Successfully managing construction projects is highly dependent on the quality of the data that’s captured about those projects. Whether you’re using the data to manage costs, bill your clients, pay your subcontractors, determine progress – or all that and more – the quality of that data is crucial to the success of the project. Current, Accurate and Complete – these are the key cornerstones of quality information. What’s more, getting quality data right from the start – i.e. from when it’s first entered into the system – saves organizations tremendous time, money and effort in executing on projects. Not only that, it reduces the chances and effects of any potential claims, disputes, safety issues and delays. Mistakes and omissions bleed energy and money from your organization. The result is not just costly, it’s often embarrassing – and you are particularly vulnerable if you have any manual “double-entry” of data from system to system.
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.
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: