Microsoft Project is one of the most awesome project management tools when used correctly, however way too many people when using project used it for the wrong task. This seems like quite an outstanding statement but you would be surprised the number of people who use Microsoft Project for the wrong thing.

Let me explain

Microsoft Project by definition is a Project Management tool. That is, it allows you to develop a prediction of how your project will run and then plot your actual data against the prediction. So the question is, what is the prediction? Well, the prediction is simply your outline of tasks, resources, time and money of how you believe the project should run. See a project by definition has three clearly defined qualities and a clearly defined outcome. The three qualities we measure all projects by are -

1. Quality
2. Time
3. Cost

All projects must have some sort of defined outcome, or it is not a project. For example if you are building a house, that is what we consider a project therefore Microsoft Project would be a suitable tool for managing the construction of a house because we can predict all the tasks that will need to do and we can document those tasks. We can apply to each of the tasks, a resource to complete the task, a duration in which the task must be completed in and costs for each individual's task. The prediction or what is known as the baseline, is what we compare how the project went against the prediction.

One of the biggest mistakes I have seen people do when trying to run a project is that they try to build the project plan as the project is going on. If you are doing this, STOP! It is the wrong way to build a project and I can pretty much guarantee your project is going to go off budget very quickly.

Before you ever start running your project you must create your baseline or prediction. This is your belief of what tasks, resources, time and money you will need to complete the project. Now the reason we do the baseline first is so that we can measure our actual results along how things are really going. Remember I said in the title that Project will save you money on your next project. Well this is where project comes into its own. See when you plot your actuals against your prediction, if for some reason a particular task took longer than expected or was delayed, the Gantt Chart in Microsoft Project will show you very quickly the impact of that delay. This means you as a project manager will then be able to react to those delays and implement strategies that will help you get your project back on track.

For example, I was consulting for a construction company in North Queensland and they were having massive problems with the people who build their kitchen cabinets. Every single property they were building, was delayed every single time due to the delay in the supply of the kitchen cabinets. Now in consultation with the construction company, we spoke with the supplier, told them the problem and ask for their help to correct it. You know what there reaction was tough that's your problem. Now if the supplier was a poor one, the construction company would have given them the flick straight away but because the cabinet company was in fact one of the number 1 kitchen companies we had a real problem.

So, how did we solve the problem?

Well here is the secret to it all, we did not fix the problem, we adjusted our way of thinking. Because we had plotted our actuals versus our prediction or baseline for a number of construction projects, we were able to find a trend in what was happening with that cabinet supply company. The construction company would always order the cabinets a certain number of weeks before they were needed, and it was generally between 4 and 5 weeks depending on the job. What we were finding from our project plans in review was that the kitchens were always delivered 6 weeks late. So in essence to fix the problem, we simply ordered 10 weeks prior to the date we required the kitchens to be delivered and guess what happened, the kitchens were on time and every one was happy.

So, how did the construction company save money?

Well it did so in a number of ways. The first was that the construction company was not paying penalties for the late handovers of the properties and in some cases being late by 6 weeks could have tens of thousands and in some cases hundreds of thousands of dollars in late penalties. The other way the company saved money, by doing this was that it continually had to change the booking times when tasks needed to be done with various tradesmen. By keeping everything on schedule, we were able to ensure that we didn't have trades staff doing nothing, thus costing us money, we did not have plant or materials sitting idle and the most important thing was that we kept the customer happy which means more business for the future.

Microsoft Project if used correctly should at the very least help you to stay on budget. Why? Well no project is perfect, that is for sure and there are just times when things go monstrously wrong but if you are plotting your baseline data versus your actual data, you will then be able to see if your project is off budget or running over time which means if that is the case, you as the project manager can then put strategies into place to help get the project back on time and on budget.

If you were trying to build your project as the project was underway, then this means you have nothing to identify to you that your project is going off the rails, which means your project could be millions of dollars off budget before you even realised. The bottom line is this. If you want to be known as a quality project manager, that runs your projects on time, on cost and on quality, then Microsoft Project is the tool you should be using.