Project Controls and its global development

What is Project Controls

Let us first understand what is Project Controls - There are many definitions of Project Controls used across industries and indeed across companies within industries. Project Controls are a professional function not widely recognised as a set of specialised skills in their own right. They are a function that is critical to achieving successful project and programme outcomes i.e. delivering required benefits to cost, time and performance. For the purposes of this article, the field of Project Controls can be defined as follows:

"Project Controls are the data gathering, data management and analytical processes used to predict, understand and constructively influence the time and cost outcomes of a project or programme; through the communication of information in formats that assist effective management and decision making."

This definition covers all stages of a project lifecycle from initiating and scoping the project, through to closure, final learning from experience and analytical analysis of overall project performance.

Click here ?to understand what PC does in detail and should you wish to understand different versions and analogies please?visit here .

Importance of Project Controls

?A report by?McKinsey ?states 98% of megaprojects face cost/schedule overruns or delays. The reasons include flawed performance management, insufficient risk management, missed connections (lack of planning) amongst a few others which lead to: loss of control on projects; missed deadlines; delayed phased completions; incurring penalties; incurring payment delays; erosion of stakeholders’ trust and finally, with public projects, poor justification of taxpayer's money.

?The?PWC report ?makes a similar comment i.e., capital projects that come in under budget are the exception, not the rule. Another?report by PWC , suggests that worldwide infrastructure spending will grow from $4 trillion per year in 2012 to more than $9 trillion per year by 2025. Overall, close to $78 trillion is expected to be spent globally between 2014 and 2025.

The Asean PWC report? suggests that in the last five years, there has been a large disparity between the growth rates of infrastructure spending in the six largest economies of ASEAN, which has ranged from 4% to 13%. For all of the selected ASEAN countries, infrastructure spending is growing faster than the overall economy. Additionally, in reference to?South East Asia Handbook , Malaysia will see record positive growth again in the construction section in the not-too-distant future following a contraction in 2020 due to COVID.

According to?Harvard Business Review , by 2027, some 88 million people around the world are likely to be working in project management, and the value of project-oriented economic activity will have reached $20 trillion. But research shows that only 35% of the projects undertaken worldwide are successful—which means we’re wasting an extravagant amount of time, money, and opportunity. To take advantage of the new project economy, companies need a new approach to project management: They must adopt a project-driven organizational structure, ensure that executives have the capabilities to effectively sponsor projects and train managers in modern Project Management & Controls.

With regards to how much % cost of Project Controls/Management on a given project, in reference to?PMI report , the combined project Controls/Management costs for all phases of a project total somewhere between 7–15 percent of the project's TIC (Total Installed Cost). The sheer scale of investment that runs in trillions would offer the PC/PM cost with easy maths, demonstrating the vital role played by Project Controls in this thriving and huge sector.

Development of Project Controls globally

United Kingdom?-?Let's start with the UK because I am being located here. In the UK, the Government initiated the efforts to put strong controls on complex infrastructure and major projects leading to the birth of the?IPA (Infrastructure and Projects Authority) ?which sits at the heart of government, reporting to the Cabinet Office and HM Treasury.?The Institution of Civil Engineers ?formed the dedicated group?“The Infrastructure Client Group (ICG)”? ?that brings together the UK’s most progressive economic infrastructure clients in partnership with government and industry. ICG’s key purpose is to lead the acceleration of the improvement and alignment in the delivery and development of UK infrastructure for the?benefit of the economy ,?society and the environment .?Major projects Association ?took a wide range of initiatives to improve the initiation, delivery and outcomes of major projects. Various initiatives such as?Project 13 ?and?Construction Playbook ?were drafted by the community with support from UK Govt.?UK National Audit Office (NAO) ?joined by creating a wide range of?frameworks ?for?providing capabilities ?that underpin the UK’s defence policy and for wide-ranging social and economic projects including Net Zero carbon emissions targets. With these net-zero targets falling in Project Controls KPI’s, The International Coalition for Sustainable Infrastructure (ICSI) was founded in 2019 by The Resilience Shift, the American Society of Civil Engineers (ASCE) and its ASCE Foundation, the Institution of Civil Engineers (ICE), the Global Covenant of Mayors for Climate & Energy (GCoM), WSP and LA Metro, among others. They aim to bring together the entire value chain of infrastructure and unlock the opportunity of using engineers as a driving force for positive impact and climate action. Refer to the?ISCI roundtable discussion paper ?following the COP26 infrastructure roundtable in Glasgow. On the academic’s front, the Department for Education took note of Project Controls as a profession and initiated the Trailblazer apprenticeship program at?Level 3 – Project Controls Technician ?with?Level 6 – Project Controls Professional.

United States of America?- On the US front, Project Controls has increasingly been promoted by industry organizations as well as state and federal governments as the differentiator for program & project management. As an over 50-year-old industry organization specializing in cost engineering/project controls,?AACE International ?has brought industry best practices to both the process and the commercial construction industries, with a complete body of knowledge called the Total Cost Management (TCM) Framework providing “an integrated approach to portfolio, program, and project management”.?The TCM addresses best practices across the full life cycle of programs, projects, facilities, and services.?The TCM is the guide to the development of AACE’s over 100 Recommended Practices on topics ranging such as scheduling, cost estimating, earned value management, risk management, and forensic analysis and the basis for respected certifications in project controls disciplines. The well-known program and construction management industry organization,?Construction Management Association of America (CMAA) , has written industry Guidelines for the disciplines of PMCM, including Time, Cost, Risk, Claims, Quality Management, and Contract Administration, along with Sustainability and CM standards of practice.?CMAA also provides certifications in construction management has a well-established network of chapters supporting construction management and produces surveys of construction manager fee structures. The American arm of the?Royal Institute of Chartered Surveyors (RICS) ?has brought their global standards for chartered surveyors to the US and offer educational and technical sessions to ensure standards are met.?The College of Performance Management ?has long shared, promoted, and advanced the use of planning, control, and performance management, providing support to the EIA-748 global standard of earned value management.?The organization holds conferences and industry sessions to expand understanding of EVM,?

On the federal government level, departments like the United States Army Corps of Engineers (USACE) have developed detailed specifications for scheduling which provide in-depth requirements and reference AACE recommended practices.?The National Defense Industrial Association (NDIA) ?published and updated?the Earned Value Management System Guideline Scalability Guide ?that helps the industry implement EVM according to EIA-748. GSA, as the largest landlord in the world, has developed their requirements for construction managers to meet best practices of CMAA and AACE across the organization.

As the federal agency responsible for audits for all federal programs,?GAO ?has developed Guides that disseminate best practices for managing programs in cost, schedule, alternatives, and technology.?These guides have been developed in cooperation with industry experts and are used to plan, manage and assess federal programs.

Australia - On the other side of the world, Australia leads a range of initiatives to improve project delivery by setting up statutory bodies such as?Department of Infrastructure, Transport, Cities and Regional development ?which put the spotlight on enhanced governance and delivery arrangements – find out more in a?talk by Ben du Bois .?Infrastructure Australia ?and regional states set up bodies such as?Infrastructure Victoria ?and?Office of Projects Victoria ?to support these efforts by drafting?2021 Infrastructure Market Capacity Report ?- The 2021 Infrastructure Market Capacity Report has been recognised internationally as an industry-leading approach towards a common challenge;?Advisory Papers on Infrastructure Resilience ?;?New Assessment Framework ?and?Sustainability Principles . The?Grattan Institute ?drafted a range of similar reports such as?The Grattan car plan: practical policies for cleaner transport and better cities ,?Towards net zero: A practical plan for Australia’s governments ,?How to get better bang for transport bucks ?and?The rise of megaprojects: counting the ?costs to further bring awareness and contribute towards these initiatives. Additionally, Australia’s professional bodies?ACES ?and?RES ?too led the efforts on professionalism in Project Controls and initiated range of actions supported by?Engineers Australia ?such as considering Chartered status for Project Controls professionals.

Summary

We as professionals need to continue to be innovative and works towards continuous development and enhancement of Project Controls for successful project delivery. With ambitious infrastructure projects across the world, we all continue bringing professionals, government and professional organisations together to bene?t the industry and to understand the skillsets that are required for future generations to deliver. Technology now plays a large part in everyday working and we have innovative technology providers showcasing new opportunities with machine learning, AI and extensive use of data for predictive analysis.

Feel free to share your views and more importantly, share what development is going on in your region. In the meantime, please visit?Project Controls Institute to see how we can help you or your team develop new skills in project management and project controls.