We typically engage critical path scheduling software to plan and control a project. We normally will define the project as all that takes place from the project authorization or initiation through to the completion of all deliverables. If we use the costing capabilities of the software, it is applied across this time period, generally encompassing all costs incurred to complete the deliverables.
But why stop here? Cash flow can be positive as well as negative. If the project that we are managing is intended to generate a positive cash flow (such as the new product developments discussed above), why not add pseudo tasks that generate income? Now we can model various scenarios and evaluate the best actions for a project. We can go beyond determining the most cost effective plan to complete the project, but rather the best plan to generate the preferred long-term cash flow.
Tool Tip Hardly any of the commercial project management software products provide direct support for positive cash flow, because they handle only costs, and not income. Super-
Project is an exception, offering this unique capability. However, it should be easily possible to transfer data from your PM database to a spreadsheet and generate the analyses there.
Carrying this process even further, we can evaluate a set of projects and manipulate the mix of projects to optimize support of the full business strategies and plans. We hear a lot lately about Project Portfolio Management. A significant component of this corporate-level strategy is the schedule-based cash flow analysis of multiple projects. (See Section 9, Project Portfolio Management.)
Was this article helpful?
What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.