THE TAX JOURNAL Monday, 30 March 2009

The Management Gap Part II – Developing the skillset

Project Management

John Rowley, a former Inspector of Taxes, in the second of two articles, explains what types of tax-related activity would benefit from a structured project management approach

In my article in Issue 973 (23 March 2009) of The Tax Journal I explored some of the issues arising when applying a project management approach to tax work. Tax work lends itself well to a structured approach - for the most part - but there are issues that get in the way. As we have seen, many of them are cultural in nature.

In this article I will explore what types of activity can benefit from a structured project management approach. And I will also consider how a tax team can go about developing its project management capability - I draw on many years' experience of doing just this.

Firstly some definitions. The word 'project' is used in many different ways. To a project manager, a project is an endeavour that is unique in nature, and of course, time-bound. We will all readily accept that a project has a beginning, a middle and an end, but often the need for it to address a unique problem is overlooked. It doesn't matter which source you look to for definitions of project management terms, they all draw out the same fundamental points about what a project is, from the Association for Project Management, Prince2 (a UK government sponsored project management method) to the Project Management Institute.

In essence a project management process has a high degree of problem solving built into it, to deal with the unique challenge. A project manager will be quick to tell you that where something identical (or nearly identical) has been done before, its repetition is unlikely to be a project. Repetitive processes lie in the realm of 'operations' and require a different skillset (or at least they don't require a specialist project management approach). All of this presupposes that an organisation has laid down processes for repetitive activities. Where they haven't, project managers may well be pulled in to support what are in essence ongoing 'business as usual' activities, which can cause confusion.

How much tax work is project work?

Having distinguished projects from other activities, we can consider what to make of the range of activities faced by those in the tax profession. My preference is to draw up simple models in such circumstances. It has been my view for some time now that tax work is made up of three essential elements (see Figure 1 [NOT REPRODUCED HERE]).

Compliance - this will not surprise you. Whichever tax you look at, compliance is a feature! As we have seen above, this is a repetitive activity and therefore the preparation of a corporation tax computation is not a project. An organisation should have a process in place for just such an operational activity.

Projects - now we know the 'professional' definition of the word project, we know that when we have a unique problem that will take up a fixed amount of time and resources, we need to have a project management approach.

Such problems are often big, intrusive in an organisation (crossing functions), and may involve a number of different companies, individuals, and may cross country boundaries. The procurer of services for such challenges needs to make sure all participants understand and can work with the same project approach.

Advisory - the need to support the seemingly endless technical queries that can arise in the field of taxation is a challenge not only to those working for professional advisory firms but also to those working at the sharp end in tax departments.

Whilst at the larger end these queries may become projects and should be treated as such, at the smaller end fielding them is another aspect of the ongoing operations for a tax team. It is possible to imagine a world where, even though there are no projects arising, compliance and advisory sit alongside one another as the key components of a tax function.

So what do we make of this analysis? Well in my view there are three fundamental points.

Firstly, despite my comments about compliance above, there are of course (always!) exceptions. Is the compliance process (or are the systems and software underlying it) changing? Or is there a change of compliance supplier and therefore a transition to manage? If so you may have a project on your hands.

This needs to be recognised and the work treated as such.

Secondly, with regard to advisory work, this may not be project activity but there are similarities and processes can be put in place to support it, thereby obtaining efficiencies. In my experience much can be gained from establishing a standardised approach (including creating templates) for the following:

  • technical analysis/research
  • information gathering
  • appointing advisers and establishing scope
  • reporting the outcome
  • time-phasing of different elements of the work and
  • no doubt, many other organisation specific activities.

The third key point is that where you have project work as a part of your team's responsibilities, seek out the best method for your organisation, and build it into your team guidelines and training.

Developing a team's project management capabilities

This brings me to the conclusion of this and my previous article. How do you develop your team's capabilities in project management?

There are a number of key questions that need to be asked when an organisation sets out to develop its project management capabilities.

  • Is there appropriate senior buy- in for the initiative (without it, even the best attempts at up- skilling the team may be undermined).
  • Is there an existing preferred method used elsewhere in the organisation and does this need to be adapted for the tax team? If not, where do you look for an appropriate approach?
  • How does this approach get codified in the team's and the individuals' skills and training, objectives and performance measurement?

Once the answers to these questions have been obtained, the following are key steps to developing your team's capabilities. My experience has been that the following are key steps to developing your team's capabilities.

Sponsor support

Firstly, it is important to consider senior sponsor awareness-raising or even training. This will help ensure the skillset is understood and misconceptions banished (this will also enable senior expectations in terms of performance and reporting to be more clearly understood).

Staff training

Secondly, and more obviously, there is a need for the establishment of staff project management training. I have seen a steady increase in this over recent years. What must also be taken into account, however, are the following key factors:

  • how the skills are to be developed on 'live' projects (mentoring can be critical to success)
  • how success is to be measured and
  • the establishment of competency profiles, linked to job descriptions, together with clearly understood career paths, etc.

Infrastructure

It is also critical to have organisational infrastructure in place to support the team members' efforts. Elements to consider here are standard tools and templates (no benefits will arise where staff reinvent the wheel all the time), a project review process to make sure issues arising are captured real- time, and post-project debriefs to inform the individual and the team of the positives to be shared, as well as the learning points.

The preparation of internal guidelines, quality and risk processes and the creation of templates can be an intimidating project in its own right, but the work here needn't be time consuming. There are many reference points for such materials. And the process of analysing how the team currently goes about project work can itself be a hugely rewarding one.

Finally the impact on the staff of such an initiative should not be underestimated. In my experience people like to develop their skills, and they certainly enjoy the success of a well delivered project. So the 'softer side' of such a programme can be a key consideration in choosing to go ahead. For the team leader, of course, benefits arise in terms of having a certainty of reporting and hopefully outcome that comes from a trained team and standardised process. This leads to a more clear understanding of resource requirements (and budget, where external assistance is required), and more effective communication 'up' in the organisation.

We left the last article with a recognition of the process skills gap which I call 'the management gap'.

I hope we leave this article with an understanding of how that gap may be filled.

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: