Post-Enron controls
As the business climate forces better controls, vendors respond with products that offer better project tracking

It's not just Enron, but a slew of mega-sized corporate failures in the U.S. and elsewhere that has prompted regulators and law makers around the world to demand more stringent controls from corporate systems.

The Sarbanes-Oxley Act passed in U.S. Congress might be ignored by some as just another kneejerk reaction to someone else's problem, but it is having dramatic effects on the interest in project control systems. The legislation effectively mandates that publicly traded companies on U.S. exchanges track how money is spent and, particularly with regard to both on and off-balance sheet transactions, ensure that it is auditable. Since many capital projects in the IT world become balance sheet items, there is a sudden focus here.

If your organization is IT-oriented, more than half the total costs may be project related. So far, it has been enough for many organizations to simply manage by planning the projects and then let the actual tracking of projects be much more casual.

For many organizations, project management is heavily planning-oriented. The plan is established, printed up on a wall somewhere and sometimes not tracked at all. Since the Y2K flurry of interest in project management, some organizations now go further, progressing the tasks on the project either manually or in a scheduling system such as MS Project.

Even without the demands of the Sarbanes-Oxley Act, there are plenty of incentives to track project and capitalization money more stringently. For public companies, this is now being mandated, but even for private firms, the vast amount of venture capital that has been invested in these firms have VC companies demanding more exacting controls. In some cases, particularly in Canada, this involves research and development money, further complicating the tracking of expenditures of capital projects.

What firms are now moving towards is better project tracking. This requires not only the "per cent complete" calculations done on an activity-by-activity basis, but also a labour cost tracking at the activity level. There's only one good way to do this and that is the dreaded timesheet. It's no wonder that one of the most improved areas of MS Project 2003 is not only the timesheet module, but also the integration functionality to external timesheets. It's not enough to simply add a project timesheet and use that for updating project progress — that data must also match up against data in your financial system. This may be no small challenge but has opened the door for large ERP vendors such as SAP and Oracle to promote CATS and Oracle Projects timesheet respectively into the PM areas of companies.

Perhaps the most interesting addition to this mix has been the proliferation of mid-market firms that are making timesheet systems that can link to both project management and finance systems. Search Google for the most current entries.

For more information on this article or any aspect of project management software or systems contact the author, Chris Vandersluis or HMS Software at info@hmssoftware.ca or by phone at 514-695-8122.