Project control,
performance evaluation and
closeout
New case: KE Company AS
Subsea installation and remote operation og diving vehicles, requires
Cranes Winches Skids
https://www.youtube.com/watch?feature=player_em
bedded&v=7GrOAshUM2M
SDLC: 5 phases for project management
DEVELOPMENT MAINTENANCE DESIGN, PLANNING FEASIBILITY Organization Estimation Planning Finance EvaluationMonitoring & Control Correcting the course
Changes & Claims
Quality & Reviews, & Audits
Is everything proceeding as we
expected?
Budget
BS Innkjøp 9.980.000 Innleige 1.600.000 Egne timer 3.300.000 Oppstart (usikkerhet) 300.000 Total kost 15.180.000 Salgspris 13.612.500 Resultatgrad -11,5% AH Innkjøp 19.500.000 Innleige 3.330.000 Egne timer 9.150.000 Oppstart 460.000 Total kost 32.440.000 Salgspris 24.684.000 Resultatgrad -32,5% Andel Innkjøp 61% Innleige 10% Andel Innkjøp 66% Innleige 11,5%Periodization (per month)
Categorization (by type)
By «budgeted»
Cost Value
Time remaining
By «completed»
Technical
Fitting/Warehouse subcon
0" 200" 400" 600" 800" 1000" 1200" 1400" 1600" ja n " fe b " m ar " ap r" m ay " ju n " ju l" au g" se p " o ct " n o v" d ec " ja n " 2013" 2014" Fi"t"t"ing/Wa"rehouse"A" subcon" War"ehouse"(Lager")" Ki"t"t"ing"(Kl"a"rgj"e"r"ing)" Fi"t"t"ing"(Mont"er"ing)" Project"subcon" Op"Kval" Technical Tech sub Fitting
Project BS (8173,03, -11,5 „profit“)
0" 50" 100" 150" 200" 250" 300" 350" 400" 450" 500"
aug" sep" oct" nov" dec" jan"
Fi"t"t"ing/Wa"rehouse";" subcon" War"ehouse"(Lager")" Ki"t"t"ing"(Kl"a"rgj"e"r"ing)" Fi"t"t"ing"(Mont"er"ing)" Project"subcon" Op"Kval" Technical Tech sub
No planned contribution (value)?
No completion %?
No remaining time estimates?
We cannot tell if we are doing allright, can we?
100" 200" 300" 400" 500" 600" 700" Fi"t"t"ing/Wa"rehouse"?"subcon" War"ehouse"(Lager")" Ki"t"t"ing"(Kl"a"rgj"e"r"ing)" Fi"t"t"ing"(Mont"er"ing)" Project"subcon" Op"Kval" Purchasing" IT" Project" Technical"subcontracJ ng" Technical" SCM" Admin" OSS"Molde" Af"t"er"sa"l"es"and"se"rvi"ce" Finance"
CR: (+3 m: 2783 hrs (3 m = 2x))
CR: (+8 m: 4943 hrs) – learn from
history?
Normalized hours – we cannot tell
the diff?
And for the four “starting block” alternatives?
What was the result in the end??
Cost breakdown
week 49 Sales order
Original
budget Exec so far
Discount 0 -396 167 0 300000 Logistics 0 546 261 685000 Hours 1 989 000 156 381 417 000 3 213 132 Parts 10 050 000 13 443 526 6 030 500 7 234 888 Sum 12 039 000 13 750 001 7 132 500 10 748 020 DiffMin% 69 % 93 % 0 % 51 % DiffMax% -12 % 0 % -48 % -22 % Resultatgrad 12,44 % 0,00 % 48,13 % 21,83 %
SDLC: 5 phases for project management
DEVELOPMENT MAINTENANCE DESIGN, PLANNING FEASIBILITY Organization Estimation Planning Finance EvaluationMonitoring & Control
Course corrections!!! Changes & Claims
Quality & Reviews, & Audits
Performance evaluation
connects control to
closeout!
Main Focus on Reports:
Performance
Main performance criteria of interest, “in hindsight”:
Scope Time Money
Good idea to prepare the KPIs (Key Performance
Indicators) in preparation for project monitoring
before project closeout!
Must facilitate the project control process as well as
the reporting functions of project monitoring
Why?
Quality
Productivity Safety
Time and excess hours depend
within projects, but not the same
way across projects
How are we doing? No, really?
Not too bad! Not so good!More on Performance Metrics
Categories Performance measurements
Targets Units of
measurement Scope Amount of work accomplished Amount of work to be
accomplished
M, M2, M3, Tons, $
Time Completion dates Milestones, Deadline Day, Week, Month
Money Cost, Cash flow Budget, Profit, Cash flow $, Net Present Value (NPV)
Quality Quality achieved (Appearance, Durability, Strength,
Suitability)
Target quality level (Appearance, Durability, Strength, Suitability) Number of defects, Value of defects, Number of change orders
Safety Actual accidents and injuries, delays and economic damages occurred
Goaled accidents and injuries level
Person, $, Day, Week, Month
Often delayed
Continuous improvement critical everywhere
Effectiveness of feedback for “real-time” systems particularly important
Selective reporting widely used: Best result
baselining (“cherry picking”)
Some reports contain only problems encountered
during external stages, with consultants, etc.
(“blaming game”?)
Need frequent reporting for
Important items (e.g. high cost)
Uncertainty (Unfamiliar procedure, …) and variance Critical and long lead material and services
Scope (“creep” or “bloat”) management and change orders
Keep track, maintain consistency, and compare for
closeout!
In order to learn a little
Internal reports
Cost control report (“the profit”)
Risks/opportunities report (for negotiation)
Example of better design – less steel – no cost reduction
Example of risk-sharing models in software development (API)
External reports
(turn page for more details),…, and the little print of the contracts
Internal Reporting
Monthly Cost Control Report
Describe project cost at current date: Budget cost Actual cost Accounted cost Cash out Estimates to completion Variances and indexes Revised schedule
Risk/Opportunity plan
Reports on planned activities and anticipated threats/opportunities during the following reporting period
Schedule review
Schedule of value and certificate of payment
Request for extra works
Change orders
Design/quality implications
Simplify reporting
Financial and time indicators are necessary but not
sufficient to alert to problems
Earned value Efficiency
Motivation of team
For serious problems and “normal” reporting, is is
very
serious by the time it is noticed in the formal reports
Content of closeout
Comprises the last series of “todos” associated with a
project
Deliverables Payment Quality
Essentially is a mini-project in itself, sometimes
benefiting from a “close out manager”, indeed
Customer Controller
Taxation, provides better motivation!
Requires careful planning and logistical management
Build on previous reporting!Track down all the paperwork, use of archives often sloppy!
May require special attention to emotional issues of
the personnel in the project
Presents learning opportunities for the organization
through the project final review and report
Closeout also find new assignments and represents
the next step
For ideas and intellectual “property” For funding initiatives
Close-out formal activities
1.
Project commissioning
• Documentation for a purpose • Indexing (SFI)
• Distribution • Training • Testing
• Formal check-out
1. Project Commissioning
Closing the contract:
All claims met? (owner, customer, controller and supplier) As-built drawings, certificates, paperwork
Bank guarantees closed and of evidence final payment Cover credit, suppliers loans and “effort” if needed Maintenance and insurances
A strategy for operations
2. Project Termination
Operations
Re-assign people to some new project
Human resources department involved
Equipment serviced and re-allocated (not left “on the deck”)
Logistics, installations and temporary facilities (software licenses!)
3. Project Feedback
Knowledge management systems
Standard WBS (list of work packages), revised and commented Estimates (unit costs), constant factors and formulas adjusted Duration of activities, productivity rates ditto
