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Project Controls Expo, Australia – 26th November 2019Melbourne Cricket Ground, MelbourneProject Controls & Earned Value ManagementApplication on Mega ProjectsSangrah BhatiaProject Controls Manager – VIC / SA / TASJohn Holland
About the SpeakerSangrah Bhatia – Project Controls Manager, John Holland Over twelve years of experience in the Engineering & Constructionindustry across Project Controls, Earned Value Management (EVM), RiskManagement and Systems Implementation Experience on projects in the Infrastructure, Building, Defence, Rail, Oil& Gas, Mining and Utilities sectors ranging from 1m to 2bn Focus on implementation and execution of best practice ProjectControls and Earned Value Management systems, processes andmethodologies Member of Engineers Australia, Australian Cost Engineering Society(ACES) and Australian Institute of Project Management (AIPM) Holds a Bachelor of Engineering (with Honours), Graduate Certificate inEngineering Maintenance Management and an MBA
What is Earned Value?An objective assessment of the value of workcompleted to dateEV Budget x % Complete
What is Earned Value?What?A way to capture a project’s scope, expressing itsprogress as money (relating to the cost budget)and phasing it over time.ScopeTimeCostCompare Value and Cost Budgeted cost of work performed Actual cost to dateCompare Earned against Planned Budgeted cost of work performed Budgeted cost of work planned “Volume of Work” not Critical Path
Why Earned Value? Provides early warning system fordeveloping project issues Facilitates proactive management andproject optimisation Drives achievement of progress “volume”month by month Integrates Scope, Cost and Time elementstogether and promotes objectivemeasurement of work performed Time and cost assurance to stakeholders Provides an independent assessment of yourforecast based on cost performance andprogress to date Helps to eliminate project surprises
Approach Establish WBS and CBS Leverage Existing Information Choose Objective MeasuresEstablish an agreed Work Breakdown Structure and CostBreakdown Structure for the project. Integrate with bothProgram and Cost EstimateUtilise existing project information such as the BaselineCost Estimate and Baseline Program Schedule to createEVM modelChoose objective progress and performance measures(Quantities) on project and establish appropriate “Rulesof Credit” for capturing progress avoiding % Spent and %Complete where possibleInputs ActivityLabourPlantMaterialSubcontract Activity or ProcessOutputs Commodity orProduct (e.g. m3of concrete)
Using the DataCompare Earned Value (EV) with Cost Compare Earned Value (EV) against Actual Cost atmultiple levels Cost Performance Index (CPI) Earned Value / ActualCost. Ratio of value of work performed compared to spend Use Cost Variance (Earned – Actual) as a guide in projectforecasting. Look at % Cost compared to % EVCompare Earned Value with Plan Compare Earned Value (EV) against Planned Value (PV) Gives an independent check of schedule on a “volume ofworks” basis Schedule Performance Index (SPI) Earned Value /Planned Value Can we achieve the work to go? Is a step changerequired?
The Journey at John Holland3018 10B20 100%Projects acrossInfrastructure,Building, RailMonthsValue of Projectswhere EVMimplementedNumber of EVMexperts acrossthe organisationLeadershipCommitmentSUCCESS
System Selection John Holland has selected ControlPro as thestandard Project Controls and Earned ValueManagement system for all projects ControlPro is a cloud based online ProjectControls and Earned Value Managementsystem that is flexible, quick to implementand interfaces with existing John Hollandsystems ControlPro has been a trusted partner andhas been instrumental in the successfulimplementation of Project Controls andEarned Value Management on all projects The platform has proven to be stable, robustallowing for generation of key Earned Valuemetrics and trends through multipledashboards and reports
Mega Projects Mega projects defined as 1B and overthree to five years in duration Providing objective data to challengedelivery teams is critical Understanding of what has been achievedto date and the project going forward Understanding the challenge ahead interms of month by month spend andearned required Delivering a successful mega project ishighly dependent on achieving EarnedValue (progress) and spend targets monthin and month-out over a long period of time
Implementation on Mega ProjectsSystems Financial (ERP) System - PCR Planning and Scheduling – P6 EVM System - ControlPro Quantity Tracking – Microsoft ExcelProcess Project Controls Plan Consistent WBS / CBS Integration of Scope, Cost, Time Objective Progress Measurement Clearly Defined Month End ProcessPeople Executive Leadership Project Leadership Project TeamThe most critical factor in success!
Implementation on Mega Projects Early engagement of ProjectControls Dedicated Project Controls team Senior and Project leadershipmust understand EVM, believe inthe data and endorse itthroughout the project Correct integration of Cost Codestructure, Estimate and Program isessential to success
Implementation on Mega Projects Break down Mega Project intoindividual “Sub Projects” Each “Sub” project contains relevantcost codes, activities, budgets andobjective progress measures(Quantities) Ensure clear link with the programSchedule to enable accurate TimePhasing and generation of PlannedValues Utilise meta-data effectively to enablegeneration of different filters andreporting lenses
Importance of Design Design phase can “make or break”your project Critical to accurately measureDesign progress objectively Vital in gaining trueunderstanding of Design cost andschedule performance from earlystages of the project Adopt a weighted stage gateapproach to objectively measureDesign packages and deliverables
StructureLevel of Detail - Rules of ThumbPer 1B of project: 1000 Cost Codes 2000 Activities (ControlPro) 15,000 – 20,000 Activities(Primavera P6)MainProjectProjectGroupControlAccount 1.1Activity1.1.1Task 1.1.AThe overall projectHigh level grouping on projectEquivalent to Cost CodesLevel that work is measured at.Quantity based measureOnly used where progress istracked by weighted stage gateapproach
Using Meta Data Apply Meta Data to produce different lensesand views of reporting Filter out ‘noise’ to really understand monthin and month out targets Select and generate Earned Value Histogramfor: Sub Project Function / Discipline Activity Responsible Person Partner (for Alliance and JV) projects Other criteria and filters
Updating EVM System
Example – Project Overview
Example – Project Overview
Example – Project Overview
Performance Summary Dashboard
Track Quantities
Track CPI and SPI Trends
Earned Schedule Analysis
Leadership Feedback“We are committed tomaking Earned ValueManagement a success inour organisation”“We have never had thismuch visibility on ourprogress to date as wedo now”“I rely heavily on the EarnedValue report and data to tellme the clear picture on myproject”- General Manager- Project Manager- Construction Manager“Industry leading in terms ofunderstanding project costand schedule performance”“The filtering of data inreporting is extremelyuseful for our project”- Operations Manager- Project Manager“This is very accurate interms of showing our truecost and scheduleperformance to date”- Commercial Manager
Lessons Learned People engagement and buy in is the most importantfactor to success. Early engagement of ProjectControls and close collaboration with Project team iscritical Senior and Project leadership must endorse andunderstand EVM, believe in it and act upon it to besuccessful Accurate and robust link to both Estimate andProgram is critical An “appropriate” level of detail in terms of trackingprogress is vital to efficiency and success Using objective measures (Quantities) to trackprogress and weighted stage gate approach to trackDesign progress A clear understanding of month in and month outearned and spend targets will result in trulyunderstanding progress to date and the work to go
Thank You
Ratio of value of work performed compared to spend Use . Cost Variance (Earned -Actual) as a guide in project forecasting. Look at % Cost. compared to % EV . Compare Earned Value with Plan Compare Earned Value (EV) against Planned Value (PV) Gives an independent check of schedule on a "volume of works" basis Schedule .
