Project Management & the Project Controls Function

Projects by their very nature tend to be complex and dynamic where statistics say most result in project failure, specifically when it comes to delivering on the success criteria. The various moving parts can make it difficult to stay aligned with business objectives. However, successful project delivery by close monitoring, analysis, and regulation can keep the project on track and set up for project success. Projects of all sizes see a marked improvement in delivering business benefits when controls are properly executed. These include:

• The ability to make timely effective decisions based on objective facts rather than subjective opinions
• The ability to control project costs and mitigate project schedule delays
• Increase 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

Enablers and Barriers of effective Project Controls

The initiation and planning phases of the project define the framework and roadmap for the project implementation. During these stages, the framework to establish an effective system to monitor and control the outcome of the project is defined. This normally forms part of quality management.

The key requirements to enable the creation of this system include:

• Business case definition – The “Why” of the project and what business results are expected
• Establishment of project goals, scope, key stakeholders, responsibilities, requirements, and any critical success factors
• Development of accurate and detailed cost and schedule baselines including breakdown structure
• Development of packaging/procurement strategies
• Alignment of commercial requirements for contractors
• Senior management involvement to ensure project controls is a requirement
• Clear definitions of project controls standards, processes, and procedures which represent “best practice”
• The employment of skilled and experienced project controls personnel

The project ecosystem is a dynamic environment that requires first and foremost, the clear framework and requirements defined. Lack of clarity of the project goals or scope or the roles and requirements of the stakeholders, creates a barrier for the implementation of effective controls and the ability in achieving successful deliver of the project.

Additionally, lack of applying this framework to all stakeholders, management staff, and particularly contractors, can lead to the inability to capture key performance and risk data.

The execution and monitoring phases of the project see the establishment of effective and efficient workflows and activities to deliver the project goals to meet the project objectives. Establishment of effective monitoring and performance controls are critical to identify risks and deviations from the original plan and to the overall success of managing the project.

Effective monitoring tools:

• Integrated project control tools (software) for sharing of accurate and timely project data
• Alignment of project cost and schedule
• Establishment of accurate performance measurement mechanisms such as Earned Value Management (EVM)
• Frequent evaluation and communication of project performance and risks
• Effective change management practices identifying deviations, risks and trends
• Effective and realistic methodology to estimate project at completion cost and duration

Project controls involves not only the collection of accurate cost, time and progress data, but effective analysis and communication, to ensure that deviations and risks are explained and/or mitigated effectively. This requires:

• experienced project controls personnel
• effective communication processes and,
• correct governance

Conclusions

1. Understanding the amount and level of project controls on any project is dependent upon the size, complexity and type of project. However, having effective project controls systems reduces risks and drives performance.
2. Project professionals know that there will always be unexpected delays, additional costs, or unexpected circumstances that occur during the lifecycle of a project. But without project controls to identify and flag these issues so that they can be mitigated, costs and delays can spiral into much larger expenses and affect other areas of the business.
3. Effective project controls system is at the heart of good project management, giving management the ability to see and control what is happening on the project and be able to quantify, control or mitigate changes which may affect successful delivery.

Related Articles:

• Developing a Business case - Delivering Successful Projects
• Project Contingency Management
• What is Earned Value Management?
• Everything you need to know about Project Management
  

References:

• Enablers & barriers to the successful implementation of project control systems in the petroleum and chemical industry
• 2020 project controls survey report

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