Financial Management

Financial management is intended to ensure funds are effectively allocated. But sometimes the rules act to prevent proper allocation of investment.

Take an investment in designing before committing funds for development. If a single project designs then develops a system, the total investment can be capex, as the result is a new system - an asset with value. However, to start the project means we have a business case approved, which means we have committed to an approach or solution.

Let's say we want to reduce the risk by designing the system before the business case so we can properly size the investment and so reduce risk. However, this design work needs to be funded, and may have a significant proportion of total costs if we do a good job and reuse existing infrastructure well. However, the design does not create an asset, so cannot be capitalised.

In some cases, projects then include a prototype in the design task explicitly to be able to create an asset which can be valued at the entire design effort, so it can be capitalised. The radical solution to a demand that only capital projects are managed through the formal project stream results in psudo assets being created who only purpose is to hold the value of knowledge gained.

Boundary Assumptions

A vendor documentation states that a particular version of a database and operating system must be used for the product to be supported.

1. One team member assumes this statement as fixed, and works on resolving the operations people to the non-preferred platform
2. Another team member does not makes this assumption, and works on the Vendor until they concede that they will support the prefered platform.

What is taken as fixed and what is taken as subject to negotiation?

Knowledge Creation

Knowledge is created through dialectic analysis of contradiction.

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