At a glance
A project management module integrated into the ERP offers decisive advantages over traditional PM tools: It enables real-time access to a shared data pool, eliminates media disruptions and reduces redundancies. As a result, companies gain transparency, efficiency and better controllability of their projects.
Goal-oriented project management is a key success factor for every company. This is because the quality of project execution not only influences the operational implementation of an order. It also has a significant impact on the costs and therefore the profitability of a project.
The only question is which software can be used to plan and manage a project most efficiently. With stand-alone PM tools such as Microsoft Project? Or is it better to use project management modules that are integrated into the ERP? In the following article, we compare the two options and show you which software wins the race.
Dedicated PM tools vs. project management in the ERP system
The weaknesses of classic project management software
The Gabler Business Dictionary defines the objective of project management as follows: “With the help of PM, project management should be efficiently designed to achieve the project goal in the required quality, planned time, with optimal use of human and capital resources.”
For this to succeed, software support is generally a must for larger projects. This is because manually entering project data in Excel spreadsheets not only causes additional work in the long run, but also provokes errors. Dedicated project management software has therefore long been commonplace in project-focused industries.
However, classic PM tools are isolated software solutions. Although they provide an excellent representation of project management, they have a decisive disadvantage: they offer hardly any interfaces to other tools in the company. They can therefore only access current company data with the help of imports and manual entries. There is no automatic data synchronization.
This inevitably leads to media disruptions as soon as data needs to be exchanged with other business areas. The consequences:
- information distributed throughout the company,
- lack of real-time data,
- lack of up-to-dateness and redundant data storage,
- Excel chaos and manual coordination effort and
- unclear responsibilities in day-to-day project work.
As you can imagine, there is a lot of friction under such circumstances. And that makes precise project planning and control almost impossible.
Standalone PM software is certainly capable of calculating the expected costs and capacities of a project and creating forecasts, for example. However, the tool receives the database for this as static input. In the background, there is simply a table that assigns a cost rate to each resource. If employees fail to make a note of changes in the software, inaccuracies are unavoidable.
The strengths of ERP project management modules
Where dedicated PM tools reach their limits, an ERP module for project planning and control really comes into its own. The reason: it maps project management directly in the ERP system and therefore has a native connection to other areas of the company.
In this way, the module can access a data pool in real time that is shared by all departments. As this does not even require data synchronization, transmission errors are ruled out.
When calculating costs, for example, ERP-supported project management does not use fixed table entries. Instead, it uses the current hourly rates of the allocated personnel as well as the actual costs for machine hours and production resources. This enables precise costing.
| Classic PM tools | Project management modules in ERP |
| isolated software | Solution integrated into the ERP system |
| No link to other divisions | Direct connection to other divisions |
| Data imports or manual entries required | Real-time access to a standardized company-wide data pool |
| No data synchronization possible | Data synchronization not required |
| Friction losses due to media disruptions | Efficiency through smooth data exchange |
What are the benefits of ERP-supported project management in practice?
More transparency
Everyone involved in the project has access to the same real-time data at all times. This means that the project team always has up-to-date, error-free company information, which ultimately makes the planning much more meaningful.
Efficiency gains
Thanks to central project coordination in ERP, there is no more friction caused by multiple software environments. Data exchange and synchronization via interfaces are a thing of the past, as are redundant data entries. This not only reduces the susceptibility to errors, but also the workload for project management.
Simple cost and deadline control
ERP software for project management allows you to dynamically monitor costs and deadlines and compare them with the preliminary budgets and deadlines. Early warning systems ensure that project managers recognize deviations in good time and initiate countermeasures if necessary.
Improved collaboration
An ERP project management tool not only schedules resources, but can also book timeslots for joint agreements. It also ensures a smooth flow of information between different departments and therefore seamless integration of adjacent areas of the company – such as purchasing, sales, warehousing and production.
Traceability
The clear documentation of processes is one of the main tasks of an ERP solution. The system becomes the central information dashboard that both ensures traceable decisions in the ongoing project and provides the data basis for subsequent review.
Compliance with regulatory requirements
The ERP system automatically generates proof of quality assurance and adherence to legal compliance requirements thanks to the project-related documentation and the use of audit trails. Sustainable project work in line with ESG criteria is also ensured – without any additional effort.
Which ERP functions are important for project management?
Project structuring in ERP
Once the customer has accepted an offer, the project management team first draws up a project structure plan. The individual project phases, milestones and task packages are derived from this. The team arranges these in chronological order and thus outlines the entire course of the project.
An ERP solution sheds light on values that would otherwise remain invisible or can only be estimated. For example, by mapping the transportation times between different locations, it enables realistic time planning and task allocation.
Resource and capacity planning in ERP
The next step is resource and capacity planning, i.e. the booking and cost recording of personnel, materials and machines for task packages and time slots. The aim is to guarantee smooth processes with the highest possible capacity utilization.
An ERP system reliably controls the allocation of resources and creates maximum transparency. For example, it prevents employees, machines or systems from being booked multiple times for individual time slots. Specifically, it answers the following questions:
- What resources and capacities are available?
- Where are they located?
- When exactly are these available?
- Which resources need to be reordered?
- What needs to be considered for the transfer of resources?
Performance and time recording in ERP
During project implementation, data from the departments involved continuously flows back to project management via the ERP system. For example, the production department’s time recording system is linked to the project via the ERP system. If employees post their expenses, the project progress is updated accordingly.
The system calculates the hours worked in monetary terms. This means that colleagues know at all times how many hours are still available to them and what proportion they have already used up. If they exceed the time budget, the project management team must first release additional hours.
Thomas Bittner, Asseco Solutions
Where dedicated PM tools reach their limits, an ERP module for project planning and control really comes into its own.
Project-related document management in ERP
The ERP-internal document management system manages project-relevant data such as contracts, reports and design drawings in one central location. In this way, everyone involved always has access to standardized and up-to-date document versions.
It is very important that all documents are stored in an audit-proof manner – i.e. unalterable, complete and traceable. The system logs every change, no matter how small, so that a complete history is available at all times. This function makes it much easier to comply with legal requirements.
Integration of adjacent modules and processes
Project management is only one part of the overall project execution. Operational implementation, customer support and finance and accounting are also important components of a project. In addition, there are numerous upstream and downstream processes such as sales acquisition or the realization of cross-selling and upselling potential.
In most cases, the functional scope of a modern ERP system is large enough to map the entire course of a project. This means that all project phases are seamlessly integrated into one system, which increases transparency and reduces the coordination effort.
Dashboards and KPIs for project controlling
To enable project managers, stakeholders and customers to continuously track all progress, ERP solutions for project management offer useful functions for project controlling. Project dashboards in the ERP system, for example, consolidate data from different modules of the software and prepare it visually at the touch of a button.
Key performance indicators (KPIs) play a major role here – meaningful key figures that make project success and target achievement measurable. These can be information on adherence to deadlines, turnover or customer satisfaction, for example.
Artificial intelligence in ERP
Although a project is a unique business process, many workflows in the company are already standardized. This means that artificial intelligence can run routine tasks automatically so that project staff can concentrate on more important tasks. This applies, for example:
- the collection and updating of data from various applications,
- the verification of user access and data input,
- carrying out calculations and project evaluations and
- project cost tracking.
By the way: According to a study by the software evaluation platform Capterra, 90% of project managers who use AI report a positive ROI in the last twelve months (as of 09/2024). A good 50% of companies stated that they use AI to automate tasks.
Remote access
Last but not least, with a modern ERP solution, it is now child’s play to work effectively on projects outside the office. Via remote access to the software, all project participants can call up information, perform status queries, process tasks or record times around the clock. Regardless of whether they are working from home or on site at the customer’s premises.
As decisions can also be made on the move, this automatically reduces delays. In addition, location-independent project work strengthens collaboration in distributed teams and facilitates the integration of external partners.
| ERP function | Benefit |
| Project structuring | Creates transparency about phases, milestones and task packages and enables realistic time and process planning. |
| Resource and capacity planning | Prevents double bookings and ensures optimum utilization of personnel, machines and materials. |
| Performance and time recording | Keeps project progress up to date, automatically calculates times and enables precise budget control. |
| Project-related document management | Centralized and audit-proof document storage ensures that everyone involved always works with the same, up-to-date versions. |
| Integration of adjacent processes | Directly integrates departments such as purchasing, sales or finance and reduces coordination effort. |
| Dashboards and KPIs | Provide visual real-time controlling and make project success and target achievement measurable. |
| Artificial intelligence | Automates routine tasks, reduces sources of error and creates scope for strategic work. |
| Remote access | Enables location-independent project work, accelerates decision-making and strengthens collaboration in distributed teams. |
Tips for optimal integration
As you already know, an ERP system is virtually predestined for most project management tasks. However, the introduction of the solution needs to be well planned and implemented. Otherwise, you run the risk of your employees not being able to cope with the new software and the added value fizzling out.
We can give you the following tips:
Analyse your processes before implementation.
This will help you uncover weak points and identify potential for optimization. Standardizing your processes will also make it possible to automate routine tasks later on. This in turn relieves the burden on project staff.
Involve the workforce in the introduction right from the start.
Openly communicate the benefits of project management in the ERP system and take the worries, concerns and ideas of each individual seriously (keyword: change management). If your team feels heard and understood, you can expect a high level of user acceptance later on.
Support the users in familiarizing themselves with the software.
With targeted training and continuous support, you can ensure that your employees use the software optimally. This is the only way for your company to reap the full benefits of project planning and management in the ERP system.
Have realistic expectations.
Implementation is particularly straightforward and cost-effective if you initially use the ERP standard. If you realize after some time that you need additional functions for ERP-supported project management, you can still make specific adjustments.
Rely on the right provider.
Industry experience is crucial when selecting a provider. As manufacturing projects differ significantly from service projects or IT projects, the respective project requirements are also different. An experienced ERP provider knows these differences and will find the right solution for you.
Conclusion: Project management and ERP system belong together
On the surface, modern PM tools and project management modules integrated into ERP are not particularly different from one another. Both solutions offer a similar range of functions and comparable usability.
However, if we look at the software solutions in detail, it becomes clear that project management modules in ERP solutions ensure greater efficiency, transparency and controllability, as all project data converge in a common data pool.
The biggest advantage of project management in the ERP system is the reduced coordination effort. As all planning and control tasks run completely via one company software, there are no more frictional losses due to the use of multiple tools.
