a review of time and cost management aspects for ongoing projects

A REVIEW OF TIME AND COST MANAGEMENT ASPECTS FOR ONGOING PROJECTS

• Introduction:

Good Morning Gentlemen. We are going to talk about Business Goals in general and how it is

planned, what are the main parameters driving these goals to achieve and what are the major hurdles for this goals.

The purpose of these presentation is to make aware of the time and cost management for a project and how it is related and how it is affecting the organization goals.

To start with, I will describe the current status of the ongoing projects in the view of time and cost management and some of the globally agreed standards to do it.

3/1/2015A REVIEW OF TIME & COST MANAGEMENT

ASPECTS 1

Goals In General

• Let us define the prime goals of our firm first,

1.Financial Related Goals-

2.Customer Satisfaction-

3.Keep Employees Happy-

4.Delivering the product on time with budget-

Let us See one of the goal in detail Delivering the Product on time with budget.


ASPECTS 2

Current Project Status

• Current status of the projects (Planning Part of View)

• Base line is not approved even the time elapsed for the project is 30 % of contractual time.

• No update for the Schedule since the start of the project

• Cash-In for the project is not planned well, deviation between plan & actual is around 60%

• Improper follow up in schedule leading to the delay of 08 Months for an activity


ASPECTS 3

Current Project StatusSchedule is not updated from the start of the project because Data date is still in the beginning of the project


ASPECTS 4


Cash in Base line is showing planned value around 45 Mn, but in actual it is only around 15 Mn.

100,000,000

300,000,000

200,000,000

400,000,000

500,000,000

8,000,000

24,000,000

16,000,000

32,000,000

40,000,000


ASPECTS 5


Substructure Concrete activity is delayed by 8 Months due to lag of monitoring & lag of follow up with schedule


ASPECTS 6

Project Management Road Map

• In the coming slides we will see some of the Time & Cost Management Standards along with a road map showing the Project Management Path.


ASPECTS 7

Project Management Road Map

Initiation

Project feasibility

Study

High level Planning

Assign a PM

Preliminary Scope

Statement

Planning

Divide large

project in to phases

Consult with

subject matter experts

Approach Analysis

WBS

Resource identificat

ion Estimatin

g

Time and cost

estimation

Network Diagramin

g

Scheduling

Cost Budgeting

Procurement Plan

Quality Plan

Human Resource Planning

Risk Plan

Communication Plan

Baseline Project

Plan

Project Plan

Approval

Execution

Acquire Project Team

Develop Project Team

Scope Verificatio

n

Information

Distribution

Quality Assurance

Procurement

Solicitation and

selection

Monitor &

Control

Over all change control

Scope Control

Performance

Reporting

Schedule Control

Contract Administr

ation

Manage project Team

Quality Control

Risk Monitorin

g & Control

Cost Control

ClosingProduct

Verification

Formal Acceptanc

e

Lessons Learned and best practices

Update Records &

archive records

Close out & Release

Team


ASPECTS 8

Assigning a P.M

• From Previous Slide, let us talk about the key points in a project road map.

• Assigning a Project Manager:

Selecting the right project manager for the project is like selecting the right tool for the job. If it is a complex project, crossing departmental boundaries, requiring risk and change management...you should be selecting a person who is both experienced and has been well-trained in project management.

A project manager can be ranked as below based on their level of authority,

1-He can be a project expediter only

2-He can be a project coordinator

3-He can be a manager with limited authority

4-He can be a manager having authority over the department managers


ASPECTS 9

Developing a “WBS”

• WBS:

– The importance of work breakdown structure (WBS) to organize all of the work in outline or organizational chart format.

– The WBS has been written to create every aspect of the project work.

– The project team participated in building the WBS or has reviewed and approved it.

– Work packages have been broken down to a level that can be delegated, but not so far as to be micromanaging.

– Milestones are added to indicate major approvals, phase gates, and other important time indicators – but with zero duration.


ASPECTS 10

Developing-WBSWBS-Name

WBS-Start & Finish

Bar Chart Representation of Start & Finish


ASPECTS 11

Time & Cost Estimation

• Time & Cost Estimate:-Time estimation is a technique by which the required time will be calculated based on the targeted

quantity & Project mile-stone.Example:

A project has two activities (A & B). Activity ‘A’ has design quantity of 500 units and the productivity rate / day is 25 & the activity ‘B has the design quantity of 600 units and the productivity rate is 20 units/Day.Duration for the activity A & B is -500/25= 20 Days , 600/20=30 Days.

Now the project duration will be calculated based on the relation between activity ‘A’ & ‘B’. If the relation is Finish to start then the project duration will be 50 days.

-Cost Estimation is also a technique to compute the summation of individual cost elements to accomplish a particular task.Example:

Activity ‘A’ is a formwork of 90 M2 and it’s unit price (Selling/Claimable Price) is 80 SAR/M2This 80 SAR is a accumulation of Direct cost-, Indirect Cost ,Over Head & Profit. The cost will be estimated based o the budget.

Total Cost=Direct + Indirect/Super vision+ Overhead +ProfitDirect - Cost directly incurred to the taskIndirect – Cost which is incurred due to manage

& supervise the particular task.Over Head- Cost to manage the office &

temporary enabling worksProfit - Financial gain to the company especially the difference

between the amount earned and amount spend

A30D

50D

20D

B

COST

DIRECT COST INDIRECT COST OVERHEAD & PROFIT


ASPECTS 12

Scheduling

• Scheduling:

Schedule is a basic time management tool consists of a list of times at which possible tasks (or) activities are intended to take place. The process of creating a schedule - deciding how to order these tasks and how to commit resources between these possible tasks - is called scheduling.

In the project management point of view, schedule is one of the basic four pillars to deliver a project aside from budget, quality & safety.

Mainly, schedule focuses on project & construction management point of view. It comprises the project elements Which is essentially the part of the objective for a project including customer satisfaction.Before Scheduling,

After Scheduling,

5D

8D

A

B

5D

8D

A

BLag of 2 D


ASPECTS 13

Base lining a Project

• Baseline:

– A baseline is a fixed schedule, which represents the standard that is used to measure the performance of the project.

– In project management there are three baselines – schedule baseline, cost baseline and scope baseline. The combination of all three baselines is referred to as the performance measurement baseline.

– Every time a change to the scope of the project is approved, the schedule should be adjusted and a new revision of the baseline should be used instead


ASPECTS 14


Activity/ScopeOriginal Duration

Activity Start & Finish

Gant Chart View


ASPECTS 15


Monthly Planned Invoice Value-as per base line schedule

Monthly Remaining Invoice value –as per updated schedule

Cumulative Planned Curve

Cumulative Remaining Curve


ASPECTS 16

Budgeting & Cost Control

• Budgeting & Cost Controlling:

• Cost Budgeting is the process of aggregating the estimated costs of individual activities or work packages to establish a cost baseline.

• Cost base line is a component of the project management plan and it is "a time-phased budget that is used as a basis against which to measure, monitor, and control overall cost performance of the Project. There are two basic indicators should be done to do the cost based measurement. Those are BCWP & ACWP.

• BCWP-Budgeted Cost for work performed- A cost indicator which is derived from base line.

• ACWP-Actual Cost for work performed- Actual cost parameter as per the records which includes Direct, Indirect & Overhead costs

• If the Difference between ‘BCWP’ & ‘ACWP’ is positive then the project is under Budget.

• If the Difference between ‘BCWP’ & ‘ACWP’ is negative then the project is over Budget.

Snap shot of BCWP Vs ACWP. & Cost Performance Summary is shown in the next slide


ASPECTS 17


Actual Cost for Material, Euipment,SubContracting, Direct Over head & staff

Budgeted Cost for Material, Euipment,SubContracting, Direct Over head & staff


ASPECTS 18


MONTHLY COST REPORT - SUMMARY Currency:Data Date: Branch:Date:

Rev.00Item Description Amount

A ORIGINAL PROJECT DETAILSA.1 Original Contract Value 83,250,000 A.2 Cost At Estimation Phase 73,461,141 A.3 Margin At Estimation Phase 11.76% A.4 Budget Cost By Projects Control 73,461,141 A.5 Job Margin Based On Budget Cost 11.76%

B VARIATION PROJECT DETAILSB.1 Approved Variations Value 7,376,313 B.2 Budget Variations cost (3,083,181)B.3 Variations margin 141.80%B.4 Pending Variations Value (at least equal to cost) 0B.5 Pending Variations cost 0

C REVISED PROJECT DETAILSD.1 Revised Contract Value (excluding Pending VO) 90,626,313 D.2 Revised Budget Cost (excluding Pending VO) #REF!D.3 Job Margin Based On Revised Budget Cost #REF!

D MONTHLY MONITORINGE.1 Budgeted Cost Of Work Performed (BCWP) 75,013,771 E.2 Actual Cost Of Work Performed (ACWP) 80,051,717 E.3 Cost Variance To Date (5,037,946)E.4 Contingency 358,438 E.5 Maintenance provision 835,125 E.6 Cost At Completion Calculation 85,512,391

D SUMMARYF.1 Expected Project Value At Completion 90,626,313 F.2 Expected Cost At Completion 86,705,954 F.3 Margin At Completion 4.33% F.4 Submitted Invoiced To Date 82,568,999.12 F.6 Progress Margin 3.05% F.7 Invoiced To Date (%) 91.11% F.8 Percentage of Completion (Cost) 93.22% F.9 Manpower overtime % 29.90%

A. Original Project Details-during start of the project

B. Variation (or) Change order

DetailsC. Revised Project Value

after the approved V.O

D. Monthly Cost Report

Status


ASPECTS 19

Performance Reporting

• Performance reporting:

– Performance report is an evaluation of a project in three aspects,-schedule, cost and scope. It is usually measured against the performance baseline.

– Purpose of the report is to alarm the management to react accordingly.Weightage of Each item based on Quantity/Manhour

Plan, Actual-Periodic increment & Cumulative

Difference between Plan & Actual-Periodic, Cumulative

Graphical Representation of the table


ASPECTS 20

Performance Reporting

Project:

Report:

Date:

S.No. IndexTotal Planned Actual Variance

Planned Until Last week This week Cumulative Until Last week This week Cumulative Until Last week This week Cumulative% This Week

Variance

1. Invoicing 89,500,000 83,051,738 433,642 83,485,380 81,469,832 336,639 81,806,471 (1,581,906) (97,003) (1,678,909) -22.37%

2. Man-Hours ( Direct @ Site-Civil + Archi ) 1,561,705 1,376,600 3,000 1,379,600 1,508,780 2,430 1,511,210 132,180 (570) 131,610 -19.00%

3. Major Equipment Hours (Construction Equipment) 140,009 136,730 600 137,330 160,310 1,020 161,330 23,580 420 24,000 70.00%

3.1. Mobile Crane 15,848 14,530 60 14,590 17,530 60 17,590 (3,000) 0 (3,000) 0.00%

3.2. Boom Truck 6,540 6,940 60 7,000 7,180 60 7,240 (240) 0 (240) 0.00%

3.3 Trailer 9,220 7,860 0 7,860 7,860 0 7,860 0 0 0 0.00%

3.4 Bobcat 13,092 12,870 60 12,930 20,680 180 20,860 (7,810) (120) (7,930) -200.00%

3.5 Excavator 10,300 8,780 0 8,780 9,840 0 9,840 (1,060) 0 (1,060) 0.00%

3.6 Compactors 13,556 16,350 240 16,590 18,370 300 18,670 (2,020) (60) (1,060) -25.00%

3.7 Water Tanker 15,133 13,920 60 13,980 14,040 60 14,100 (120) 0 (1,060) 0.00%

3.8 Dump Truck 10,650 10,660 60 10,720 14,800 240 15,040 (4,140) (180) (1,060) -300.00%

3.9 Other Equipments 51,474 44,900 60 44,960 50,410 120 50,530 (5,510) (60) (1,060) -100.00%

Total Value as per Contract (or) B.O.Q

Cumulative Planned value up to last period, This period planned value, Cumulative plan up to date

Cumulative Actual value up to last period, This period actual value, Cumulative actual up to date

Variance (Difference) between Actual & Plan


ASPECTS 21

Schedule Update

• Schedule Control/Update:

Schedule update is a technique to measure the variance in schedule, cost and scope between the live schedule and baseline.

Following are the snapshots for the schedule update.


ASPECTS 22

Schedule Update

Activity/Scope Live Schedule Start & Finish

Base line Schedule Start & Finish

Schedule % Complete as per base line up to the data date-Based on the duration based weightage

Performance % Complete as per live schedule up to the data date-Based on the duration based weightage


ASPECTS 23

Schedule Update

0

100000

200000

300000

400000

500000

600000

700000

800000

0

50000

100000

150000

200000

250000

300000

Wk-1 Wk-2 Wk-3 Wk-4 Wk-5 Wk-6 Wk-7 Wk-8 Wk-9 Wk-10 Wk-11 Wk-12 Wk-13 Wk-14 Wk-15 Wk-16 Wk-17 Wk-18

July August September October November

Actual Invoice Remaining Invoice Cum.Planned Invoice

Cum. Actual Invoice Cum.Remaining Invoice

If the cumulative planned curve is below the cumulative actual curve then the schedule is ahead by cash in

If the cumulative planned curve is above the cumulative actual curve then the schedule is behind by cash in


ASPECTS 24

Procurement Plan

• Procurement Plan:

A plan showing the process of procurement starts from designed specification, to delivery of an item and it has the direct link to the installation (or) construction of that item.


ASPECTS 25

Procurement PlanSchedule of Material Submittal & Approval

Schedule of Procurement of material

Gant Chart View


ASPECTS 26

Resource Management

An Overview for Resource Management


ASPECTS 27

Resource Management

Resource Capacity Plan

Resource Allocation

Resource Task

Management

Resource Work

Management

• A technique by which the available resource is allocated/distributed along the projects in an economic way

• Plan showing production capacity of an organization (Example- 300 Million SAR of work volume/Year (or) 2 Million Direct Man days/year)

• Resource work management is a function in an organization designed to maximize the resource’s performance output. (Example-Introducing target plan for employee, Incentive plan for workers, etc.,)

• Resource Task Management is also a function of managing the tasks allotted to resources


ASPECTS 28

a review of time and cost management aspects for ongoing projects

Documents

project management path

time cost management

project management road

complex project

project coordinator3

right project manager

project road map

contractual time