For projects-intensive organizations, the practice of outsourcing part of the project overall scope is a very common practice. They do that to transfer the risks associated with this scope of work to other organizations who have the better know how, skills and experience in managing those risks. Nevertheless, failing to have a formal process for managing the deliverables of those contracts could result in new risks for those projects-intensive organizations that could eliminate the benefit of outsourcing this scope of work.
Of course, those organizations need also to have a formal for pre-qualifying the companies that could be considered for the outsourced work as well as have proven processes for inviting those qualified companies to bid, analyze and award the contracts to the successful bidders, contract administration and contract closeout. The point to remember is that procuring contracts is intended to reduce the project’s risk exposure and therefore the project owner must ensure that this is what is being implemented.
Deliverables Based WBS
The Project Management Body of Knowledge (PMBOK) defines the work breakdown structure as a “A hierarchical decomposition of the total scope of work to be carried out by the project team to accomplish the project objectives and create the required deliverables.” A work breakdown structure element may be a product, data, service, or any combination thereof. A WBS also provides the necessary framework for detailed cost estimating and control along with providing guidance for schedule development and control.
For example, PMWeb Project Management Information System (PMIS) allows creating the Work Breakdown Structure (WBS). It also allows importing the WBS from MS Excel, Oracle Primavera P6 and MS Project. The important point is that there should be one WBS for the whole project to be used across all project management processes.
When a project has a complete WBS, this will help in ensuring that all deliverables are defined and agreed to by the project sponsor. For the project scope that will be outsourced using contracts, the contract deliverables need to be aligned with the project WBS. For each deliverable, the amount to be paid for each deliverable needs also to be identified. For example, when the project owner decides on outsourcing the project design scope of work to a qualified engineering consultant, the contract should specify what are the deliverables for each stage of the design stage and what will be the value or weight of that deliverable.
PMWeb commitments module will be used to capture all those outsourced contracts along with the details of each contract deliverables including the value of each deliverable.
In addition, PMWeb commitments module allows capturing the complete details of each contract such as the contract number, award date, payment terms, retention percentage among other attributes of the contract. Of course, the contract agreement document and other related documents can be attached to the contract agreement.
The Deliverables Submittal Schedule
In this article, the type of deliverables that will be discussed are those deliverables that need to be formally submitted for review and approval before the project owner will accept and pay for. Of course, in many other projects specially in construction projects, most deliverables completion status will be assessed at the end of each progress period on their percentage complete of work in place. For example, roof slabs are one of the construction project deliverables that will be assessed at the end of each progress period to determine how much to pay the contractor based on the approved work in place. This work will also be subject to the site inspection review and approval processes to ensure that it has been delivered in accordance to the contract agreement and specifications.
It is recommended to include the project deliverables as activities in the project schedule as not only this will ensure having a complete integrated project schedule, but also will provide the realistic expected dates for completing those deliverables. Organizations might use different tools for producing and managing the project schedule. Some organizations might select Oracle Primavera P6 while others might select Microsoft Project or PMWeb Scheduling module. The PMWeb Scheduling module can also import the schedule created in Oracle Primavera P6 or Microsoft Project.
Deliverables Submittal Log
Nevertheless, and as stated earlier, this article focus on deliverables that need to be formally reviewed and approved before they can be accepted as being complete. Therefore, there will be a need to capture the formal process for reviewing and approving those deliverables which might be subject to multiple review processes when deliverables are not approved from the first submission. Further the review and approval of each deliverable might vary depending on the type of the deliverable.
The PMWeb deliverable submittal log will be used to capture the details of all deliverables that need to formally submitted and approved for each contract in a project.
For each deliverable, PMWeb allows capturing all possible attributes of each deliverable. It allows capturing the WBS and the project schedule activity of each specific deliverable. In addition, it allows attaching the deliverable documents which will be usually stored in PMWeb document management repository.
When the deliverable is formally submitted by the contractor or vendor, PMWeb workflow engine will automatically launch the deliverable review and approval process. The workflow review and approval steps could vary depending on the deliverables attributes. In PMWeb, this is achieved by designing the workflow branches and conditions to reflect the needed review and approval steps depending on the values for the deliverables attributes.
Payment for Approved Deliverables
At the end of each progress period, which is usually at the end of each month, the contractor or vendor needs to present the progress invoice for those completed and approved deliverables. For example, using PMWeb, the contract agreement will capture the details of those progress invoices which will details the amounts paid till the last progress invoice, payment due this invoice and balance to be paid.
Of course, the progress invoice will also include the complete details of the progress invoice submission showing total invoiced to date, retention, amount paid, any changes to contract, payment due this period among others. Similar to other PMWeb modules, the submission of the progress invoice can again be through a formal workflow process that will detail the steps by the different roles for reviewing and approving the progress invoice.
Reporting and Analyzing Project Deliverables Performance
Having a real-time performance and status report of all project deliverables is important when it comes to assessing the project’s overall health and performance. With the detailed data captured by Project Management Information System software like PMWeb, the project team can analyze and visualize the deliverables performance in any desired format. For example, the report below details all project deliverables status by deliverable type.
The second report analyzes the actual time taken to review and approve the project deliverables by deliverable type. This will help to analyze the reasons for this delay as could be due to quality of deliverables submitted where they have to go multiple review cycles for them to be accepted or there is an issue with the deliverable review team who might be delaying this approval process with no valid reasons.
The point is that without having the right and trusted real-time data, the project team cannot have the right insight for them to better understand their project’s performance status as well as issues whether it was related to project deliverable or any other project management process.