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Transcript of Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information....
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information.
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Top 10 Challengesto Effective Cost Controlsand how to overcome them!
Jorge Rossini, Latin America Director, CIMATravis Mattern, Senior Sales Engineer, EcoSys
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information.
• EcoSys Company Background
• Fundamental Cost Control Questions
• Top 10 Cost Control Challenges
• Case Study
• Recap / Q&A
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Agenda
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 3
Founded in 2000
Enterprise Project Controls Software Experts
Designers & Developers of original Primavera P6 and EcoSys EPC
Professional Services
Enterprise Consulting Expertise: Project Portfolio & Cost Management Best Practices Global Primavera Implementation and Systems Integration Leader
250 Customers in Global 1000 and Public Sector
EcoSys Company Background
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 4
Representative Customers
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 5
Capital Planning
Project Cost Controls
Earned Value Management
Progress Measurement
Estimating
Resource Staffing
Portfolio Management
Shutdown, Turnaround, and Outage Management
Core EPCSolutions
Enterprise Planning & Controls Platform
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 6
Bridging Planning & Execution
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information.
Fundamental Cost Controls Questions
• What is the current budget and forecast?
• How and why has my budget and forecast changed?
• How much funding is available?
• What are our contract commitments?
• How much has been spent?
• How are we trending?
• Do schedules correlate with costs?
• How can we recover/improve performance?
• Are we in compliance with the rules?(Contractual? Regulatory? Legal?)
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EcoSys has met with cost controls professionals throughout the industry to identify their biggest cost controls challenges.
Top 10 Challenges
Here are the Top 10 Challenges we see…
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 10Perceived as cost accounting
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Top 10 Challenges
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How to overcome this challenge?
• Educate your organization regarding the risks of poor project performance
• 3 primary objectives for project cost control:
– Improve project predictability
– Control and reduce costs
– Improve project controls efficiency
• How to meet these objectives?
– Use the power of technology to focus on forward looking activities to improve project predictability
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 11
How to overcome this challenge?
PlanningEstimatin
gRisk
Change Control
Forecasting
Commitments
Actuals
• Value adding activities• Biggest impact to project performance• Require integrated project controls
system and processes
Backward Looking
Forward Looking
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 9Budgeting and forecasting effectively
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 12
Top 10 Challenges
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• Establish standards and consistency• Budgeting
– Time-phase or manage in lump sums– Integrate data or manage in web-based spreadsheets
• Forecasting– Leverage critical data: actuals, commitments, progress– Provide forecasting flexibility
• Calculated forecasts• Imported forecasts• Flexibility to override imported and calculated amounts• Vary forecasting methods at different levels of the WBS
• Unlimited budget/forecast versions for comparison, trending, auditing
How to overcome this challenge?
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Example: Calculated Forecast
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Example: Imported Forecast
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 8Getting progress data from multiple subcontractors
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Top 10 Challenges
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Leverage multiple methods of capturing progress data• Import from scheduling systems• Direct entry of completion percentages• Calculate progress using more complex methods• Multiple progress methods and sources of data
within the same project
How to overcome this challenge?
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Example: Progress Data in EPC
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 7Integrating schedule and cost
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Top 10 Challenges
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• Integrate scheduling data into EPC– Primavera P6– Microsoft Project– Other scheduling systems
• What data to integrate?– WBS– Resources– Schedule dates– Progress data– Forecast data
• Powerful tools to align schedule and cost– Support for separate WBS structures– Apply rates to schedule data to calculate cost
How to overcome this challenge?
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information.
CBS-0
CBS 1
CBS 10
CBS 11
CBS 2
CBS 20
2121
Level 2
Level 1
Project 100
WBS A
WBS A1
WBS A2
WBS B
WBS B1
Combine work (WBS), cost (CBS) and organization (OBS) reporting structures together for Budgeting &
Forecasting
e.g. 100.X.X1.B.B1.10.Civil
project wbs cbs
OBS
OBS X1
OBS X2
OBS X3
OBS X
obs resource
How to overcome this challenge?
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 6Aligning data between multiple source systemsCopyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 22
Top 10 Challenges
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Powerful integration platform• Web Services
Standard Industry Formats – SOAP XML, REST XML, REST JSON
• Flat filesFormat Flexibility – Excel, XML, delimited flat files, etc.
• Direct integration with global partners
How to overcome this challenge?
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 5Time and effortinvolved with reportingCopyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 24
Top 10 Challenges
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Cost DataHere
ScheduleDataHere
Do all roads lead to Excel?
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Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information.
Eliminate Excel errors and inefficiencies
• Manual data imports/exports/consolidation
• Human error
• Physical limitations
• Version control
• Constrained views
• Lack of standardization
• Lack of auditability
26Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 26
How to overcome this challenge?
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 4Managing the Customer Relationship
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Top 10 Challenges
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• Internal/external reports auto-generated from the same data and reporting platform
• Reporting format flexibility– Tabular Reports– Form Reports– Graphical Charts– Excel Template Reports– Automated and User-Initiated Report Batches– Configurable Role-based Dashboards– Report Configuration (non-technical)– Report Outputs (Excel, PPT, PDF etc..)
How to overcome this challenge?
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Example: Comparisons by Alliance Partner
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 3Accuracy of reports
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Top 10 Challenges
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• Automate data loads from external systems– Prevent errors associated with manual data entry and
consolidation
• Store transaction level detail for all categories of data
• Targeted dashboards for all stakeholders– Drill-down to transaction level detail – Establish trust in the data– Quick identification of project performance
problems
How to overcome this challenge?
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Example: Drill-down to investigate
Click on poor productivity metric to
drill-down
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Example: Drill-down to investigate
Drill-down shows resource level detail of
actual and earned hours
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 2Insufficient controls resources
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Top 10 Challenges
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information.
Time Analysis: Before EPC
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20%
16%
13%12%
30%
6%2% 1%
Fixing Oracle Issues
Correcting Labor Coding
Collating Internal &External ReportsManual Downloading
Monitoring & Controlling Costs
Change Management
Forecasting & Trending
Analyzing Budgets & ActualsCost Analysts Spent
61% of Time on “Wasteful” Activities
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 36
65%25%
5%5%
Analyzing Data
Forecasting &Trending
Running ReportsTroubleshooting
Cost Analyst Target Utilization Provides Much
Greater Value
Time Analysis: After EPC
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 1Controlling Changes
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Top 10 Challenges
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• Integrated change process– Change registers, change logs, workflow
• Link changes to risks and issues• Define detailed cost/revenue allocations
– Early in the process for change visibility– Auto-update budgets and/or forecasts after
approval• Integration with document management,
accounting and contract management systems
How to overcome this challenge?
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Example: Change Order Register
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Case Study: Tahoe Resources
Company Background• Founded in 2009 and focused on becoming a leading
producer of precious metals.• Flagship Escobal silver mine project is responsible for
creating 500 jobs in Southeast Guatemala.
Challenges• Required a system to support cost control best practices
“out of the box,” but with the flexibility to meet unique requirements.
• Sought a single system to support budgeting, change management, commitments tracking, reconciliation of actuals, performance measurement, forecasting, as well as integrated reporting.
• Needed to aggregate its own internal commitments and transactions with those initiated externally by its EPCM consultant.
• Support for multiple currencies.
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information. 41
Case Study: Tahoe Resources
EcoSys EPC Solution• Central repository all project controls data• Exchange budget and actuals data with Microsoft Dynamics• Detailed budget tracking for Annual and Life Total bases• Budget change management process with an auditable workflow• Manage all commitments and reconcile against actual costs• Model forecasts based upon multiple approaches including direct,
time-phased estimates or earned value methodology• Allow for planning, forecasting and recording actuals in multiple
currencies, as well as adjusting for exchange fluctuations• Extensive built-in reporting capabilities (e.g. monthly cost
performance, change order logs, 12-month rolling cash flow forecast, earned value by area)
• Allow end-users to create new reports as needed
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information.
Achieving effective cost-controls is a challenge…1. Controlling changes
2. Insufficient controls resources
3. Accuracy of reports
4. Managing the customer relationship
5. Time and effort involved with reporting
6. Aligning data between multiple source systems
7. Integrating schedule and cost
8. Getting progress data from multiple subcontractors
9. Budgeting and forecasting effectively
10.Perceived as cost accounting42
Recap
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information.
Overcoming these challenges is not possible without an integrated project controls system• Visibility• Efficiency and Accuracy• Process Standardization• Improved Financial Performance
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EcoSys EPC
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The Right Tool for the Job
If attempting to overcome these challenges without a tool designed for this purpose, things will:• Break• Be harder in the
long
Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information.
Questions?
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Copyright 2012 EcoSys Management LLC All Rights Reserved. Confidential and Proprietary Information.
Thank you!
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