Project management matters to chief financial officers because projects matter to CFOs. Projects are often capital intensive and highly uncertain. Because the CFO controls the purse strings, and completed projects are meant to produce value to the corporation, I believe that CFOs should care a great deal about projects.
Consequently, chief information officers must provide project management software that allows their CFOs to do their jobs exceedingly well.
Project management software for grownups
Many project management software packages have standard features like showing "percent complete," graphing the relationship among tasks and drawing a critical path. These are all fine, but can still leave the CFO high and dry. Let's examine some of the problems.
The perils of percent complete
You ask one of your staff members to describe his progress on a task. "Eighty percent done," he says proudly. The next week the answer is 85%, followed by 88%. It is easy to see where this is going. This leads me to one of my favorite expressions about "percent complete": The first 90% of a task goes much faster than the last 90% of the task.
We can do better by tracking earned value
Suppose we assigned a value to each task. The value (it could be the cost of the task, or its economic value) is earned when the task is complete, and a deliverable is produced to show the task is done. To make this work, tasks should be "small" -- perhaps no more than two weeks of work. There is no percent complete, just a payoff for work finished. And, now, the project is done when all the value is earned. Therefore, the new percent complete equals value earned as a percent of total value.
Estimates to complete a useful measure
Many project management software packages allow users to input the time spent on the project in a given week. This is interesting, but kind of like driving forward by looking through the rearview mirror. What is needed is for staff members to input an estimate to complete, and for the project management software to re-compute the end date based on the estimate to complete. The key to predicting when we will get there is to have the ability to input updated estimates.
Tasks consume project resources
As work is done on tasks, cash, staff time and materials are consumed. But does the project management software allow for the input of a total budget across those three categories? And does the CFO get reports on how much of the budget is being used up? Are critical resources really critical? What if two projects compete for the same scarce resources? The IT department must provide the CFO with tools for answering these questions.
Significant project management software vendors
There have been significant changes in the project management software industry. The following vendors continue to offer solid software but there are issues to consider before purchasing.
Artemis International Solutions Corp. was originally created by Metier in 1976; it was later sold to Lockheed, and finally Versata in 2006. With Artemis, it is not a question of the strength of the software; with so much change, buyers should spend time understanding Artemis' current go-to-market strategy.
Dassault Systemes Enterprise Project Management represents another well-known approach to project management. Interestingly enough, when you look at Dassault as a company, it is very much focused on 3D visualization. So, there is an obvious question to be asked: If Dassault is mainly a 3D visualization company, how much attention is it paying to its project management division?
Deltek offers a highly functional project management offering but has a major focus on government, education and construction. Companies that investigate Deltek should examine the industry fit.
Microsoft Project -- how could one resist? Microsoft Project is important because of its ubiquity. It will be fine for many smaller projects, and there are a large number of add-ons available. But if you like the idea of earned value, budgets, and estimates to complete, first find out whether they can be done with the software.
Primavera was acquired by Oracle in 2008. This is certainly attractive for Oracle shops, and could be fine in general, but you should determine for yourself whether Primavera looks and feels like an independent company. For example, do you have to buy the Oracle DBMS, or can you run Primavera on SQL Server? See how "Oracle-ized" Primavera is and whether that is acceptable to you.
technology disruptions have created the advent of the strategic CFO