7 Reasons Why Excel Is Putting Your Project At Risk
Managing time, cost, resources and quality is crucial to your business. The processes around those are critical to your success and the success of your clients. So why are you still putting your faith in spreadsheets?
We’re not anti-spreadsheets. They are great for some types of data analysis like pivot tables. However, they aren’t great for managing projects. Whether you are working with waterfall, Agile or another project management approach, successfully completing a project requires you to be on top of a lot of strands of information at any one time.
Here is why you shouldn’t leave that success in the hands of what Forbes calls the most dangerous software there is.
Risk #1: No Specialized Features
We’ve all seen them: project plans created in Excel by coloring in cells that represent days or weeks. The trouble is that when the plan moves – and it will – there is a huge overhead to update those colored boxes.
Excel project management lacks the specialized features that allow you to manage the day-to-day challenges of project work. A new requirement? You have to amend the whole plan to add in a single line. A team member off sick for a month? You have to consult various tabs and files to find out who can step in.
You might think that a specialized project management tool will be hard to learn, but actually today’s modern tools are intuitive and work seamlessly with your processes from the moment you create an account. With all the features that you need to manage simple and complex projects, you’ll never have to build a plan manually or struggle to reallocate tasks to an available team member again.
You don’t even need to be a project manager to do things like identifying if progress is slower than expected or recognizing if resources are overbooked. The software pulls out the information you need, allowing you to concentrate on getting the job done.
Risk #2: No Single View Of All Work
Spreadsheets make it hard to get a complete view of all the work that’s going on. You have to flick between the data in the billing spreadsheet, the timesheets, the plans. Linking spreadsheets just introduces more complexity: when a single formula is wrong it can affect around 9 other formulas as well.
Project management software gives you a portfolio view of your work and the work of your teams. Powerful features let you roll up individual projects into a complete, holistic view of everything. You can see where the resource conflicts will be across multiple projects and put them right before they start to have an impact on delivery. You can forecast when the team will be available to take on new work. You can see the overall billable days for the month and track productivity across all your clients.
Oh, and you can do all that out of the box with a couple of clicks. Simple.
Risk #3: No Professional Communication With Clients
You’re a professional company (even if you do everything from contract negotiations to cleaning the office at the moment). Clients expect you to present yourself professionally.
Spreadsheets lack a corporate look and feel so they look unprofessional when you share them with clients, even if you slap a logo on the corner of the page and add some footers.
The specialized features of project management software give you endless possibilities to create professional dashboards and bespoke reports. Not only do these look better, they are much faster to produce than fiddling about trying to get Excel to format correctly.
This is important because today concepts like testimonials and social proof are how many businesses get and keep clients. Making sure that your customers trust you do to the job and deliver the project successfully is more essential than ever.
Ralph Beslin and Chitra Reddin, writing in Ivey Business Journal, say that, “At the heart of building trust is the process of communications.” Building trust can be done through open, transparent communication: in other words, project dashboards and tailored, meaningful reports instead of emailing difficult-to-interpret spreadsheets.
Risk #4: Adding More Time To Projects
It’s true, even though many managers would find it hard to admit. You cannot easily collaborate in Excel. Project managers have folders full of different versions. Research by financial modelling firm F1F9 uncovered a group of employees in a global company that were emailing around 100 spreadsheets to each other every day.
Specialized project management has none of those issues. Online tools allow you to centralize data easily, keep one version of the truth, share information and collaborate with colleagues wherever they are based.
Spreadsheets are also labor intensive to check and build. If you want to work out whether a task is open, closed or overdue you need a formula. Project management tools have all that built in out of the box. No need to create and maintain formulas and add valuable time to your project kick off activity.
And talking of formulas…
Risk #5: Inaccurate Calculations
Nearly 90% of spreadsheets contain errors, according to researchers from the University of Hawai’i. They looked at 7 different studies and discovered that 88% of the spreadsheets have problems. This is a huge risk for a small business, both because it puts billable hours into question but also because it takes ages to work out what has caused the error and put it right.
You don’t have to worry about any of that with project management tools. Because they are built to do the job and to deal with the complexities of changing requirements, tracking time and productivity and handling risk calculations, you know that the information you get out is always going to reflect the data you put in. No errors ever. Just an accurate reflection of what is really happening on your project.
Risk #6: Losing Data
Because spreadsheets are an everyday tool, managers don’t consider the need for security in the same way as they would other data. Cell protection is probably the most commonly used data security feature after password protecting Excel files. However, the Tuck School of Business at Dartmouth College uncovered that cell protection in spreadsheets is only in use 30% of the time.
Excel project management puts data at risk. It’s too easy to delete a column of time entries in error and lose the data you need to bill a client.
Project management software has security built-in. Your data is backed up and role-based access means that you can give people the access they need to do their job without risking them accidentally deleting critical project information. Your cloud-hosted secure solution takes away the risk of someone leaving business confidential data on a memory stick somewhere, or moving it to another directory and then not being able to find it again.
Professional project management tools also take away the risk of relying on the single person who understands how the spreadsheet was put together. Spreading the knowledge in the team, and having dedicated support mean that you don’t need to designate someone the spreadsheet guru and have them spend a lot of unbillable time maintaining your files.
Risk #7: Making Bad Decisions
As we saw, spreadsheets are an ‘everyday’ tool but that actually makes them more risky for your business, especially when it comes to making decisions.
EUSPRIG (the European Spreadsheet Risks Interest Group – who knew that there was the need for such an initiative?) found that one of the most common issues with spreadsheets is that they are interpreted incorrectly. When business problems get translated into spreadsheets the researchers say that decision makers put too much belief in the data in the spreadsheet, even when there is evidence that shows it is incorrect. In other words, people believe what spreadsheets say, even when they are wrong.
The impact for your projects is significant. The wrong decision can delay a project, add additional cost or reduce quality. The powerful reporting and analysis tools within a professional project management solution have been tried and tested over years. Feedback from users and project management best practice means that what you see on the screen is what you really need to make the right decisions.
The Time Is Right to Leave Excel Behind
Excel has many benefits for a business – it’s a robust, adaptable tool capable of performing powerful data analyses. You wouldn’t want to get rid of it for those purposes. But it isn’t built for scheduling, resource management or managing your business workflows in the same way that a professionally-designed tool is.
The scalability, performance and features of a system like Paymo will skyrocket your business to the next level, freeing up time to focus on the things that really matter: serving your customers.
Whether you choose to stick with Excel or move to a modern project management app is ultimately your choice, but it’s worth considering what you, your teams and your clients are missing out on. Spreadsheets have their place, but have the potential to put your projects and your success at risk. As a SMB leader, how long are you going to let them hold you back?