Ecostar Plan was present at IPMA France’s or “la Société de Management de Projet (SMAP)” 3rd Workshop in Montrouge, focusing on Cost Management in industrial projects.
The meeting gathered professionals in project planning and cost control from companies as EDF, Thales, Total and others. Sharing knowhow on project planning and cost management was the key for this succesfull event.
The main topics were:
- Today’s challenges of estimating and controlling project costs-
Jeremie Averous - Risk Management- Didier Lagrange, TOTAL
- Measuring the project’s physicall progress and Earn Value Management – Cédric Le Masson, EDF
- What rules for an efficient Desgn to Cost? Éric Bocher ALSTOM
Today’s challenges of estimating and controlling project costs
In today’s world Artificial Intelligence is gaining more and more popularity starting to be introduced in the project control area as well.
There is an increasing need of well established databases that can be further used for new projects, beeing easier to plan and estimate a new project. Most of the big players as Microsoft are doing developments that will automatically build documents, for example a Risk Register, just by an interaction with a robot.
The Artificial Intelligence (AI) is already collecting and processing raw data and is verifying the information. In the future it will be able to interpret the data and use models to predict future estimations, it will develop strategies for action.
Risk Management at TOTAL
Huge projects, as the ones within TOTAL, one of the top Oil & Gas companies worldwide, requires a good Risk Management process in order to be able to deliver projects in the given constraints. The presentation performed by Didier Lagrange was very well structured and covered all the Risk Management processes.
Giant installations are risky so there is a MUST for Project Risk Management driven by:
- Complex contracting strategies
- Interfaces
- Different parties involved
- People and equipments
- Complementary components (Business risques, HSE, Environmental, contries, HAZID, HAZOP…)
interfaces 
nombreux composants; different parties 
people and equipment
Project Risk Management Processes
Having a good Project Risk Management Process means also establishing clear project lifecycles according to which the risks are identified and tracked
We can see that the project risk management is being done from Preliminary Design to Construction Completion.
The Project Risk Management Processes are a key element within the company for ensuring a framework according to wich he team will monitor and control risks. Specific software tools as Primavera Risk Analysis were being used for the Risk Assessement within TOTAL.
Project Risk Management Processes 
Project Risk Management Plan 
Qualitative Risk Analysis 
Risk Register 
Risk Matrix 
Quantitative Risk Analysis 
Risk Communication
Risk Management Conclusions
Project Risk Management is mandatory in order to be able to confirm the contigencies and probabilities to achieve the project within the given constraints as time, cost and scope.
As experts in the field, Ecostar Plan’s consultants can help in establishing the Risk Management Methodology, doing the Risk Management Workshops and calculating your project’s probability of achievence.
Measuring the project’s physicall progress and Earn Value Management – EDF
The presentation covered the main topics from Project Cost Estimating to Earn Value Management.
- Introduction from cost estimation to physicall advancement
- Elementary Notions-PMBoK (EV, EVM, SPI, CPI…)
- Desired outcomes and shareholders
- Sharing knowledge from large projects
- Conclusions
1. Introduction from cost estimation to physicall advancement
Estimating a project in terms of costs requires a database with resources, costs, hours, equipments… While these info might be available from previous projects or from subcntractors, the difficulty lies further in the monitoring and control, where processing such a huge amount of data becomes very challenging.
2. Elementary Notions-PMBoK (EV, EVM, SPI, CPI…)
Earn Value Management
When the project manager is asking: What is the % complete of the work performed? What should we repond? Is it %physicall? %hours, %cost, %duration? Earn Value Management is the key for ensuring a proper monitoring of the work accomplished. (In the United States, EVM is a mandatory requirement of the US government.)
The presentation covered topics as SPI, CPI used in most of the organisations as KPIs.
Measuring the physicall progress is of course different depending of each activity:
- On site (m3 of concrete, m of cable, area, hours, liniar metters…)
- Engineering Design (no. of documents, hours…)
In order to be able to track the EVM, the project should have a mapping between the Cost Breakdown Structure (CBS) and Work Breakdown Structure (WBS).
Measuring progress during the project execution should be also estabished based on clear rules from the begining of the project.
3. Desired outcomes and shareholders
Monitoring and controlling a project is a key collaboration between:
- project planner
- technical prescriptor/design manager
- purchaser
- contract manager
- cost estimator and cost manager
The desired reporting should be done using milestones and S Curve reports.
4. Sharing knowledge from large projects
large industrial projects 
project planning
Building the project structure in terms of WBS, CBS, %complete gathering techniques and EVM calculations plays a key role while doing the monitoring and control in large projects. Different tools are required to plan and control projects, the main used within EDF are Oracle Primavera and Microsoft Project.
5. Conclusions
Managing large projects should be focused on keeping it simple as possible and implementing a manageable system that will ensure a clear overview on the project’s completion status.
What rules for an efficient Design to Cost? – Alstom
The presentation from Alstom has been focused on the main rules and principles used to do a good cost estimation. What is the % of small articles used in the cost estimation? How can we better estimate the cost of the new built elements?
Summary of IPMA-France (SMAP) – Montrouge – Cost Management in industrial projects
Managing large industrial projects is chalenging. Respecting standards as the PMBoK Guide and the best practices gathered by different companies requires a good knowledge in terms of project planning, scheduling, risk management, cost estimation and earn value analysis. Ecostar Plan can assist you in planning and controlling your project.
Plan your work and work your plan!
Virgil ANDREI, PMP | Trainer| Senior Project Planning and Risk Management Consultant