Project Financial Management has become more of an art than a science. Todays PPM solutions are great at tracking hours and activities but rates poorly at managing financials—that is because PPM tools are not built on a financial and accounting foundation.
Below we list a few gaps in the most common PPM solutions in the market:
- Traditional PPM solutions can’t effectively track and manage benefits and business value.
- Making business decisions is difficult. Analyzing projects and deriving conclusions needs to be done separately in Excel or other tools or systems.
- PPM Solutions lack effective Projecting, Budgeting & Forecasting capabilities – many processes still depend on Excel.
- Project financials can’t be captured at the account and cost center level.
- PPM Tools can’t easily align project financial data to the General Ledger.
- It is very difficult for finance teams to convert project plans to financial budgeting data.
- PPM Tools are focused on time tracking and less on total project spend – CapEx, OpEx and benefits realization.
To compensate for these gaps companies are using manual processes and spreadsheets. This leads to a significant number of resources dedicated to translating project data into financial data and ultimately results in poor data quality.
Disparate processes add significantly to the complexity of managing project financials. PMO teams have to take disparate data from various groups and standardize them to create meaningful financial data so they can report back to management teams. PPM solutions only contain partial information and therefore teams must rely on other data sources to gather financial information.
Tracking project actuals is another difficult task. Tracking resources is straight forward with time-tracking solutions but when it comes to tracking CapEx and other OpEx data companies are having difficulties using existing solutions.