# Goodbye excel spreadsheets, hello performance management tools
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-06-23
Category: TECHNOLOGY
Category URL: https://financedigest.com/category/technology
Meta Title: Digital Transformation Projects: Challenges and
Meta Description: Learn how to avoid IT project failures with insights from Harald Matzke. Discover strategies for successful project portfolio management and cost control.
URL: https://financedigest.com/goodbye-excel-spreadsheets-hello-performance-management-toolshtml

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_By_ **_Harald Matzke,_** _Executive Adviser at Serviceware Performance_

Whether it’s the implementation of new software or the use of innovative technologies such as RPA, the opportunities and challenges that arise in the context of digitalisation are manifold. Many companies [face challenges](https://www.financedigest.com/under-saved-and-underprepared-women-face-challenges-saving-for-retirement.html "UNDER-SAVED AND UNDERPREPARED: WOMEN FACE CHALLENGES SAVING FOR RETIREMENT") due to the complexity of converting systems and processes: high costs as well as investment effort and the lack of time and resources. The [project landscape for many companies is becoming increasingly confusing, which repeatedly leads to errors in project management](https://www.financedigest.com/prince2-and-msp-training-the-rise-of-online-project-management-courses.html "Prince2 and MSP Training: The Rise of Online Project Management Courses"). For example, project resources are planned twice, schedules and deadlines are not met, the budget is not adhered to or, in the worst-case scenario, the project fails completely. Unsuccessful IT projects are not uncommon, especially with large-scale projects, such as initiatives for [digital transformation](https://www.financedigest.com/redefining-the-human-touch-with-data-driven-digital-transformation.html "Redefining the human touch with data-driven digital transformation"). Despite this, research from Citrix has revealed that [three in four IT leaders (77%) see opportunities for success in past digital transformation failures](https://www.digit.fyi/digital-transformation-failures-can-help-drive-later-successes/).

**IT projects fail – but why?**

There are many reasons why IT projects fail. Errors occur both before and during the project phase. Often it is due to the scope of work, which was inadequately defined in advance. Companies also repeatedly underestimate the scope and [impact that IT projects](https://www.financedigest.com/equinor-evaluating-impact-of-british-windfall-tax-on-projects.html "Equinor evaluating impact of British windfall tax on projects") have on the entire business. Quite often, they [plan too little](https://www.financedigest.com/birmingham-lines-up-post-brexit-housing-plan-with-a-little-help-from-its-friends-in-china.html "Birmingham lines up post-Brexit housing plan, with a little help from its friends in China") time, so that even at the beginning, important targets can only be met with difficulty.

So how should companies proceed? First of all, they should ask themselves two questions:

- Are we running the right projects?
- Is our project implementation result-oriented?

The intersection of these two core issues is the project portfolio, which maps the projects already underway and those awaiting a decision. A good portfolio [management should actively](https://www.financedigest.com/with-the-right-active-manager-you-really-do-get-what-you-pay-for.html "With the Right Active Manager, You Really Do Get What You Pay For") add and remove projects in order to achieve the intended transformation goal. Portfolio [management is an important basis for comparing resource](https://www.financedigest.com/the-importance-of-strategic-human-resource-management.html "The Importance of Strategic Human Resource Management") supply and demand and making it transparent for all stakeholders. In project scoring, defined criteria can be used to make a comparison of different project alternatives as objective as possible. Especially when so-called hard and soft facts have to be taken into account, [project scoring provides valuable support for the most diverse investment](https://www.financedigest.com/4-important-factors-to-consider-when-choosing-an-eb-5-visa-investment-project.html "4 Important Factors to Consider When Choosing an EB-5 Visa Investment Project") scenarios.

The goal at the beginning of planning is to find a project or product portfolio that is as [balanced as possible in terms of opportunities and risks](https://www.financedigest.com/managing-corporate-currency-risk-the-cfos-balancing-act.html "Managing Corporate Currency Risk: The CFO’s Balancing Act") whilst also promising long-term success. [Project costs](https://www.financedigest.com/britain-delays-major-rail-project-hs2-as-costs-soar-again.html "Britain delays major rail project HS2 as costs soar again") must also be calculated here. In addition to classic cost types such as personnel, travel or material costs, these also include those that have a special significance in the project context, for example external consulting services. Project cost [management includes both planning and actual plan comparison as well as regular revision during the project in order to have a clear picture of the costs incurred at all times](https://www.financedigest.com/time-management-strategies-that-work.html "Time management strategies that work"). Adjustments only work if there is continuous and complete project reporting. Here, the achievement of project [goals is to ensure that the business](https://www.financedigest.com/business-goals-vs-business-purpose-and-how-to-combine-them-for-success.html "Business Goals vs Business Purpose and how to combine them for success") is attaining a desired outcome.

**The importance of keeping an optimal overview of projects**

To get a [clear overview of the status and development](https://www.financedigest.com/crypto-firms-will-develop-offshore-without-clear-us-rules-coinbase-chief-says.html "Crypto firms will develop ‘offshore’ without clear US rules, Coinbase chief says") of projects, companies often use a number of different tools and applications such as Excel or PowerPoint. In principle, both are solid tools for calculating projects and creating reports. However, they quickly reach their limits as soon as the requirements increase. Modern tools are therefore essential, especially when [managing complex IT project](https://www.financedigest.com/power-management-integrated-circuit-pmic-market-is-projected-to-grow-at-6-4-during-2021-2028.html "Power Management Integrated Circuit (PMIC) Market is projected to grow at 6.4% During 2021-2028") portfolio. If a tool from the performance management area is chosen, non-financial indicators can also be taken into [account and serve as a basis for business](https://www.financedigest.com/making-your-accountant-an-invaluable-asset-to-your-business.html "MAKING YOUR ACCOUNTANT AN INVALUABLE ASSET TO YOUR BUSINESS") decisions. Parameters such as [“service level performance” not only indicate the pure cost](https://www.financedigest.com/home-start-lincolnshire-implements-flexible-unified-communications-service-to-reduce-costs.html "HOME-START LINCOLNSHIRE IMPLEMENTS FLEXIBLE UNIFIED COMMUNICATIONS SERVICE TO REDUCE COSTS") aspects of a new project, but also take into account the scope and quality of the service provided.

But what should performance tools do in order to make the described planning [steps more efficient](https://www.financedigest.com/factoring-in-fail-safes-five-practical-steps-for-more-efficient-transparent-reporting.html "Factoring in fail-safes: five practical steps for more efficient, transparent reporting")? First of all, the most important requirement is integration into existing systems, making sure that it meets the [needs and requirements of the company](https://www.financedigest.com/italys-windfall-tax-on-energy-companies-needs-to-be-rewritten-pm.html "Italy’s windfall tax on energy companies needs to be rewritten – PM") and the respective projects. Often, individual systems ( [product data management](https://www.financedigest.com/understanding-management-theories-and-maximising-productivity.html "Understanding management theories and maximising productivity"), enterprise resource planning or operational project management) already exist in the company and the data only needs to be merged and prepared.

The chosen [solution should also provide a transparent view of the entire project](https://www.financedigest.com/demand-for-temperature-controlled-pharma-packaging-solutions-to-reach-over-us-9-bn-by-2030-fmi-projects-a-decline-till-q2-2020-amid-covid-19-pandemic.html "Demand for Temperature Controlled Pharma Packaging Solutions to Reach over US$ 9 Bn by 2030; FMI Projects a Decline till Q2 2020 Amid COVID-19 Pandemic") portfolio in relation to the resource and capacity situation. Information should be stored “multidimensionally” (project view, organizational view, time, [data types in forecast](https://www.financedigest.com/cbd-gummies-market-current-scenario-and-industry-growth-forecast-with-major-key-players-data-2030.html "CBD Gummies Market| Current Scenario and Industry Growth Forecast with Major Key Players data 2030") versions) and analyzed using standard reports and ad hoc evaluations. The [forecast view also helps to simulate potential](https://www.financedigest.com/grab-and-go-containers-market-anticipated-to-have-positive-potential-during-the-forecast-period-fmi.html "Grab and Go Containers Market anticipated to have positive potential during the forecast period.: FMI") future portfolios and predict their impact on the future cost situation and resource utilization.

Furthermore, the tool should offer the possibility to [develop business cases](https://www.financedigest.com/covid-19-makes-the-case-for-technology-and-automation-for-business-development-in-professional-services.html "Covid-19 Makes the Case for Technology and Automation for Business Development in Professional Services") that can serve as a basis for comparison for later versions of the project. By filing them in a central database, the assumptions in the business case can be continuously [refined over time](https://www.financedigest.com/home-prices-are-setting-records-while-mortgage-rates-plunge-is-it-time-to-refinance.html "Home Prices Are Setting Records While Mortgage Rates Plunge – Is It Time To Refinance?") and supplemented with facts and key figures such as net present value, payback period or internal rate of return (IRR) can be calculated. Organizations should also be careful not to use business cases only as an [initial means of defining the project](https://www.financedigest.com/taylor-fay-homes-recruit-cordant-projects-for-innovative-property-initiative.html "Taylor Fay homes recruit Cordant Projects for innovative property initiative") scope and evaluating the economic viability, but to keep an eye on them on an ongoing basis. Unfortunately, experience shows that few [organizations open up the initial business](https://www.financedigest.com/the-medical-tourism-market-is-estimated-to-substantiate-i-e-grow-at-a-handsome-rate-in-upcoming-years-the-present-day-scenario-implies-the-adoption-of-smarter-ways-to-do-business-as-such-digital.html "The Medical Tourism Market to get filtered through organic digitized growth") case at the milestones and, in particular, review the initial assumptions and objectives after the project has been completed. In some cases, this would be important in [order to see that projects are no longer goal-oriented and would possibly contribute more to success](https://www.financedigest.com/cutting-edge-order-automation-retailers-secret-weapon-for-success-this-christmas.html "Cutting-Edge Order Automation: Retailers’ Secret Weapon for Success This Christmas") if they were stopped, thus freeing up the resources used for other projects and tasks.

**Two sides of the same coin: project and people**

With performance management tools, a [close link to business](https://www.financedigest.com/citigroup-says-will-close-russian-consumer-commercial-business.html "Citigroup says will close Russian consumer, commercial business") strategy and operational planning and budgeting can be achieved, which brings more transparency to react in time to rapidly changing developments. Besides all the technical possibilities that can be used to implement IT projects, however, the human factor must not be forgotten. Changes and transformation are usually unpopular because they often trigger [concerns about being replaceable or having to give up privileges and routines](https://www.financedigest.com/new-china-covid-rules-spur-concern-as-some-cities-halt-routine-tests.html "New China COVID rules spur concern as some cities halt routine tests"). Involving the affected groups of people and open [communication regarding the introduction of new software that will impact](https://www.financedigest.com/how-mifid-ii-will-impact-financial-advisor-communications.html "HOW MIFID II WILL IMPACT FINANCIAL ADVISOR COMMUNICATIONS") the company and the work is crucial. Managers should always [deal honestly and openly with employees’](https://www.financedigest.com/how-to-deal-with-challenging-employees.html "How to Deal With Challenging Employees?") concerns and wishes and communicate changes in the course of the project promptly. Then nothing will stand in the [way of project portfolio success](https://www.financedigest.com/intuitive-decision-making-could-this-approach-be-the-most-underrated-way-to-becoming-a-successful-leader.html "Intuitive decision making: could this approach be the most underrated way to becoming a successful leader?")!


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