Beyond clear objectives, timetables, and budgets and quality of deliverables to be respected, project management must assure that human and technical resources are available, at necessary quantity and skill, to implement the IFRS directives.
One of the conditions is that the project leader obtains corporate-wide commit- ment in terms of participation to the project. Another ‘must’ is the ability to mon- itor results of the activities relating to the implementation of IFRS, as well as to:
● Assure that critical issues are thoughtfully analysed
● Both leadership and guidance are on hand, commensurate with personal responsibility, and
● Interdisciplinary issues, which require a corporate rather than departmen- tal focus, are resolved in a timely manner.
In this connection, a great deal can be learned from other projects, particularly those connected to new information technology. Interdisciplinary coordination by senior management is often done through a task forcewhose role is resolving strategic and tactical issues (see Chapter 7).
In connection to information technology projects, this task force has often been known as a ‘steering committee’ – a title I prefer not to use. Its mission has typi- cally been that of providing direction and of elaborating policies which result in the resolution of strategic and tactical technology issues. Also, of obtaining corporate-wide commitment to IT policies and solutions.
Figure 6.1 translates this task force framework into an IFRS-oriented process, adapted to rapid implementation. The IFRS project team will need to structure this block diagram in a way that takes into account the unique situation of the institution for which it works, by assessing objectives, analysing needs, assuring resource availability, and making sure the proper linkages are provided for inter- dependencies. Apart from the main functional goals, it is also necessary to con- sider the need for specialists in areas such as:
● Taxation
● Pensions
● Derivatives, and so on.
Another important element to successful project management is required involvement from various business departments like legal, internal audit, risk management, human resources, investor relations, subsidiaries, business units and, most evidently, information technology. Outsourcing part of the work to be done should also be considered if it proves to be necessary.
It should be evident to the reader that because so many departments and spe- cialists need to be involved, prior to starting the IFRS project everyone should be clear about his or her role, what others are responsible for, and how everybody is to work together to achieve project objectives. This should be done within the realm of integrating personal role and responsibilities, for full-scale IFRS project management.
Moreover, while typically many companies are at ease with this definition of the task force’s role, the less clear-sighted may require further explaining, particu- larly in regard to:
● Individual contributions, and
● The establishment of priorities.
Both permit the task force to focus on the resources needed for interdisciplinary coordination, and also help to guide the project manager’s hand. With IFRS, this is of prime importance, because it is an interdisciplinary project par excellence.
Priorities and resource-level needs/allocations fall within the responsibility of the task force for review and approval and within project control for execution.
The project manager must establish:
REVIEW CURRENT ACCOUNTING
STATUS
IFRS REQUIREMENT
IDENTIFY ISSUES CONNECTED
TO IFRS
DEFINE PROCESSES
DEVELOP IMPLEMENT- ATION PLAN
GET TOP MANAGEMENT
APPROVAL STRATEGIC
ISSUES
IDENTIFY KEY ISSUES
TACTICAL ISSUES
DETERMINE ROLES
Figure 6.1 Work plan up to approval from top management
● Which part of the IFRS project impacts more than one department
● Which will probably have corporate-wide impact, and
● How friction that might develop down the line can be pre-empted at the start.
Good project management is also necessary to complete the conversion process within time and budget. What is needed is an integrated team of specialists able to assure that resource needs are met, and that each department, as well as each individual within the company, develops IFRS knowledge and expertise through the IFRS project. In terms of management proper, there are different scenarios to choose from, but all tend to involve:
● The CEO
● Director of finance
● Director of accounting
● Director of internal auditing
● Director of information technology
● Director of personnel and training
● Several accounting and finance employees
● Several system programmers, analysts, and communications specialists.
Members of the board also need to contribute, taking the time to understand the change from the company’s current accounting policies, impact of IFRS on financial statements, restructuring of management information (see Chapter 8), and communication links to stakeholders and the authorities. The project man- ager must present in a comprehensive manner to the board, the CEO and senior executives:
● The IFRS conversion project phases, and
● The support necessary to attain the project milestone plan.
The better policy is to visually demonstrate whatmust be done, by whomor what team, and when. Also what will be the timing of deliverables. A project plan reflecting agreed roles and responsibilities should identify measurable mile- stones and interdependencies. At any point in time the plan must show:
● A clear picture of the project status, and
● How it is performing against the original goals.
The project manager should also highlight problem areas, steps taken to resolve them, and what more may be needed in terms of top management approval. For every worthwhile project, it is vital that a strong consensus is reached that project
management must have the latitude to pursue relevant issues with a strong, open- minded independence. The task force should be given:
● The authority to pursue any and all IFRS issues which fall within its char- ter, and
● The ability to resolve, by bringing to terms, the different issues independ- ently of departmental or other vested interests.
Both points are critical to the ongoing credibility of the IFRS project. The reader should also take notice that, other things being equal, management support will be more forthcoming ifprogress review meetings are well organized with clear purpose (see section 5 on design reviews). Also, if agendas are distributed to focus the meetings, and minutes are taken to capture the:
● Key issues being raised, and
● Decisions that are reached.
A well-managed project ensures that there are always status reports, with updates on goals reached and procedural changes, if any, being made. Also very helpful are issue resolution memos, action logs, and task force checklists. The project should maintain a complete history of:
● What has happened, and
● What did not happen that should have happened.
This must be accessible to all project team members and to management. A thor- ough record of past events is most helpful, as well, for new project team members and their orientation. Therefore, the project journal should be organized in a way that is easy to understand; being databased, it is simple to access and to mine.
Other databased information must include project team contact list, team struc- ture roles and responsibilities, milestone plans, issues logs, project status reports, and IFRS technical information. Issue memos, meeting agendas, and minutes are other important elements of a memory facility. These requirements may sound
‘obvious’, yet the number of cases in which they are not met is depressing.