Jon Grunzweig gave a presentation on controlling project costs. He discussed how projects often go over budget and past deadlines due to a lack of accountability and oversight. Grunzweig emphasized the importance of having an accurate project plan, accountable time tracking, and timely status reporting to keep projects on track. He also noted common areas where estimates fall short, such as testing and rework, and stressed measuring success rates to improve estimates over time. The key, according to Grunzweig, is having the right systems and processes in place to monitor costs and catch issues early.
1. Controlling Project Costs 10/26/2012
SoTecConference 2012
Controlling Project Costs
Jon Grunzweig
Vision Business Systems
Leading IT to Business Excellence
Jon Grunzweig 1
2. Controlling Project Costs 10/26/2012
SoTecConference 2012
Ever Happen?
• Great project plan, good resources, design
• Before you know it…..
– Delivery date slipping
– Going over budget
• Project keeps going along
– Start ignoring the budget, so far overspent
– Timeline goes into oblivion…
Shuttle Route
Endeavor’s Last Mission
• Great preparation
Things happen….
• $$
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3. Controlling Project Costs 10/26/2012
SoTecConference 2012
Credibility Issues….
Blame game starts……
Which leads to…….
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4. Controlling Project Costs 10/26/2012
SoTecConference 2012
Why ?
• Many moving parts (very few fixed parts)
• Circumstances occur different
• Things left out / Estimates incomplete
• Poor cooperation within business, people
• Events and changes
• Issues with service providers
• Outside uncontrolled events
• Unknowns….
Most Projects
• Predictability
• Been done, or very similar (not one of a kind)
• Experienced resources
• Therefore:
– Should be on time and on schedule
(or very near)
What’s the disconnect?
• Good plan, design, resources, project mgt
but……..
• Poor alignment of Accountability Cycle
• Poor hours accountability
• Elements unplanned for
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5. Controlling Project Costs 10/26/2012
SoTecConference 2012
Our focus today….
• Alignment of Accountability Cycle
• Accountability of hours
• Areas short-changed in estimates
Foundation for Control
Project Execution Cycle
Project Planning & Agreements
Governance & Project Management
Contract & Vendor Management
Methodologies & Processes:
Design, Project, Change Control
Technology Vision and Strategy
Spend & Execution Cycles
Spend Execution
Authority Cycle Cycle
Project
Budgets
Plans
Timesheets/
Proposals
Billing
Status
SOWs
Reporting
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6. Controlling Project Costs 10/26/2012
SoTecConference 2012
Accountability Cycle
Methodology
Status
Proposals
Reporting
Billing SOW’s
Project Plan /
Time Sheets
Est
Accountability Alignment
Prop SOW Plan Time Invoice Status
Total 120 120 120 90 70 130
Task 1 40 40 40 30 20 35
Task 2 80 80 80 60 50 95
Accountability Hours
How Much ---> A B C
Remain
Plan Actual A-B
Total 120 90 30
<----- What
Task 1 Rsc 1 40 30 10
Task 2 Rsc 2 80 60 20
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7. Controlling Project Costs 10/26/2012
SoTecConference 2012
Accountability Hours – Plan
How Much ---> A B C
Remain
(Plan -
Plan Actual Act)
Total 120 90 30
<----- What
Task 1 Rsc 1 40 30 10
Task 2 Rsc 2 80 60 20
Accountability Hours – Actual
How Much ---> A B C
Remain
(Plan -
Plan Actual Act)
Total 120 90 30
<----- What
Task 1 Rsc 1 40 30 10
Task 2 Rsc 2 80 60 20
Accountability Hours - ETC
How Much ---> A B C D
Remain
(Plan -
Plan Actual Act) ETC
Total 120 90 30 40
<----- What
Task 1 Rsc 1 40 30 10 5
Task 2 Rsc 2 80 60 20 35
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8. Controlling Project Costs 10/26/2012
SoTecConference 2012
Accountability Hours – Proj Total
How Much ---> A B C E D F G
Proj
Remain Total Var
Plan Actual A-B ETC B+D A-E Billing
Total 120 90 30 40 130 (10) 70
<----- What
Task 1 Rsc 1 40 30 10 5 35 5 20
Task 2 Rsc 2 80 60 20 35 95 (15) 50
Accountability Hours - Summary
How Much ---> A B C E D F G
Proj
Remain Total Var
Plan Actual A-B ETC B+D A-E Billing
Total 120 90 30 40 130 (10) 70
<----- What
Task 1 Rsc 1 40 30 10 5 35 5 20
Task 2 Rsc 2 80 60 20 35 95 (15) 50
Accountability Hours - Keys
• Must do it timely (daily or weekly)
– With additional early warning protocol
• Accountability at the resource level
• Accountability of the group
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9. Controlling Project Costs 10/26/2012
SoTecConference 2012
Problems with Estimates
• More than initial coding or configuration
• Testing Unit, integration, system,
regression
• Rework It will occur
• Deployment (prepare, deploy, verify)
• Post live support (immediate)
Summary - Key Elements
• Appropriate Project Plan
– Watch out for common items left out
– Resources own estimates & updates
• Accountability Cycle lines up
• Solid relationship with vendors
• Timely reporting (within 1-2 days of cutoff)
• Stick to methodologies/processes
• Plan for contingencies and issues
• Measure your success rate
If control costs…..
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10. Controlling Project Costs 10/26/2012
SoTecConference 2012
Footnotes
• Types of Projects: ERP vs. Development
• Not Covered: All other types of issues
• Hard Costs (hardware, equipment, etc.)
• Challenges
– Putting time in without regard to estimate
– Getting systems, processes aligned
Questions / Discussion
?
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SoTecConference 2012
Controlling Project Costs
Jon Grunzweig
Thank You!
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