As the name suggests, project resource management is the arrangement and deployment of resources available to a project. Project resources typically include finances, supplies and inventory, human time, skills and input, equipment, and information technology.

Why Is Effective Resource Management Important?

One of the most important and most challenging jobs of a Project Manager is to effectually and efficiently organize all the resources involved in a project. It goes without saying that the complexity of this task will depend heavily on the scope and nature of the project at hand. But in all cases, it is a critical factor behind success or failure.

At any given time, a Project Manager must know how to effectively juggle numerous project resources. The manager must know how to create and stick to a budget so that funds are allocated where they are needed and effectively organize workers and project personnel so that the right people are assigned appropriate tasks. In addition, it is necessary to have an effective deployment and flow of services, supplies and inventory so that the project has access to what it needs, when and where it needs it and at the most appropriate price.

Effective and fluid communications with support services is vital for project success. It is often stated that “project management is too important to leave to the project staff alone”. Support staff members have critical skills and experience. They need to be engaged in the project as early as possible. Failure to involve them will usually result in inaccurate and/or incomplete planning and, as a result, poor implementation and delivery.

The PMD Pro focuses on three of the Project Resource Management areas: finance management, supply chain management and human resources management. These three form the core of project support services.

It is important to be clear that ultimate responsibility for project finance, supply chain and Human Resource Management rests with the Project Manager. This is true even though the Project Manager may not have direct line management responsibility for finance, supply chain and staff. It is the Project Manager’s job to make sure that project finances are well managed; that goods, services and materials are managed effectively and efficiently; and that project staff have all skills necessary to achieve success.

 

 

Collaborating with the Support Staff

Project Management is Integrated!

One of the most important challenges in project resource management is ensuring that the Project Manager along with the project support staff (i.e. finance, HR, IT, and supply chain) and their managers are closely aligned and integrated. This relationship building should begin during the Identification and Design phase. As the initial project design is formulated, the appropriate support staff should be involved in establishing high-level budget parameters, identifying skills and specifying supply needs.


 

As a project enters the Planning phase, the support staff can be especially helpful in ensuring that budget formats are correct, that estimates are accurate, that the budget item list is comprehensive and that the budget is detailed. They will ensure that supply chain plans are accurate and that recruitment and skills development planning is incorporated into project plans.


 

Later, as a project enters the Monitoring, Evaluation and Control phase, support staff will be critical to ensuring that project financial reports are accurate, timely and useful. Only with this information, will the project team be able to gain a full understanding of where the project stands with regard to its progress.

Managing Project Finances

Development sector organizations usually rely on individual or organizational donors to fund programs – and they expect donations to be well managed. Development organizations also have an obligation to the communities and partners they serve, being responsible to ensure that resources obtained on their behalf are used in an optimal manner in order to maximize impact.

To exercise prudent financial management of the project, the Project Manager will need to develop skills in these three areas:

  • Developing Budgets

  • Identifying Cost Estimates

  • Monitoring Budgets and Expenditures

It is the practical reality of most projects that a manager will not be given full control over all financial processes. To be successful, a Project Manager will need to collaborate and coordinate closely with a Finance Manager plus an array of other people in all steps of the finance management process. Nonetheless, even though there will be elements of financial management where the manager lacks full authority and control over processes, the Project Manager is still accountable. These six areas of coordination and collaboration in finance are especially critical:

  • Accessing historical data for financial reports

  • Explaining budget variances

  • Issuing checks

  • Authorizing expenditures

  • Managing cash balances

  • Implementing purchasing policies

As discussed previously, the mandate of the Project Manager is to assume responsibility for ensuring overall success of the project. In the case of the financial elements, a Project Manager must ensure that roles and responsibilities of all individuals involved in financial processes are clear AND that individuals are living up to their commitments.

Developing Budgets

A budget is a description of the project’s financial plan that includes a list of project cost estimates. As is the case for all components of the project plan, the key to accurate budgets is assuring that they are comprehensive and detailed.

Comprehensive Budgets – All budget items required to deliver the products and services must be included. As a first step, the project team needs to identify expenses required to deliver project products and services. These are expenses related to the direct work of the project; including salaries, vehicles, materials, supplies, equipment, etc. However, it is important not to stop there but to remember that a comprehensive budget must anticipate expenses related to the indirect work of the project. A Project Manager must ask an important question: “what resources will be required for the supporting processes that are vital to project success?” These include resources required for communications, risk management, monitoring, evaluation, project management services, human resource management, procurement processes, project integration and general overhead of the project.

Detailed Budgets – Just as the project scope should drill down to identify specific activities required to successfully implement a project, so should the project budget. While high-level budgets are helpful to communicate the general parameters of the project to various stakeholders, the project team requires a more accurate and specific identification of project costs in order to implement activities successfully.

Some examples of the level of detail that needs to be included in the project include:

Transaction Costs: For instance, when identifying the cost of procurement, the team budget should not only identify the cost of the service or product but also the cost of managing the procurement process. The level of budget detail might include expenses required to start up a project (establishing internal controls, accounting systems, hiring processes, etc.) and the cost of terminating projects (closing out contracts, terminating staff, etc.)

Shared Services: Another level of detail often missing in project budgets is the cost of services allocated to the project by the development organization itself. For example, does the budget need to include expenses for the percentage of time allocated to the project by the financial manager, a driver, an information technology staff or others? If the project fails to include a sufficient level of budget detail, it runs the risk of being unable to access the full range of services and oversight needed for successful project implementation.

Design and structure of a budget document often depends on the source of the project funding. For example, in situations where development projects receive money from external donors, the budget parameters most frequently follow donor guidelines. As a result, project budgets vary considerably with regard the chart of accounts and timing.

Chart of Accounts – Project budget items are grouped in cost categories that help project teams capture and analyze transactions by program area, funding source, location, department, etc. In turn, these cost categories are grouped in sub-elements that are provided with line-item codes. While it is a common practice for budgets to employ a chart of accounts approach that identifies all accounts in the project, the cost categories and line items are not standardized and vary between donors, implementing organizations, and/or project partners.

Timing: All budgets must define the time period to which they apply. There are multiple approaches to managing budget time schedules:

Life-of-project budget (or multi-year budget) – Here the global budget for the entire life of the project is developed and serves as the official financial document that accompanies the project plan.

Annual project budgets – Some projects adopt the norm of revisiting the life-of-project budget on a regular basis and requiring that a project team submit a one-year budget upon the completion of each project year. While multi-year budgets tend to be the standard in the development sector, requiring an annual project budget lowers the risk that budget estimates based on multi-year horizons will be inaccurate, will suffer from price variability, or will not be flexible enough to adjust to shifts in the field operating environment.

 

Activity Based Budgeting

Activity based budgeting focuses on identifying costs of activities that take place in every area of a project and determining how those activities relate to one another – including direct and indirect work.

Proponents see activity based budgeting as more realistic than other budgeting approaches, as it involves understanding how much activities will actually cost. If a Project Manager is able to develop a complete (both comprehensive and decomposed) list of activities along with cost estimates for activities, then a budget will prove accurate. Activity based budgeting also offers more opportunity for line staff to get involved, making it more likely that a budget will be accurate.

While there are a number of possible activity based budget formats that add details such as account codes, donor codes, and unit costs -- they all have two similar requirements:.

1) Develop a complete list of activities during scope planning.

2) Work out what will be needed to achieve each activity and estimate how much each will cost.

By meeting these two requirements, the budget will provide details for each activity and show associated costs that can, in turn, be monitored. If monitoring shows that actual expenditures have exceeded cost estimates, then a Project Manager will know that the project is unlikely to deliver the complete project scope. Re-planning of work must be done to find more efficient ways of implementing remaining activities. Alternatively, the manager can request a Project Board, or other Project Governance structure, to adjust scope.

Simple Activity Based Budget Example

 

Figure 46: Simple Activity Based Budget Example

 

Identifying Cost Estimates

Regardless of the project or the format of the project budget, a financial plan is only as good as the estimates upon which it is based. To an extent, there is always going to be risk associated with project estimates. Estimating will never be a precise science that produces 100% accurate results. Project Managers can’t predict the future. There will always be project variables that will lie outside the control of the project team.

And yet, while there are abundant reasons why making accurate estimates is a challenge, estimates can be sufficiently accurate to support good project decisions. Furthermore, there are best practices that help Project Managers improve the accuracy of their budget estimates:
 

  1. Choose the right approach to make the estimate – Estimates are normally developed through a combination of the following three techniques:

Top-Down Estimates start with a global estimate for the cost of a project and then assign a percentage for that total to different phases or work packages of the project. The percentages assigned to the components are generally identified by individual(s) who have previous experience on similar projects. This approach to estimating tends to be more exclusive and involves a relatively small group of people who are considered to be “experts”, based on their past experience.

Bottom-Up Estimates do not start with a global estimate of the cost of the project. Instead, tasks are estimated and “rolled up”. In this model, the estimates are solicited from the people who have knowledge of the field reality of the project, and who are often the same people who will be responsible for implementing project activities (including partners, suppliers, community members, etc.) Bottom-Up estimating tends to involve a larger number of participants and requires more effort to manage. Bottom-up estimates are more likely to be accurate as field staff will probably have a better awareness of the resource constraints that impinge on cost estimates. As an example, they may know exactly how much resource different communities can provide to help with latrine digging – giving a much better estimate than assuming that all communities can provide the same resource.

Parametric Estimates rely less on people and instead uses a statistical relationship between historical data and other variables (for example, square footage in construction, meters of road, etc.) Parametric estimates tend to be used for projects and project components that produce concrete outputs (for example, infrastructure building, road construction translation services, etc.) Here the estimate is made by identifying historical data from projects that delivered similar outputs (for example, miles of road, square footage in construction, lines of text) and using it to calculate estimates for scope/quality, cost/resources, and/or time/calendar. This technique can produce higher levels of accuracy, but depends on the quality of the underlying data built into the model.

  1. Develop phase estimates (when possible) – At the beginning of project implementation, donors often require a firm commitment to a life of project budget. While this practice is often considered a good strategy to manage runaway budgets, the strategy only works to the extent that the project budgets are realistic. Often it is difficult to develop accurate budgets during the early stages of the project life. The field reality often changes during implementation. Unforeseen costs will arise. The field reality will evolve. Prices and inflation will change. For that reason, project teams often prefer to work through a process of phased estimating which allows the possibility of developing a series of budgets at different points along the project calendar (this could, for example, be a string of annual budgets). This strategy helps ensure that project budgets are accurate as they enter the next phase of the project. It also provides a logical point for the project governance body to check in on the justification of the project and ensure that it still “makes sense” before devoting additional funds.

Monitoring Project Financial Performance

When monitoring project financial performance, the first question is usually, “Is the project over or under budget?” To answer this question, most project teams pull out the most recent budget data and compare the Cumulative Planned Costs to the Cumulative Actual Costs for the project up to a certain date. Unfortunately, this calculation is often limited in its usefulness. While it might provide a snapshot of whether a project has spent more or less money than was estimated over a given time period, it provides no data to explain why any variance might exist.

Take, for example, the data provided in Figure 47. The initial analysis of the data from month three of this project would indicate that this project is over budget. This is because the Planned Cumulative Cost at the end of month three (1100) is lower than the Actual Cumulative Cost (1300).

Figure 47: Illustrative Budget for a Six Month Project (including actual costs through Month 3)

Task

Planned Cost

Month One

Month Two

Month Three

Month Four

Month Five

Month Six

A

100

100

 

 

 

 

 

B

200

 

200

 

 

 

 

C

100

 

100

 

 

 

 

D

400

 

 

400

 

 

 

E

100

 

 

100

 

 

 

F

200

 

 

200

 

 

 

G

200

 

 

 

200

 

 

H

100

 

 

 

100

 

 

I

300

 

 

 

 

300

 

J

100

 

 

 

 

 

100

Planned total cost per month

 

100

300

700

300

300

100

Planned cumulative cost

 

100

400

1100

1400

1700

1800

Actual total cost per month

 

150

350

800

 

 

 

Actual cumulative cost

 

150

500

1300

 

 

 

Unfortunately, this quick calculation doesn’t give the whole picture of the financial status of the project. Yes, the project has spent 200 (11%) more than was budgeted for the first three months of the project. However, while it is tempting to assume that the cost variance at the end of month three means that the project is “over budget”; be careful not to jump to assumptions! The higher than expected costs could be attributable to one of two reasons:

  • Scenario A: On the one hand, the project could be more expensive than was originally estimated. In this case, project activities are on schedule, but they cost more than anticipated in the budget. Analysis: Scenario A is definitely problematic. It points to a trend that, if continued, will result in a project that will be over budget. In this situation, corrective action will need to take place to ensure that the project avoids budget shortfalls.

  • Scenario B: On the other hand, the project might be spending more than it expected because the project is ahead of schedule. As a result, the project is spending more than they anticipated in the first three months of the project. Analysis: Scenario B is not necessarily problematic. Yes, the project in Scenario B is spending more money per month than was originally planned; however, it is also completing more work than it had planned. In this scenario, the project needs to collect more information to decide whether the project is spending more money than it had anticipated for the amount of work it is completing.

Note - In both scenarios, the project will need to ensure it has enough cash on hand (cash flow) to continue operations because it is spending more money per month than was originally anticipated.

Scenario B provides an interesting challenge to a project team. This scenario underscores the important message that it is not enough to look only at whether a budget has spent more or less money than was estimated over a given time period. Instead, monitoring financial performance must also watch two separate but related indicators: monitoring cash flow and monitoring costs through earned value analysis.

Monitoring Project Costs through Earned Value Analysis

To best monitor project costs, it is preferable to monitor the cost of the work completed during a time period. Earned Value Analysis is a tool that compares the planned and actual cost for each task that has been performed and ALSO compares the rate of progress on each task to what was scheduled in the project plan. This means that in order to conduct Earned Value Analysis the Project Manager will need a more complete set of data that combines elements of both the project budget AND the project calendar.

Figure 48 provides an updated view of the six month project introduced earlier, but now includes two new columns that provide the actual cost of each task and the percentage of work completed for each task.

Figure 48: Example of a 6 Month Project Budget (including data for Earned Value Analysis)

Task

Planned Cost

Actual Cost

% Done

Month One

Month Two

Month Three

Month Four

Month Five

Month Six

A

100

150

100%

100

 

 

 

 

 

B

200

200

100%

 

200

 

 

 

 

C

100

100

100%

 

100

 

 

 

 

D

400

400

100%

 

 

400

 

 

 

E

100

 

0%

 

 

100

 

 

 

F

200

100

50%

 

 

200

 

 

 

G

200

200

100%

 

 

 

200

 

 

H

100

50

50%

 

 

 

100

 

 

I

300

100

50%

 

 

 

 

300

 

J

100

 

0%

 

 

 

 

 

100

Planned total cost per month

 

 

 

100

300

700

300

300

100

Planned cumulative cost

 

 

 

100

400

1100

1400

1700

1800

Actual total cost per month

 

 

 

150

350

800

 

 

 

Actual cumulative cost

 

 

 

150

500

1300

 

 

 

When analyzing the information in Figure 48, there are two important conclusions to be drawn from the data:

  • After three months the project has either fully or partially completed eight tasks. By comparing the planned costs of each of these tasks with the actual cost of performance of these tasks, it can be shown that the project is EXACTLY on budget when compared to the work performed ((The project spent 1300 to get 1300 worth of work done.)

  • The project plan calls for 1100 worth of work to be accomplished in three months. Instead, 1300 was accomplished. That means the project is 18% ahead of schedule.

So what conclusions can be derived from this analysis?

  • If the project continues at the current rate work, it will complete early;

  • If the project trends continue unchanged, the project will complete on budget.

Note that the conclusions of the Earned Value Analysis differ from the conclusions of the cumulative cost variance analysis in the previous section. This is because the Earned Value Analysis is providing richer data that integrates scope, budget and calendar data at the activity level of the project.

As a result, Earned Value Analysis helps underscore that not all scenarios where the cumulative costs exceed the project budget are “bad.” Conversely, not all scenarios where a project’s cumulative costs are under budget are “good.” The Project Manager should explore further to get a clearer understanding of the budget situation in comparison to the scheduled completion of project deliverables.

Figure 49 provides an overview of the combinations of results that can occur when conducting Earned Value Analysis and identifies the implication of the different scenarios. Note that the cells of the table provide some budget/schedule combinations that are “good”, others that are “bad” and some that require more data to understand the project status.

Figure 49: Results Combinations for Earned Value Analysis

 

Behind Schedule

On Schedule

Ahead of Schedule

Under Budget

Need more data

Good

Good

On Budget

Bad

Good

Good

Over Budget

Bad

Bad

Need more data

While the status classifications in Figure 49 are helpful, regardless of the classification Project Managers should use the status classification to begin a deeper exploration of “Why is our current Earned Value Analysis status what it is? Is our current status a result of decisions the project has made regarding quality management, risk management, stakeholder management or any of the many other topics that influence the budget and the calendar?”

As we conclude this exploration of Financial Monitoring, there is one final observation that is important to highlight. While Earned Value Analysis can provide rich data that helps better monitor the financial status of the project, it also requires an accurate project accounting system that integrates activity based cost and schedule data. Together, this data can be used to calculate earned value measurements for the project’s overall cost and schedule performance. The accounting system will need to be founded upon a practical, activity-driven work breakdown structure and will need to include timely cost information. Any delay in cost reporting is a delay in the ability to assess the current cost and schedule status of the project. These prerequisites are often absent from the systems of development organizations, making it difficult to adopt this management tool within the context of development projects.

Managing the supply chain

Imagine you are building a house. How would you address the complex challenges related to managing the flow of the goods, and services between their point of origin and their eventual use in the construction of the house? How do you plan the purchase of materials, establish delivery schedules, purchase equipment, identify storage facilities for materials, obtain permits, track the status of all the materials...the list goes on!

Now imagine building the same house in a remote, resource-poor community. As a Project Manager, you will now need to manage all of the complex supply management challenges listed above, but you will also need to manage an array of risks that are unique to the development context. Are suppliers reliable? Is there corruption in the procurement system? Are there any existing mechanisms for transporting materials? Are there security issues? Is staff safety a concern? What are the resource constraints?

Even this short list of risks provides insight into the challenge of managing supplies in development projects. Delays caused by faulty supply line management lead to not just loss of project control, but also to the loss of reputation and beneficiary satisfaction. These are priceless assets, which are almost impossible to recoup once lost. What's more, due to the critical nature of the services development organizations provide, shortcomings and oversights can result in serious consequences for the beneficiaries that could literally mean the difference between life and death.

In addition, supply chain management can account for a significant percentage of a project budget. This is why it is important for project supply to be managed as efficiently and effectively as possible.

It is likely that the Project Manager will not hold line management responsibility for the supply chain function. There may be a team of logisticians who provide procurement and logistics support to a range of projects. Despite this, the Project Manager is responsible for making sure that the project has access to the right goods and services at the right time and, as a result, needs to collaborate and coordinate closely with the supply chain support function to ensure success.

The PMD Pro defines three components in supply chain management:

Procurement Management – including the identification of what materials and services are needed, when they needed, and identifying how it will be acquired and by whom. The procured plan also needs to be integrated with all of the other elements of the project plan to ensure that all procurement decisions are aligned with the project’s budget, calendar, quality and risk parameters.

Logistics Management – including planning, implementing and controlling the efficient, cost-effective flow and storage of raw materials, in-process inventory, finished goods and related information from point of origin to point of consumption for the purpose of conforming to customer requirements.

Asset Management including the systems whereby things that are of value to a project are monitored, maintained and disposed.

The Project Manager is responsible for making sure that these components are being well managed.

Procurement Management

Procurement includes the complete process of obtaining goods and services from preparation and processing of a requisition through to receipt and approval of the invoice for payment. The Project Manager may be responsible for the actual procurement of the services or products needed to develop and implement the project, or may be directing these activities through a contracting or procurement Team Leader. Regardless of the precise role and responsibility of the Project Manager, these procurement activities may have a significant impact on the Project Budget and Schedule, so they must be integrated into the overall project plan, budget and schedule.

Examples of typical procurements associated with a project include:

  • Materials: These may range from typical products such as furniture and personal computers, to highly specialized products for the project such as medical equipment, well-boring machinery, or road construction materials. The Project Manager may be responsible for the actual procurement of the services or products needed to develop and implement the project, or may be directing these activities through a procurement specialist.

  • Consultants: Frequently, while in-house resources are available to perform a significant amount of the project work, additional resources are needed to complete the project on time or to provide some needed skill. One strategy is to obtain outside resources, usually consultants, to augment the project staff.

  • Suppliers: In this case, the supplier assumes responsibility for performing all aspects of a selected service, usually to specific standards and for a fixed cost. In this type of scenario, the project purchases the specific service. Examples might include demolition services, transportation services, security services, and construction services. 

There are three steps in procurement management:

  • Procurement planning

  • Identification of providers

  • Selection, negotiation and award.

Procurement Planning

It is advisable to create a Procurement Plan whenever the project requires that items are purchased from suppliers. A Logistics Plan defines the products and services that the project will receive from external suppliers. A good Procurement Plan will go one step further by describing the process you will go through to appoint those suppliers contractually. The steps in procurement planning include:

  • Defining the items you need to procure;

  • Defining the process for acquiring those items;

  • Scheduling the timeframes for delivery.

Identification of Providers

Various procurement documents can be used to solicit information from potential providers of services and materials.

Estimates: An independent estimate of the time and cost to provide the service or materials are generally provided when the evaluation criteria for selecting the provider is relatively simple and going to be decided primarily/exclusively by price.

While price will be an especially important consideration when evaluating estimates, care should be taken to assess that the proposed cost is a realistic and not overly optimistic estimate that takes into consideration the technologies and skills involved in the project. If there are significant variations between cost and schedule estimates in submitted proposals, the lowest bid may not always be the best value. If the low bid is significantly lower than other estimates, it should be looked at very carefully. If the contract is not profitable it can generate many problems for the contractor and the agency.

Proposals: When the selection criteria for potential providers are more complex, estimate documents will not necessarily collect all the information required to make an informed decision. These types of procurements may collect additional information via an Invitation for Bid (IFB) or a Request for Proposal (RFP) process. The RFP should contain a comprehensive and concise statement of work (SOW) that clearly defines the products desired, their functional requirements, operating and performance characteristics and required interfaces with other agency systems and processes.

Selection, Negotiation and Award:

The procurement process should be designed to enable the organization to obtain and evaluate estimates/proposals from a number of different providers, using a variety of criteria that might be relevant to the decision.

Selection criteria can be limited to price and calendar if the material or service is readily available and relatively simple in its configuration. Generally, however, provider selection will be based on a combination of financial and technical considerations.

Whatever selection criteria are employed, the decision-making group should be clear about the criteria to be used to make decisions and their relative weights. This understanding will inform their ultimate choice so as to facilitate easy assessment of responses.


 

Logistics Management

Since many projects are dependent on the timely delivery of materials, proper logistics support is an important necessity. Logistics means having the right thing, at the right place, at the right time. In its most limited sense, logistics involves the transport of goods, but there is more to it than this. In a much wider sense, logistics includes all the activities required to deliver items accurately, efficiently and in a time bound manner to the place and person it is meant to be sent. This wider definition of effective logistics involves:

  • Inventory management and warehousing

  • Materials transport

 

 

Inventory Management and Warehousing

Depending on the project, inventory can represent a large cost of the total project value. This value is made up of the cost of the inventory itself, plus the cost of transporting the goods, cost of managing the goods (labor, packaging, etc.) and keeping the goods in warehouses. The project team needs to establish an inventory management that ensures that stock is available to meet the needs of the project as and when required.

To this end, the Project Manager must coordinate with the team members directly responsible for inventory management, constantly connecting the inventory requirements to the changing needs and priorities of the project. As part of this challenge, the project must establish a balance between supply and demand by establishing minimum holding stocks to cover lead-times.

As the project team establishes this balance, the Project Manager must ensure that appropriate policies are in place to establish the standards and controls for managing all elements of inventory control and warehousing.

Materials Transport

The aim of transport is to physically move supplies in a reliable and safe manner, on time, cost effectively and efficiently to its destination.

A transport strategy not only depends on the needs of the project; it can also vary from situation to situation.

 

Asset Management

All project equipment, supplies and other property financed or provided by the project should be considered a project asset. As such, the project should identify a policy of asset management whereby materials of value to the project are monitored, maintained and disposed of in a manner consistent with the requirements of the organization and/or the donor(s). This policy should include guidance on the following topics:

Definition of Assets: Each organization will need to set its own definition of value and useful life that defines what is an asset. This definition will vary depending on the organization, the donor and/or the project. The UNDP, for example, identifies the threshold for fixed assets as USD $1,000 or more, and a useful life of at least three years. The table below provides an overview of several of the major categories of assets it manages, and the lifespan for each of those asset categories.

 

Figure 50: UNDP Asset Categories

CATEGORY

LIFESPAN

OTHER FACTORS

Typical office items that run on electricity: (e.g., computers printers)

3 years

 

Large machinery: (e.g., generators, air conditioners)

20 years

 

Furniture

10 years

 

Vehicles

5 years

OR 100,000 kilometres (62,000 miles),

Recording Assets: Projects should maintain complete and accurate records of all fixed asset acquisitions. All assets acquired for the project (via purchase, transfer or donation) should be recorded.

Labeling Assets – Project assets should be labeled to facilitate their oversight and control. Any suitable labeling convention may be used as long as it is applied consistently and serves the purpose of monitoring assets.

Monitoring and Asset Records – Asset information should be updated on a regular basis to account for acquisition, adjustment, transfer and disposal information. This will include a physical count and discrepancies need to be investigated, understood and documented in the project issue log.

Safeguarding Assets: Establish adequate controls are in place so that fixed assets are properly maintained and safeguarded. These controls will vary depending on the asset and the risk. For example, an organization might require that computer laptops be secured with an appropriate locking cable and securely placed in a locked drawer or filing cabinet when not in use. Another example would be a requirement that office equipment on loan to staff members should always be recorded in the equipment log/loan records.

Disposing of Assets - Clear processes for asset disposal should be established that include any requirements related to approvals, publicity, donor requirements, and reporting. If necessary, the policy should include any special requirements related to the value of the asset or the type of asset being managed (vehicle, computers, otherwise). Poor asset disposal can have a major impact on project finance as donors may refuse to allow expenditure for assets, which have not been correctly disposed of and they may require repayment or they may reduce monies from final contract payments.


 

Human Resources Management

Human resource management is both an art and a science. The art of human resources management depends on the interpersonal and leadership skills of the Project Manager. Can the project manager motivate stakeholders? Inspire confidence? Manage conflict? Build team morale? The science of human resources management depends on effective planning. Human resources planning is an integral element of a comprehensive project implementation plan. The project’s human resource management plan identifies the activities and resources required to manage the project team. Components of human resources management include:

Acquiring Project Staff – As part of the function of managing the team, the project team leader must be clear on the systems for identifying staff candidates, interviewing candidates, identifying selection criteria and making final selections of project staff.

Identifying Project Staff Assignments – Project staff assignments are the list of project duties, roles and responsibilities for team members. Staff assignments are often used during the monitoring and controlling process to evaluate individual team members.

Documenting Project Organization Charts – Project charts represent the reporting relationships among the project team.

Developing Project Staff – What skills are needed? What are the training needs? Are there certification requirements? What are the compliance issues?

Conducting Performance Assessments – Performance assessments are the documented formal or informal assessment of the project team members’ performance. After analyzing the information, Project Managers can identify and resolve problems, reduce conflicts, and improve overall team work.

Promoting a Highly Productive Team Environment – As the leader of the project team, the Project Manager must actively work to identify issues and conflicts and work creatively to resolve these issues.

Many of the activities involved in managing the project team (implementing the project staffing plan, acquiring staff, identifying staff assignments, documenting organizational charts) are technical in nature – often described as the ‘science’ of managing the project team. The skills, attitudes and behaviors required to promote a highly productive team environment, however, depend on the Project Manager’s ability to move beyond the ‘science’ of project management and engage in the ‘art’ of the discipline. In order to promote a highly productive team environment, the Project Manager must be skilled in communicating vision, encouraging shared ownership, moving agendas within and outside the organization, and managing situations where there is no direct hierarchical authority.

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