/system (including flow charts and written instructions), testing, implementation, and training.

7.3 Execution

Construction of the Process/System Development of Ongoing Maintenance and Data Updating Processes (including flow

charts and written instructions) Development of Report Formats (based upon internal and customer reporting needs,

including flow charts and written instructions on producing reports) Testing Implementation (putting the process/system into production with maintenance plans) Training Users (delivery/project managers, maintainers, management)

Educating the Customers Continuous Monitoring and Controlling of the Project

7.4 Close Down

Project Close by Sign-Off from Organizational Leader Post-Project Review

Following implementation, and after several months of production, it will be beneficial to evaluate the new project financial status reporting process and formats against a set of performance criteria. The measures presented earlier in this proposal will be used:- Reduction in the number of different financial status reporting processes and

formats. This will be measured by assessing the number of processes and formats after implementation.

- Decreased time spent on generating project financial status reports. This will be measured via survey of the users and maintainers concerning their time spent on reporting after implementation.

- Increased customer satisfaction with project financial status reports by meeting or exceeding requirements. This will be measured through feedback from the customer on each identified requirement, rated on a scale of 1-5, where 1 = Below Expectations, 2 = Somewhat Below Expectations, 3 = Meets Expectations, 4 = Somewhat Above Expectations, 5 = Exceeds Expectations.

- Increased management satisfaction with internal project financial status reports by meeting or exceeding requirements. This will be measured through feedback from management on each identified requirement, rated on a scale of 1-5, where 1 = Below Expectations, 2 = Somewhat Below Expectations, 3 = Meets Expectations, 4 = Somewhat Above Expectations, 5 = Exceeds Expectations.

8.0 Project PlanThe project plan follows the project approach as outlined earlier in the proposal. Target dates, predecessors, successors, and initial durations have been assigned to each step. Once the Start Up phase is complete, the project plan will be fleshed out with further details based upon the alternative chosen and the project resources available. The current rough plan estimates that the Company Project will last approximately five months and that the Capstone Project final report and presentation would be ready for submission in late August. Following is a picture capture of the current Microsoft Project project plan:

9.0 Planned Use of ETM MaterialsSuccessful execution of this project is incumbent upon the knowledge obtained through the following ETM courses:

Project ManagementThe Project Management course gave exposure to the basic principles of project management that will be used in the execution of this project: planning, organizing, directing, and controlling [2]. The course also provided reading, researching, and discussion on various project management methods, which enhanced personal experience with the experience of other professionals. Finally, the course supplied the opportunity to build and progress a project plan in the Microsoft Project scheduling tool. Engineering TeamingThe Engineering Teaming course introduced tools and techniques for working with and managing project teams. This project will involve the management of at least two other resources, as well as working with management and customer expectations and feedback. Learning the facilitating methods and developing an understanding of how personality types and management styles impact the progression and success of a project, and applying these concepts to project management will prove most helpful in managing the human aspect of this project. Problem Solving and Decision MakingThe Kepner Tregoe decision analysis method learned in the Problem Solving and Decision Making course will be used as a major part of the evaluation of the three alternatives presented in this proposal. The Problem Solving and Decision Making course also emphasized the use of proven tools and methods in analysis, stemming from the scientific method, which provides depth in the ability to apply logic in all problem solving and decision making opportunities. Strategic Quality Leadership (Total Quality Management)The Strategic Quality Leadership course provided a comprehensive background of quality movements, concepts, methods, and successes. This allowed for a more global understanding of the organizational objectives towards achieving a higher standard of quality through utilizing best practices that are repeatable and sustainable. In particular, through a term paper, the author had the opportunity to research and learn about SEI’s CMM, which is the specific context under which FWO Airline Solutions is working.

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References[1] Kepner, Charles and Tregoe, Benjamin. The New Rational Manager. Princeton, NJ: Kepner-Tregoe, Inc., 1997.

[2] Kerzner, Harold. Project Management: A Systems Approach to Planning, Scheduling, and Controlling. New York, NY: John Wiley & Sons, Inc., 1998.

[3] “Project Management Core Practices.” EDS internal training manual, November 2001.