Benjamin Franklin (1706-90) said “In this world nothing can be said to be certain, except death and taxes.” It was in the context of taxes that I was reading the FT supplement on Indirect Tax which has become popular as Governments seek to raise additional revenue to combat shrinking economies and the inability to raise direct taxation. The amounts raised by indirect tax are huge they now make up about 75% of all taxes remitted by business Globally.
Robert Langham of Philip Morris makes a very interesting point “ With VAT, a company typically pays input tax on purchases, then simply subtracts it from the output taxes it collects from customers before remitting the difference to the tax authorities, but there is a huge administrative burden, much more so than corporate income tax. Also because these taxes don’t show up in that bottom line tax number, they’re generally hidden from the business – if the input tax is not recovered, then it effectively becomes part of the cost of goods sold or the cost of doing business”
Two statistics from the above translated for me into the Project Management domain the first was the 75% figure, which despite the investment in project management, still represents the percentage projects that fail to match the objectives set. The second was the implication of failure to recover input tax translated to a cost of doing business. For those projects that don’t meet their objectives.
Unlike the failure to recover input tax, where the cost is quantifiable; the project dimension is hidden in small amounts of additional headcount, performing tasks to complete activities that should have been automated. Reduced customer satisfaction, as the customer journey is continuously compromised due to a poorly designed customer interface. The list of project compromises is endless a frequent frustration to the Operational teams as they are managing the cost of doing business.
The Programme Management learning I took from the article was to focus upon the small details in a project whereby a failed or compromised deliverable will have over the long term a huge detrimental impact on a business’ operational performance which will become part of the cost of doing business. Once the compromise has been made it is very difficult to irradiate the resulting impact.