I recently attended a Project Controls Training Workshop where one of the participants asked “which tool is used for cost management?” The trainer stood up with a smile and proudly stated “Excel is the tool used all over the world to manage cost in projects”.
I could not help but wonder whether this was true. There is no doubt, Excel is a valuable tool. But does it meet the changing needs of today’s project controls teams especially when they are trying to manage multi-billion dollar projects? I realised that this is just another example of how software technology has been evolving faster than people have been able to adopt it.
You can, of course, continue to use Excel and manually consolidate data from all the sources used in a project, and then try to produce a usable report for managements’ review. But that can be a daunting and time consuming task. The Excel files used often consist of a large number of work sheets with a great deal of data, and some files have complex formulas and macros that can be difficult to maintain and validate. The Excel files can also take an excessive amount of time to load which is inefficient for everyone who uses them.
There are also multiple risks associated with relying solely on Excel spreadsheets. The data can easily be manipulated, mistakes can be made, data can be omitted, and formulas can be incorrect or deleted: all ultimately yielding inaccurate results. The best case scenario in these situations is that someone checks the report and finds the errors. They would then need to rework the Excel spreadsheets to generate accurate results. Nonetheless, even in this scenario the reports will be delayed in reaching management. Do we really want management to be making key decisions with three week old data?
Another risk associated with using Excel is that there are normally so many files involved in a project’s management that a file can be omitted or the wrong version of a file can be used when consolidating the data. At the end of the day there is simply too much potential for mistakes to be made when using Excel.
Believe it or not, software technology has been evolving and eliminating these common spreadsheet risks. Software tools like PRISM are fully integrated to allow financial data to be directly imported from major accounting systems, such as SAP, and schedule data to be directly integrated from Primavera P6 and Microsoft Project. Data is now consolidated much faster, the risk of mistakes is reduced, and a single source of data is created for the project, portfolio, or program.
Using a commercial-off-the-shelf (COTS) tool allows users to utilize numerous standard reports that can be consolidated to cater to various levels of management. For instance, PRISM allows you to manage and report on your projects at an Enterprise level, and all enterprise enabled projects can use the same enterprise data which makes it simpler when new projects are created. This significantly speeds up the process of rolling out new projects on the system. In addition, business processes can be significantly improved with helpful features like automated change management which utilize workflows and greatly improve even the most complex change management process.
At the end of the day, it is important to stay up-to-date on the latest tools for project controls instead of just settling for how it has been done in the past. We need to look forward and embrace today’s software technology so we can make sure that our capital projects are delivered on-time, within budget, and as efficiently as possible.
Download White Paper:
Why Spreadsheets No Longer Meet Today's Project Management Needs
Explore why yesterday’s approach to managing cost and risk with spreadsheets no longer works. While spreadsheets serve many purposes on the construction of capital projects, it can be ineffective as a core “business critical” application.