Enterprise Project Control (EPC)

Moving from a single project to a whole organization working “by projects”, PROJECT CONTROL becomes ENTERPRISE PROJECT CONTROL(EPC).

At corporate level, the role assumed by the Project Control Department is:

to support Project Departments (PD) in coordinating and in managing decisions finalized to maximize profitability;

to support Functional Departments (FD) in optimizing the use of their resources and maximize their operational efficiency;

to support Company Control Department (CD) in exercising the activities of the Economic and Financial Planning of the company as a whole. 

This role brings to the Project Control activity additional problems because come into play other factors such as:

- the need to plan and control - in parallel - a set of projects (large, small, innovative, repetitive, research, ... ..) which raise into the company departments (Engineering, Procurement, Production, ... ) the problem of priority; whose solution is often the cause of conflicts between Projects and between the Project Departments and Functional Departments;

- the relationships, sometimes binding, between the estimates performed by the Project Control Department on the alleged profitability of individual projects and the economic assessments made by the Company Control Department on the final profitability of the company as a whole.

The practical and systematic application of PROJECT CONTROL in the enterprise environment presents many kinds of difficulties that interact with each other and that, very often, are undervalued.

Common difficulties

In Enterprise environments, the Project Control Department is sometimes in difficulties to respond with reliability and awareness to the main questions that come from the Company managers:

• Will the Project be completed on schedule?
• Will the Project bring the expected profitability?
• what will be the effects of such profitability on single periods?

Among the problems related to operations that are raised by the experts, those that occur more frequently are basically two:

• the untimeliness and the poor reliability of the information on costs incurred (actual);
• the effort required to collect the needed information to effectively carry out the forecasting activity that represents the main mission of Project Control.

The root causes of the first problem are often ascribed to inadequate software systems but, if it is always true that software systems are perfectible, it is equally true that often it is a lack of procedures, methods and organization that are the necessary condition for the success.

The root causes of the second problem are much more complex as they involve a multitude of issues for which it is not easy to establish a priority:

• the inertia of the Operational Departments in accepting the introduction of methodologies and systems perceived as control tools;
• the insufficient authority given to people dedicated to the activity of Project Planning and Control;
• the lack of skills and experience of the people dedicated to Project Control activity;
• the stiffness and / or lack of integration of computer tools available;
• ………………….

The relevant information

Information needed to be able to exercise effectively the project control activity are numerous and some can’t be found even on the most advanced Information Systems (ERP). Normally, in facts, many of this kind of information resides elsewhere:

• some of them may still be hidden in the folds of the contracts signed with the client (in the form of requirements or provisions of ambiguous interpretation);
• others may arise as constraints arising from agreements with some partners and/or subcontractors already in the preparation of the bid;
• some lie on the table of the designers as technical solutions other than those envisaged initially;
• others are to be found in a make or buy strategy that is being developed and that is consolidatedday by day;
• others are hiding in messages (sometimes informal) that are contained into the correspondence with customers, partners and suppliers.

In practice, only some information residesin the ERP systems , without prejudice to the fairness of the data source, are only able to describe what has already happened and been formalized.

The final result is that, in an enterprise context, the Project Control activity, rather than being focused - as it should – on the "forecast", might not be able to more than a costly and frustrating collection, eventual certification of accounted data often ignoring the quality, content and origin of them.        

The transformation of a system based on individual knowledge, in a system that represents a company's assets, it require the development, the implementation and the dissemination of a methodological, organizational and software solution able to collect and integrate, in a continuous way, the information on costs incurred, with the information of costs predicted that usually are managed under a set of sub-processes headed by a multitude of subjects located both inside and outside the company. 

An authoritative opinion

Scott R. Longworth (American Association of Cost Engineering) afferma:

 “A fully integrated EPCS does not exists on most cases; project information is often fragmented and spread around between groups:

• The Accounting department records invoices, but may not be using the right cost codes;
• The Contract and Procurement departments know what has been purchased, but may not code commitments as they are budgeted;
• The Project Manager understands the project’s scope of work, budget and schedule, but does not have timely information to proactively manage the project …  this is the Project Control Manager worst nightmare“.

With responsibility in so many places and on multiple systems, it can be extremely difficult to manage the project’s budget and schedule performance”.