Last week we hosted “The Evolution of Project Cost Reporting”, a webinar where we looked at some of the unfortunate yet pervasive processes that make project cost reporting slow, inaccurate, and not nearly as helpful as it should be. We then talked about technology trends available today that are increasing efficiency, predictability and actual project control— all of which, in turn, improve cost and schedule performance.
In our survey to the attendees about the topic, we asked about the biggest challenges of project cost reporting they’re facing at their respective organizations. Three interesting themes emerged.
Struggles in Gathering Data for Project Cost Reporting
Simply assembling the necessary information to compile project cost reports is a huge challenge. Arrays of data siloes, overlapping or redundant systems, and lack of standardization all play a part. Information is often not integrated – schedules from one place and cost actuals from another (without sufficient granularity or aligned coding structures). And the litany of data sources goes on and on. Thus, our old friend Excel becomes the defacto tool of choice. Efficiency is lost.
When simply collating the data is such an issue, the challenges snowball. Even if all departments can agree on what information is necessary in the front end of a project, can you actually access it during the project? Can you get buy-in on the validity of the report? Can you adapt as the very fluid execution plans change throughout the life cycle of large capital projects?
Difficulty Realizing Value of Project Cost Reporting
An outgrowth of the data gathering issue is the ability to realize value from the reporting. At the most fundamental level, questions arose regarding timeliness and accuracy of reporting. Other attendees expressed a desire to do more, but are struggling to accomplish these specific kinds of tasks effectively:
- Earned Value Management calculations and forecasting while tracking the necessary detail
- Visibility into Key Performance Indicators (KPIs) or the ability to drill down into the problem areas
- Keeping up with Budget-At-Complete changes and variance analysis at a Work Breakdown Structure (WBS) level
Battling the Status Quo
One of the most telling comments was simply a quote one of our attendees provided. The quote comes from Warren Buffet in a 2008 TIME magazine article where he observed:
People will always try to stop you doing the right thing if it is unconventional.
While not a challenge to reporting outright, this underscores a frustration we often hear from the organizations we speak with: not enough support to drive change. Perhaps there’s a ready champion who understands how a change to the current solution can improve the daily life of your project manager or cost analyst, but no management sponsor that can elevate the priority.
In situations like these, it’s important to build a solid business case that speaks the executive language. Break perceptions that project cost management is a “back room” function that checks a box. Instead, connect the dots from improvements in reporting to greater business value that come from applying better processes consistently across EVERY project in your organization. Visibility leads to proactivity; proactivity to course correction and on to higher returns or higher margins.
There’s a great deal of potential ahead. Leveraging technological innovations can usher in an digital era of efficiency. As a result, effort will shift away from creating reports to actual forecasting, trending and root cause analysis. It begins with more accurate data collection (think laser scanning and 3D models as sources for progress measurement) and then extends to integration and automation to drive faster and more insightful reporting.
We invite you to learn more about the evolution of cost reporting, now available on-demand.