Page 260 - DMGT521_PROJECT_MANAGEMENT

Unit 14: Conflict and Negotiation

also referred as negative budget analysis dilemma made the respondent’s capital budgeting Notes
system inefficient because expensive investment’s problems are let undetected (2000).
Since PCA has the capacity to monitor operations, projects that have costs that are highly sensitive
to certain business forces should be applied with it. In this way, the cause of deviations to
intended results will be determined and will serve as a platform for appropriate action plan.
However, PCA does not have the ability to discipline accountable persons who failed to produce
planned operation/strategy outcome. Due to this, PCA is the suitable tool in monitoring big
projects that employees may hesitate to handle due to certain bonds or disciplinary clauses if
they fail to succeed (2007).

PCA should be implemented based on three criteria; namely, significant projects, nature of
objectives of the project and nature of the project. The first obliges the firm to apply PCA in cases
where the project affects its strategic direction, financial scope is comparable to its size, strategic
duration, limited risk or extraordinary returns and the requirements to use new forecasting or
planning techniques does not adversely affect some societal ethical issues. The second refers to
the projects simplicity or complexity because PCA is more useful when projects are categorized
as the latter. The third component suggests that non-recurring projects should not be applied by
PCA because learning would be useless (2007).

Nature and Size of a Post Completion Audit Team

Most PCA are applied within a formal and complex system especially for large organizations.
Due to this, the cost of applying PCA can compensate the risk attached to adopting new process
or technologies. However, small organizations, small projects and relatively less risky strategies
would not be able to compensate the costs and human resources burden associated with PCA
(2007).
According to VP of Greif Manufacturing, when the project tends to benefit the entire firm,
departmental projects should hold the entire firm also accountable if it fails. This stance will put
every employee and department accountable to the project’s success even though they are
indirectly participating in the project. It usually take ten (10) days when an organization undergoes
PCA but other firms like Sun Financial aspires to complete PCA within two weeks. In determining
the people who will be involved in PCA, the quality of their feedback is the core criteria for
most companies. For example, Honeywell Aviation Services and its projects use its employees
who have training in Six Sigma to evaluate IT department projects and assure that the system has
streamlined workflows (2007).

Usually, the most common groups or workers involved in PCA are members of project
implementation team from IT, members of project implementation team from both IT and the
business and/or representatives from a company’s internal audit department. In this view, Sun
Life Financial approach to PCA implementation is one of the industries best according to
PricewaterhouseCoopers. In the latter opinion, PCA should consist of a businessperson, IT
personnel and someone who is not part of the project team like the internal auditor. In this way,
a group of people with different functions participates in the audit, which creates holistic approach
to benefits, deliverables and requirements for the project (2007).
Managers and top-level executives carry PCA team. Furthermore, committee should be formed
consisting of persons who are experienced in the firm’s financial control system and familiar
with technical, financial and marketing aspects of the project in question as well as its outcome.
Since PCA is more than financial evaluation, the team should be headed by a managerial
accountant to prevent overly focus on accounting processes rather business thinking. Lastly, the
size of the committee to be formed is dependent on the size of the organization or it can also be
suited to the size of the project in terms of the assets used, personnel involved, time frame for
completion and business partners engaged (2007).

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