Project controls are a group of processes that gather and analyze project data to keep costs and schedules on track. The beauty of project controls is they allow for proactive monitoring of current projects, and alert stakeholders so that timely, corrective actions can be taken.
While controls deliver projects on time and budget, the scope of their benefits extends far beyond that, leading toward significant performance improvements.
With their emphasis on stringent monitoring, frequent data collection, status reporting, communication, and adaptability to changes, project controls generate a ton of performance metrics that help keep a tab on the current status and steer the project in the right direction. As a result, projects that have tightly integrated project controls demonstrate stellar results.
Impact of Controls on Critical Project Functions
Project performance is defined as a project that is on schedule, on budget, and delivers on intended business outcomes. A project is high performing when it meets deadline, budget, and other criteria set for it. If even one of these objectives is not met, a project may very well be considered a failure.
Unfortunately, projects completed under budget are the exception rather than the norm. A PwC analysis estimates that mega-projects, defined as those exceeding $1 billion revenues, often exceed their budgets by 50% or more.
For enterprises to avoid these pitfalls and improve their project performance, many functions—including project portfolio management and contract management—must come together in conjunction with project controls.
Let’s take a look at how project controls improve the performance of specific project functions.
Forecasting is a key tool of project controls that uses historical and present project data to predict future costs and outcomes. Using forecasting methods applied to good progress measurement, project controllers can accurately estimate whether or not costs and schedules remain on track or how far off they’ll be.
Better forecasting leads to better performance and cost control. For example, forecasting allows mapping of expected outcomes right at the initial stages and adjusting throughout the project lifecycle. These insights allow project managers to always be cognizant of budget and milestone deviations. They provide opportunities to take corrective actions, such as reduce scope or adjust resources.
Scheduling is the process of defining timelines and mapping resources against each task identified in the project work breakdown structure (WBS). A project schedule is a plan that enables tracking progress and aligns expectations of all people involved in a project.
Project controls improve the scheduling function via enforcing a realistic project schedule that factors in risks. Tracking metrics, such as variance percentages, provides visibility on schedule status. This allows for early identification and management of obstacles that could throw off the project timeline. The transparent communication framework of controls encourages team members to highlight issues and course correct when required.
Controlling Project Costs
Controlling project costs is a function that aims to minimize the difference between planned and actual costs.
Project controls make a huge difference to cost management. They provide a data-driven approach to continuously monitor whether costs are running within budget. Because the checkpoints are frequent and in real-time, controls help predict cost escalations accurately. And by forecasting overruns early in the game, controls offer sufficient time to fix the issue.
For example, a project is measured as running over budget and forecasted to continue at this upward trend. Controls give you the opportunity to improve resource utilization and other aspects of the project. As a result, you can course correct to change the expected outcome.
Change management is a set of approaches that focus on controlling changes. It also enables project teams to adapt to unforeseen changes during the project lifecycle.
Although changes are inevitable in a project, how you manage them determines the course of the project. Project controls adopt a proactive approach, ensuring that stakeholders properly define and approve every change before execution. For example, before the approval stage, teams need to confirm resource availability.
Project controls also establish a culture in change management where every change is discussed sufficiently to avoid unnecessary changes. Furthermore, project controls ensure that teams take accountability for the proposed change, as well as its consequential impact to cost and schedule.
Risk management is the process of identifying, planning for, and minimizing or mitigating uncertainties and any negative impact they may have on project goals.
Project controls’ focus on data transparency—to senior executives, customers, and team members alike—creates an environment where everyone is better prepared to tackle risks. This sense of awareness and visibility into what is happening and what could potentially happen forces preparation, keeps everyone alert to identify risks in advance, and prevents risks from slipping through the cracks.
Moreover, the continuous cycle of measuring and improving projects via monitoring, analysis, and mitigation stops imminent threats and boosts project quality across the portfolio.
Standardized Processes and Systems
Projects that have fundamental processes and systems in place respond well to changes. The most agile and predictable projects have systems for team members, defined communication channels, and appropriate tools to manage and execute the work. For example, organizations that undergo more frequent reporting and use performance information to manage projects have a 68% success rate compared to a 7% success rate for those that didn’t.
The project controls pillar boosts project quality by enforcing the establishment of such processes for data gathering, management, and analytics. These, in turn, influence the time, cost, and outcomes of the project for the better. They also enable executives to compare different projects, isolate project-specific issues versus systemic ones. This improves performance across the organization.
Performance management is an umbrella of activities that help achieve project goals through continuous monitoring and action.
Project controls lead to high performance. They leverage reliable key performance indicators (KPIs), rather than ambiguous guesstimates, to take remedial actions. The KPIs offer team members clear insights into performance trends and project corrections. In other words, project controls support better performance management, resulting in superior results.
Putting Project Controls to Work in Your Portfolio
To take complete advantage of project controls, they cannot remain a passive function that simply take stock of data and status. Good project controls processes offer real-time monitoring tools accompanied by a meticulous strategy for stakeholders to act on data points. They also have to be integrated with the holistic project landscape, binding together various elements of project management, so that they do not simply generate disparate data, but generate actionable, useful insights at the right time.
EcoSys is a powerful solution for project controls and project management that helps enterprise projects to perform at their maximum potential. Request a demo to see it in action and learn more about how EcoSys can improve your own projects.