Much of the data used in financial planning for a new product is derived from other sources, and integration directly with the source data enables the financial planning to always be current. We just discussed integration with resource management source data, and the integration with product information is the same for product cost information. Sophisticated design and product data-management tools can automatically compute the cost of modules and components of a product. As the product design advances, there will be a bill of material that can be the basis for setting the product's cost.
Using an advanced development chain management system, a company will link its product design tools directly to its financial models, so that changes to the product design will be automatically transferred to the financial model. Then, when there is a product design change, it is immediately reflected in the financial models. Typically, this link will be created for each product module, since the design application software may be different for each module. The financial model then integrates all of the financial information from the various design systems.
Integrated financial planning for new products also includes the automatic integration of standard financial data, such as assumptions for cost allocations, currency conversion rates, inflation rates, and the like. By integrating this standard financial data into all financial planning models, a company can assure consistency of financial analysis across all projects. Here again, simply publishing these assumptions periodically and expecting all teams to follow them and update their financial plans accordingly is not as effective as automatically integrating the assumptions into the financial models.
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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.