10 Reasons Why Your Projects Aren’t Improving

With today’s increasingly tight budgets, organizations need greater visibility into project and program performance in order to ensure that funds are being well spent. As a result, Project Controllers need to deliver timely and accurate information to pro-actively shape business decisions.

EcoSys regularly meets with project controls professionals across a variety of industries and the cost controls challenges that we discuss are common and pervasive. These challenges emerge from various sources ranging from organizational readiness to the design of processes and systems. Let’s take a look at our view of the top 10:

Number 10: Cost accounting, not cost analysis

A growing frustration among project controls professionals stems from being perceived as cost “accountants”, finding that a great deal of their job consists of reconciling and ensuring that recorded data is accurate. Project controls should about be creating scenarios, planning and analyzing the data of a project, not counting costs. In essence, looking forward; not looking back.

Number 9: Budgeting and forecasting effectively

Most organizations do not have a consistent method for cost controls. This is not just a systems problem, but includes a lack of standards: do we have a standard for creating budgets? Updating forecasts? Do we execute these tasks consistently across the organization for similar projects? Are there standard benchmarks and measures for determining success? Generally, the answer is no.

Number 8: Getting progress data from multiple (sub)contractors

Attempting to pull together an integrated master schedule from many different contractors and/or subcontractors is a problematic task, especially on larger projects with involving potentially hundreds of different parties. Even gathering progress data, and ensuring accurate sign-offs from subcontractors can be difficult. The cumbersome nature of obtaining this data, compounded with inaccurate or irregular information, obstructs good reporting or analysis of a project.

Number 7: Integrating schedule and cost

Schedulers tend to work in terms of work breakdown structures (WBS) and activities, while cost analysts and finance use cost codes, transactions, and fiscal periods. Each side typically has different managers who are reviewing their data and schedules. Scheduling and cost are also often using different tools to report their data. Therefore, pulling information from both sides to provide a clear view of project performance has been a huge challenge.

Number 6: Aligning data between multiple source systems

In addition to schedule and costs aspects of a project, projects have to align data from different sources such as a time sheet system, asset management systems, procurement systems, etc. Many organizations ultimately use Excel spreadsheets to attempt to reconcile the data pulled from various locations. However, due to the complex nature of some projects, the result is often wrought with mismatched data and inconsistencies.

Number 5: Time and effort involved with reporting

An even bigger problem than pulling information from different sources is the time it takes to gather the information for reporting. The typical solution for gathering this information is a manual process, which is tedious, time consuming and prone to error. A cost engineer’s time is better spent analyzing reports rather than building them.

Number 4: Managing the customer relationship

Clients will often want to see cost and performance measurements in a manner that your organization does not currently provide. For contractors, these customers are project owners, but even internal customers such as executives or other stakeholder’s can add to this burden with ad hoc requests. We often see organizations focus much of their time and effort generating reports for the customer in the format they have requested. This diverts efforts from actually improving project performance, which would be the greater client “reward.”

Number 3: Accuracy of reports

Once the data has been collected and the format has been established for a report, you need to ensure that the report is accurate and understandable. For example, a summary report should be able to provide accurate details in WBS or costs and provide a level of clarity on the project.

Number 2: Insufficient resources for controls

There seems to be an ever greater demand for cost reporting, better planning and scenario analysis. In more complex environments, massive amounts of collaboration between different project stakeholders are necessary for success. This places a great deal of pressure on the limited project delivery resources of the organization. The challenge becomes having sufficient resources to provide detailed, accurate reporting in a timely fashion.

Number 1: Controlling changes

Managing changes within a project can be the most difficult aspect of cost management. While a budget may be set for a project, there will inevitably be a variation or scope change. Various questions arise due to changes: How did the variable affect the budget and the forecast? Were all changes accurately reported on? Does the current budget and forecast reflect the change? Compounded with other challenges (insufficient resources, disconnected data and systems, manual compilation of data), a mismanaged change can severely impact the accuracy of reporting and jeopardize the potential success of a project.

These challenges can seem like major obstacles standing between you and project success. Luckily there is a solution…technology. Modern Enterprise Project Controls solutions can help you overcome these challenges, providing a single source of truth to help keep your project on budget and on schedule.

Learn more by watching this webinar on Enterprise Project Controls, or connect with an expert to see how Enterprise Project Controls can benefit your company.

No-Code Mobile Apps Provide Right-Fit Functionality for Projects, Without the Overhead

As more and more organizations look to mobile apps to distribute enterprise business application functionality to their employees, they face an all new challenge. Enterprise mobile apps are seemingly simple, yet often require more development effort than their desktop/laptop counterparts: functionality, UX, platform support, and integration with secure data sources can add up to much more time than any organization can afford. Gartner anticipates that by the end of 2017, market demand for mobile app development will grow five times faster than IT organizations can deliver them.

The alternative has usually been relying on enterprise software vendors to provide pre-built mobile applications for the organization’s users. The problem there is that each organization has its own unique preferences, business rules, and priorities. What makes mobile apps effective is often their simplicity, and it’s unlikely that an organization will find an off-the-shelf app that caters to every single item on their wish list.

But a new approach to software development, low-code platforms, creates an opportunity for organizations to create their own software with little or no coding expertise. As Fortune reports, “opening an app’s development to the non-techies who need the app removes misunderstandings between the IT department and other employees about what the end user needs”. Allowing the user to play a role in developing the app can greatly reduce development time and also ensure that the app fills the appropriate need for any given organization.

Considering the McKinsey estimate that 9 out of 10 large-scale projects face cost overruns or delays, EcoSys understands that improving project performance means improving connections and communication, and that in turn means effective mobile apps. Our Mobile Application Platform is designed so that specific business needs can be met with no “programming” involved, no data integration effort, and no need for updates. Time to release an app takes days instead of weeks. The only real effort involved is deciding what the app should do.

EcoSys CTO Noah Parker says the mobile app platform is really just a logical continuation of what EcoSys EPC has already enabled. “We want business users to be able to independently create right-fit workflows with easy interfaces. It’s good for our customers because they get exactly what they need, and it’s good for us because we can focus on producing new capabilities.”

4 Persistent Myths About Earned Value Management

Myths are great material for the movie screen. The lost kingdom of Atlantis, bloodthirsty vampires, or fire-breathing dragons: these are all the “good” kind of myth and will fill theaters. Of course, everyone usually knows that these myths are just that. The danger is when myths are confused with reality.

When large amounts of money, reputations, and even careers are at stake – such as in the execution of large-scale projects – risk aversion can easily blur the line with fear, and fear is where the “bad” kind of myth can take hold. Even when large-scale projects are failing at an unacceptable rate, change of any kind is intimidating, and the various myths that pervade business thinking can hold back progress.

Consider Earned Value Management (EVM) as an example. It’s proven time and again to be a highly effective forecasting tool, it makes for clear visualization of progress, and it reliably leads to better scope definition. So why isn’t it more widely adopted? Let’s debunk four myths about EVM.

It’s too complicated! Probably the most rampant misunderstanding about EVM is that it is synonymous with the EIA-748 guidelines for compliance with large US government contracts. Interested parties assume that EVM requires a complex and rigid set of processes for all projects, and so they avoid implementing EVM altogether.

Reality: EVM is a highly adaptable methodology. Outside of projects where the EIA-748 guidelines are specifically mandated, the level of effort applied can be tailored to fit the needs of a project. An organization can – and should – apply entirely different EVM processes to the construction of a power plant and a maintenance shed. Apply vigilance where it’s needed.

It’s too costly! The overhead expense – in both financial and labor resources – stemming from the implementation of an EVM system is an understandable concern for any kind of organization. Undertaking an added (and potentially very costly) expense for performance measurement is often looked upon as an unwelcome additional cost, rather than an investment leading toward cost reduction.

Reality: An entry-level EVM process can leverage information provided by systems most organizations already use for project management and project controls. If you can provide a well-defined scope, a linear time-phased budget, and actual costs, then you require no additional investment to get started.

It’s not sustainable! Again, the requirements of an EIA-748 compliant system imply a laborious level of detail that must be recorded and tracked to ensure an accurate measure of earned value. Organizations new to EVM, or with immature processes, would find this level of detail very burdensome. An EVM system relies on employees to accurately indicate times of productivity to measure progress. Within this data capturing struggle, many find themselves in a minefield of information, having to record data from different sources. Human error becomes a greater risk with this type of reporting.

Reality: At the most basic level, progress measurement can be captured as a basic percent complete from each person responsible for their part of the work. While it is subjective and vulnerable to those notorious “stuck at 99%” situations, it’s an easy way to wade into EVM with no additional work required in the project planning.

It’s not accessible! Another obstacle voiced by many is the unfamiliar terminology and formulas necessary to execute Earned Value (EV) metrics, making it difficult to train employees and difficult to translate findings for executive consumption.

Reality: The workers assigned to specific EVM calculations need only learn a handful of terms, and the formulas in question involve rudimentary math. “How much did we do?” compared to “How much did we think we would do?” is the fundamental question EVM asks. The answer translates quite easily into more descriptive “productivity” language, which is sufficient to capture the attention of stakeholders.

With even the most rudimentary implementation of EVM, organizations can achieve a number of benefits, including comparison against performance baselines, better forecasting, and scenario impact analysis, to name a few. It is a highly flexible, highly adaptable approach to project controls that can lead directly to improvement over time. To achieve the best performance, don’t rely on anecdotes. Do the research. EVM is legitimate.

For more information on implementing EVM that best fits your organizational needs, please refer to our white paper, “Adopting Right-Sized EVM to Drive Project Performance.”

Bechtel Named in Fortune’s 25 Most Important Private Companies List

Congratulations Bechtel! We’re thrilled to see Bechtel in Fortune’s 25 Most Important Private Companies list. The list includes private companies who have a deep connection to our daily lives, and what has a deeper connection to all of our daily lives than the environment and infrastructure around us? We rely on the infrastructure around us for everything from providing buildings for us to live and work in to safe transportation, having clean drinking water and much more. The projects needed to build, restore and maintain this type of critical infrastructure across the globe are extremely complex and often cost billions of dollars.

This is where Bechtel comes in. Bechtel is perhaps the world’s leading builder of one-of-a-kind megaprojects. They’ve worked on such epic projects as the Hoover Dam and the Trans-Arabian Pipeline.

A recent McKinsey report found that innovation and productivity gains in the construction industry have been meager compared to the advancements of other industries, due to a number of factors ranging from poor organization and inadequate communication to flawed performance management, contractual misunderstandings, and poor planning. Yet today, despite being an over 100 year old company, Bechtel is among the leading innovators in the construction industry and is renowned for expertly controlling projects and driving productivity.

We’re proud to be providing the project controls technology that assists Bechtel in these achievements.

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