How can technology benefit your everyday project’s communications?

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For those involved in engineering and construction projects, regardless of being the project owner, project management consultant, engineering consultant, contractor, subcontractor or supplier understand the challenges of ensuring the effective management of everyday project’s communications. This is even of greater challenge to the project management team for which it is estimated that approximately 70-90% of their time is spent communicating.

What is project communication?

Project’s communications include both formal and informal communications. Examples of project communications include correspondence, transmittals, RFIs, meetings, phone calls, email communications, written and verbal instructions, inspection requests among many others. Those involved in delivering projects understand that project’s communications need to be properly captured and documented should they become required to confirm taken actions, record project events, resolve issues, report performance, support change requests, resolve disputes among others.

Project Communication Channels

The volume and frequency of everyday communications can grow rapidly during the execution of an engineering and construction project which can take up to 5 years to complete taking into consideration the complete project life cycle stages. For projects that end in dispute, those communications might need to be accessed for an additional five years if not more. The formula for determining the number of communication channels show how extensive the number of possible communication channels that could exist between the team members of the different project parties.

The Responsibility Assignment Matrix (RAM)

Managing engineering and construction project’s communication requires the implementation of many project management processes that involve the different project parties. Processes like notice to proceed, request for information, meeting minutes, site inspections, non-conformance reports, submittals, transmittals, safety incidents, daily reports, potential change orders, change orders, progress invoices, permits, site work instructions, confirmation of verbal instructions, snag list, budget, budget adjustments, project closeout, project charter, letters, delay analysis and EOT request among many others. One of the proven project management techniques used to streamline the execution of project management processes is the responsibility assignment matrix (RAM). The RAM describes the participation of the various project roles in completing the project management processes. In an engineering and construction project, the RAM will list all project pre-contract and post-contract management processes and the specific roles from each organization involved in managing those processes. Those could include the roles of initiating the process, reviewing and approving the process, those available to be consulted and those that need to be kept aware of the process status.

Managing A Project Process

In engineering and construction projects, a common practice that has been adopted for many years is the use of document templates, known as forms, to capture the details of each specific process. Each form will have the fields needed to manage each process including the status of the process and project team members who made the approval or rejection action and when. The form would usually list the supportive documents that are needed for each process for which they need to be attached to the form. Many professional bodies like the Construction Specification Institute (CSI), American Institute of Architects (AIA) among many others have developed samples of recommended forms to be used in managing engineering and construction projects.

When a form is initiated by one of the parties of the contract, the form will be distributed to the project’s team members in accordance with the approved RAM. To ensure that the sequence of reviews and approvals as well as project team members involved performing the task is well defined and without ambiguities, workflow charts are created for each process. The workflow charts also help in showing decision points and how they will affect the workflow process. Those decision points should be aligned with the project’s authorities and approval levels which is part of the project’s execution plan.

For each project management process, a log is usually created to capture the status of all transactions of each process. The log will usually capture part of the data recorded in the process’ form and would usually include reference number, description, dates and status. It is not feasible to capture all data in those logs as it will take considerable effort and time in addition to encountering the high risk of wrong data entry specially for text fields. The log is usually updated on weekly, bi-weekly or monthly basis to share the status of the project management processes.

How can Technology Improve the Management of Project’s Processes?

Using a Project Management Information System (PMIS) like PMWeb, an organization can automate all of the processes needed to manage a project. This will be achieved by having an input form to capture the data needed for the process, upload and attach supportive documents needed for the processes, link to a workflow that maps the steps defined in the RAM and process workflow, produce the output form in the exact format needed for each project and maintain a real-time automatically generated log of all transactions for each specific process.

How Can Technology Provide the Insight for Better and Faster Informed Decisions?

Having access to the real-time data of each project communication, the organization can consolidate, review, analyze, monitor, evaluate and report the performance of each project management function during pre-contract and post contract project phases. Those could include cost management, document management, risk and issue management, schedule management, bid management, design management, contract management and administration, quality management, HSE management, sustainability management among many others. For example, the organization can create a dashboard that will report on the project’s cost status by consolidating the data from budget, budget adjustments, commitments, potential change orders, approved, pending and disputed change orders, progress invoices and actual payments against approved progress invoices.

How Can Technology Provide Single Version of the Truth Projects Performance Status?

In addition, the organization can use the same projects’ communications data to consolidate, review, analyze, monitor, evaluate and report the performance of each project as well as the organization’s projects portfolio performance. This provides executives and project stakeholders with a real-time single version of the truth on how a project or a portfolio of projects are performing. In addition, this enables those executives and stakeholders to drilldown to the specific form of a specific project management process to understand or verify the reported performance at a function, project, or enterprise level.

Conclusion

PMIS solutions like PMWeb can bring massive benefits to organizations involved in engineering and construction projects in particular to their project management team who spends approximately 70-90% of their time communicating. In addition, process automation will improve efficiency and reduce wasted manhours in performing everyday project communications. Some of the benefits that were reported by organizations who are using project management information systems include:

1.      Enforce transparency in capturing everyday project’s communications and project management processes data.

2.      Enforce accountability in submitting, reviewing and approving project management processes.

3.      Improve project’s collaboration and communication among all parties involved in managing the project delivery.

4.      Capture everyday knowledge acquired and lessons learned from delivering projects.

5.      Save and store project’s records and documents electronically to enable quick search and locate them when needed and even after the project is completed.

6.      Enforce the adoption of professional project management best practice processes across all projects. This will enable the organization to achieve and maintain the ISO 9001 certification.

7.      Eliminate the high cost of project records and documents loss and dislocation risk.

8.      Improve the insight to make better and faster informed decisions.

9.      Have a real-time single version of the truth of your projects’ performance reporting and status.

Digitally Transform Your Manual Everyday Project Management Processes In 10 Weeks

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ARCAN Project Management Services (ARCAN) is one of the UAE successful Project Management Consulting (PMC) firms with operations that spread across different countries in the Gulf Cooperate Council (GCC) countries made the important decision to stop wasting the massive effort in managing everyday projects’ communications and the lack of real-time projects’ performance reporting by selecting the PMWeb project management information system (PMIS) solution. For them, having a solution like PMWeb will not only improve their current project management consulting services but will also bring their adoption of digital transformation to the level that leading international project management consulting firms have started to adopt on projects that they manage.

Why PMWeb?

ARCAN decision to select PMWeb was driven by a number of factors including the need to have an on-premise solution that is catered to manage unlimited number of projects where not only the data for those projects can be stored for years after the project completion but to also make this data available for enable them to analyze projects’ management processes trends, documenting lessons learned and set performance benchmarks for future projects as well as internal processes. They also needed a PMIS that supports the Arabic language in terms of data capturing as well as an interface to meet the project communication requirements in the GCC. Their selection also included the need to have a system that can be easily configured to manage all project management processes without any limitations on what processes it can manage. They also wanted a solution that enables adding more users as adoption for the PMIS grows as well as new projects get awarded. ARCAN also wanted a solution that is locally supported and was already in use by other organizations in the UAE and GCC in managing the delivery of engineering and construction projects.

Nevertheless, what has mattered most for ARCAN is that they wanted to have a PMIS solution that could be implemented and launched in no more than 10 weeks and with an initial investment not to exceed US$ 132,000 inclusive of software licenses, two years of technical support and software updates, implementation, training as well as web-hosting the solution. For ARCAN, a US$ 5,500 per month investment over two years was justifiable for the anticipated benefits that they strongly believe a PMIS solution will bring for their projects delivery. For ARCAN, this cost is less than the cost they already spend in preparing the monthly progress report for a single project. The cost of ownership for the PMWeb PMIS will drop by 80% as the initial cost of licenses, implementation and training will be covered in those two years.

The two constraints, PMIS budget and time to launch were very critical to ARCAN as the decision to implement the PMIS was related to a high-profile project that have just started. Therefore, delaying the use of the PMIS will create massive backlog of everyday project communication data that needs to be migrated as well as delaying the anticipated benefits from having a PMIS. In addition, the investment amount was the amount that ARCAN senior management were able to approve and spend at this stage. Growing the number of licenses, which will entail additional cost, will be justified by the need to use the PMIS on the additional projects that ARCAN could win soon and in the coming years.

The Sprint Implementation Strategy

The PMWeb implementation was done in four back to back stages with a total duration of 10 weeks. Those were the Kick-Off, Everyday Communication, Reports, Dashboards and Cost Management and Executive Training and Handover stages. The duration for those stages varied between one week for the first and last stages and four weeks for the second and third stages.

Stage One – The Kick Off

The first stage was the PMWeb PMIS kick-off stage which took one week to complete. During this stage, CMCS provided on-site training for ARCAN team to better understand PMWeb functions and features. In addition, it was used to determine how to map ARCAN existing project management processes into PMWeb which was a must to define the scope of work for the next two stages. The on-site training covered the PMWeb modules for portfolio, engineering forms, cost management, custom form builder, workflow, document management repository and administrator training. In addition, ARCAN selected to subscribe to PMWeb University to provide unlimited training videos, workshops and exams for their project management team as well as the consultants, contractors and some of their project owners. This enabled ARCAN and their partners to better understand the capabilities that PMWeb can bring to better manage their projects.

Stage one also included identifying ARCAN’s PMWeb Project Champion as well as the PMWeb System Administrator, who is the current ARCAN’s IT administrator and who will become responsible for adding new users, granting access rights, data backup among others. The PMWeb Project Champion, who is currently responsible for providing project controls, will take the responsibility for providing PMWeb training for ARCAN team members, consultants, contractors and project owners when the 10 weeks implementation is completed.

Stage Two – The Everyday Communication

The second four-weeks stage was to automate ARCAN’s 26 key project management processes that are needed to manage everyday project communications. Those included Contractor RFI, Consultant RFI, Confirmation of Verbal Instruction, Accident Report, Material Inspection Request, Non Conformance Report, Notification of an Early Advise, Notes for Coordination Meeting, Starting New Activity, Site Memo, Contractor Daily Report, Daily Consultant Extra Time Request, Request for Night Work, Handing Over Site to Subcontractor, Job Site Instruction, Job Site Notice, Taking Over Certificate, Day Work Request, Inspection Request, Material Inspection Request, Non-Conformance Corrective Action Report, Risk Form, Issue Form, Request for Change, Material/ Document Submittal and Shopdrawing Form. In total, 19 new custom forms were created and 7 forms were used from PMWeb default out of the box modules.

For each input form, an output form was created in the exact layout and branding that ARCAN has been using for years and are part of their project management procedures manual. Having hard copy output forms that will be formally signed is not only a must requirement to comply with the laws of the UAE but also provides the information in a format that project stakeholders are used to have. Stage two also included creating the workflow for submitting, reviewing and approving each form as well as the document management repository filing structure. The workflow steps will be used to provide the content for the signature boxes on each form. This stage also included testing these processes to ensure that the created workflows match those provided by ARCAN.

Stage two scope of work also included developing six tabular reports that are used to provide real-time status of the project management processes. Those tabular reports included Document Log, Material Submittal Log, Supplier Prequalification Log, Procurement Tracking Log, RFI Log and Material Submittal Log. Before implementing PMWeb, those six reports where managed using MS XLS where the project control manager was responsible to ensure that those logs are always kept current and correct. Using PMWeb enabled ARCAN to have more meaningful and actionable reports. For example, the RFI log will automatically display the question and answer fields for which in the past this was not possible as retyping the content took a lot of time plus the high possibility of data entry mistakes. During stage two, training was also done for the consultant and contractor who will be using those communication forms on the current project.

Stage Three – Dashboards and Cost Management

Stage three which was also for four weeks included developing the project’s monthly progress report and the projects’ performance dashboard. The project monthly report is of great importance as this what ARCAN uses to communicate project performance status with the project owner. For project owners who have more than one project managed by ARCAN, access will be also given to the projects’ performance dashboard.

Stage three also included the implementation of the cost management processes for which it was decided to be implemented at high level with the option to have a detailed implementation at a later stage after finalizing and agreeing on the scope of work. For stage three, it was decided that the cost breakdown structure for each project to be set at as a single cost account level until a detailed cost breakdown structure is approved. ARCAN selected PMWeb out of the box processes for cost management including project budget, budget adjustments, commitments, potential change orders, change orders, progress invoices and cost worksheet. It was also decided to use PMWeb out of the box output forms and reports for the cost management module. For all those forms and reports, the PMWeb logo was replaced by ARCAN logo and the color branding was changed to match those of ARCAN.

Stage Four – Executive Training and Handover

The fourth and final stage was to do the final executive training and handover of the PMWeb PMIS solution. This stage also included the final acceptance by ARCAN for the implementation deliverables. The fourth stage also included a workshop with ARCAN to determine what additional project management processes that need to be implemented to improve the adoption of project management best practices. Those processes could include design management, value engineering, cost estimating, prequalification of consultants and contractors, bid management including online bidding, resource management including staff appraisal, snag list, permits among others. In addition, separate workshop was held to address improvements to the quality control processes which would include inspection checklists for each project specification section. This will enable ARCAN to enforce the items that need to be checked and verified by the supervision consultant for completed works by the contractor.

Another area that will be also considered as part 2 of the PMWeb adoption is the use of the big data that will be generated from the everyday project communications and cost management across the complete projects portfolio of ARCAN. Using business intelligence applications like MS Power BI, Qlik, Tableau among others will provide ARCAN with better insight on how to improve their current project management processes and practices as well as how to provide their clients with better visualization of their project investments’ performance. Those business intelligence applications allow extracting, associating, blending and presenting data from PMWeb as well as ERP, CRM and other applications to provide a comprehensive real-time visualization of how the overall business is performing.

Justifying the Investment

The current slowdown in awarding new projects and the increased competition from other project management consulting firms made the decision to make any type of new investments for ARCAN not an easy one to approve. ARCAN senior management wanted to have a return of investment (ROI) analysis to be done if PMWeb will be used on one of their current projects and without including other projects or even assuming that new projects will be awarded soon. The senior management wanted to quantify the anticipated benefits that PMWeb will bring from automating their current project management processes, knowledge management, reporting project performance, stakeholder engagement, project handover and claims management. The estimated benefits below were more on the conservative side and they could be higher, nevertheless, those benefits were easy to agree on and made sense for all those involved in the approval process.

Automating Project Management Processes

One of the key benefits of automating project management processes is the increased efficiency in submitting, reviewing, approving and sharing the contents of those processes. By replacing the manual or semi-manual processes of completing the project management forms, distributing those forms for actions and then getting the updated status with an automated process that PMWeb will bring, one could assume that this will bring at least 30% efficiency improvement. In addition, there is the additional benefit of enforcing governance, transparency and accountability while improving the efficiency in executing those processes. ARCAN team assumed that there will be US$ 1,000 saving for the wasted effort per month per project. This brings the total anticipated savings to US$ 24,000 for the project two years duration.

Knowledge Management

The benefits of stopping the knowledge wasted by capturing and analyzing the everyday projects data and lessons learned is massive taking into consideration the massive talent drain facing the engineering and construction in general and the GCC region in particular. Knowledge could be related to what material to use and what not to use, contractors and suppliers’ performance, risks and how best to respond to them, cost estimates, dealing with contract agreements, among many others.

The organization will not only have access to all of the above data from the project management processes captured in PMWeb but can enforce a formal Lesson Learnt process to ensure that knowledge gained and best practices are formally captured, analyzed and shared. For this benefit, ARCAN team assumed that the value of this captured knowledge is US$ 20 per day per project or US$ 14,600 for the project two years duration.

Reporting Projects Performance

It is estimated that organizations who continue to use MS XLS as their platform for monitoring and evaluating the performance of the projects, waste 65% of their senior project management team members in consolidating, analyzing and reporting the projects’ performance data. In addition, the period between the cutoff date of the captured and when the performance reports and dashboards are available to be presented varies between 3 to 6 weeks. In other words, the presented information is not valid anymore.

On the other hand, PMWeb provides all those reports and dashboard in real-time single version of the truth form and format that can be accessed by authorized users anytime, anywhere using any device. Accordingly, ARCAN team assumed that this could bring at least US$ 2,000 savings per month when it comes to reporting project’s real-time performance. This totals to US$ 48,000 for the project two years duration.

Stakeholder Engagement

The benefits of improved stakeholder engagement by sharing trust-worthy projects performance and status reports and dashboards could be massive. Not only it helps in building trust and confidence with those stakeholders, but also helps in keeping them engaged in the project delivery by keeping them aware of the progress and status in the form and format that matters to them most. This will drastically reduce the conflicts that usually occur on projects when stakeholders feel that they are left out or being the last to know.

Quantifying the benefits of having more engaged stakeholders and with less conflicts is not that easy to determine. Nevertheless, we will assume that the organization has five key stakeholders that they need to manage. Having trust worthy dashboards designed to their own needs that they can access on their own when they desire regardless where they are, could save the projects department at least one day of effort to resolve conflicts and respond to stakeholder queries and needs, the saved effort will be estimated at US$ 1,000 per month per stakeholder which will be the project owner. This totals to US$ 24,000 for the project two years duration.

Project Handover

One of the key challenges in handing over a project is the snag list of items that need to be rectified by the contractor before the project can be considered complete. One of the recommended practices is to use the Snag List as an Observation Report where the assigned supervision consultant capture and share defects during the project execution as soon as they are identified rather than delaying this process toward the completion of the project. This will not only help the contractor in rectifying those defects as soon as they are identified but also reduce the list of pending snag items when it comes to handing over the project.

ARCAN team assumed that implementing such best practice using PMWeb Snag List will save 5 days from the duration given to the contractor to rectify the snag list items. Assuming that for the project owner each day saved in handing over the project for operations can generate a revenue of US$ 10,000, then the estimated total benefits could reach US$ 50,000 per project.

Construction Claims

No one can deny that construction claims in the GCC in particular and globally in general are on the rise. The decline of new project awards, projects at low profit margins, liquidated damages claims for late completion are rising in frequency and amount, and tough pressure on margins among other issues are compelling owners and contractors to become more contentious and adversarial thus resulting in growing volume of claims and disputes.

The benefits of having online access to all project’s documents and records that can be searched to identify documents and reports needed to either support the submission of a claim or support the response of a counter-claim are massive. Actually, they can be the deciding factor of who will have better chances to win or lose the claim. It is anticipated that this will bring a saving of US$ 2,000 per month per project for the time-consuming effort spent in searching and locating the requested documents. This is a total saving of US$ 48,000 per project.

Calculating the PMWeb Adoption Return on Investment (ROI)

Automating Project Management Processes                            US$         24,000

Knowledge Management                                                              US$         15,600

Reporting Projects Performance                                                US$         48,000

Stakeholder Engagement                                                              US$         24,000

Project Handover                                                                           US$         50,000

Construction Claims                                                                       US$         48,000

Total Benefits                                                                                  US$       209,600

The US$ 209,600 benefits represent 159% return on the US$ 132,000 investment even if the benefits are limited to a single project. Since the day that ARCAN has selected the PMWeb solution, two new projects were awarded. In addition, some of PMWeb modules where used on their other on-going projects. Should the ROI analysis be adjusted to reflect the expected benefits of those projects as well as adjusting those benefits for the additional cost of adding more PMWeb licenses needed to manage those projects along with the additional cost of hosting those licenses, the ROI could easily jump to more than 365%. Of course, there are many other intangible benefits that ARCAN can gain like improving ARCAN’s industry reputation as one of the few PMC firms that uses technology to improve the delivery of their services as well as to better protect and defend their clients’ interests.

How Can Technology Improve Site Inspection on Construction Projects?

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Ensuring the quality of completed works on construction sites not only a must objective for achieving successful project delivery but also a contractual obligation for the contractor to comply with. The contract drawings and specifications are the two documents that details the quality requirements for a project. Drawings identify materials that will be used on the project whereas specifications describe those materials.

Specifications are the written contract documents which define the quality and types of workmanship and materials upon which the construction contract is based. After contract award, the contractor will submit details of all materials, equipment, suppliers’ and subcontractors’ qualification, manuals and other requirements set in the specification for approval before procuring and installing those products on the project.

Project drawings are graphic representation of the work which will show: Sizes, Forms, Shapes, Materials, Quantities, Locations and Connections. After contract award, the contractor will produce and submit for approval what is known as shop drawings which will detail how the work will be executed.

Using project management information system (PMIS) like PMWeb, the organization can implement a comprehensive project quality management system. PMWeb is widely used to manage the quality assurance requirements through the submittal process and the quality control requirements which include three processes, site inspections, non-conformance reports and snag list or punch list for final acceptance. Some organizations might also consider the request for information (RFI) and quality review meetings, which are available by default in PMWeb, as part of the project quality management system.

The Submittal Process

The submittal for all items required in the specifications including shop drawings will be done through the submittal management process for which there will be a predefined process for submitting, reviewing and approving those submittals. This process could vary depending on the specification section, submittal type among others. The submittal process should be aligned with the project’s integrated master schedule to ensure that the submittal approval process does not delay the procurement and installation activities that depend on the completion of the submittal process. It is a must that the contractor has the detailed submittal log as part of the project’s integrated master baseline schedule submission.

PMWeb submittal module will be used to capture the data for the submittal process to provide a real-time status of the submittal log. For each submittal item, PMWeb will enable the user to capture the submittal particulars, link to the relevant project schedule activity along with the procurement lead time, attach the submitted documents such as shop drawings, catalogues, certificates, warranties among others, link the relevant CSI specification sections among others. The submittal will have a conditional workflow for which branches are created to map the different levels and authorities assigned to the submittal process as per the project’s responsibility assignment matrix (RAM).

The Site Inspection Process

The Construction Specification Institute (CSI) which is widely used in the MENA region organizes project specifications in 49 divisions. Those specifications will establish the standards of workmanship associated with the installation of materials, equipment, and components, and define the installation requirements. The project’s engineering consultant should have predefined checklists for each specification section detailing items to be inspected whether at site delivery or installation. The checklist will detail the contractual requirement as set in the project’s contract documents for accepting this work. Having those predefined inspection checklists will expedite the site inspection process as well as insure the completeness and correctness of the site inspection. PMWeb custom form builder will be used to create the inspection form for each specification section. This will enable the inspection team to use their smart phone device, for example iPad, to do the on-field site inspection and report the compliance of each line item in the checklist along with comments made and whether the inspection is approved or rejected. Comments can be added using “Speech To Text” function of the iPad and other smart phone devices.

The inspection form will have a field to identify the location of the inspection which could be which tower, floor, room among others. Those locations which are defined at the project level will be aligned with the locations field available in the daily report and snag list modules of PMWeb. In addition, the location field will be added to the non-conformance report. The location field which is defined at the project level and usually is aligned with the locations as identified in the contract drawings to ensure clarity and avoid ambiguity.

The site inspection form could also be designed to have other data fields that could be of interest to the organization. For example, it can have link to the project schedule activity that relates to the work at this particular location and type of work as well as the WBS level, it can also have reference to building information model (BIM) object number and it can also have a field to capture the asset reference number which could be of value during the asset management stage of the project life cycle among others. In summary, it is up to the organization to decide on the data that is needed to be captured when the site inspection is done.

Attachments such as pages of the relevant specification sections and shop drawings as well as links to relevant submittals will be part of the site inspection form. Using a smart phone device like iPad, the inspector can also take pictures and/or videos of inspected works and upload to the inspection form.

As soon as the site inspection is done, the inspector will submit the inspection form electronically using the predefined workflow process. The workflow will detail the workflow steps needed to ensure that all intended recipients will have immediate notification and access to the site inspection result and details.

Tabular and graphical reports can be designed to reflect the performance and status of site inspection process for each CSI specification division. For example, they can provide a log of all rejected or failed site inspections or it can provide histograms to detail the number of site inspection requests issued each week as well as the total volume of site inspections completed to date group by status as what was accepted and what was rejected. As long as the organization have access to real-time trust worthy inspection data, the organization can analyze and report on the inspection data in any desired form or format.

Conclusion

Adopting the concept of predefined checklists for site inspections can be easily expanded to other processes in the capital projects delivery. For example, the same approach can be done for design stages deliverables, BIM models deliverables, permits and non-objection certificates, project closeout and handover, progress invoices, technical bid analysis among many others. The principle is that instead of depending on project team members on what needs to be done to approve a product or a process, there will be a predefined checklist that is aligned with the contractual and technical contract requirements as well as the knowledge gained from performing similar processes. Not only will this well help in expediting the performance of those processes but will also eliminate the argument of what should be done as well as eliminate the risk of failing to check what should be inspected.

How Can Technology Accelerate The Much Needed Transparency for Reconstruction Programs?

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No one can deny that the Middle East and North Africa region would be requiring trillions of dollars to reconstruct the ailing and damaged infrastructure. Funds will be needed to rebuild roads, bridges, hospitals, schools, universities, housing, commercial centers, utilities, factories among many other projects. Nevertheless, donners and investment agencies will not be willing to fund those reconstruction programs if there a chance that those funds will not be spent on those reconstruction programs. Those donners and investment agencies are obliged to ensure that there is an acceptable return on those investments.

Regretfully, the Middle East and North Africa region does not score high when it comes to transparency. This even gets worse when it comes to capital projects where the chances for committing fraud is much higher due the ineffective fraud prevention adopted measures. According to the Transparency International (TI) index for the year 2016, five of the bottom 10 countries are from the Middle East and North Africa region– Iraq, Libya, Yemen, Sudan and Syria. Countries where most, if not all, of the reconstruction programs will be needed.

Most of construction projects monitoring and evaluation reports generated in the Middle East and North Africa region continue to be based on manual data feed by different sources and not covering the whole aspects of executing a project. Not only the content of those reports lacks the trust-worthiness and could be manipulated but are only available after the fact where little or almost nothing could be done on the damage caused. In addition, most of those progress reports do not cover the complete aspects of project management needed to monitor and control the execution of projects.

To attract development agencies and investment funds to the much-needed reconstruction programs, governments in the Middle East and North Africa region must enforce the professional project management practices when it comes to managing and delivering those programs. The policy makers need to pass the needed laws and regulations to enforce the adoption of professional project management practices at least in the public sector. The adoption of digital transformation for managing projects delivery can help in accelerating the enforcement of those best practices. Digital transformation will enforce transparency and accountability in capturing projects data as well as ensure real-time single version of the truth when it comes to reporting projects’ performance.

Project Management Information Systems will enforce the automation of every-day project management processes by enforcing the use of pre-defined templates for capturing needed data to manage each process. Thus, eliminating the use of manual forms that not only could be subject wrong data entry, whether by accident or intentional, but eliminating the wasted effort in data capturing and verification. In addition, it allows to electronically store and attach all supportive documents associated with each form. Those systems also allow defining the automated workflow steps to distribute and share the information captured in these forms thus eliminating the lost accountability in sharing, reviewing and approving those project transactions. In addition to those much-needed benefits, automating everyday project management processes will also reduce the thousands of hours spent in completing, distributing, tracking and searching for project communications by more than 50%.

In addition to the improved transparency, accountability and governance in managing the different project processes, project management information systems ensure that all of this data is captured in single database repository. Thus. eliminating the high risk of having projects’ data stored in fragmented databases that will disable knowing the impact of the different project management processes on each other. Of course, this excludes again the wasted effort in compiling, reviewing and analyzing those data silos as well as the delay in reporting and sharing this information. It is reported that organizations are wasting more than 60% of their management resources to manually compile, review, analyze, report and share projects’ performance information. Those systems will provide the project stakeholders with real-time single version of the truth monitoring and evaluation of projects’ performance to give them the insight to make better and faster informed decisions.

The benefits of digital transformation are not limited to improved transparency, accountability, governance and real-time single version of the truth reporting but also it provides the many benefits associated with big data. The everyday data captured by project management information system across the many managed and delivered projects, provide the organization with unmatched source of knowledge that can be used to analyze, compare and correlate performance trends as well as well build a repository of lessons learned that will help in better managing risks and issues that usually results in projects’ failure.

Although the adoption of technology in managing and delivering projects will not bring miracles in providing the much-needed transparency for reconstruction programs, but for sure it will accelerate the adoption of project management best practices needed by donners and investment agencies to improve transparency, accountability, governance and real-time single version of the truth projects’ performance reporting.

Implementing Earned Value Method On Lump Sum Contracts

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Construction Contractors who are keen on implementing the earned value method (EVM) technique to monitor and evaluate their projects’ performance understand that EVM cannot be implemented as is on lump sum contracts. Those contractors understand that the amount earned for completing works on site does not necessarily tally with the actual cost incurred in completing the same scope of work. This could be attributed to many reasons including but not limited to front loaded contracts, unbalanced bids, differing progress percentage complete calculation for invoicing the project owner than those used by subcontractors and suppliers, subcontracts and material supplies using currencies different than the project currency, site and home office overhead cost, contingency and management reserve allowance, funding and project finance cost among others.

To resolve this issue and take advantage of the EVM technique in providing objective performance metrics that are critical for assessing the project’s efficiency in meeting the target performance budget, the organization needs to run two sets EVM of metrics. The first will be based on the contract that the contractor has with the project owner, also known as Revenue Contract, and the second will be based on the project’s cost commitments for awarded subcontracts and purchase orders and non-commitment cost for site and home office overhead and miscellaneous invoices.

Establishing the Project Performance Budget

The first step for EVM performance reporting is to ensure that there is an approved project performance budget. This budget is based on the approved cost estimate for the different work packages that were established using the Work Breakdown Structure (WBS). In addition, it covers the additional project cost that are attributed to site and home office overhead, contingency allowance for accepted risks, management reserve for unknown risks, project funding and finance cost, profit among others. PMWeb Project Management Information System will be used to capture all budget versions until the organization has an approved performance budget baseline.

The budget planned spending (PV) will detail the spending that organization anticipates to have during the project duration. This requires aligning the budget with the project’s integrated schedule by associating each budget line item with the relevant project schedule activity. The spending plan for each financial period covered by the activity could be front loaded, back loaded, linear, bell shaped or any other curve format that is aligned on how actually the budget will be sent.

The project performance budget will be used to establish the project’s bid proposal. It should be noted that some of the budget’s WBS levels will not be displayed in the Bill of Quantity established by the project owner. Those would usually include site and home office overhead, contingency allowance for accepted risks, management reserve for unknown risks, project funding and finance cost, profit among others. In addition, the contractor might decide to front load some of the early planned work packages to secure additional revenue to fund the project. Further, some contractors might decide to unbalance their bids to take advantage of scope of work that could be subject to increased where those items will be priced with higher profit margin than other scope of work that might not be subject to change. The most important that the total of the performance budget should not change regardless how the project budget is distributed.

PMWeb project revenue module will be used to capture all proposal versions including the one that the formal awarded contract represents. The revenue module allows capturing the retention on completed works and material stored on site, advance payment recovery, VAT and other adjustments. In addition, it allows capturing all change orders as well as progress invoices which will detail the schedule earned value.

In addition, the project performance budget will become the basis for awarding the subcontracts and purchase orders that the contractor will use to procure work packages that will be delivered by the selected subcontractors and suppliers. During the procurement stage, the project performance budget line items could be subject to increase or decrease depending on actual values of the awarded subcontracts and purchase orders. Some contractors might decide to create a new performance budget taking into account the new values while many others prefer to adjust the values of the approved performance budget to match the values of the awarded commitments. This will require using PMWeb budget request module to increase or decrease budget line items by shifting funds from one work package to another including shifting funds from the project contingency.

Monitoring and Evaluating Project’s Schedule Variance and Schedule Performance Index

The awarded project contract or revenue contract will be distributed on the project’s integrated schedule activities to produce what is known as the cost loaded project schedule using applications like Oracle Primavera P6. This will establish the Schedule Budget At Completion (SBAC) value for each project schedule activity. This cost loaded schedule will be used to calculate the Schedule Planned Value (SPL) for each period and Schedule Earned Value (SEV) which will be based on the approved percent complete at the end of each specific progress period multiplied by the Schedule Budget At Completion (SBAC) for the relevant activity. This will provide the two EVM metrics Schedule Variance (SV) and Schedule Performance Index (SPI).

There is a growing trend to have pre-agreed activity accomplishment weight values to calculate the percent complete for the progressed project schedule activities. This will expedite the process on agreeing on what percent complete each activity should have based on tangible achievements or deliverables. Usually, those are calculations are done in MS XLS and then the weighted percent complete for each activity will be either uploaded manually or imported by having an interface between Oracle Primavera P6 and MS XLS.

Those EVM metrics will provide the contractor along with the critical path method (CPM) total float (TF) value with a better understanding on the project schedule performance from two aspects. The first is how good the contractor in earning the revenue contract value in alignment to the cost loaded baseline schedule while the second aspect is how good the contractor in achieving the project’s milestone dates including the project completion date.

Managing the Project Cost Variance and Cost Performance Index

The same approved project budget will be used to place the actual commitments against the project. Those could be subcontract agreements, material supplies as well as internal company commitments such as plant, project management, overhead contribution. The different commitment agreements will be detailed to the same cost breakdown structure levels, which could be identical to the WBS levels, used in the project performance budget and revenue contract.

On monthly basis, the subcontractors, supplier and contractor’s project management team and other business units involved in the project delivery will submit the monthly project invoice for completed works and material on site. This will represent the actual cost (AC) incurred by the contractor for delivering the project’s scope of work. It is highly recommended to use the same percent complete used in the revenue contract to calculate the percent complete of commitments unless there are pre-agreed percentages to evaluate the actual cost of completed work in those commitments. Those could include for example cost of material procured and equipment mobilized. Retention of completed works and material on site will adjust the amount that the subcontractors and suppliers will be entitled to have.

Should the actual cost for delivering the project is not fully captured in the awarded commitments, PMWeb allows capturing actual cost from timesheets and miscellaneous invoices. The timesheet module allows capturing the labor and non-labor resource hours against each cost breakdown structure as well as project schedule activity. The captured hours can be based on normal working hours, overtime, weekend and other type of hours. The rate for each hour type will vary depending on the organization’s approach in calculating premium hours.

The miscellaneous invoices can be used to capture cost of services, material and other items that are not part of a commitment contract. The progress invoices can have multi-currency value that could differ from the project budget currecny depending on what is being purchased.

Using the budget’s earned value (EV) and actual cost (AC) captured in the commitments’ progress invoices and non-commitment actual cost captured in miscellaneous invoices and timesheets, the project’s cost variance (CV) and cost performance index (CPI) will be calculated. The earned value (EV) for each cost center will be calculated by multiplying the current budget with the approved percent complete for the cost center as calculated by the updated project schedule. This will allow calculating the other cost metrics including estimate to complete (ETC), estimate at completion (EAC) and variance at completion (VAC).

The Earned Value Performance Report

The schedule and cost earned value metrics calculated above will become the basis for reporting the project’s performance using the earned value metrics. In addition, they will be used to create a new metric that will called Risk Alert Index (RAI) which is based on the values of the schedule and cost performance indices. Further, the report will display the current project Total Float (TF) value to indicate the delay in the project’s completion date. This report will exclude the details of the project budget and commitments as those considered to be internal transactions and not to be shared. Of course, those cost transactions and metrics will be closely monitored and evaluated by the assigned project team members using other reports with restricted access.

The schedule variance and cost variance as well as schedule performance index and cost performance index metrics, risk alert index and total float performance trends can be also monitored and evaluated across the project periods. The report will also have a chart to display the planned percent complete for each period as per the approved cost loaded schedule as well as the actual percent complete to date.

Conclusion

The earned value method is an excellent technique to monitor and evaluate the performance of construction projects. Nevertheless, for lump sum contracts, the earned value method cannot be implemented as it is as the selling price will not only not match the target cost price but also could have different funds allocation for each WBS level. This occurs because of front loading and unbalancing the selling price to take into consideration the contingency and management reserve allowance, project financing cost, home office overhead, profit among others. To overcome this issue, two planned spending values and earned values need to be calculated for the project. The first will be based on the selling price and the second will be based on the approved current budget. This will enable having the EVM metrics be used in a way that are best suited for Lump Sum contracts.

How much are you willing to waste in solving your project’s performance puzzle?

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Many of the projects intensive organizations continue to waste their most valuable resources time and effort to solve their current projects’ performance report puzzle. A report that is a must to provide the insight to make informative decisions that could impact a project’s performance budget, completion date, quality of work among many other project’s success objectives. With the growing projects’ complexity, change dynamics, contractual obligations, lower profit margins, less attractive opportunities, delivery risks among others, organizations cannot afford not having real-time single version of the truth project performance report.

Projects’ senior resources continue to waste their time in consolidating, reviewing, verifying and analyzing the reported projects’ data that are usually captured in fragmented MS Excel files to solve the project’s performance puzzle. Those MS Excel files which are usually managed and populated by the different project team members might have different form and format in reporting the captured data. There will files to capture RFIs, Submittals, NCRs, Permits, Safety Incidents, Meeting Minutes, Daily Reports, Change Orders, Potential Change Orders, Progress Invoices, Material Deliveries among many others. In addition, those files are never designed to capture all of the important data included in project’s communications. For example, the RFI log will not include the question, proposed solution and answer fields. In addition, those MS Excel files will never provide the access to the supportive documents such as drawings, pictures, etc. and links to other relevant project’s communications. Further, those files will never reflect the current real time status of those communications as the assigned project team member needs to collect those communications and update the fields in MS Excel. This adds an additional challenge which is to ensure that all MS Excel files used in the report have the same cut-off date.

Using Project Management Information System (PMIS) solutions like PMWeb, those projects intensive organizations will have a single web-integrated platform to capture all projects’ data along with all supportive documents in a pre-defined workflow steps to formalize the submission, review and approval of reported data. This will ensure the trust-worthiness as well as timely reporting of project’s data which will eliminate the manual processes of preparing the relevant project communication form, for example RFI, attaching all supporting documents, distributing the RFI to the intended recipients and then logging the part of the RFI data in the MS Excel file. This data will provide the content of the pre-defined project’s performance reports to enable the project’s executive to analyze, visualize and share project information in any form and format.

Capturing Everyday Projects Data

PMWeb comes ready with most of the everyday forms needed to manage a project including but not limited to request for information, meeting minutes, daily reports, submittals, transmittals, safety incidents, budget, contracts, change orders, progress invoices among many others.

In addition, PMWeb custom form builder allows creating unlimited number of new forms that PMWeb might not have by default. The custom form builder can be used to create non-compliance report, request for inspections, audit reports, permits, executive narrative report among many others. Those input forms can be in English or any other language, Latin or Non-Latin.

Since these forms would have repeated type of data that should be standardized across all forms within a project or even across the complete organization’s portfolio of projects. PMWeb allows creating pre-defined lists of those values not only to ensure consistency and correctness of captured data but also to speed adding this data by the different project team members.

PMWeb security rules will be used to enforce accountability on captured data by setting the right access rights for the different project entities and team members for using those forms. This could include access rights for each form at each project as well as access rights for the fields within the form itself. PMWeb audit trail captures the details of all those users who have accessed PMWeb along with the details of what actions they made and when.

PMWeb customizable online help allows the organization to access an extensive help content that explains how to use each form. When the user clicks on “?”, PMWeb will open the online help manual to provide the needed knowledge. This editable online help can be used by the organization to customize the help manual to align the content with the project management procedures adopted by the organization.

PMWeb document management repository allows the organization to upload the different documents such as drawings, pictures, videos, manuals and others that are usually attached to the above project communication. Folders and subfolders are created to match the project’s filing system structure as well as to limit access for each folder. Document attributes and redline comments can be added to each uploaded document.

To enforce transparency in submitting, reviewing and approving the captured data, PMWeb visual workflow will be used to map those steps for each form. The visual workflow can include branches and conditions to match the level of authorities assigned to each project team member as it relate to reviewing and approving or rejecting project management processes.

Reporting Single Version of the Truth Project Performance

All of this captured data will be stored in PMWeb database to provide the real-time content needed for the different performance and status reports needed to monitor and evaluate the projects performance. Tabular and graphical reports as well as dashboards can be designed in the desired form and format. Those web-enabled reports and dashboards will become available for the intended stakeholders anywhere, anytime using any device.

Nevertheless, this is not the only benefit those stakeholders will get but they will be able to drilldown for additional details on the reported performance information all the way to the input form that was the basis for the reported information. This not helps in building trust on what is being reported but also provides the details and links to other records that could be related to the reported information. Of course, filters can be added to those reports to limit the selection of the data being reported on. This provides decision makes with the insight to make better and faster informed decisions.

In addition, the project team can use interactive business intelligence and data visualization applications like MS Power BI, Tableau, Qlik among many others to provide in depth analysis of the captured data and identify trends and correlations between the data of the different processes captured in PMWeb. For example, the analysis could identify if there is a relation between the volume of RFIs raised and change orders that could have an impact on the project’s budget and completion date. In addition, the same analysis could also run all projects managed by the organizations to identify additional trends and correlations.

Conclusion

With the growing projects’ complexity, change dynamics, contractual obligations, lower profit margins, less attractive opportunities, delivery risks among others, organizations cannot afford not having real-time single version of the truth project performance report. Projects intensive organizations cannot continue to waste their most valuable resources time and effort to solve their current projects’ performance report puzzle. Those organizations understand that the project performance report is a must to provide the insight to make informative decisions that could impact a project’s performance budget, completion date, quality of work among many other project’s success objectives.

How can technology helps financial institutions in monitoring and evaluation their projects’ finance?

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Financial institutions who are involved in providing finance for engineering and construction projects are now required more than ever to predict and report on the likelihood of loan default before it actually occurs. Project management standards have identified the best practices that must adopted to ensure robust cost variance at completion reporting. Those best practices are crucial to enforce transparency, accountability and real-time monitoring and evaluation of projects’ financial key performance indicators and metrics.

Project Management Information System (PMIS) similar to PMWeb provides those financial institutions as well as the contractors with an integrated ready-to-use platform to implement those best practices and achieve the desired outcome. All those forms allow having all supportive documents attached to the record to provide the complete details of each transaction. Those supportive documents will be uploaded and stored in the right folder or subfolder of PMWeb document management repository. In addition, a workflow can be created to formalize the steps for submitting, reviewing and approving each transaction. The trust-worthy data captured in those transactions will provide the organization with information needed to have the insight to make better and faster informed decisions.

Defining the Project Performance Budget

Regardless of your project size, type or location, every project represents an investment that was based on estimating the cost for delivering the project’s scope of work. The Work Breakdown Structure (WBS) is the technique used to define the project scope of work and determine what is included and what is excluded from each work package. This will enable the organization to estimate the labor and non-labor resources needed, materials to be procured and scope of work to be subcontracted to deliver the project. Accordingly, it makes sense that reporting the project’s financial performance should be aligned with the WBS levels for which they will become the project’s cost breakdown structure.

Assumptions for the unknown scope of works and events to be identified and assessed. The project risk register will be used to capture likelihood and impact of those assumptions and identify the most appropriate response actions to treat them. This could result in increasing the cost estimate to accommodate for additional management effort, replacing vendors and suppliers, subcontracting more project scope and allowing funds for contingency and management reserve.

The cost estimate will become the basis for establishing the project budget where additional cost might be added to cover the cost of project finance, home office overhead and profit. The project performance budget will become the total investment amount that the organization wants to earn revenue as well as spend on the project to achieve the desired profit or return on investment.

The budget planned spending will detail the spending that organization anticipates to have during the project life cycle. This requires aligning the budget with the project’s integrated schedule by associating each budget line item with the relevant project schedule activity. The spending plan for each financial period covered by the activity could be front loaded, back loaded, linear, bell shaped or any other curve format that is aligned on how actually the budget will be sent.

Managing the Revenue Contract

When the contractor submits his bid proposal, the contractor strategy for presenting his price might vary from how the budget was detailed, although the total of both would remain the same. Some contractors might front load the proposal to secure additional funds to finance the project. Other contractors might lower the price of project items that could be deleted or reduced while increasing the price of items that could be increased. With the absence of “unbalanced bid” clause, many contractors might opt to do this. Of course, the alerting part of having unbalanced bids that reporting project’s actual profit and loss will not be true. Unbalanced bids could result in having part of the project scope delivered at high profit while other scope of work at loss.

During the project’s execution, changes to the project scope will usually occur. The contractor needs to capture all pending, approved and disputed changes along with all supportive documentation. For those disputed changes, the contractor will usually submit a claim requesting for the financial, time extension and prolongation costs associated with those changes.

On monthly basis, the contractor will submit the monthly project invoice for completed works and material on site. Today, most engineering and construction projects use the activity percent complete of cost-loaded project schedule to determine the amount to be invoiced at the end of each progress period. Retention of completed works and material on site will adjust the amount that the contractor will be entitled to have.

There is a growing trend to have pre-agreed values to calculate the percent complete for the progressed project schedule activities. This will expedite the process on agreeing on what percent complete each activity should have based on tangible achievements or deliverables.

The actual payment of the approved progress invoice, or account receivable, needs to be captured and how it was paid. Some project’s agreements require that the approved progress invoice be of a minimum value to be paid otherwise it will be delayed for the following month.

Managing the Project Cost

The same approved project budget will be used to place the actual commitments against the project. Those could be subcontract agreements, material supplies as well as internal company commitments such as plant, project management, overhead contribution. This will provide the financial institution as well as the contractor a better understanding of the actual costs sources that the project will encounter. The selection and award of subcontracts and material supplies need to be competitive and compliant with the project scope of work and specifications. This will require technical and commercial evaluation of received bids before selecting the successful bidder.

The different commitment agreements will be detailed to the same cost breakdown structure levels used in the project performance budget and revenue contract. The commitment agreements could be in different currency than the currency in the project budget and revenue contract. This is very true when it comes to imported equipment and material supplies.

Similar to the performance budget and revenue contract, the anticipated invoicing for the scope of work needs to be captured to identify the payment obligations, or cash out, on the contractor. Payments can be made in full the approved progress invoice or partial.

Changes to the project could happen for many reasons and the contractor needs to implement a proactive policy to capture all potential changes as soon as a change event get identified by a subcontractor, supplier or even the contractor’s own team. This helps the contractor to be fully aware of all events and incidents that could increase the project cost.

If after reviewing the submitted potential change request it’s found that the change is valid and could have an impact on the project approved budget and/or delivery schedule, a change management will be generated from the submitted potential change request. The change management will capture the cost and time impact of the change on both, the approved project budget and cost commitment.

This will also get the contractor to submit his request for a change order based on the additional scope of work and the impact it has on the project. This will result in starting the change process for which a change order will be issued to the contractor as detailed earlier. Usually, only when the contractor’s change order is approved by the project owner, the contractor will issue a change order for relevant subcontractor or supplier.

This would also affect the approved project budget where budget requests will be used to increase or decrease the project budget depending on the nature of the change order as well as shift funds from one cost center to another. The most common budget shift is when funds get shifted from the contingency cost center to another cost center to cove for the cost of accepted project risks that were already considered in the risk mitigation plan.

On monthly basis, the subcontractors, supplier and contractor’s project management team and other business units involved in the project delivery will submit the monthly project invoice for completed works and material on site. It is highly recommended to use the same percent complete used in the revenue contract unless there are pre-agreed percentages to evaluate the actual cost of work in place. Retention of completed works and material on site will adjust the amount that the subcontractors and suppliers will be entitled to have.

Should the actual cost for delivering the project is not fully captured in the commitments, PMWeb allows capturing actual cost from timesheets and miscellaneous invoice. The timesheet module allows capturing the labor and non-labor resource hours against each cost breakdown structure as well as project schedule activity. The captured hours can be based on normal working hours, overtime, weekend and other type of hours. The rate for each hour type will vary depending on the organization’s approach in calculating premium hours.

The miscellaneous invoices can be used to capture cost of services, material and other items that are not part of a commitment contract. The progress invoices can have multi-currency depending on what is being purchased.

The actual payment of the approved progress invoice, or account payable, needs to be captured with details on when and how it was paid.

Reporting the Project’s Profit and Loss

The cost worksheet provides a tabular presentation of the project’s profit and lost against the different cost breakdown structure levels or cost centers. The cost worksheet will detail the current project performance budget which includes all approved budget requests and adjustments as well as the projected budget (BAC) which adds all pending change requests to the current budget. The earned value (EV) for each cost center will be calculated by multiplying revised budget with the approved percent complete for the cost center as calculated by the updated project schedule. The cost worksheet will also show the commitment cost against each cost center and approved changes to detail the revised commitment and all pending and disputed changes to details the projected cost at completion for each cost center (EAC). The actual cost (AC) incurred against each cost center will be also displayed. Should the contractor desire to view the actual revenue earned, this can be done too.

The project’s profit and loss as of the report date or cost variance (CV), will be the difference the between the earned value and actual cost. The cost performance index (CPI) will detail the project’s efficiency in maintaining the project budget. The estimated cost to complete (ETC) the balance of the project’s scope of work will be the Estimate At Completion (EAC) minus the Actual Cost (AC) to date. To determine whether the project will be at profit or loss when it is completed, the variance at completion (VAC) will be the difference between the projected budget at completion (BAC) and the Estimate at Completion (EAC). Those metrics are critical for assessing if the project will be completed within the approved budget thus achieving the desired profit.

Reporting the Project’s Earning Performance

The cost loaded integrated project schedule will be used to defined the planned revenue earning which was established when the baseline schedule was approved by the project owner and the actual revenue earned will indicate how good the contractor is in achieving the scheduled scope of work (SV). Along with the total float (TF), the schedule variance (SV) and schedule performance index (SPI) provide three important metrics to report on the project’s ability to achieve timely completion.

Conclusion

Financial institutions who are involved in providing finance for engineering and construction projects are now required more than ever to predict and report on the likelihood of loan default before it actually occurs. Using proven project management best practices along with the technology that supports implementing those practices provide financial institutions with a robust cost variance at completion monitoring and evaluation solution. This will ensure transparency, accountability and real-time reporting of the project’s financial performance status and health to provide the insight for better and faster informed decisions on how to reduce the risks of loan default.

Work Smart Not Hard When Monitoring and Evaluating Your Projects Performance

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Regardless of the project size or type an organization needs to deliver, reporting the project’s performance and status is a must requirement. The different project stakeholders might have different requirements for monitoring and evaluating how the project is performing but would usually cover aspects that relate to schedule, cost, quality, risk, issues among others. The frequency of performance reporting could vary from weekly or monthly and it could be limited to a specific project, program or portfolio of projects.

Most of those organizations, and in particular those involved in delivering engineering and construction projects, continue to use MS XLS as the platform to provide this performance reporting. MS XLS is used to manually extract the performance data found in the forms used to implement the different project management processes which will become the data source for those reports and dashboards. The performance report is then printed or saved and manually shared with the stakeholders. For those who use data visualization tools like MS Power BI, Qlik, Tableau among others, they will import the MS XLS tables to create, present and share the project’s performance report with the stakeholders.

Nevertheless, the effort spent and time needed to capture, analyze and verify the projects’ performance data needed for those performance reports could be massive. It is estimated that it will take as long as 6 weeks and 500 man-hours to produce the performance report per project. At least, 65% of those spent hours are usually spent by project executives who need to review, analyze, verify and approve the reported performance data. Assuming an average cost of US$ 50 per man-hour, this could cost US$ 300,000 per project per annum. For an organization with a portfolio of 5 ongoing projects, this could jump to as high as US$ 1.5 million per annum.

In addition to this high cost, there is the cost of wasted benefits when using MS XLS to capture projects’ performance data. For example, in addition to the high cost of fraud risk due to the lack of transparency and accountability in captured performance data, there is the high cost of wasted benefits of not gaining the knowledge from storing and analyzing projects’ historical data. For example, if the organization can capture the details of all request for information (RFI) issued across all of their projects for the current and past years, they can analyze the data to identify the most common reasons for RFIs and how to avoid them, respond to them in a better way or use them to generate change orders to adjust the project price and delivery period. The same could apply to the many other data content generated during the project delivery life cycle stages.

How Can Technology Help Us to Work Smarter Not Harder?

Project Management Information System (PMIS) like PMWeb helps organizations to formalize the capturing of projects’ performance data. PMWeb comes ready with most of the everyday forms needed to manage a project including but not limited to request for information, meeting minutes, daily reports, submittals, transmittals, safety incidents, budget, contracts, change orders, progress invoices among many others.

In addition, PMWeb custom form builder allows creating unlimited number of new forms that PMWeb might not have by default. The custom form builder can be used to create non-compliance report, request for inspections, audit reports, permits, executive narrative report among many others. Those input forms can be in English or any other language, Latin or Non-Latin.

Since these forms would have repeated type of data that should be standardized across all forms within a project or even across the complete organization’s portfolio of projects. PMWeb allows creating pre-defined lists of those values not only to ensure consistency and correctness of captured data but also to speed adding this data by the different project team members.

PMWeb security rules will be used to enforce accountability on captured data by setting the right access rights for the different project entities and team members for using those forms. This could include access rights for each form at each project as well as access rights for the fields within the form itself. PMWeb audit trail captures the details of all those users who have accessed PMWeb along with the details of what actions they made and when.

PMWeb customizable online help allows the organization to access an extensive help content that explains how to use each form. When the user clicks on “?”, PMWeb will open the online help manual to provide the needed knowledge. This editable online help can be used by the organization to customize the help manual to align the content with the project management procedures adopted by the organization.

PMWeb document management repository allows the organization to upload the different documents such as drawings, pictures, videos, manuals and others that are usually attached to the above project communication. Folders and subfolders are created to match the project’s filing system structure as well as to limit access for each folder. Document attributes and redline comments can be added to each uploaded document.

To enforce transparency in submitting, reviewing and approving the captured data, PMWeb visual workflow will be used to map those steps for each form. The visual workflow can include branches and conditions to match the level of authorities assigned to each project team member as it relate to reviewing and approving or rejecting project management processes.

All of this captured data will be stored in PMWeb database to provide the real-time content needed for the different performance and status reports needed to monitor and evaluate the projects performance. Tabular and graphical reports as well as dashboards can be designed in the desired form and format. Those web-enabled reports and dashboards will become available for the intended stakeholders anywhere, anytime using any device.

Nevertheless, this is not the only benefit those stakeholders will get but they will be able to drilldown for additional details on the reported performance information all the way to the input form that was the basis for the reported information. This not helps in building trust on what is being reported but also provides the details and links to other records that could be related to the reported information. Of course, filters can be added to those reports to limit the selection of the data being reported on. This provides decision makes with the insight to make better and faster informed decisions.

For those organizations who want to continue monitoring and evaluating projects performance data using data visualization tools like MS Power BI, Qlik, Tableau among others, all those applications can extract PMWeb performance data as long as they have the right access rights for the database. The PMWeb data can be associated with other data sources like those of ERP, accounting, CRM, human resources among others to blend and provide business-wide performance reporting.

Conclusion

Sooner or later, organizations who are involved in delivering projects, and in particular engineering and construction projects need to adopt technology to improve their business bottom line and sustain their business growth if not existence. PMIS technology like PMWeb provides organizations with the proven technology to work smart rather than hard which will enable them to get more from their resources. The high benefits from increased transparency, accountability, real-time single version of the truth reporting and the insight to make better and faster informed decisions will offset the investment needed to adopt PMIS technology. Organizations who have adopted PMIS technology are reporting a return on investment (ROI) in excess of 300%.

So in conclusion, organizations can decide if they want to continue working hard or start working smart and get more out of the resources, financial and manpower, that they have.

How Can Technology Support Your Projects’ ISO Compliance Audit?

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With the growing trend among capital project owners in using ISO to enforce the adoption of quality, HSE and Sustainability best practices on their projects’ delivery, checklists tend to be the preferred method to perform the compliance audit. The audit checklist, which will be unique for each ISO practice, is used to assess the organization’s compliance with the ISO quality management systems (QMS) and how its processes are implemented and maintained.

Once all the audit data has been gathered accordingly, auditor will need to analyze and determine the data, to be classified in which category of audit finding. In general, there are 4 types of Audit Findings; Non-conformance, Observation, Opportunity For Improvement (OFI) and Compliant. The Non-conformance is when a breakdown, or partial breakdown of a process in the Quality Management System (QMS) which requires Corrective Action Request to document action taken. Whereas, Observation is when a minor deviation from an otherwise well-implemented process. Opportunity for Improvement (OFI) is a finding based on facts and data that shows a potential improvement opportunity.

The audit checklist ensures the audit is conducted systematically and consistently, provides a repository for notes collected during the audit process, ensures uniformity in the performance of different auditors and provides reference to objective evidence.

How Can Technology Support Your Projects’ ISO Compliance Audit?

Using a Project Management Information System (PMIS) like PMWeb will help in automate the ISO audit process and use the data captured in the audit process to analyze non-compliance trends and report on the overall performance of the audit process. The PMWeb custom form builder will be used to create the ISO audit checklist. There could be different audit checklists depending on the ISO standard being audited. For those involved in capital projects delivery, the most common ISO standards used are the ISO 9001 for quality management system, ISO 14001 for environmental management system and 18001 for occupational health and safety assessment. In addition, some organizations might also consider having audit checklist for ISO 10006 for quality management in projects. Those audit checklists can be created in English or any other language used by the organization like for the example those shown below which were done in Arabic.

The audit check list can be designed to capture the data needed to perform the ISO audit which will include the clause No., question No., audit question, audit finding and audit evidence. In addition, it can include comments and examples, details of the opportunities for improvement and the reference to the PMWeb module used to fulfil the audit requirement like request for inspection, daily report, etc.

The documents used to support the audit evidence will be uploaded into PMWeb document management repository. Folders and subfolders will be created to match the ISO clauses and audit questions for each ISO standard. This will help the organization in storing those audit evident documents for all projects being audited. Those uploaded documents will then be attached to the relevant ISO audit checklist.

Should there be a need to have a formal process for submitting the audit checklist for review and approval, a workflow can be created for audit checklist. The workflow could include conditions to determine who should be involved in the review and approval process depending on the ISO standard, project being audited among others.

Reporting The ISO Compliance Audit

All data captured in the audit process for all ISO standards, for all audit periods and for all projects will be available in a single real-time log. Filters can be added to the report to select which projects to display, which periods to report on, what audit actions results to be selected and which ISO standard to be included. The layout of the report can be designed in any desired format.

The same real-time data can be used to create the ISO audit dashboard for each project. The dashboard will report on the ISO standards being audited, for example ISO 9001, 14001 and 18001. The dashboard will include a donut chart to detail how many audit items were in compliance, had opportunities for improvement, reported as observation (sometimes also considered as minor non-compliance) and those reported as non-compliance. The dashboard also reports on the non-compliance trend for the past three periods where it includes both non-compliance and observations. The dashboard also details the percentage of audit findings per each clause group of the relevant ISO standard.

For those executives who are interested in having an overall view of the ISO audit across the complete projects portfolio being delivered by their organization, the projects audit dashboard will be used to provide this insight. The dashboard has similar visuals of the specific project dashboard but instead of reporting on the data of a specific project it consolidates the data from all audited projects. In addition, it provides an overall audit status of each project by showing the percentage of audit findings for that specific project.

Of course, the audit data can be also used to create more specific analysis reports like the report shown below which details the non-compliance and observation audit findings for each audit item for each project. The report consolidates the data from all audited projects and separates the data for each ISO standard.

Conclusion

With the growing trend among capital project owners in using ISO to enforce the adoption of quality, HSE and Sustainability best practices on their projects’ delivery, checklists tend to be the preferred method to perform the compliance audit. PMWeb PMIS can be used to automate and improve the audit checklist process as well as make the real-time data captured in the audit available for the organization in the desired form and format. Reports and dashboards are created to monitor and evaluate ISO compliance as well as analyze non-compliance trends.

How Can Technology Support Your Construction Project Quality Management Plan Implementation?

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Regardless of your project type or size, projects need to be completed on time, within the approved budget while meeting the required quality standards. Similar to the other project management plans, the Project Quality Management Plan (PQMP) documents the necessary information required to effectively manage project quality during the construction stage. It defines the project’s quality policies, procedures, criteria for and areas of application, and roles, responsibilities and authorities.

The successful implementation of the PQMP will enable the project delivery team to achieve the following objectives: Minimize construction defects from occurring, Ensure work conforms to contract documents and functional performance requirements, Select quality-oriented subcontractors and suppliers of all tiers, Ensure that workmanship required by contract documents is performed by qualified craftsmen from every trade, Perform contractually required inspections and tests in a timely manner, Perform relevant inspections/observations as defined by the approved construction inspection checklists, Minimize rework during the course of construction, Strive for a zero-item completion list at substantial completion and Minimize final punch list.

How Can Technology Support Your Construction Project Quality Management Plan Implementation?

Project Management Information Systems (PMIS) like PMWeb are specifically designed to manage the complete project life cycle of capital projects. This will cover managing the project schedule, budget, procurement, commitments, communications, risks, HSE, stakeholders, quality among other project management processes. PMWeb provides an integrated web-enabled platform to automate the processes of quality assurance and quality control as stated in the PQMP as well as provide real-time single version of truth monitoring and evaluation of the project’s QA/QC performance.

QA/QC Organization Chart

The project’s QA/QC organization chart created in PMWeb organization chart module will be used to reflect the requirements presented in the project’s execution plan (PEP). The organization of the project staff, including QA/QC staff, Construction Quality Manager (CQM) will provide QC oversight and guidance throughout the duration of the project.

The needed resources as per the QA/QC organization chart will be booked to ensure their availability as per the project’s quality management requirements. PMWeb resources requirement module will be used to identify and book the required resources for the needed duration and level of effort. The booking of resources can be detailed and mapped to the QA/QC activities identified in the project schedule.

This will help the organization to assess the efficiency of the QA/QC resources by comparing the actual hours recorded using PMWeb timesheet module and the planned hours as per the resource requirements template. The timesheet module allows capturing the details of actual hours whether they were spent as regular, overtime or weekend pay. PMWeb timesheet module allows capturing the hours for the complete QA/QC team in a single timesheet if needed. Of course, the timesheet also allows capturing the details of non-labor resources in addition to the labor resource.

QA/QC Roles and Responsibilities

The Project Quality Management Plan should include clear job description detailing roles, responsibilities, authorities and performance criteria assigned to each QA/QC resource. PMWeb custom form builder will be used to capture the job description details for each QA/QC resource position. For example, the Construction Quality Manager (CQM) will be responsible for Overall implementation of the PQMP, Review and approval of daily reports, Ensure proper scheduling of preparatory and initial phase inspections, Attending preparatory and initial phase inspections, Prevent, stop, or correct QC deficiencies, defective work, or noncompliance, Exercise “stop work” authority when required to prevent performance inconsistent with contract documents, Investigate research, define, and isolate quality problems and participate in their resolution, Initiate and maintain QC records, review procedures, and monitor documentation for completeness, accuracy, and compliance with contract requirements, Monitor and update the submittal register and review submittals, Ensure that as‐built drawings are being accurately maintained and Staffing, approval, and assignment of additional discipline specific inspectors as needed to ensure effective implementation of this PQMP.

In addition, the job description forms could include a scoring field for each identified task to appraise the resource performance in achieving their assigned tasks. This data can be then used to report the performance of the QA/QC team and to identify actions and measures that need to be taken to ensure the proper performance of the assigned team.

Project Directory

The PQMP should have detailed list of all organizations and individuals who have a role in the project to achieve the project’s quality assurance and quality control requirements. The list should include the contact details for each individual which are captured in PMWeb companies’ directory.

PMWeb pre-qualification module will be used to enforce a formal process for selecting quality-oriented subcontractors and suppliers who might be involved in the project delivery. The pre-qualification template can be designed to capture the needed information for each entity that might be involved in the delivering the project’s scope of work. In addition, it includes a scoring matrix that can be defined by the QA/QC team to ensure that subcontractors and suppliers are objectively assessed against the same measures that matter most to the organization as well as the project.

Quality Control Meetings

Weekly Quality Control (QC) meetings are a must on every construction project. As a minimum, the following shall be accomplished at each QC meeting:

  • Rework items (Identified since the last meeting and Completed since the last meeting)
  • Submittal status (Submittals reviewed since the last meeting and Submittals expected within the next 2‐week window)
  • Identify any testing required in support of or confirming remedial activities
  • Review status of any offsite activities
  • Identify any special documentation requirements for either production or QC
  • Address and resolve any production or QC problems
  • Identify any production or QC procedures that may be less effective than anticipated and may require revising the project delivery or contingency plan and annotate any recommendations
  • Identify any activities or items that may require revising the PQMP and annotate any recommendations

Daily Reports

Daily Report is one of the many formal communications that a Contractor is obliged to submit on daily basis. The daily report is used to record details of the completed works and resources, labor and non-labor, employed on the construction site. The daily report will detail the weather status among others. In addition, the daily report will also report on quality control activities including field calibrations. PMWeb Daily Report module will be used to capture those details along with the progress photographs of progressed works or important incidents.

Submittal Review and Approval

Submittals are the contract documents that require the contractor to prepare, review, approve and submit to the Consultant for review, approval, or other appropriate action. They demonstrate the contractor’s understanding of the contract documents and how the contractor intends to execute the project requirements by Identifying products selected from acceptable products in specifications, Detailing how items constructed and interface with adjacent construction, Identifying optional characteristics, Scheduling types of products by location, Describing physical and performance criteria and Certifying that products meet or exceed specified requirements.

PMWeb submittal module allows capturing the details of all needed submittals including the relevant specification section, title, supplier, subcontractor WBS level, project schedule activity ID, lead time to procure among others. In addition, PMWeb allows creating unlimited number of attributes with list of values that can be used to better describe the submittal and use to report and analyze the performance of the submittal process.

Request for Inspection

During construction of works in a Project, the Contractor needs to constantly inform the Engineer about his work plan. This Information is passed in the form of ‘Request for Inspection’ (RFI). Usually, the project specifications detail the inspection tests needed for each section. Therefore, it is highly recommended to have a detailed inspection checklist defined for each specification section. This will help in building consensus among all parties involved in the inspection process whether this was at a single project level or across all projects managed by the organization. PMWeb custom form builder will be used to create the RFI for all specification sections.

Non-Conformance Reports (NCR)

Non-Conformance Reports (NCR) is a construction related document that keeps track of deviation and work that fails to meet standards and specifications. The following are the most common situations that will require the issuance of an NCR: Work that was not built as indicated in the approved Issued for Construction Drawings, Work that fails to meet specified tolerances as established in the project specifications, Work that is being performed using non-approved methods or standards, When the testing and inspection plan is not followed as agreed, When testing results demonstrate that the product does not meet established and approved standards, When a material is used and has not been approved as a substitute (equal or similar), When design is not accurate and does not represent actual field conditions and When the approved procedure was not followed, and quality defects have been identified by the project team. (https://www.thebalance.com/non-conformance-report-how-to-report-a-quality-issue-844987). PMWeb custom form builder will be used to design the NCR in the desired form and format to capture the needed information.

Punch List Inspection

Near completion of all work or any increment thereof, the CQM will conduct an inspection of the work and develop a “punch list” of items that do not conform to the approved figures and specifications. This “punch list” will include the estimated date by which the deficiencies will be corrected. In addition, the CQM can assess the amount of funds to be withheld from the Contractor’s progress invoice until those deficiencies are corrected and accepted. The CQM will make a second inspection to ascertain all deficiencies have been corrected.

Documents Filing

Documents generated by the QA/QC processes must be maintained in an orderly fashion. PMWeb document management repository will be used to store all documents that were attached to the different QA/QC processes. These should be arranged by category to include Photographs and videos, Specifications, Contract, Shop-Drawings and As-Built Drawings, Test Results and Certificates, Warranties and Guarantees, Operations and Maintenance Manuals, among others. All of those documents will be available to be linked to one or many PMWeb QA/QC records and other PMWeb records like change orders, Request for Information, Transmittal among many others.

Automating QA/QC Processes

The Project Quality Management Plan (PQMP) should include a responsibility assignment matrix (RAM) the details the role for each project entity and team member in implementing the processes included in the PQMP. The RAM defines the project management processes and identifies the team member responsible for their performance, review, comments and who to be informed. The RAM helps to clearly define the responsibilities of the project Team Members, lines of authority and flow of approvals and information among the Team Members.

The RAM or RACI defines the Responsible individual to do the work to achieve the task, Accountable (also Approver) is the one ultimately answerable for the correct and thorough completion of the deliverable or task. In other words, an accountable must sign off (approve) work that Responsible provides. There must be only one accountable specified for each task or deliverable. The Consulted are those team members whose opinions are sought while Informed are those who are kept up-to-date on progress, often only on completion of the task or deliverable.

Using PMWeb workflow module, RACI values for each process will be translated into a workflow that details the steps for the project team member responsible for initiating the process, the project team member accountable for reviewing and approving the process, the project team members who might need to be consulted by the team member accountable for reviewing and approving the process, and the project team members who need to be informed on the process status and details.

QA/QC Management Performance Reporting

The data captured in the different QA/QC processes will become the trust-worthy source of information to provide real-time single version of the truth on project’s performance from the quality perspective. Tabular logs for the different processes including submittals, request for inspections, non-conformance reports, punch lists among others can be produced in the desired form and format.

In addition, graphical reports and dashboards can be produced to provide the insight to make better and faster informed QA/QC related decisions. The project quality status report displayed below provides the QA/QC team as well as other project team members with real-time monitoring and evaluation of Non-Conformance Reports, Request for Inspections and Punch Lists that could be assigned to different project’s milestones.

Conclusion

Regardless of your project type or size, projects need to be completed on time, within the approved budget while meeting the required quality standards. Similar to the other project management plans, the Project Quality Management Plan (PQMP) documents the necessary information required to effectively manage project quality during the construction stage. PMWeb PMIS provides a single web-enabled platform to automate the PQMP processes to capture real-time trust worthy data to provide the insight to make better and faster informed QA/QC related decisions.