Project Controls : What is it and why is it important ?

Project Controls : What is it and why is it important ?

 

 

Definition of Project Controls : 

There are many definitions of Project Controls used across industries and indeed across companies within industries. For the purposes of this portal, the field of project controls is defined as follows:

Project controls are the data gathering, management and analytical processes used to predict, understand and constructively influence the time and cost outcomes of a project or program; through the communication of information in formats that assist effective management and decision making. This definition encompasses all stages of a project or program’s lifecycle from the initial estimating needed to ‘size’ a proposed project, through to reflective learning (lessons learned) and the forensic analysis needed to understand the causes of failure (and develop claims).

Consequently, the project controls discipline can be seen as encompassing:

• Project strategy, undertaking planning and methods studies to help the PM optimise future outcomes;
• Scheduling including development, updating and maintenance;
• Cost estimation, cost engineering/control and value engineering;
• Risk management, including maintaining the risk register and risk analysis/assessment;
• Earned Value Management and Earned Schedule, including WBS, OBS and other breakdown structures,
• Document control;

• Forensic Assessment for required diagnosis of schedule and cost

• Supplier performance measurement / oversight (but excluding contract administration);
• The elements of a project management methodology that integrate these disciplines both within the ‘controls’ domain and with other project management functions;

Put simply, Project Controls encompass the people, processes and tools used to plan, manage and mitigate cost and schedule issues and any risk events that may impact a project.  In other words, Project control is essentially equivalent to the project management process stripped of its facilitating sub-processes for safety, quality, organizational, behavioral, and communications management. 

 

 

 

 

Importance of Project Controls : 

The successful performance of a project depends on appropriate planning. The PMBOK Guide defines the use of 21 processes that relate to planning out of the 39 processes for project management, (Globerson & Zwikeal 2002). The execution of a project is based on a robust project plan and can only be achieved through an effective schedule control methodology.  The development of a suitable Project Control system is an important part of the project management effort (Shtub, Bard & Globerson 2005). Furthermore, it is widely recognised that planning and monitoring plays a major role as the cause of project failures. Despite the continuous evolution in the project management field, it appears evident that the traditional approach still shows a lack of utilisation of Project Controls and there have been a number of articles published to support the importance of control in the achievement of project objectives. It has been proved time and again that Project performance can be improved if dedicated Project Controls systems are in place. An IBC 2000 Project Control Best Practice Study carried out by IPA identified that good Project Control practices reduce execution schedule slip by 15%. Project Controls cost range from 0.5% to 3% of total project, (including cost accounting), therefore, to break even, Project Control needs to improve cost effectiveness by around 2%.  A sample study carried out by the IBC Cost Engineering Committee (CEC) in 1999, showed cost improvements for the projects in the study, was more than 10%. It is noted also that NPV (Net Project Value) also benefits from schedule improvements. Success factors are based on good Project Control practices, which result in good cost and schedule outcomes.