Guest post by Karen Tait-Lane. Karen is an experienced procurement and project management specialist who helps businesses and third sector organisations win competitive tenders and implement their projects. For more information and to contact her directly, visit www.tait-lane.com.
I am an ex architect and relatively new to the world of financial modelling. I recently downloaded F1F9’s ebook – 10 principles of Agile modelling. Following this I was both surprised and enlightened.
As an architect, design and effective project management are essential to the success of the role.
I was surprised that financial modellers have, it appears, not understood that there is an inherent design process when constructing models, but preferred instead to view it as a purely linear project management process. This approach can be rigid, limiting and can increase the risk of a poor solution.
I believe there are lessons to be learned from the design professions. Good designers know that the most important stage of a project is at the start, before decisions are fixed.
Careful preparation, combined with adequate time, allows the greatest opportunity to add value and reduce the risk of trouble at the end, where, late changes in the construction stage, do contribute to cost escalation.
In practice, architects / designers avoid final specifications for as a long as possible, preferring to keep to outline / drafts to encourage stakeholders to continue contributing to the design development as an iterative process.
This is not to suggest that there should be a lack of structure, but instead, a unifying objective for the different contributing disciplines, supported by a review process to test proposed solutions against that objective.
Architects are trained to challenge the status quo, achieve the best solution and not to be precious and protective about a proposed solution; the more this occurs at the early stages of a project, the smaller the risk of expensive changes or errors during the construction.
As financial modelling requires multi disciplinary input and, in certain instances, across organisation review, I am also surprised that a standard approach is not a fundamental.
Without wishing to bang on too much about the architect profession, the complexity of a building, together with multi disciplinary input (plus the high risk of litigation) requires, amongst others:
- standardised and clear presentation
- standard nomenclature, measurement, referencing
- scales and co-ordinated coding and conventions
Without these standardised factors, quality is placed at risk and costs can escalate. This happens through delays, errors, abortive work arising from inappropriate, insufficient, missing, or unclear information and poorly presented work.
Can you see any parallels?
This was brought home to me recently when I inherited an appalling, over complex, and, frankly untidy series of spreadsheets which I was required to understand in a short time frame.
It was not only a frustrating, but also an undermining experience. The eventual outcome was that the long formulae and messy set up hid several major errors, the process increased resource costs, delayed reporting and ultimately provided less business savings than previously identified to the CFO.
A further parallel to construction arises from the Agile Principles of partnering; the collaborative approach to project management which encourages value add and continuous improvement.
This approach was encouraged by Egan some 15 years ago in the construction industry with a similar aim of improving quality, reducing waste and cost.
I have found this approach core to a project’s success and a far more satisfying working arrangement, with all members of the team treated as equals and where open and regular discussion is encouraged with the aim of improving the proposed solution for the benefit of all.