Framework: An Integrated Approach to Portfolio, Program and Project
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I. INTRODUCTION TO TOTAL COST MANAGEMENT - CHAPTER 2 - THE TOTAL COST MANAGEMENT PROCESS MAP
2.4 Project Control Process Map
.1 Definition of Project Control
Project Control is a process for controlling the investment of resources in an asset. In TCM, project control is the recursive process cycle that is nested within the "do" step of the strategic asset management process cycle. A project is a temporary endeavor an enterprise undertakes to create, modify, maintain, or retire a unique asset. Being a temporary and therefore unique endeavor, projects are by nature uncertain and that element of risk puts a premium on control and discipline.
As discussed in Section 2.1, project control (or control of any process for that matter) is built on the PDCA cycle steps of (1) planestablish a plan, (2) domake measurements of performance, (3) checkcompare the measurements against the plan, and (4) assess/acttake corrective, mitigating, or improvement action as may be determined. As a cycle, steps 2 through 4 are repeated periodically until the project is complete.
.2 The Project Control Process Cycle
Figure 2.4-1 illustrates project control as a process. Each step or sub-process in the figure is covered in a section in the Framework. A project starts with project scope and execution strategy development, which translates the project implementation basis (i.e., asset scope, objectives, constraints, and assumptions from Section 4.1) into controllable project scope definition and an execution strategy (Section 7.1). From the work breakdown structure (WBS) and execution strategy, integrated plans for cost, schedule, and resource management are developed (Sections 7.2 to 7.4). The plans are time-phased baselines against which performance is measured. Value analysis and engineering (Section 7.5) ensures that the scope and plans consider functional importance of scope relative to costs. Risk management (Section 7.6) ensures that the scope and plans address uncertainty at that point in time. Procurement planning ensures that information about resources (e.g., labor, material, etc.) as required for project control is identified for, incorporated in, and obtained through the procurement process.
The project control plans are communicated to and implemented by the performing parties (Section 8.1). For work in progress, performance measurements include accounting for cost expenditures and commitments, as well as physical progressing, which includes measures of the work and resource quantities that have been completed (Sections 9.1 and 9.2.)
Performance assessment includes evaluative techniques for determining if the expenditures and progress vary from the plans (Section 10.1). If everything is according to plan, the control process continues on with more measurements. If there are performance deviations or trends noted in assessments, action should be taken to correct or improve the performance trend. Forecasting techniques (scheduling, estimating, and resource planning) are used to determine if corrective actions will achieve plan targets (Section 10.2). If performance corrections will affect the project scope, or changes to the requirements or scope are initiated by the strategic asset or other stakeholder, the project baseline plans must be managed to incorporate the changes (Section 10.3). Finally, project performance, history, and lessons learned are captured in a historical database for use in future asset management and project control (Section 10.4).
.3 Relationship of Project Control to Other Processes
Project control is essentially equivalent to the project management process stripped of its facilitating sub-processes for safety, quality, organizational, behavioral, and communications management. Project control may be considered the quantitative resource control subset of the project management process (or as the AACE International constitution states, where " engineering judgment and experience are utilized").
Project control is also roughly analogous to the processes of manufacturing and enterprise resource planning (MRP/ERP) with the difference being that MRP/ERP is focused on ongoing operations rather than projects. The enterprise has a portfolio of operations, and MRP/ERP is a recursive process of controlling the investment of resources within those ongoing operations. MRP/ERP and project control processes share many of the same tools and techniques.
As was discussed in Section 2.2, many of the sub-processes in project controls are the same as in strategic asset management.
.4 Organization for Project Control
On smaller projects or those with limited types and quantity of resources, the project control process may be managed by the project leader be they a project manager, engineer, architect, systems analyst, cost engineer, or whoever. On larger projects, with many resources to deal with (such as major construction projects), there may be planners, schedulers, estimators, cost/schedule controllers, value specialists, cost accountants, and other specialists involved. Project control on large teams may be coordinated by a lead cost/schedule or resource manager, quantity surveyor, project controls manager, or project manager. For certain techniques, the individual performing the project tasks (i.e., turning the wrench) may be responsible for control tasks such as progress measurement.
A central project management organization may be responsible for development of project personnel, processes, and procedures for all projects in an enterprise (i.e., a project system). That organization may also manage relationships with project resource providers. All of the project control steps require experience and skills in which an enterprise should develop organizational excellence.
2.4.2 Process Map for Project Control
Figure 2.4-1 below maps the major steps or sub-processes of Project Control.
Figure 2.4-1 The Project Control Process Map
The process blocks or steps mapped above have each been diagrammed at a detailed level in the sections noted. Those detailed diagrams have also been combined into an integrated process diagram for project control, which is included in the Appendix.
2.4.3 Inputs to Project Control
.1 Project Implementation Basis. The basis includes objectives, constraints, and assumptions to be addressed in project control planning. The enterprise may establish requirements for schedule planning and development such as completion milestones, constraints, or limitations on the use of resources, and other criteria (see Section 4.1). The basis also includes the scope description of the asset solution in sufficient detail to provide a basis for planning.
.2 Asset Historical Data. Information and data from strategic asset management (e.g., relevant asset performance metrics) may be useful for project control planning purposes.
2.4.4 Outputs from Project Control
.1 Asset. The end product of the project process (of which project control is a subset) is the new, modified, maintained, or retired asset along with any information products defining or related to the asset. The overall output of project control is information needed for Strategic Asset Management.
.2 Project Performance Information. Project performance information is conveyed to the enterprise level for strategic assessment and financial analysis and reporting.
.3 Project Actual Data. Information and data from projects may be used in strategic asset management.
2.4.5 Key Concepts for Project Control
The following concepts and terminology described in this and other sections are particularly important to understanding the project control process of TCM:
.1 Project. A temporary endeavor undertaken to create, modify, maintain, or retire a unique asset (product or service). Control of ongoing endeavors producing non-unique assets (e.g., factories) is not covered by project controls but is covered by processes such as manufacturing resource planning. Given their temporary nature, an important characteristic of projects to address is risk and uncertainty.
.2 Planning. The management or control sub-process of defining scope and establishing baselines or targets against which work performance can be measured. For project control, integrated plans for cost, schedule, and resourcing are established (some refer to planning as the activity definition and sequencing steps in the scheduling process). All plans should address risks.
.3 Control. A process to ensure that an endeavor produces a desired end result. The process includes identification of the desired end result, measurements and assessment of intermediate results, and identification of actions needed to ensure that the end result is achieved. Project controls then is a control process applied to a project to ensure a desired asset investment result.
.4 Requirements. An established requisite characteristic of an asset, product, process, or service.
.5 Scope. The sum or end result of all resources and activities to be invested in an asset or project. Scope definition is a process to decompose the scope into manageable elements.
.6 Scheduling. A predictive process of estimating and assigning the duration of activities based on available resources and planned means and methods and iteratively refining the planned activity logic in a way that achieves asset investment and project time objectives. A schedule is the output of the planning and scheduling process that documents planned activities and their start and finish times in a way that is logically sequenced; achieves asset investment, operation, project or other time objectives; and addresses available resources, investment objectives, and constraints. A schedule may be used for projects, operations, maintenance, business planning, and other purposes.
.7 Estimating. A process to predict or approximate the cost of or price for scope. Estimating quantification techniques are also used to predict or approximate resource quantities and schedule durations.
.8 Budgeting. A process to develop a cost plan by allocating estimated costs or prices to controllable cost accounts or activities and time phasing the cost in accordance with the schedule.
.9 Resource Planning. A process of defining resource types and quantities needed to achieve the scope and time phasing the resourcing in accordance with the schedule.
.10 Cost Accounting. A process of measuring and reporting actual costs for financial reporting and project control purposes. For control, costs are collected in cost accounts that correspond to the budget accounts.
.11 Baseline. A plan or target against which performance is measured. Analogous to baseline targets in statistical process control.
.12 Value Analysis and Engineering. A process to analyze the functional value of a process, asset, product, or service where value is defined as the ratio of importance to cost. Increasing value is not synonymous with decreasing cost because value takes into consideration measures of functional importance.
.13 Risk Management. A process to identify, quantify, manage, and communicate risks or uncertainties that may impact an asset investment or project. Also includes steps to find ways to mitigate risk factors; to continuously monitor the project or asset for the occurrence of risk factors; and to continue to identify, quantify, manage, and close out risks throughout the life cycle of the project or asset.
Further Readings and Sources
The following sources provide basic information related to project control. There are many references for project control principles in various industries. Because project control is a major subset of project management, texts on project management are also good general references.
Cost Engineering and Project Control
AACE International, the Association for the Advancement of Cost Engineering, www.aacei.org
AACE Internationals Cost Engineers Notebook. Morgantown, WV: AACE International (current revision).
AACE Internationals Recommended Practices. Morgantown, WV: AACE International (current revisions).
Amos, Scott J., Editor. Skills and Knowledge of Cost Engineering, 5th ed. Morgantown, WV: AACE International, 2004.
Clark, Forrest and A.B. Lorenzoni. Applied Cost Engineering, 3rd ed. New York: Marcel Dekker, 1996.
Gransberg, Douglas D. and James E. Koch, Editors. Professional Practice Guide (PPG) #12: Construction Project Controls. Morgantown, WV: AACE International, 2002.
Hackney, John (Editor: Kenneth Humphreys). Control and Management of Capital Projects, 2nd ed. Morgantown, WV: AACE International, 1997.
Humphreys, Kenneth, Editor. Jelens Cost and Optimization Engineering. New York: McGraw-Hill, 1995.
Humphreys, Kenneth, Editor. Project and Cost Engineers Handbook, 4th ed. New York: Marcel Dekker, Inc., 2005.
Humphries, Kenneth and Paul Wellmann. Basic Cost Engineering, 3rd ed. New York: Marcel Dekker, 1996.
OBrien, James J. and Fredric L. Plotnick. CPM in Construction Management, 6th ed. New York: McGraw-Hill, 2005.
Pritchett, Michael B., Editor. AACE Internationals Certification Study Guide, 3rd ed. Morgantown, WV: AACE International, 2006.
Stumpf, George R., Editor. Professional Practice Guide (PPG) #5: Earned Value. Morgantown, WV: AACE International, 1999.
Ward, Sol. Cost Engineering for Effective Project Control. New York: John Wiley & Sons, 1992.
Project Management and Project Control
Project Management Institute, www.pmi.org
A Guide to the Project Management Body of Knowledge (PMBOK® Guide), 3rd ed. Newton Square, PA: PMI, 2004.
Bent, James and Kenneth Humphreys, Editors. Effective Project Management Through Applied Cost and Schedule Control. New York: Marcel Dekker, Inc., 1996.
Kerzner, Harold. Project Management, 7th ed. New York: John Wiley & Sons, 2000.
Murch, Richard. Project Management: Best Practices for IT Professionals. New Jersey: Prentice Hall, 2000.
OBrien, James J. and Robert G. Zilly. Contractors Management Handbook, 2nd ed. New York: McGraw-Hill, 1991.
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