Controlling project costs
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Jon Grunzweig gave a presentation on controlling project costs. He discussed how projects often go over budget and past deadlines due to a lack of accountability and oversight. Grunzweig emphasized the importance of having an accurate project plan, accountable time tracking, and timely status reporting to keep projects on track. He also noted common areas where estimates fall short, such as testing and rework, and stressed measuring success rates to improve estimates over time. The key, according to Grunzweig, is having the right systems and processes in place to monitor costs and catch issues early.
Controlling project costs
- 1. Controlling Project Costs 10/26/2012 SoTecConference 2012 Controlling Project Costs Jon Grunzweig Vision Business Systems Leading IT to Business Excellence Jon Grunzweig 1
- 2. Controlling Project Costs 10/26/2012 SoTecConference 2012 Ever Happen? • Great project plan, good resources, design • Before you know it….. – Delivery date slipping – Going over budget • Project keeps going along – Start ignoring the budget, so far overspent – Timeline goes into oblivion… Shuttle Route Endeavor’s Last Mission • Great preparation Things happen…. • $$ Jon Grunzweig 2
- 3. Controlling Project Costs 10/26/2012 SoTecConference 2012 Credibility Issues…. Blame game starts…… Which leads to……. Jon Grunzweig 3
- 4. Controlling Project Costs 10/26/2012 SoTecConference 2012 Why ? • Many moving parts (very few fixed parts) • Circumstances occur different • Things left out / Estimates incomplete • Poor cooperation within business, people • Events and changes • Issues with service providers • Outside uncontrolled events • Unknowns…. Most Projects • Predictability • Been done, or very similar (not one of a kind) • Experienced resources • Therefore: – Should be on time and on schedule (or very near) What’s the disconnect? • Good plan, design, resources, project mgt but…….. • Poor alignment of Accountability Cycle • Poor hours accountability • Elements unplanned for Jon Grunzweig 4
- 5. Controlling Project Costs 10/26/2012 SoTecConference 2012 Our focus today…. • Alignment of Accountability Cycle • Accountability of hours • Areas short-changed in estimates Foundation for Control Project Execution Cycle Project Planning & Agreements Governance & Project Management Contract & Vendor Management Methodologies & Processes: Design, Project, Change Control Technology Vision and Strategy Spend & Execution Cycles Spend Execution Authority Cycle Cycle Project Budgets Plans Timesheets/ Proposals Billing Status SOWs Reporting Jon Grunzweig 5
- 6. Controlling Project Costs 10/26/2012 SoTecConference 2012 Accountability Cycle Methodology Status Proposals Reporting Billing SOW’s Project Plan / Time Sheets Est Accountability Alignment Prop SOW Plan Time Invoice Status Total 120 120 120 90 70 130 Task 1 40 40 40 30 20 35 Task 2 80 80 80 60 50 95 Accountability Hours How Much ---> A B C Remain Plan Actual A-B Total 120 90 30 <----- What Task 1 Rsc 1 40 30 10 Task 2 Rsc 2 80 60 20 Jon Grunzweig 6
- 7. Controlling Project Costs 10/26/2012 SoTecConference 2012 Accountability Hours – Plan How Much ---> A B C Remain (Plan - Plan Actual Act) Total 120 90 30 <----- What Task 1 Rsc 1 40 30 10 Task 2 Rsc 2 80 60 20 Accountability Hours – Actual How Much ---> A B C Remain (Plan - Plan Actual Act) Total 120 90 30 <----- What Task 1 Rsc 1 40 30 10 Task 2 Rsc 2 80 60 20 Accountability Hours - ETC How Much ---> A B C D Remain (Plan - Plan Actual Act) ETC Total 120 90 30 40 <----- What Task 1 Rsc 1 40 30 10 5 Task 2 Rsc 2 80 60 20 35 Jon Grunzweig 7
- 8. Controlling Project Costs 10/26/2012 SoTecConference 2012 Accountability Hours – Proj Total How Much ---> A B C E D F G Proj Remain Total Var Plan Actual A-B ETC B+D A-E Billing Total 120 90 30 40 130 (10) 70 <----- What Task 1 Rsc 1 40 30 10 5 35 5 20 Task 2 Rsc 2 80 60 20 35 95 (15) 50 Accountability Hours - Summary How Much ---> A B C E D F G Proj Remain Total Var Plan Actual A-B ETC B+D A-E Billing Total 120 90 30 40 130 (10) 70 <----- What Task 1 Rsc 1 40 30 10 5 35 5 20 Task 2 Rsc 2 80 60 20 35 95 (15) 50 Accountability Hours - Keys • Must do it timely (daily or weekly) – With additional early warning protocol • Accountability at the resource level • Accountability of the group Jon Grunzweig 8
- 9. Controlling Project Costs 10/26/2012 SoTecConference 2012 Problems with Estimates • More than initial coding or configuration • Testing Unit, integration, system, regression • Rework It will occur • Deployment (prepare, deploy, verify) • Post live support (immediate) Summary - Key Elements • Appropriate Project Plan – Watch out for common items left out – Resources own estimates & updates • Accountability Cycle lines up • Solid relationship with vendors • Timely reporting (within 1-2 days of cutoff) • Stick to methodologies/processes • Plan for contingencies and issues • Measure your success rate If control costs….. Jon Grunzweig 9
- 10. Controlling Project Costs 10/26/2012 SoTecConference 2012 Footnotes • Types of Projects: ERP vs. Development • Not Covered: All other types of issues • Hard Costs (hardware, equipment, etc.) • Challenges – Putting time in without regard to estimate – Getting systems, processes aligned Questions / Discussion ? Jon Grunzweig 10
- 11. Controlling Project Costs 10/26/2012 SoTecConference 2012 Controlling Project Costs Jon Grunzweig Thank You! Jon Grunzweig 11