The Major Elements and Challenges of Project Control

 

When it comes to mid-sized and large-scale projects like those found in oil or gas installations, power generation, construction and various types of government and private-sector projects, around 98% of projects often incur major cost overruns and delays.

 

On the average, experts say that cost increases are estimated at 805 of the original value, and completion timelines are often delayed by 20 months or more. The reasons why large-scale projects miss their targets (and go beyond their budget) are various, and among these include insufficient data, manual estimation errors, scope creep and more.

 

So, what’s the difference between a long-overdue, unreasonably expensive and mysteriously lagging project, and one that’s delivered on time and within budget? Well, the answer is good project control.

Project Controls – What Are They?

Again, according to our experts, project control actually refers to a number of processes for analyzing and gathering project information and data to keep costs and schedules on track. The functions of project control include planning, initiating, monitoring, controlling, communicating and closing out project costs and schedule.

The activities that are under the umbrella of project control include aligning projects with organizational or company goals and objectives. It also includes developing a work breakdown structure, collaborating on initial project schedules, developing a risk management plan and project budgeting and forecasting.

In the project hierarchy project control falls under project management. A project controller could report to a project manager on a specific project, or on an entire portfolio or projects. This make it integral to efficient project management, because it alerts all the project’s stakeholders to any potential trouble spots or areas, and it also enables them to correct the course of the project if required.

The Processes Which Define Project Control

 

The strength of project control lies in their data-focused approach and attention to detail. A project manager and his key personnel do not simply want to know that there is a cost overrun, but would rather wish to know the root causes of the cost overruns, and how it can be corrected.

 

This is where a comprehensive and fully integrated project control solution can assist in getting answers quickly, and it can also improve visibility into performance, which can in turn reduce project costs.

Now, let’s look at the various processes which define project control, and the first process is project planning. Planning is one of the most crucial steps where project controllers and managers work together.

The second process is budgeting. Integrating the budget process into project activities is key to calculating costs accurately, as well as to understand when and why variances occur. By refining the numbers and time-phasing the budget, a more transparent model is made available for senior project managers and team members to serve as a benchmark throughout the project, as well as to help everyone understand important cash flows.

The next process which defines project control is risk management. When managing risks, project controllers provide managers and personnel with a more meticulous approach, because they pre-emptively identify risks, monitor risks and develop contingency plans to effectively address as well as mitigate any issues.

This is why change management is key, because by tracking changes and understanding their impact, while at the same time following a clear and transparent process for approval, evaluation and accountability. With change management, projects can remain on their charted trajectory or direction.

 

The next process that defines project control is forecasting.  By increasing, or enhancing the accuracy of estimates, project controllers and managers can get a lot of helpful insight into the current drivers of schedule or cost overruns.