Project Control Fundamentals | Don't miss these 7 techniques

Summary

This video script by Vijay, founder of projectsmind.com, highlights the critical role of project controls in ensuring project success. It explains the difference between project management and project controls, emphasizing the latter's focus on monitoring cost and schedule risks. The script outlines seven key techniques for effective project control, including work breakdown structures and gate reviews, to guide project managers in making informed decisions and achieving project objectives on time and within budget.

Takeaways

• 📉 High Failure Rates: 98% of EPC projects face cost overruns or delays, with an average cost increase of 80% and delays of 20 months or more.
• 🛠️ Importance of Project Controls: Good project controls are crucial for delivering projects on time and within budget, and are often overlooked in project planning.
• 📈 Project Controls Definition: Project controls involve the processes and tools for monitoring and controlling project lifecycle phases, including estimating, cost and schedule management, and risk management.
• 🔍 Continuous Monitoring: Project controls are iterative, focusing on measuring project status and forecasting outcomes to improve performance based on data measurements.
• 📚 PMBOK and APM Definitions: According to PMBOK, project controls involve data collection and analysis to predict and influence project outcomes, while APM defines it as measuring performance against the plan to correct variances.
• 💰 Cost Control by AACE: AACE emphasizes cost control as monitoring expenditures and performance against project progress to measure variance from budgets and achieve minimum costs.
• 🔑 Key Project Control Functions: Project controls provide the right information at the right time for project managers to make informed decisions, focusing on resource, information, and financial flows.
• 🔄 Distinction from Project Management: Project controls are a subset of project management with a focus on cost and schedule, while project management oversees a broader range of processes.
• 📊 Data-Driven Approach: The strength of project controls lies in its detailed data analysis, providing precise insights into cost overruns and necessary corrective actions.
• 👥 Project Controller's Role: The project controller operates under a matrix structure, advising the project manager on cost and schedule risks and providing key performance indicators.
• 🛑 Early Warning System: Project controls serve as an early warning system for potential issues, allowing for timely course corrections and risk mitigation.

Q & A

Why do many projects miss their targets despite best efforts and intentions?

Many projects miss their targets due to factors like cost overruns, delays, and insufficient project controls. According to a study by McKinsey group, 98% of EPC projects incur cost overruns or delays, with the final project cost increasing by an average of 80% and timelines often delayed by 20 months or more.

What is the main reason behind project delays and budget overruns?

The main reason behind project delays and budget overruns is the lack of effective project controls, which include monitoring and managing costs and schedules.

What is the difference between a failed project and one delivered on time and within budget?

The difference lies in good project controls. Projects that are delivered on time and within budget typically have robust project controls in place, ensuring effective management of costs and schedules.

What is project control?

Project control is a process that encompasses resources, procedures, and tools for monitoring and controlling all phases of the project lifecycle. It involves estimating, cost and schedule management, risk management, change management, earned value progressing, and forecasting.

How does the Project Management Body of Knowledge define project control?

The Project Management Body of Knowledge defines project control as data collection, management, and analysis processes used to predict and constructively influence the time and cost results of a project by communicating information in formats that support effective management and decision-making.

What are the three key differences between project management and project control?

The three key differences are: 1) Project control is a subset of project management focused on monitoring and controlling cost and schedule. 2) The Project Manager owns the project and directs the team, while the Project Controller advises on cost and schedule risks and mitigation plans. 3) The Project Controller provides key performance indicators and reports, which the Project Manager uses to make decisions.

What are the main areas covered by project controls?

The main areas covered by project controls include planning, risk management, cost management, scope and change management, earned value management, performance management, stakeholder management, and reporting.

Why is project control considered the backbone of project management?

Project control is considered the backbone of project management because it helps define key performance indicators, measure performance outcomes, provide early warnings of risks, and ensure effective decision-making based on accurate and timely data.

What are some simple yet powerful techniques for managing and controlling a project?

Some powerful techniques include work breakdown structure, project baselines, project status meetings, project gate reviews, tracking milestones, formal sign-offs, and the V method for validation and verification.

How does project control contribute to the success of a project?

Project control contributes to the success of a project by ensuring accurate forecasting, effective resource allocation, timely identification and resolution of issues, and maintaining consistent high-quality data and reports. This helps in making informed decisions and implementing corrective measures to improve time, cost, and quality performance.