CONSTRUCTION

MANAGEMENT
SUMAN

PROJECT PLANNING MANOJ TM

LOHITH
HARSHAVARDHAN
PROJECT SCHEDULE MANOJ HJ
NIRANJAN
PROJECT CONTROL PRAJWAL
AKHILA
RAMYA
JAISURYA
MANIKIRAN
PROJECT PLANNING
In planning phase, plan is made and strategies are set, taking into consideration the
company policies, procedures and rules Planning provides direction, unifying frame work,
performance standards, and helps to reveal future opportunities and threats In Planning,
the following steps are followed.

The Objectives of the projects in definite words

• Goals and stages intermediate to attain the final target
• Forecast and means of achieving goals i.e., activities.
• Organization resources-financial, managerial and operational-to carry out activities and
to determine what is feasible and what is not.
• Alternatives-individual courses of action that will allow accomplishing goals.
• For consistency with company‘s policies
• An alternative which is not only consistent with its goals and concept but also one that
can be accomplished with the evaluated resources.
• Decision on a Plan
Forward Planning
• Planner starts from the initial event and builds up the events and activities logically
and sequentially until the end event is reached.
• What event comes next?
• What are dependent events?
• What events can take place concurrently?

Backward Planning
• The planner starts with the end event, and arranges the events and activities until
the initial event is reached.
• The planner asks himself ―if we want to achieve this, what events or activities
should have taken place?

Combined Planning
• Combination of both forward planning and backward planning.
• At any stage the planner may need to traverse the network back and forth several
times until it is found to be satisfactory.
• Questions of the Planner
• What event or events must be completed before the particular event can start?
• What event or events follow this?
• What activities can be accomplished simultaneously
Project Planning
Once the scope of the project has been defined in the terms of reference, the project enters
the planning phase. This involves creating a:
Project plan outlining the activities, tasks, dependencies and timeframes;
Resource plan listing the labor, equipment and materials required;
Financial plan identifying the labor, equipment and materials costs;
Quality plan providing quality targets, assurance and control measures;
Risk plan highlighting potential risks and actions to be taken to mitigate those risks;
Acceptance plan listing the criteria to be met to gain customer acceptance;
Communications plan describing the information needed to inform stakeholders;
Procurement plan identifying products to be sourced from external suppliers.

At this point the project will be planned in some detail and is ready to be executed. By now,
the project costs and benefits have been documented, the objectives and scope have been
defined, the project team has been appointed and a formal project office environment
established. It is now time to undertake detailed planning to ensure that the activities
performed during the execution phase of the project are properly sequenced, resourced,
executed and controlled. The activities shown in the following figure are undertaken.
Create a project plan: The first step in the project planning phase is to document the
project plan. A ‗work breakdown structure‘ (WBS) is identified which includes a hierarchical
set of phases, activities and tasks to be undertaken to complete the project. After the WBS
has been agreed, an assessment of the level of effort required to undertake each activity
and task is made. The activities and tasks are then sequenced, resources are allocated and
a detailed project schedule is formed. This project plan is the key tool used by the project
manager to assess the progress of the project throughout the project life cycle. Create a
resource plan: Immediately after the project plan is formed, the level of resource required
to undertake each of the activities and tasks listed within the project plan will need to be
allocated. Although generic resource may have already been allocated in the project plan, a
detailed resource plan is required to identify the:
Type of resource required, such as labor, equipment and materials;
Quantity of each type of resource required;
Roles, responsibilities and skill sets of all human resource required;
Specifications of all equipment resource required;
Items and quantities of material resource required.
A schedule is assembled for each type of resource so that the project manager can review
the resource allocation at each stage in the project.
Create a financial plan: A financial plan is created to identify the total quantity of money
required to undertake each phase in the project (in other words, the budget). The total cost
of labor, equipment and materials is calculated and an expense schedule is defined which
enables the project manager to measure the forecast spend versus the actual spend
throughout.
the project. Detailed financial planning is an extremely important activity within the
project, as the customer will expect the final solution to have been delivered within the
allocated budget.
Create a quality plan: Meeting the quality expectations of the customer can be a
challenging task. To ensure that the quality expectations are clearly defined and can
reasonably be achieved, a quality plan is documented. The quality plan:
Defines the term =quality‘ for the project.
Lists clear and unambiguous quality targets for each deliverable. Each quality target
provides a set of criteria and standards to be achieved to meet the expectations of the
customer.
Provides a plan of activities to assure the customer that the quality targets will be met (in
other words, a quality assurance plan).
Identifies the techniques used to control the actual quality level of each deliverable as it is
built (in other words, a quality control plan).
Not only is it important to review the quality of the deliverables produced by the project, it
is also important to review the quality of the management processes that produced them.
A quality plan will summarize each of the management processes undertaken during the
project, including time, cost, quality, change, risk, issue, procurement, acceptance and
communications management.
Create a risk plan: The next step is to document all foreseeable project risks within a risk
plan. This plan also identifies the actions required to prevent each risk from occurring, as
well as reduce the impact of the risk should it eventuate. Developing a clear risk plan is an
important activity within the planning phase, as it is necessary to mitigate all critical
project risks prior to entering the execution phase of the project.

Create an acceptance plan: To deliver the project successfully, you will need to gain full
acceptance from the customer that the deliverables produced by the project meet or
exceed requirements. An acceptance plan is created to help achieve this, by clarifying the
completion criteria for each deliverable and providing a schedule of acceptance reviews.
These reviews provide the customer with the opportunity to assess each deliverable and
provide formal acceptance that it meets the requirements as originally stated.

Create a communications plan: Prior to the execution phase, it is also necessary to

identify how each of the stakeholders will be kept informed of the progress of the project.
The communications plan identifies the types of information to be distributed to
stakeholders, the methods of distributing the information, the frequency of distribution,
and responsibilities of each person in the project team for distributing the information.
Create a procurement plan: The last planning activity within the planning phase is to
identify the elements of the project to be acquired from external suppliers. The
procurement plan provides a detailed description of the products (that is, goods and
services) to be acquired from suppliers, the justification for acquiring each product
externally as opposed to from within the business, and the schedule for product delivery. It
also describes the process for the selection of a preferred supplier (the tender process),
and the ordering and delivery of the products (the procurement process).

Contract the suppliers: Although external suppliers may be appointed at any stage of the
project, it is usual to appoint suppliers after the project plans have been documented but
prior to the execution phase of the project. Only at this point will the project manager have
a clear idea of the role of suppliers and the expectations for their delivery. A formal tender
process is undertaken to identify a short list of capable suppliers and select a preferred
supplier to initiate contractual discussions with. The tender process involves creating a
statement of work, a request for information and request for proposal document to obtain
sufficient information from each potential supplier and select the preferred supplier. Once a
preferred supplier has been chosen, a contract is agreed between the project team and the
supplier for the delivery of the requisite products.

Perform a phase review: At the end of the planning phase, a phase review is performed.
This is a checkpoint to ensure that the project has achieved its objectives as planned
SCHEDULING IN PROJECT MANAGEMENT
Scheduling in project management is the listing of activities, deliverables, and milestones
within a project. A schedule also usually includes a planned start and finish date, duration,
and resources assigned to each activity. Effective project scheduling is a critical component
of successful time management.

When people discuss the processes for building a schedule, they are usually referring to the
first six processes of time management:

• Plan schedule management

• Define project activities
• Sequence activities
• Estimate resources
• Estimate durations
• Develop the project schedule
• How to do scheduling in project management
There are three main types of schedules:
• Master project schedule: A master schedule tends to be a simplified list of tasks with a
timeline or project calendar.

• Milestone schedule or summary schedule: This type of schedule tracks major

milestones and key deliverables, but not every task required to complete the project.

• A detailed project schedule: This is the most thorough project schedule, as it identifies
and tracks every project activity. If you have a complex, large, or lengthy project, it‘s
important to have a detailed project schedule to help track everything.

The most common form of project schedule is a Gantt chart. Both a milestone schedule and
a detailed project schedule can be created as a Gantt chart. When choosing a scheduling
software, look for tools that allow you to create different views from the same schedule. If
you create a detailed schedule with milestones as a Gantt Chart, make sure it can be
summarized up to that level for a simpler view that can be easily shared with your team or
stakeholders. This gives you the ability to present the same schedule in different formats
depending on the level of detail required and the target audience.
Benefits of project scheduling in project management
• Assists with tracking, reporting, and communicating progress
• Ensures everyone is on the same page with tasks, dependencies, and deadlines
• Highlights issues and concerns, such as a lack of resources
• Identifies task relationships
• Monitors progress and identify issues early
• Seven tips for creating a solid project schedule
• The time management processes identified above are the key steps to creating a project
schedule. However, keep these seven tips in mind to make sure your schedule is
realistic.
• Get input from stakeholders: Don‘t create your schedule in isolation. It‘s important to
use your team and other stakeholders to identify tasks, resources, dependencies, and
durations.
• Reference past projects: Looking at previous projects with similar scope and
requirements can help create realistic estimates and ensure you haven‘t forgotten any
tasks.
• Keep risk in mind: Identify and document any factors that pose a risk to staying on
schedule. This will help your risk management efforts.
• Consider any non-work time: For example, make sure vacations and holidays are
reflected in your schedule so that you‘re not assuming people will be working when
they‘re not. Define the critical path on your project: Identifying your project‘s critical
path allows you to prioritize and allocate resources to the most important tasks in the
project.
• Record scheduling assumptions: Write down the logic behind your scheduling
predictions. For example, if you assume it will only take 10 hours to complete a task
because you have a senior engineer. Then, if you end up with a junior engineer, you
can understand and explain why it took twice as long as planned.
• Include project milestones: Milestones are events or markers that stand for an
important point in your project. They‘re useful for creating a summary schedule,
reporting to executives, and identifying problems early. Here are some milestone
examples:
o Project kickoff
o Design approvals
o Completion of requirements
o Product implementation
o Project closeout
How to Make a Construction Schedule
• Construction projects are notoriously difficult, and they‘re known for encountering
delays. They involve a lot of moving parts, teams, equipment and materials. If any
discipline needs a well-thought-out schedule, it‘s construction project management.
• Tools that are embedded in construction project management software, such as Gantt
charts and resource management, are key features to control the many phases of a
construction product. But they just facilitate the process. The construction schedule is
the backbone of any successful project management for construction.
• Yes, construction scheduling is time-consuming. You want to take all the steps, avoid
shortcuts and work towards creating the most accurate schedule you can. The more
time you put into the construction schedule, the less issues you‘ll have when you
execute the project plan, which is key to good construction project management.

What Is a Construction Schedule?

A construction schedule is a timeline for every task and event in a construction project. The
construction schedule is a fundamental part of the project planning phase, as it also defines
the resources needed and the teams responsible for each task in the construction process.
 5 Steps to a Make a Construction Schedule
If you follow these five steps, you‘ll hit all the major points that need addressing when
creating a construction schedule.
1. Get Info and Tools
• Construction scheduling involves different types of resources, stakeholders and participants.
Begin by listing all subcontractors involved in the job. There are always many in a
construction project. Once you have the list, reach out to them and ask how much time it‘ll
take to procure materials. Once you have that information, ask how long their part of the
project is estimated to take. This is key for sound time estimation on your part.
• You‘ll also need to speak with the local code office and get a list of requirements and what
inspections will be needed throughout the build. Code restrictions vary depending on the
type of construction and materials you‘ll be using, so you‘ll need to do the research to make
sure your project is compliant.
• When it comes to budgeting your project, you‘ll need to go through the process with your
bank and determine when they‘ll release funds. You‘ll need a steady influx of cash to keep
the project moving forward, so before it starts, it‘s key to have an understanding with your
bank and its process about disbursing money. Talking to the bank before scheduling gives
them a big-picture view of the project and you valuable insight into how to schedule.
• Figure out a project management tool that will suit your needs. There are templates that can
help you get started with your construction schedule if you don‘t want to build your plan and
schedule from scratch. Naturally, ProjectManager.com being an online project management
software, recommends a cloud-based tool. But we‘ll get to those benefits in full later.
2. Collect and Prioritize Tasks
• You have context and tools, but now you need to step up to the project and break it
down into the steps that will lead it from a construction plan to a completed project.
These are the tasks. You can‘t have an accurate construction schedule until you have a
thorough listing of every task that must take place to end with a successful
construction.
• You can use a work breakdown structure (WBS) to get a handle on the size and scope
of your project. You can think of this tool as a way to visualize your deliverables by
starting with whatever you‘re going to construct and then breaking it down level by
level until you‘re at the most basic parts.
• At this point it doesn‘t hurt to gather the team and whatever subcontractors you‘re
going to employ and pick their brains. Remember, the more thorough your task list,
the more accurate your construction schedule. Tasks are what can derail a project, so
keep your mind on scope. And don‘t forget that some tasks are dependent on others,
so you‘ll want to link those.
• Once you have your task list as complete as possible, you‘ll next need to put those
tasks in an order. The WBS can help with this, as it takes a complex project and boils it
down to the essential parts and when they need to be worked on. You can use Gantt
chart software to spread these tasks over a project timeline. We‘ll get into more detail
on that in a bit.
3. Add Duration
• Now take each of the tasks and give them a start and finish date, which will create a bar
chart on the Gantt that represents the duration of the task. These determinations must
be realistic. A construction schedule is impacted by climate and weather forecasts are
only so accurate, especially long-term. Therefore, look at historical data about the
weather to get an estimation of how the climate might impact the work.
• Depending on how long-term the project is, you‘ll need to calculate into your
construction schedule holidays and consider sick and vacation days for employees. If
there are other seasonally related or personal issues that might come up, then be sure
to use them as a ruler when measuring your schedule‘s duration.
• Outside of those issues, there is working with subcontractors and suppliers. The specifics
will be outlined in your contract, but more often than not those dates are subject to
change. It‘s best for your construction schedule to have the wiggle room to
accommodate fluctuations.
• It‘s important to make the schedule realistic. You might want it done at a certain date,
but to achieve that goal, you have to cut corners and sacrifice quality. This is not possible
in construction. The repercussions are too serious. So, be honest with yourself and give
everything enough time in your construction schedule to be completed correctly.
• Don‘t neglect non-task related scheduling, such as procurement, delivery and other
sources that are crucial to the project. You need to have a clear picture of what to order
or reorder supplies. It‘s as important as the build. So is scheduling in any inspections, so
there‘s time in your schedule to respond to any code issues.
• There‘s also the financial portion of the project to keep in mind when scheduling. Add
the bank draws, and link them to the appropriate tasks in your construction schedule.
You and the bank need to know when money will be required. You don‘t want to chase
the cash and stall the project.
4. Allocate and Execute
• In a nutshell, construction scheduling is about activities and resources. Tasks won‘t get
done by themselves, of course, but allocating that work to teams can get confusing in
your construction schedule when you have so many subcontractors to keep track of. By
color-coding tasks, you can easily distinguish the different teams and work. Now you can
pinpoint who is working on what once the project execution phase begins.
• You should have already made estimations on the length of work from your teams and
have a detailed profile of their skills and experience to assign them appropriately. After
allocating your resources, a project management tool like ProjectManager.com can send
alerts when new tasks are assigned and deadlines are due.
• Once you have the people assigned to the work, the construction schedule is ready to
venture into the real world. Make sure that your resources are balanced. You don‘t want
to over-allocate one team while another is twiddling their thumbs. ProjectManager.com
has workload calendars to help with this process.
5. Review
• Construction scheduling is highly complex and requires permanent monitoring. No
construction schedule is written in stone, at least none that will succeed. Things
change, and if you‘re not monitoring and reviewing throughout the project, those
changes will send you off-track—or worse.
• Therefore, you‘ll need to look over the construction schedule throughout all phases of
the project to make sure your actual progress is in line with your plan. Look at your
schedule daily and depending on your time, update frequently. You can use our
construction daily report template to keep track of the progress of your construction
project.
• This is a matter of time management. If you find that a daily update is taking you away
from other project issues and responsibilities, then maybe you need to set aside time
each week to respond to the changes you‘ve noted daily and apply them to the
schedule. It‘s up to you, but monitoring and adjusting your construction schedule as
on- and off-site issues arise is perhaps the most important aspect of keeping your
project on schedule.
TYPES OF PROJECT SCHEDULING

1. CRITICAL PATH METHOD

• The Critical path method is a pictorial representation of the project that is useful for
identifying the overall length of time that a project will take. It also demonstrates
which activities are necessary to complete the project and those that are not as
critical. In this technique, the project is represented pictorially as a network, where the
nodes represent activities and the duration of an activity is represented by lines or arcs
in between nodes. The duration of each activity is estimated based on industry
knowledge. Before constructing a diagram, the activities need to be identified, as does
the sequencing of these events. For example, activities A and B might occur
simultaneously prior to activity C, producing a diagram with the following overall
shape: ― >," where the upper left end would have node labeled A, the lower a node
labeled B, and the point at the right side would have a node labeled C.
• 2. Pros 1. Makes dependencies visible 2. Organizes large and complex projects 3.
Organizes large and complex projects 4. Encourages the Project Manager to reduce the
project duration
• Cons 1. For large and complex projects, there‘ll be thousands of activities and
dependency relationships 2. For large projects with thousands of activities, it may be
difficult to print the project network diagram.
2. PROGRAM EVALUATION AND REVIEW TECHNIQUE (PERT)
• The program evaluation and review technique (PERT) is typically applied to more complex
projects. Again, a network diagram is used. The activities and their duration are
represented pictorially as a network in the same manner as the critical path method.
However, unlike the critical path method, PERT allows for flexibility in the period of time
to complete a task. Just like the critical path method the activities and their duration are
defined.
• However, the duration is determined with the following formula:
• Expected time = (optimistic time + 4*(most likely time) + pessimistic time)/6
• Optimistic time is the shortest time that the activity can occur in and pessimistic is the
longest.

3. GANTT CHARTS
• Gantt charts are a pictorial representation of the phases and activities of a project, and
they are typically applied to plans in a setting in which there is little variation among the
projects. These charts graphically illustrate the start and end dates of a task with
horizontal bars under a horizontal line representing the date. Information about the
complexity or size of task is not accounted for, so a bar representing a relatively small
task can have the same pictorial representation as a larger one if the timing is similar.
This can cause a problem if an activity is behind schedule.
Pros: 1. Adaptable to all industries and projects
2. Easy to view progress
3. Ability to set accurate deadlines and define dependencies
4. Easily modified
5. Can be created in Microsoft Excel or in a project management system
6. Ability to assign tasks to resources

Cons:
1. If the Gantt chart is not part of a project management system, it is flat
2. No versioning
3. Limited collaboration
4. No progress tracking
PROJECT CONTROLLING
Project controlling is a core task in project management. It includes all activities that are
necessary to implement the project according to plan.
The goal of project controlling is to ensure that the project goals are achieved in the
desired quality, while adhering to the planned deadlines and costs. The project
management is responsible for project controlling. In large projects, there is often a
dedicated project controller who performs this task on behalf of the project management.

Goals of project controlling

• Securing the achievement of the project objectives
• Determination of the current project progress
• Determination of critical plan deviations (target/actual comparison), analysis of causes
and evaluation of consequences for the project
• Planning and implementation of project management measures
• Social project controlling
• Documentation of the results of the project controlling in a project status report
Core areas of project controlling

• Project controlling is an integral part of project management over the entire duration
of the project. Project controlling includes all activities that are necessary to realize the
project according to plan. Project preparations and project plans, which are created in
the initial phase of the project, serve to determine the desired course of the project as
precisely as possible and to think ahead.
• During active and effective project control, the target specifications of the project
planning are compared in regular cycles with the actual values achieved in the course
of the project, which are introduced by the experts responsible for implementation
and results. The target/actual comparison refers both to the project object and to the
course of the project.

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Any deviations found between target and actual values must always be considered in an
integrated manner and subjected to a critical and cause-related analysis. Experience shows
that deviation is not equal to deviation. The evaluation of the effects and consequences on
goals, deadlines, milestones, costs, result quality, customer satisfaction, mood, etc. is
optimally carried out together with the technical experts.
Checklist: Project planning as a prerequisite for project controlling

As a prerequisite for efficient project controlling, project planning must be as comprehensive

as possible. The checklist below shows which plans are necessary in detail. These questions
should be clarified before the implementation of the project is started!
• Are the project goals measurable, realistic and coordinated within the project team?
• Is there a written project order?
• Is the cooperation in the project team sufficiently regulated?
Project organization is known
– Project roles are described
– Work package managers are defined
– Communication structures are defined
– Rules of cooperation are agreed upon

Is there a detailed performance planning in the project

– Project results are known
– Project phases (= main tasks in the project) are defined
– Work packages are defined and described Is there a detailed schedule in the project?
– Milestones are known and scheduled – Detailed schedule at work package level exists

Is there a detailed personnel deployment plan?

– Personnel resources are planned at work package level
– The availability of personnel resources is ensured
Is there a detailed cost planning in the project?
– Project costs are planned at work package level
– Budget plan prepared

Is there an analysis of the project environment?

– The environment is known
– Critical influencing factors are identified
– Measures to minimize risk are documented

Is there an investigation of the project risks?

– Risks are identified and assessed
– Risk-minimizing measures are defined
– Contingency planning exists
– Risk budget has been applied for and approved

Project controlling structures are defined – Goals and tasks of project controlling are
clarified
– The tasks in the team are known
– The controlling cycle has been agreed, as have the deadlines for the
– Participation in the Controlling Meeting is regulated
– Regular deadlines for project controlling are planned
– There are agreements on proxy arrangements
Project reporting structures are defined
– Objectives and tasks of reporting are clarified
– Report content and design are defined
– The reporting cycle is defined as follows
– The addressees of the project report are known

Guidelines for project controlling

• Controlling means to be on management! Control is only one aspect that is necessary
for controlling – it should not be the focus!
• Plans that are not ―controlled‖ lose a large part of their value – therefore, everything
that is planned must also be ―controlled‖!
• Project controlling is much more than deadline and cost controlling – the project must
be kept in view!
Execution of project controlling
Project Controlling Meeting
• At periodic intervals (14-day, monthly), the current status quo (snapshot) in the project is
recorded together with the project team. A separate project controlling meeting is best
suited for this purpose.
• The project controlling meeting serves the periodic and active coordination and monitoring
of the project plans and takes place regularly over the entire course of the project.
Periodicity and dates of the meeting are determined in the project start phase.
Changes in the intensity of the controlling cycle are possible and are decided specifically and
situatively by the project manager. Participants in the project controlling meeting are project
managers, project controllers (if a specially defined person is available in the project), project
core team and optionally other employees from the project organization

The following parameters are considered in project controlling

• Project objectives according to project order
• Performance progress in the project (work packages according to work breakdown
structure)
• Quality of service
• Dates and Milestones
• Costs / financial resources / use of resources
• the project environment (stakeholders) and the design of the relationship to the various
environments
• Project risks and critical success factors
• Social relations in the project and the cooperation of all project participants
The following parameters are considered in project controlling

• Project objectives according to project order

• Performance progress in the project (work packages according to work breakdown
structure)
• Quality of service
• Dates and Milestones
• Costs / financial resources / use of resources
• the project environment (stakeholders) and the design of the relationship to the various
environments
• Project risks and critical success factors
• Social relations in the project and the cooperation of all project participants

Execution of the project controlling meeting.

• The project controlling meeting is chaired by the project manager. In the meeting, the
work package managers present the current status of their work packages. The personal
presentation by the work package managers promotes the exchange and networking of
the experts among each other.
• Current problems can be discussed directly in the project controlling meeting and, if
possible, solved. The result of the meeting is a synchronized information status on the
current project status for all participants. Difficulties and problems are known, but also
the areas in the project where things are going well and according to plan.
• In the course of the follow-up of the meeting, the project plans are updated and the
result is documented by the creation of a protocol.
Creating a Project Status Report
• After the project controlling meeting, a project status report is created on the basis of
the current information in compressed form. The project status report serves the
project manager as the basis for the regular meeting with the project client. It is an
important document in the course of the project and is usually presented to the
steering committee.
• The regular preparation of project status reports brings transparency, security and
continuity to the project development process. The report should be accessible to all
project members.
What Are Project Controls?
Project controls are processes for gathering and analyzing project data to keep costs and
schedules on track. The functions of project controls include initiating, planning,
monitoring and controlling, communicating, and closing out project costs and schedule.
Ultimately, project controls are iterative processes for measuring project status,
forecasting likely outcomes based on those measurements and then improving project
performance if those projected outcomes are unacceptable.

Activities under the umbrella of project controls may include:

• Aligning projects with portfolio/organization goals and objectives

• Developing a work-breakdown structure (WBS)
• Collaborating on initial project schedules
• Developing a risk management plan
• Project budgeting and forecasting
• Monitoring project costs
• Feedback and reporting
• Optimizing project strategies to enable better outcomes in the future
• While a project may deal with many parameters, such as quality, scope, etc., the
discipline of project controls focuses on the cost and schedule factors, continuously
monitoring for any risk to them.

• Hierarchically, project controls nest under project management. A project controller

could be reporting to a project manager on a specific project or an entire portfolio of
projects. Project controls are integral to successful project management, as it alerts
project stakeholders to potential trouble areas and allows them to course correct, if
needed.

• For project controls to succeed, they cannot be applied in spurts or in a vacuum. Rather,
project controls activities must run through the complete project life cycle—from the
initiation phase until closure—to monitor and control the various factors that impact
cost and schedule.

• Interweaving project controls with the rest of project management provides timely
insights that empower project stakeholders to make the right decisions at the right
time.
Processes That Define Project Controls

The strengths of project controls lie in their data-focused approach and attention to detail.
A project manager does not simply want to know that there is a cost overrun, but rather
wants to know the root causes, the precise numbers, and how it can be fixed. This is where
a fully integrated project controls solution can help with efficiency in getting answers
quickly, and visibility into performance that can reduce project costs.

Let‘s dive into the processes that define project controls

Project Planning
Planning is one of the important steps in which controllers and project managers work
together. Whether it‘s creating project plans, schedules, work-breakdown structures or cost
estimates, planning gives everyone a baseline to work with throughout the project.

Budgeting
Integrating the budgeting process into project activities is essential to calculate costs
accurately and to understand when and why variances occur. By time-phasing budgets and
refining the numbers, a transparent model is available for senior managers and team
members alike to serve as both a benchmark throughout the project and understand vitally
important cash flows.
Risk Management
Project controls provide a meticulous approach to managing risk. By preemptively
identifying risks, monitoring risk continuously, and developing contingency plans to address
and mitigate issues, it becomes possible to reduce impact on budget and schedule. It also
helps prevent some risks from happening in the future.

Change Management
When a project deviates from its original estimates, it‘s often not due to a single factor, but
due to the cumulative effect of several factors that tend to go unnoticed. This is why change
management is critical. By tracking changes and understanding their impact, while following
a clear process for evaluation, approval, and accountability, projects can remain on their
charted trajectory.

Forecasting
By increasing the accuracy of estimates-at-complete, project controllers and managers can
gain a lot more insight into the current drivers of cost and schedule overruns. Good progress
measurement is a critical input to the forecasting process. It serves as the comparison
against actual and committed costs that enable project controllers to extrapolate a forecast
using a combination of standard forecasting methods and formulas. Regular, timely updates
aid the project controller by enabling faster response and corrective action to when a
project begins to get off track.
Performance Management
Defining and using key performance indicators (KPIs) to monitor project health and forecast
trends is crucial to take corrective actions. Organizations that use performance information
to manage projects, like the calculations used in Earned Value Management, achieve a 68%
success rate, compared to a 7% success rate for projects that don‘t leverage this data.

Project Administration
This process involves establishing processes and systems that can help team members
communicate and collaborate with each other. The goal is to track status updates, capture
meeting minutes and lessons learned, and manage workflows seamlessly so teams can focus
on actual execution rather than routine tasks.

Project Controls vs. Project Management

The overlap in function between these two disciplines can at times make it difficult to
differentiate between them. Many organizations assign the role of a project controller to
one of the project managers, making this even more confusing. However, it‘s important to
discern the differences between these two in order to fully appreciate the role of project
controls.
Project Management
• Project management is a holistic function that involves managing people, processes and
deliverables in a project through various sub-functions. It focuses on quality and scope, in
addition to cost and schedule.
• The objective of project management is more exhaustive in that it aims to successfully
complete a project given the resources available.

Project Controls
• Project controls are a sub-function and focus on just two parameters: cost and schedule.
People management and quality control, for example, does not fall under the purview of
project controls.
• The main objective of project controls is to minimize the variance in costs and schedule from
what was originally planned.
• Controls acts as a safety harness to project management. Sometimes project managers can
focus almost solely on delivery, which leaves less room to examine costs, deviation from the
project plan and other variables involved. Project controls introduce a necessary reality check
for project managers, giving a more data-grounded view of how the project resources and
objectives are trending over time.
• At its core, project controls are part of a monitoring function that analyzes scenarios and
provides recommendations. A project controller reports on cost and schedule and advises the
project team of potential issues. The actual execution of these recommendations is not done
by the controller, but rather by the project managers.
• Even though controls is a sub-function of project management, project controllers interact
with more than just the project managers that they report to.
A few team members that controllers interact with are:

• Project manager
• Finance team
• Vendors
• Construction manager
• Procurement team lead
• Technical team lead
Importance of Project Controls
• In a 2018 survey, 88% of respondents said they perceive project controls to be important or
critical to the success of enterprise projects.
• The report also confirms the correlation between project controls and success: those that
perceived controls as ‗critical‘ were twice as likely to meet all project objectives. Those who
perceived project controls as ‗not important at all‘ were more than 3 times more likely to fail.
• These results emphasize the significance of controls, especially considering the number of
major deviations from initial project estimates in the past.
• In a PwC analysis of capital projects, six nuclear plants observed an average cost overrun of
157%! In another instance, a refinery project eventually overshot its budget from an initial $4
billion to $12 billion.
• Project professionals know that, whether it‘s a large-scale construction project or the launch
of a new website for a small business, there will always be unexpected delays, additional
costs, or unexpected circumstances. But without project controls to anticipate and resolve
these issues, costs and delays can spiral into huge expenses and affect other areas of the
business.

Benefits of Project Controls

In megaprojects, the various moving parts can make it difficult to stay aligned with the initial
plans. However, close monitoring, analysis, and regulation can keep this in check. Projects of all
sizes, not just large projects, experience significant benefits when controls are properly
executed.
The following are some of the key benefits of project controls:

• Reduced project costs through ability to make timely decisions using KPIs
• Increased project predictability for cost and completion date
• Increased visibility into the financial health of the project at all stages
• Ability to mitigate project scope creep
• Meaningful benchmarking data for future projects via well-structured projects
• Increased margins when working in a fixed-price environment
• Improved reputation for properly managing and controlling projects
• Competitive advantage over organizations with less mature project management
capabilities
• Increased job satisfaction for project team members

Reports That Every Project Controls Team Should Have

• Too often, project controls are perceived as ―back office analytics,‖ without a clear
understanding of how it directly relates back to project performance and ROI. This makes
it difficult for project teams to grab the attention of management.
• However, when recommendations are backed by facts and actionable data, teams are
more likely to embrace them. This is why it‘s essential to build smart, automated and
regular reports into the process.
• Here are a few reports that help to socialize project controls concepts with project teams
and allow everyone to align on the best path forward:
1. Cost Report
• One of the most frequently used tools for communication, a status report should include
all metrics regarding project costs. Examples of metrics on cost include actual budget
consumed so far, committed expenditures—such as contracts signed with vendors for
work yet to be completed—and ratios of actual versus planned work as of a given date. A
staple of the project controller‘s cost report is the S-Curve, visually tracking total
expenditures to date.
• Cost reports can be shared in a variety of formats and frequency: some teams prefer a
daily scrum style, some have their own customized templates sent on a weekly basis, and
some pack them into real-time dashboards. While frequency of reporting has been
shown to improve project performance, all stakeholders should be clear on how to access
the report and how to use the information provided.

2. Change Management Register

• Scope creep is a common challenge for most project managers. A change management
register keeps track of change in scope from the initial statement of work or estimate. It
identifies how much extra cost the project has to incur and how much the project may be
delayed due to the addition in scope.
• This information helps project teams prepare for the impact and communicate that
impact to customers, whether internal or external. Sometimes, those customers may be
willing to cut back on their requests when they understand the implications. It also
provides a formal way to get all parties to review and sign-off on the changes.
3. Risk Register
• A risk register is a document that manages risks and records contingency dollars
associated with known risks.
• It works as a RAID (risk, action, issues, decision) log and is created at the beginning of a
project, documenting risks, assumptions, issues, and dependencies. As a project
progresses, the risk factors can change, and these changes are tracked in the risk
register.
• In large teams, a risk register provides visibility to everyone about the top concern
areas. It lends clarity to stakeholders by addressing what-if scenarios and correlating
these scenarios to their risk quotient. It also builds more predictability into projects, as
team members can review past occurrences of these changes or risks to anticipate
how it may affect this project.

Challenges Within Project Controls

• Despite the growing recognition of controls as a discipline, the questions for
organizations are: How well is it implemented within? Is it bringing in results as
expected? Are these results consistent?
• When projects fail, many organizations may end up blaming the effectiveness of their
project controls. However, this is the time to assess whether the control processes
have been adequately implemented. Let‘s look at a few challenges and obstacles faced
by project teams in implementing controls properly:
1. Lack of commitment and support from senior management:
This is one of the biggest challenges. Control does not simply mean monitoring; while
monitoring is passive, control refers to actively making decisions based on analysis and
reporting. Hence, this cannot be achieved without sufficient authority provided by
leadership. In the absence of autonomy and support, controllers cannot achieve their goals.
Many project controls teams tend to be understaffed or not backed with enough budget to
invest in the right tools.

2. Perception as just another cost function:

As controls do not come into limelight unless things go awry, they can be perceived as an
overhead expense. However, this is far from true. One study on this subject conducted by
IPA Global indicates that while project controls function costs range from 0.5% to 3% of the
project, cost improvement from their best practices can range from 6% to 20%.
Organizations can resolve this perception issue by training project teams and executives of
the potential ROI from controls.

3. Confrontational dynamic:
Functions such as controls and audit are often viewed with a suspicious approach by people
focused on delivery and timelines. By building partnerships rather than a me-versus-you
approach, this can be overcome. It‘s also important for organizations to integrate the
function with other areas of project management. A project controller is not someone who
visits once every few weeks or months with bad news. Rather, the role should be blended
harmoniously into the project lifecycle.
4. Manual and outdated processes:
Even when there is sufficient support from management and awareness in teams about the
importance of controls, the actual implementation may not be keeping pace with the difficult
challenges in projects. Many organizations still use manual processes with cumbersome
spreadsheets to attempt to track and manage risk matrices and change requests. The manual
systems tend to remain siloed and generate disparate data rather than holistic insights. They
also do not provide the required visibility into the big picture.