CharlieRose

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So far Charlie Rose has created 17 blog entries.

Top 9 signs you need Construction Cost Tracking Software

If you’re like most companies that run construction projects, getting accurate cost data live from the jobsite can present many challenges. If you’ve never considered a software system to take on the heavy lifting of that process – here’s a list of signs you need to have a serious look at it. First, I’ll summarize the signs, and then further below, I’ll provide more explanation of each one. You Have Way Too Many Spreadsheets There’s too Much Time Spent Re-Keying Data Your Project Data is Inaccurate or Incomplete You struggle with information Delays: Project Managers Can’t Make Key Decisions Accounts Payable Spends Far Too Much Time on Vendor Invoice Approvals Your Billing Cycle in Accounts Receivable is Slow and Inefficient You Have an Overwhelming Feeling of Chaos Your Executive Teams are Demanding Better Reporting You Can’t Monitor Subcontractor Productivity #1 You Have Way Too Many Spreadsheets Your Site Foremen probably use one or more spreadsheets to capture the daily hours and activities of your crews and equipment for each of your jobsites. Let’s call that spreadsheet the Daily Field Report.  You likely also have a few contractors working for you that also submit their spreadsheet to your site personnel for approval – which need to get included into your Daily Field Report. You may also have some expenses, documents, scanned receipts, safety & inspection reports, etc. that you need to include into the mix.  If you’re a contractor yourself, all this needs to be combined to present to the client’s Site Superintendent to be signed & stamped. Your Site Foreman then sends the Daily Field Report and associated Documents to an email address for processing.  The person back in the office responsible for unpacking this

Should I Re-Baseline or Create a Change Order?

We often get asked about the distinction between re-baselining a project and creating a change order. I can see why there’s a bit of confusion there because in many respects they accomplish a similar outcome. However, they are fundamentally different processes that serve unique purposes. First of all, let’s have a quick look at what a re-baseline is. Those of you familiar with P6 and MS Project will associate a re-baseline with a revision to the Schedule. For the purposes of this article, I’m referring to a re-baseline from the perspective of Scope and Budget rather than Schedule. Given that distinction, when you revise the baseline scope (re-baseline), you’re effectively adding project scope to the initial project baseline. The purpose of this is to further complete project scope that was not defined at the time the initial baseline was created.  This is especially useful for larger projects that are broken up into phases. By using the revise baseline feature, you can fully define and baseline the scope of phase 1, and then add phase 2 to the baseline later, once it’s been defined. Let’s say for example, that your project is broken into three phases: Engineering, Construction, Commissioning. In the initial planning stages, you may be able to fully scope out the Engineering phase and begin working on that without having full definition of the later two phases. You therefore create a baseline and budget for the Engineering phase; and begin that work. Some months later, you are able to scope out the planning for the Construction phase, so you add that to the project. Clearly the construction phase should be considered part of the initial project scope, so it’s added

By |November 15th, 2016|Categories: Uncategorized|0 Comments

What is a CPI Forecast

Before I get started on the details, I’ll give you a quick definition: A CPI Forecast allows project controls professionals to predict the performance of their project using a subjective CPI value rather than the calculated CPI that’s determined based on past performance. In case you’re wondering what that all means, I’ll go on to explain.  First, CPI stands for “Cost Performance Indicator" (or Index). It’s a standard EVM metric, and is calculated using the following formula: CPI = Earned Value (EV) / Actual Cost (AC) A CPI Forecast is a mechanism for providing a subjective view on the standard calculation. Using EVM for calculating the remaining costs to complete on a project – like ETC and EAC – typically use the project’s latest Progress Measurement as the basis for that calculation. This is effectively using past performance to predict the future.  What it’s saying is, for example, “Judging from where you’re at right now, your project is underperforming at a performance index of 0.8.  With that performance to date, your ETC will be $X.” While this is important information for project analysis and forecasting, users often need an alternative way to view these projections. It may be the case that there are very good reasons for the poor performance to date, and corrective action has been taken – so that the performance metric of 0.8 might be misleading. Or maybe, unforeseen circumstances had dragged performance for a while, and things are looking better now for the remainder of the project. To give you an example, let’s say that the first 6-months of a project occurred during winter; when progress moves slower than it does during the spring & summer.  A project manager wouldn’t want to

What’s the Difference between Estimate-to-Complete and Forecast-to-Complete

Predicting the future is what we’re all about. But when do you use ETC versus FTC – and what’s the difference? Everyone gets nervous when they’re in the dark with how things are going on their project. Collecting real-time information on activities and costs is a big piece of the “Where are we at?” questions, but how do you take that data and leverage it to answer the “Where are we going…” questions? Forecasting the near future and long-term outcomes on projects is a critical function for project controls professionals.  To accomplish this, it’s important to first understand the two main methods for preparing and calculating a forecast: Using historical performance indicators Manual predictions of remaining effort Notice that I didn’t include “Remaining Budget” as a forecasting metric. And that’s because, simply taking total project budget and subtracting costs-to-date, does not provide a reasonable forecast. It doesn’t take into consideration any new information or productivity challenges that can significantly influence the remainder of the project. To dive deeper into these two forecasting methods, let’s drill-down into each of these to understand the difference. Performance-based Forecast – ETC Performance-based forecasts are the standard Earned Value method.  It takes the historical project performance and determines a productivity ratio based on that performance (CPI). It then uses that ratio to calculate how the rest of the project will play-out if you continue to perform at that level.  So, if you’ve been under-performing, you’ll end up over budget and behind schedule if you continue at that pace. And vice versa. It’s a bit like how your car’s computer calculates remaining distance. If you have a reasonably new car, it’ll have screens on the dashboard showing

Managing Vendor Accruals and Vendor Invoice Matching on Large Construction Projects

 Click to download whitepaper The Situation The “Owner” on major construction projects, has a very different set of challenges and priorities than contractors or EPCs. While contractors are busily figuring out ways to get the work done as cheaply as possible – and invoicing the client for as much as possible – the Owner is busily controlling project finances, monitoring vendor performance, and making sure the project is commissioned on time and on budget.  In the big picture, Owners of course have a much more holistic view of the project in its entirety; and ultimately are managing the cost & timing expectations of their stakeholders & investors.  What that translates to on a day-to-day basis for the Owner, is close management of their vendors. Put into simplistic terms, it’s the vendors who are doing the work, and the Owner who is paying for it.  The challenge to the owner however; is that close management of vendors is not a trivial thing to do. There can be dozens if not hundreds of vendors on the job throughout a project’s lifecycle, and keeping on top of their costs, activities, productivity – and validating the invoices they send – all requires the owner to collect, organize and analyze a lot of information on a daily basis.  Which is not a trivial thing to do. 1 The Problem The Construction Industry is one of the last industries to adopt and embrace technology as end-to-end solutions for management of major projects. It’s shocking how many paper timecards, home-grown spreadsheets, phone calls, emails and handshake agreements that are still used on multi-million dollar – or multi-billion dollar – projects. I know there are a lot of people that hold on to

A Collaborative and Integrated System

4castplus is a centralized platform that integrates people, data, processes and workflows to deliver the intelligence and reporting required for a multi-discipline project team. By bringing together critical project functions such as Project Controls, Procurement, Project Tracking and Project Management, 4castplus offers a connected and collaborative world for users to share information and work efficiently together as a unified team. Although 4castplus brings a robust suite of solutions within one platform, there are numerous areas of total project delivery and corporate enterprise technology that 4castplus does not cover. It is strategically positioned as a top performing best-of-breed Project Cost Management solution with integrated Procurement and Document Management as they relate to projects. A key factor in any organization’s decision around software systems that fit into their enterprise portfolio, is more than just the footprint that one system covers, but how well that system can integrate with other related enterprise applications.  As a cloud-based software system, 4castplus is committed to delivering the integration APIs necessary to connect and synchronize data so that organizations can share data from end-to-end. True one-touch approach to systems. The world is becoming more social, mobile and connected.  Integrated solutions like 4castplus are enablers for organizations to take advantage of these trends. When companies are considering their options of choosing a disconnected solution approach – by picking multiple separate products to serve each functional area – versus an integrated solution like 4castplus, it’s important to weigh the following factors: 1)      Manual integration. A non-collaborative solution will force the users to manually integrate data by using Excel and email as a mechanism of exchange. This introduces risk, effort and errors. 2)      No Analytics. Users will miss out on the analytics and dashboards that

Project Controls First Steps – Define Your Objectives

There’s a lot of talk about Project Controls out there. There's a growing awareness and momentum that's rapidly spreading throughout the world; and more and more organizations big and small are undertaking initiatives to insert Project Controls into the management of their projects. It's more than just a trend – the need is real, and follows decades of over-spending and lack of project visibility. As you can imagine, some companies embarking on a project controls initiative have a clear understanding of what that means, how to go about it – and have defined objectives as to what they intend to achieve. And some don't. For those that don't, this brief article is for you. It's intended to help you frame a few questions to get you started on the path of knowing how to make the next steps. For many companies, this momentum for project controls is driven from outside the organization. For example, from customer demand, or from vested stakeholder demand.  It’s common now, for example, for large projects to require contractors or EPCMs to demonstrate project controls practices in order to even bid on a contract. Of course, many companies just want to improve. Their momentum stems from an internal need to become better at what they do, and to differentiate their business. Whatever the impetus may be, the challenge any organization faces when embarking on a journey like this is: “How do we get started?”  The quick answer to that question is, “What do you want to achieve?”  I know that’s the kind of answer that’s not very helpful, so I’ll go on to explain to you what I mean. It’s easy to get paralyzed with uncertainty since

Now is the Time for Strategic Thinking

The recent downturn in the energy industry has a great number of companies scrambling to cut costs, cut staff and do whatever they can to hold on to existing business. The number of projects that have been cancelled or put on hold in the oil & gas industry over the past few months is unprecedented. Owners and producers are slashing capital budgets and announcing massive layoffs – reducing staff by the thousands. On the service side, Contractors and EPCMs are not only facing project cuts and fewer new opportunities – they’re also facing demands from their clients to apply significant reductions in their rates. It’s times like these that can really separate companies that are well run and strategic in their operations, versus those that are not so well run. The past 5 years have been fat times for the energy industry with high oil prices and new technology generating new opportunities. Year over year record profits have made oil & gas the economic engine for much of the world. Businesses small and large have been able to feed off that momentum; and achieve success without having to concern themselves with long term strategy or operational efficiency. We’ve come across many companies whose revenue model has relied on an inefficient labor force billing as many hours as possible to their client.  They’ve expressed a lack of interest in adopting a software product like 4castplus because it would make them too efficient and result in fewer billable hours. This of course has had us scratching our heads wondering how they can justify deliberately billing non-productive hours – and moreover, how it is they can compete against companies who do strive for excellence

Rules of Engagement: Collaboration is Key

Tell me you haven’t heard this one before: “Our teams need to collaborate!” And then everyone in the room nods their heads in approval. But what does collaboration really mean on the construction project, and how do companies structure their personnel, teams, vendors and clients into a truly collaborative project working environment? It’s a question that bears a lot of consideration since the roles and disciplines that are at play on any project are diverse and highly specialized – each with its own dialect, toolset, and key deliverables. Each sees the world in their own way; but are nevertheless completely dependent on each other to achieve a successful project outcome. Project management must do more than simply coexist with procurement and project controls – and vice versa. They all have a vital role to play. They have key information inputs and outputs that can make or break a construction project. They need a very high bandwidth of collaboration to get things done. Some organizations opt for grouping specializations together in their own silos; thinking that like-minds will work effectively together. Project Schedulers can be in an entirely different building than the procurement team or the cost engineers. The communication mechanisms used between them will be emails and spreadsheets passed back and forth with an expectation that the other side will understand the significance of the details contained. Although this is not ideal, this isn’t that uncommon since projects can be global, teams can be virtual, and the knowledgebase so specialized in each discipline. It would be nice if all disciplines of a construction project team could sit in the same room and live & breathe each other’s world – but that’s

How Long Does it Take You to Put Together a Status Report?

One of the most challenging aspects of successful project management is the ability to collect a vast amount of project data into one place for easy reporting. If you’re like most organizations however, when you get asked for a status report, you can’t just click a button and a report pops up that’s nicely formatted, with current and accurate information, ready to send to your boss or your client. No way. If you’re like most organizations, when you get asked for a status report, you kick into “Report Gear” and start gathering information so you can build your report. You need to request the latest actual costs, you need the latest vendor invoices, you need to make sure you have all the current change orders up-to-date, you need your progress forecasts entered, and on and on.  You need to start sending emails and making phone calls and trolling through spreadsheets – to pull together all the details you need to get that report ready. Any of that sound familiar? For a project manager, reports can take hours, if not days, to prepare. A guy I spoke with a couple weeks ago explained it like this, “It’s like using a shovel and wheelbarrow to excavate a trench,” he said, “You’ll get it done eventually. But that would be ridiculous.  Why would a company provide me with primitive tools like a spreadsheet to do complex work when there are better tools out there? Why am I using a wheelbarrow when I can use a digger and a dump truck?” Clearly, enabling a project manager to pump out reliable and accurate reports in a matter of seconds rather than hours makes good business sense.  The squandered hours