Article #297 How to Enforce the Best Practices of Transparency, Accountability and Real-Time Single Version of the Truth Reporting of Cost on Capital Construction Projects?

Although the management of capital construction projects requires managing the different aspects of scope, schedule, quality, safety, communications, risk, procurement, human resources, stakeholders among others, nevertheless, no one can deny that managing the project cost always take a priority. Managing the cost of a capital project requires implementing many processes which usually include as a minimum cost estimate, baseline budget, budget adjustments, awarded contracts, potential change orders, change orders, interim progress payment certificates, miscellaneous invoices and actual payment of those approved invoices.

Some of the data captured in those different processes are usually connected to each other. For example, the approved cost estimate will become the basis for generating the project budget. In addition, the same cost estimate can be used to establish the value for budget adjustments. Further, the cost estimate will become the basis for setting the estimate baseline when reviewing bids received from contractors. Similarly, the awarded contract will become the basis for issuing interim progress invoices. Further, a potential change order could become the basis for generating a change order and this change order is approved it will adjust the awarded contract.

Enforcing the best practices of transparency and accountability for managing the project cost requires implementing those processes in accordance to what have been established in the cost management plan. There is no short cut for achieving this objective. Having spreadsheets that are populated directly with the cost data is not the answer.

For each cost management process, there will be a need to have an input form to capture all the data needed to perform the process. Access to those input forms including the data fields needs to be aligned with the responsibilities assigned to the project team members. In addition, there should be the option to attach supportive documents as well as add links to other cost records and other type of project records as well as emails to provide the complete information needed to perform the process. Finally, and by definition, each process requires having a workflow to detail the sequence of tasks required for submitting, reviewing and approving the process deliverable. Some of those workflows might require incorporating approval authority levels that limits who can approve some of those processes depending on the value of the transaction among others.

Enforcing the best practices of transparency and accountability for managing those cost management processes requires having a Project Management Information System (PMIS) that has the processes for cost management as well as all other project management processes on a single platform. PMWeb is a PMIS that comes ready with all cost management and related procurement management processes where for each process it can have an input form, option to attach documents as well as link records and emails and assign a workflow to formalize the execution of the process.

The connected cost data captured in those processes will become the basis for achieving the real-time single version of the truth of cost management reporting best practice. Unlike spreadsheets, PMWeb cost worksheet although gives the feeling of a spreadsheet, nevertheless the content of the information displayed in the cost worksheet is directly connected to the source process. In other words, the cost worksheet allows the user to drilldown to the specific cost management process transaction that includes the reported information. The reported cost data in the cost worksheet will be reported at the cost breakdown structure (CBS) levels defined for the project. In addition, the reported cost data can be limited to certain time period of the project duration.

There is no limit to the number of cost worksheet layouts that can be created and shared by the project team members. Each cost worksheet layout could be defined to include the needed cost data fields as well as create alias fields for which the values will be calculated from other cost fields using the different mathematical functions.

The real-time values for each cost data field that the cost worksheet is reporting on are stored in PMWeb cost ledger. This module provides a single repository for the data captured in each cost management transaction. The data will be captured at the granular level of each cost breakdown structure (CBS) level, period, status, cost data type, currency among others.

Of course, for every single transaction captured in the cost ledger, when the user clicks on the record, PMWeb will automatically open the relevant cost management process transaction. For example, when the user clicks on a transaction that is considered as an Actual Costs – Commitment, PMWeb progress invoice will be displayed showing the details the of the transaction.

To view the attached documents and linked records or emails, the attachment tab on the progress invoice will display those records. The attachment tab will detail all those documents, records and emails.

To review the current status or history of the progress invoice submit, review and approve tasks, the user needs to click on the workflow tab. PMWeb will display the details of those steps including all comments made by the assigned team members in the review process and when those comments were made. PMWeb workflow also allows seeking the input of other team members on the workflow task as well as the to delegate the workflow task to other team members.

The input forms, attached documents and linked records and emails are crucial to enforce transparency in capturing and reporting the cost data and generating the cost worksheet to provide the needed cost reporting. Nevertheless, it goes without saying that without having the workflow assigned to those input forms, there is no way to enforce accountability when it comes to performing those cost management processes. Even the objective of real-time single version of the truth reporting could become questionable if the accountability for the reported cost data is absent.

About the Authorfounder

Bassam Samman, PMP, PSP, EVP, GPM is a Senior Project Management Consultant with 40-year service record providing project management, project controls services and project management information system to over than 200 projects with a total value in excess of US $100 Billion. Those projects included Commercial, Residential, Education and Healthcare Buildings and Infrastructure, Entertainment, Hospitality and Shopping Malls, Oil and Gas Plants and Refineries, Telecommunication and Information Technology projects. He is thoroughly experienced in complete project management including project management control systems, computerized project control software, claims analysis/prevention, risk analysis/management (contingency planning), design, supervision, training and business development.

Bassam is a frequent speaker in topics relating to Project Management, Strategic Project Management and Project Management Personal Skills. Over the past 40 years he has lectured at more than 350 events and courses at different locations in the Middle East, North Africa, Europe and South America. He has written more than 300 articles on project management and project management information systems that were featured in international and regional magazines and newspapers. He is a co-founder of the Project Management Institute- Arabian Gulf Chapter (PMI-AGC) and has served on its board of directors for more than 6 years. He is a certified Project Management Professional (PMP) from the Project Management Institute (PMI), a certified Planning and Scheduling Professional (PSP) and Earned Value Professional (EVP) from the American Association of Cost Engineers (AACE) and Green Project Management (GPM).

Bassam holds a Masters in Engineering Administration (Construction Management) with Faculty Commendation, George Washington University, Washington, D.C., USA, Bachelor in Civil Engineering – Kuwait University, Kuwait and has attended many executive management programs at Harvard Business School, Boston, USA and London Business School, London, UK.


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