Roles and Responsibilities of a Project Manager in the Finance Industry

The finance domain is considered as an essential aspect of project management as every project needs to be meticulously planned considering budget constraints. Thus, the project manager should possess necessary budgeting skills, which allow them to assign a cost to various areas of the project.

The finance related organization encompasses risks, and managing those risks should be diligent enough and in the utilization of resources as well. People playing a prominent role in the field must be competent and skilled enough. They must be capable of monitoring the work carefully and complete the work on time.

However, a skilled project manager can create a considerable difference when handling finance projects and assure a higher level of productivity within the team. Finance project managers are the most sought after in organizations as they are proficient at completing the projects within the given timeline and budget. 

Want to know more about financial project managers

A finance project manager is a new role within the organization’s finance department. They are accountable for making suitable plans, technology improvements, and handling finance-related activities. People responsible for project management in the finance domain/people managing finance-related operations supervise from planning till implementation and assures on-time completion of projects with an assigned budget. This job role requires a proper balance of organization skills, financial expertise, and the ability to set schedules.

Financial project managers are responsible for the financial health of an enterprise. They are responsible for direct investment activities, financial reports, and develop strategies considering long-term/continuing financial goals. 

Essential skills

Let’s explore what are all the key skills required for a finance project manager will involve:

◉ Communication skills 

An efficient project manager should be a skilled communicator and should be able to thoroughly communicate with executives and team members across various departments and justify complex financial transactions. 

◉ In-depth knowledge of financial analysis

Knowledge is the primary differentiator that can decide who can be hired for a particular role. Project managers in this domain need to have extensive knowledge in financial management, and they will always be preferred for the job role.

◉ Interpersonal skills 

Being a project manager in the finance department, you need to connect with a lot of people across various departments such as suppliers, bankers, investors, etc. Thus, you need to have strong assertiveness and interpersonal skills. 

◉ Team coordination 

Coordinating with cross-functional teams is essential for an accomplished finance project manager. It is because projects involve sales, accounting, and other project-related activities. 

◉ Detail-oriented

While preparing income statements and balance sheets, the financial managers should be detailed and attentive/intent to their work to avoid errors.

Duties and responsibilities

The financial project manager’s job role is indeed a challenging task. They thoroughly analyze the financial data prepared by the accountants, monitor the financial status of the organization, and implement financial status. 

The key responsibilities of a financial project manager are:

◉ Financial planning 

Financial planning involves preparing and supervising the organization’s financial plan that projects expenditures and revenues, long-term investments, and cash flow. They should be able to come up with cost-benefit analysis concerning projects across various departments, thereby identifying cash flow and revenue where it could be improved. 

◉ Scheduling and organizing

Scheduling and handling project timelines is a vital aspect of the financial project manager’s duties. They work in correlation with the team members and the department managers to implement project timelines and ensure that the team meets milestones all through the project lifecycle. It’s the responsibility of the successful project manager to prevent delays and make sure that deliverables are completed as per the schedule. 

◉ Budget management

Finance project managers are skilled with budgeting skills and financial management to assist the teams in completing the project, considering the budget, and oversee the organization’s financial performance. An effective manager handles revenue and expenditure to make well-informed decisions about emerging opportunities and areas for improvement.

◉ Team leadership

The primary task of finance project managers is to develop and work with cross-functional teams. They coordinate across various departments and motivate the staff members to complete the projects considering external and internal deadlines. 

◉ Efficiency improvements

Project managers look for methods to improve the overall efficiency and performance of the project. This means coming up with cost-saving opportunities at the enterprise level. They ascertain the areas for improvement and identify solutions to avoid project delays and help a company to meet its cash flow goals. 

Education, training & certifications 

Financial project managers should possess a bachelor’s degree in business administration, accounting, and finance. 

In fact, many employers seek candidates with a Master’s degree, particularly in economics, business administration, accounting, and finance. These programs help the students to progress analytical skills, financial methods, and software. 

On the other hand, experienced financial project managers can become Chief Financial Officers (CFOs) having the accuracy of the organization’s financial reporting. 

Industry-recognized project management certification courses are essential for aspiring financial project managers to demonstrate their understanding of various methodologies, frameworks, and best practices. 

Salary 

The average annual pay of a Financial Project manager is approximately $104,862 /year. The pay depends on various factors like education, training, industry, geographic location, and experience level. 

Source: Zip recruiter

Career prospects

Candidates with proficiency in finance and accounting, and particularly those with add-on certifications or master’s degree, enjoy the best career prospects in the industry. Having a thorough understanding of international and complex financial documents is indeed essential. 

Financial Managers – Employment Project Data, 2018-28

Occupational Title	Employment, 2018	Projected Employment, 2028	Change, 2018-28
Financial managers	653,600	758,300	16(Percent)	104,700(Numeric)

Source: collegegrad

Source: invensislearning.com

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Difference between Project Management and Financial Management

1. Project Management :

Project management, as name suggest, is simply management that is employed in project to maintain its activities from project initiation till its termination and meet organizational goal.

2. Financial Management :

Financial Management, as name suggests, is simply management that focuses on management of financial operations and resources that in turn increase profit and achieve objective of organization as soon as possible in satisfactory manner.

Difference between Project Management and Financial Management :

Project Management	Financial Management
It mainly focuses on management of project planning and its completion.	It mainly focuses on management of financial operations of organization.
It is a temporary management process i.e. one time activity.	It is a permanent management process i.e. an ongoing process.
Project manager have more responsibilities than financial manager.	Financial manager have less responsibilities than project manager.
Factors affecting project management includes project manager, organizational culture, no expertise, no clear objective or goal, etc.	Factors affecting financial management includes savings and investments, financial goals, provision of emergencies, financial potential, etc.
Process of this management includes project initiation, project planning, project execution, checking performance controlling activities, and at last terminating project.	Process of this management includes planning, organizing, controlling, and monitoring financial resources to achieve goal and objective of organization.
Its benefits include increase customer satisfaction, reduce risk of failure, improve performance, maintain time and budget, etc.	Its benefits include cost control and profit planning, cash flow management, tactical planning and cost management, preparation and execution of budget, etc.
Its main objective is to lead working team to achieve goals and fulfill requirements of customer.	Its main objectives is to maintain financial department i.e. maintain cash flow of organization or company.
Type of project management includes PRINCE2 project management, Kanban project management, Six sigma project management, etc.	Types of Financial Management include Treasury and capital budget management, working capital management, insurance and risk management, etc.
Project management is more difficult than financial management.	Financial Management is less difficult than project management.

Source: geeksforgeeks.org

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The Six Sigma Renaissance? What the Future Holds for Six Sigma in Financial Services

Process standardization and quality improvement had been neglected in the financial service industry for decades. When the manufacturing industry needed to become more efficient and reduce waste, the financial service industry was flourishing and therefore, found itself not in need for major improvement initiatives. When this situation changed, everyone suddenly started to look for a quick fix and Six Sigma, which had already been so successful in the manufacturing industry a method of Quality control, was seen by many as the golden path.

Countless financial services companies have followed this path and have implemented Six Sigma in the last decade. Some have been very successful and happily announce their multi-million dollar savings. However, many others keep very quiet about their returns or have stopped their engagement in Six Sigma all together because they didn’t attain the expected return on their investment. This is reflected in the coverage of Six Sigma in the financial service sector – there is only a handful of books available on the topic, while there are hundreds on the use of Six Sigma in manufacturing.

Why Six Sigma has been so successful in the manufacturing industry, but only worked for a small group of FS firms? More importantly, how can the financial service sector make better use of Six Sigma?

Strengths and Weaknesses of Six Sigma in Financial Services

Without question, Six Sigma is a well accepted quality enhancement method which has been applied with great success in the manufacturing industry for decades. However, Six Sigma methods cannot just be transferred from the manufacturing industry to the financial service industry without any changes. Let us review the main strengths and pitfalls of Six Sigma, when transferring it to the financial service industry.

Strengths:

1. Unique customer focus

Focus on the customer is one of the main strengths of Six Sigma. By linking quality improvement initiatives to customer needs, Six Sigma teams ensure that the improvement has a positive impact on the customer. Particularly in the financial service industry, where the interaction with the customer takes place on a daily basis, customer focus is of utmost importance. When implementing Six Sigma in finance processes, customer needs have to be given highest priority. Short-sighted focus on cost or headcount reduction will not bring the long term benefits Six Sigma promises.

Only a close cooperation with customers and a clear focus on customer needs can lead Six Sigma to success in a financial service environment.

2. Six Sigma framework and tool kit

Many financial service organizations have not engaged in structured process improvement until recently. Therefore, they often lack standardized processes, organized quality and engineering departments and a general understanding of what quality improvement means to them. Six Sigma provides, with the DMAIC cycle, a structured framework to guide users throughout the improvement efforts and ensures that the project develops in the desired direction. Additionally, Six Sigma comes with a whole tool kit of brainstorming, analysis and prioritization tools that help to unfold its power. This structured approach, combined with the Six Sigma tools are particularly valuable for teams with a financial service background.

3. Data-driven and statistical methodology

Some may argue that financial service process improvement greatly benefits from its data richness. However, in my experience exactly this data overflow is one of the main problems for successful project selection and completion in this industry. Too many improvement efforts are based on ill selected data and the general assumption that the problem root cause is already known before the project even starts. This causes projects to fail and the improvement efforts to loose their reputation. Six Sigma offers a more statistical approach to measuring and analyzing data, thereby minimizing the risk of quick assumptions and allowing projects to be wisely selected and executed.

Weaknesses:

1. Resistance from people

I experienced that resistance towards change is even greater in the service industry, than in manufacturing. The average white-collar worker seems to be extremely unaware of the waste in his daily work and is, to my surprise, very resistant towards others outlining this waste to him. Now this most likely originates from the fact that processes in the service industry are invisible, following an unwritten process through electronic data exchange and peoples’ heads. Seeing and accepting waste in such a virtual environment is more difficult than in a factory, where bottlenecks and process defaults are physically existing. This resistance leads to many project failures and makes it very difficult to implement Six Sigma.

2. High initial investment and slow return on investment

The financial service industry is famous for its fast-paced culture, striving from one budget to another. However, for anyone looking for short term return on investment, Six Sigma is not the right cure. Six Sigma requires a high level of initial investment for implementation and the first years of Six Sigma introduction into an organization are particularly costly. During this period Six Sigma experts and employees have to be trained or recruited and senior management focus on Six Sigma implementation is required. Additionally, return on investment is often not realised in the short term.

From an organization-wide perspective, achieving a break-even from implementing Six Sigma takes a considerable amount of time as initial investment is high and results from improvements might only become apparent after several months.

Recommendations and Outlook for Six Sigma in Financial Services

Six Sigma is more a culture than it is a methodology. In order to make it work, you have to prepare your whole organization to embrace the values and ideas behind the concept. If you are looking for a quick fix to make the next budget, then Six Sigma is definitely not the right thing for you. The same holds for organizations that have not yet had any or only limited engagement with quality and process improvement. If you still have a lot of low hanging fruits out there, then go for Lean and 5S first.

However, if you are willing to take your organization through a true transformation, to standardize and re-engineer processes and to make a long-term commitment to Six Sigma, then go for it. Success cases from the financial service industry and many years of successful implementation in the manufacturing industry prove that Six Sigma is indeed a very effective method to bring your organization to the next level.

Both of the weaknesses outlined in this article can, with the right commitment, be reduced to a minimal. Once you have made the initial investment of time, effort and money, Six Sigma will reward you with a very worthy return on your investment.

In my opinion, particularly the ever increasing importance of outsourced finance services brings a never before seen centralization and standardization to financial organizations. This allows for large scale projects and makes the return on investment more favorable, than implementing Six Sigma in small decentralized offices. The most recent developments in the financial industry and the harsh competition following the financial crisis have further strengthened the need for more cost efficient solutions and better quality. At the same time, many players in the financial service industry have already hit their climax in getting process improvement from Lean. That's why I predict that Six Sigma will see a renaissance – this time not in manufacturing, but in financial services.

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