Jun 18 2014

Move Beyond Excel for Effective Project Control

Image of the CONJECT project control iconIn the recent primer on Project Control article, I mentioned the widespread use of Excel for budget and cost management on construction projects and programmes.  This post reviews the use of Excel to manage financial risk in projects, and suggests 5 criteria that a commercial management tool should meet.

Excel as the starting point for cost control on projects

There are good reasons for the popularity of Excel: it’s ubiquity means most people have access to, and some basic familiarity with it, and it’s quick and easy to start using it.  Excel is also flexible and you can throw large amounts of data at it, but this is where the trouble begins.

Firms of any moderate size don’t try to manage their financial accounts using Excel; they use specialised software that is scalable, flexible, multi-user and produces intelligent reporting.  For the purposes of complex cost management, there are some major down sides to the use of Excel.

The gilded cage of Excel

First, Excel is not scalable.  It can be a repository of large volumes of data, but the performance of the programme declines.

Second, Excel is reliant on the correct creation and maintenance of formulas.  Unless you’re skilled at programming macros in Visual Basic (few non-programmers invest the time required to do this), you won’t be able to conduct the analysis or reporting that you need to make informed decisions.  That’s a sizeable risk in itself, but then you have to factor in the impact of distribution.  This often involves emailing the latest version to team members, and accurately keeping track of all the revisions.  And once you hit ‘save’, all of the previous versions, including any with mistakes in the logic of the formulas, are tacitly accepted.

A third disadvantage of Excel arises when trying to collaborate.  The creator of a complex spreadsheet is usually the only one who really understands it, thereby limiting the effective sharing of information across work teams.

Fourth, even when document creation standards are in place, whenever a separate user creates a spreadsheet, the idiosyncrasies of the way each is set-up means the effective consolidation of data across programmes and organisations is virtually impossible.

Fifth, data security is a problem as soon as the file leaves the safety of your company’s firewall.  Locked sheets can easily be accessed by the most basic retrieval methods, compromising proprietary and personal data.

And finally, what happens when someone leaves the organisation?  All of their knowledge around the detail goes with them.  We see instances where large, unexpected costs coming to light when key commercial team member(s) leave.

Beyond Excel to project control – integrating data to make better decisions  

You need to have a tool that has been designed for the job of cost management and the interaction of costs on the time, quality and change aspects of a project.  Here are five criteria to consider when designing a cost management system for the control of your project/ programme:

  1. Enhances project-wide decision-making –  

When all data sources are integrated in a single unified platform, a rich, timely source of information is provided in a consistent uniformed structure.  This makes the running of the commercial aspects of projects not about the individual people and their bespoke spreadsheets, but about consistent systems and configurations to run projects.

  1. Easy-to-use –   

A simple user interface coupled with ‘drill downs’ to transactional data, provide a full audit of how and where costs were derived.  This up-to-date view of information allows effective decisions to be taken to mitigate costs and successfully manage risk.

  1. Aids collaboration –

A centralised project platform will provide a single record of cost data, providing access to an up-to-date view of the project that doesn’t rely on any one person emailing the latest monthly report to whoever is involved the project.

  1. Maintains full record of all costs & is auditable –

The system should be easy to control so that all relevant team members can view information.  The input and editing of data in other parts of the system – say in contracts management – is integrated with the rest of the system, so that the financial impact of a new agreement is automatically included in the calculations of the commercial module.

  1. Produces intelligent information and reports –

The system is automated to provide an overview of project status, highlighting the financial impact of project activity.  Even better are those systems that combine cost data with schedule data (say from Primavera or Asta) to enable earned value management updates as the project progresses, and produce ‘what if’ scenarios to support decision-making.

Find out more about CONJECT project control solutions, or to arrange a demo call Christian Harvey on 01483 712 620.

About the author

Michelle Mason

Michelle Mason leads the UK and MEAP Marketing team, with far too many years in B2B marketing to mention. A CONJECT newbie, Michelle is eagerly climbing a steep learning curve.

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