Similar to any other function required for managing capital construction projects, the commercial management team needs to first ensure that all processes needed to achieve the objectives of managing the project’s commercial activities are fulfilled. Managing those processes should be done in a transparent and accountable format to ensure that the generated information is trustworthy and valid. This leads to the second requirement, which is how to use this information to provide insight for better and faster-informed decisions as well as share the performance status of the commercial management processes with other project stakeholders. This performance information will also become an integral part of the project, program, or projects’ portfolio overall performance reporting.
This requires using a Project Management Information System (PMIS) solution like PMWeb that enables managing the commercial management processes and other project management processes needed for delivering capital construction projects. As an enterprise solution, PMWeb can manage all commercial management processes across the complete projects’ portfolio that an entity might have. In addition, being 100% web-enabled allows all individuals involved in performing commercial management processes to collaborate regardless if they collocated on the same project site or not. Further, being web-enabled will enable stakeholders to access the needed performance information anywhere, any time using any device.
All commercial management processes will be managed in PMWeb to enforce transparency and accountability to ensure the trustworthiness and validity of generated information stored on a single database and not dispersed data silos. PMWeb comes ready with almost all processes required for commercial management in accordance with the Royal Institute of Chartered Surveyors (RICS) Professional Guidance for Commercial Management of Construction (1st edition, March 2016). For example, PMWeb has modules for a cost estimate, budget, budget adjustments, commitments, potential change orders, change orders, joint measurement report, timesheets, progress invoices, miscellaneous invoices, actual payments management, vendor register, vendor prequalification, risk register, among others.
Other processes like those for value engineering proposal, claims, and others when needed, PMWeb custom form builder will be used to create the input form for those additional processes. Each form will be assigned a workflow to map all submit, review and approve tasks along with the conditions for approval authority levels. In addition, the PMWeb document management repository will allow uploading and attaching all supportive documents required when performing those processes.
Fulfilling the second requirement of using the commercial management information to provide insight for better and faster-informed decisions can be achieved by either using the PMWeb Business Intelligence reporting tool. Although the reports displayed in this article were done using MS Power BI, which is another option for reporting PMWeb data, the same reports can also be created using the PMWeb reporting tool. The same approach would also apply to reports used to share the performance status of the commercial management processes with other project stakeholders as well as project, program, or projects’ portfolio overall performance reporting.The first reporting requirement on a capital construction project is the cost estimate. PMWeb allows creating reports to display the details of the estimated cost, compare an estimated version to another version, compare estimates across projects, among others. In addition, reports can be used to provide an analysis of the cost estimates developed during the different project life cycle stages.
The second reporting requirement would be budget reporting, which will report on information captured from the baseline budget and all budget adjustments. The budget adjustments will cover adjustments for tender addendums, contract variations, procurement strategy, update to project’s deliverables or outputs, update to labor and equipment resource rates, update to material cost rates, changes to prelims and site overhead strategy, risk mitigation, value engineering proposals, opportunity recognition among others. The reporting will also include reporting the cashflow for the planned budget spending.
Value Engineering Proposals reporting is another requirement for commercial management. PMWeb, a custom form builder, will be used to capture the details of all value engineering proposals. In addition, other PMWeb modules like meeting minutes will be used to document value engineering workshops, while the cost estimate module will be used to estimate the cost savings of those proposals.
If the contracts’ procurement process is managed using PMWeb, PMWeb online bid and procurement modules will be used to capture the details of all submitted proposals. This will enable creating reports to compare submitted proposals from a technical and financial perspective. Of course, reports can also be created for the other processes needed during the tendering period.
Reporting on vendors who might be considered to bid on the project’s scope of work, PMWeb processes for vendor directory, and prequalification will be used to capture those details. In addition, a custom form builder will be used to create the vendor performance appraisal forms. These forms will provide the commercial management team with the ability to have a comprehensive vendor management report.
When contracts for professional services, material supply, and construction works are awarded, PMWeb will be used to capture the details of all those awarded contracts, potential changes, change orders, progress invoices, miscellaneous and actual payments made. This will enable the commercial management team to have a consolidated actual cost report.
The data captured in the budget and commitment modules, including those for the actual cost, will be used to create earned value performance reports. The report will display the values and trends for schedule and cost variances as well schedule and cost performance indices.
Since most awarded contracts would require the consultants, suppliers, and contractors to provide bonds and insurances, the commercial management team would require having a register of all those certificates along with their details and expiry dates. PMWeb, a custom form builder, will create the bonds and insurance certificates details that need to be reported on.
Another report that the commercial management team would need to have access to is the risk register. Either using PMWeb ready to use risk register module or risk register created using PMWeb custom form builder. This will enable designing the risk register in the desired format. The commercial management team can also generate a report to provide details on the consumption of the project’s risk buffer or contingency.
Of course, there is no limit on the number of reports that the commercial management team could generate as long as the information to be reported on is available. For example, reports on the status of defects that need to be rectified during the defects liability period, claim notices, an extension of time requests, time impact analysis status reports, contractual obligations, and entitlement report. Having those reports and others depend on commercial management processes implemented on the project.
The data captured in those commercial management processes can be associated with other data sources available on the project to provide a different perspective for reporting a project’s commercial performance. For example, with the growing use of Building Information Models (BIM), reports can be generated when the commercial data will be associated with the BIM model asset or space it belongs to.
The commercial management processes data captured across the complete projects’ portfolio managed by the entity will become the basis for generating consolidated commercial reports. Those reports could also include a map to show the locations of projects being managed. What is important to note is that all commercial data reported is based on a single version of the truth data captured in PMWeb.
