5 ways to improve the project management of your portfolio

There are plenty of recent examples of projects that have got out of hand, resulting in major cost overruns. Sometimes this is due to external problems such as nitrogen standards, sometimes to a lack of clarity regarding requirements and wishes such as in the case of Zuidasdok, but often enough it is also due to the inability to properly identify risks and delays in these projects. In this article we look at 5 ways to gain and maintain better insight into these risks in project management.

Project management with spreadsheets

Many organizations manage their project portfolio in spreadsheets. The flexibility and user-friendliness of this solution has made it one of the most popular tools for many years. But, as so often, the strength of a solution is also an immediate pitfall. That flexibility can lead to a lack of uniformity, and the user-friendliness often comes at the expense of things like standardized workflows and auditability.

Managing projects in spreadsheets can go well for a long time. But especially with increasingly large and complex projects (think of large infrastructure projects), it eventually becomes more difficult to timely identify problems in planning or execution. Especially when a portfolio of different projects is involved, it becomes difficult to keep the (financial) overview.

5 ways to better understand project risks

There are also plenty of challenging projects on the agenda in the Netherlands in the near future. Just think of the most obvious examples such as solving the housing shortage, making existing homes natural gas-free, the construction of 5g and major civil engineering projects. You just don't want to think about these all going way off schedule or becoming financial debacles.

What 5 steps can you take to ensure proper (financial) control of these projects?

1. Work together on the same numbers

It becomes very difficult to keep a good overview when not all information is available in the same environment. A typical problem with large-scale deployment of spreadsheets is the fact that information gets fragmented. Eventually, files become too large and too many people have to work in them at the same time. Cutting up files leads to fragmentation and all sorts of risks of reconciliation discrepancies. You also have this problem when part of the project management is done in a software solution but other, critical, information is still in Excel. Adjustments in one source have to be updated in other sources, leading to more manual work or error-prone reconciliations. Instead, it is important for all involved to work together on the same numbers; an adjustment made somewhere should immediately affect all related components. So make sure that everyone involved in the figures of a project or program can work in the same environment.

2. Create an integrated overview

In project control, different parties want their own questions answered. A project controller needs insight across multiple projects, where a project manager or client wants more detail from a single project. Information about sustainability is also becoming increasingly important but that responsibility probably lies with other stakeholders.

The larger and more complex the project, the more important it is to have an integrated overview. This makes it easy to understand the relationship between these components. An adjustment in the planning then immediately affects the costs and, where necessary, other areas as well. Again, it is important that all stakeholders can base their overview on the same information, they just look at different cross-sections and levels of detail. So try to integrate the overviews with each other and where possible base them on one source.

3. Provide transparency to the lowest level of detail

In addition to working together on the same numbers and having an integrated view, it is important that all necessary numbers are available down to the lowest level. This does not mean that all details from an ERP system are required for your project control but it does mean that all relevant details should be available when needed. When you have to go back to your transactional systems (ERP) for every detailed question, it causes delays and usually discussion about the numbers. It is important that stakeholders can click through to underlying details from an aggregated level without delay and reconciliation discrepancies.

4. Choose the right software solution

Choose a solution that provides structure and offers enough flexibility to incorporate new insights. The reason that spreadsheets are still so widely used in this field is the great flexibility. Project management is often less standardized than other planning and control processes, partly because there can be large differences between projects. Flexibility is especially important in this area. At the same time you do want to structure and standardize certain things in order to be able to analyze and steer properly.

Moving from Excel to a rigid software solution often creates resistance and leads to people creating their own Excel files alongside it. You also don't want to be dependent on (expensive) customization within the software. There are several solutions on the market that allow people within your own organization to adjust the setup themselves where necessary. So choosing the right solution is very important here.

5. Ensure timeliness

While "timeliness" of information is important in many processes, it is precisely in project control that we often see challenges, again related to the diversity of stakeholders and their interests. A project controller is likely to want to do weekly and monthly analyses across projects. While project planners and managers are less tied to this (financial) cycle. They actually want to make continuous adjustments and have the current status.

It is important to properly capture all interests and needs in a clear process with clear sequencing. A solution with good workflow capabilities can help with this. When set up properly, it ensures that all stakeholders know exactly when which information is available. It minimizes the chance that people will keep their own overviews and ensures that new risks on a project can be quickly identified.