Hey, don’t laugh, it’s a key skill. The only creepy thing about it is I can look at someone right in the eye and be muttering to myself at the same time. And even though I have at least another 40 years before I’m at that station in life where muttering is just something you do, I’m getting an early start because I’ve discovered that it has high value. I’m not the first to discover this, as it turns out. Experiments have been done to prove that regularly talking to yourself is a positive thing: http://newsfeed.time.com/2012/04/25/talking-to-yourself-may-actually-be-a-good-idea/.
Risk is everywhere in business. Whether you’re a large or small company; or whether you run large or small projects – you are always running the very real risk that you’re project won’t succeed according to plan. How your business performs on a project however, goes well beyond just your own internal issues of cash flow and resourcing. The interdependencies that are inherent in construction projects means that what you do has a direct effect on your peer organizations and the owner. In other words: what you do is not just your own problem. If you blow it, you may end up blowing it for everyone around you. That doesn’t go over well – people talk.
It’s always very interesting to me how much difference there is between how organizations structure the management of major projects. Naturally, the bigger the project, the more bodies they’ll need for project controls, construction project management, procurement, etc. Adding more people of course, adds more complexity (to anything). When you add more people, those people need to be organized into groups and disciplines; each requiring key inputs and outputs and deliverables. In defining this organizational structure; I’ve found that there is a tendency for major to mega projects to disconnect these groups into individual silos. Working in silos, they coexist with each other, but with minimum interaction. No-one wants this to happen, of course, and any person would tell you that healthy communication is vital for streamlined success.
Project Owners spend an extraordinary amount of time trying to get an accurate reading on all the costs to complete for a project. On big projects, it’s hard enough determining what’s been spent to date, nevermind remaining. Gathering the right information to calculate forecasted spend can be tricky to do and requires good tools & processes to piece together a realistic estimate of projected costs.
Why the WIP Report is so Important
In addition to effectively managing the costs and schedule of your project, it’s critical to stay on top of your Work in Progress or WIP. WIP is critical to monitor. You, your CFO and your investors need to know just how profitable your project is, how much of the project has been funded by your customer, and how much has been financed by you. Combining WIP information with project profitability and performance metrics, will give you a complete picture of the financial health of your project or your program.
Excel is an amazing tool. It is truly the great multi-purpose software of our time. People can bend and twist spreadsheets to do pretty miraculous things - from planning a children’s party to full enterprise budgeting & forecasting. Like anything, of course, it has its limits. Excel works just fine in many cases, but when it comes to more complex jobs - like estimating, tracking, controlling and analyzing large construction projects – it simply breaks down. People certainly try to force Excel to work in this field, and there’s no question that with enough time, resources and effort, a person could achieve some - rather limited - results. But the truth is, it’s just not worth it. Especially when there are good tools available which are designed specifically for that task.