Wanting to know where things are at during all stages of a project is a healthy thing to do. Whether you’re the owner, operator or customer, there’s no question that every day of your project, you’ll want to know if things are moving along as expected. And you’ll want to know details; because whether you’re running a $10 million or a $100 million project, going 10% over budget is a lot of money. So you’d better be asking a lot of questions.
- Where are we at with our suppliers?
- Where are we at with the Cement Crews?
- Where am I at with those materials commitments?
- Where am I at with Task XYZ?
- Where am I at with cash, did we get paid from our last 2 invoices
In this post, I’d like to touch on the top 4 things you’ll need to have in place in order to have easy access to answers on the “Where am I at” questions that flow through the veins of the project manager or financial professional.
The first thing you need is a Reliable Estimate
The first part of answering ‘where are things at’ is knowing where you expected you should be at – which is all about Estimating & Planning. You need to have spent sufficient upfront effort in detailing the component parts of the project to determine cost and complexity. (I hopefully don’t need to convince anyone of the need to plan out projects – but you’d be surprised). What’s key to point out though, is the importance of being able to determine costs down to the resource level. This is absolutely vital to estimating accuracy. If you’re only estimating at the task, or phase level, you’re really only guessing at the true cost of that task. (Watch this video on 4castplus resource-level estimating)
Then, you need to be able to compare that estimate against what’s actually happening – Estimate vs. Actual
The second part of understanding “Where You’re At” is all about Accurate, Real-time Visibility into the project. Understanding “Where things are at” can be a nightmare if you don’t have reliable, real-time information flowing daily from the field. Without an automated system in place to feed you information about your project in real-time, you’re dependent on pulling all that together and compiling it manually. This usually means: making phone calls, torturing spreadsheets, driving around from site to site, waiting for emails, flipping through time-cards and digging up supplier & contractor invoices. It can also mean sweet-talking the Controller for some reports out of the financial system – the financial Data might be 2-3 weeks old at best, but it could provide a couple extra clues as to what was spent on the project. All in all, figuring out “Where Things are At” can be a stressful panicky time that could take several days to come up with what will end up being a half-baked guess. And it’s a process you’ll have to repeat over and over for the life of the project.
Next, you’ll need to determine Project Progress
Determining Project Progress is really the key piece that stitches the whole “Where am I at” thing together. And it’s often the one that’s hardest to find in software packages. It brings meaning and completeness to all the other information you’ve managed to gather. Here’s why it’s important: You might find out that you’re 20% over budget after only a month into your project – which may cause a hole in your stomach to suddenly appear – but if you have Forecasting tools (for project progress), you might then find out that you’re also 20% ahead of schedule. And maybe, just maybe, that makes being over budget okay – if it’s happening for all the right reasons. Remember, however, you might find out that in addition to being over budget you’re also behind schedule. Which will mean that hole in your stomach might stick around.
Project Progress Reporting requires having Forecasting, EVM tools to analyze project data and feed real numbers back that indicate where exactly your project is At. Forecasting additionally gives you a projection into the final cost, revenue, margin and variance of your project once it’s complete.
Finally, you need Details – you need to know ‘Why’
A project can be a complicated thing with many moving parts, resources, and an involved work breakdown structure that has numerous layers and depths. Risk is everywhere. Without control & knowledge of the details, finding out that you’re over budget and behind schedule can send you into a deep panic if you can’t easily figure out why. Being able to quickly pinpoint the exact sources of project issues empowers you with the ability to assert swift corrective measures and get things back on track quickly and with minimum cost or schedule impact. In fact, if you have all these 4 measures in place, you’ll have the level of current, accurate information at your fingertips with the kind of control that will virtually guarantee your project won’t go over budget or behind schedule in the first place.
Know Where you’re At
For control over your projects, and to hold on to your sanity: Know Where you’re At – All the time
If arriving at reasonable answers to the Where Am I At questions requires hours & hours of gathering and compiling data from a variety of places, it’s maybe time to re-think your tools that provide that information. To fully understand and control your business, your projects, and your cash-flow, you should be able to ask that “where am I at” question at all times of the day and get an immediate, valuable answer that was effortless to obtain.
This isn’t rocket science. This is just simple management of your money.