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Project Management Track: Lean Projects, Cost Controls, Price Forecasts, & Resource Management - PART 1
This document discusses best practices for project controls in the energy sector. It begins by introducing the speaker and background of the company. It then defines best practices as consistent processes that achieve optimal results. The document outlines how organization, processes, and systems can both defeat and enable best practices. When defeated, practices include misaligned budgets and estimates, manual data entry, and a lack of visibility for managers. When enabled, practices include integrated change control, automatic scheduling and cost integration, and a project controls system that eliminates duplicate data entry and provides managers full visibility.
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Project Management Track: Lean Projects, Cost Controls, Price Forecasts, & Resource Management - PART 1
- 2. Project Controls Best Practices forthe Energy Sector Presented by Mark White Vice President, EcoSys
- 3. Agenda • Introduction • WhatIs Best Practice? • Organization and Process Enabled • Systems Enabled
- 4. • Founded in2000 – Enterprise Control Systems • Enterprise Project Controls Software Experts Designers & Developers of original Primavera P6 and EcoSys EPC • Implementation of Project Controls Best Practices • Strong Technology and Implementation Partner Networks • Global Standard for Leaders in Industry and Public Sector Our Background
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- 6. What Is BestPractice? • Consistent application of processes proven to achieve optimal results • Not just one way of doing things – no instruction manual • Lots of common practice regarding forecasting – no motherhood and apple pie today • Defeated by inadequate organizational, process and systems infrastructure
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- 8. Organization and Process– Defeating Best Practice 8 Forward Looking Backward Looking Value Adding Commodities PO coding not aligned with Estimate coding Budget is summarized estimate, detail not visible Contingencies are fixed percentages with minimal risk basis. Leads to early, optimistic utilization Offline change process not owned by project controls. No real-time visibility into Changes and Trends. Schedule developed without consideration of cost needs. No means of data exchange. Without aligned data, Forecasting becomes a “black hole” of best guesses based on gut feel. Finance “allocation” rules not agreed with project controls. Actuals don’t match budgets. Progress reporting is non- standard and subjective
- 9. Organization and Process– Enabling Best Practice Forward Looking Backward Looking Value Adding Commodities CBS structure aligned with Estimate breakdown Budget merely the final iteration of the estimating process, full traceability. Contingencies based on objective risk assessment, utilized appropriately Integrated change control process (inc workflow and DOA). Real-time draw from contingency and impact on Forecast Schedule automatically feeding EcoSys to ensure accurate time-phasing and progress Full internal integration, ensuring all sub-processes converge in the Forecasting module. Forecasting accounts for various contracting and measurement methods. Automated loading of Commitments and Actuals, enabled by a compatible, common coding structure across the enterprise
- 10. Systems – DefeatingBest Practice Summary Financial Obligations ERP System Project Finances Detailed Performance Obligations Offline Tools Manual Data Entry Excel and Access SAP, Oracle, etc ERP Add-On Integrated One-Way View Visibility Manual Data Extraction EcoSys EPC u w v y x z u Du project high le v To recogn often u functio w Pro offline obligat many, of main albeit h x Pro manua the ER y Ev analyse the ER z Fin visibilit proces being m standa
- 11. Systems – DefeatingBest Practice Summary Financial Obligations ERP System Project Finances Detailed Performance Obligations Offline Tools Manual Data Entry Excel and Access SAP, Oracle, etc ERP Add-On Integrated One-Way View Visibility Manual Data Extraction EcoSys EPC u w v y x z u Due to ERP System inadequacies, project financials are often managed at a high level v To support forecasting and revenue recognition processes, ERP add-ons are often used but are still serving the Finance function, not the Projects function w Project managers are forced to use offline tools to meet the performance obligations of their clients. These tools are many, varied, and uncontrolled. The costs of maintaining these tools is significant, albeit hidden. x Project Managers waste excessive time manually obtaining commodity data from the ERP, e.g., commitments and actuals y Even worse, the results of their detailed analyses must be double-keyed back into the ERP z Finance and Business managers have no visibility into the underlying systems and processes and must trust that projects are being managed in accordance with standards. Auditing is time-consuming and costly.
- 12. Systems – EnablingBest Practice Summary Financial Obligations ERP System Detailed Performance Obligations Project Controls System Excel and Access SAP, Oracle, etc ERP Add- Ons Integrated Two-Way View Visibility EcoSys EPC u The detailed avoiding v No l to suppo w Proj purpose standard tool is us practice x No l extractin it’s upda y Proj Controls ERP at th double k z Fina visibility and can This new all proje u v w x y z
- 13. Systems – EnablingBest Practice Summary Financial Obligations ERP System Detailed Performance Obligations Project Controls System Excel and Access SAP, Oracle, etc ERP Add- Ons Integrated Two-Way View Visibility EcoSys EPC u The ERP System need not accommodate detailed project management processes, thereby avoiding costly ERP customization. v No longer is there a need for the ERP Add-On to support project finance management. w Project managers manage projects in a purpose built commercial tool that enforces standards across the entire projects portfolio. The tool is used willingly because it was built for best practice project controls. x No longer do Project Managers waste time extracting commodity data from the ERP because it’s updated daily via automated integration. y Project financials roll up in the Project Controls System and are automatically fed to the ERP at the required level of detail. No more double keying is needed. z Finance and Business managers have FULL visibility into the underlying systems and processes and can easily audit against published standards. This new visibility drives positive behaviors across all projects. u v w x y z
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