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174 SOFTWARE FOR COST MANAGEMENT

hear the arguments for the other options, first. The biggest argument is that any
costing functions that are built into a traditional CPM program are likely to be
weaker than those in a specialized financial management program. The latter is
likely to have support for all types of overtime and overhead (burdens). It will al-
low for multiple billing and cost rates. It may support multiple currencies. It will
have extensive capacity for various code of accounts structures.

Then there is the ownership of the systems and data. The two systems will be
owned and maintained by two different groups, with the probability of two differ-
ent sets of standards, practices, and cultures. Just recently the projects organiza-
tions and the operations organizations are learning to work together. Finance
operations have traditionally been isolated from the rest of the firm. This has
been by design, to prevent contamination from the other disciplines. Now, we are
trying to reverse this age-old tradition by getting the finance people and the proj-
ects people on the same playing field.

There is a third option. This is a full integration of two systems, which share a
common set of data. One system is optimized for project planning and control—
usually a traditional CPM system. The second system is optimized for financial
management. A bridging program facilitates the collection of data for both sys-
tems and the transfer of information between the three modules.

Such solutions became available in the late 1990s, as the popular ERP ven-
dors, such as Oracle, PeopleSoft, SAP, Baan, and J.D. Edwards created Projects
modules, designed to integrate their financial management modules with many
CPM programs. The potential for these to be an ideal solution has been there,
but the jury is still out on how successful the early implementations have been.
The upside is that these systems should be able to support all the specialized
needs of the financial and operations community, as well as the projects commu-
nity, while avoiding duplicity of data. The downside is complexity, cost, and the
time to implement such solutions. We discuss this area of PM/ERP integration in
Section 10.

Recommendations

Your choice of the available options should be based on what your needs are. The
simplest solution is a robust CPM program with strong costing capabilities. This
option will work only if you do not have specialized financial management needs
that are integrated with projects, or if the financial management systems do not
have to address projects data.

If you need exceptionally strong costing functions, but still would prefer to
work with a single program, look into one of the CPM-type products that empha-
size cost management.