Financial control in PPM: integrating Clarity with your financial systems

Connecting finance and project management is the holy grail of business operations: desirable, yet difficult to attain. Portfolio decisions get made in one system while budgets, actuals, forecasts, and purchase orders live in another, and the two rarely line up.

It's understandable why.

Most general PM tools are limited in scope and fall short when it comes to managing multiple projects with complex financial requirements. Intensive capacity planning, complex resource allocation, advanced analytics, and integrations with financial systems are often beyond their capabilities.

On the other hand, while powerful, high-end ERP systems can strain budgets and may not provide the flexibility and specialized features that dedicated PPM tools offer.

This is where advanced PPM tools like Clarity step in. Clarity excels at blending financial oversight with project portfolio management, so portfolio decisions and the numbers behind them stay connected.

Whether you're evaluating Clarity or already running it and not getting the financial picture you expected, this guide covers how Clarity connects to your financial systems, the most common mistakes, and how to avoid them.

Clarity to the rescue: supercharging financial control in PPM

Imagine managing multiple projects with tight schedules and budgets. You need to track purchase orders and vendor invoices, plan capacity, assign staff, and manage timesheets, all while reporting against a budget that was approved months ago. These tasks are usually split between disparate financial, accounting, and project management systems, forcing you to bounce between them to get anything done.

Enter Clarity.

By integrating with your financial systems, Clarity creates a steady flow of information between the financial system and the project management solution. This expressway keeps essential data in sync on a schedule you set.

• As actual costs post from timesheets and your financial system, Clarity updates the actuals and forecasts in your cost and budget plans, so your budget stays accurate and current without manual adjustments or mismatches.
• Scheduling, staffing, and capacity are handled easily. Dynamic changes, such as staff shifts or new deadlines, are reflected across all projects.

Integrating your financial system with Clarity gives you the synchronization you have always needed.

But it doesn't stop there. Harnessing this integration, Clarity opens up a new level of financial optimization and efficiency in project management. With financial integration, you can:

• Break down project costs: Get a complete breakdown of all project attributes. Spot trends and optimize spending as necessary.
• Up-to-date financial insights: Use current financial metrics to make data-driven financial decisions. Compare estimates with actuals, see where you stand, adjust as needed, and ensure that all investments are accurately allocated.
• Spot risks early: Identify and address potential risks before they impact projects. Prevent cost overruns with proactive management and data-driven decisions.
• Optimized financial planning and budgeting: Use current project data for more accurate forecasting, whether your goal is profitability or getting the most from a fixed budget.

Clarity in action: integration with financial systems

Clarity provides a unified approach to managing project finances by integrating with your financial systems. This unified method ensures complete control and visibility over every aspect of your project's financials for optimal management.

This level of control and management is made possible by the foundational financial components of Clarity. These essential pieces fit together to offer a detailed and cohesive view of your project's financials.

Core financial components for a 360-degree view

To give you a clearer picture of how effectively Clarity integrates with financial systems to deliver a 360-degree view of your project's finances, let's look into the key financial components that make this work:

1. Core financial components:
   • Entity: Think of this as your financial home base. It sets up your primary currency and financial defaults to make reporting and currency management across projects smooth and straightforward.
   • Department and location: Tracks costs specific to departments or locations. With Clarity, you can set specific rates for different departments and locations so you can monitor expenses accurately.
   • Financial OBS (organizational breakdown structure): OBS organizes your financial data by department and location, allowing you to see how different areas of your business are performing.
   • Fiscal periods: Align your project costs with suitable timeframes so your financial planning and forecasting are spot on.
   • Currencies and exchange rates: Handles multiple currencies, critical for global operations. Built-in exchange rates keep everything accurate to give a clear financial picture across different currencies.
2. Rate matrix:
   • Configurable rates: This feature lets you set precise rates for internal resources, contractors, and other expenses. It helps you track costs and forecast accurately.
   • Cost calculations: These rates are used to determine project costs, whether exact or blended, so your plans reflect current costs.
3. Actual costs:
   • Actuals tracking: This feature captures actual labor costs from timesheets and non-labor costs from your financial system as transactions, giving you a current view of where your money is going. It also keeps you updated on project expenses, which is critical to keeping the projects' finances in check.
4. Cost, budget, and benefit plans:
   • Cost plans break down planned, actual, and forecasted costs by resource type and transaction class, helping you understand spending patterns.
   • Budget plans: Once approved, cost plans are converted into budget plans and a financial baseline is established to manage and monitor cost deviations.
   • Benefit plans: Tracks projects' expected and actual benefits to gauge ROI and evaluate their long-term value.
5. Capital and operating expenses:
   • Separate capital from expense: Clarity can separate capitalized expenditures from expenses, so capital projects are reported the way finance reports them.
6. Hierarchy rollups:
   • Roll up to the program or portfolio: With investment hierarchies, a parent investment's cost plan can include its children's actuals, so leaders see the financial picture above a single project.

With core financial components at the center, features like the rate matrix, actual costs, cost, budget, and benefit plans, and hierarchy rollups form the foundation of Clarity's financial management system.

These elements work together to create a reliable connection with your financial systems. They build a bridge that ensures free-flowing financial information, 360-degree visibility, and granular control of the project's finances.

Powerful features don't guarantee smooth execution

Clarity excels in financial management thanks to a powerful set of financial components. However, the strength of its features doesn't automatically guarantee a smooth execution. The back end of any powerful system comes with its share of challenges, and things can go sideways quickly when the integration isn't done right.

It's not just about having great features. It's about how well they're implemented, integrated, and aligned with your processes.

The perils of DIY: common mistakes in Clarity financial integration

Virelli's team has worked with Clarity longer than anyone else.

We've integrated Clarity with many financial systems, including a custom integration that brings non-labor actuals from Oracle Financials into Clarity for an energy company, with automated data checks so costs stay accurate without manual fixes. Our team has tackled many common issues and gotten projects back on track when they went awry.

Based on what we've seen so far, here are some of the most frequent mistakes and pitfalls in PPM implementations:

1. Over-complicating the system:
   The extensive features in Clarity can be exciting but can also lead to overcomplicating the system. Too many complex configurations make the system hard to use, overwhelm users, and reduce performance, ultimately hurting productivity.
   Over-engineering complicates integration with other tools and increases the maintenance burden.
2. Skipping the discovery phase:
   Starting without a solid grasp of your current financial processes and requirements often leads to misalignments and mismatched expectations.
   When there's a disconnect between what the system can do and what the organization needs, it wastes time and resources, and often a lot of rework.
3. Not involving the finance team:
   Not involving the finance team leads to incomplete requirement gathering, misalignment with financial goals, and integration issues with existing workflows.
   All of these problems stem from the finance team's lack of input. Even if these issues don't show up immediately, other consequences, like poor adoption and inefficient system use, are bound to happen.
4. Data inconsistency issues:
   Complex system configurations, integration hiccups, and even inaccurate data entry can lead to inconsistency. These issues often reduce data accuracy, making reporting and analysis unreliable.
   When the data doesn't line up, it impacts decision-making and quickly spirals into more significant problems across the system.

While the mistakes we've discussed are common, the biggest issue is often underestimating the complexity of financial integrations. Financial management features can be trickier than anticipated, so the integration process usually requires extensive customization and setup. If these aren't handled properly, they can lead to a cascade of problems, causing delays and impacting the overall project.

Many implementations don't give this complexity enough attention, creating a chain reaction of issues and setbacks. To avoid these problems, following best practices for PPM implementation is essential, especially regarding financial integrations.

The simplest way to avoid these pitfalls and save time and money is to work with a team that has a solid track record with Clarity implementation.

How Virelli can help

Every business is unique, with its own set of financial processes, requirements, and goals. This often leads to a need for customization, which can create challenges during PPM implementations.

Integrating financial systems with your PPM tool can feel like navigating a complex maze. Without the right approach and expertise, you risk encountering obstacles that waste time and complicate the process.

At Virelli, we use a structured, strategic approach to ensure your financial integration with Clarity is smooth and successful. Here's how we can help:

1. Streamlined configuration:
   Our team simplifies configurations to meet your immediate needs, keeping things running smoothly while laying a solid foundation for future growth.
2. Ensure the right collaboration:
   From the start, we involve your finance team and key stakeholders, conducting interviews and research to ensure the system meets their needs and fits your existing processes.
3. Process alignment:
   We help map your current financial processes to Clarity to ensure that the system fits your current needs and can adapt as your requirements change.
4. Efficient data management:
   Our experts set up streamlined integrations for smooth data management, saving you time and creating a solid foundation for future processes.
5. Strategic and phased setup:
   By thoroughly researching your processes and goals, we create a strategic plan with realistic expectations that align with your objectives. We handle the setup process in phases, which allows us to customize effectively while keeping things as efficient as possible.

If you're already running Clarity and the financial picture still lives in spreadsheets, a Solution health check is a good place to start. To see a top-down funding model in practice, read how UCLA manages funding and purchase orders in Clarity.

Frequently asked questions