Integrating Plans with Actuals
Projects are executed in order to bring in a positive return on investment (ROI). The ROI might be lowering risk, enhancing the organization's strategy, streamlining processes, complying with regulations, or otherwise improving the state of the organization in some way. This potential return must be quantified in financial terms, even if it is only a very rough estimate of the benefit provided. It motivates people to understand why they are working so hard, and a big number is a good motivation.
The other half of ROI is the investment or cost. Project managers and executives cannot know if a project was successful or not unless they understand its cost. In today's globalized knowledge worker world, project costs are mainly derived from the cost of labor. Consequently, tracking time to projects and tasks is an inescapable requirement for measuring project ROI.
If 10% of a project's allocated budget has been spent and only 5% of the work has been completed, there is a problem. Project managers who track employee actuals and find this out early in the project have a fighting chance of recovery. Those who don't will find out much later on that their projects are drastically over budget. This is just one example of how real-time data enables project managers to fix problems before they start.