MBA Journal Six Sigma Education Resources

Involve Finance in Project Selection, Not Just Validation

The success of any project relies mostly on financing, without funds nothing can go on as evidenced by stalling or complete downfall of great projects when funding is suspended. The trend has bee that whenever projects are being evaluated and selected, the personnel from the finance department usually are left to do routine work pushing papers instead of actively assessing project viability, sustainability among other crucial duties.

However, organizations are coming up with new trends and ways of doing business. They involve the finance staff in the bulk of the project selection all through to completion. In order to be successful in any 6 sigma project finance must be involved from idea generation and triage, project charter, benefit assessment, project approval, project prioritization, project works control and tollgate, project completion and finally tracking and reporting benefits.

It clearly indicates that other than validation, finance if importance and issues to d with auditing the project must be handled actively by the finance team. Most companies including the ones using Six Sigma are known to involve the financial staff in project completion to handle audits and review results, it should not be this way; let them run a bigger stake all through.

When accounting errors are not scrutinized and documented from the beginning, bigger challenge will be encountered by the auditors and data analyzers at the end of the project. Finance personnel should collect data right from the start for a smooth flowing project and for total financial accountability. When the company is not able to explain where funds have gone to, finance department will not be able to defend nor explain the origin of the errors if they are brought in only towards the end of the project.

The successful companies which are changing their ways of operation have realized that involving the finance people in strategy, idea generation at the beginning of the project will go a long way in streamlining all processed since everything in a project requires finances. Developing the culture of feeding financial data into project selection can have great benefits to the project and organization as a whole. A good control of he financial systems will have immense rewards resulting in remarkable savings on expenses, overheads and job costing.

The support of the finance department is needed in every other department and their projects, maybe the approach should be that of a consultant or line management in order to avoid a confrontation and being locked out by the department head who may see the finance guys as nosy intruders.