THE TAX JOURNAL Monday, 23 March 2009

The Management Gap Part I – Cultural Barriers

Project Management

John Rowley a former Inspector of Taxes, explains why project management is as important in the tax sphere as elsewhere

In a previous article in The Tax Journal (13 November 2000) I explored the increasing need for a structured project management approach in the tax profession. If that was right then – some years ago now – it is no less right now. It seems clear not all projects are run as well as they can be. And it would be a brave person who would say they have no need for improvement in this area. Indeed with commercial pressures applying as sharply as they are at present, this seems to be a very good time to focus on the effectiveness of project management as applied to tax projects.

After working in a project management capacity within the tax business for a decade and a half, it is clear to me that issues can arise in a number of ways. This article explores some of these issues. The skills requirement arising in the tax profession (and indeed other professions) may be categorised as 'the management gap', as we will see later.

The issues for in-house tax teams and for professional advisers differ in some respects. This article will seek to explore the issues from both sides. The starting point for each is rather different however. Whilst for the in house team the focus of any project will be very clearly on the delivery to the business of a technically robust solution, cost containment is also going to be high on the agenda. There can be some suspicion of advisers, for whom technical precision, innovation and an element of 'gold-plating' may be attractive. Scope extension is not necessarily a bad thing for an adviser!

Working cross-functionally can be an issue. Projects necessarily involve people from a number of areas of an organisation. Many corporates have a preferred in-house project management approach; some functions will be more familiar with it than others. That needn't be a problem but advisers may adopt their own preferred approach, which can cause tensions. For an experienced project manager working with a variety of methods need not be an issue, however.

Let’s explore some of the issues arising when applying a professional project management approach to tax projects. In my experience some of the main issues are cultural.

A misunderstood role

In professional advisory businesses the phrase ‘project manager’ is often incorrectly attributed to a person who:

  • Is administrative in terms of responsibilities, and therefore fairly junior, (a 'bag carrier')
  • Is a 'content provider' rather than a manager.

Thus this is largely a misconception about the role, and once entrenched in an organisation can take some shifting. The attitude may be prevalent as the people in the business have traditionally equated 'delivery' with 'technical input', and so find it hard to conceive of a delivery role that isn’t 'technical', unless it is administrative. In fact the need for the application of management skills (be it project management or any other type of management), and the value this brings, is often overlooked.

This view is not narrowly a problem in the tax profession of course, and is prevalent in legal and corporate finance (where you find a lot of 'bag carriers'!) and no doubt many other businesses.

Creative input

The [project management] issues for in-house tax teams and for professional advisers differ in some respects

Many offerings in the tax business require original thought; technical input with an innovative element.

Traditional project management methods may be of limited use here (in fact they may not add any value).

Although methods designed for more creative endeavors (such as 'Agile' software development) may well be adapted in such circumstances. Certainly a loose approach fits better with this type of project.

Photo of John Rowley

The kudos of delivery

A technical professional will often want to be associated with leading a successful delivery, not 'just' the tax technical input. There may be an element here of not wanting the kudos of successful delivery to go to a project manager.

In my view though this fear is misplaced; the technical input is not under-estimated by others and the successful deployment of someone in a project management role is a sign of strength – it is after all an appropriate resourcing decision. There is no point holding a scarce tax technical resource in a management role unnecessarily.

Micro-management

There is in my view a tendency for those with a highly technical skills base to micro-manage delivery, which is largely, and understandably, borne of the need to ensure quality is not prejudiced. The quality of output is particularly critical where the stakes are high. But this is usually not consistent with a traditional project management approach, which empowers the project manager to be responsible for delivery, and offers benefits of efficiency. Indeed micro-management can often reduce the project manager to an administrative support role, and add greatly to project costs.

However classic project management does have an answer here; a well structured quality management process can deal with the need to sustain the quality of output, without the need for the senior technical resource to adopt a micro-management approach. And when this works well, it releases the skilled technician to spend time on other valuable projects.

Lack of confidence

Where the tax professional is inexperienced in project management there can be a tendency to 'jump in' and start the technical analysis straight away. This inevitably leads to the adoption of an iterative approach. There is no start-to-finish project planning, where all the project issues are considered and a plan prepared of what is needed, by when, and indeed who is responsible for each element. And all too often the limitations of this approach arise in terms of costs; where the project is not effectively planned, it will not be effectively budgeted. This approach may be inevitable for certain types of activity, although that is open to question. But it may be accepted as the only way forward in circumstances where there is in fact a better way. One caution I would offer is that where services are to be procured, it is the purchaser who must insist on the approach to be adopted. The supplier may well be happy for ambiguity in this area!

Where the tax professional is inexperienced in project management there can be a tendency to ‘jump in’ and start the technical analysis straight away

A further issue arising when applying a professional project management approach to tax projects is that of infrastructure. Are there the support tools, guidance, templates and techniques to enable a meaningful attempt at project management? In some organisations there are. In many this is not the case. This can lead to even the best intentioned adopting a ‘make it up as you go along’ approach. Without a set methodology giving a standardisation of approach it is difficult to achieve a process of continuous improvement, which is itself one of the most important benefits arising from applying project management techniques.

The management gap

So where does the 'management gap' come from? We all understand the need for teams to have leaders, and for those leaders to exercise team management skills. And we understand the need for the teams to have subject matter expert members. For many types of activity this structure works well. But for some challenges – including complex project work – the application of specialised process skills is needed too. This is where project (and indeed programme) management skills fit in. Whether they are needed as a permanent feature of the team make-up depends on the balance of work arising to that team. But when project management skills are needed, they must be brought into play if the project is to be effectively delivered, and the technical team members used most effectively in the organisation. Not to leverage those process skills is to risk falling into the 'management gap'.

In a future article I will deal with the twin problems of; i) which types of project merit the application of project management skills (and which don't), and ii) what is required to put in place performance improvement for project work?

John Rowley is a former Inspector of Taxes and a qualified project management professional and Prince2 Practitioner. John can be contacted on; Tel: 07711 217839 Email: