Expertise in project control systems is a core McLachlan Lister competency. Anamaria Popescu has prepared and delivered an insightful review on the issues involved in adopting effective project control measure

1. Adopting Effective Project Controls Strategies
Dr. Anamaria Popescu, PE,PSP,PMP
McLachlan Lister - Hill International Australia
www.hillintl.com

2. My Profile
• Associate Director-McLL in Brisbane
• Project Auditing Services
• Project Controls Implementation
• Construction Claims Expertise
• Forensic Schedule Analysis
• Joined Hill International in 2011
• Consulting to the Oil and Gas Industry
• University of Texas at Austin
• Civil Engineering/CEPM Program
• PhD in Schedule Analysis
• PM at Enron

3. A Good Indication….
….that Your Project Controls System was Ineffective!!!

4. Project Characteristics
• Coalbed Methane Natural Gas Drilling Program
• Gas Field: 1.9 Trillion Cubic Feet of Gas
• 13 Year Period
• 1000 Wells
• 2+ Billion Investment ($US)
• Environmental Sensitive Area
• Minimize Environmental Impact
• Use Existing Infrastructure

5. Situation
• Project in Feasibility Phase
• No Project Controls People
• No Cost Control or
Schedule Existed
• Wanted a Schedule to
“Pass Through” Gate
Review
• Wanted it in Two Weeks
• Did Not Have a Software
Platform
• “Power Point” as the
Panacea
• Huge Political Pressures
for Success

6. Our Scope…to Develop:
• A standard WBS for the project
• An Integrated Schedule
• Re-Alignment of Cost Estimate with WBS
• Risk Allocation/Contingency Management
• Earned Value System
• The basis for the cost and schedule baseline

7. Step 1: Work Breakdown Structure Development
FIRST THINGS FIRST…..What is a WBS
Anyway?
• Grouping of Project Elements
• Defines the Total Scope of Work
• Each Level More Detailed than Previous
.

8. WBS Development Benefits
• Scope Capture Check
• Promotes Consistency of Cost and Schedule Data
• Rollup for Reporting Requirements
• Cost Breakdown Structure Framework
• Earned Value is Actually Possible!
$ $ $

9. WBS Development: What We Did…
• Got a Plotter (A BIG One!)
• Became Visio Experts
• Had One-on-One Meetings…Lots of Them!
• WBS Wallpaper
• Captive Audience
• Comment Period of One Week
• Graffiti Allowed!
• Custom Pen Colors!
• True Integration Effort
• Transparency in SOW
• “Light Bulbs” Went Off
• Made Changes…Replotted…Rehung
• Not Very “Green” but Very Vital

10. WBS Requirements & Questions for Consideration
• Number of levels in the WBS
• Define Each Level
• Schedule Activities Captured at Level X
• Costs Captured at Level X
• Numbering Structure: Alpha/Numeric
Critical that the Team “Buys-In” and “Owns” the WBS

11. WBS Structure for Project
Level 1
Project
Level 2
Delivery Area
Level 3
Facility Package
Level 4
Facility Type/Rig No.
Level 5
Specific Facility/Well Name
Level 6
Phase
Level 7
Discipline

12. WBS Structure: Levels 1-4

13. WBS Structure: Levels 5-6

14. Step 2a: OBS Development
• Definition: The identification of project participants and
their hierarchical relationship.
• Assigned in P6 Directly

15. Step 2b: OBS Assignment
• Intersection of OBS and WBS Creates:

16. Step 3: Activity Development
Activity Elements
Calendar
Interface Relation-
Points ships
Activity
Durations
Codes
(3)
WBS No.

17. Activity Development: What We Did….
• Set Up Excel Templates • 3 Durations
• Emailed to Team Leads • Import into P6
• One Tab per WBS Element • “Live” Logic Ties
• Team Brainstorming Sessions • Schedule Projected on
• No Dates! Screen

18. Activity Development: Standardization of Well
Activities
Well No. 1
18

19. Step 4: Schedule Integrity Check
• Assess through
Metrics
• Don’t Skip!
• CP should not be
published
• P6 Schedule
Report or Fuse

20. Step 5: Critical Path Review
• Plotted Out both CP and NCP
• Grouped by Top 10 Float Paths (Top 10 Wells)
• Graphically Could See the Critical Path
• Took Up Four Walls of Conference Room- “BAG”
• Each Team Had a Different Colored Pen
• Marked Up and Changed Logic Ties
• Had Collaborative Discussions about Sequencing
• Made Changes “Live” in P6
• Re-plotted Top 3 Paths
• Management Accepted “The Answer”
• Not Thrilled but Convinced!

21. Step 5: Critical Path Review
• Achievable project completion date set!
• Avoided……….

22. Step 6: Incorporating Risk into the Schedule
• Interactive workshop with various disciplines to
come up with the risks.
• Develop a Risk Register
• Risk Matrix- Likelihood of Occurrence vs. Impact
• Running a risk analysis on the baseline
schedule in Pertmaster
• Probability of achieving expected completion
date
• Schedule Contingency Management-Buffers

23. Step 6: Incorporating Risk into the Schedule
Risk Register
Mitigation Strategies

24. Step 6: Incorporating Risk into the Schedule
Likelihood of Occurrence
Risk Assessment Matrix

25. Step 6: Incorporating Risk into the Schedule

26. Step 6: Incorporating Risk into the Schedule
Forecasted Project Duration
with Probability

27. Step 6: Incorporating Risk into the
Cost Estimate
Forecasted
Project Total
Cost
by
Probability

28. Step 6: Cost and Schedule Sensitivity Index
Pareto Principle :
80% of Risks
Originate from
20% of the Activities

29. Step 6: Cost and Schedule Sensitivity Index
Cost Sensitivity
H007 - RR Flagging & Administration 64%
D001 - Detailed Engineering 44%
H002 - General Conditions 39%
H004 - Inflation 38%
H006 - CA&I Incidentals 37%
H003 - Overhead & Profit 36%
H001 - Balance of Scope 25%
D002 - Permitting 19%
C009 - Electrical Service & Distribution 8%
C011 - Membrane Roofing -7%

30. Step 6: Contingency Management
• CP shows only the early date for project completion.
• The next step will be to determine the late dates for project
completion
• The project will have two completion dates:
• a finish date without contingency (the early date)
• a finish date with contingency (the late date).
• Paradigm shift for most companies-usually mange to only one
finish date & no contingency
30

31. Step 6: Contingency Boxes
• This step is based on the organizational structure of
the project and the company.
• The person with authority to distribute a portion of the
project float needs to be assigned a contingency box.
• These boxes are represented as activities in the
schedule-tied in series
• The schedule will now have two finish dates:
• the early target finish date, preceding the contingency
• the late target finish date that succeeds the boxes.
31

32. Step 6: Contingency Boxes (Continued)
+
+
+
=
32

33. Step 6: Calculate the Contingency
• Choose the % of Contingency to Allocate based on:
• The corporate culture of the company.
• How much risk the leadership team is willing to take.
• Risk management plan
• Monte Carlo Simulation (PERT) of the baseline schedule using the
three durations
• Pert Master ©
• “What-If” Scenarios using all 3 durations
• Benchmark Data
• “Cutting Edge Technology” vs. “Tried and True” Projects
• Length of Project
• Phase of Project
 Calculate contingency duration based on Total Duration of Longest
Path x %
– From Start Milestone to Early Finish Date of Project
33

34. Step 6: Percentage Allocation
• Distribute the contingency to each box based on the
amount of authority the three team leaders have on
the project.
• Percentage distributed to each box.
• DOES NOT HAVE TO BE EQUALLY
APPORTIONED.
• Formal Float Distribution Process-Float is not
“Scattered” throughout
34

35. Step 6: Percentage Allocation
15% Contingency
Total Project
Duration=300 Days
Contingency:45 Days
PM: 60%
PGM: 30%
PD: 10%
“Drop Dead Date”
35

36. Output: Integrated Baseline Schedule

37. Output: Overall Program Critical Path Drilling
Sequence
37

38. Step 7: Schedule Basis
• Baseline AFTER critical path acceptance
• Key step that is overlooked
• Assumptions/Key decisions recorded
• Provides validity to the schedule itself
• Provides an understanding of team’s thought process
• Allows team members to resist scrutiny/criticism
• Basis for change management
• Excusable Delay: Conditions Different than Assumptions

39. Step 8: Integrating Cost and Schedule: Earned
Value

40. Integrating Cost and Schedule: Earned Value

41. Value
• Standardization of activities
• Great Communication Tool: Everyone Spoke the Same Language
• Integrated Software Platform: Primavera Enterprise
• Schedule allowed for realistic and accurate well count by year
• Contractor Payments-Virtually Eliminated Disputes
• No management surprises!!!
• Benchmarking – Setting standards for other drilling programs
• Record actual times and adjusted future projections accordingly
• Accuracy increased year by year

42. Conclusions
• Understand what the Client Needs vs.Wants (two very different
things in this case)
• Don’t expect them to know terminology and benefits…educate
them (Project Controls 101 Class)
• Hands-On Development of Project Schedule (face-time is key)
• Print out items for discussion and hunt people down….no passive
emails..if you are an introvert, get over it! (also a six foot long
schedule is hard to read on a screen)
• Let the teams mark stuff up, nothing is set in stone!!!!
• Have many integration meetings…live in a conference room, I
did…
• Schedule Review Meetings should have strict time
management…no more than 1 hour at a time…you will lose people
and they never will come back! Respect their time and they will
respect yours…..

43. Conclusions
• Have the team explain their scope and process on a “generic”
project first
• Get them thinking Logic not Dates… they can’t cheat the schedule
that way
• Set up different report templates to match their needs so they will
actually use it….what a concept!
• Allow suppliers, engineering firms, etc. to attend the progress
meetings and comment on the schedule… don’t worry about the
contractual hierarchy
• Have a transition plan and implement it before you leave
• Momentum is Key….
• ….losing it can derail all of your efforts

44. Questions ?

45. Contact Information
Dr.Anamaria Popescu, PE,PMP,PSP
Brisbane Office
2/19 Musgrave Street
West End, QLD, 4101
Email: anamariap@mclachlanlister.com
Phone: 61 07 3255 0223
Sydney Office Perth Office
Level 1, 1 Hickson Road 189 Colin Place
Phone: 61 02 9241 7328 Phone: 61 08 9480 0647