Several decades ago, organizations used to manage all their finances using big paper-based ledgers, where they’d spend much of their day “doing the books”. These large ledger books worked for hundreds of years, however it would be a challenge to find any modern company today that runs their business on paper-based accounting methods.
Spreadsheets... Are they the Solution?
At the very least, an organization today will use Quickbooks (or equivalent) and a payroll service; and larger companies will use a full ERP like SAP or Dynamics. Clearly the effort of manually writing in every journal entry would be debilitating for any modern business; along with the high probability for errors, fraud and missing entries.
For a while, spreadsheets (like Excel and Lotus 123) helped modernize finance departments by at least partially leaning on technology to improve productivity and financial reporting. Spreadsheets however, only delivered a modest improvement, as they didn’t do away with errors, fraud, re-keying of data, missing data or issues around timeliness of information. Spreadsheets are only cells and formulas. They have no intelligence or logic that understands the financial process, compliance, or specifics of the business. You’d have a difficult time finding a company that runs its finances in a spreadsheet or paper today.
To challenge yourself on this point:
Would you invest in a $100m company that runs its finances using paper-based ledgers or spreadsheets? Of course you wouldn’t. What company with any brains would run its business like that right?
What’s baffling, is that still to this day, the vast majority of $100m projects are being managed using primarily paper and spreadsheet-based tools. I’ve picked $100m a bit randomly, because major and mega projects much bigger than that are commonly run on spreadsheets and paper. Not surprisingly, the historical failure rate of these projects has forced companies to increasingly adopt systems to manage project costs. Systems like 4castplus are gradually taking over from spreadsheets as the operational tool to manage major project finances. Having a system in place for “Project Cost Management” is quickly becoming the standard for any company that manages major projects – or even a lot of modest-sized projects.
Time to Make the Move from Paper to Digital
Similar to how organizations made the shift to adopting accounting systems, the same is now happening operationally for projects. For many years, companies have underestimated the complexity of managing major and mega projects. In some ways, they are more complicated, with more moving parts and chances for failure, than an equivalent sized company. Today however, more and more organizations are recognizing the need for technology to provide the intelligence, workflows and vast improvements in productivity required to successfully bring home major and mega projects.
Modern organizations are moving forward, embracing the tools they need to streamline their teams and ensure their costs are being managed prudently. Project performance is more than ever a critical priority to maximize profitability, and to execute consistently and reliably. It’s time to move forward.
Learn how having an operational-level project cost management solution like 4castplus can help you streamline your teams and ensure project costs are managed prudently.
Sign-up for our FREE demo, here.