Introduction to Project Controls

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PROJECT CONTROLS DEVELOPMENT PROGRAM

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PCDP Module 1 - Introduction to Project Controls. Rev 0

This document has been prepared for the exclusive use of WorleyParsons. Copying this document without the permission of WorleyParsons is not permitted.

MODULE 1 - INTRODUCTION TO PROJECT CONTROLS

Rev Description Originator Review Approved Date

0 Released for Global Implementation Humphrey Kerger Project Controls R5 Management Team Project Controls R5 Management Team) Mar 2011

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SPECIAL ACKNOWLEDGMENTS & THANKS:

The Project Controls R5 management team would like to thank the following persons for their continuous support and contribution to the development of this training module

Ahmed Hammad, Tony Isaac, Mark Deverell, Abkar Bannayan, James Lee, Suwit Suriyo, John Armstrong and Walt Falgout.

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Module Content

1.0 Project Controls Development Program

6 1.1 Introduction to the PCDP. . . 6

1.2 Project Controls modular training program. . . . . . 6

1.3 PCDP Competency Assessment survey. . . 9

1.4 Coaching program. . . .. 10

1.5 Staff Rotation program. . . .. . 11

1.6 Project Management modular training program. . . 12

1.7 EMS/WPMP training videos. . . .. . 12

1.8 Estimating modular training program. . . 12

1.9 External training programs. . . 12

2.0 Introduction to WPMP / EMS

13 2.1 WPMP. . . 14

2.2 EMS. . . .. 17

3.0 Preamble: Objectives & Assumptions

19 3.1 Methods, Philosophies & Procedures. . . 19

3.2 Project and Contract formats. . . 20

4.0 Project Breakdown Structures

22 4.1 Major Values . . . 22

4.2 Analysis.. . . 22

4.3 Project life-cycle.. . . 23

4.4 Coding Structures. . . 25

4.5 Project Breakdown concepts. . . .. . . . 25

4.6 Segregated CBS/WBS concept. . . 25

4.7 Integrated CBS/WBS concept. . . 27

4.8 Managing EPCM contracts . . .

32 4.9 Control Accounts and Cost Centres. . . 32

4.10 Contract Administration and Cost Control. . . .. 33

5.0 Enterprise Coding Structures

35 5.1 Enterprise Codes and Attributes . . . 36

5.2 Attribute Codes . . . 37

6.0 Project Initiaton

41 6.1 Baselines . . . . . . 41

6.2 Tool selection . . . ……….. 41

I N T R O D U C T I O N TO P R O J E CT C O N T R O L S

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7.3 Project Baseline - Control schedule.. . . 51

7.4 Project Baseline - Engineering.. . . 52

7.5 Control schedule - Procurement . . . 53

7.6 Control schedule - Construction.. . . 55

7.7 Control schedule - Commissioning.. . . 56

8.0 Schedule Control

57 8.1 Schedule Analysis. . . 53

8.2 Schedule reports. . . 56

9.0 Progress Measurement

57 9.1 Engineering - Incremental Milestones method. . . .. 63

9.2 Procurement - Incremental Milestones method. . . 65

9.3 Construction - Variety of methods . . . 68

9.4 Commissioning - Incremental Milestones method . . . 74

9.5 Earned Value for variable budgets. . . 75

9.6 EPCM: Consolidated progress. . . 81

9.7 “House with the golden doors” scenario. . . .. 82

10.0 Cost Control

84 10.1 Engineering . . . 85

10.2 Procurement . . . .. . . 86

10.3 Construction & Commissioning . . . 87

10.4 Summary . . . 88

10.5 Contingencies & Provisions . . . 90

11.0 Management of Project Change

92 11.1 Levels of change. . . 92

11.2 Prime contracts . . . 92

11.3 Prime contracts: E & EPCM Services . . . 93

11.4 Prime contracts: Management & Support . . . 94

11.5 Prime contracts: Procurement & Contracts . . . 95

11.6 Prime contracts:Construction. . . 95

11.7 Prime contracts: Seeking approvals: PVNs and PCRs . . . 96

11.8 Client commitments . . . 97

11.9 Variances: budget and forecast impact . . . 98

7.2 Execute Phase.. . . .. . 46

7.1 Evaluate / Define Phase (FEED schedules). . . 44

7.0 Schedule Development

44

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PCDP Module 1 - Introduction to Project Controls.

Rev 0

12.0 Cost and Schedule Performance

103 12.1 Self performing contracts. . .

103 12.2 EPCM contracts . . .

103 12.3 Performance indicators . . .

104 12.4 Variance analysis . . . 104

12.5 Forecasts . . .

106 13.0 Project Reporting

107 14.0 Document Management & Control

109 14.1 Document Control.. . . 109

14.2 Electronic Document/Data Management.. . .

109 14.3 Document Management Plan.. . . 110

14.4 Distribution Matrices. . .

110 14.5 Quality Audits. . . 110

15.0 Capital Cost Estimating

111 15.1 Methodologies. . .

111 15.2 Estimate build up. . .

112 15.3 What is Known? . . .

112 15.4 What Experience tells us?. . .

112 15.5 What is Unknown. . . 113

15.6 Estimating classes. . .

113 15.7 Class 1 estimates: Order of Magnitude. . .

114 15.8 Class 2 estimates: Screening. . .

114 15.9 Class 3 estimates: Control. . . 115

15.10 Class 4 estimates: Definitive. . .

115 15.11 Accuracy ranges. . .

116 15.12 AACEI Estimating Classes. . . 117

16.0 Cost and Schedule Risk Analysis

118 16.1 Introduction. . .

118 16.2 Cost Risk analysis. . . 118

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1.1 INTRODUCTION TO THE PCDP

Whether you’re just beginning a new career, or you’re a sea-soned professional, accepting a position in any WorleyPar-sons Project Controls depart-ment across the globe means you’re making a commitment to an ongoing learning process. Over the last 20 years, the industry has developed a gen-eral trend in the Project Man-agement / Controls workforce which has resulted in a peak age group in the mid 50s’ with the next largest in the mid 20’s. This trend was, and still is, a major concern to the Worley-Parsons Project Controls com-munities, as without sufficient development of our younger resources, many of our offices are going to experience a knowledge - gap in the near future.

In addition to the potential skills and knowledge gap trend, most of our customers will have more stringent require-ments and higher expectations of increasing the local content (skills & knowledge) on their projects.

So where does our next gen-eration of local Project Control-lers come from?

Project Controls is a relatively young discipline that has been influenced by the use of tech-nology, creating a risk that system-skills (for instance Pri-mavera) is becoming more of an entrance pre-requisite to Project Controls rather than project delivery background. Today, it is common to see a mix of young system literate people team-up with older, more experienced but less

computer literate personnel. In order to accelerate the transfer of knowledge & main-tain the commonality of Tools & Methods within the group amidst growth and staff-turnover, WorleyParsons has developed a program called the PCDP (Project Controls Development Program). The PCDP is a continuous development program, tailored for our business and using our language. It consists of :

•

Annual competency

assess-ment, to ’baseline’ the indi-vidual skills, knowledge & experience gaps;

•

individual competency

im-provement targets based on the Gap analysis;

•

a Development Program that can be customized to indi-vidual needs.

Generally, there are three op-tions to choose from when it comes to closing skills, knowl-edge and/or experience gaps: 1. Hands-on experience 2. Internal training 3. External training

Since external courses run by consultants often fail to meet the specific WorleyParsons requirements, WorleyParsons

opted for a combination of the following competency develop-ment tools:

1. a comprehensive coaching program;

2. a variety of modular in-house developed and selected exter-nal training programs, ad-dressing every aspect of Pro-ject Delivery;

3. Staff Rotation Plan to close experience gaps.

The flowchart on the next page will outline the Overall PCDP concept.

1.2 PROJECT CONTROLS MODULAR TRAINING PROGRAM

The Project Controls training modules are designed to provide the participants with an overall introduction to the skills & knowl-edge required by Project Control-lers when executing EPCM / PMC projects. All courses are written and delivered by Worley-Parsons personnel.

To compete in a global environ-ment, WorleyParsons needs Project Controls professionals who are equipped with the full range of Project Controls skills and knowledge, armed with a solid base of good ethical values, who have been trained to think, to question, and who are able to

“learn, unlearn and re-learn” -

all in the language which is un-derstood by the rest of the world. As the external resource market-place and education system mainly produces ’one-dimensional’ Project Controls professionals (e.g. specialists in either Planning, Costing or Esti-mating), the prime focus of the

PCDP will be on the

develop-ment of a workforce with all-round Project Controls capability

1.0 PCDP - PROJECT CONTROLS DEVELOPMENT PROGRAM

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1

2

3

4

5 INDUCTION

ASSESSMENT

ANALYSIS

DEVELOPMENT

TOOLS

•

PCDP MODULE 1: “INTRODUCTION TO PROJECT CONTROLS”

•

ANNUAL INDIVIDUAL COMPETENCY ASSESSMENT SURVEY

•

INDIVIDUAL COMPETENCY GAP ANALYSIS

•

DETERMINE COMPETENCY DEVELOPMENT TARGETS (KPI’s) — WHAT NEEDS TO BE DONE ?—

•

CUSTOMIZED INDIVIDUAL

COMPETENCY DEVELOPMENT PROGRAM FOR THE COMING YEAR

— HOW TO ACHIEVE THE DEVELOP-MENT TARGETS ?—

IDENTIFY & SELECT (AND / OR): 1. APPROPRIATE TRAINING PROGRAM / MODULE 2. SPECIFIC HANDS-ON EXPERIENCE / EXPOSURE (OPPORTUNITIES) 3. COACHING PROGRAM

4. EXTERNAL TRAINING PROGRAMS

TRAINING PROGRAMS

•

EMS / WPMP VIDEO TRAINING

•

PROJECT CONTROLS MODULAR TRAINING PROGRAM

•

PROJECT MANAGEMENT MODULAR TRAINING PROGRAM

•

ESTIMATING MODULAR TRAINING PROGRAM

•

SELECTED EXTERNAL TRAINING PROGRAM

EXPERIENCE / EXPOSURE

•

STAFF ROTATION PROGRAM COACHING

•

PCDP COACHING PROGRAM

HIGH LEVEL INTRODUCTION TO WORLEYPARSONS METHODS, SYSTEMS & PROCEDURES MANDATED INDUCTION FOR ALL NEW AND CURRENT WP PROJECT CONTROLS STAFF.

MANDATED FOR ALL PROJECT CONTROLS STAFF

IEMBEDDED IN THE ANNUAL APPRAISALS PROCESS.

MANDATED PROCESS FOR ALL PC STAFF AND THEIR LINE—

SUPERVISORS

SELECTION OF APPROPRIATE PRO-GRAM IS A JOINT EFFORT BY THE PROJECT CONTROLLERS AND THEIR LINE SUPERVISOR

AVAILABLE PROGRAMS TO SUPPORT CAPABILITY DEVELOPMENT TARGETS

ANNUAL APPRAISALS

Pa

ge 7

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The first module is a general introduction to the WorleyPar-sons philosophies and method-ologies.

Completion of this Module is compulsory for all Project Controls staff, regardless of their experience and skills & knowledge level.

For new recruits, completing the Introduction Module is part of the Induction process, to-gether with the Competency Assessment Survey. The Introduction Module is followed by 7 specialized mod-ules.

These specialist modules are designed and structured fol-lowing the same concept: 1) Each training module

should provide the partici-pant with hands-on skills and knowledge for that specialized topic. 2) All modules will have the

same “project theme”, so at completion of the program, the participant has covered the full range of services that are expected from a WorleyParsons Project Controls professional on one complete project.

3) The output of one module, and the deliverables gener-ated through the exercises, are to be used as input and/or reference data for the following module(s). 4) Every module consists of a

manual (“back-of-fag-pack” principle) and a systems part, where the manual exercises will be repeated using the WorleyParsons preferred tool-kit. Below is an overview of the Project Controls Training Mod-ules:

“Hard work

never kills

anybody who

supervises

it”

~/~

Harry Bauer

Rev 0

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Module 1

Introduction to

Project Controls

Module 2

EPC Schedule

Development

Module 3

Services

Management

Module 4

Commercial

Performance

Module 5

Introduction to

TIC Cost Estimating

Module 6

TIC Management

Module 7

Schedule Risk

Analysis

Module 8

Cost Risk

Analysis

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1.3 PCDP COMPETENCY ASSESSMENT

SURVEY

PCDP participants are ex-pected to continuously monitor and analyse their WorleyPar-sons work experience, in terms of competency elements. The basis for this will be the WorleyParsons Competency Assessment Survey, which every new recruit is required to complete as part of their induc-tion.

This Competency Survey (which is in essence a SWOT analysis) is the basis for moni-toring the development and progress of all Project Controls Staff.

The letters stand for Strengths; Weaknesses; Opportunities & Threats.

SWOT Analysis

The SWOT analysis template presents the 4 major catego-ries of competencies:

Qualifications / Experience (self assessment)

Technical Skills (self as-sessment)

Systems & Software Skills (self assessment) Personal / Work scope Management & Organiza-tional Capability/Teamwork (supervisor’s assessment) The theory of the SWOT is that Strengths & Weaknesses are internal and Opportunities & Threats are external, although the suggestion is not to be too restricted by this theory. Similarly, items could appear in

more than one quadrant, e g. a person can consider

“inexperience in EPCM sched-uling” as both a Weakness AND an Opportunity. Competency Assessment The participant’s competency score should be discussed with their supervisor to identify future experience and training needs.

The initial competency score (the first one) will not be taken into account during the annual appraisals; whether someone performs to their capabilities/ competency level is a perform-ance assessment and not part the annual competency as-sessment.

However, achievement of fu-ture competency improvement targets will become a KPI (Key Performance Indicator) for the next year’s appraisal. Annual Appraisal Interface The development targets are set during the Performance Appraisals and should be a joint agreement of both staff and their line manager. To ensure that the participants will be supported in achieving

their KPIs, they can be as-signed a personal coach. Delivering on these KPIs will become a KPI for all parties involved in the Development Program.

By making both staff and their line manager responsible for achieving the competency targets, WorleyParsons closes the loop and insists all stake-holders take their commitments seriously … and not just … “something to be attended to, once one has a spare mo-ment”!

The PCDP Competency Sur-vey will be conducted for all Project Controls staff across WorleyParsons globally. The Competency Survey Questionnaires were reviewed and approved by all Regional Managers of Project Controls / Project Services and are, therefore an accurate reflection of what is expected from a WorleyParsons Project Con-trols professional in terms of skills and knowledge.

The survey is conducted online around April, and can be ac-cessed via a dedicated link in the new Global Project Con-trols & Estimating Website via Link https://www.tba.com

“Rule number

one is, don’t

sweat the

small stuff.

Rule number

two is, it’s all

small stuff “

~/~

Robert Eliot

(10)

1.4 COACHING PROGRAM

Coaching is regarded as an essential feature of the Worley-Parsons Project Controls De-velopment Program. The skills, knowledge and ex-perience that you have gained in your professional career are valuable not only to you but they are of great benefit to the growth of the department. Coaching is a vital process in transferring this experience and knowledge to younger and/or new members of the Project Controls Department, and achieving the vision for WorleyParsons in promoting Project Controls excellence for everyone's benefit.

Coaching versus Mentoring The PCDP coaching program is different from the WorleyPar-sons mentorship programs, and our employees may con-fuse the two programs. In the WorleyParsons Mentor-ing program, the mentor acts as your counsellor, providing advice on career paths, devel-opment opportunities, and an overview of what it takes to become a leader in the com-pany. (in essence; a sounding board)

Typically, the mentor is a sen-ior manager, at least two levels above you in the organization. The mentor must have broader experience in the company and the ability to place you into assignments that will help with your development.

The PCDP coach is more of a tutor, observing your work and actions, providing comments on execution, and teaching skills which may be lacking.

Coaches can come from many sources.

A coach can be a colleague, a manager, or an employee, and have to come from the same function or division in which you work.

It is critical in the coaching relationship for the coach to have opportunities to observe your work and for you to re-spect the coach and be open to feedback.

Mentoring must be viewed as long-term relationships -- a commitment of two years should be obtained before the relationship is established. Mentoring is biased in your favour.

Coaching, on the other hand, is impartial, focused on improve-ment of professional skills. A coaching relationship usually lasts only for the duration of the “gap-closure” period (quick hits).

Once the competency gaps are closed, new competency de-velopment targets will be set for the following year, and achieving these new targets could require a completely different skill-set (and coach). In summary, the mentor pro-vides guidance and opportuni-ties for practice, while the coach observes and critiques the performance and provides you with an outside perspec-tive on your skills.

The PCDP Coaching Program hangs personal KPIs (Key Performance Indicators) of achievement of competency for both Coach and ‘student’. Assigning these KPIs is not only done to give the partici-pants an incentive to deliver on their targets, it is also a com-mitment from their line-manager that they will support professional growth in their team.

Differences between Mentoring and Coaching

Component Mentor PCDP Coach

Driver Human Resource

Group

Project Controls Group

Focus Career Path Performance /

Com-petency development Role Facilitator with no

agenda

Tutor with specific agenda / Capability Targets

Relationship Self selecting Assigned by Supervi-sor based on Compe-tency Assessment Personal returns Career Opportunities

& Development

Teamwork / Skills & Knowledge Develop-ment

Arena Life / Career Capability Improve-ment

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“Inside every

older person is a

younger person

-- wondering

what the hell

happened.”

-/~

Cora Harvey

Armstrong

(11)

Page 11

1.5 STAFF ROTATION PROGRAM

The staff rotation program is a program designed to encour-age the temporary rotation / exchange of employees be-tween two WorleyParsons offices with the minimum of bureaucracy and cost. It is a simple process which benefits the company and em-ployees alike, and can be con-sidered one of the tools for closing experience gaps for those employees who want an overseas assignment, but are not necessarily available to relocate on a long term basis. How does it work?

Location Project Controls Man-ager identifies an experience / specific project exposure gap during the annual appraisals, and posts the candidate par-ticulars on the Global Project Controls & Estimating website. There has to be a valid need for the exchange, such as clos-ing a skill or knowledge gap or it may be an opportunity for both specialists, as well as younger employees to obtain experience in other locations or overseas.

Each set of candidates will, ideally, be of a similar level in terms of experience and quali-fications.

It is envisaged that the Rota-tion/Exchange program will last a maximum of six months. Each home office will pay the salary of its own employee. Each home office will pay the round-trip airline ticket of its

own employee.

Each home office will pay ei-ther actual expenses or a per diem, of its own employee. Each home office is responsi-ble for any income tax implica-tions for its own employee both from an individual and corpo-rate perspective.

Each home office will pay the visa costs incurred at that loca-tion for outgoing and/or incom-ing employee as appropriate. Personal goals/Company ob-jectives to be pre-agreed, clearly defined and monitored. Who is eligible?

In essence all Project Controls staff as long as the exchange

meets one of the following criteria:

1. Specialists with different skills/experience – to close a skills/knowledge gap; 2. Specialists with equal

ex-perience - to obtain experi-ence in other locations/ overseas.

3. Younger employees – to obtain experience in other locations/overseas How to participate? Anyone interested to partici-pate in this program can apply via their line Managers during the annual appraisals

"If you really want

something in life

you have to work

for it. -

Now quiet, they're

about to

announce the

lottery numbers."

~/~

Homer Simpson

(12)

1.6 PM MODULAR TRAIN-ING PROGRAM The Project Management train-ing program is an in-house developed entry level project management training (using 10 training modules) for personnel starting work in project man-agement at project engineer level.

The Program consists of 10 Modules:

The primary intent of this train-ing is to deliver basic traintrain-ing in the principles of project man-agement and explain the sys-tems and processes that WorleyParsons use to meet these principles.

The intended recipients are personnel who have enrolled to join the project management discipline and experienced project managers/engineers wanting a ‘refresh’.

It is possible that project con-trols personnel could benefit

from one or more of these modules.

These needs could be identi-fied when determining the Competency development targets during performance appraisals.

1.7 EMS/WPMP TRAINING VIDEOS

The WorleyParsons Project Controls community developed a series of 9 Induction training videos to familiarize new em-ployees with the Project Con-trols & Estimating specific con-tent of EMS / WPMP. The following induction videos have been made available:

The training videos can be accessed via the Project Con-trols & Estimating website: www.tba.com

1.8 ESTIMATING MODULAR TRAINING PROGRAM

The Estimating Training pro-gram will have an Entry Level focus and is developed to:

•

Align newly recruited experi-enced EPCm estimators;

•

Train experienced

construc-tion estimators in the field of EPCM estimating;

•

Provide a structured EPCm estimating course for gradu-ates or new recruits. The following 10 modules are currently developed by the Estimating community:

1.9 EXTERNAL TRAINING PROGRAMS

There are several external training courses related to Pro-ject Management & Controls. Each region has a short-list of WorleyParsons recognized external training-programs which can be used to comple-ment the existing in-house developed programs.

Page 12

EMS/WPMP VIDEOS 01. Project Controls Executive Directive 02. Planning 03. Cost Management 04. Management of Project Change

05. General Project Controls Guideline 06. CTR Preparation 07. Progress Measurement 08. Contingency drawdown 09. Cost Estimation PM TRAINING MODULES

01. Project Initiation & Scope Management

02. Project Controls & Com-mercial Management 03. Risk Management 04. Business Management Systems 05. HSE Management 06. Proposals 07. Project Quality

08. General Management & Leadership

09. Procurement & Material Control 10. Construction & Completions ESTIMATORS TRAINING MODULES 01. Orientation 02. Introduction to Estimating 03. Estimating Components 04. Initiating an Estimate 05. Direct Cost Estimating 06. Indirect Cost Estimating 07. Owners Cost Estimating 08. Design Allowances 09. Contingency Risk

Analysis

10. Review & Prepare Estimate basis PCDP Module 1 - Introduction to Project Controls.

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IDENTIFY EVALUATE DEFINE EXECUTE OPERATE Determine project

feasibility and align-ment with business

strategy.

Select the preferred

Develop-ment Option(s) & Execution

Strategy.

Finalize scope, cost, schedule and get

project funded

Produce an operat-ing asset, consistent with scope, cost and

schedule

Start Up, operate asset to ensure

per-formance specifica-tions & return to

shareholders Key Deliverables

•

Valuation Report

•

Class 1 – Order of Magnitude Estimate (+ / - 50%)

•

Development Plan

•

Class 2 – Screen-ing Estimate (+ / - 30%)

•

Business Pro-posal / Front End Engineering De-sign (FEED) Package

•

Class 3 – Control Estimate (+ / - 15%)

•

Level 2-3 EPC Schedule

•

Functional Asset

•

Class 4 – Defini-tive Estimate (+ / - 10%)

•

Performance Assessment Key Decision Approve Feasibility Review Approve Develop-ment Plan AFE approval (Approved For

Ex-penditure) Operations Accep-tance Value Enhance

1

2

3

4 Page 13

2.1 WPMP

The Project Delivery process model is a process that will ensure that the value and risk is always known throughout the project life-cycle. Most clients and contractors will have such a model and the principle, in most instances, will be identical.

The project life-cycle is usually divided into five phases. Each phase is subdivided into detailed management process-steps/activities.

By having decision gates at the

end of each project phase, the project can be stopped, author-ized to proceed or re-cycled. To ensure a consistent Project Delivery approach that is aligned with the various pro-ject life-cycle models utilized by our clients, WorleyParsons developed the WorleyParsons Project Management Process (WPMP) below.

The node points between each of the phases (commonly re-ferred to as gates), demarks the completion of a project-phase, and is aligned with the “Go / No-Go” decision-gates for progression into the next phase.

As the project progresses through the “phase-gates”, the level of definition in the project-scope increases.

WorleyParsons is primarily involved in the Evaluate (studies), Define (Feed), and Execute (EPC) phases. The Identify and Operate phases are typically managed by cli-ents.

WPMP aligns and interfaces with the project delivery sec-tions of WorleyParsons Enter-prise Management System (EMS) where all procedures, guidelines and forms are con-tained.

2.0 INTRODUCTION TO WPMP / EMS

“43.7 per

cent of all

statistics are

made up on

the spot”

~/~

Steven

Wright

(14)

WPMP delivers useful guid-ance on project delivery best practise.

Once the phase and risk cate-gory is defined using a simple flow process (below), WPMP provides a list of mandatory

tasks and recommended tasks (see next page).

This helps the Project Team to quickly navigate though EMS using Task sheets and quickly identify and locate the specific Workflows, Procedures, Docu-ments, Guidelines and

Tem-plates associated with each Project Phase.

Once the task list has been selected, each task can be highlighted (see page 16) and hyperlinks take you to proce-dures, guidelines and forms in EMS.

Page 14

“What you

don't know

hurts you…”

~/~

David

Copperfield

(15)

Pa

(16)

Page 16

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2.2 EMS

EMS stands for Enterprise Management System and holds all our Procedures, Forms, Guidelines, Templates and Go-Bys, categorized in the Business Process Steps for each function.

EMS can be accessed via the WorleyParsons NOW page. (see screenshot)

By selecting the location and Project Controls in the func-tional group list on the left side of the page, the two options will appear; Planning and Cost. By selecting one of the op-tions, the Project Controls EMS page for your chosen

option is retrieved.

Both Planning and Cost are divided in 5 process-steps. For Planning these steps are:

•

Policy

•

Planning

•

Develop

•

Schedule Control

•

Planning Report

For Cost the steps are almost identical:

•

Policy

•

Planning

•

Develop

•

Cost Control

•

Cost Report

The EMS page will list down all the Process-steps, the intent of each step, as well as the activi-ties and documents associated with these Process steps. The search can be narrowed down by selecting the Work-flow, Document or Form tab on top of the page, and can be filtered by CSG

(Hydrocarbons, Infrastructure & Environment, Power and Minerals & Metals)

An EMS webpage screen-shot is shown on the next page.

Page 17

“If you can keep

your head while

all about you are

losing theirs,

you haven't

understood the

plan.”

~/~

Isaac Heyes

(18)

(19)

Page 19

3 . 0 P R E AM B L E : O B J E C T I V E S & AS S U M P T I O N S

The objectives of Project Con-trols is to provide accurate timely information to Project Management that will enable informed decisions and action to correct any possible adverse situations or trends, and to advise the Client of the true status of the project. 3.1 METHODS,

PHILOSOPHIES & PROCEDURES The methodologies & tech-niques described in this mod-ule facilitate a consistent and methodical information flow process across the project phases, and enables compila-tion of all project status report-ing / recordreport-ings in an agreed

format for:

• Development of CBS / WBS structure for the project • Establishment of a Cost

Con-trol budget from the estimate • Expenditure and performance

in relation to approved control budgets;

• EAC (Estimate At Comple-tion) and ETC (Estimate To Complete) forecasting in rela-tion to approved control budg-ets

• Change Control

• Development of the Baseline control schedule and progress control base

• Project Progress in relation to the agreed control sched-ule;

• Cost and schedule fore-casts

• Cash flow/Cash call man-agement in relation to fore-casted project expenditure. All Schedule & Cost controls methods, philosophies and procedures described in this Introduction-module are cur-rently employed by Worley-Parsons and accepted as ’best practice’ methodologies for the Define and the Execute phases of the project and are fully supported by the suite of WorleyParsons preferred Pro-ject Management tools & sys-tems.

“Good control

reveals

problems early

- which only

mean you'll

have longer to

worry about

them.”

~/~

Author

Unknown

(20)

Page 20

3.1 PROJECT &

CONTRACT FORMATS

A project can be defined as an item of work that requires plan-ning, organizing, dedication of resources and expenditure of funds to produce a concept, a product or a facility.

A contract is a mutual business agreement recognized by law under which one party under-takes to do work (or provide service) for another party for a consideration.

A written contract is the docu-ment by which risk, obligations, and relationships of all parties are established.

For the client, the contract is the means by which the con-tractor can be controlled, and ensures that the work and end product meets their require-ments.

For the contractor, the contract specifies risks, liabilities, and performance criteria, and out-lines the terms and conditions of payment.

Throughout the training pro-gram references will be made to the following two contract categories:

•

Prime Contracts

•

Sub Contracts

Although the Contract and Project Management practices offer various, but similar defini-tions to explain the difference between these two contract categories, it is still used in many different ways by differ-ent people.

In relation to the PCDP training program WorleyParsons

differ-entiate Prime and Subcontracts as follows:

Prime Contracts

A contract agreement between WorleyParsons and the client to do work, or to provide services. WorleyParsons will invoice the client directly for provided ser-vices on its own ‘letterhead’ paper.

For the project controls function this means that cost, revenue and profit margin is managed and monitored against an inter-nal approved control budget and a client approved contract value. The value of the contract (commitment) is the client’s cost to the project and Worley-Parsons revenue.

Sub Contracts

As the prime contract holder, WorleyParsons can commit part of the work scope to a special-ized third party contractor. This contractor becomes then a sub contractor or sub consultant of WorleyParsons, and as such, will invoice the WorleyParsons directly for their services. Unless special approval is re-quired, clients will usually not be party to this contract arrange-ment; as far as they are con-cerned the subcontracted scope of work is still WorleyParsons responsibility.

For the Project Controls function this means that the value of the committed subcontract will be part of WorleyParsons’ cost to the project.

Internal cost and profit margin for this commitment is managed by the subcontractor, and is of no concern to WorleyParsons.

EPCM / PMC Contracts Prime contract holders are awarded total responsibility for the execution of the

workscope.

This includes cost, schedule, quality, project delivery risks & liabilities, as well as the com-mercial outcome of the pro-ject.

The project is fully executed by own resources and/or (partly) subcontracted under their responsibility.

Therefore Prime contracts are often referred to as ‘self per-forming’ contracts. Engineering & construction contracts can be drawn up in any number of formats, de-pending on the project objec-tives and drivers, contract strategy and the skills and resources of the client and /or the contractors.

The PCDP training modules have a strong focus on:

•

Self performing Engineering

and Procurement Services contracts

•

PMC (Project Management Consultant) contracts

•

EPCm (Engineering,

Pro-curement, Construction & Completions management) contracts.

and to a lesser extent on Turn Key EPC contracts.

“A verbal

contract is not

worth the

paper it’s

printed on.”

~/~

Samual

Goldwin

(21)

Page 21

PMC

PMC Projects are executed under a three-part contractual relationship among:

1. The Client - who establishes the form of contract and general terms & conditions. 2. The Project Management

consultant - acting as the client’s representative in administering the contract (s) and managing cost, schedule, design, procure-ment and construction & completions of the overall development.

3. The respective contractors, who responds to the risk and liabilities of the general con-tract

The usual contractual relation-ship amongst these 3 parties on a single project is for the client to have one contract with the Project Management Con-sultant (PMC), and separate contracts with the respective contractors.

In short, the PMC is managing the commitments on behalf of the client.

No contractual relationship exists between the PMC con-tractor and the other contrac-tors.

Unless agreed otherwise, the PMC contractor is not respon-sible or liable for the technical or commercial outcome of the project.

The approach of the PMC pro-ject controls function is there-fore different to that of a ‘self performing’ contract. Cost and schedule

perform-ance is managed and monitored against a client owned TIC (Total Installed Cost) budget and a high level EPC schedule as opposed to the agreed Con-tract Value and detailed EPC execution schedule in self per-forming contract environments. The budget for the PMC con-tract usually sits outside the TIC budget so management of this contract does not fall under the remit of the PMC team. However, the contract arrange-ment between the client and the PMC contractor can contain risk and reward incentives for achieving the overall project goals, which means that all cri-teria for self performing con-tracts will be applicable to this contract.

For that reason, the commercial health of this contract will only be managed, controlled and reported internally, separately from the PMC scope of works. Because the client has no direct benefit or interest in the com-mercial outcome of the PMC contract, the cost associated for controlling and managing the PMC contract itself is usually carried by WorleyParsons.

EPCM

Identical to PMC projects, with two differences:

1. In addition to the tasks de-scribed for PMCs, the EPCM contractor has fur-ther responsibilities; carry-ing out detailed engineercarry-ing work as well as purchasing equipment and material on client’s behalf.

2. The budget for EPCM ser-vices is part of the project TIC.

This is a significant difference; it means that an EPCM ser-vices contract will be one of the commitments that needs to managed under the TIC budget on behalf of the client. To avoid area’s of conflict and confusion, EPCM projects are usually executed with two distinct ‘line-ups’; one team looking after the EPCM Ser-vices contract (the self per-forming bit), the other team with a focus on the responsi-bilities associated with manag-ing the Overall EPC develop-ment and TIC budget on be-half of the client.

“If everything

seems under

control, you’re

just not going

fast enough.”

~/~

Mario Andretti

(22)

“Ability is what

will get you to

the top if the

boss has no

daughter “

~/~

Author

Unknown

4.1 MAJOR VALUES

Good project controls require the effective integration of cost, schedule and technical infor-mation and the management systems that generate that information.

However, many management systems used on projects are not well integrated because they were developed inde-pendently of each other to satisfy specific needs.

For example, the accounting system can be designed pri-marily to keep track of ex-penses and payments, to meet payrolls, calculate taxes, etc. Cost information is still in many cases related to organizational

and high level General Ledger accounts, the scheduling sys-tems’ focus is to support work planning and control (detailed project tasks), while technical management is mainly oriented to specifications, performance characteristics and technical goals (project deliverables). Pulling cost, schedule and technical information together in a meaningful, coherent fash-ion is considered essential for effective project management and failing to do so will even-tually lead to fragmented pro-ject reporting and may mislead the manager by presenting a distorted view of the project status.

A combination of 6 major measures is needed for project

analysis and to determine how well the project is performing according to plan:

•

Planned Values

•

Earned Values

•

Committed Values

•

Cost Incurred

•

Forecast Values

•

Invoice/Payment Values

4 . 0 B R E AK D O W N S T R U C T U R E S

4.2 ANALYSIS

The system set-up must be structured in such a way that it can generate the required data to analyse project-performance in terms of:

Planned Achievement - What is planned? Actual Achievement - What is done?

Expenditure - What is the cost incurred to achieve this?

Commitment - What’s the amount committed?

Budget Control - What are the forecasted under/overruns? Cash flow / Call - What is the projects’ Cash flow position?

Page 22

(23)

Page 23

“It is not

enough to do

your best; you

must know

what to do, and

then do your

best”.

~/~

W. Edwards

Deming

of WPMP.

The Define phase is a very im-portant phase, because this is the decision-gate for proceeding with the execution of the project. The key deliverables of the de-fine phase are:

•

The FEED package (technical definition of what needs to be done)

•

The Class 3 Total Installed Cost (TIC) Estimate (cost of the execution stage)

•

The level 2–3 EPC Schedule (what the project duration will be)

The class 3 estimate becomes the basis for the Control Budget. The level 2-3 EPC schedule becomes the basis for the Detail Execution Schedule.

The project initiation process begins once the project passes this gate.

At this point we want to break the project into manageable units. We do this with coding. The Project Controller must understand the use of each section of code structure, since this structure drives cost collec-tion, performance measurement and data interchange among several company systems. 4.3 PROJECT LIFECYCLE

The table below represents WorleyParsons’ Project Man-agement Process (WPMP). Like most of our clients, Worley-Parsons has an “Opportunity and Project realisation” process model in place that ensures that the value and risk is always known throughout the project life-cycle.

Decision gates at the end of each phase allow us to proceed with, stop or recycle a project at each gate.

This PSDP training module focuses on the Phase 3 "Define" and Phase 4 "Execute" portions

IDENTIFY EVALUATE DEFINE EXECUTE OPERATE

Determine project feasibility and align-ment with business

strategy.

Select the preferred

Develop-ment Option(s) & Execution

Strategy.

Finalize scope, cost, schedule and get

project funded

Produce an operat-ing asset, consistent with scope, cost and

schedule

Start Up, operate asset to ensure per-formance specifica-tions & return to

shareholders Key Deliverables

•

Valuation Report

•

Class 1 – Order of Magnitude Estimate (+ / - 50%)

•

Development Plan

•

Class 2 – Screen-ing Estimate (+ / - 30%)

•

Business Pro-posal / Front End Engineering De-sign (FEED) Package

•

Class 3 – Control Estimate (+ / - 15%)

•

Level 2-3 EPC Schedule

•

Functional Asset

•

Class 4 – Defini-tive Estimate (+ / - 10%)

•

Performance Assessment Key Decision Approve Feasibility Review Approve Develop-ment Plan AFE approval (Approved For

Ex-penditure)

Operations Accep-tance

Value Enhance

(24)

Page 24

its market presence. In essence, the EPS breaks an organization down into CSG’s (Customer Sector Groups.

EPS facilitates projects port-folio management and prioriti-zation, enterprise wide pro-ject and functional reporting, efficient management of resources’ requirements / assignments across projects and business units, etc. • WBS (Work Breakdown

Structure)

The WBS is a deliverable-oriented hierarchical break-down of the project scope into smaller, easier managed components.

With each descending level of the WBS, the definition of the project scope increases in detail.

A WBS is project specific, therefore varies from project to project based on technical, schedule and costs risks and execution strategies. The WBS is typically accom-panied by a WBSD

(dictionary).

• CBS (Cost Breakdown Structure)

A “flat”, pre-defined, enter-prise wide dictionary of cost codes (also referred to as Codes of Account). The CBS is identical across all projects and business entities and in itself contains little valuable project perform-ance information, but when tag linked to elements in the project WBS, it forms a struc-ture that facilitates finding, sorting, compiling, summariz-ing, defining and manage-ment of the information the code is linked to.

Chapter 5.0 will address the principles of the Codes of

Accounts in more detail. **Note: In project manage-ment practice the CBS is defined in two distinct ways: One, already described above, and second, being a project specific code structure that breaks down the Control Budget into small manage-able components for cost management purposes. Although the latter is not the WorleyParsons preferred approach, this model can be encountered in some parts of the world. Section ‘4.6 - Seg-regated CBS/WBS’ concept will elaborate further on this CBS concept.

•

OBS (Organizational Break-down Structure)

A hierarchical arrangement of the company’s organization, also depicting reporting rela-tionships (in essence, the Company Org-chart). • RBS (Resources

Break-down Structure)

Closely related to OBS, with one major difference that company’s personnel func-tionally assigned to OBS element, can and does per-form different role(s) on pro-jects (Project Org-chart). • Client Codes

List of pre-defined codes provided by the client to facili-tate cost and progress report-ing and analysis against Cli-ent specific breakdown struc-tures.

Defined as any of the follow-ing, but not limited to: AFE (Approved For Expenditure), OAG (Operational Asset Grouping), Owner’s Cost Centre, Asset Management WBS (closely related to fixed and assets under construc-tion settlement rules), Work Order numbers, etc. 4.4 CODING STRUCTURES

Coding structures, in their hier-archical and dynamic index forms, are the foundation of all management systems. Project delivery, financial and other corporate business sys-tems & tools exchange relevant data based on defined coding structures at any required level: from detailed execution levels, all the way up to the summary dashboards and executive re-porting.

In order to meet ever changing and increasing demand of our business, the code values con-tained in the various coding structures should satisfy several criteria, like being robust, intelli-gent, intuitive, uniform or ex-pandable.

Coding structures and codes also have additional attributes. These attributes can be variable (i.e. code values that change from project to project), or can be fixed (i.e. pre-defined codes applicable to all projects, also referred to as ‘constants’). The degree of adoption, align-ment and implealign-mentation of coding structures is a key factor in the organizations’ ability to successfully manage and de-liver projects in a consistent, reliable and fast, yet flexible and easy way.

The same applies for the or-ganizations’ functional lines of managing and reporting on all aspect of its business. The most familiar coding struc-tures are listed below: • EPS (Enterprise Project

Structure)

In a broader sense, the EPS is viewed as a reflection of company’s diversification and

“If I wanted

you to

understand, I

would have

explained it

better”

~/~

Johan Cruyff

(25)

Page 25

Rev 0

Subsequently, the Project ends up with two different breakdown structures, one for collecting cost and another for measuring progress.

Both WBS and CBS are not aligned because they serve a different purpose to different stakeholders, and they don’t correlate with each other at the adequate level for manage-ment, control and reporting purposes.

While this concept is not fa-voured by WorleyParsons, it still may take place due to a variety of reasons, such as:

•

different project stakeholders having uncoordinated objec-tives;

•

timing of both structures defi-nition may be different;

•

there could be a lack of

un-derstanding of differences between an asset driven WBS on one side (operating organizations) and execution strategy driven on the other side (project delivery oriented organizations).

An example of a scenario that can easily lead to a segregated CBS/WBS set-up is described below:

“ A Class 3 TIC estimate is gen-erated in the Define phase and taken up by the cost control function in the Execute phase. The estimate components are rolled-up to a manageable level of detail and adopted as the Control Budget.

Subsequently, cost will be col-lected and controlled against these CBS elements. Because the elements are rolled-up estimating line-items,

odds are that the cost baseline will be commodity-oriented. On the other hand, the project planning function is tasked with the development of the project execution strategy and division of the project scope into smaller, activity based compo-nents.

They will use a WBS as the tool, and the result will be the work packages and underlying activities logically connected to reflect the way the project pro-gress will be executed, moni-tored and reported. (activity based elements)”.

In such an environment, the scheduler monitors and expe-dites progress and completion of the detail project activities, while the cost engineer man-ages the project cost. Interfaces between the two groups are usually minimal. Pro’s

+

Easier to develop a break-down structure in isolation. Almost everyone is capable to develop a separate CBS and/ or WBS when you only have to consider your own require-ments

4.5 PROJECT BREAKDOWN CONCEPTS

The previous four sections of this chapter defined the general framework related to the coding structures definitions, major values and required analyses considerations, as well as the gated approach to the project delivery through its lifecycle. As mentioned in section 4.4, WorleyParsons preferred ap-proach for establishing break-down structures is the inte-grated WBS-CBS concept. There are no straightforward “rights” or “wrongs” when it comes to breaking down pro-jects into manageable units for cost and progress management purposes; it really comes down to the collective experiences of the various stakeholders to de-termine what would make the most sense for the project at hand.

In general, Cost and Work breakdown structures can be developed following one of the two basic concepts:

•

concept that returns separate Cost and Progress status info (Segregated CBS/WBS)

•

Concept that returns

inte-grated Cost & Progress status info (Integrated CBS/WBS) The following sections will ad-dress some of the issues re-lated to the degree of synchro-nization between WBS and CBS coding structures: 4.6 SEGREGATED WBS/

CBS CONCEPT

In this approach, the WBS and CBS are developed independ-ent from each other. Both struc-tures are project specific.

(26)

Project Stage Overall Project Area / Facility Cost Centre Cost Centre Area / Facility Cost

Centre Centre Cost

Project Stage Overall Project Activity Detail Project Stage Area / Facility Trade / Discipline Activity Detail Trade / Discipline Area / Facility Project Stage Activity

Detail Activity Detail Activity Detail

Page 26

return data across projects for benchmarking or business intelligence reporting pur-poses

The following graphical repre-sentations illustrates how a segregated WBS-CBS coding structures could look like on projects:

+

Seamless flow of cost data from Estimate Breakdown into the CBS, and from there into Benchmark Database Code Structure

+

Relatively straight forward to develop a WBS when scope and execution strategy are defined

+

Clients are very familiar with this concept

Con’s

−

No performance measure-ment possible, unable to compare cost and progress against the same breakdown elements

−

Forecasts not based on per-formance-to-date results, and tend to be more of a guessing by involved project stake-holders

−

Regular re-visit of the control budget by the estimator or quantity surveyor required to confirm the ETC (to-go) and EAC (at-completion) fore-casts.

−

One-dimensional skill & knowledge development of project controls staff — you’re either a cost engineer or a planning engineer

−

No ‘natural’ incentive for cost and planning to interact/ interface

−

Complex environment for implementing enterprise wide systems.

−

Since both WBS and CBS are project specific, it will be difficult to collect consistent

CBS - COST BREAKDOWN STRUCTURE

WBS - WORK BREAKDOWN STRUCTURE

Cost Collection Progress Collection R oll_u p /_d rill_d ow n a bil_ity p ro gr_es s R oll_u p /_d rill_d ow n a bil_ity C os_t

Cost Management Function Scheduling/Planning Function

(27)

Overall Project Control Account Project Stage Area / Facility Trade / Discipline Control Account Trade / Discipline Area / Facility Project Stage Control

Account Account Control Account Control

Page 27

4.7 INTEGRATED WBS/CBS CONCEPTS

The integrated WBS/CBS con-cept is gaining fast momentum in the Project Delivery commu-nity because of its ability to return credible cost and sched-ule forecasts based on perform-ance-to-date indicators for both expenditure and progress in parallel.

Integration of Cost and Work breakdown structures can be achieved via the following two methods:

• By having the Cost Break-down exist within the Work Breakdown Structure. • By tag-linking

‘project-specific’ WBS elements to a ’fixed’ CBS (predefined, en-terprise wide dictionary of Codes of Accounts). Integration via the WBS To create an integrated WBS/ CBS, the various team functions will have to work together to find a common structure that con-tains breakdown elements that would satisfy both cost and schedule requirements, taken all execution strategies and client/contract requirements into consideration.

The lowest level where cost and progress coincide is called the Control Account level: The project performance base-lines are established in a way that allows full implementation of EVM (Earned Value Method-ology) according to the best and recommended practices in pro-ject management.

In essence, this means captur-ing, monitoring and control of cost & progress against the same elements at the lowest levels of breakdown structures, and the ability to roll-up and report on project cost and pro-gress (schedule) at any level of detail.

From the project controls pro-spective the Integrated WBS/ CBS concept calls for involve-ment of personnel with a broader project management and integrated cost and

plan-ning skills.

This concept is also known as the “CTR” model is widely used for Asia, Middle East, Australia and some parts of Europe & Africa

Pro’s

+

Ability to capture and com-pare cost & progress against the same breakdown ele-ments (see page 28)

+

Ability to perform Project Per-formance Analysis (and man-agement).

+

Forecasts-to-go are based on Performance-to-date data & trends (defendable forecast as opposed to ‘best guess’)

+

Improved interface between Cost & Schedule groups. Concept requires Schedule and Cost engineers to work together to find a common structure that contains break-down elements that suit both cost and progress require-ments.

“He who

smiles in a

crisis has

found

someone to

blame”

~/~

Author

unknown.

Cost & Progress Example integrated WBS - CBS R oll_u p /_d rill_d ow n a bil_ity c os t & p ro gr_es s (_pe rfo rm an ce )

(28)

PC D P Mod u le 1 Int rod uc tio n t o Proj e c t C ont ro ls . Rev 0

Pa

ge 28

CODE CONTROL ACCOUNT CONTROL _BUDGET _{TO DATE}COST _COMPLETE% _{TO COMPLETE}ESTIMATE _COMPLETIONESTIMATE AT _OVERRUNUNDER-/

CONTRACT ‘A’

A-100 Site Survey $4,000 $5,750 100% $0 $5,750 $1,750

A-200 Prepare Site Design $4,500 $5,600 100% $0 $5,600 $1,100

A-300 Procurement Equipment/Materials $1,000 $750 100% $0 $750 -$250

A-400 Commissioning BTS $750 $0 0% $750 $750 $0

A-300 Transmission Connection $750 $0 0% $750 $750 $0

A-400 Integrate BTS $500 $0 0% $500 $500 $0

TOTAL CONTRACT "A" $11,500 $12,100 70.3% $2,000 $14,100 $2,600

CONTRACT ‘B’ B-100 Procurement Equipment/Materials $4,000 $5,250 100% $0 $5,250 $1,250 B-200 Equipment Installation $1,000 $1,250 80% $200 $1,450 $450 B-300 Antennae Installation $2,000 $1,800 80% $400 $2,200 $200

B-400 Installation Feeder Lines $4,000 $3,500 90% $400 $3,900 -$100

B-500 Testing Antennae Line System $1,500 $1,600 33% $1,000 $2,600 $1,100

B-600 Installation BTS Cabinet $1,000 $800 50% $500 $1,300 $300

TOTAL CONTRACT "B" $13,500 $14,200 81.5% $2,500 $16,700 $3,200

EPC MANAGENT & SUPPORT

O-100 Procurement Long Lead Items $15,000 $13,500 100% $0 $13,500 -$1,500

O-200 Produce Site Folder $1,000 $0 0% $1,000 $1,000 $0

O-300 Site Assessment $500 $0 0% $500 $500 $0

TOTAL MANAGEMENT & SUPPORT $16,500 $13,500 90.9% $1,500 $15,000 -$1,500

TOTAL $41,500 $39,800 85.5% $6,000 $45,800 $4,300

CONTINGENCY (15%) $6,225

CONTROL BUDGET $47,725 $39,800 85.5% $6,000 $45,800 -$1,925

(29)

Page 29

parison, data collection, cross-WBS elements reporting as well as statistical & benchmarking analyses across multiple pro-jects via a ‘common denomina-tor’ (fixed CoAs).

As described in section 4.4, Project management practice defines Cost Breakdown Struc-tures in two distinct ways: one, the project specific budget breakdown (CBS = Project Con-trol Budget), and second, the enterprise-wide coding structure (CBS = pre-defined cost codes across the company ). The latter is the basis for the WBS+ enterprise codes model. With this approach, Control Account = WBS + CBS (+ At-tributes, as and if required). The Project Management Insti-tute (PMI) defines Control Ac-counts as follows:

“a management control point where scope, budget (resource plans), actual cost and schedule are integrated and compared to earned value for performance measurement “ (PMI PMBoK 4th Edition).

While not directly included in the control account, other

cod-ing structures can be used as attributes or mapping codes. When cross-referenced, all these matrices of EPS, WBS, OBS, CBS, RBS, etc., create a variety of control points enabling management and reporting by any selection criteria, level of detail, or angle, a project and/or business may require. (such as shown in the pyramid represen-tation).

The next page shows the princi-ple of the Integrated WBS-CBS concept using the examples of page 25 and 27.

The project specific WBS+CBS+ attributes method has all the benefits that comes with an integrated WBS/CBS model plus:

• It allows for the transfer of data between enterprise-wide systems and tools within WorleyParsons.

• it has the potential to collect consistent return data across projects for benchmarking or business intelligence report-ing purposes

Examples of both WBS/CBS integration models are shown on page 30 - 31.

+

Seamless roll-over Control Budget elements - Control Schedule activities

+

Creates a multi-dimensional skill level in the Project Con-trols Group. (Very effective way to gain an understanding of the complexities of each other’s tasks is to let a Cost Engineer develop and moni-tor a schedule and a Sched-ule Engineer manage a Con-trol Budget).

Con’s

−

Many Clients are not familiar with this concept (see Segre-gated Concept) and mostly do need some encourage-ment before they fully com-prehend and accept this con-cept.

−

The Contract Strategy needs to be firmed up before the CBS/WBS can be locked in.

−

Developing an Integrated CBS/WBS breakdown struc-tures requires all-round EPC Cost and Schedule capability.

−

Two-dimensional; slicing & dicing, sorting, filtering or summarizing of project data is restricted to the elements and levels of the WBS.

−

Project specific, structure, therefore it will be difficult to collect consistent return data across projects for bench-marking or business intelli-gence reporting purposes Project specific WBS + Pre-defined Enterprise codes. This concept facilitates a tailor-made work scope breakdown for each individual project (through the variable WBS ponents), but still enables

com-“Few things

are harder to

put up with

than the

annoyance of

a good

example”

~/~

Mark Twain.

(30)

Pa

ge 30

PCDP Module 1 - Introduction to Project Controls. _{Rev 0}

EPCM DISCIPLINE CTR / CONTROL ACCOUNT PROCUREMENT SERVICES AREA / SUB FACILITY DISCIPLINE CTR / CONTROL ACCOUNT DETAIL ENGINEERING DISCIPLINE CTR / CONTROL ACCOUNT EPC

MANAGE-MENT & SUPPORT PROCUREMENT

PROCUREMENT PACKAGES DISCIPLINE LOGISTICS DISCIPLINE SERVICE CONTRACTS PROCUREMENT & LOGISTICS AREA / SUB FACILITY DETAIL ENGINEERING CONTROL ACCOUNT DISCIPLINE PROCUREMENT DISCIPLINE PROCUREMENT PACKAGES FABRICATION CONSTRUCTION WORKPACKS DISCIPLINE INSTALLATION / ERECTION DISCIPLINE CONSTRUCTION WORKPACKS AREA / SUB FACILITY FACILITY DETAIL ENGINEERING CONTROL ACCOUNT DISCIPLINE PROCUREMENT DISCIPLINE PROCUREMENT PACKAGES FABRICATION CONSTRUCTION WORKPACKS DISCIPLINE INSTALLATION / ERECTION DISCIPLINE CONSTRUCTION WORKPACKS AREA / SUB FACILITY FACILITY OVERAL PROJECT

CONTRACTORS’ DETAILED CBS/WBS LEVELS VENDORS‘ / SUPPLIERS’ DETAILED _{CBS/WBS LEVELS} CONTRACTORS‘ DETAILED CBS/WBS LEVELS CONTRACTORS‘ DETAILED CBS/WBS LEVELS