Best Practices to Predictably Meet Your Project Budget

infrastructure-projects-budget-strategiesBudget and schedule overruns have plagued infrastructure programs for decades.

McKinsey Capital Projects reports that distressed programs often lack adequate controls. These faltering programs do not have robust risk-management protocols – nor do they provide comprehensive reporting on budgets and timelines – ultimately hindering their ability to manage program delivery and control cost overruns.

The opportunity to improve how programs operate is significant. Project controls help provide accurate up to date information in addition to a snapshot of where a project is at in its entirety. In their report, McKinsey Capital Projects finds that just a 1% reduction in costs would save the construction industry approximately $100 USD billion annually. Effective project controls can provide one single source of the truth for the entire project team with timely information to help assess progress and performance.

Project controls = better decisions

In a recent Aconex webinar, three project controls experts: Paul Chapman- Senior Fellow from the Saïd Business School at the University of Oxford, Chris Perkins – Project Manager at Fluor and Crawford Patterson – Operations Director at Mace Group shared their insights into the vast opportunities for better results by improving project controls within the industry and how to achieve them.

Tips on gathering relevant project data for a team to analyze and make project decisions

Paul Chapman of Oxford University shared his following recommendations:

  • Step 1: Analyze data and trends from project controls systems, to determine what information is needed to support decisions which have the biggest impact on project performance.
  • Step 2: Implement project-wide systems to track all project performance metrics. This system should be flexible and allow an easy exchange of information between organizations and/or disciplines.
  • Step 3: Ensure easy and continuous access to the information in a format that is usable, actionable, and forward looking.

Project controls = better performance

A project controls system can analyze data and trends, providing proactive alerts for early intervention. Having one source of all project information helps avoid miscommunication, errors and costly rework. Solid project controls include ongoing visibility into project status, letting project team members to better set and achieve goals and provide greater assurance to external stakeholders. Additionally, by automating project controls, the project team is free to do more value added work and there is less room for human error.

“When the right metrics are tracked and progressed regularly, you can begin to see a forecast of where the project is headed,” Chris Perkins, Project Manager at Fluor shared. Metrics inform better forecasting by leveraging historical data and by having a continuous, complete and accurate picture of project status.  Early alerts improve productivity by enabling the project team to rectify issues before there is negative impact on the project.

What to look for in a project controls system

Crawford Patterson, Operations Director at Mace, shared: “A solid project controls system will offer the following functionality: project-wide accessibility, flexibility and configurability, reporting, and usability.”

He suggested looking for the following attributes in a cost management system:

  • Configurability: a system should support YOUR optimized processes
  • Compabitility is key; particularly through APIs
  • Security: Keep your data safe
  • Avoidance of double entry: save time, reduce errors and rework
  • End to end system that covers the project lifecycle to understand the full project scope
  • Mobile data capture: a secure system you can use in the field or anyplace
  • Preservation of system data

“In terms of standardization, you need to maximize the benefits of standardization while still meeting project specific needs.” Crawford said. He outlines his approach in two steps:

  • Step 1: Develop a base level of standardization. Look at what the commonalities are across all of our projects, then across business units or vertical industries.  Select a configurable platform that supports all of your project process needs.
  • Step 2: Look at what processes need to be project specific to meet client, contract or other requirements.
  • Always standardize as much as you can and customize what you have to.
  • Implement systems with fast setup, local, multi-lingual implementation teams, and training and support for all project participants.

Crawford mentions that there are also tradeoffs between ease of use and functionality. “Spreadsheets are easy to use, but create challenges within themselves, including revision discrepancies, visibility, human error, and access to the information by others,” Crawford states.  Ease of use and flexibility becomes vital in the rapid-changing environment of a project.  “Access to data is now easier, visibility of the process cycle times leads to better accountability, and the overall duration of these processes have been reduced with modern project controls systems,” he says.

Watch the full webinar recording here:  “Best practices to predictably meet your project budget“.

Webinar Summary:  In this webinar, global industry experts including Paul Chapman from the University of Oxford, Crawford Patterson from Mace and Chris Perkins from Fluor discussed opportunities within the AEC industry and shared industry standards and best practices to meet project budgets through the effective implementation of collaborative project controls.

Introducing Aconex Connected Cost: a modern approach to Cost Controls

Connected Cost does what yesterday’s solutions do not, by connecting project controls to the rest of your project information across your teams. Access, measure performance and forecast wth confidence. Make better project decisions to keep your project on schedule and within budget.

For more information, view our short video to see how Aconex Connected Cost is challenging the status quo of project controls.

Corie Cheeseman

Corie Cheeseman

Product Marketing Manager at Aconex
Corie Cheeseman is a Product Marketing Manager for Aconex, the world's leading collaborative construction and engineering management software.
Corie Cheeseman