Project Management Software – A Comparison With Spreadsheets for Managing Projects

Spreadsheets are the king of project management support tools because they are the most convenient tool to use and the most frequently used tool. How do they compare to project management software? What are the benefits of each and when should you make the switch to project management software? While only you can make the determination as to when you should make the switch, this article will walk through the benefits of each and provide some guidelines.

Depending on which research you rely on, the market for project management software is between $1.5 billion and $3.5 billion. That is for software that is specifically designed to support project management. Most organizations that have made significant efforts towards effective project management have recognized that it is very difficult to manage a greater number of projects and people, or a larger project, without the support of technology.

Yet there is no tool for project management that is more popular or widespread than the spreadsheet, despite the fact that spreadsheets are not designed to be project support tools. Even in organizations with an established project management tool, spreadsheets are used. There are obvious reasons for this. A spreadsheet program is on almost every computer in every organization, people are familiar with spreadsheets and how to use them, and people are pre-disposed to use these “office” types of software tools to solve problems. And I am right there with them. I love using spreadsheets to track all kinds of data. It is easy, convenient, and I admit ego-boosting to show off what I can do in a spreadsheet.

With that in mind, let’s look at some of the differences between these two different types of tools. For the purposes of this article, I selected six criteria by which to make the comparison. These were selected from the feedback of customers and prospects as well as learning what is important for the successful adoption and implementation of project tools within an organization.

Data Mining

Data mining is a huge part of project management tools. The whole reason for having a tool is to collect data, so that you can look intelligently at that data, make sure your processes are performing as advertised, and make good decisions. You need to know which projects and tasks are slipping through the cracks so that you again react. You need to know when you will not have enough resources to meet demand so that you can allocate them properly or manage the demand. You need to know which issues are lurking so that you can address them now before you lose the favor of a critical customer. And you need to see how your processes are working so that you can continuously improve your processes.

In today’s economy, competitive landscape, and accountability standards you must have the data. Managers are getting blindsided because they do not know what is coming and what is going on. This is where the right project management software tool shines and spreadsheets fade. A good project management tool will be database-oriented and should allow for different types of ad hoc reporting across multiple projects. This enables the mining of all kinds of data. You simply cannot do this in a spreadsheet at the same level. If you really, really know what you are doing it is possible to tie spreadsheets together and generate some integrated data. But that is not the same thing. You simply cannot, on a whim, mine into the data represented in your multiple spreadsheets. And in today’s environment, this is critically important. Gone are the days when not having the right data is acceptable.

Advantage: Project Management Software

Ease of Use

There are project management software systems that are easy to use. However, spreadsheets clearly have an advantage here. Most people are familiar with how to use spreadsheets; they are comfortable with them, and even like using them. A big reason is because spreadsheets have no structure. People are not usually “forced” into how to use them. They are free to use them however they want. Of course, there is a downside to this. It is very difficult to standardize a process or have any sort of standard data structure when there is no structure in the tool itself. However, from a strict ease of use standpoint, spreadsheets cannot be beat.

You can counter this in project management software by employing good, relevant, and periodic training, keeping your implementation simple, and using helps such as templates. But we’ll give the advantage of this one to spreadsheets.

Advantage: Spreadsheets

Centralized Access

One of the things that organizations are doing today to become more competitive and more efficient is to provide everyone access to the project information that they need. Marketing organizations are putting all of the information online about each client project. Engineering organizations are tracking all schedules and immediately identifying problems. Government agencies are putting all of the various required data online with their projects. And on it goes. The value of immediate access to information is profound. An engineer can look at one system and immediately find the specifications he needs. A client manager can track the status of his client’s projects and identify issues early. A professional services manager can look up the contract information and scope of work for a key project before answering a question.

Productivity means yielding results, bringing things about, or making things happen. This type of centralized access enables those on the front lines of yielding results to know which action to take when.

Project management software, especially online project management software, wins this one hands down. Spreadsheets are not designed for access by multiple people from multiple locations. They are designed with a single file / single user scenario in mind.

Advantage: Project Management Software

Maintenance and Administration

Time and again, I talk with organizations that are spending an amazing amount of time maintaining spreadsheets. There is so much time spent on activities attributable to spreadsheet usage:

  • Tracking down the right spreadsheet
  • Tracking down the right version of the right spreadsheet
  • Tracking down the email with the right version of the right spreadsheet
  • Emailing out the right spreadsheet to the people that don’t have it
  • Tracking down the people who have the information that is needed to update the spreadsheet
  • Actually updating the spreadsheet
  • Maintaining the formulas and formatting of the spreadsheet
  • Updating the standard format of all the spreadsheets to accommodate a “process enhancement”
  • Creating new spreadsheets

And the list goes on. The point is that while any tool will take time to maintain, spreadsheets take an inordinate amount of time because they are single-user focused. Only one person can update them at a time. They also take time because they are file-based, meaning that you have to maintain separate files. Unless an organization is really good with a process to manage these files (the exception not the rule), the files tend to be stored in a hodgepodge of locations with non-standardized file names and even non-standardized layouts. If you take the time to study the amount of time people take to maintain these spreadsheets, you will be amazed.

On the flip-side, project management software also takes time to maintain. I cannot say otherwise. It takes time to make sure the data is correct in the system, that processes are being followed properly, and to simply get information in the system. One of the flip sides of this is that many project management software systems enable the entry of information by everyone so that one person does not have to both find and enter the information. In this scenario, the maintenance is more truly maintenance than continual, non-stop data entry.

There are some ways to minimize the amount of maintenance and time spent on project management software systems, and these are focused on the initial setup. If you setup the system well, the maintenance time is reduced. Using items such as templates and pre-setup reports really help to minimize the amount of time spent in the tool.

While both types of tools require time, a well setup project management software system definitely has the edge over spreadsheets.

Advantage: Project Management Software


Flexibility in this context refers to the ability of the tool to adapt to your processes. In practicality, this refers to things such as being able to track any type of data peculiar to your company (i.e. adding fields), or implementing a new project template.

This is a harder attribute to measure, especially with the variation in project management software tools. Many tools are very rigid, meaning what you see is what you get. Some tools have become more flexible and allow a great deal of adaptability – such as being able to adapt screens and data structures. This has become increasingly important.

It is difficult to perform a direct comparison because it really depends on the project management software system that you are evaluating, but in reality many systems will not be as flexible as a spreadsheet. In a spreadsheet, you can create a new column or row on a whim or create a brand new spreadsheet to track new information. Obviously there is a downside to this flexibility, specifically the difficulty in standardizing a process. However, from a strict look at flexibility, we have to give spreadsheets the nod. But I caution you to test your project management software system for flexibility and do your own comparison.

Advantage: Spreadsheets

Resource Allocation and Forecasting

This is similar to data mining, but it is so important that it gets its own billing. The management of which resources are assigned to which projects and tasks is a critical component of project management and one of the big differences between spreadsheets and project management software.

There are three critical pieces to ensure good resource management. These include:

  • A good work breakdown structure (breakout of the tasks in a project)
  • A good estimation of the effort (not duration) to be expended on each task (and thus project)
  • A composite view of this information across all projects

Because of the single-file focus of spreadsheets, a good project management software system should win this hands down. A good system will provide views and reports with insight into resource allocation so that you can view problems and do future forecasting. That isn’t to say that you cannot do this with spreadsheets but it is difficult at best and you need to have a very, very good setup.

Advantage: Project Management Software

Final Thoughts

Only you can decide the right tool for your organization. Certainly using spreadsheets is better than using absolutely nothing. They do have value, and they may be a good fit for some organizations. However, good, project management software (especially enterprise-level) clearly has the advantage for the following types of organizations:

  • Organizations with more than a handful of projects to manage
  • Organizations with more than a handful of people working on or managing projects
  • Organizations with large or complex projects

Spreadsheets are primarily used because of convenience. However, convenience is not a great reason to use a tool that supports your critical processes. Be sure that you select and use a tool that adds to the efficiency and productivity of your people and processes, and not the other way around. This will far outweigh the benefits of convenience.

While spreadsheets do have a couple of inherent advantages, such as a natural ease of use and flexibility, you can employ best practices to minimize any downside to project management software. For example, use templates as much as possible, simplify screens as much as possible, document clear processes, focus on those processes instead of features, provide good training, and create good, relevant reports. Combining this with the inherent advantages in project management software will help to create efficiencies, increase productivity and resource utilization, and to become more competitive.