Acumen & ARES: Simplified Cost & Schedule Integration
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Acumen & ARES delivered this presentation on the need to properly build, analyze and cost-load a schedule. Acumen gave a special sneak peek of Fuse 3.0 and 360.
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Acumen & ARES: Simplified Cost & Schedule Integration
- 2. Agenda • Company Introductions • Acumen & ARES G2 Partnership • Delivering Value through our Partnership – Schedule Validation – Cost Management from Estimating to Time-phased Budgets Coffee Break – Accurate Forecasting and Change Management – Analyzing your Data • Wrap & Questions 5/8/2012 © 2011 Acumen & ARES Software. All Rights Reserved. 2
- 3. Acumen: Proven Project Analytics Passion and dedication to helping to improve the World Renowned practice of CPM scheduling Risk Assessment & analysis Workshops • 2o Year+ PPM legacy across multiple industries Oracle Accredited Training • Oracle, Deltek & Microsoft partner • Based in Austin, Texas Acumen Fuse • Global presence 5/8/2012 3
- 4. Acumen DNA acumen s1 > s5 acumen DNA • Schedule Basis • Reflects latest scope/contractor updates Schedule is King… S1 • Critiqued Schedule Metrics: “Analytics leverage • Structurally sound, no contingency, S2 sound logic data in a particular functional process (or application) to enable • Risk-Adjusted Schedule • Estimate uncertainty, risk events context-specific insight that is S3 actionable” • Optimized Target Scenarios • Reduced hot spots, higher confidence S4 • Team Validated Scenario • Buy-in on mitigation plans S5 5/8/2012 4
- 5. ARES Software Extensive industry-wide ARES Software is a full-service global Project perspective (Oil & Gas, Mining & Metals, Energy, Management provider Construction, Aerospace, Defense) ARES products are used all over the world with over 250 commercial accounts with more than 5,000 user projects worldwide Proven ability to manage and sustain growth (e.g. hire qualified resources) $130M in revenue and Brazil growing Sao Paulo Excellent employee benefits program, including profit sharing 95% repeat business 5/8/2012 © 2011 ARES Software. All Rights Reserved. 5
- 6. Worldwide Clients Over 5,000 users at ~250 customers around the world. Bolivia China Panama Suriname APEX Silver SNPTC-Shaw Minera Panama BHP Billiton Rio Tinto INDUSTRIES Brazil Peru Taiwan Vale Czech Republic Antamina CTCI • Aerospace Onca Puma Koch Glitsch Gold Fields Yanacocha UAE • Construction Canada Ghana Sama Contracting • Energy BP Exploration Newmont Gold Company Phillippines Canadian National Lycopodium FCF Minerals • Mining & Metals Resource Limited (CNRL) London Hospital Hungary Singapore • Nuclear EnCana Nexen Olajterv PEC Tech • Oil & Gas Shell Canada Iceland South Africa • Public Utilities Century Aluminum AngloAmerican Suncor Energy Syncrude (Alliance 21) HRV AngloPlatinum USA • Transportation Aurecon TransCanada Pipelines Indonesia Alyeska Pipeline Bateman Vale-Inco American Electric Power PEC Tech Eskom MEG Energy Petronas Bechtel IES Consulting Newmont Petrosea Carter-Burgess GoldFields Nalcor CH2MHill Lonmin Denver Regional Transit District Chile Italy Murray & Roberts Fluor Total Project Management ProjectLink Aker Solutions Kaiser-Hill RSV AngloAmerican NASA International Space Station Malaysia RSVENCO Barrick Gold Corporation Parsons Sasol Petroleum BHP Billiton Petronas Parsons Brinckerhoff SSP Codelco Port of Portland TMP (TWP-Matomo) Compania Minera Dona Ines Mexico TWP Portland General Electric de Collahuasi Instituto Mexicano del Petroleo U.S. Department of Energy Vhumbanani (DRA-TWP) Coprim Westinghouse Xstrata (services) Fluor Mongolia South Korea WGI JRI Centerra Gold Mongolia Minera los Pelambres SKEC Ivanhoe Mines Penta Sur * Representative Sample 5/8/2012 © 2011 ARES Software. All Rights Reserved. 6
- 7. Only Complete Solutions Provider Integrated Project Management 5/8/2012 © 2011 ARES Software. All Rights Reserved. 8
- 8. The Acumen & ARES Software Partnership Dr. Dan Patterson, PMP 5/8/2012 © 2011 Acumen & ARES Software. All Rights Reserved. 9
- 9. Acumen & ARES Software Partnership CPM Schedule Acumen Fuse Ares Prism Platform G2 Integration launch date: October 18 2011 at Acumen Summit 5/8/2012 10
- 10. Scenario Outline • Create Schedule P6/MSP • Schedule Critique Fuse • Develop cost estimate PrismG2 • Create time phased budget (integrate with schedule) • Update actuals; update forecast PrismG2 • Update changes • Analyze performance Fuse 5/8/2012 11
- 11. Schedule Critique Dr. Dan Patterson, PMP 5/8/2012 © 2011 Acumen & ARES Software. All Rights Reserved. 12
- 12. CPM Building Blocks Project Defines start or finish of the job Encapsulates the defined work Scheduling tools are Activities Defines duration for a given scope of an excellent means work of modeling these Logic Links Defines sequence of work moving parts. Calendars Defines when an activity/resource can work But… Constraints Defines date overrides They do little for Resources Defines who/what is available to making sure the execute work building blocks are Resource Links the “executors” to their work Assignment used correctly…. 5/8/2012 13
- 13. Sound Logic • Use of FS, FF, SF, SS links • SS links don’t account for durations • Lags hide schedule detail • Leads cause reverse dates redundant • Circular logic between projects A • Out of sequence updates • Open start/finish: hidden open ends B • Logic Density™ • Logic Hotspot™ C • Redundancy Index™ New: Driving Logic analysis 5/8/2012 14
- 14. Float Analysis • Average Float • Maximum Float • Float ratio (# of days float per day of work) • Float Map™ 5/8/2012 15
- 15. Scorecarding 1 6 • Metrics are useful but don’t give overall picture • Scorecarding: group individual metrics into single score • Schedule Quality Index™ • Scores can be either: – Activity based: number of activities that fail a test (less detailed, higher scores) – Metric based: number of metrics that fail a test (more detailed, lower scores) • Weight importance of metrics May 8, 5/8/2012 16
- 16. Sound Planning Equals Project Success… 100% R² = 0.603 90% 80% 70% Finish Compliance Index™ 60% 50% 40% 30% 20% 10% 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% Schedule Quality Index™ 5/8/2012 17
- 17. Cost Management with PRISMG2 Britt Creer 5/8/2012 © 2011 Acumen & ARES Software. All Rights Reserved. 18
- 18. Introducing PRISMG2 5/8/2012 © 2011 ARES Software. All Rights Reserved. 19
- 19. Introducing PRISMG2 • Reduce Risk & Detect Potential Problems • View real-time cost tracking, variance analysis and forecasting • Exceeds all Federal Government (ANSI 748) requirements for Earned Value Management • Built for the Enterprise ‒ Enterprise, Program, and Project reporting ‒ Multi-language, Multi-Currency, Remote Access, Dashboards ‒ Full integration to Oracle® Primavera P6, Microsoft ® Project, SAP®, Oracle EBS, & JD Edwards 5/8/2012 © 2011 ARES Software. All Rights Reserved. 20
- 20. Value of Time-phased Budget • A time-phased representation of the project execution plan to determine: ‒ The feasibility of the plan ‒ The ability to predict project success ‒ Address resource funding requirements • A time-phased budget represents a Performance Measurement Baseline (PMB) • A tool to measure cost and schedule performance against the plan …. and prevent surprises! 8 May 2012 2 5/8/2012 21
- 21. Performance Measurement Baseline • Two typical methods used in developing a PMB 1. Cost loading schedule activities 2. Developing a “Time-phased Budget” 8 May 2012 2 5/8/2012 22
- 22. Cost / Schedule Integration Method 1 – Cost Loading a Schedule 8 May 2012 2 5/8/2012 23
- 23. Issues with Cost Loading a Schedule • Difficult to match up based on granularity of estimate vs. schedule • It is a very time-consuming process to setup ‒ Project must start with a schedule before budget can be established • It is a very time-consuming process to maintain • Difficult to manage intangibles – such as indirect costs • Difficult to manage cost changes • Difficult to manage contingency The costs exceed the benefits 8 May 2012 2 5/8/2012 24
- 24. Cost / Schedule Integration Method 2 – Developing a “Time Phased Budget” 8 May 2012 2 5/8/2012 25
- 25. Time-phased Budgets Advantages Improvements Over Cost Loaded Schedules Removes estimate/schedule granularity issues Quick and efficient setup Much easier to maintain Manage performance on Approved and Control Budgets Efficient use of distribution curves for spreading costs Addresses issue on how indirect costs are spread Addresses issue on spreading of contingency Easier to manage changes in scope and forecast Efficient and Effective PMB Development 8 May 2012 2 5/8/2012 26
- 26. Coffee Break 5/8/2012 © 2011 Acumen & ARES Software. All Rights Reserved. 27
- 27. Accurate Forecasting with PRISMG2 Britt Creer 5/8/2012 © 2011 Acumen & ARES Software. All Rights Reserved. 28
- 28. 5/8/2012 © 2011 ARES Software. All Rights Reserved. 29
- 29. Analysis and Forensics Dr. Dan Patterson, PMP 5/8/2012 © 2011 Acumen & ARES Software. All Rights Reserved. 30
- 30. Metrics for Execution Baseline Compliance™ • Traditional measures include: – Earned value: heavy time investment to implement – Earned schedule: similar to EV – Percent complete: what does this really tell us? – Ahead/behind baseline: too granular a scale… • Baseline Compliance™ – Used to determine how close a schedule is planned and executed against it’s baseline – Measure of well the plan is being executed – More than just date comparison – Looks at period-compliance 5/8/2012 31
- 31. Compliance Scenarios Feb March April Baseline Excellent Scenario 1: Started Early, Finished Early Scenario 2: Started Early, Finished On-Time Scenario 3: Started On- Time, Finished On-Time Scenario 4: Started On- Time, Finished Late Poor Scenario 5: Started Late, Finished Late 5/8/2012 32
- 32. Compliance Metrics Group Metric Jan-11 Feb-11 Mar-11 Apr-11 May-11 TOTAL Baseline Scheduled/Baselined to Start 4 1 4 0 1 10 Scheduled/Baselined to Finish 2 1 4 0 3 10 Updated Start/ed 2 4 1 2 1 10 Schedule Finish/ed 1 3 1 3 2 10 Statistics Start/ed on Time 2 0 0 0 1 3 Start/ed Early 0 0 2 0 0 2 Start/ed Late 2 1 2 0 0 5 Finish/ed on Time 1 1 1 0 2 5 Finish/ed Early 0 0 1 0 1 2 Finish/ed Late 1 0 2 0 0 3 Start/ed on Time, Finish/ed Late 0 0 1 0 0 0 Compliance Start Variance 2 1 4 0 0 7 Cum Start Variance 2 3 7 7 7 Start Compliance 50% 0% 0% N/A 100% 30% Finish Variance 1 0 3 0 1 5 Cum Finish Variance 1 1 4 4 5 Finish Compliance 50% 100% 25% N/A 67% 50% 5/8/2012 33
- 33. Example Baseline Compliance™ Analysis 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 5/8/2012 34
- 34. Wrap-up & Questions Dr. Dan Patterson, PMP dpatterson@projectacumen.com Britt Creer bmcreer@arescorporation.com 5/8/2012 © 2011 Acumen & ARES Software. All Rights Reserved. 35
- 35. More Information: Fuse Trial & White Papers: www.projectacumen.com PrismG2 Information: www.arescorporation.com 5/8/2012 36
Editor's Notes
- Size, Locations, Depth
- All projects start with the development of a project budgetBut, preparing a project budget is only half the effort.What differentiates project data from operations data is that projects have a start and end date.So, integrating cost and schedule data is a necessity in any project.It represents the project execution plan in monetary terms.Going through the process of time-phasing a project budget helps you determineThe feasibility of the project execution planIt helps you predict the chance of project successIt also helps you address resource funding requirements… when are funds required for the project.A time-phased budget also represents the Performance Measurement Baseline of the project against which we will measure cost and schedule performanceAnd therefore prevent surprises. So, the budgeting process is not complete unless we determine how and when we plan to execute the project work.
- In our experience that are 2 typical methods used for developing a PMB or time phased budget.The first method involves cost loading schedule activitiesThe second method involves developing a Time Phased BudgetPRISM G2 provides features that will allow you to use either method.Let’s look at how each is handled by PRISM G2.
- While the process of getting a cost loaded schedule into PRISM G2 is very efficient, there are issues that need to be addressed before the data is imported in PRISM.It’s difficult to develop a cost loaded schedule in P6 or MSP.There’s the problem with mixed granularity between the estimate and schedule data. E.g. the estimate data may be prepared at one level of detail that doesn’t easily correspond to the activities that are at another level of detail. The ideal situation is a matching of one estimate cost to one schedule activity, but this is rarely the cast.Also, it’s a very time-consuming process to setup a cost loaded schedule… on large project, it typically takes weeks to develop.It’s also a very time-consuming process to maintain a cost loaded schedule.How are indirect costs, e.gfrieght cost and taxes, etc… handled using a schedule?How are cost changes to either scope of forecast handled using a schedule?How do we manage contingency using a schedule?All these issues require “creative work-around” in order to use a tool designed to manage time, into a tool designed to manage costs.So, when you look at the overall setup costs involved in developing a cost loaded schedule, these setup costs far exceed the benefits derived from that effort.
- So, regardless of which method you wish to use in developing a PMB, PRISM G2 can handle either method.But, in our experience, the advantages of using a Time-Phased Budget provide marked improvements over using a cost loaded schedule.These advantage include..
- Size, Locations, Depth