1 00:00:00,008 --> 00:00:04,008 - I've heard the statement, "Executives don't read," often, 2 00:00:04,008 --> 00:00:08,001 even when I was an executive myself. 3 00:00:08,001 --> 00:00:09,003 It's inaccurate, 4 00:00:09,003 --> 00:00:12,005 but that doesn't mean it's far from the truth. (chuckles) 5 00:00:12,005 --> 00:00:15,005 When managing a team of over 450 people, 6 00:00:15,005 --> 00:00:18,003 I received over 300 emails a day, 7 00:00:18,003 --> 00:00:20,006 and there was no way I could read 8 00:00:20,006 --> 00:00:24,006 every word of those emails, not to mention the attachments. 9 00:00:24,006 --> 00:00:29,002 So from many people's perspectives, I didn't read. 10 00:00:29,002 --> 00:00:32,004 Yet every executive is keenly interested 11 00:00:32,004 --> 00:00:35,005 in the financial status of their scope of work. 12 00:00:35,005 --> 00:00:37,000 As project managers, 13 00:00:37,000 --> 00:00:40,002 we have the tools to produce financial reports 14 00:00:40,002 --> 00:00:44,000 and we don't want them to go unread. 15 00:00:44,000 --> 00:00:48,000 PMI recommends using information radiators, 16 00:00:48,000 --> 00:00:51,005 brief charts that quickly convey your budget status. 17 00:00:51,005 --> 00:00:54,000 There are a few charts that I strongly recommend 18 00:00:54,000 --> 00:00:55,008 and examples of each of these charts 19 00:00:55,008 --> 00:00:58,007 are included in the exercise files. 20 00:00:58,007 --> 00:01:03,004 The first is your Spending Over Time compared to your plan. 21 00:01:03,004 --> 00:01:07,007 The X-axis is time and the Y-axis is money spent. 22 00:01:07,007 --> 00:01:10,004 The orange line is your actual spending 23 00:01:10,004 --> 00:01:13,000 and the blue line is your plan. 24 00:01:13,000 --> 00:01:14,003 In example one, 25 00:01:14,003 --> 00:01:17,001 the orange line is below your blue plan line, 26 00:01:17,001 --> 00:01:20,000 so you have spent less than planned. 27 00:01:20,000 --> 00:01:21,004 In example two, 28 00:01:21,004 --> 00:01:23,003 the actual spending orange line 29 00:01:23,003 --> 00:01:25,007 is above your blue plan line. 30 00:01:25,007 --> 00:01:28,007 So you've spent more than planned. 31 00:01:28,007 --> 00:01:31,000 Consider including a one-line explanation 32 00:01:31,000 --> 00:01:32,008 of your budget status. 33 00:01:32,008 --> 00:01:35,009 This is important because spending more than prepared 34 00:01:35,009 --> 00:01:37,008 isn't necessarily bad. 35 00:01:37,008 --> 00:01:40,009 If you've completed more tasks than planned, 36 00:01:40,009 --> 00:01:43,000 you could be in good shape. 37 00:01:43,000 --> 00:01:45,001 The Spending Over Time chart works well 38 00:01:45,001 --> 00:01:47,007 if you're managing an agile project. 39 00:01:47,007 --> 00:01:50,000 Combined with a feature burndown chart, 40 00:01:50,000 --> 00:01:52,004 which plots the amount of work completed, 41 00:01:52,004 --> 00:01:54,008 you can tell a complete story. 42 00:01:54,008 --> 00:01:58,000 My second recommendation is to use Earned Value charts 43 00:01:58,000 --> 00:02:01,007 if you have the timely data required to use that approach. 44 00:02:01,007 --> 00:02:04,002 You plot the earned value or EV 45 00:02:04,002 --> 00:02:07,007 and the actual costs or AC on a single chart 46 00:02:07,007 --> 00:02:10,000 that tells the whole story. 47 00:02:10,000 --> 00:02:14,007 If your EV is higher than AC, you're in good shape. 48 00:02:14,007 --> 00:02:17,003 Conversely, if your actual costs are higher 49 00:02:17,003 --> 00:02:18,005 than earned value, 50 00:02:18,005 --> 00:02:20,005 you've spent more money than you planned 51 00:02:20,005 --> 00:02:22,009 for the task you have completed. 52 00:02:22,009 --> 00:02:27,001 See the exercise files for Earned Value chart examples. 53 00:02:27,001 --> 00:02:30,001 My 3rd go-to chart plots the cost 54 00:02:30,001 --> 00:02:32,005 to address risk on your project. 55 00:02:32,005 --> 00:02:34,001 A reasonable project will include 56 00:02:34,001 --> 00:02:37,009 contingency reserve funds to mitigate risks. 57 00:02:37,009 --> 00:02:39,003 This chart is similar 58 00:02:39,003 --> 00:02:41,007 to the overall Spending Over Time chart, 59 00:02:41,007 --> 00:02:45,003 except it plots the costs you plan to address risks 60 00:02:45,003 --> 00:02:48,003 over the actual risk contingency spending. 61 00:02:48,003 --> 00:02:49,007 For additional information, 62 00:02:49,007 --> 00:02:52,005 you can include the funding from management reserves 63 00:02:52,005 --> 00:02:55,000 and your contingency budget. 64 00:02:55,000 --> 00:02:57,005 While using these charts is effective, 65 00:02:57,005 --> 00:03:01,003 it's important to have detailed cost reports by task 66 00:03:01,003 --> 00:03:04,003 and for each purchase because you never know 67 00:03:04,003 --> 00:03:08,000 when an executive might decide to read something.