Appendix A: All Materials
To access a document version of the appendices click: Project Management Fundamentals Appendices.
Appendix B: RACI Matrix
Project governance accountabilities
Many projects run into trouble because they do not have clear accountabilities. To resolve this, you can define your governance accountabilities in the form of a RACI matrix.
A RACI (Responsible, Accountable, Consulted, Informed) matrix describes how the project roles are involved in the delivery of tasks, activities and deliverables.
- Responsible
- The role(s) who will do the work to achieve the task.
- Accountable
- The role with ultimate responsibility for the completion of the task or deliverable. There can only be one accountable person per task or deliverable.
- Support
- Depending on the project, you could also include Support and create a RASCI matrix.
- Consulted
- The people whose opinions are sought, usually experts.
- Informed
- The people who need to be kept up-to-date on the progress or completion of the task or deliverable.
It might look like this:
| Tasks | Project Sponsor | Project Manager | Project Officer | Business Analyst | IT Manager | Finance Officer |
|---|---|---|---|---|---|---|
| Approval of funding | AR | R | C | C | ||
| Finalisation of Business Requirements document | A | R | R | C | ||
| Development of Tender Plan | I | AR | R | I | C | R |
Some basic guidelines for the matrix are:
- The left-hand column can be defined in many different ways – project tasks, deliverables, work packages, stages, functions and so on.
- Accountability is where the buck stops. If something goes awry, this person is held to account.
- But, they may delegate to someone else – in which case that other person is Responsible.
- There should ideally only be one Accountable (A) in any row, to avoid buck-passing.
- One person may be both Accountable and Responsible (AR).
- Multiple people may be Responsible i.e. authority may be delegated to several people.
- ‘Consult’ means two-way communication – we are seeking feedback, input, opinion, advice.
- ‘Inform’ means one-way communication – we are pushing information out and not seeking anything back.
- As such, it makes no sense to have both C and I in any one box.
- Not every box needs to be filled.
Appendix C: Return on Investment (ROI)
There are a number of ways to measure the ROI of your project. Some organisations require you to calculate the Net Present Value (NPV) or Internal Rate of Return (IRR) as a means of deciding whether to proceed with the work. We’re going to focus on something far simpler than that, but you should check this with your organisation.
- ROI = (Change in Operational Costs - Costs of Project) / Cost of Project
- ROI = (Change in Revenue - Costs of Project) / Cost of Project
Costs of Project: Capture the total cost of the project, both the external and internal expenses. This would include things like: salaries, on-costs, service costs (IT, office space etc.), consultants, procurement, service contracts, insurances etc.
Operational Costs: Capture all changes in operational costs based on your project. This would include things like: contracts and licensing you no longer have to pay, changes in amount of materials required, changes in time taken (as a salary figure), changes in cost of materials, any ongoing expenditure of the project (licences, insurances etc.), etc. Note: not all these will be a reduction and some of them are difficult to calculate.
Revenue: Capture all changes to the organisation’s revenue relating to the project. This is self-evident and of course you could have Operational Cost savings alongside Revenue.
Most organisations consider ROI over a number of years, since it is often unrealistic to consider that a project will break even with its expenditure in the first year of implementation – and a project that introduces a significant organisational change may take a number of years to break even. This is often done over five years, depending on the size of the project.
For example, our project costs are $55,000 and we’ve calculated that the annual saving to the organisation is $25,000, but in the first year we’ll only realise half of that saving:
| Project Costs | Operational Savings | ROI | |
|---|---|---|---|
| Year 1 | $55,000 | $12,500 | -$42,500 |
| Year 2 | $37,500 | -$17,500 | |
| Year 3 | $62,500 | $7,500 | |
| Year 4 | $87,500 | $32,500 | |
| Year 5 | $112,500 | $57,500 |
You can see we will break even during Year 3 and after five years this project would realise a $57,500 return on investment – or using the calculation above:
($112,500 - $55,000) / $55,000 = 104.5% at the five year mark.
- Cole K, 2016, Management Theory and Practice Edition 6, Cengage Australia
- Dobie C, 2007, A Handbook of Project Management: A Complete Guide for Beginners to Professionals, Allen & Unwin, Australia
- Gibbons P, 2015, The Science of Successful Organizational Change: How Leaders Set Strategy, Change Behavior, and Create an Agile Culture, Pearson Education
- Hartley S, 2009, Project Management Principles, Processes and Practice 2nd Ed., Pearson Prentice Hall, Australia
- Harvard Business Review, 2012, Guide to Project Management, Harvard Business Review Press
- Project Management Institute, 2017, A Guide to the Project Management Body of Knowledge (PMBOK® Guide), Sixth Edition
Online Resources
- Project Planning with Sticky Notes: https://youtu.be/80c-LRRJ0W8
- Tasmanian Government, Project Management, www.egovernment.tas.gov.au/project_management
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