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Bridging the Cost/Schedule Divide: Integrating Primavera and Cost Systems
Javier Sloninsky EcoSys
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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
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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
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• 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
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Representative Customers
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6
EcoSys EPC Certified to run seamlessly with Oracle and SAP:
Professional Partnerships with Global Tech Leaders:
Global Technology Partners
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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
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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
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Full Lifecycle Project Controls
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Bridging Planning & Execution
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• 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
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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
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Departments/Programs > Program > Project > Transactions
Full Drilldown Visibility
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Project Budgeting
Project Forecasting
Contract Commitments
Planning
Customizable Web Spreadsheets for data entry
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From Summary to Variance Analysis
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Dashboards
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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
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Compare/Reconcile P6 and Cost Data
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Capital Projects Budget Report
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• 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
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• 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
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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
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• 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
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Cumulative & Periodic Performance
Standardized Performance Reporting
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Cumulative & Periodic Performance
Standardized Performance Reporting
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By Project, Category Code and EV Method
Flexible Earned Value Analysis
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EVM Dashboards Comparisons by Alliance Partner
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CPI / SPI
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WBS and ABS WBS & CBS
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– 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
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– 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
33
Case Study
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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
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65%
25%
5% 5%
Analyzing Data
Forecasting & Trending
Running Reports
Troubleshooting
Cost Analyst Target Utilization Provides Much Greater Value Added
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• 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
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• 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
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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
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Forecasts in same view
Reference & Initial Budgets
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Time-Phased Budgeting
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Budgeting of Material Quantities
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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
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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
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Questions?
Thanks!