Successful project management is probably more of an art than a science. The magic words “on time and within budget” are the ultimate goal for every project manager but are in truth rarely heard. So complex is the process for even seemingly straightforward projects that it has been compared to multi-dimensional chess with a dash of Donald Rumsfeld’s known unknowns and unknown unknowns thrown in.
This complexity is due to, among other things, the fact that projects change and evolve over time. Costs, conditions, and specifications are subject to almost constant change. Even the best designed and planned projects will not follow the path originally envisaged. The impact of events, both internal and external, simply cannot be avoided but must be taken into consideration.
Maintaining control of projects and their costs in these circumstances is no easy task and nigh on impossible if the project manager is relying on spreadsheets which are not integrated into the organisation’s core ERP and accounting systems.
The problems begin with costing. No matter how accurate the initial costings are or how tight the contracts with suppliers there will be variations as the project goes on. Suppliers can go out of business, the project specifications may change with impacts on quantities, raw material prices may rise on the open market.
However, with a standalone system, these changes aren’t fed into the overall costing for the project. Data which is held in procurement and accounting systems does not find its way onto the project spreadsheet. The project manager remains blissfully unaware of escalating costs until it is too late.
On the other hand, if the cost increases are plainly visible immediately remedial action can be taken. This might entail a redesign or revision of the scope of the project or negotiations with alternative suppliers. If cost increases are inevitable the budget can be revised upwards to avoid nasty surprises later on.
Tracking a project’s progress can also be a much more difficult task using a non-integrated system. For example, it will not be possible to establish if a job is within budget at key milestones without access to up to date costings.
Payments too are affected. If the project is being carried out for an external client there will be an agreed payment schedule. How will invoices be raised if the project management system is not connected to the accounts system? How would the accounts department know to issue an invoice without an alert from the project manager to indicate that a milestone has been reached?
The potential impact on cash flow is one thing, but overall profitability is also an issue. Without accurate and up to date information on costings on the one hand, and payments and projected payments on the other it is simply impossible to know if a project is profitable at any given point in time or likely to be when completed.
Having to wait until the end of a project to find out if you have made money on it or not is pretty much the antithesis of good project management practice.
The solution to these issues lies in having a full integrated system in place which tracks all of the multiple variables involved in a project and updates it accordingly. TRC’s integrated project management solution puts you in control of your projects all the way through from cost calculation, resource management, purchasing and time tracking to final billing with all data held in one system.
This allows up-to-date project analysis that helps keep track of projects at all times. Project resources can be easily visualised in a Gantt chart with the cost, revenue and schedule impacts of any changes or potential changes highlighted immediately. Margins are plainly visible and different scenarios can be worked through to get a project back on track in cases of cost or schedule overruns.
The ultimate benefits include the ability to monitor profitability and performance against budget and schedule on a weekly or even daily basis rather than one a month or once a year. This greatly increases the chances of the elusive “on time, within budget” goal being achieved.