Reginald Tomas Lee - Project Profitability: Ensuring Improvement Projects Achieve Maximum Cash ROI

Project Profitability

Project Profitability

Ensuring Improvement Projects Achieve
Maximum Cash ROI

Dr. Reginald Tomas Lee

Project Profitability:
Ensuring Improvement Projects Achieve Maximum Cash ROI

Copyright Business Expert Press, LLC, 2022.

Cover design by Divya Pidaparti

Interior design by Exeter Premedia Services Private Ltd., Chennai, India

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any meanselectronic, mechanical, photocopy, recording, or any other except for brief quotations, not to exceed 400 words, without the prior permission of the publisher.

First published in 2022 by

Business Expert Press, LLC

222 East 46th Street, New York, NY 10017

www.businessexpertpress.com

ISBN-13: 978-1-63742-169-7 (paperback)

ISBN-13: 978-1-63742-170-3 (e-book)

Business Expert Press Portfolio and Project Management Collection

Collection ISSN: 2156-8189 (print)

Collection ISSN: 2156-8200 (electronic)

First edition: 2022

10 9 8 7 6 5 4 3 2 1

To Rey
Life is so awesome with you as my son

Description

Consultants and internal project teams often make substantial claims about the savings opportunities resulting from their projects. Oftentimes these claims do not come true. Project Profitability explains why these opportunities are not realized and offers a framework that will guarantee your teams identify projects that align with your strategy, calculate cash savings appropriately, and realize these cash savings upon implementation.

Customers of consulting organizations can use this book to keep their consultants honest when savings are promised. Consulting organizations can use this book to help document the value their solutions bring, how much of that value can be realized, and whats necessary to achieve it.

If you are a consultant, you do not want to risk having your customer know the content of this book and challenge the value promise!

Keywords

project ROI; improvement project profitability; project costbenefit analysis; cash ROI; business domain management; managerial accounting; improving efficiency; capacity management; capacity maps; project implementation; project selection

Contents

Whether youre a consultant who sells projects or are in charge of project success inside your organization, this book is requisite reading for positioning and assuring a projects worthiness. Dr. Lee helps you understand, articulate, and plan for realizing a projects actual cash value, and illustrates why the oft undefined path to savings within the project plan itself is the crucial element for realizing that value. Turns out theres a distinct difference between accounting value and true cash value which can be misleading or even dangerous to a companys viability. He explains why accounting-departmentdefined profitability is a detrimental vanity metric and why end cash position is the optimal goal.Michelle (Golden) River, CEO, Fore LLC

If your position requires you to analyze the ROI or increased efficiencies of projects, then this is a must read. This book could literally save you millions of dollars by analyzing projects based on the cash return instead of perceived savings. Perceived savings might be in a presentation, but not actually realized in the business. Dr. Lees work in this book has really changed the way I approach the value and savings of projects that I am in charge of.Jarrod Souza, CFO at Michael Hyatt and Company

Blending an engineers mind with the historical accounting and finance equation generates clarity to the murky world of business process improvement initiatives. Reginald Lee has expertly prescribed the cure for ineffective business process improvement initiatives by focusing on CROI (cash return on investment). If cash flow is not improved, under what rationale is the business using to invest shareholder value? Project Profitability should be read, underlined, and regularly revisited by any leader responsible for improving the bottom line.Daniel D. Morris, CPA, CGMA, TEP; Senior Partner, Morris + DAngelo, Silicon Valley

I have been a fan of Dr. Reginald Tomas Lee for several years. His efforts to reframe the metrics by which organizational projects are evaluated has and continues to challenge the managerial accounting cannon. Project Profitability is his latest addition to a body of work that should be required reading for every CEO and CFO. Dr. Lee presents clear and compelling evidence that thinking just a little differently about how projects are considered can lead to decisions that increase the likelihood of business success. The subtle, and not so subtle, principles he advances, form a translational space in which established project accounting paradigms are challenged, or even obsoleted, bringing to the fore, decision practices which enable leaders to focus on what matters mostpreserving and growing cash. His practical examples, and straightforward language makes his transformative ideas accessible to all.John B. Hammond, Sr. Director, Center for Community Services, Atlanta Regional Commission

Dr. Reginald Lees business domain management framework addresses the glaring cash misses which so often occur on so many company projects. The framework avoids overstating value propositions by focusing on cash and not accounting information, understanding when a project is just right for the company to avoid wasted time on financial justification, and finally ensuring cash is the key objective for project success. This book is a great way to help improve cash generation for any business! Thanks for sharing your insight Dr. Lee!Jeffrey S. Wuest, CEO SynFiny Advisors and Former Finance Executive at P&G

Reginalds new book Project Profitability will appeal to both practitioners and academics alike. It is written in a style that is practical and immediately applicable. He provides real world examples that most managers and executives can relate to and challenges leaders to ask tough questions up front to properly scope projects and force realistic estimates of true cash benefits. Having worked directly with Reginald in the past, I know he is a strong advocate for companies to avoid the pitfalls of using traditional accounting methods for project benefit valuation. This book does an excellent job explaining the rationale for taking a different approach to assessing project value and then walks the reader through how to apply it, measure, and track to ensure real cash benefits are realized.Greg Soltis, Business Unit President

Yet again, Dr. Lee has knocked it out of the park with this book. As a virtual CFO, one of the things my clients struggle with is whether or not to undertake a project and what they should be measuring to make an assessment. Dr. Lees original thinking on this topic gives a different, much needed, perspective than what wed normally consider in the Accounting Domain. Id highly recommend this book to anybody assessing projects in an organization.Chris Hervochon, CPA, CVA, Owner, Chris Hervochon, CPA, CVA LLC

In Project Profitability, Dr. Reginald Lee has made another vital contribution to how cost accounting distorts managerial decision making. As a recovering cost accountant, I have to remind myself constantly never to confuse accounting costs, or efficiency gains, or traditional ROI, with cash flow. The focus should be on CROICash ROI. Cash is a measured value. Cost accounting is based on metrics, completely contrived. If youre an accountant, you have some unlearning to do. This book is an excellent guide to learning the correct approach.