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If You Don’t Provide Them a System, They’ll Build Their Own

If You Don’t Provide Them a System, They’ll Build Their Own

Many CFOs and Controllers are reluctant to accept that there is financial activity going on in their organization that’s occurring outside their ERP finance system.  While this is an understandable sentiment, the reality is that, for any company whose primary source of revenue is project-driven, there will always be project-based financial activity going on outside the ERP. 

 

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The thought that the project teams require a System to manage the finances of complex projects, is often cause for the CFO to exert their influence and put an end to that – forcing the project teams into using a project management or job costing extension available with the ERP.  While the CFO might have good intentions, the result of that act always results in the project team having to piece their own system together using spreadsheets and other office tools anyway, because finance systems just don’t have the depth in features & functions that can meet the needs for managing complex projects. The net result being that, by denying them a proper system, the project controls and project managers end up managing the majority of project finances outside the ERP anyway; but they’ll do it in error-prone and inefficient spreadsheets instead.

This is a common rookie mistake for a CFO or Controller that is relatively new to, for example, a construction contractor that is in the project delivery business.  They’ve likely come from a company where all financial governance and control is entirely held within their ERP; and hence get nervous and agitated to discover that many millions of dollars are being managed in the projects, not the ERP. Their attempts at wielding control over that are most-often more damaging than they can possibly realize because they’re putting their project experts at a significant disadvantage by forcing substandard tools onto them.  Worse than substandard, they are in fact, withholding business-critical systems from them, leaving them emptyhanded.  People are resourceful of course, so they’ll just end up building their own tools.

Project controls software solutions are designed with the same rigor, structure and financial governance of the ERP.  The processes, data and workflows are subject to security and control measures for the careful management of project finances.

Regardless of the finance system you use – SAP, Oracle, Dynamics, Viewpoint, Sage, etc. – the tools they have available for project management & project tracking, just don’t meet even the most basic requirements of what your project teams need.

Don’t leave your guys high & dry – listen to them. Understand their requirements. Make your decisions based on the greater need of the organization – not just your department.  The need for control may compromise corporate profitability.  

 

By Michael Wilson | November 12, 2019 | Categories: project management software construction, project cost management solution, Enterprise Software Integrations | 0 Comments

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