One of the first principles of project controls is that the project budget has to be time-phased over the duration of the project. Here’s why: It’s not enough to simply know the total budget for a project – it’s critical to also know when that budget is planned to be spent. In other words, each quantity of material, labor hour or subcontractor service that’s planned for the project, is planned to occur at a particular time on the project.
The recent downturn in the energy industry has a great number of companies scrambling to cut costs, cut staff and do whatever they can to hold on to existing business. The number of projects that have been cancelled or put on hold in the oil & gas industry over the past few months is unprecedented. Owners and producers are slashing capital budgets and announcing massive layoffs – reducing staff by the thousands. On the service side, Contractors and EPCMs are not only facing project cuts and fewer new opportunities – they’re also facing demands from their clients to apply significant reductions in their rates.
Even the most organized and planned projects can have ad-hoc purchases that happen at the jobsite. In an ideal world, all vendor expenses would be controlled by issued purchase orders driven by a project budget. Vendor expenses should be recorded as an incurred cost against the original purchase order so that you know all of your budgeted costs upfront and you have full clarity around your accruals.
In reality, a project can have a substantial number of non-purchase order vendor expenses that need to be recorded and accounted for on a project. The right vendor management tools can provide you with full visibility into vendor accruals so that you have accurate project cost tracking.
Changes are inevitable on projects. No project manager in their right mind moves forward with a project not expecting changes to happen - fluctuations in scope, cost, schedule and activity can happen almost daily. In this article, I want to tackle a segment of change management that I often come across in conversations. Which is: the different types & states of Change Events that can be registered on a project; and some of the nuances of each. The three main project change events are:
“If you keep going at this speed, you’re going to be late!”
That’s my simplistic real-life analogy of earned value management. It’s a simple bit of math that we all do in our heads anytime we’re trying to get somewhere or finish something. If you gave yourself an hour to get there and after a half-hour you’re still less than half-way, you’re going to be late. It’s that simple. As simple as it is, it requires us to know quite a bit of information about the current situation in order to calculate late vs. on-time. Just like EVM, you need to know 3 key elements to make the calculation:
New Report Finds Project Profitability and Replacement of Manual Methods as Top Reasons For Project Management Software Buying Decisions
After interviewing thousands of buyers looking for Project Management software, Software Advice has compiled an insightful report that sheds light on key factors buyers are using in their purchasing decisions
Key Findings Include:
As most any project manager will tell you, you can’t manage the past. You have to manage in the Now to have a chance at staying on top of your projects. "Managing the Now" means providing project managers with current, reliable information on what’s going on. The idea of “current” project data isn’t anything new of course, but it’s astonishing how many projects are managed using data from the construction site that’s days or even weeks old. Historical information is interesting – and it does serve a purpose in the final analysis – but it doesn’t help much on a day-to-day basis when snap decisions need to be made to keep things running smoothly.
If you can do anything to help your projects, your business and the mental health of your project management team, give them better information and good tools to report on that information. They’ll hug you and probably never stop.