Article #323 How Can Capturing Financial Data at the Required Detailed Level and Using Business Intelligence and Data Visualization Tools Provide the Insight to Trace and Analyze Capital Construction Projects’ Financial Data?

One of the key reporting requirements by executive stakeholders is to visualize the source of reported financial information on capital construction projects. Whether this information was related to the project budget and its planned spending, awarded contracts, earned payments, actual cost, estimate to complete remaining scope of work, estimate at completion and variance at completion. Usually, those executive stakeholders have access to single-version of the truth consolidated financial reports that combines and summarize this information at contract, project, program and enterprise level. Those reports provide the option for a stakeholder to drilldown to the data source that was the basis for the reported information. Nevertheless, what those executive stakeholders are looking for is a single-page report that enables them to find the data source for the reported information without the need to search for this information through the drilldown process.

This single-page can be easily generated using the decomposition tree. This report will detail the data source for each reported cost information which could include for example project budget, planned budget spending, earned payments, actual cost, estimate to complete remaining scope of work, estimate at completion, variance at completion among others. The executive stakeholder can easily trace and analyze the reported cost information to the desired level of the control. The decomposition tree will usually start with the total value at enterprise level for the selected cost category. This will be detailed into the different capital construction programs that the organization has which could include for example commercial, residential, retail, education among others. The next level will be the projects that are part of each program followed with the bid packages or contracts awarded to outsource the delivery of the project’s scope of work. The next levels will be the levels used to decompose the projects scope of work which are usually aligned with the Construction Specification Institute (CSI) MasterFormat, UniFormat or a combination of both.

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Whether the requirement is to have the consolidated single-version of the truth consolidated financial report or the decomposition tree report, there should be a cost breakdown structure (CBS) that is configured in alignment with the required control levels and for which the financial data included in the different project cost management processes are aligned with. Those processes include project budget, budget changes, budget transfers, awarded commitments, potential change orders, change orders, interim progress payments, miscellaneous invoices, actual payments made, revenue contracts, requisitions, actual payments received, funding among others.

Using a Project Management Information System (PMIS) like PMWeb all those project cost management processes are available out-of-the-box and ready to be used. In addition, PMWeb custom form builder can be used to create additional cost management processes that could be unique for an organization. Those could include for example claim notices, value engineering savings among others. For each one of those processes, PMWeb will be used to enforce a formal process for capturing all needed cost management information that is fully documented, traceable and audited. This will be achieved by having Input forms, either available by default or created using the PMWeb form builder, attached and linked supportive documents, records and MS Outlook emails and a workflow to formalize the submit, review and approve tasks for each cost management process.

PMWeb cost account module will be used to create the cost breakdown structure (CBS) that will become the standard to be used across the complete projects’ portfolio that the organization has. PMWeb allows creating a cost breakdown structure (CBS) that could have up to 16 levels. Those should include as a minimum the Program, Project and Bid Package levels. In addition, it should include the breakdown down levels that are aligned with Construction Specification Institute (CSI) MasterFormat, UniFormat or a combination of both.

Each PMWeb cost management process will automatically have the cost breakdown structure (CBS) field available in the detailed section of each form where the relevant cost data will be captured. Similarly, the cost breakdown structure (CBS) field will be added to all newly created custom forms that will be used to capture cost information. Those PMWeb cost management forms will include project budget, budget changes, budget transfers, awarded commitments, potential change orders, change orders, interim progress payments, miscellaneous invoices, actual payments made, revenue contracts, requisitions, actual payments received, funding among others.

The captured cost data at the selected control level for each cost management process, will become the basis for the real-time single version of the truth consolidated financial reports that combines and summarize this information at contract, project, program and enterprise level or the decomposition tree report. The projects’ executive stakeholders can select the desired report to monitor, evaluate, analyze and trace the reported projects’ financial performance information.

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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