Project management using MS Excel - when does it cease to be a sufficient tool for project management?

MS Excel is a powerful tool used in virtually every organization. Initially, and still today, it is a spreadsheet that allows you to perform simple and complex operations on data sets. Microsoft’s development of Excel over the years has made it very flexible, with many applications. MS Excel is also a relatively widely used tool in project management.

Using MS Excel as a project management program

Many organizations that use MS Excel in project management have developed a model file to carry out most of the processes involved in planning and executing a project. In practice, it looks like the following main functions are available in the following tabs of the file:

Project charter
Stakeholder analysis
RACI matrix
Project schedule
Project deliverables
Project resources
Record of actual working time
Project budget
Register of project risks
Project issues
Project dashboard

PeoplE who are advanced in using MS Excel and have a deep knowledge of project management can develop a reasonably well-functioning schedule or project budget. Undoubtedly, it is worth noting that MS Excel is a particularly effective tool for developing a project budget. Developing a risk register or project charter format is a small problem. An essential issue of working with such a MASTER file is the possibility of simultaneous work of multiple users on a single project. This can be solved by placing such a file on a Sharepoint environment to some extent. Another rather tricky issue of such a solution is the possibility of creating integrated information about ongoing projects, especially when the company implements many of them simultaneously.

Advanced use of MS Excel - "almost" a project management program

You can also build a project management program in which MS Excel is integrated with a relational database such as SQL. Then Excel can be just an interface to the database. This means that all the data is stored on a single relational database. This data is entered and retrieved through an interface developed in MS Excel. Such a solution, however, requires a lot of work on the part of programmers and their relatively advanced knowledge. A common problem is when key programmers leave the company, and the developed in-house program needs more support.

When does MS Excel become an insufficient tool for effective project management?

Undoubtedly, the larger an organization is, the more advanced it is in project management. The more projects it manages simultaneously, the more often such organizations use advanced, dedicated project management software. Therefore, when organizations decide to replace their tools developed based on MS Excel and the entire MS Office suite and replace them with a professional project management application, these are a few symptoms that indicate the point at which MS Excel begins to fall short:

Simultaneous management of multiple projects. Studies show that the number of projects organizations carry out increases annually. Some organizations simultaneously manage dozens of projects, many of which are strategic and complex. Obviously, more than MS Excel is required in such an environment.
Problems with consistency of data and information on ongoing projects – quite often, project management office staff say that ensuring consistency of information in a large organization working on MS Excel is highly problematic. Undeniably, when PMO employees have to report large amounts of data and information to the finance department or the company’s board of directors, this data consistency is even essential.
“Clutter” in project resource management – Undoubtedly, the most common challenge of medium and large organizations in project management is efficiency in project resource management. When deciding to launch the next strategic project, a company’s management wants to have available information on whether there are resources available in the company to carry out the project. Unlike organizations with MS Excel, companies with professional project management software have such information for resource availability.
Need for more advanced functionality – as organizations become more sophisticated in project management, more and more needs for new program functionality naturally arise. Simple solutions are easy to do in MS Excel. However, the more advanced ones are already labor-intensive, require programming expertise, and are increasingly expensive. The significant risk, then, is the availability of competent people who can build such solutions
Difficult access to historical data – Design excellence is built, among other things, by learning from one’s mistakes. Without a doubt, easy access to lessons learned is a significant advantage
Ineffective collaboration and communication – Project communication, rapid exchange of information and quick decision-making are the keys to effective project management. This is perhaps the biggest problem in organizations that use Ms Excel

Professional project and portfolio management software - significant advantages over MS Excel

Without a doubt, professional project and portfolio management applications have many advantages over tools developed based on MS Office. It is noteworthy that such programs are developed and improved over the years. Often, companies that develop project management programs deal only with this, which is their core business. Such companies regularly access thousands of users from whom they receive feedback. This feedback is a massive support for improving the program. In opposition to these companies, building such professional in-house programs is very difficult and often outright unprofitable. The main advantages of such programs include:

Effective project resource management – as we mentioned earlier, project resource management is one of the biggest challenges in project management. It is common for companies to have too many projects running simultaneously and for key employees to be overloaded with work. Therefore, the ability to easily plan resources and access information about resource availability in the following weeks or months become crucial. The following illustration comes from the project and portfolio management software FlexiProject and shows the situation with project resources over the next three months.
Project resources over the next three months
Effective collaboration and communication – the efficiency of implementation of especially large projects requires effective collaboration and communication. The ability of multiple users to work simultaneously on a single project schedule is even a basic requirement. Unquestionably, in a professional project management program, such information is available directly in the system, grouped into dedicated discussion threads, and does not result in the need for tedious sifting through emails. In terms of communication, it is also crucial to design effective decision-making processes and then automate them.
Making decisions about new projects based on good information – a key role of a company’s management is to make decisions about launching more projects in the organization. A good project management program allows you to build appropriate scoring models to evaluate ideas for new projects. As in the illustration below, the company’s board of directors can see on a matrix in the upper left corner of the screen how attractive the projects in the portfolio are. Such a tool is very effective in assisting the board in meetings, discussions and decision-making. Unlike Excel, the scoring process itself is mostly automated.
Attractiveness of the projects in the portfolio in FlexiProject software
Integrated and consistent information – access to a single “source of truth” is key, especially for PMO employees who report project statuses to the company’s management. In situations where project managers present their data and others are shown by the PMO it creates an atmosphere of mistrust and hinders decision-making processes.
Building databases and standards – a key role of the Project Management Office is to build project management standards and databases. In terms of standards, these include a project charter, a project closure charter, templates for projects of a repetitive nature, or document templates. Also very important are databases collecting lessons learned, historical risks or best practices from perfectly executed previous projects.