What the Star Wars Movies Can Teach Us About Project Controls

In case you’re one of the two people who hadn’t heard, there’s a new Star Wars movie opening this Friday. In the US, pre-orders for tickets have broken the previous record (Hunger Games) eight times over. A thousand shows sold out within 12 hours of tickets becoming available.

The excitement got us thinking about some of the messages offered by the movies that have come before: hope, good vs. evil, destiny, friendship, and yes, even project controls. Below we offer just a few of the lessons the movies can teach us about effective project controls and improving project performance.

“Stay on Target” with Regular Forecasts

Completing a capital project within sight of your original budget and deadlines is a lot like hitting a 2-meter exhaust port with proton torpedoes while being chased by a dark lord of the Sith. It’s pretty hard. You probably aren’t going to pull it off unless you have help. And since most of us can’t just close our eyes and trust in the Force, we need the tools to provide regular, accurate forecasts.

For a lot of projects, the stakeholders don’t know if a project is going to go over budget until it’s already gone over budget, sometimes even months after the project is completed. With the right forecasting tools, you’ll be able to predict where your project is going and make the necessary changes to line things back up.

Eliminate Subjectivity from Progress Measurement

From watching this scene, it’s pretty clear that Moff Jerjerrod is fudging the numbers and the Emperor is calling his bluff. You would think, with a project as massive as the Death Star, that the project owners would leverage some software tools to measure and report on progress. “I assure you”, in contrast, seems like the wrong approach when you want to ease the mind of someone who can suffocate you with a thought. If you want to make a strong case, make sure you have solid data backing you up. With an accurate measure of current progress, it’s relatively easy to make predictions about future performance. “I assure you, because of this minimal schedule variance,” is an approach that would probably extend an Imperial officer’s lifespan.

Having the data there also brings in the question of how easy it is for Jerjerrod to agree to double the efforts of the project teams. How hard were they working before? Is the cause of the delays due to labor efficiency? Can overtime solve his needs? The whole thing just sounds suspicious.

Watch Out For Scope Creep

Because of the time required to complete a large scale capital project, there’s plenty of opportunity for someone to come up with “just a little change” to add on. And while it can be hard to say no, it’s important that everyone involved understand the risks inherent with increasing scope.

The trouble, of course, with agreeing to one scope change, is that it can leave you vulnerable to additional scope changes. Effective change management is necessary for measuring the impact and designating clear responsibility.

Keep an Eye on Your Cash Flow

In the real world, you can’t just blast everyone who comes around to collect payment. A successful project depends on maximum visibility into both the sources of funding and when that funding needs to go out. How accurate is the time phasing of your costs?

This scene also raises questions about contract negotiation. Unless you’re doing business with a Hutt crime lord, you should be able to establish guidelines regarding liability. An Imperial cruiser is the smuggling equivalent of a force of nature, the cost of doing business. Who’s responsible for that cost? Are the terms clear?

May the Force Be With You

The force of project controls, that is! If you can think of any project controls words of wisdom in the movies we might have missed, please share them below.


Project Cost Control a Rising Concern for Oil and Gas Megaprojects

Project Controls Imperititive for complex and often overbudget megaprojects

Project complexity is growing. It’s a truth we’ve seen across a multitude of industries as projects become more ambitious, take on new technological challenges, and command stratospheric budgets (where a $10 billion capital expense is no longer surprising and can be dwarfed multiple times over by the world’s very largest endeavors).

A recent Wall Street Journal article entitled, “Big oil companies struggle to justify soaring project costs,” corroborates this growing complexity and cites the difficulty in containing costs with megaprojects that span years and face ongoing market changes. Factors that are driving complexity and cost are diverse, but can include items like:

  • Exchange rate fluctuations as projects utilize multiple currencies which can also be distinct from reporting and home currencies.
  • Underlying economic conditions affecting the viability of projects – from commodity price volatility to changing regulatory requirements
  • Rising labor costs as competition rises for a limited skillset and increasing productivity becomes essential
  • The need for collaboration on projects amongst competitors, as multiple players join forces and pool resources to embark on these gargantuan projects.

The result is seen in megaproject costs soaring 50% to even 300% of original budget. The article quotes Gary Fischer who leads Chevron’s 120-person cost controls and contract management group. These projects “are very fragile and totally unforgiving” indicating why the department has tripled in size in its efforts to complete megaprojects on time and on budget.

Why undertake “Elephant Projects” of this size and scope then, you may ask? It’s a key part of the growth strategy of many of the oil majors looking to boost production to replace aging fields. It’s a calculated risk, however, given the long lead times between capital expenses and when the revenue begins to flow.

Major oil companies, once seemingly impervious to project cost overruns which had paled in comparison to revenues the projects produce, are now directly impacted by the sheer cost of megaprojects and their negative impact on near-term profits.

To combat the megaproject complexity, organizations are implementing procedures and systems that offset the risks of overruns and combat the factors noted above. The intent is to add visibility into project performance and allow for greater agility to address issues that lead to overruns before they grow into billions in added expenses.

 

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