Look after the pennies, and the pounds will look after themselves! – saying, based on an old Yiddish proverb

When all is said and done, cost overruns are often forgotten about when projects otherwise succeed in making their objectives. For example, the Millennium Wheel in the UK is generally held to have been a great success, despite being late and over budget. However, the Millennium Dome (which was delivered on time) disappointed many and, thus, financial overruns were scrutinised at great length!

Perhaps most importantly, however, sound financial management has two over-riding benefits; (1) it gives great confidence to project sponsors and (2) it can be a very useful tool to control project scope, get more delivered and ground the team in commercial realities.
 

The size of the 'pot'

From your business case, you will have been allocated a 'pot' of money to use over the course of the project and in steady state support. It is likely that the size of the pot is limited overall.

Your pot is likely to break down into internal costs and external costs, revenue and capital. If you are using external system integrators, you may (under certain circumstances be able to capitalise their costs - see business case section).
 

Your part of the financial budget

If (as for most organisations) you have an annual budget cycle and the project runs over a year end, it is important to make sure the amount you have got approval for in your business case is fully reflected in this year's and next year's budgets!

It is amazing how often a lack of attention to budgeting can result in a cut to the funding of a project!
 

The Intranet Project financial forecast

I recommend that a monthly forecast of finances is prepared roughly one week prior to the Project Board and the Project Manager, Project Director and Project Accountant meet to review it's contents.

If any part of the project is running over budget, this small team should review ways in which the project could be brought back under costs. If an action plan cannot be developed, then report this to the Project Board and change the status of the project to 'red for finances'. These steps should ensure that costs stay under control and are properly scrutinised.
 

The Intranet Steady State finances

Do not neglect the close scrutiny of steady state costs! As an example, were one to delay a particular release on the project, this could add to overall project costs. However, an offsetting saving may well be made in the steady state support costs!