Project owners who are actively involved in delivering their capital construction projects portfolio understand that their own organization costs allocated to those projects can be very high when compared against the overall budget cost of those projects. Those would include the direct cost of the professional resources assigned to project management, engineering, commercial, procurement, quality, health and safety, project controls, site management, legal, marketing, sales and others. In addition, it includes indirect cost that are usually associated with operating overhead expenses such as those for office rent, utilities, insurance, general office equipment, local transportation, regional and international travel, etc.

Those direct and indirect costs vary by each stage of the capital project delivery life cycle which might take five to ten years to complete. This is due to the fact that the project team members and other individuals assigned to each stage do vary depending on the requirements of each stage and the role that the project owner organization plays during those stages. The same applies to the indirect expenses.

Using a project management information system (PMIS) solution like PMWeb, this can be easily achieved as all required business processes are readily available out of the box. To start with, the capital project owner needs to first have a complete understanding of the project life cycle and its stages. This includes the start and finish dates of each stage as well as the key tasks and deliverables needed to manage the execution of each stage. PMWeb schedule module helps capture those details of the overall project life cycle stages. The master schedule can be created directly in PMWeb or if needed can be imported from Primavera P6 or MS Project.

PMWeb 7 Schedules Schedules Capital Project Life Cycle 

The next step is to estimate the direct cost of labor and non-labor resources that the project owner’s organization needs to manage the tasks and deliverables for each life cycle stage. To have a better visibility of the labor resources required at each stage, it is highly recommended to create an organization chart to map the resource roles and assigned responsibilities for each stage. 

PMWeb organization chart module helps to create the organization chart for each project life cycle stage and then associate the needed resources to each role. Those labor resources are defined in PMWeb labor resources module. For non-labor resources, those are defined in PMWeb equipment resources module.

PMWeb 7 Tools Resource Management ORG Chart Construction Management 

The next step would be to determine the needed labor and non-labor resources deployment levels, that is full time or part-time and to what extent. Those requirements are estimated for each project life cycle stage considering the organization chart defined for the project owner team, who are responsible for managing the stage. Although the common practice would be to assume that those labor resources get deployed at regular pay rates, nevertheless, PMWeb also allows approved users to determine if those rates should be deployed at overtime or weekend rates. The estimate for each resource requirement stage is assigned the cost breakdown structure (CBS) or cost account level that this estimated cost is associated with.

PMWeb 7 Tools Resource Management Requirements Construction Phase 

As for the indirect costs associated with the project owner’s own organization cost required to manage the capital construction delivery, PMWeb cost estimate module helps estimate those costs. Similar to all other estimate templates created in PMWeb, all those indirect cost items are detailed into their unit price, quantity and unit of measure to enable calculating the total cost of each item.

PMWeb 7 Plans Portfolio Planning Estimates Cost Estimate 

The direct cost estimate for the resource requirements for each project life cycle stage and the indirect cost associated with those stages becomes the basis for establishing the budget for the project owner’s own organization cost required to manage the capital construction delivery. This budget is captured at the cost breakdown structure (CBS) or cost account level assigned for project owner own organization cost.

PMWeb 7 Costs Budgets Budgets Construction Budget 

To ensure that there is a commitment by the project owner organization to control the actual direct and indirect costs for managing the tasks and deliverables of each project life cycle stage, a commitment record is created. The commitment record represents the amount estimated by project owner organization for the direct and indirect costs required to manage the tasks and deliverables of each project life cycle stage. On a monthly basis, the actual cost incurred against the detailed direct and indirect line items are captured. This becomes the basis for reporting the actual cost incurred against the project owner’s organization estimate to manage the tasks and deliverables of each project life cycle stage and the balance to complete each item.

PMWeb 7 Costs Invoices Progress Invoices Estimates 

To ensure that the actual direct cost associated with the consumed labor and non-labor resources are formally captured and documented, it is highly recommended to use the PMWeb timesheet module to capture the details of those spent hours. The timesheet module enables defining if the spent labor resource hours were spent during normal working hours for regular pay or weekend, overtime, or holiday pay types. 

Although PMWeb allows the organization to directly report from the timesheet module on the non-commitment actual direct cost, nevertheless, it is highly recommended to document this cost in the commitment progress invoice. Those timesheets become linked to the progress invoice to provide the needed justification to what has been charged as actual direct cost for the project owner’s organization’s own team.

PMWeb 7 Tools Timesheets 

The PMWeb potential change order module helps to capture any potential changes identified that could impact what was originally estimated for the direct and indirect costs required to manage the tasks and deliverables of each project life cycle stage. The reported potential changes are subject to a detailed review in accordance with the workflow assigned to this business process. If a potential change is approved, then it becomes the basis for generating the change order to adjust the estimated commitment for the project owner own organization management cost. 

PMWeb 7 Costs Change Management Commitment COS 

Whenever there is an approved change to the estimated cost for project owner own organization, the project’s baseline budget also needs to be revised by issuing a budget request. To ensure that all changes to the project owner’s own organization commitment have the required budget adjustment record, the PMWeb change event module combines the approved budget with the approved change or changes to the project owner’s own organization commitment.

Costs Change Managment Change Events Additional Design Services 

Similar to all other business processes managed in PMWeb, the project team can attach all supportive documents to each business process template detailed above. It is highly recommended to add details to each attached document to better explain to the reader what is being attached and viewed. In addition, links to other relevant transactions or records of other business processes managed in PMWeb can also be added.

PMWeb 7 Forms Inspections Progress Observation Level 01

It is also highly recommended that all those supportive documents, regardless of their type or source, get uploaded and stored on the PMWeb document management repository. PMWeb allows creating folders and subfolders to match the physical filing structure used to store hardcopies of those documents. Permission rights can be set to those folders to restrict access to only those users who have access to do so. In addition, PMWeb users can subscribe to each folder so they can be notified when new documents are uploaded or downloaded.

PMWeb 7 Document Manager Projects Capital Project Construction Phase BP02 Superstructure

To enforce transparency and accountability in managing the business processes detailed above, a workflow needs to be added to each template to map the submit, review and approve tasks, role or roles assigned to each task, task duration, task type and actions available for task. The workflow can be configured to include the approval authority levels as set in the Delegation of Authority (DoA) document.

PMWeb 7 Workflows Business Processes (BPM)

When a transaction for any of the business processes detailed above is submitted for review and approval, the workflow tab available on the relevant template captures the planned review and approve workflow tasks for each transaction as well as the actual history of those review and approval tasks. The captured workflow data includes the actual action date and time, done by who, action taken, comments made and whether team input was requested. 

PMWeb 7 Forms RFIs Conflict 


The world’s top organizations are selecting PMWeb because of its comprehensive features, functionality, and ease of use. Since 2007, PMWeb has been used by tens of thousands of users to manage their Plan | Build | Operate lifecycles.