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
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
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
As most any project manager will tell you, you can’t manage the past. You have to manage in the Now to have a chance at staying on top of your projects. "Managing the Now" means providing project managers with current, reliable information on what’s going on. The idea of “current” project data isn’t anything new of course, but it’s astonishing how many projects are managed using data from the construction site that’s days or even weeks old. Historical information is interesting – and it does serve a purpose in the final analysis – but it doesn’t help much on a day-to-day basis when snap decisions need to be made to keep things running smoothly. If you can do anything to help your projects, your business and the mental health of your project management team, give them better information and good tools to report on that information. They’ll hug you and probably never stop. It’s like moving from print to digital photography. Digital cameras have made all of us better photographers; if only because we get immediate results on the photos we take. If the photo stinks, take another. The moment is still there and you can keep taking them until you get a good one. Back in the day of print film, it was days later before you could see the result, and by then it was way too late to do anything about it. Giving your project managers that same kind of immediate feedback arms them with the power to make informed decisions on the fly. So, assuming you can equip your teams with current and reliable field data, the next thing you need to give them is good tools
In the following video clip, Peter Timmins, VP Operations at Triumph EPCM, explains how their use of 4castplus has dramatically improved their business - and has led to winning this prestigious award for Project Management Excellence.
A Legacy of Long and Costly Software Implementations has Caused Businesses to Re-Think how they Buy Business Critical Solutions A few days ago I had an interesting lunch conversation with some friends who were talking about disaster software implementations they’d experienced in past companies. Each had their own horror story about the never-ending struggles and disruptions and the years of fruitless effort that went into them. We all mused about how common it is to hear stories like that, and the crazy amounts of money that companies blow on the implementation. That legacy has caused modern businesses to re-think their approach to enterprise software. Modern businesses that are looking for software solutions are increasingly seeking out products that can provide immediate value to an immediate need. Companies today are much less likely to look at the large enterprise behemoths like Oracle and SAP that are out to reinvent their business. There just isn’t the appetite anymore for the high costs, uncertain results and painfully long & expensive implementations. Today’s businesses want to solve a specific need and get up and seeing results quickly; and at a minimum cost. This doesn’t always mean however; that the decisions around adopting new technology are necessarily easy – even when that new system looks to be a perfect fit. Easy or not, those decisions have to be made; because as businesses grow, they start to feel the pinch of old technology slowing them down or causing unnecessary errors and failures. The decision process typically works a bit like this. Once they accept that they need to improve things, companies start looking around for what software is out there that can help fix their burning issues.
Businesses suffocating from internal systems they've grown out of should have a close look at what it's costing them to delay improving things The Pain of Same vs. The Pain of Change It’s common for organizations to simply cope with their current solutions and avoid or delay required technology upgrades. This delay is typically rooted in a fear of the effort and disruption the change may cause – the easy route is to hesitate and avoid the pain of change. The cost of inaction is the business and opportunity costs associated with organizations not deploying necessary technology and other business-innovation improvements to match the complexity of their business. To be clear, these are businesses that have recognized that they’re struggling with their current solution, and they’re aware that they need to do something, but they nevertheless postpone it for one reason or another. At some point, of course, any growing business will be forced to make a switch. All too often, that tipping point comes long after the pain of same has outweighed the pain of change. It's about Money The thing is, it’s not just about pain. It’s also about money. And it’s about opportunity. You have to ask yourself, what are you leaving on the table by not taking action? What is it costing you to hesitate? If you were to take the plunge and upgrade your software and underlying processes to something that was built to match the complexity of your business, what would that cost you, and when would you see a return on that investment? To help you get an answer to that, we’ll need to first quantify your situation by using a few key metrics. To
How on earth do we manage to make sense of the chaotic volumes of information that gets thrown at us every day? If you’re anything like me, in any 24-hour period you can get hundreds of emails, documents, txts, tweets and messages filling your inbox and various other mediums. It’s impossible to believe we can do a decent job of cataloging and organizing it all in order to get back to it later. I don’t have any stats on this, but I bet that over 90% of people use Outlook as an information management system – supported by hundreds of folders located somewhere on a company shared drive. And to some degree that works ok. There does come a point, however, when that system simply breaks down. I talk to a lot of people who plan, manage and procure construction projects, and easily one of the biggest struggles they fight to endure is how to tackle the barbaric amounts of information they need to stay on top of. Contracts, drawings, change orders, vendor invoices, daily site reports, budgets, status reports and on and on it goes. Each document and email thread can contain important information that’s critical to a project’s smooth and healthy progress. At some point, engineering and construction companies need to upgrade the systems they use for managing all that project-related content. It’s like when you used to have no kids, and now you have three kids: you have to face the reality that you need to upgrade your two-seater car to something that can haul around the whole family. I specifically wrote project-related content as opposed to enterprise content. There’s a very big difference. The difference is: Project
Back in the 18th century there was a period of new thinking called the Age of Reason; or the Enlightenment. The thinkers of the time were moving towards a largely fact-based view of the world and all things in it – using reason rather than sentiment or religion to explain things. Dominated by a well-known group of French Philosophers, it’s this period that has significantly influenced our current scientific approach to our view of the world. Amongst other things, they described the process of understanding things by breaking them down into individual parts. Like, a bicycle is made up of wheels, a chain, handlebars, pedals, etc. As though all whole things in the universe were merely a sum of their parts. At the same time as the French philosophers were enjoying their breakthroughs in thinking, there was a smaller group of British philosophers, like Edmund Burke and David Hume, who believed that there was more to it than just Parts. This idea of pure reason clearly breaks down when it comes to living things: like people. It’s far too simplified an approach to say that we’re merely a collection of parts: like arms, head, skin, liver, heart, legs, etc. What Hume & Burke argued to all those Frenchies across the Channel, was that it’s not just the parts that matter, it’s what’s between the parts that also matters. Maybe even matters more. It’s the connections, and the intelligence in those connections that makes the whole much greater than the sum of its parts. I’m telling that story as a simple metaphor about Workflow. We often talk about workflow in the software business, and how important it is in creating easy-to-use and intelligent software. When describing
I recently had a meeting with a group of project managers and engineers at a mid-size oil & gas producer. For managing their construction projects, this team have an immediate need to improve efficiency, improve project cost reporting, and reduce the amount of manual movement of documents. Especially the high number of documents shared through emails. Throughout the meeting, the four guys were passionately articulating their many diverse challenges they have day-to-day and month-to-month. Each time one piped up to speak about his own version of the ideal solution they needed, another would chime in with a slightly different take on his version of utopia. They went back and forth just unleashing their troubles and desires for a better system. My role in meetings like this is often to listen and facilitate. And, ultimately, to distill their needs down to a straightforward plan that would improve how they operate, and simplify their lives. Although they brought up many examples and frustrations - the underlying cause of what was truly troubling them was not that complicated. In their case, the challenges they articulated in our meeting could be broken into three broad categories: Field tracking of: labor hours, materials received & used, and daily log information Project Cost Reporting related to the above tracking captured. Reporting that’s easily accessible by multiple users through a common ‘cloud’ interface Document Workflow management and multi-user collaboration & approvals around documents Their perception was that their struggles are quite involved and complicated, but in reality, a very simple solution would eliminate a large percentage of their current pain. This perception is common amongst groups like this, because their daily work-lives are over-complicated by the many manual steps they have