McLachlan Lister provides a range of management consulting and project management services. These are offered either discretely or as an integrated service - you control the depth of our relationship:

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