Debunking Excel’s Shortcomings as a Project Management Tool

Many people in project management think of Microsoft Excel as an inferior tool. They worry about version control with collaboration across the business, especially when dealing with large enterprise projects. However, Excel can be a powerful project management tool when used with the right add-ins. When you understand the unique challenges of enterprise projects and how Excel can serve those needs, you can learn to use it wisely. Excel can help you simultaneously keep track of many large projects, which is important for business stakeholders, analysts, and project managers who have to manage and report on profit and loss of their projects.

The Trouble With Enterprise Projects

While all areas of business are tied to finance, project management has its own set of complications that multiply in enterprise organizations. Consider how that can play out. Size Complications—The bigger the project, the higher the stakes for your business. The bigger the stakes, the higher the financial risk. Larger projects also bring more stakeholders and their varied data needs. Some will only want updates when there is a discrepancy between existing plans and reported actuals, while others will require more regular updates. Time Constraints — Projects can last many years and have unusual life cycles. These timelines are very different from the standard approach for financial professionals, who focus on the fiscal year. IFRS and GAAP reporting conventions require financial analysts to record actual project spend-to-date via methods like work in progress and earnings via accruals. Scope Creep — Project overruns are the stuff of nightmares for businesses. Getting a handle on scope, timelines, and budget is critical. Projects can be heavily susceptible to changes in political, economic, and other environmental factors. Also, their scope can extend from what was originally planned, making real-time status updates with accurate data critical for management. When the reality of a project on the ground doesn’t match what was initially planned, leaders need to make adjustments quickly to stay within budget. Real-time data can help your project managers stay on top of the budget through these shifts. Global Complexity — Projects that operate globally have even more complications. Currency conversions, alternative formats, and a central data repository accessible 24/7 are some of the obvious challenges that businesses face. Most businesses have addressed these challenges by implementing enterprise resource planning (ERP) solutions like SAP. Having this single source of truth means that the ERP system keeps everyone on the same page. However, getting the data out of the ERP system often presents its own unique challenges. When you download data to Excel and reformat, you leave too much room for error. To solve the problem, reporting has become its own cottage industry. Because the risk is so high with large projects, your analysts need something more robust, reliable, and auditable than Excel.

What Does Excel Bring to the Party?

Since 1985, Excel has been the staple go-to tool used by financial analysts. Not only is it affordable, but it’s also already on most analysts’ computers. Excel’s familiarity is legendary, and your analysts rely on it. One of the things Excel does best is lend itself to business self-service and data manipulation. Many small projects can be sufficiently managed using Excel, so they don’t require an additional tool. With these projects, Excel can easily give stakeholders a snapshot of their finances. However, transforming data to suit the many business stakeholders involved in enterprise projects can lead to spreadsheet errors and inconsistencies.

How To Overcome the Isolation of Excel

In larger companies, project data often resides within the ERP system. SAP, for example, has a project management module. The SAP Project System module uses project standard reporting hierarchies to manage cost assignments, and Work Breakdown Structure (WBS) is the common naming convention used. The WBS elements are referenced when all finance-related activity is recorded, creating alignment. Unfortunately, getting to the data has always been a challenge with SAP. Real-time Excel add-ins for reporting effectively solve this issue. These add-ins link the live SAP data to an Excel spreadsheet. Your analysts can view the data through the lens of their own SAP authorization user IDs and profiles. Updates of current information into an Excel format from SAP are made in real time. These updates or data refreshes include transactional data, such as invoices and payments posted, as well as master data, such as WBS and milestones. Furthermore, an Excel add-in lets users drill down into transactional data, giving your analysts true insight into the figures. As a complement to an Excel add-in for reporting, you can use Excel add-ins for uploading plan data and updating forecast data directly from Excel into SAP. This gives you an immediate feedback loop, as everyone on the project can immediately see the outcome of the reforecast. Finally, it delivers a plan that works with the business and stakeholders and removes the risk of manual errors. Another advantage of Excel add-ins is that you can quickly deploy them to any number of analyst PCs without a lot of disruption or lengthy training on new software. With these reporting and uploading tools, your analysts can confidently create reports for stakeholders. You know stakeholders are getting the latest updates rather than static, outdated SAP data that’s stored and manipulated in Excel. Your business can gain and maintain control over project spend and time frames, presenting a single version of truth to all stakeholders. If you like the familiar feel of Excel but want more robust capabilities for large projects, explore our webinars.

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