Financial processes in the sales and opening phases of mega projects from the controller’s point of view

Ville Peräkorpi: Financial processes in the sales and opening phases of mega projects from the controller’s point of view Master of Science Thesis Tampere University Master’s Degree Programme in Industrial Engineering and Management Examiners: Professor Teemu Laine and D.Sc. Tuomas Korhonen August 2019 Large projects are usually very complex which makes their managing difficult. Clear processes, as well as roles and responsibilities, help to manage projects and prevent risks. However, previous literature has focused a lot on the importance of communication and flexibility in large projects. In the case company of this thesis, certain types of large projects are called mega projects. These mega projects are usually worth more than 100 million euros. The thesis focuses on financial processes in the sales and opening phases of mega projects especially from the controller’s point of view. A controller of mega projects, mega controller, is expected to have a good overall view of the project already in the sales phase. The mega controller is expected to actively participate e.g. in defining currency hedging plan or contract structure. He or she is also expected to act as a link between different functions. In the opening phase of the project, the mega controller is expected to direct the whole opening process by determining the big picture of the project structure and by giving clear responsibilities to e.g. other controllers and cost estimators. Results of the thesis show many challenges in the financial processes of mega projects from the mega controller’s point of view. The main challenge found in the study is that processes are not always followed. Because of that, currency hedging plan and contract structure aren’t often considered early enough. Currency hedging plan may even be left totally out of considerations. The second challenge is the lack of relevant information of cost estimations for currency hedging or project’s opening. This is mainly caused by a lack of communication between controllers and cost estimators. The third challenge relates to the unclarity of roles and responsibilities of the project’s opening to ERP system. Also, many other challenges are found during the study. To solve the main challenge, this thesis suggests that the case company would add two meetings to the sales process. The first meeting, contract and global mobility review, would force stakeholders to consider the contract structure of the project in the firm proposal phase. The second meeting, currency hedging plan meeting, would force stakeholders to consider currency hedging plan, also in the firm proposal phase. The second challenge would be alleviated by taking currency basket template into use in cost estimation work. The third challenge is tried to be solved by a process description made as a result of this thesis. The process description illustrates the roles and responsibilities of different stakeholders in the sales and opening phases. At the conclusions, a roadmap for the case company is introduced to illustrate the steps the case company should next take regarding the challenges.