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We will look at setting up a Funding Pool, the draw down arrangements and how this works later. Now we look at the main trigger to our project: the project funds to get the project underway.

At this point your project has performed an early assessment of the proposed project, provided an estimate for the first stage and for the remainder of the project, your management team have approved the next stage of the project and now you want to see the colour of the money.

What we will do over the course of the new few sections is look at how your project gets funded, where the funds come from, how we record the transfer of funds and how project funding triggers are established.

Project funding triggers use demand (or pull) concepts and have been associated in articles across the web with the Kanban agile method. This is not an accurate comparison. Pull technology is an inherent technology concept of networks in the instance where client machines in a network trigger demand requests (or pulls) to the network and await responses from server.



Networks were doing this way back in the 1960s. While Kanban principles were most closely associated with the analysis of retail replenishment projects of shops and warehouses in the 1950s, it is more accurate to say that the Kanban Pull principle is somewhat broader than the simple pull principle used in a network. The comparison has been made because the broader pull element of Kanban covers the concept that a subsequent process demands or withdraws only what is needed.

Likewise the principle used in the Toolkit is a simple pull request by the project for the next funding release. The timing and value of requests is determined by the preparation of cumulative cash forecasts through thorough and detailed cash flow forecasting. This is performed to evaluate project liquidity to acknowledge and plan funding investments for the project to manage the outgoings.

Often there is a lag or a wait between the request for funding and the allocation of funds for the use of the project. We know this as the Funds Delivery Gap. To get round this there is the option, which is especially suitable for Small Change projects, to allocate temporary funding. We very often see companies distribute credit cards to a project for daily purchases such as consumables and software. They ring-fence the amount or limit this spending to an agreed daily or weekly amount and manage this accordingly. The management of this facility must include validation that the credit limit of the credit card does not exceed the Small Change allocation threshold.

The objective, as with all concepts and techniques in The Big Agile Toolkit, is to minimise waste and provide an environment that demands minimal intervention from management with enough control to ensure the organisational budget is being used wisely and the proposed benefits are delivered as promised.

The options are to arrange temporary funding, agree a sequence of planned funding releases or to agree to allocate the whole budget from the outset of the project. There are benefits and risks in all options of course. Mitigation for delay in receiving funds on Typical sized projects is always a challenge and especially demands that the funds release process is fast and responsive, or made faster and more responsive. Simply said but difficult to achieve, this is a very important element to ensure you deliver to budget as significant hold up of funds will cause detrimental equipment delays, wasteful personnel downtime and potentially catastrophic project failure.

If an organisation is serious about delivering the project and receiving the benefits the very least it can do is provide the funds it promised at a time when the project needs them released. The timing of funds release is often uniquely aligned to the Project Funding Cycle.

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 The Project Money     The Project Money   Project Funding Cycle    Project Funding Cycle



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