Bridging the Cost/Schedule Divide: Integrating Primavera and Cost Systems

Javier Sloninsky EcoSys

Agenda

Speaker intro

Corporate Introduction

The Challenges of the Cost / Schedule Divide

Best Practices and Case Studies in Cost Integration with Oracle Primavera: • Elements of a “Best Practices” Cost Controls Solution • Case Study: B&W • Case Study: Technip

Benefits

Q&A

Founded in 2000

Enterprise Project Controls Software Experts

Designers & Developers of original Primavera P6 and EcoSys EPC

Professional Services

Enterprise Consulting Expertise: Project Portfolio & Cost Management Best Practices

Global Primavera Implementation and Systems Integration Leader

Partnerships with Oracle, SAP, Accenture, Microsoft, IBM

250 Customers in Global 1000 and Public Sector

EcoSys Company Background

• Project Controls System Designers

• Project Controls Implementers:

– Owners and Operators

– Contractors

– Public sector

• Enterprise architecture mindset

• Partnership approach with industry

• Constant evolution

Our Perspective Our Perspective

Representative Customers

6

EcoSys EPC Certified to run seamlessly with Oracle and SAP:

Professional Partnerships with Global Tech Leaders:

Global Technology Partners

The Cost/Schedule Divide

Cost Schedule

• Control • Structure • Auditable

• Dynamic • Flexible

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In most organizations, Cost Controls is not a simple affair

Departmental Budgets

Project Forecasts

Project Budgets

Actual Transactions

Commitments

Contract Database

Project Planning

General Ledger General

Ledger

Time Cards

JVFunding

Funds Management

Impact

• Teams of people consolidating data in spreadsheets

• Double entry

• Spreadsheet errors

• Performance reports available too late to address issues

Challenges for Cost Controls

Strike a balance between flexibility and business rule enforcement

Tailorability /Configurability

Terminology

Processes

Reporting

Metrics

Project/Cost Structures

WBS

CBS

OBS

Alternate Breakdown Structures

Phases/Lifecycle Financial data structures

Actual Expenditures

Accruals

Revenue

Commitments

Pricing & Rates

Multi-currency

Project schedule data

WBS

Cash Flows / Time Phasing

Time Periods

Resource loading

Successful Cost Controls Systems

Full Lifecycle Project Controls

Bridging Planning & Execution

• Import Projects/WBS from P6

• Import Resources

• Import Dates

• Import % Complete

• Import time-phased Resource Assignments – Units (BL, actuals, planned, remaining)

– Costs (BL, actuals, planned, remaining)

• Import/Map P6 Codes/Attributes – Project Codes

– Resource Codes

– Activity Codes

– Cost Accounts

– Expense Categories

Different integration rules can be established for different

business areas, departments, project types, etc

• Export Projects, Activities to P6

• Export Actuals – Units

– Costs

– Resources

– Dates

– Map to WBS/Activity Codes/Roles

• Export Forecasts – Units

– Costs

– Resources

– Dates

– % Complete

– Map to WBS/Activity Codes/Roles

Flexible Primavera Integration Options

Create Projects and Build WBS in EcoSys, or import from Primavera, or other systems.

Budget in EcoSys, or Import from Primavera, Oracle Projects, etc.

Actuals from General Ledger and/or from Accruals

Import Commitments or Manage in EcoSys

Progress and Forecast in EcoSys, and compare to cost loaded schedules, contractor forecasts

Maintain Each Version in EcoSys, gaining Trending and Audit Trail

Planning & Controls Platform

Departments/Programs > Program > Project > Transactions

Full Drilldown Visibility

Project Budgeting

Project Forecasting

Contract Commitments

Planning

Customizable Web Spreadsheets for data entry

From Summary to Variance Analysis

Dashboards

Can set up company specific custom

criteria:

• Group By Capital and O&M

• Filter by Outage/Online

• Distribute cost manually or by curve

Configurable Cost Processes

Compare/Reconcile P6 and Cost Data

Capital Projects Budget Report

• Babcock & Wilcox, Nuclear Power Generation company, establishes EVM standards and reporting mechanisms

• Technip Project Cost Management System integrating systems for global standard project controls

Project Controls Best Practices

• Nuclear Power Generation & Operations company with major R&D, Construction, and Services projects in US & Canada

• Also in Alliance with Bechtel for Modular Nuclear Reactor technology

• Standardized on SAP and Primavera P6

• Selected EcoSys for integrated earned value performance management, project reporting, and controls

• Expanded EcoSys for Outage Reporting in 2012

Case Study

WBS & WBS Status

Budgets, Forecasts

Integrated Earned Value Mgmt

Budgets & Forecasts

Commitments

Actual Costs, Revenue

Change Orders

Project Cost Reporting

Historical Snapshots

Transaction/Audit Repository

Projects, WBS

Dates

Labor plans

Percent Complete

Actual Costs

Timesheets

Commitments

Revenue

Case Study

Timesheets

Case Study

Integration Approach

• EV Technique Varies by Work Package

• Full Time-Phased History of Earned Value by Month

• EV Measures based on both Hours and Costs

• Performance analysis by Month, Year, and Project Life

• Change & Trend Management integrated into Current Budget & Current Forecast

• EV Reports can be run by toggling Baseline Budget =Cur Budget or Cur FC

• Ability to analyze performance & ETC by Alternate Breakdown Structures:

• Discipline

• OBS

• Cost Type (Labor, Material, ODCs, etc.)

Highlights of B&W Approach

Case Study Case Study

Cumulative & Periodic Performance

Standardized Performance Reporting

Cumulative & Periodic Performance

Standardized Performance Reporting

By Project, Category Code and EV Method

Flexible Earned Value Analysis

EVM Dashboards Comparisons by Alliance Partner

CPI / SPI

WBS and ABS WBS & CBS

– World leader in Project Management and Engineering & Construction in the Energy Industry

– Revenues of €6 Billion Annually

– 48 countries

– 27,000 people

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Case Study

– Uses P6 and Oracle E-Business

– Sought Common Work Process for

• Budgeting

• Forecasting

• Change Management (client vs. internal changes)

• Commitment Management

• Standardized reporting

• JV / Client reporting

• Multi-currency forecast analysis: spot & fixed

• Multi-project reporting

– Selected EcoSys EPC for Global Project Cost Controls System

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Case Study

20%

16%

13% 12%

30%

6%

2% 1%

Fixing Oracle Issues

Correcting Labor Coding

Collating Internal & External Reports Manual Downloading

Monitoring & Controlling Costs

Change Management

Forecasting & Trending

Analyzing Budgets & Actuals

Cost Analysts Spent 61% of Time on “Wasteful” Activities

65%

25%

5% 5%

Analyzing Data

Forecasting & Trending

Running Reports

Troubleshooting

Cost Analyst Target Utilization Provides Much Greater Value Added

• Can be unique per Project

• Frees project teams to report based on needs of project or contract

Work Breakdown Structure (WBS)

Total Project

M1000Compressors

M0900Pumps

3.2.2Pressure Vessels

3.2.1Rotating Eq

3.2 Main Eq3.1

Company Assigned

4Yard Fab

3 Procurement

M0930Rotary Pumps

M0920Recip Pumps

M0910Cent Pumps

Case Study

• Standardized Globally Via EPC

• Top Four Levels for Corporate Reporting and Consolidation

• Levels 5+ Allow Regions Flexibility – Typically broken out by Cost Types and Disciplines

– Material Codes

– Construction Codes

– Financial/Accounting Codes

Corporate

Reporting

Dept. &

Financial

Codes

Common

Material

Codes

Common

Constr.

Codes

Work hours

Labor $ Material Quantities

Unit $

Total $

Work hours

Labor $

Total $

Cost Breakdown Structure (CBS)

Case Study

EPC aligns all work by both CBS and WBS

• Provides Flexibility at Project Level

• AND Standardization at Regional and Corporate Levels

• High Level Budgets, forecasts, actuals can exist at any level, but still roll up

Case Study

Forecasts in same view

Reference & Initial Budgets

Time-Phased Budgeting

Budgeting of Material Quantities

Visibility

• Executives and Strategic Planning gain Visibility into Execution

• Ability to Drill Down and Respond Quickly

• Data Reportable by Any Attribute

o Project, Project Type, Division, Location, Plant, Asset

o Vendor, Unit, Phase, Sub-Asset, Resource, Activity

Increase Efficiency and Accuracy

• Less Effort Consolidating Data, Supporting Data Calls,

Troubleshooting Errors

Benefits

Achieve Process Standardization

• Increased Predictability

• Instill Best Practices and Institutional Learning

Improve Financial Performance

• Ability to Prioritize Work more effectively

• Resource Optimization

• Cost and Schedule Performance Improvements

• More effective management of global project financials,

such as hedging

Benefits

Questions?

Thanks!