The project manager’s paradox

released: 4/2/2014

In many ways, today’s project control can be summed up in a single phrase: More for less. Competition is more aggressive, projects are more complex, and schedules are more demanding. But budgets decrease, resources are scarce and there is less understanding for a project manager’s role, let alone support. One of the main characteristics of projects is change. Projects are often referred to as unique processes and organisations to deliver change. To maximize results in this environment, you need to execute with precision and optimize your use of human and capital assets. So even though your project portfolio is growing, your vision across the enterprise is becoming progressively cloudier.
That’s why your continued growth and success depends on managing relationships, uncertainty and greater transparency across all phases of your project.
Adapting to Today’s Risks, Challenges and Opportunities
In a constantly changing business environment, you must continually find new ways to respond to changes in project scope, costs, and schedules. Whether it’s underperforming subcontractors, unforeseen field conditions, a stretch of bad weather, or sudden supply shortages, you must overcome each obstacle in your path to stay on course and meet customer expectations.
Operational and Financial Risks
Project owners are increasingly trying to shift more and more risk onto you. Contractual demands for penalties and liquidated damage clauses are on the rise. For “fast track” projects, you may even have to submit bids based on designs that are still in progress. Completion schedules are shrinking, and cash flow is tighter than ever before. Coping with these challenges requires better visibility into the performance of your current portfolio so that you can adequately evaluate how much risk you are willing to take on with each new project. To accurately craft new bids, you need structured access to your historical performance. You must also accurately forecast future availability of employees and equipment and shorten the duration of progress billing cycles to maintain cash flow.
Cost and Quotation Management
For any construction company, the quotation process sets the foundation for generating new business and maintaining profitability. Quoting too high could take you out of the running. Quoting too low may results in a loss or can cut your profits. The key is striking the right balance, and this requires access to historical cost and performance information.
When looking at a prospective new project, consider whether you can answer the following questions:
  • Which past projects best match this opportunity?
  • Where were these projects carried out?
  • What staff do I have with the required skills and are they willing to relocate?
  • What supply chain elements (such as subcontractors, vendors, and fabricators) are in place?
  • What are my historical costs, and how do I pull them forward to present-day levels localized for this project?
  • What is the optimum contract, work, product and budget structure?
Dimensys’ solution PreFab SAP can answer these questions with a level of speed and accuracy that was previously impossible.
Cost Control
Without strict cost control, you can quickly calculate the estimated cost, the cost to complete and the cost at completion. To help you avoid budget and cost overruns the project manager’s workbench supports integrated cost reporting for all types of costs (planned, committed, actual, and forecast).