Project Management Accounting: Budgeting, Tracking, and Reporting Costs and Profitability, Second Edition

Project Team and Financial Success

In this chapter, we first review a case study of how strategic project management can help a company link project success to financial success and motivate the project team to be successful by having them understand how they will affect the company's (and possibly their own) finances. In the case study, we use financial and accounting information to discover where the real problems are with the company's finances and discuss some implications of different solutions.

In Chapter 7, a second case study presents the problems of another company and how project management and accounting and finance work together to ensure that projects are executed properly and contribute to the company's well-being.

In the second part of this chapter, we show how the implementation of strategic project management will help a company to forge a link between company mission and objectives, strategy, and everyday project work.

In order to illustrate how important the link is, let's take a look at an example of a fictitious food manufacturing company that is not performing well (see Exhibit 3.1). Marvelous Food's mission is to provide customers with delicious products that are healthy and nutritious. At the same time, Marvelous Food wishes to give investors a good return on their investment. Unfortunately, that is not happening. To see why that is not happening, we can break down Marvelous Food's financials using a DuPont analysis. All of the information in Exhibit 3.1 ...