Financial steering and management

General

The project's financial steering and management starts with the decision on project initiation release and ends with the decision on project closure, in some cases with the decision on project discontinuation.

Funding

As the owner of the project, the core organization provides the financial resources for the project. The initiation phase constitutes preliminary goods/services for the entire project, financed using the project budget or line budget. The outlay for the initiation phase is included as preliminary goods/services in the project's economic efficiency considerations.

The planning of resource requirements and financing is carried out for the entire project. A master plan is created in the initiation phase, and this is continuously checked and adjusted. In the traditional approach, the binding investment and operating costs must be known at the end of the concept phase. These also factor in the costs of covering project risks.

In the agile approach, key figures for operating costs are fleshed out successively from release to release and reported on a release-by-release basis. The expected investment costs or the total budget for the solution development, plus the costs for the closure phase, are in principle defined as fixed in the execution order.

The operating costs are financed using the project budget during project execution and then using the line budget.

Steering

With the decision on execution release, the investment budget required for execution is approved by the core organization. The project sponsor assumes responsibility for this and, in the traditional approach, releases the financial resources in phases. This release is steered by means of the phase release decision-making tasks.

In the agile approach, there is no need for a successive release of finances. These are fixed for the solution development or defined as a cost ceiling and are released once with the execution order. Within the framework of agile development, the estimated remaining outlay is compared with the actual remaining outlay by means of a burndown chart and communicated by means of a release report.

The project sponsor is responsible for financial steering and ensures the economic efficiency of the project. The project sponsor accordingly steers the project costs and the future operating costs. Reporting provides all the information the project sponsor needs to assess the project status and cost developments. Given that the budget is fixed in the agile environment, financial control and project success are measured and ensured by other instruments.

If necessary, the project sponsor appoints an independent quality and risk manager for steering support.

The project management is responsible for the financial management of the project. The project management takes care of project accounting and prepares the information for steering.

Through the manage changes task, the project management ensures that changes in requirements and scope, as well as their impact on costs, personnel requirements, and deadlines, are identified, analyzed, requested, and decided in a timely manner. Planning is adjusted accordingly.