Humans are creatures of habit - this applies to the workplace as well. After our first coffee, this is often one of our first activities: We open Excel to check on tasks, numbers, and even entire projects. Excel can process different data types, generate complex calculations and large graphics. It can be used as an input or output format in combination with other software solutions. But is project portfolio management with Excel the right way to success? We have taken a close look at the tool…
Do you want to learn more about project portfolio management?
Then you should read our article "Project Portfolio Management - An Introduction For Practitioners With Little Time On Their Hands"!
Why is project portfolio management (PPM) with Excel problematic?
- Excel makes mistakes
- Excel is unsafe
- Excel quickly becomes confusing
- No multi-user capability
- No rights management
- Work requires special Excel knowledge
- Hidden costs are high
You can find a detailed explanation of the 7 reasons in this article.
To start with: A software - Excel or even a dedicated project portfolio management (PPM) solution such as Falcon - is a central but not the only important factor for successful project portfolio management. Equally important are the structures and working methods of portfolio management, which, if neglected or inadequate, can lead to major problems and even the failure of projects or the entire portfolio. Together with our project portfolio management experts, we have created a checklist that we are happy to provide to you free of charge. It will help you to analyze your project portfolio management and address the problems at an early stage.
Step by Step - What makes Excel so successful?
With an estimated 750 million users, Excel is the most widely used spreadsheet program in the world. But what makes the tool so popular? Excel is able to process numerous data types, display them in a variety of graphs and statistics and interacts with many other software solutions as input or output format. Quite an achievement!
The recipe for success of the all-rounder at a glance:
- accessibility: Excel can be found on almost every computer
- pre-defined know-how: a basic understanding of Excel is part of the repertoire of every student in this day and age
- popularity: alternatives are often still unknown
- savings: there are no additional costs for programs or trainings
- customization: you can customize the program to your individual needs
Excel can therefore be used in almost all areas, both privately and professionally. Task lists, checklists, spreadsheets and reporting are among the main functions of the software. But Excel often reaches its limits in project portfolio management.
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Project portfolio management with Excel? Please don't!
With these successes, it is hardly surprising that Excel is also particularly popular for project portfolio management. But this is the decisive mistake: Just because Excel is great in many areas, no one doubts its PPM skills. The truth is: Excel is simply not made for project portfolio management! We will show you why a PPM tool is the better choice in this case:
1. Excel makes mistakes
About 94 % of all Excel worksheets contain errors. So it's not a question of whether you make an error, but rather how many. These errors can be very serious, as prominent examples show:
- Due to a formatting error, the wrong devices were intercepted by a secret service.
- A sign error turned a $1.3 billion loss into a profit.
- The results of a known study are wrong, because a wrong data area was chosen for the calculation.
The background stories to the small examples (and many more) can be found here. We all know the minor and major errors that can occur again and again when working with Excel. A dedicated project portfolio management tool, on the other hand, is customized for the challenges faced in this use case. Everything is already set up and nothing has to be "programmed" into an empty Excel mask. This saves a lot of time and avoids countless errors.
2. Excel is unsafe
If you store your data in a file format, you make yourself vulnerable. Knowingly or unknowingly, data and links can be falsified, stolen or deleted. Systematic checks are not provided for in Excel and a manual check exceeds the capacity of every employee. With the help of various user rights, access management, backup and recovery functions, project portfolio management tools prevent these problems.
3. Excel quickly becomes confusing
Complex or parallel projects portfolios can hardly be handled with Excel. Information has to be obtained, collected and interpreted again and again. It is therefore not surprising that Excel quickly causes confusion among the people involved in project portfolio management and that the overview will almost certainly be completely lost at some point. Project management portfolio tools are designed to create order in this chaos.
4. No multi-user capability
Working in a team with Excel can become the purest pain. A file can only be edited by one person at a time because the data is not synchronized in real time. The danger is different versions and states, which can be consolidated only at large expenses. Also the communication between the participants is almost never achievable with Excel. For example, it is not possible to record the current project status centrally for all to see.
5. No rights management
In many extensive projects, especially in sensitive situations such as restructuring, M&A initiatives or other transformation projects, there are project contents, milestones, measures, effects and forecasts that should not be visible to every project employee. Targeted control of who has access to which information is simply not feasible without time-consuming versioning of files in Excel. Dedicated project portfolio management solutions enable simple, intuitive and secure rights management at the touch of a button.
6. Work requires special Excel knowledge
Not every project participant is an Excel expert. The program contains many functions that are designed for their original use as an analysis tool and can be complicated to use. Especially when a lot of information is tracked in various forms by colleagues with different Excel levels across several spreadsheets, this problem is exacerbated. In the event of unexpected errors or problems during use, there is no Excel contact person at Microsoft who can answer specific questions about the application. A project portfolio management solution such as Falcon, on the other hand, can be used from the very first minute. Drag'n drop, right mouse click, info texts and descriptive function names make it very easy to get started. For any questions, our support is personally available within less than 2 minutes.
7. Hidden costs are high
Excel itself is very cheap at first. However, huge costs are arising from the problems we just mentioned. The time-consuming search, aggregation and interpretation of information hidden in Excel lists is a good example of this. Driven by the size of the project portfolio and the number of people involved, these costs increase and become a real burden in day-to-day project business. With a dedicated project portfolio management tool, your project portfolio can be managed much more effectively and efficiently. As the investments and financial benefits of the projects in your project portfolio quickly run into the millions, the financial advantage of a dedicated PPM solution over Excel is indisputable! Whether craftsmen, chefs or project managers - professionals should work with professional equipment.
No more Excel?
Excel is a very powerful tool for spreadsheets and calculations. However, we strongly advise against using Excel as a project portfolio management tool! We know from experience that chaos is big and projects fail because of it. With our free resource "20 reasons why your project portfolio management fails", you can analyze your project portfolio management and identify weaknesses that often lead to major problems in your projects.
Project portfolio management with Falcon
We develop the project management software Falcon and replace Excel with it. This saves you a lot of time and allows you to concentrate on your tasks.
Falcon creates clear responsibilities and a simple overview of your entire portfolio, with all its projects, goals and progress. You have all information in one place and can access it from anywhere with your team.