SPREADSHEETS ARE KILLING YOUR PORTFOLIO AND PROJECT MANAGEMENT

INNOVATIONS AND INSIGHTS SPREAD- SHEETS ARE KILLING YOUR PORTFOLIO AND PROJECT MANAGEMENT CONSIDERATIONS BEFORE YOU KICK OFF YOUR NEXT PROJECT WITH A SPREADSHEET.

There is no doubt that the entire Project Management industry from project owners, managers, contractors and suppliers, rely on spreadsheets.

While spreadsheets are a powerful tool for statistical, engineering, and financial data management and analysis, the spreadsheet was not designed to be collaborative or customisable to specific industry use cases. As such, spreadsheets are not an environment in which the planning and delivery of projects can thrive and innovate.

The current world of Project Management professionals could never have imagined one in which they deliver projects without spreadsheets. Hence many consider spreadsheets an industry standard tool.

However, just because there is a critical mass of acceptance across the Project Management industry, does not mean that spreadsheets should be used for the most important aspects of project and portfolio management.

In the Project Management of capital works projects, the efficient and effective management of cost tracking, requires accurate, meaningful and real-time reporting. This involves multiple internal and external players, frequent updates, and the need to manipulate data and report. Key decision makers are no longer satisfied with the incomplete, inaccurate, and confusing data represented by Project Managers using spreadsheets.

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The issues are exacerbated as spreadsheets are passed up the chain – creating a hair on fire issue that spreadsheet information can no longer represent the business cases to the strategic detail necessary to move projects or decisions forward.

Just as Forbes reported to the finance industry in 2013 that “Excel might be the most dangerous software on the planet”, the Project Management industry should be feeling the same way with 90% of all spreadsheets having errors.

What’s worse, University of Hawaii has research that reports 99% of spreadsheets that link more than 10 cells, 10 times, have errors. If you consider the complexity of some spreadsheets produced to manage projects today, the amount of risk being carried is astounding.

To help, here are four considerations before kicking off your next project with a spreadsheet.

1. DON’T TELL YOUR CLIENT YOU USE SPREADSHEETS

Owners, clients and key decision makers are no longer satisfied with spreadsheets being the primary system for Project Managers. The question being asked often by clients is “What systems are you proposing to handle this complicated project?”. If your answer is spreadsheets, you are setting yourself up for embarrassment and reputational damage.

Clients have such great software in their personal life that they are starting to want the same in the office. And why not? Better to impress clients by identifying systems that can provide live dashboards, boost productivity, and increase transparency without touching a single spreadsheet.

2. DATA AND INFORMATION TRANSPARENCY ARE KEY We’ve all been there and clicked on that spreadsheet cell to reveal a giant formula or macro that magically gives us the value in a cell. Clients are left with little but to trust that the spreadsheet has been quality-assured and checked for errors across every formula and data point.

What’s worse, spreadsheets are great information silos and record no time-series information, which is the exact opposite of what we need to create transparency and datadriven decision making. With spreadsheets locked away in drives and data trapped behind giant macros, this makes it difficult or impossible for interested parties to access the value of that data for lessons learnt, analytics, insights, benchmarking and more.

Organisations need to move off spreadsheets and into a bespoke software system to unlock the value of this data across the organisation to deliver never-before possible levels of data insights.

3. SPREADSHEETS ARE EASY TO MESS UP AND BREAK Good project and program reporting require accurate information, particularly financial. From typos to ‘SUMIFs’ and forgotten negative signs, it’s easy to miss errors and inaccuracies, especially when there are multiple linked or unlinked spreadsheets and workbooks.

It was not long ago in the US that Fidelity Investments was forced to cancel a $4.32/share year-end dividend distribution. The problem? A missing negative sign in a spreadsheet calculated the wrong return.

As the data and complexity of spreadsheets grow over the life of a project or program, probability of an error increases exponentially as there are many calculations that depend on precedent cells. No human is sufficiently skilled to check every cell in a spreadsheet once they grow, so why take a chance?

4. SPREADSHEETS LACK SECURITY

Since spreadsheets are commonly shared through email or data storage devices, this puts client data at risk of broad, unintended dissemination. There is no way to track or control this dissemination/download and there is no way to know if security breaches have indeed occurred.

With many files shared across many users, spreadsheets lack visibility as there is no built-in audit trail and no way to record who made the changes or why. While it is possible to password protect worksheet or workbook elements, this doesn’t prevent wilful abuse accessing confidential or sensitive data. There’s also the threat of losing critical information if spreadsheets or workbooks are hacked, infected by viruses, experience data corruption, or aren’t properly backed up or otherwise protected. For Project Managers, moving teams off spreadsheets and into centralised, secure cloud based software with detailed audit capabilities greatly mitigates the majority of data security risks.

To reduce organisational risk and build an environment in which the Project Management industry can thrive requires organisations to move off spreadsheets and into fit-for purpose software. These considerations for Project Managers relying upon spreadsheets should serve as a wake-up call that project and organisational data is currently rife with human error, limited visibility and confidence, complex and unwieldly files and high risk of security/audit issues.

Author: Doug Vincent is co-founder and Managing Director of Mastt, a fast-growing tech start-up that provides a realtime and data-driven capital works portfolio management system. Doug is a thought leader in ConTech (construction technology) and the future of digital project management. Before founding Mastt, Doug was a CPSPM and program manager delivering capital works for government and private sector organisations.