Spreadsheets, a recipe for disaster?
I am amazed at how many companies are still managing projects using spreadsheets. The fact is, when managing multiple projects; with a range of different consultants; across different geographies; using spreadsheets is a recipe for disaster. They are instantly out of date, create administration headaches, and are often littered with errors and inaccuracies; in the complex world of project portfolio management (PPM), this is simply unacceptable.
Successful PPM requires total visibility and control, with real-time intelligence on costs and resources. Lack of control leads to inefficiency, rising costs, and damaged customer relationships; yet many companies are still failing to manage their costs and resources effectively. Automation allows companies to track financial project health and manage resources in real time; ensuring the right skills and assets are deployed, on the right projects, at the right time.
Using an automated PPM solution, companies gain better control by having a more cohesive, consolidated view. As such, they are more able to anticipate and plan for any issues that may impact the wider portfolio, keeping pace with changing requirements and shifting internal expectations. Organisations can analyse, track and forecast opportunity and risk to better manage the profitability and performance of the business; this creates a repeatable recipe for success, while eliminating redundancy and waste.
Whatever solution you chose to use, my advice is to throw away the spreadsheets the future health of your project could depend on it.
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When I first saw this headline, I thought that this was going to be a plea for organisations to stop using spreadsheets full stop, rather than just stop for projects. I don't know of any major company, or to honest some of the smaller so ones out there that don't use Excel to manage their world. Most financial reports from companies get distributed on it, senior executives not only run their projects using it, but also their entire company. The only saving grace is that it is isnt PowerPoint. I had a conversation with a few PMO person recently who suggested that every PMO person needed to be a whizz with Excel, because it would be how the project would end up being managed, regardless of the PPM tool in place. I do agree that a PPM tool is the better solution, however only if those people using it can do so confidently. Surely it is better to use a tool well, no matter how flawed, than to use a good tool badly.
First, I agree with the conclusion that spreadsheets are the wrong 'tool' to manage all but the most basic of projects; however, they are used and have the advantage of fulfilling the 'need' of the user.Truth is, whether it is because of the malleable data, the comforting familiarity, or the fact that a spreadsheet application is universally provided on business desktops, many titular project and programme managers use and cling to spreadsheets. And so to do Project Executives, SROs, Project Directors and all the other myriad levels of the organisation which want to 'see' how the project is doing.EPM or PPM tools are great, but they have a cost in terms of performance and 'feeding the beast' which is often not associated with spreadsheets. And, since the vast majority of those 'directing' a project don't know what they should be looking for to assess the performance of a project, they are perfectly content with the spreadsheet.Rather than speaking amongst ourselves, how do we engage and educate that senior level?
Spreadsheets have their place as does MS Project however...Working in a global organisation with a large number of projects to deliver I recently reflected on the need for some project scheduling and issue management tools. The idea of trying to manage 50 plus projects in an organisation where all those that needed to contribute and share this information where not necessarily fully conversant with Microsoft Project was not attractive as most of my time would have been spent simply managing data in MS Project rather than providing high value functions as a project manager. MS Project would not provide easy issue management and tracking.I remembered having seen Redmine an open source project management tool. Reviewing the open source web site www.redmine.org I realised that a simple solution that everyone could potentially use was more attractive and likely to provide a sound Pereto 80% solution. I called a colleague who had used it successfully and realised it was probably more powerful than I had expected.read more at projecttech blog
I use Project in a box software, botht the single user and the SQLServer version. Allows me to use spreadsheets but keep them under control and generate use full summaries and graphs for reports. It also keeps my documentation ISO9001 compliant which is important in my view even in a non-ISO environment.
I think that whilst throwing spreadsheets away is perhaps a step too far, we do need to recognise their limitations and indeed the dangers of relying on them. I have seen cases of spreadsheets being used for pricing calculation with no cross checks and significant errors then going forward undetected. At best they should be used for basic calculation and analysis and as a cross check against whatever results the corporate ERP tools produce.Having said that, the choice of ERP tools is important and if these are unwieldy and difficult to use then the use of spreadsheets (which are too easy to use!) is understandable.
I share your amazement Lori. The quality and range of tools to support P3 has risen markedly in the last 10 years or so.Many times I have assisted organisations in procuring and implementing them, goodness, I even designed one in BT way back in the 90s!I have also seen large sums thrown away because the organisation was not ready - was not mature enough for such tools. The old phrase, don't try to run before you can walk springs to mind.Most commonly[1] the processes were not stable[2] the templates were not stable[3] the data to be used (types, levels of detail, formats) was not stable[4] the behaviours of project managers and others involved were far from consiistent.And I have been in organisations that used spreadsheets superbly, even in a distributed environment with much remote working. Surprise surpirise, items 1-4 had been addressed.For me, a successful P3 approach is the evolvution of a mature approach that integrates People, Process and Technology aspects.And I am pretty sure that a P3 tool would usually form part such a mature approach, i.e. one that produces value.
I work in an environment where Excel is the ubiquitous management tool, where some spreadsheets are truly horrible.The utility of a spreadsheet is the ability to extract and present data as management information, when it is employed as a decision support tool.The danger of spreadsheets is when they become key components of an integrated business process which can potentially subvert intelligent decision making.The ability to change a spreadsheet dependent process becomes a major headache as, invariably, this will involve a signifficant exercise in effort and duration to assure that the change is fully and accurately captured.My health warning on spreadsheets is they make information look good but there is no guarrantee the data behind them is also good, so always look for the devil in the detail lest he comes back later to bite you.
80%+ of spreadsheets contain significant errors and they do not link easily to other data sources. Organisations that use spreadsheets as the tool of choice for PPP are either ignorant of the research or more likely prefer a tool that can be fudged to provide conveniently acceptable, wrong, answers that do not need management attention. Effective control systems need accurate data as a starting point.
I suspect most PPM professionals are not working at Portfolio or even complex Programme level and whilst I agree with almost all that is said here, the last bit of advice to throw away all your spreadsheets is IMHO not applicable to the majority of project or programme managers. I would go as far, though somewhat tongue in cheek, to reiterate a bit of advice given to me several years ago that Excel is the best project planning tool out there.As a simple planning tool or a communication tool to Seniors Excel is excellent. It is also highly useful as a tool to produce helicopter views of complex programmes projects and even portfolio interactions and timelines and I, for one, have spotted many planning issues and potential gains doing this.Enterprise level project planning tools have their place but so does a spreadsheet!