Controlling Project Costs Through Interactive Planning
If time is money, keeping a project on budget requires utilizing the project's estimate, schedule, cost forecasting, and earned value systems interactively.
Mark A. Borodynko, Senior Director of Project Controls, Skanska USA (Nov 07)
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Principle 3 - Stop "Silo Thinking"
need to graduate from our specialized silo thinking into a more of a
proactive community approach. What you do on the project directly
affects the community or, in this case, the project, both in time and
money. This is always most evident at the start of a project. In the
beginning, everyone has their own plans for how and when things need to
get done. Most of the plans are genuine and meaningful. However, it
reminds me of someone dropping a quill full of arrows onto the ground
that are going in many different directions. A project needs to have
all these arrows, or plans, identified and positioned so that they are
all headed in the same direction. I recommend doing this early in the
project with the key members of the team, in what I call an
"interactive planning session."
This planning session will
identify the owner's critical milestones and the dates that they need
to be completed. It will establish the necessary tasks that need to be
accomplished in order to support these key milestones and will form the
baseline for the entire project's master schedule. The major tasks are
identified interactively by having the team place their key tasks on
one comprehensive timeline. These key tasks cover all phases of the
project and include: preliminary engineering; various bid packages for
detailed engineering; purchase and delivery of major equipment and
procurement of long lead material such as structural steel; funding
requirements of the owner; permitting and environmental requirements;
major subcontract procurement strategy; demolition, if required; major
construction activities; major tie-ins; and commissioning/validation,
depending on the project. This intense effort identifies problems early
and gives the team an opportunity to get realigned, if necessary. It
turns individual plans into the project master plan and shows the
interdependence of each task to the other.
projects stay on budget does not happen by looking at what is spent or
invoiced to date. The answer lies with changing our current thinking. A
project's budget rests upon a three-legged stool - each individual leg
consists of the estimate, cost engineering/earned value, and
planning/scheduling systems. But all three need to be working together
to support the budget. If one is missing, then the budget is in
jeopardy. Therefore, a team needs to ensure they embrace and
incorporate the project controls mission statement into its culture and
"utilize an integrated application of estimating, cost
engineering/earned value, and planning/scheduling with the correct
level of software in support of project management."
project must go the extra mile and truly transform itself into a team
effort. This team can change the fulcrum of the project. With a team
attitude, defenses come down and team members can look for problems to
solve, which in turn lets the team run more efficiently and effectively
towards the goal of an on-time and on-budget project. Through
interactive planning, and the team working together toward one goal,
there is an increased awareness that what an individual team member
does has a direct effect on other team members and their downstream
This integration of project controls tools applied by the
project control professionals, combined with an early paradigm shift,
will ensure projects are completed on time and within budget. You may
even end up with some contingency.
A. Borodynko is the senior director of project controls for Skanska
USA, located in Blue Bell, Pennsylvania. He has 35 years of project
controls experience in the engineering, construction management, and
validation of projects. His expertise covers the pharmaceutical,
biotech, healthcare, petrochemical, defense, and power industries. Mr.
Borodynko can be reached at (267) 470-1033.