THE TAX JOURNAL 15 Monday, 13 November 2000

Planning for Success Using project management skills in tax work

Project Management

John Rowley, Director of Tax Project Management, KPMG and Micheal Pashby, National Tax Management Group, KPMG, explain that it is becoming increasingly important to use project management skills in tax work

Tax work is becoming increasingly project orientated, and therefore the ability to use project management skills is becoming a requirement. Whilst there are many excellent intuitive project managers in the profession, we can all learn to manage projects better than we do.

Surveys have shown that in over 80% of cases the reason for project failure is not 'technical' but due to inadequate project management. For example failure can be caused by a lack of clarity over what is to be delivered, insufficient time spent planning or insufficient/inappropriate resources being allocated. This is particularly true of tax projects where the tax technical aspects are rarely overlooked but the other aspects may well be.

Applying a project management approach to tax projects can help prevent failure. Whilst project management is a generic discipline, its application can be tailored to a tax environment. Tax carries the constant possibility of legislative change which can change the direction of a tax related project in mid-flow. This imposes a need for flexibility and effective appraisal of the consequences of change. Clearly there are significant risk management issues as well as quality and communication issues for tax professionals to face up to.

This article considers the actions that can be taken through three key stages of a project lifecycle; the scoping of activity, planning, and management of the project team.


'I didn’t know that was included?'

Difficulties on projects are frequently caused by insufficient focus on the objectives at the start of the project. We have all experienced the problems that can arise due to ‘diving in’ to project activity before knowing exactly what the project is intended to achieve, and how best the project could be run, and agreeing and communicating this to those involved. To run a project successfully it is necessary to spend time at the start of the project establishing the aims and desired outputs, the methods of achieving these, the activities that need to be done and when and who needs to do these.

Omitting this step can lead to a perceived failure regarding the quality of the ultimate output from the project team, as well as time and cost overruns.

In order to establish clearly the aims of the project it is best practice to formulate a project definition on which the whole team can agree. This will cover such matters as the objectives, assumptions and constraints of the project. This is the first step to precisely establishing the scope of the project.

Involving the team in this process is also an important team building activity – helping to ensure that all members are on the 'same page'. This is particularly important where teams are not co-located. Without such a definition there is the possibility that even if the project succeeds in delivering something, the full potential of the project will not have been realised and opportunities will have been missed.


'You want it when?'

It may not be possible to complete a project by the deadline assumed to be reasonable at the start. Planning the project identifies the scale of activities to be conducted and will also reveal what can be achieved in the time allocated. Knowing this upfront allows expectations with regard to time and cost to be managed. Without a planning process we are trusting to luck that the project will be successful both in terms of delivery and perception.

As part of the planning process work should be broken down into strands and the strands broken down into tasks. This breakdown of work will enable the project manager to put the tasks into a logical order by identifying tasks which need to be completed before other work is started. An error as simple as not identifying the link between two related tasks could result in avoidable delays in the implementation of the project.

A good project plan will enable the project manager to identify:

  • The skills necessary for a successful outcome
  • Whether the resource available is adequate, and a realistic deadline for the activity
  • Quality parameters can also be built in at this stage

Experienced project managers like to use a graphical representation of this breakdown of work an example (a 'Gantt' chart) of which can be seen in Figure 1 [not shown]. This representation can be used to communicate issues concerning activities and timing to team members and other stakeholders. Project planning techniques also allow the plotting of the 'critical path' of tasks appropriately focusing management time. The 'critical path' is the series of activities which determines the earliest completion date of a project.

In order to plan effectively it is necessary to build the plan by establishing the 'internal logic' and only then recognise a reasonable date for completion. Clearly this is counterintuitive in a tax environment where externally imposed deadlines prevail. Nevertheless this process is necessary to consider fully the interaction between task duration, the dependency of tasks on one another, and the resource availability. Problems with externally imposed deadlines can be addressed using advanced project management skills (beyond the scope of this article) to compress the critical path to reduce the total length of the project. At this point the plan is one that is truly achievable – it is not necessary to trust to luck on a planned project!

Resource allocation can be planned to reduce the possibility of people not being available when required. Allocating people to tasks using a suitable planning tool makes it easy to see if one person is responsible for too many tasks at once, or for activities when unavailable due to other commitments. Identifying these issues at this early stage allows them to be planned around, or to use the time before the activity commences to identify or train additional personnel.


'What do I do now?'

Project management, as the phrase suggests, is not just about planning but also relies on management skills. Principal areas requiring close management include quality, risk, resource and communications. Project scope change must also be carefully managed. Clearly the scale of activity on risk and quality management will be driven in part by the size and complexity of the project. However, with an increasing management focus on results and greater awareness of risk management issues in many organisations, these areas of activity should not be underestimated even on relatively modest projects.

Most of us would admit on reflection that we have rarely had the comfort of knowing that someone has been specifically charged with responsibility for managing these key areas of activity from the start to finish of a project. This issue can and must be addressed on projects of sufficient size or impact on the organisation.

Key points

What does experience tell us about the application of project management principles to tax projects? The most important project management issues can be summarised in the following way.

Application of a project management process gives us;

  • a clearly expressed and communicated definition and scoping statement;
  • a project plan which takes account of resource requirements and resource availability and is clearly expressed so that it can be used as a communications tool (for example, Gantt chart, as in Figure 1 [not shown]);
  • depending on the scope of a project a dedicated project manager with appropriate skills and sufficient empowerment/seniority;
  • clearly defined policy regarding quality and risk requirements; and
  • parameters for project change.

Many industries have embraced these skills in addition to their core technical competencies. Civil engineers and architects would find their designs remained on paper without project managers to implement them. The tax profession must catch on quickly to ensure the success of its projects which are becoming ever larger and more international as the global economy marches on.

John Rowley is Director of Tax Project Management at KPMG, and is a member of the Project Management Institute and a former Inspector of Taxes. Micheal Pashby works in the National Tax Management Group at KPMG. John can be contacted on 07711 217839, or by email at