Project Execution from POME by Gautam Koppala VT

8/9/2019 Project Execution from POME by Gautam Koppala VT

1/127

1

1

Kanaka maha lakshmi Thalli

Be bold when you loose and be calm when youBe bold when you loose and be calm when you

win.win.

POMEPOMEPOMEPOMEPOMEPOMEPOMEPOME0707070707070707

"Changing the Face" can change nothing."Changing the Face" can change nothing.

But "Facing the Change" can change everything.But "Facing the Change" can change everything.


2/127

22


3/127

3

2007,POME,Gautam_Koppala,AllRightsRe

served

KANAKAMAHAL

AKSHMITHALLI

THIS

BOOKISDEDICATED

TOTHEALMIGHTY,WHO

A

LWAYSSH

OWERSHE

RBLESSIN

GSONHER

CHILD

REN.


4/127

4

2007,POME,Gautam

_Koppala,AllRightsReserved

P

ROJECTSAND

OPERATIONS

MANA

GEMEN

TEXPOSED

(POME)

PartPROJECTEXE

CUTION

ACOLLECTIONAMELIORATEDBY

GAUTAMKOPPALAV.T.


5/127

5

2007,POME,Gautam



6/127

6

6


7/127

7

2007, POME, Gautam_Koppala, All Rights Reserved

You are the only person who can revolutionise your life.

You are the only person who can influence your happiness,

your realisation and your success.You are the only person who can help yourself.

Your life does not change, when your boss changes,

when your friends change, when your parents change,

when your partner changes, when your company changes.Your life changes when YOU change,

when you go beyond your limiting beliefs,

when you realize that you are the only one responsible for your life.


8/127

8

2007,POME,Gautam


Copyright2007POME

Allrightsreserved.Nopartofth

isproductmaybereproducedorutilizedinanyform

orbyany

means,

electronicormechanical,includingphotocopy,recording,broadcasting,or

byanyinformationst

orageor

retrievalsy

stem,withoutpermis

sioninwritingfrom

t

heauthorGautam

Ko

ppala.

Allknowled

geinPOMEbookiss

ervicemarksand/ortrademarksoftheaut

horGautam

Koppala.

Exceptasotherwisespecified,names,marks,logosa

ndthelikeusedinth

eeducational/teachin

g

contentof

thesematerialsarein

tendedtobe,andto

thebestofLicensors

[Gautam

Koppalas]

knowledge

andbeliefare,fictitio

us.Noneofthenames,marks,orlogosus

edhereinisintended

to

depictany

pastorpresentindividualorentity,orany

trademark,servicem

ark,orotherprotectable

markofan

yindividualorentity.

Anylikeness,similarityorsamenessbetw

eenanyname,mark,

orlogo

usedhereinbyLicensorandthe

name,mark,orlogo

ofanyindividualore

ntity,pastorpresent

,is

merelycoincidentalandunintentional.Anysuchnames,marks,andlogosusedinthe

educationa

l/teachingcontentof

thesematerialsareu

sedonlytoprovideexamplesforpurposes

of

teachingth

eeducationalcontentofthematerials,andareinnowayintendedtobeusedinany

trademark

senseormanner.

Thenames

ofactualpastorpresentindividuals,entit

ies,trademarks,servicemarks,logosand

thelike

(otherthan

thoseofLicensorusedintheeducational/teachingcontentofthesematerialsareus

edonly

toprovide

examples(includinginsomeinstancesactualcasestudiesbaseduponfactualevents

or

circumstan

cesinvolvingtheindividuals,entities,marks,orlogos)forpurposesofteachingthe

educationa

lcontentofthematerials.Anysuchnames

,marks,andlogosusedinthe

educationa

l/teachingcontentof

thesematerialsarein

tendedandusedsolelyforthepurposeof

providinge

xamplesandcasestu

dies,andareinnow

ayintendedtobeusedinanytrademarks

enseor

manner.


9/127

9

2007,POME,Gautam


VITA:FROMTHEAUTHOR:

Academically,Iam

acum

laude

graduatewithaBach

elorofTechnologydegreeinElectricaland

Electronics

Engineering(B-Tech

E.E.E.)andapostgraduateinMastersinHumanResources

Manageme

nt(M.H.R.M.)andMa

stersofForeignTrade(M.F.T.),allfrom

In

dia.

Myenginee

ringcompletedinar

emotevillageinIndia

,Srikakulam,andits

beenalongjourney

from

there,and

journeystillcontinues.Ifeelthisbookde

monstratesmyability

tomaintaindedication,

motivation

andenthusiasm

fora

projectmanagementoveralongperiodo

ftime.Ibelievethat

in

combinatio

nwithmyextensivebroad-basedoperationsworkexperiencealongwithmydrive,


10/127


11/127


12/127

12

2007,POME,Gautam



13/127

13

2007,POME,Gautam

_Koppala,AllRightsRes

erved

GRA

CEF

U

LEX

ITS

FR

O

MTR

OUB

LED

PRO

J

ECTS


14/127

14

2007,POME,Gautam


erved

Gracef

ulExitsfromT

roubledProjects

Projectscanfailforanynumber

ofreasons...poorde

finition,poorplanning,lackofcommitmen

t....and

thelistgoe

son.Nomatterthereason,whenyoufind

yourselfinthemidstofatroubledproject,you

needaway

out---quickly,clean

lyandwithminimaldamage.

But,beforeyourushtocancelanyproject,youneedtobecertaint

hatcancellationisthebest

andmost

viableoption.

Assumption

:Towarrantatroubledprojectassessmen

t,youshouldhaveclearandcrediblesignsthata

projectisin

trouble-i.e.youarebehindschedule,de

liverablesarenotworkingoutasplanned,

the

projectteam

isnotworkingwelltogether.Toconductaneffectivereviewofthetroubledproject,the

followingquestionsmustbeconsideredandaddressed.

Whyistheprojectfailing?

Aswehave

alreadynoted,proje

ctsmaybeheadedto

wardsfailureforany

numberorcombinationof

reasons.Ifyouaretoreactproperly,youmustbeab

letoreadilyidentifythosereasonsasthey

applyto

aprojectathand.

Thefollowinglistprovidesafewillustrationsofthenum

erouspotentialproblems...

PoorConcept

PoorPlanning

Lack

ofResources

Lack

ofFunding

OverlyAggressiveSchedules

TechnicalProblems

VendorFailures

BusinessPrioritiesHaveC

hanged

Lack

ofSkills

PoorlyDefinedScope,De

liverablesorObjectives

Insu

fficientManagement

Oversight

Lack

ofTeam

Commitment

Lack

ofManagementSup

port

Other.....

Canthisp

rojectbesavedby

anyofthefollowingactions....

Re-workingprojectplans?

Reducingprojectscope?

Reviseddeliverables?


15/127

15

2007,POME,Gautam


erved

Staf

fchanges?

Changingmanagement?

Revisedschedules?

Addingmorefunds?

Reorganizingtheprojectteam?

Stre

ngtheningmanagementoversight?

Som

eothermethod.....?

Iscancellationpossible?

Itmaybed

ifficult,ifnotimpossible,tocancelcertain

projects,nomatterh

owtroubledtheymaybe.

Theseproje

ctsmayjustbetooc

riticalortoovisible.

Inthisinstance,you

willneedtolooktowa

rds

repairasa

solution....takingall

possiblestepstosalv

agetheprojectinlieuofcancellation.

Whatare

thebenefitsofcancellation?

Whenyoucancelaproject,youneedtobesurethatcancellationisthebes

tcourseofaction.Project

cancellation

canyieldmanybenefits,eventhoughits

ignalstheendofapr

eviouslychosenproje

ct

initiative.Whenaprojectiscancelleditcansavemoney,time,andfreeup

resourcestoworkonmore

important,

potentiallysuccessfulprojects.

Doyouha

vecancellationcon

sensus?

Projectmanagersrarelyhavetheabilitytocancelaprojectunilaterally,andeveniftheydid,itwouldbe

unwisetoe

xercisethatpowerwithoutconsultationan

dconsensus.Acance

lledprojectisnotnecessarily

amanagem

entfailure,particularlywhenthecancellat

ionisappropriateandtimely.Butitisimp

ortant

tohavethe

buy-inofallkeyprojectparticipants-spo

nsors,management,

end-usersandteam

members.

Whatisth

ecancellationimpactonthefollowing

....?

ProjectStaff

End-Users

ContractualObligations

RegulatoryRequirements

ITC

redibility

Inte

rnalPolitics

OtherProjectsUnderway

OtherImpactConsiderations....?


16/127

16

2007,POME,Gautam


erved

Willcance

llationbetemporaryorpermanent?

Itmaybep

ossibletoreviveatroubledprojectatalaterdate,whentiming

andcircumstancemayyield

betterresults.

PLANNING

THECANCELLATION:

Shouldyou

rassessmentshowth

atcancellationisthe

best,mostappropriatecourseofaction,th

at

cancellation

shouldbeconducted

inastructured,orde

rlyfashion.....

Prep

areaProjectCancellationStatement,explainingwhy,howand

whentheprojectisto

be

canc

elled.

Consultwithsupportingd

epartmentsasneede

d....(i.e.LegalandH

umanResources)toensure

that

yourcancellationapp

roachisappropriate.

Obtainallnecessarymanagementapprovals.

Informtheprojectteam

andallmajorstakeholders.

Form

allyannouncethepr

ojectcancellationasneededaccordingtothenatureandvisibilityofthe

projectathand.

Re-a

ssignprojectteam

m

emberstootherprojectsortoreturntore

gularworkassignments.

Rele

asecontractorsandt

emporarystaffasneeded.

Com

pleteapostprojectr

eview.

Fina

lizeprojectdocumentationandretainasneededforfutureproje

cts,orforanypotential

projectrevitalization.

ConcludedNote:

Itisimportanttorememberthatprojectcancellationandfailurearenotthesamething,whyyo

umay

sometimes

needtocanceltroubleprojects,thatveryactofrecognitioncan

beasignofmanagement

strengthan

dsuccess.


17/127

17

2007,POME,Gautam


erved

POMEPrescribe:

Givemorethanyou

plannedto.

G

POMEPrescribe


18/127

18

2007,POME,Gautam


erved

PRO

JECT

ME

THOD

OLO

GY


19/127


20/127

20

2007,POME,Gautam


erved

methodolog

ylowerscost,reduce

sresourcerequireme

ntsforsupport,minim

izespaperwork,and

eliminatesduplicatedefforts.

Figure:Integratedprocesses

(past,present,andfu

ture).

Thecharacteristicsofagoodmethodologybasedupon

integratedprocessesinclude:

Arecommendedlevelofd

etail

Use

oftemplates

Stan

dardizedplanning,sc

heduling,andcostco

ntroltechniques

Stan

dardizedreportingformatforbothin-hous

eandcustomeruse

Flexibilityforapplicationt

oallprojects

Flexibilityforrapidimprovements

Easy

forthecustomertounderstandandfollow

Readilyacceptedandusedthroughouttheentirecompany

Use

ofstandardizedlife-cyclephases(whichca

noverlap)andendofphasereviews

Base

duponguidelinesratherthanpoliciesand

procedures

Base

duponagoodworkethic

Methodolog

iesdonotmanagepr

ojects;peopledo.Itisthecorporateculturethatexecutesthe

methodolog

y.Seniormanagementmustcreateacorp

orateculturethatsup

portsprojectmanagement

anddemonstratesfaithinthemethodology.Ifthisisdonesuccessfully,the

nthefollowingbenefitscan

beexpected:

Faster"timetomarket"throughbettercontroloftheproject'sscope

Loweroverallprojectrisk


21/127

21

2007,POME,Gautam


erved

Betterdecision-makingpr

ocess

Grea

tercustomersatisfac

tion,whichleadstoincreasedbusiness

More

timeavailableforva

lue-addedefforts,ratherthaninternalpoliticsandinternalcompetition

Onecompanyfoundthatitscustomerslikeditsmetho

dologysomuchandthattheprojectswere

so

successful,

thattherelationshipbetweenthecontractorandthecustomerimprovedtothepoint

where

thecustomersbegantreatingthecontractorasapartnerratherthanasas

upplier.

POMEhase

stablishedprojectandworkforcemanagem

ent,projectengineeringandprojectcontr

olsas

coreprofessionalcompetency,whichisneededtoaccomplishstrategicbusinessobjectivesanda

competitive

advantageinourma

rketplace.Theseare

combinedintotheProjectMethodology(PM

)to

providethe

frameworkthatwillf

acilitateindividualandcorporatesuccessinprojectexecution.P

Mhas

evolvedove

rtimetakingthebes

tofestablishedproce

duresfrom

pastprojecteffortsandexperiences,

combiningt

hem

withadvancedc

onceptsandstate-of-

the-artpracticesthat

retainsourstatusof

best-in-

classcompaniesinprojectexecu

tion.ThePMapproachtoprojectexecution

addressesthefollow

ing

aspects:

Developingandassigning

professionalprojectmanagers,engineers

andprojectcontrols

spec

ialists.


22/127

22

2007,POME,Gautam


erved

Establishingandusingac

onsistentprocessand

acommonapproach

toprojectmanagem

ent,

engineeringandcontrolsforallprojectteams

Addr

essingprojectengine

eringdisciplinesinclu

dinghardwareandsiteservices,systems

engineering,processcont

rolapplicationsinclud

ingbatchandadvanc

edapplications,safety

systemengineering,operatoreffectiveness,asseteffectiveness,plantbusinessprocess

effec

tivenessexpandinga

sneededtocoverCo

mpany'sportfolio

Clearidentificationofresu

ltingdeliverablesand

thestakeholders'rolesandresponsibilitie

s

Prov

idinganalysisofdata,productionofinform

ation,standardrepor

tingandaccuratepre

diction

ofpr

ojectcost,scheduleandperformance

Prov

idingeffectivetools,techniques,training,performancemeasure

sandcontinuous

impr

ovement

Align

ingprojectmanagem

entservicestoprovideoversightandongo

ingsupportforproject

man

agersandmaintenanceofthePMmethodo

logy

PMisamaj

orpartoftheoverall

methodologyrespons

iblefortheanalysiso

fdata,productionof

information

andtheaccuratepre

dictionofprojectcost,scheduleandperformance.ProjectContr

ols

assistsprojectmanagementwith

theestablishmentan

dcontrolledadjustmenttotheprojectbas

elines.

ProjectControlsistheinterfacet

oAccountingFinance

toensuretheprojectisfollowingcorrect

accounting

procedures.TheAcco

untingProceduresan

dbasicsareillustrate

dinAccountingChapters.

Haveagrip

onit.ProjectManage

rsstrengthisingras

pingthecommercialaspectsratherthanany

others.

PMProces

sMaps

Theoverallprojectdeliveryprocessisdefinedbyphas

es,supportingproces

sesandinterfacesas

shown

below.The

projectdeliveryproce

ssiscommonlydescribedbyahighlevel,

4-PhasemodelofConcept,

Planning,Im

plementationandCloseout.Theterm

LeadershipTeamisused

toincludetheProject

ManagerplustheLeadsassigned

from

ProjectControlsandProjectEnginee

ringwhoeachhavea

rolein

theoverallmanagementandcon

troloftheproject.Th

eseactivitiesaresho

wninyellow.Thetechnical

efforttobe

supportedbyEngineeringDisciplinesthatproviderefinedtools,

bestpractices,exam

plesand

acommunitythatownsandmain

tainsthisdisciplines

pecificcontent.Theo

verallprojectdelivery

processiss

hownbelow:


23/127

23



24/127

24

2007,POME,Gautam


POMEPrescribe:

AboutAcros

sBorders-It'sagloba

lworld!

Whet

herworkingwithoffshoreteamsorjustadiverse

groupathome,today'sprojectenvironmentis

multicultural.Beopentoandawareofyourprojectsta

keholders'cultures.Not

onlyshouldwerespectour

collea

gues'cultures,butweshouldunderstandandEXPERIENCEthem.Goo

utforDimsumwiththeteamor

learn

anewphraseinanotherlanguage.(allpm.com)

Cross-culturalglobalrelations

:

a)Planextratimetomodelrequirementswhenworkingcross-culturally.

While

modelingisanexcellen

ttoolforovercomingsomecross-culturalcommu

nicationissues,multi-cu

ltural

projectmanagementmaystill

takeextratimetogettherequirementsandensu

rethatimportantfactsa

re

captu

red.

b)Itisimportanttoplanmo

retimeforcapturingreq

uirementswhenworking

inmulti-culturalenvironments.

c)MeetinginPersontoDevelopRelationshipsSavesTimeandMoneyinth

eLongRun.Insomecultures

tasks

arecompletedbasedon

establishedrelationship

sand,ultimately,trust,ratherthansimplybeing

drivenby

schedules.Attemptingtoforgeaheadwithtasksbeforespendingsocialtimew

ithclientscanwellleadto

incom

pleterequirements.Whileitmaynotbestandardpracticealloverthewo

rld,whenPMsareworkingin

some

otherculturestakingthetimetomeetface-to-facecansavetimeandmo

neyforyourprojectand

organ

ization.

POMEPrescribe


25/127

25

2007,POME,Gautam


Enjoylifetoday

yesterd

ayisgone,

tomorrowmay

nevercome.

EPOMEPrescribe


26/127

26

2007,POME,Gautam_Koppala,AllRightsReserved

OU

TSOU

RCED

PR

O

JECT

WORK:

C

HOICE

OR

NE

CESS

ITY?


27/127

27


Outsou

rcedProjectW

ork:Choiceo

rNecessity?

Projectsma

ybeoutsourcedfora

nynumberofreasons,eitherbychoiceor

necessity.Butonethingis

clearoutsourcingdoesnotequalsimplicity.Whileou

tsourcingmayeliminatecertainin-house

headaches,

theaddedoutsourcin

goverheadcreatesa

newlayerofcomplex

ityandresponsibility

forthe

internalprojectmanager.Justco

nsidertheseexample

s:

Whenyouo

utsourceaproject(in

part,orasawhole),

youwillhaveto.....

Make

theoutsourcingdecision.

Find

therightcontractor/c

onsultant.

Nego

tiateandmanageproposals,bidsandcontracts.

Rely

onanexternaloperationwhereyouhavelittleinfluence.

Clearlydefinethe"visionthing"(youwonthav

etheluxuryofinternalfamiliarityand"cultural"

assumption).

Manageanadministrative

overheadforaccountspayablepurposes.

Educ

atethecontractor/consultantoninternalp

rocedures,goalsand

operationalrequirements..

Trackprojectprogresswit

houtdirectauthority,

relyingonprojectstaffthatmaynotbe"v

isible"

toyo

u.

Manageinternalmoraleandlackof"in-houseo

wnership"issues.

Plan

forknowledgetransfertomaintaindeliverablesonanoperation

albasis.

Asthislistillustrates,theoutsourcedprojectpresents

alitanyofuniquecha

llenges,whichmustbe

recognizedandaddressedtoensuresuccessfulresults.Aswithmostmanag

ementdecisions,

"outsourcing"viabilitycanbestbedeterminedthrough

astructuredprocessforanalysisandplanning.

TheOutsourcingDecision


28/127

28


Manyprojec

tsareoutsourcedfor

avarietyofreasonssometimesoutofchoice,andsometimes

,outof

necessity.W

henoutsourcingisa

matterofnecessity,thereasonswillusual

lybeobviousandclear-cut:

Lack

of"in-house"timedu

etootherprojectsandworkloaddemands

.

Higher"in-house"costsdu

etolearningcurvesandconflictingworkplacepriorities.

Lack

ofrequiredinternals

kills,resourcesande

xperience.

Politicalconsiderations(i.e.thesensitivenatureofaproject).

Whenprojectoutsourcingisama

tterofchoice,thede

cisioncomesdownto

abalancingofcosts

and

benefits.Th

iscost/benefitanalysiscanbesummarized

viathefollowingseriesofdefiningquestio

ns:

Willoutsourcinghelpyoutodelivertheproject

onafastertimetable,andisafaster"time

to

mark

et"animperativefor

thisproject?

Willoutsourcinghelpyoutodelivertheproject

atlowercosts,andis

"lowestcost"aprimarygoal

forthisproject?

Willoutsourcinghelpyoutodeliverbetterresults(improveddelivera

bles)?

Willoutsourcinghelpyoutorealizeshortterm

productivitybenefits?

Willoutsourcinghelpyoutorealizelongterm

p

roductivitybenefits?

Whataretherisksanddrawbacksofoutsourcin

g?

How

dotherisksofoutsourcedprojectdelivery

comparewiththerisksof"in-house"proje

ct

delivery?

Asthesequestionsareappliedan

dconsideredintheo

utsourcingdecisionp

rocess,project

characteristicsmustalsobeexam

ined.Certaintypeso

fprojectswillbemor

esuitedtooutsourcin

gthan

others.Whileindividualcircumsta

nceswillvary,thefo

llowingelementscan

beusedasanalytical

benchmarks

:

Expertise.Whatisthelevelofexpertiserequiredtocompletetheproject.In-housestaff

may

lackthenecessaryskillsfo

rahigh-techprojects.

Nov

elty.Whatistheleve

lofinnovationrequiredtocompletethispr

oject?In-housestaff

maybe

need

edforhighlyuniqueprojects,leavingmore

routineprojectstoo

utsourcedproviders.

OrganizationalReach.H

owdeepisthe"orga

nizationalreach"ofthisproject?Projectsh

aving

anextensiveimpactoninternaloperationsmay

betoocomplexforo

utsourcingintheentirety.

Dep

endencies:Whatisthelevelofdependencyon,andconnection

with,otherprojects?

Linked

proje

ctsmaynotbewells

uitedtoindividualizedoutsourcing.

OutsourcingOptions


29/127

29


Considering

theissues,character

isticsandinternalinfluences,outsourcingdoesnothavetobeanallor

nothingproposition.Outsourcing

canbeusedasanop

erationalalternative,

oritcanbeusedast

rategic

toolforprojectdelivery.Forexam

ple,youmaychoose

tooutsourceanentireproject(managementand

all),andjus

tmaintainan"in-hou

se"coordinationresponsibility.Or,youcan

choosetooutsource

specific

projectelem

ents,bydeliverableorphase,basedonne

eds,benefits,costsa

ndtiming.

Tofacilitate

thisdecision-making

process,projectscan

beviewedasaserie

sofoperationalcomp

onents:

TheVisionThing(StrategiesandTactics)

DaytoDayManagement(

IssuesTrackingandResolution,Baselines,ResourceManageme

nt)

Plann

ing(Scheduling,TasksandResourceAlloc

ation)

Deliv

erablesDesignandD

evelopment

Testi

ng(DeliverablesVerification)

Docu

mentation(ProjectDocumentsandTechnicalDocuments)

Administration(Logistics,Purchasing,Paperwor

k)

Implementation(Installation,SupportandOwn

ershipTransition)

Eachofthes

ecomponentsmustbeexaminedtodetermineoutsourcingviab

ility:

1.Canthiscomponentbeou

tsourced?

2.Shou

ldthiscomponentbe

outsourced?

3.How

willanypartiallyouts

ourcedcomponentsb

eintegratedintothe

projectasawhole?

Outsourcin

gforSuccess

Outsourcing

successisnotguaranteedwhentheinitialoutsourcingdecision

ismade.Managemen

t

standardsandbestpracticesmus

tbeappliedtotheou

tsourcedprojectwith

thesamedegreeof

enthusiasm

asthetraditionalin-h

ouseproject.Thefollowingguidelinesprovideyouwithabestp

ractices

snapshotfortheoutsourcedproject:

Make

fullyinformedoutsourcingdecisions,analyzingneeds,costsan

dbenefits.

Cons

idertheoutsourcingintangibles(employee

moraleandprideof

ownership).

Clearlydefineallprojectg

oals,requirementsan

ddeliverables.

Choo

setherightoutsourcingpartnerconsiderin

gprojectneeds,experience,andcapabilities.

Docu

mentallexpectations

andobligationsinfo

rmalcontractsandStatementofWorkdoc

uments.

Identifyalllikelyrisksand

developprojectcont

ingencyplansshould

outsourcingproblemsarise.

Keep

projectchangestoa

minimum.Continualchangescanwreckhavoconanoutsource

d

proje

ctwhere"requirements"aredefinedaspa

rtofacontractualobligation.

Sche

duleandholdregular

statusmeetingswith

contractorsandconsultants.Makesureth

at

week

lystatusreportsare

includedinallcontractsandagreements.I

ftheprojectworkisbeing

done

off-site,schedulereg

ularvisitstocontractorlocationsifatallp

ossible.


30/127

30


Keep

in-housestaffinform

edofalloutsourcing

issuesthatmayimpa

ctinternalprojectwo

rk.

Besu

retoconductanin-h

ousereviewofalloutsourcedprojectstoidentifysuccesspoints

,

problemsandtolearnfrom

theexperience.

Insummary

,outsourcingisatoo

lforprojectdelivery,

andaswithanyothe

rtool,itsusemustbe

carefullywe

ighed,plannedandm

anagedforsuccess


31/127

31

2007,POME,Gautam_Koppala,AllRightsRese

rved

TIME

SHE

ETS

3 TTmicceLtTeTfaNSTdNrttT


32/127

32


rved

TimeSheetsMonitoring:

Thefollowingformatmethodologyhasbeenenclosed.

Rulesrelatedtothetimereporting(bymeansof

man-hourstobechargedtoproje

cts)areanimportantpreconditionforproperProjectControlling.This

isusedform

onitoringthe

Pr

oductivityandtheusageoftheindividualresources.Thisisab

asefor

costandPro

ductivityvariancesanalysis.Internalcostofdeputationshall,th

erefore,becalculatedand

chargedtot

heorder,basedondefinedcoststructuringandmonthlytimesheetspreparedbythe

engineers,inlinewiththeratesc

ircular.Theseshould

beauthorizedbythe

ProjectManager/Group

Leader.The

costestimationmust

beguidedbyTimePlanCatalogue,previousexperience/repea

tjobs

takennoteo

f.

Themonthly

timesheetsfillingin

&monitoringbygrou

pleaderswillassistinstreamliningthecost

estimation/a

ctualcostduringoffe

rstage&alsoorderstage.

Theenginee

rshouldkeepatrack

ofthetimespentfor

thevariousactivities

onadaytodaybasisand

fillupthesa

mefrom

theserecord

swhilefillingupthe

timesheet.Theextra

hoursarealsotobe

filledin

aspertheir

classificationforeffec

tivemonitoring.

Normally,timesheetsbeenfilled

andsentthroughPMISorsomeotherERP.

Startwithth

erecordingofeveryo

nestime.

Timerecordingalsohastheadvantagethatitappliest

oeveryoneintheorg

anization,from

theC

EO

downtothe

shopfloorassistant.

Ifthepresidentdoes

it,thenwhyshouldn

tI?

Nowtimere

cordingalsoisntallt

hatsimple,becausethereshouldbesome

uniformityinwhatpe

ople

recordtime

against.Anecdote:I

mbuildingacathedralvs.Im

haulingbricks.Recordingtime

thereforerequiresacentraldefinitionofwhatpeoplecanrecordtimeagains

t:approvedprojects,

or

tacticalaims

,orwhatever,tosay

whattheyhavebeen

busywith.

TimeSheetsSampleFormat:

3 P


33/127

33


rved

POMEPrescribe:

Dontgiveu

panddont

give

in.

D

POMEPrescribe

3


34/127

34

2007,POME,Gautam_

Koppala,AllRightsRese

rved

ISSU

ES

MA

NAGEMEN

T

3

IsIsoLodansumOwitdreJuthA


35/127

5

2007,POME,Gautam_


rved

ssuesManagement

ssueshap

pen.Asanyprojec

tproceeds,questio

nsandproblemsarise,andifthecour

seor

outcomeoftheprojecthangs

inthebalance,thenan"issue"isborn

.

ookingatthisdefinition,itappea

rsasifprojectissues

andrisksareonean

dthesame.Althoughthe

istinctionsmaybesubtleinnatu

re,issuesdifferfrom

risksintermsofpred

ictabilityandmanagement

pproach.T

hefactthatissueswillariseispredictable,

butthespecificsubs

tanceofanygivenissueis

ot.Risksa

repredictablecircumstances,thosewhich

shouldbeidentifiedb

eforeaprojectbegins.As

uch,longtermstrategiescanbe

developedtoavoids

aidrisks,allowingfor

theapplicationofdefined

managemen

tsolutionsshouldthe

riskberealized.

Ontheotherhand,issuescanpopupatanytimedurin

gaproject,andmus

tbedealtwithquickly,

withoutthebenefitofpre-defined

solutions.Typically,

projectissuesinvolvetheprojectdeliverable

tself,inthe

form

ofunexpectedt

echnicalproblems,incompatibilities,bugsorotherconflicts.Ho

wever,

uringthecourseofaproject,itislikelythatotherissueswillalsoarise,relatingtoprojectsched

ules,

esources,m

aterials,finances,or

otherunexpectedchangesintheprojecte

nvironment.

ustbecause

youcan'tpredictissues,doesn'tmeanyo

ushouldn'tbeprepar

edtohandleissueso

nce

heyarrive.

Everyprojectshould

beginwithadefined

processforissuesma

nagement.

Aneffective

issuesmanagementprocessshouldcoverthefollowingbases:

ProjectPartneringFramework

36

A

tomloPWa

nIsprIs

an

IsIsIsIsIs


36/127

6

2007,POME,Gautam_


rved

Goals:whatareyoutryingtoaccomplishwiththeprocess?Inalllik

elihood,yourissuesprocess

shouldbedesignedtoensurethatallissuesare

identifiedandresolvedinatimelyfashion,

keepingallpartiesinforme

dasneededtogetth

ejobdone.

Capabilities:whattoolsw

illbeusedtoraise,r

esolve,andtrackissu

esastheyariseandasthey

areclosed?

Orig

ination:howwillissu

esberaisedtothepr

ojectmanager?

Evaluation:howwillissue

sbereviewedandas

signed?

Trac

king:howwillissues

bemonitoredandtra

ckedfortimelyresolu

tion?

Esca

lation:howwillissue

sbeescalatedinthe

eventtheycannotbe

resolvedandclosed?

lloftheserequirementsshouldbereflectedinyourissuesmanagementmechanism,consistingofthe

oolsandproceduresbywhichiss

uesareraised,resolv

edandmanaged.Yo

urissuesmanagement

mechanism

willhavetwoelements....aphysicalelement(software,onlineform,paperform)anda

ogicalelement(managementstrategiesandprocedure

s).

hysicalIs

sueManagementM

echanisms:

Whetheryou

trackprojectissues

onapieceofpaper,o

rinadatabasesyste

m,youwillneedtocollect

ndtrackthefollowingtypesofin

formation:

ssueType:tocategorizeissues

foreasierassignmen

tandtracking.Issue

categoriesmayvary

be

rojecttype,butcanusuallyinclu

dethefollowing:

Technical:anissuerelatingtothetechnicalaspectsoftheprojectprocessordeliverable.

Finan

cial:anissuerelating

toprojectfunding,s

pendingorbudget.

Resource:anissuerelatin

gtoprojectresources(equipmentorpeop

le).

Schedule:anissueinvolvingtheprojecttimeline.

Other:auniqueissuespec

ifictotheprojectathand.

ssueDesc

ription:toidentifythespecificnatureand

impactoftheissue(whatistheissueallabout

ndhowdoe

sitimpacttheprojec

tintermsofdelivera

bles,schedule,costs,

scopeorotherparam

eter?).

ssueOriginator:whofirstraise

dtheissue?

ssueDate:thedatetheissuew

asraised.

ssueOwn

er:whoisresponsible

forissueresolution?

ssueIden

tifier:auniquecode

ornumbertotrackissuestatus.

ssueStatus:totrackissuestatus:

Open

:Issueresolutionha

snotyetbegun.

InProgress:Issueresolut

ionisunderway.

Close

d:Theissuehasbee

nresolved.

Escalated:Theissuehasbeenescalatedforfur

thermanagementaction.

37

IscoTaRe

On

na

un

ca

ha

mof

Amca

An

firgiv

pe

ac

we

Co

As

imreprP

O


37/127

7

2007,POME,Gautam_


rved

ssuePriority:toensurethatis

suesaredealtwithappropriatelyconsideringimpactand

onsequence

s:

High

Priority:Issueshavin

gamajorimpactontheproject,requiring

immediateattention.

Mediu

m:Issueshaveam

oderateimpactontheproject,requiringat

tentioninthenearfu

ture.

Low:

Issueshavinganinsi

gnificantimpactonth

eproject,requiringa

ttentionatsomefutu

redate

iftim

epermits,ornotata

ll.

argetCom

pletionDate:toest

ablishatimeframefo

rresolution.

esolution

Description:toidentifythestepstakentoaddressandresolvetheissue.

nceanissu

eisraisedanddocum

ented,resourceassignmentsmustbemade.Dependingonthe

atureoftheissue,anyprojectte

ammemberorresou

rcemaybeinvolved.

Forexample,an

nexpectedbuginapieceofsoftwarewilllikelybeass

ignedtoatechnicalteam

member,whomaybe

alledupontoresolvetheproblem

,orwhomayhavet

otracktheproblem

w

ithavendor.Onthe

other

and,anissueofanadministrativ

enature(i.e.thelackofavailablefacilities

forstagingnewequipment)

aybeassignedtoafacilitiesma

nager,whomayothe

rwisehavelimitedinvolvementinotheras

pects

ftheprojec

t.

keychallengeinissuesmanage

mentisknowinghow

tomakeeffectiveissuesassignments.Sin

ce

ostissues

mustberesolvedquickly,withlittlefanfare,itisimportanttoassignissuestothosewho

anhittheg

roundrunningwhene

verpossible.

notherkey

challengeintheissuesprocessistotrack

issuestatus,from

thepointatwhichissuesare

rstraiseda

ndassigned,through

toresolution.Depen

dinguponthecomplexityandvisibilityofany

venproject,youmayneedtoholdongoingissuesme

etings..Issuesmeetingscanbringanimportant

erspectivetotheprojectprocess

,providingtheoppor

tunityfortheentireteam

toconsiderissue

s,plan

ctionsandtakea"bigpicture"perspective.Theseme

etingscantakeplace

asneeded,onadaily,

eeklyormonthlybasis,toensur

ethatissuesareproperlytrackedandmanaged.

oncluded

Note:

syouwork

toresolveissues,youneedtolookatsolu

tionsthatcansolvetheproblem,withthe

least

mpactonth

eprojectschedule,budgetandscope.Whenhandledquickly,is

suesoffertheopportunityto

efineandim

proveprojectresults

.Inaddition,anyorganizedissuesmanag

ementrecordwilllike

ly

rovidevaluableinsightsandexperiencesforyournextproject.

OMEPrescr

ibe

38


38/127

8

2007,POME,Gautam_


rved

C

onsiderthingsfrom

every

angle.

C

POMEPrescri

be

39


39/127

2007,POME,Gautam_


rved

PRO

JECT

EVAL

UATI

ON(FOR

MA

C

RO

PRO

JE

CTS)

40

Pr

Pu

The

ope

lea

Do

The

orig

#


40/127

2007,POME,Gautam_


rved

roject

EvaluationTemplates(forMacroProjects):

Initiating,

Planning,

Executing,

Controlling

EvaluateKeyAspects

ofProject

TransitionProjectto

Operations

DocumentLessons

Learned

Closing

Project

Evaluation

rposeof

theProjectEvaluationTemplates

epurpose

oftheProjectEvalua

tiontemplatesistoevaluatetheproject,transitiontheprojectt

o

erations,p

rovideabasisforfee

dbacktotheprojectteam

andmanagement,todocumentthelessons

rnedtoim

provetheprocessan

dfutureprojectpotential.

ocumentChangeActivity

efollowingisarecordofthech

angesthathaveoccu

rredonthisdocumen

tfrom

thetimeofits

ginalappr

oval

Change

Description

Auth

or

Date

41

This

add

DE

Doc

Inte

egreeof

attainmentofobjective

uccessFactors

atureandcausesofvariances

GREEOF

ATTAINMENTOFB

UDGETOBJECTIVES

atethePla

nnedCostandFundin

gfortheproject,asapprovedintheInteg

ratedProjectPlan.S

tate

eActualCostandFundingatcompletion.Document

andexplainallcostandfundingvariances,

ludingapp

rovedchangestothe

costbaseline.

42

Exp

Int

Se

So

Ha

Ma

Su

Fa

Te

sTra

Co

To

Fun

Ge

No

Ce

Ot

To

DEG

Com

any


42/127

2007,POME,Gautam_

Koppala,AllRightsReserved

penditur

es($000)

Planned

Actual

Variance

Explanation

ternalSta

ffLabor

ervice

oftwareTo

ols

ardware

aterialsan

d

upplies

cilities

elecommunication

aining

ontingency(Risk)

otal

ndingSo

urce($000)

Planned

Actual

Variance

Explanation

eneralFun

d

on-Genera

lFund

entral

ther

otal

GREEOF

ADHERENCETOSC

HEDULE

mparethe

approvedscheduleb

aselineagainsttheactualcompletiondates.Documentandexp

lain

yschedule

variances,including

approvedchangesto

theschedulebaseline.

43

DEG

Doc

Sch

DEG

Doc

DEG

Indi

decr

DEG

List

cont

1.

2.

3.TR

A


43/127

2007,POME,Gautam_

Koppala,AllRightsReserved

GREEOF

SATISFACTIONOF

USERREQUIREMEN

TS

cumentan

ychangestotheReq

uirementsandtheirimpactonPerformanc

e,Cost,Qualityor

eduleBaselines.

GREEOF

REALIZATIONOFANTICIPATEDBENE

FITS

cumentth

eprimarybenefitsob

tainedbytheproject.

GREEOF

PRODUCTIVITY-EXPERIENCED

icatethe

productivityleveloftheprojectandfactorsthatcausedincreasedperformance,aswellas,

reasedpe

rformance.

GREEOF

DELIVERYPROJECTDELIVERABLES

themajo

rProjectDeliverables

andthedateeachw

asacceptedbytheuser.Identifyany

tingenciesorconditionsrelatedtotheacceptance.

D

eliverable

Date

Accepted

Contingencieso

rConditions

ANSITIO

NTOSERVICESANDMAINTENANCE

44

Desc

belo

serv

wha

Sam


44/127


cribethe

planforservicesandmaintenanceofthe

product,good,orser

vicedeliveredbythe

project

ow.Inad

dition,statetheprojectedannualcosttoo

perateandmaintain

theproduct,good,or

vice.Ifth

eoperationandmain

tenanceplanisnotinplace,whatistheta

rgetdatefortheplanand

tistheimpactofnothavingo

perationsandmainte

nancefortheproduct,good,orservicesin

place.

mpleFormatofProjectsHanidng

overfromProjectstoS

ervices:

Gautam Koppala ORG


45/127

45


Project Name:

JOB HANDOVER TO FACILITIES/ SERVICES GROUP

TO: Service Manager DATE:

CC(on e-mail): AMS Head, Operations Head FROM(name): Gautam Koppala

JOB NUMBER CUSTOMER

Operations must prepare the following documents for handing over the job to Facilities/ Services. This

document and Project handover to Customer Form to be sent to Service Support/ Facility Manager for

Records and Installed Base Updation

S.N. DOCUMENTS LIST Attached Y/N Remarks/ Give reason if any

item is NOT attached

1

Customer P.O. with all subsequent

amendments, add-on orders, Spare Orders,

Operation Contract/services

2

Project Close-out form with all attachments :

Duly signed by client/consultants and

concerned Proj. Engr/Manager.

3Billing BreakUp Cum BOQ with complete part


46/127

46


3nos. for Main, Add ON and Spares orders.

4Copy of complete set of Engineering

Documentation, 'As Built' drawings.

5

Operations Manuals / Maintenance

Manuals/catalogs/specs of various field

instruments as submitted to customer.

6

Complete System Software and Application

Software on CD /Drivers/Any other & ALL

PASSWORDS

7

List of spares available at site &

Recommended list of spares, if any given to

the customer

8Statutory Approvals (such as NOC< Fire

Officer's approvals etc.) ,if any.

9

All important communications (e-mail/letter

copies to/from customer) during project

execution

Verbal / unrecorded commitments or understanding with customer/ consultants or any other important info. which may be

useful for AMS to provide better service to customer/including any scope for add-on etc.


47/127

47


Is Handover to customer done with a snaglist?

No Is there an internal snag list? No

Date committed by PM to clear the snag list Date committed to clear internal snag

list

Has one set of this document & Project close-

out form duly signed by customer given to

Service/ Facility Support Manager for records

YES RSM must confirm this from SSM Sharjah before signing this Handover

document.

(Signature ) (Signature)

Date of HandOver agreed

by PM and

RSM

Project Manager Regional Service/ Facilty Manager ( RSM)

48

SERV

Defin

theap

priori

what

Eme

Expe

Inte

Serv

Softw

othe

Hard

Mate

Supp

Facil

Tele

sTrain

Cont

Tota

Fund


48/127


VICEAN

DMAINTENANCEP

LAN:

ewhatwillbemaintained,wh

owillberesponsible

formaintaining,how

changeswillbemadeto

pplicatio

n,howregularupgra

destoinfrastructure,

software,utilities,an

dhardwarewillbe

itized,whatbusinessunitisresponsibleandanyot

herserviceagreemen

ts.Youmaywantto

define

arefun

ctionalityenhanceme

nts,Operationsenh

ancements,Defect

enhancementsand

ergencyFixesandhowthese

requestswillbeprioritizedinthefuture.

OperationsandMaintenanceCost

enditures($000)

Yr1

Yr2

Yr3

Yr4

Yr5+

E

xplanation

rnalSta

ffLabor

vices

wareTo

ols/

ers

dware

erialsan

d

plies

lities

communication

ning

tingency

(Risk)

al

dingSo

urce($000)

49

Gene

Non-

Fede

Othe

Tota

RELE

Listth

wastr


49/127

2007,POME,Gautam_Koppala,AllRightsReser

ved

Yr1

Yr2

Yr3

Yr4

Yr5+

E

xplanation

eralFun

d

-Genera

lFund

eral

er

lASEOFPROJECTRESOURCES

heResourcesusedbythepro

ject.Identifytowhomeachresourcewas

transferredandwhen

it

ransferr

ed.Accountforallprojectresourcesutilizedbytheproject.

Resou

rce

(Desc

ribeornamethere

source

used)

Personor

OrganizationWho

ReceivedResource

TurnoverDate

ProjectTeam

Custom

erSupport

Facilities

50

TRAN

Identi

typeo


50/127


ved

Equipment

Softw

areTools/Others

Other

NSITIO

NOFPROJECTDOCUMENTATION

fyallprojectdocumentation

materialsstoredinth

eprojectlibraryorotherrepository.Identifythe

ofmediausedandthedispos

itionoftheprojectdo

cumentation(seeCommunicationsPlan).

Report(s

)an

d

Docume

nt(s

)

MediaUsed

Storage

Lo

cation

Disposition

51

LESSO

Identif

andC

include

Statemen

1.

2.

3.

4.


51/127


ved

ONSLEARNED

fyprim

aryLessonsLearned.

LessonsLearnedshouldbestatedintermsofProblems(or

issues)

CorrectiveActionstaken.

S

iteanyreferencesthatprovideaddition

aldetail.

Reference

smay

eprojectreports,plans,issu

elogs,changemanagementdocuments,o

rLesson-learnedchecklist.

ntofLesson

Refer

ences

Correctiv

eActions

52

Proj

Comp

addre

appli

colum


52/127


ved

ectCloseoutTransitionC

hecklist

pletetheStatusandCommentscolumn.IntheStatuscolumnindicat

e:Yes,iftheitemha

sbeen

esseda

ndcompleted;No,if

itemhasnotbeenaddressed,orisincomplete;N/A,iftheitem

isnot

icabletothisproject.

Prov

idecommentsorde

scribetheplantoresolvetheiteminthelast

mn.

Item Status Comments/


53/127

53


Plan to Resolve

1 Have all the product or service deliverablesbeen accepted by the customer?

1.1 Are there contingencies or conditions related

to the acceptance? If so, describe in the

Comments.

2 Has the project been evaluated against each

objective established in the product

description and Integrated Project Plan?

3 Has the actual cost of the project been tallied

and compared to the approved budget?

3.1 Have all approved changes to the cost baseline

been identified and their impact on the project

documented?

4 Have the actual milestone completion dates

been compared to the approved schedule?

4.1 Have all approved changes to the schedule

baseline been identified and their impact on

the project documented?



54/127

54


Plan to Resolve

5 Have all approved changes to the projectrequirement been identified and their impact

on the performance, cost, and schedule

baselines documented?

6 Has operations management formally accepted

responsibility for operating and maintaining

the product(s) or service(s) delivered by the

project?

6.1 Has the documentation relating to operation

and maintenance of the product(s) or

service(s) been delivered to, and accepted by,

operations management?

6.2 Has training and knowledge transfer of the

operations organization been completed?

6.3 Has the projected annual cost to operate and

maintain the product(s) or service(s) been

approved and funded? If not, note and

explain who is responsible to resolve.

7 Have the resources used by the project been

reassigned to other units or projects?



55/127

55


Plan to Resolve

8 Has the project documentation been archivedor otherwise disposed as described in the

project communication plan?

9 Have the lessons learned been filed with the

Project Management Office? Projects

Department?

56

Appro

Proje

Proje

Maint

Mana

Mana

POME


56/127

2007,POME,Gautam_K

oppala,AllRightsReserved

ovals

Pos

ition/Title

Signature/Printed

Name/Title

Date

ectManager

ectSponsor

tenance/Service

ager/Agency

ageme

nt

ELIG

HTERVEI:

57

POME


57/127

2007,POME,Gautam_K


EPrescribe

B

elieveiny

ourself.

B

POMEPrescribe

58


58/127

2007,POME,Gautam_K


PER

CENT

AGEOF

CO

MPLE

TION

(POC)

59

Perc

Forab

qualify

project

tothem

accoun

expens

Forsuc

estimat

Priorto

passes

beene

Therea

method

expens

isassc

Ifexpe

soonas

expens

expecta

simply

Thenth

estimat

exactly

accoun

shifting

thistyp

Howto

JonesB

estimat

transac

1.

2.

3.


59/127

2007,POME,Gautam_K


entageofCompletion

bookstoreitiseasytotellw

henacustomerhas

takenpossessionofthemerchandise,thus

ingth

etransactionasasa

le.However,considerlong-term

projectss

uchaslargeconstruc

tion

ts.Is

itrighttowaituntilthelastbrickislaidbe

forerecognizingthesale?Remember,according

matchingprinciplerevenuesandtheirassociate

dexpensesshouldbe

recognizedinthesame

tingperiod.Thecontractorhasexpensesthroughoutthecourseofth

eproject.Shouldthe

se

sesbeheldoffthebooksu

ntiltheprojectiscom

pletedaswell?

chprojects,thematchingp

rincipleisessentially

turnedaroundandtheexpensesareused

to

tetheassociatedrevenues

.Thisprocessiscalle

dthepercentageofc

ompletion(PoC)method.

othe

projectsstartthecon

tractorestimatesthe

costsateachstageo

ftheproject.Astime

and

thestagesarecompleted,thecontractorrecognizesanestimateoftherevenuethat

has

arnedbasedonthepercen

tageoftheestimated

coststhathavealreadybeenincurred.

aretw

opotentialissuesforinvestorsincompan

iesthatusetheperce

ntageofcompletion

d.Botharisefrom

thefact

thatthecontractoris

recognizingrevenue

onthebasisofestimated

ses.O

fcourse,actualexpe

nsesmaybehighero

rlowerthantheestim

ate,evenifthecont

ractor

crupu

lousaspossible.

enses

turnouttobehigher

thanestimated,thepastexpensesrecogn

izedwillbetoolow.A

s

sthe

contractorrealizesth

ereisacostoverrun

hemustrecognizealloftheunderstatedp

ast

seinthecurrentreporting

period.Thiscancausesignificantearnings

shortfallsrelativeto

ations.Itisverydifficultfo

rinvestorstoanticipatesuchevents,soin

steadmanyinvestors

disco

untthepricetheyarewillingtopayforacompanythatextensivelyusesthePoCme

thod.

hereisthepossibilitythat

thecontractorisnotentirelyscrupulous.Inadditiontothediffic

ultyin

tingc

ostsattheprojectsoutset,atanystagea

longthewayitcanb

edifficulttodetermin

e

yhow

muchoftheprojectiscomplete.Ifthecontractorwantstoboo

strevenueinthecurrent

tingperiodhecouldmake

anaggressiveestima

teastohowmuchoftheworkiscomplete

,

grevenuethatshouldberecognizedlaterintothecurrentperiod.Inv

estorsmaybeableto

spot

peof

activitybymonitoringtheunbilledreceivablesaccountforsuddenspikes.

oUs

ePercentage-of-Co

mpletionAccountin

g

Buildersjustobtainedacontractfor$500,000tobuildahomeforMr.&Mrs.Smith.Jones

teshistotalcostonthejobtobe$400,000.Duringthefirstmontho

fthejob,thefollowin

g

ctions

occur:

Cash

of$10,000ispaidfo

rpermits,feesandotherstartupcosts.

Anin

voiceisreceivedfrom

theexcavationsubc

ontractorfor$10,000

.

Thefirstprogressbillingispreparedfor$60,00

0.

60

Ifthea

undere

Re

Gross

Undert

($60,00

1.

2.

Byexam

reflects

receive

5%com

Howeve

month.

($100,0

Howeve

outcom

Fewcor

estimat

Percent


60/127

2007,POME,Gautam_K


above

transactionswereth

eonlyonesJonesBuildershadforthemonth,itsincomestatem

ents

each

accountingmethodw

ouldlooklikethis:

Cash

Accr

ualCompleted

Contract

%of

C

ompletion

venue

$0

$60,000

$0

$25,000

Cos

ts

10,000

20,000

0

20,000

Pro

fit$(10,000)

$40,000

$0

$5,000

thea

ccrualmethod,revenueearnedequalsthe

amountinvoicedont

hefirstprogressbillin

g

00).Revenueunderthepe

rcentage-of-completionmethodwascomp

utedasfollows:

Calc

ulatewhatpercent

ageofthejobisco

mplete.

Calc

ulatetheamounto

frevenuetobeear

ned.

Coststodate/totalestim

atedcosts=%comp

lete

$20,000/$400,000=5%

complete

Cont

ractamountx%com

plete=revenueearn

ed

$500

,000x5%=$25,000

minin

gthefourincomesta

tements,youseetha

tthepercentage-of-completionmethodbe

st

sthe

company'srevenue,costsandgrossprofit

fortheperiod.Ifthe

presidentofJonesBu

ilders

dan

accrual-basisstatement,hemightthinkth

ecompanyisreallyp

rospering(thejobis

only

mplet

e,andthecompanyalreadymade$40,000).

er,th

isstatementdoesnotgiveatruepictureo

fthecompany'sprofitabilityasoftheend

ofthe

Becausethejobwasonly

5%complete,only5

%($5,000)ofthetotalprojectedgrosspr

ofit

000)

hasbeenearned.

er,th

ecostsandrevenues

calculatedinthisme

thodareatbeststillestimatesofthejob's

true

me.Fo

rthisreason,caresh

ouldbetakenwhendeterminingjobprogr

ess.

rpora

teutilizesastandard

processmakingchan

gestotheconventionalPOCforallproject

tesatcompletionorITC(I

ndicatedTotalCost).

tage

ofCompletion(POC)P

rocessandisdesigne

dto:

bea

GlobalProcessforallofprojects,leanedbyPOME.

establishaStandardTerm

inologyforthePOCp

rocess

61

ThePOC

ofappro

revenue

from

co

standar

pending

identify

systema

PoCPo

POMEs

(PBS).

project

Inaddit

thePBS

Projects

policyw

ThePro

PoCadj

system,

(Monthl

Allproje

Deta

Doc

Deta

follo

CC


61/127

2007,POME,Gautam_K


CPro

cessisdesignedtom

eetthemanagementandinternalcontrolrequirementsforthe

level

oval

ofchangesinaprojectPOCcostbasedon

thefinancialimpactt

otheapprovedcosta

nd

ebud

get(controlbudget)

oftheproject.Thep

rocessrequiresthatt

heProjectPOCbede

rived

ostandscheduleanalysispertheProjectManag

ementandProjectCo

ntrolsmethodsand

rdsin

ordertorepresentthemostlikelycostou

tcomeoftheproject(excludingthebenefitof

gcha

ngeordersuntilthey

arebooked,unlessrequiredbycontractto

bepaidifincurred)and

variationsasquicklyasp

ossible.Theprocess

alsorequiresthatallProjectPOCsbe

atica

llyreviewedthroughtheMonthly,Executiv

eandGatingReview

processes.

olicy

:

PoC

requiresthatallprojectsmeetingthecrite

riaforinputintotheProjectBalancedScorecard

Forprojectsmeetingthis

criteria,noPOCcost

adjustmentmaybeb

aselinedinthelocal

acco

untingsystem

priort

oobtainingallofthe

requiredapprovalsof

thePOCcostadjustm

ent.

tion,

everyprojectPOCco

stbudgetmustbeva

lidatedeachmonthbytheProjectManagerin

Sand

thereviewdatesfor

Monthly,ExecutiveandGatingReviewsmustbeupdatedinthe

PBS.

sfallingbelowthecriteria

forinputintothePBS

arestillrequiredtofollowtheguidelinesinthis

withrespecttodetermination,reviewandappro

valofPoCs.

oject

ManagerisresponsibleforthevalidityoftheirprojectPoCcostbudget,ensuringthat

every

ustm

enttotheirprojecth

astherequiredappro

valspriortobaselininginthelocalaccoun

ting

,and

thattheirprojectissystematicallyreviewedinthethreeprojec

treviewprocesses

y,ExecutiveorGating).

ectP

oCadjustmentsrequirethefollowinganaly

sistobecompletedb

eforeapproval:

ailhoursandcostbymajo

rEstimateToComplete(ETC)task

umentedmitigationaction

stakenand/orplannedwithresponsibility

andduedatesidentified

ailof

hoursandcostchangebymajorPoCtask,includingreasonsforchangecategorized

as

ows:

ContractT&C's

Customer

62

ECPHQSSST

Process

TheProj

complet

Manage

Thisapp

adjustm

required

financia

represen

Shoulda

totheo

cannotb

Financia

theproj

Project

Project

regardle

takepla

Leaderl

pre-defi

requirem


62/127

2007,POME,Gautam_K


Estim

ate

CustomerExpectations

Proposal

Hard

ware/Software

Quality/re-work

Sche

dule

Scop

e

SubContractorsor3rdparty

Technology

sDescription:

ject

Managerisresponsibleforinitiatinganden

suringcompletionof

thePoCprocess.Upon

tionofthePBSinputsthe

requireddocumentsaretobesubmittedt

otheProjectControls

men

tfortheirrequiredfu

nctionalreviewanda

pproval.

provalistoverifythatthe

standardmethodsan

dtoolswereeffectivelyusedtoderivethe

POC

ment.

UponapprovaltheP

oCadjustmentisforwardedtoCompanyM

anagementfortheir

dbusinessreviewandapp

rovals.TheBusiness

Reviewersmustdete

rminetheultimate

ltreatmentofPoCadjustmentsfrom

taskingprojectteamswithrecoverytargetsand

ntingthepotentialriskin

quarterlyrepresentat

ionletterstotakingt

headjustmenttothe

P&L.

any

approverfindsufficientreasonnottoapprovethePOCcostadju

stmentitistobereturned

rigin

atorforre-workand

re-submittalortobe

filedintheprojectarchiveasrejectedifit

bere-worked.OncetheP

oCadjustmenthasfinalapprovalitistob

esubmittedtothelo

cal

alAn

alyst/Accountantforentryintothelocalpr

ojectaccountingsystemandre-baselining

of

ectbudget.

tRe

views:

Managementisresponsibletoensurethatprojectreviewsareoccurringonasystematicbasis,

esso

fwhetheranadjustm

entisdeemedcurren

tlynecessary.Atlea

st3levelsofreview

must

ace.

Thefirst,monthlyreviewsaretoincludem

anagementupthrou

ghtheRegionalProje

ct

level.Thesecond,gating

reviews,areconduct

edwhenlargeprojectsincontractvaluere

ach

ned

stagesofprojectexe

cution.ThisprocessismaintainedbyProjectControls.Participation

mentsforgatingreviewsa

redocumented.The

third,quarterlyreviews,areconductedbasedon

63

theselec

ProjectC

basedon

PoCAdj

Cur

Presiden

CFO

GlobalO

Contract

Regiona

Regiona

PoleCon

PoleProj

Regiona

Program

ProjectM

PoleEng

PoleFina

Regiona

LocalFin

GlobalP

PoleProj

GlobalP

PoleProj


63/127

2007,POME,Gautam_K

oppala,AllRightsReserv

ed

ctionofthePoleFinanceManagerincoordinationwiththePoleProjectDirectorandPole

ControlManager.Criteria

aredocumentedbut

flexibilityexiststose

lectadditionalprojects

ntherequestoftheregio

nalorglobalmanagementteams.

justmentSampleApprovalMatrix:

rrentquarterPOCadjustm

entimpact(+/-)

Very

La

rge

Projects

Large

Projects

M

edium

Projects

Small

Projects

nt

X

X

OperationsVP/GM

X

tsVP

X

lVP/GM

X

lGe

neralManager

X

ntractsDirector

X

ject

Director

X

lPro

jectLeader

X

m

Ma

nager/PMCManager

X

Manager

X

gineeringDirector

X

ance

Director

X

lFin

anceManager

X

nanc

ialAnalyst

X

Proje

ctFinanceDirector

X

ject

FinanceManager

X

Proje

ctControlsDirector

X

ject

ControlsManager

X

64

ProjectC

Theexpe

review(m

following

Project

Concurre

X%(Xst

managem

Project


64/127

2007,POME,Gautam_K


ed

Cont

rolsLead

X

ecta

tionisthattheindividualapprovingtheseadjustmentsmustatt

endanappropriateproject

mon

thly,gating,quarterly)andhasreviewedthePOCchangeapprovalform.Inaddition

,the

gspecificfunctionalroles

andresponsibilitiesm

ustbeinoperationd

uringthereview:

Ma

nagement

ence

withtheprojectRev

enue,MarginandPer

centageofCompletio

n(PoC)confidenceof+/-

tand

sfortheprojectsacc

eptabledeviation)andthatthebusinessstrategyandproject

men

tmethodologybeing

employedontheprojectensureeffectiveprojectmanagement.

Controls

65

Concurre

toolsbein

accurate

Finance

Concurre

thedeter

Reviewed

FinanceP

Engineer

Concurre

appropria

Regional

Toasses

ProjectM

Contracts

Toensur

optimize

orders.

Complia

PoChmo

metrics:

Average

%ofProj

%ofPlan

%ofPlan

Inadditio

analysis

followed-


65/127

2007,POME,Gautam_K


ed

ence

withtheprojectPoC

confidenceof+/-X%

andthattheprojectcontrolprocessesan

d

ngemployedontheprojecteffectivelytrackprojectperformance,facilitateprojectcontroland

lyforecasttheprojectes

timatetocomplete.

ence

thatthePoCpresentedisreasonableconsideringallknownitems.Alsoresponsible

for

rminationofhowtoaccountforanyPoCadjus

tmentinthefinancialswithinapprovedpolicy.

dallitemsincludedonPr

ojectBalancedScorecardaswellasaddressedrelevantitemsfr

om

ProjectReviewChecklist.

ring

Management

ence

withthetechnicals

tateoftheprojectandthatthetechnicalaspectsoftheproje

ctare

atel

yaccountedforinthe

projectPoC.

Ma

nagement

sth

efullrangebusiness

impactofPoCadjustmentsandforecasts

andworkwithFinanceand

Managementtodeterminehowtotheyarereflectedintheregionalbusinessforecast.

srethePoC

reflectsthe

requirementsofthe

contractualtermsandconditions,asw

ellas

theProjectspositionundertheagreementforissuessuchasscheduledelaysandc

hange

anceReporting:

onth

,ProjectControlssha

llbepublishinganPO

CScorecardthatmustincludethefollowin

g

PoC

AdjustmentandStandardDeviation

Monthly

jectswithPoCValidated

byProjectManageme

ntandProjectContro

ls

Monthly

nvs

.ActualofProjectsw

ithscheduledExecutiveReviews

Quarterly

nvs

.ActualofProjectsw

ithscheduledGating

Reviews

Quarterly

on,

ProjectControlsmustmaintaindocumenta

tionofPoCapprovals

includingtherequire

d

and

reviewparticipation/

signatures.Inaddition,actionlogsmustb

eprepared,publishedand

-up.

66

Checksa

ThePOC

balances

responsib

ProjectC

isbeingd

functioni

withProje

POCAud

Toensure

tomateri

ofprojec

checksa

processa

POMEPr


66/127

2007,POME,Gautam_K


ed

andBalances:

andProjectReviewProcessesaredesignedto

ensurethateffective

businesschecksand

are

institutionalizedwith

intheimpliedProjects.TheProjectManagementfunctionis

blefordeliveringtheprojectsafely,ontime,w

ithinbudget,andperclientrequirements.

The

ont

rolsfunctionisresponsibleforensuringthattheprojectplanning,trackingandforeca

sting

don

eincompliancewiththeProjectControlss

tandardsandtools.TheProjectFinance

isresponsibleforensurin

gthatthefinancialrepresentationofthep

rojectisinaccordanc

e

ect

FinancialTermsandCorporatePolicies.

dit:

eth

erearenosystemic

failuresintheexecutionofthePOCPolicy

thatwouldexposePr

ojects

ialfinancialrisk,theProjectFinancefunctionmustconductbothsc

heduledandrandom

audits

ctsonaglobalbasis.

Inadditiontotheprimaryobjective,these

auditsmustreinforcethe

nd

balancesintheorganization,andidentify

opportunitiestocon

tinuouslyimprovethePOC

and

theexecutionofproj

ects.

res

cribe:

Av

oidnega

tivesour

ces,

people,places,thin

gs

andhabits.

A

POMEPrescribe

67

PCO


67/127

2007,POME,Gautam_K


ed

PERC

ENTA

GEO

F

MPL

ETIO

N(PoC)

VS.CONT

RACT

COM

PLETION

METHO

DS

68

Percen

Inthecon

uncomple

onlyrepor

balancesh

billings.W

asincome

incomest

ofworkco

ofcostsin

projectwa

expected

$1,000,00

$200,000


68/127

2007,POME,Gautam_Koppala,AllRightsReserv

ed

ntageOfCompletion(PoC)Vs.completed-c

ontractMethods

ntextofprivateconstruc

tionfirms,particularproblemsariseinthe

treatmentof

ted

contractsinfinancia

lreports.Underthe"

completed-contract"method,incomeis

rte

dforcompletedproje

cts.Workonprojects

underwayisonlyrep

ortedonthe

heet,representinganas

setifcontractbillings

exceedcostsoralia

bilityifcostsexceed

Whe

naprojectiscomple

ted,thetotalnetprofit(orloss)isreportedinthefinalperiod

e.U

nderthe"percentage

-of-completion"meth

od,actualcostsarereportedonthe

tate

mentplusaproportionofallprojectreven

ues(orbillings)equa

ltotheproportion

om

pletedduringtheperiod.Theproportionofworkcompletediscomputedastheratio

ncu

rredtodateandthetotalestimatedcosto

ftheproject.Thus,if

twentypercentofa

as

completedinaparticularperiodatadirect

costof$180,000andonaprojectwith

revenuesof$1,000,000

,thenthecontractre

venuesearnedwould

becalculatedas

00(

0.2)=$200,000.Thisfigurerepresentsa

profitandcontributiontooverheadof

-$180,000=$20,000fortheperiod.Notethatbillingsandactualreceiptsmightbe

69

inexcess

organizati

billingsan

Asanothe

contract"

flowfora

Thesuper

year2.Un

(60%of$

contract"

The"perce

representi

resultingp

occurwith

of-comple

obscureth

observers

untilamin

statement

thereare

taxesone

theprojec

offorty-se

millionint

method.

Itshouldb

estimateo

accounting

exampleo

accounting


69/127


ed

or

lessthanthecalculat

edrevenuesof$200,

000.Onthebalancesheetofan

on

usingthepercentage

-of-completionmethod,anassetisusually

reportedtoreflect

ndtheestimatedorcalculatedearningsinexc

essofactualbillings.

re

xampleofthediffere

nceinthe"percentag

e-of-completion"and

the"completed-

me

thods,considerathr

eeyearprojecttocon

structaplantwithth

efollowingcash

co

ntractor:

YearContractExpensesPaymentsReceived

123Tota

l

$700,000

180,000

320,000

$1,200,000

$900,000

250,000

150,000

$1,300,000

rvis

ingarchitectdeterminesthat60%ofthef

acilityiscompleteinyear1and75%in

nde

rthe"percentage-of-completion"method,

thenetincomeinye

ar1is$780,000

$1,300,000)lessthe$70

0,000inexpensesor

$80,000.Underthe

"completed-

me

thod,theentireprofitof$100,000wouldbereportedinyear3.

entage-of-completion"m

ethodofreportingperiodearningshastheadvantageof

ing

theactualestimated

earningsineachperiod.Asaresult,theincomestream

and

pro

fitsarelesssusceptib

letoprecipitateswin

gsonthecompletion

ofaprojectascan

hthe"completedcontractmethod"ofcalculat

ingincome.However,the"percentage-

tio

n"hasthedisadvantageofrelyingupones

timateswhichcanbe

manipulatedto

he

actualpositionofacompanyorwhichare

difficulttoreproduce

byoutside

.T

herearealsosubtletiessuchasthedeferralofallcalculatedincomefrom

aproject

nim

um

thresholdofthe

projectiscompleted.

Asaresult,interpretationoftheincome

tandbalancesheetofa

privateorganizationisnotalwaysstraightforward.Finally,

taxdisadvantagesfrom

usingthe"percentag

e-of-completion"met

hodsincecorporate

exp

ectedprofitsmaybecomedueduringtheprojectratherthanbeingdeferreduntil

ctc

ompletion.Asanexa

mpleoftaximplicatio

nsofthetworeportingmethods,astudy

eve

nconstructionfirmsconductedbytheGen

eralAccountingOfficefoundthat$280

tax

esweredeferredfrom

1980to1984throu

ghuseofthe"completed-contract"

be

apparentthatthe"percentage-of-completion"accountingprovidesonlyarough

oftheactualprofitorstatusofaproject.Also

,the"completedcontract"methodof

gisentirelyretrospectiv

eandprovidesnogu

idanceformanageme

nt.Thisisonlyone

oft

hetypesofallocation

sthatareintroduced

tocorrespondtogen

erallyaccepted

gp

ractices,yetmaynotfurtherthecauseof

goodprojectmanage

ment.Another

70

commone

purchasec

severecha

profitover

Today'sm

organizatio

relevantfo

Manageme

reducecos

theyrequi

variancest

Themanag

distributed

notrepres

Exa

Asanexam

completing

jobsaresh

of-complet

Asshown

Underthe


70/127


ed

exa

mpleistheuseofeq

uipmentdepreciation

schedulestoallocate

equipment

costs.Allocationsofcostsorrevenuestoparticularperiodswithinaprojectmaycause

angesinparticularindicators,buthavenorealmeaningforgoodm

anagementor

rtheentirecourseofaproject.AsJohnsonandKaplanargue:

an

agementaccounting

information,drivenbytheproceduresand

cycleofthe

on'sfinancialreportingsystem,istoolate,to

oaggregatedandtoo

distortedtobe

ormanagers'planninga

ndcontroldecisions..

..

entaccountingreportsa

reoflittlehelptooperatingmanagersastheyattemptto

sts

andimproveproductivity.Frequently,the

reportsdecreasepro

ductivitybecause

re

operatingmanagers

tospendtimeattemp

tingtounderstandan

dexplainreported

thathavelittletodowiththeeconomicandtechnologicalrealityo

ftheiroperations...

ge

mentaccountingsyst

emalsofailstoprovideaccurateproductc

osts.Costare

dtoproductsbysimplisticandarbitrarymeasures,usuallydirectlaborbased,thatdo

en

tthedemandsmade

byeachproductonthefirm'sresources.

am

ple:Calculatingne

tprofit

mp

leofthecalculationofnetprofit,suppose

thatacompanybega

nsixjobsinayear,

gt

hreejobsandhaving

threejobsstillunder

wayattheendofthe

year.Detailsofthes

ix

howninTablebelow.Whatwouldbethecom

pany'snetprofitunder,first,the"percentage-

tio

n"and,second,the"

completedcontractm

ethod"accountingco

nventions?

TABLE1

2-7ExampleofFinancialRecordsofProje

cts

NetProfitonCompletedContracts(A

mountsinthousandsofdollars)

Job1

Job2

Job3

TotalNetProfiton

CompletedJobs

$1,436

356

-738

$1,054

StatusofJobsUnderway

Job4

Job5

Job6

OriginalContractPrice

ContractChanges(C

hangeOrders,etc.)

TotalCosttoDate

PaymentsReceivedorDuetoDate

EstimatedCosttoCo

mplete

$4,200

400

3,600

3,520

500

$3

,800

600

1

,710

1

,830

2

,300

$5,630

-300

620

340

5,000

in

Tableabove,anetprofitof$1,054,000wa

searnedonthethreecompletedjobs.

"c

ompletedcontract"m

ethod,thistotalwouldbetotalprofit.Und

erthepercentage-

71

ofcomplet

thisamoun

ContrEs

Esti

Similarcal

forJob5a

completion

theevento

yearwere

.


71/127


ed

ionmethod,theyear's

expectedprofitontheprojectsunderwayw

ouldbeaddedto

nt.Forjob4,theexpectedprofitsarecalcula

tedasfollows:

Currentcontract

rice=Oriinalcontract

rice+ContractCha

nes

=4,200+400=4

,600

Creditordebittoda

te=Totalcoststoda

te-Paymentsreceive

dorduetodate

=3,600-3,520=

-80

ac

tvalueofuncompleted

work =Currentcontract

price-Paymentsreceivedordue

=4,600-3,520=

1,080

Creditordebittocom

e=Contractvalueo

funcompletedwork-

EstimatedCostto

Complete

=1,080-500=580

stimatedfinalgrossprofit=Creditordebitto

date+Creditordeb

ittocome

=-80.+580.=5

00

m

atedtotalroectcos

ts=Contract

rice-Gross

rofit

=4,600-500=4,100

EstimatedProfittoda

te=Estimatedfinalg

rossprofitxProportionofworkcomplete

=500.(3600/4100

))=439

cu

lationsfortheotherjobsunderwayindicat

eestimatedprofitsto

dateof$166,000

nd-$32,000forJob6.

Asaresult,thenetprofitusingthe"percentage-of-

n"

methodwouldbe$1,

627,000fortheyear.Notethatthisfigure

wouldbealteredin

of

multi-yearprojectsin

whichnetprofitson

projectscompletedo

runderwayinthis

claimedinearlierperiods

72


72/127


73

Estimat


73/127


ESTIMATINGA

ND

T

RACKIN

G

PR

O

JECT

COS

TS

t

ingandTracki

ngProjectCosts

74

Duringthee

recordkeep

Managemen

thatoccura

withaproje

projectas"

budgetand

andtheext

Inthischap

monitoring

managemen

straightforw

managemen

Hence,man

projectman

discusssom

toprovidea

TheCostC

Thelimited

primarilyin

areasforco

becomesim

anddesign

projectand

fulfillingthe

searchingfo

Finally,the

Projectman

usedinman

activities.F

aresult,pro

reportsont

toinferthe

process.Co

usefulpurpo

controlproc


74/127


executionofaproject,

proceduresforprojectcontrol,Percentage

ofCompletionand

pingbecomeindispensabletoolstomanager

sandotherparticipan

tsintheProject

ntprocess.Thesetools

servethedualpurpo

seofrecordingthefinancialtransactions

as

wellasgivingmanagersanindicationoft

heprogressandprob

lemsassociated

ec

t.Theproblemsofpr

ojectcontrolareaptlysummedupinanolddefinitionofa

a

nycollectionofvague

lyrelatedactivitiesthatareninetypercentcomplete,over

late."Thetaskofpro

jectcontrolsystemsistogiveafairindicationoftheexistence

e

ntofsuchproblems.

pt

er,weconsidertheproblemsassociatedw

ithresourceutilization,accounting,

a

ndcontrolduringaproject.Inthisdiscussion,weemphasizetheproject

ntusesofaccountinginformation.Interpretationofprojectaccou

ntsisgenerallynot

warduntilaprojectisc

ompleted,andthenitistoolatetoinfluenceproject

nt.Evenaftercompletionofaproject,theaccountingresultsmay

beconfusing.

na

gersneedtoknowhowtointerpretaccountinginformationforthepurposeof

nagement.Intheproce

ssofconsideringmanagementproblems,however,weshall

meofthecommonacco

untingsystemsandc

onventions,although

ourpurposeisnot

a

comprehensivesurve

yofaccountingproce

dures.

ControlProblem

o

bjectiveofprojectco

ntroldeservesempha

sis.ProjectCostcontrolproceduresare

tendedtoidentifydeviationsfrom

theprojectplanratherthanto

suggestpossible

os

tsavings.Thischaracteristicreflectstheadvancedstageatwhichprojectcontrol

mp

ortant.Thetimeatw

hichmajorcostsavin

gscanbeachievedisduringplanning

fortheproject.During

theactualprojectex

ecution,changesare

likelytodelaythe

leadtoinordinatecostincreases.Asaresult,thefocusofprojec

tcontrolison

eoriginaldesignplansorindicatingdeviationsfrom

theseplans,r

atherthanon

orsignificantimprovem

entsandcostsavings.

issuesassociatedwith

integrationofinform

ationwillrequiresom

ediscussion.

na

gementactivitiesandfunctionalconcerns

areintimatelylinked,

yetthetechniques

nyinstancesdonotfac

ilitatecomprehensive

orintegratedconsiderationofproject

o

rexample,scheduleinformationandcostaccountsareusuallyk

eptseparately.As

ojectmanagersthemselvesmustsynthesize

acomprehensivevie

wfrom

thedifferent

th

eprojectplustheiro

wnfieldobservations.Inparticular,manag

ersareoftenforced

c

ostimpactsofschedulechanges,ratherth

anbeingprovidedwithaidsforthis

om

municationorintegrationofvarioustypes

ofinformationcanserveanumberof

oses,althoughitdoes

requirespecialattent

ionintheestablishmentofproject

ce

dures.

75

Themanage

projectman

overallfate

Toid

Toes

Totr

Step#1Id

Whilecostf

projectcost

ResourceCo

Salar

Bene

Outs

Temp

Over

AssetCosts

implementp

Hard

Softw

Perip

Infra

Telec

Insta

OverheadC

completion,

Offic

Prem

Supp

ProjectSpec

caninclude:

Trave

Meal

Meet

Print

Step#2Co


75/127


ementofprojectcosts

canbethemostcom

plicated,political,(an

dtedious)elementofthe

na

gementprocess.But

,costshavetobecon

trolled,forthesakeofITcredibility,andt

he

o

fcurrentandfutureprojects.

Therearet

hreeprimarystepsto

projectcostestimating:

dentifyprojectcostfactors.

stimatecostvaluesan

dcreateabudget.

ra

ckcostsandmonitor

variances.

dentifyingCostFactors:

a

ctorswillvarybased

onprojectcharacteristicsandbusinesscirc

umstances,ingeneral,

s

canbeviewedfrom

fourbasicperspective

s:

osts:thecostsinvolve

dinstaffingaproject,whichcaninclude:

ryefits

o

urcingContracts

p

oraryStaffing

rt

ime

:

thecostsofassetac

quisition,usuallyinvolvingtangibleassets

thatareusedtocrea

teor

projectdeliverables,w

hichcaninclude:

dw

are

w

are

pherals

as

tructure

communicationsEquipment

allationTools

o

sts:thecostsinvolvedinmaintainingthe

projectenvir