Project Selection Process – Budget Cycle

The core mission of Clarity is to provide a Portfolio Management construct for the organization, along with delivering the Project Management components that are needed to fulfill the PPM solution. This system depends on a process within the organization to select and prioritize projects based on the goals and alignment with Corporate priorities.  If you are fortunate, you will have the opportunity to begin a new phase of your Clarity implementaiton through the integration of Clarity into your budget cycle.

My wife is an Accounting professional who spends her working time in two major areas – the period close process and budget cycles.  Each quarter, about 6 weeks after the quarter begins, the group she is in begins a process akin to water torture – they begin pulling together spreadsheets, figures and reports to align the current budget to the next quarters expectations.  Each manager pulls together a set of figures that details how their budget will be spent, and these worksheets are rolled up to their reporting manager and so on.  There are usually three or four rounds of revisions, trimming and painful decisions regarding what to cut (in an environment where hard data about priorities is sketchy).   This process typically consumes the better part of the rest of the quarter – and takes a tremendous amount of effort.

Cut to a budget cycle that leverages Clarity for the data component of the budgets.  The managers of projects and programs have realistic budgets of time and cost that can be included in a portfolio.  The manager of the portfolio (the budget owner) can review the priorities of the projects (and KTLO or keep the lights on efforts) as well as the risks and benefits of the components of the portfolio.  In the event that the budgeted amount for the portfolio must be reduced, the manager has the ability to setup scenarios.  These scenarios allow the adjustment of portfolio investments of all types (projects and KTLO efforts) in an area where the change won’t affect the current operations.

Through effective scoring and evaluation of the investments the manager can decide where budget dollars can be allocated most effectively, and make this case with the proper understanding to help everyone.   The spreadsheet onslaught is removed, as all of the information needed to deliver the budget cycle process to completion is in Clarity.  The pain is also reduced, as well as the time it takes to complete the cycle (usually over 50% less time is needed for the budget cycle compared to traditional methods).

Using Clarity for your budget process is a wise choice, assuming of course you spend the time and energy to build a process that can take advantage of Clarity’s benefits.  It’s also the first step in a healthy Project and Portfolio Management solution – the creation of an intake/budgeting process for prospective projects and operational requirements.  The development of a working projects queue is the first step to effectively managing your project load in alignment with your resource constraints.

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