Financial Management Policy

The Financial Management policy controls:

  • whether you can view financial information of a program and of the lifecycle entities that are included in the program (if these entities are configured to track this information).
  • how budget is managed in Program Management.
  • whether PPM calculates program actual labor cost from time sheets.

Options of this policy are described as follows:

Option Description
Allow program manager to override the setting If a program is created using the program type, this option controls whether or not the program manager can edit the program settings inherited from the program type.
Enable Financial Management for this program

When this option is selected:

  • The program cost graph is visible in program header, displaying program cost and budget.
  • The Cost tab appears on the Program Overview page. The tab:

    • Provides a link to the program's financial summary;
    • Displays program cost and financial information of lifecycle entities included in the program;
    • Enables you to use Earned Value Analysis to compare cost data across projects in the program.
Budget strategy

Enabled only when the Enable Financial Management for this program option is selected.

See Choosing budgeting strategy.

Calculate the actual labor costs from time sheets

Enabled only when the Enable Financial Management for this program option is selected.

When the option is selected, PPM calculates actual labor costs of a program from time sheets that are submitted against the program. The actual labor costs are rolled up to the program's financial summary.

Choosing budgeting strategy

After you enable financial management for a program, PPM adopts bottom-up budgeting strategy for the program by default. You can switch to the top-down budgeting strategy if it fits more to your business needs.

The following table describes how PPM manages budget with different budgeting strategies.

Budgeting strategy How budget is managed
Top-down budgeting
  1. Program managers estimate the cost that can cover the program and its content, and update the budget for the program.

  2. Program managers estimate the cost of each program content, and allocate program budget to the program content.
  3. If allowed by program managers, project (proposal or asset) managers can add budget for projects (proposals or assets) if, for example, they find the budget allocated from the program is not enough.

If the option Allow adding budget in the proposal, project, and asset level is selected, project (proposal or asset) managers can add budget for projects (proposals or assets) if, for example, they find the budget allocated from the program is not enough. Otherwise, projects, proposals, or assets can get budget only from the program.

Bottom-up budgeting
  1. Program managers estimate the cost of the program, and update the budget for the program.
  2. Project (proposal or asset) managers estimate the cost of the projects (proposals or assets), and update the budget for the projects (proposals or assets).
  3. PPM rolls up the budget of projects, proposals, and assets to the program.

See also: