By Mark White
It’s month end.
The new VP of Engineering recently issued an edict that ALL projects’ forecasts must be updated monthly, regardless of project size and status. A noble ideal, but like many such edicts, nothing else changed.
Your control estimates were rushed together with less than 10% of design complete; Work Breakdown Schedule (WBS)/Cost Breakdown Schedule (CBS) coding was left to the discretion of the project manager; long leads were procured with only one purchase order line to ensure timely delivery; changes are being approved verbally for expediency; schedules are in a constant state of flux as scope and design evolves; progress updates lag because contracts prescribed no means of objective measurement; accounts payable moved offshore last year and invoice workflows are optimized for rapid payment instead of validation; AND overhead allocations and inter-company transfer rules were established by finance and accounting without proper consultation with engineering.
And then there are the systems … the very many systems. Estimating, procurement, accounting, document control, project/contracts admin, and scheduling. Luckily you have at your disposal the greatest tool known to man, one whose ubiquity is trumped only by its simple complexity: Microsoft Excel. Armed with such a beautiful instrument, updating the forecasts of the 10 projects under your control within the five-day month-end window can only be a cakewalk.
Lest you forgot, it’s month end. Right now.
The prevalence of incredibly similar scenarios is an alarming indictment on our industry and the project controls profession. To a large degree, you’re a victim of circumstance. You’re keenly aware of the root causes of your monthly madness, but your once raucous voice has, after years of protest, understandably quieted.
But what’s the cost?
To the corporation: budget overruns, missed forecasts, lost revenue, opportunity cost, reputational damage, high levels of attrition, and business failure.
To the individual: dissatisfaction, angst, reputational damage, disenfranchisement, and career change.
So how to right the ship and where to start – people, processes, or systems? All three have their challenges, complexities, and mine fields.
Project controls is the poor cousin of finance and accounting. Budgets and forecasts continue to be blown. It’s time for a revolution.
- First, select and implement a particular commercial Project Controls system.
- Leverage the system provider’s experience in implementing the system in parallel with process improvements.
- Focus on a core set of business requirements, e.g., the production of a cost report, including change management and forecasting. Address only high-value, high-volume areas so as to maximize benefits and efficiencies, and minimize time to value.
- Limit the initial implementation to 6-8 months or less. Stakeholders need rapid results if they’re to provide long-term support.
- Take what the system gives out of the box and apply that to your existing environment. As needed, modify your processes to support systems integration, allowing data to flow automatically from all source systems mentioned above into your new system. As needed, modify the system configuration to accommodate your critical processes and data structures.
- Create system-oriented work instructions and integrate them with the system contextually.
- Retain smart, experienced individuals and immerse them in your new systems so as to educate them on the underlying processes/dataflows, and even deeper lying organizational inter-dependencies.
The global standard for Enterprise Projects Performance is EcoSys, which now goes beyond project controls to look strategically at all projects in an enterprise – from project portfolio management, to project controls, to contract management.
The mission of Enterprise Projects Performance is to maximize investment returns … and quiet those end-of-the-month headaches.
Watch this video to learn more about what’s new in Hexagon PPM’s EcoSys 8 and how it can help you.
Mark White is the Senior Vice President of Global Business Development for EcoSys.