Having a single-version-of-the-truth financial performance reporting is one of the important, if not the most important, requirements when it comes to delivering capital construction projects. This single version of the truth reporting cannot be achieved if the required cost data are captured and stored in different data silos or simply being not connected. On the other hand, the credibility of what is being reported depends on the trustworthiness and validity of the captured cost data. Readers of the financial performance reports need to be able to trace the source of shared cost data when needed.
Achieving a single version of the true financial performance reporting requires a solution that can manage all pre-contract and post-contract cost management processes to capture the granular details of all those transactions on a single integrated platform. This requires using a Project Management Information System (PMIS) that is specifically designed to manage capital construction projects like PMWeb. The connected-cost chart below displays the many processes that will be managed in PMWeb to achieve the required single version of the true financial performance reporting. The first group of processes is the cost estimate processes (light blue), which will ensure that the project cost is valid and realistic. The budget management processes (burgundy) are the processes need to ensure that there is an approved budget for the project. The funding management processes (light orange) are needed to manage the availability of funds to deliver the project. As an option, The contract procurement management processes (light green) are needed to ensure that the qualified bidders are selected to deliver the project within the approved cost estimate. The contract management processes (yellow) are needed to manage the awarded commitments, potential changes, change orders, the value of actual work invoiced, and actual payments made against what was invoices. PMWeb forecast process (green) will be used to calculate and report on earned value measures. Other processes (gray) for managing miscellaneous invoices, risk, schedule, resource requirements, and timesheets also need to be managed. In addition, other cost management processes that could be unique to each entity will be managed using PMWeb custom form builder (red). Finally, if project income or revenue (orange) is needed to be reported on, then this can also be managed in PMWeb.
For a credible, traceable, and trust-worthy single version of the true financial performance repotting, each one of those cost management processes needs to be managed like any other project process. For each cost management process, PMWeb will provide the input form to capture the required data by its assigned individual. This will not only ensure the trustworthiness and traceability of captured data but also ensures that the data is provided by the individuals assigned to do so.
For example, the change order form, which is one of the many ready to use forms available in PMWeb, will be used to capture all details that are associated with a change order form. In addition, PMWeb allows adding all other user-defined fields for each input form to capture additional types of data when needed. The same approach will also apply to all other input forms created using PMWeb custom form builder.
Knowing that each cost management process might require documents to support what is being communicated, PMWeb allows attaching any type of documents to each input form. Although documents can be directly uploaded and attached to the form, nevertheless, as a best practice, it is recommended to upload and store those documents in the PMWeb document management repository. PMWeb allows creating file folders and subfolders to upload those documents in an organized and controlled manner. Access permission rights can be set to each folder or subfolder to restrict viewing or editing those documents. In addition, PMWeb allows linking relevant transactions to each record, whether those transactions were other PMWeb records or imported emails.
Enforcing accountability when it comes to performing the cost management processes is a must and requires assigning a workflow for executing each process that is aligned with the requirements defined in the project’s cost management plan. The workflow will map the submit, review, and approval tasks for each process detailing the responsibility for each task, allotted time, actions available task, the sequence for performing the tasks, rules for returning and resubmitting transactions, and alerts rules. In addition, the PMWeb workflow allows adding conditions to enforce the approval authority levels, which is a must requirement when it comes to performing the cost management process. Those workflows can be specific to each project, program, or common to all projects managed in PMWeb.
The integration between PMWeb, cost management processes comes ready for most processes in accordance with best practices in managing project cost. In addition, PMWeb allows creating other integrations between those processes and other non-cost management processes to enable generating a process from another when needed. The integration will identify what data fields will be copied between the two integrated processes. This will not only eliminate data input redundancy but also ensures that processes are connected to each other when needed.
All cost management input forms managed in PMWeb have one compulsory field that will be common to all. This field will be the cost account or cost breakdown structure (CBS) field, which could be unique per project or common to a different group of projects or standardized across the complete projects’ portfolio. PMWeb allows creating cost accounts of up to 16 control levels with ten digits length to define each level. The cost account or cost breakdown structure (CBS) will be the basis for consolidating, monitoring, evaluating, and reporting a single version of truth for a project, program, or a portfolio of projects’ financial performance.
By having a single web-enabled platform to capture the details of all connected cost data using governed processes, stakeholders can be assured of having a single version of truth financial reporting at a project, program, or portfolio of projects. Having the connected cost data on a single repository provides those stakeholders with the ability to dice and slice this real-time data to analyze performance trends and identify the correlation between the cost management processes as well as processes managed in PMWeb like Request for Information (RFI) among others.
The cost breakdown structure (CBS) will enable stakeholders to have a single version of the truth reporting at any desired control level or group of control levels. Authorized project stakeholders can consume the captured cost data in any desired form or format to provide them with the insight to make better and faster-informed decisions. They can have reports that will summarize the cost data by CBS control level while detailing cost data by the process type it was captured from. Reports can include tables and visuals to provide insight in the needed format.
The captured cost data can also be associated with the geospatial locations of managed projects, objects, or assets in Building Information Models (BIM), or any other location or building system type to provide project stakeholders with the visibility they need when it comes to reporting projects, programs or projects’ portfolio financial performance. A knowledge that most project stakeholders continue to be deprived of.
The benefits of managing the cost management processes across the complete portfolio of capital construction projects for an entity is not limited to financial performance reporting. The actual captured cost data can be used to build the entity knowledge. For example, the PMWeb cost database will automatically update all cost items with the actual prices of similar cost items that are part of awarded contracts. PMWeb will create a purchase history of those cost items for which it will enable the entity to benchmark their cost estimates as well as improve their cost estimates of future projects. This is a much-needed functionality for project owners who have projects in countries where no reliable cost database of past similar projects exists.
In addition, by having access to a considerable volume of trust-worthy cost, risk, schedule, and other types of projects’ data, entities can start to realize the benefits of the emerging practice of Artificial Intelligence (AI). For example, AI can improve financial performance reporting by enabling real-time prediction of project cost, measurement of wasted budget due to delays and inefficiencies. The possible use cases of artificial intelligence in the capital construction industry are many, but they all depend on the availability of valid and trust-worthy data volume.