What is project control and what are its steps?
What is project control and what are its steps? Despite their best efforts, many organizations find that large projects fail to achieve their original goals for many reasons: over-optimism, manual estimation errors, insufficient data, and many other factors.
When it comes to capitalizing on large projects, 98% of projects are cost overrun or delayed. On average, cost increases are estimated to be 80% of the original amount, and the timeline is often delayed by 20 months or more.
So what’s the difference between a costly and late project and one that’s delivered on time and under budget? In many cases, the answer to this question is project control.
What is project control?
Project Control is the process of collecting and analyzing project data to guide costs and programs in the right direction. Project control tasks include initiation, planning, monitoring, control, communicating, and determining project costs and schedules. Finally, project control is an iterative process of determining project status, predicting possible outcomes based on that, and then improving project performance if the outcomes are unacceptable.
Project control activities may include:
- Aligning projects with the goals and portfolio of the organization
- Develop Work Breakdown Structure (WBS)
- Cooperation in the initial plans of the project
- Developing a risk management plan
- Project budgeting and forecasting
- Project cost monitoring
- Feedback and reporting
- Optimizing project strategies to achieve better results in the future
While a project may deal with many parameters including quality, scope, etc., project control focuses on factors and schedules and continuously monitors them for potential risks.
Hierarchically, project control is a subset of project management. The project controller can report to the project manager on a specific project or the entire portfolio. Project control is essential to its successful management because it alerts project stakeholders to potential problems and allows them to make corrections if necessary.
Project control activities should be performed throughout the entire project life cycle (from initiation to closure) to control the various factors that affect cost and schedule.
Integrating project control with the other elements of project management provides timely insight that enables project stakeholders to make the right decisions at the right time.
Project control processes
Project control’s strengths lie in its data-driven approach and attention to detail. A project manager doesn’t just want to know if a cost overrun has occurred, they want to know the root causes, the exact numbers, and how to fix it. This is where a fully integrated project control solution can help improve efficiency in getting quick responses and identifying performance issues, ultimately reducing project costs.
Project control processes include:
Planning is one of the important steps in which controllers and project managers work together. Whether it’s creating project plans, schedules, work breakdown structures, or cost estimates, planning gives everyone a foundation from which to work throughout the project.
Integrating the budgeting process into project activities is essential to accurately calculate costs and understand when and why they exceed the budget. By budgeting and refining it in stages, a transparent model will be available to senior managers and team members to serve as a benchmark throughout the project and make critical costs understandable.
Project control provides a rigorous approach to risk management. By proactively identifying risks, continuously monitoring risks, and preparing proactive plans to address issues, it is possible to reduce the impact on budget and schedule. It also helps to prevent some risks in the future.
When a project deviates from its original estimate, it is often not because of one factor, but because of the effect of several factors that are usually not considered. This is why change management is so critical. By tracking changes and understanding their impact, while following a clear process for evaluation, approval, and accountability, projects can stay on track.
By increasing the accuracy of estimates, controllers and project managers can gain more insight into the current drivers of costs and schedules. measuring progress It is a critical input to the forecasting process that serves as a comparison against actual and committed costs, enabling project controllers to forecast using a combination of standard methods and formulas. Regular and timely updates help the project controller by enabling faster response and corrective actions than when a project started.
Defining and using key performance indicators (KPI) is very important to monitor the health of the project and the forecasting process to take corrective actions. Organizations that use performance information (such as calculations used in earned value management) to manage projects. They achieve a success rate of 68%; While for projects that do not use this data, there is a 7% success rate.
This stage involves creating processes and systems that can help team members communicate and collaborate with each other. The goal is to integrate status updates, meeting timekeeping, tutorials, and workflow management so that teams can focus on actual execution instead of day-to-day tasks.
Difference between project control and project management
The overlap of performance between these two disciplines can sometimes make it difficult to understand the distinction between them. Many organizations assign the role of project controller to one of the project managers, complicating the issue. However, it is important to distinguish between the two in order to fully understand the role of project control.
Project management is a comprehensive function that includes the management of people, processes, and deliverables in a project through different functions. In addition to cost and schedule, it also focuses on quality and scope.
The goal of project management is the complete success of a project with respect to available resources.
Project control is a sub-function and focuses on only two parameters: cost and schedule. For example, quality management and control are not included in the scope of project control.
The main objective of project control is to minimize the cost and schedule variances that were originally planned.
Controllers act as a safety harness for project management. Sometimes project managers focus almost exclusively on deliverables, which leaves less time to consider costs, deviations from the project schedule, and other variables involved. Project control provides a reality check for project managers, thereby providing more information about the progress of project resources and objectives over time.
Project control is part of the monitoring function that analyzes scenarios and makes recommendations. A controller reports project costs and schedules and guides the project team on potential problems. The actual implementation of these recommendations is not done by the controller but by the project managers.
Even though control is a subset of project management, project controllers only interact with the project managers to whom they report.
A few team members that controllers communicate with are:
- project manager
- Financial team
- Construction manager
- Procurement team
- Technical team
The importance of project control
In a 2018 survey, 88% of respondents stated that project control is important or critical to the success of enterprise projects.
The report also confirms the correlation between project control and success: those who consider control to be “vital” are twice as likely to meet all project objectives. Those who do not consider project control “at all important” are more than 3 times more likely to fail.
These results emphasize the importance of project control.
Benefits of project control
In large projects, various drivers can make it difficult to align with initial plans. However, careful monitoring, analysis, and regulation can make this easier. When projects of any size are properly managed, significant benefits can follow.
The following are some of the main benefits of project control:
- Reduce project costs through the ability to make timely decisions using key performance indicators (KPIs).
- Forecasting the cost and completion date of the project
- Increasing visibility of the financial health of the project at all stages
- The possibility of reducing the scope creep of the project
- Provide meaningful data for future projects by completing well-built projects
- Better reputation for proper project management and control
- Competitive advantage over organizations that have less project management ability
- Increasing job satisfaction of project team members
Challenges in project control
Despite the growing recognition of control as a discipline, the question for organizations is: How well is project control implemented internally? Does it work as expected? Are these results consistent?
When projects fail, many organizations may doubt the effectiveness of their project controls. However, this is an opportune time to assess whether control processes have been properly implemented. Some challenges and obstacles faced by project teams in the correct implementation of control are:
Lack of commitment and support from senior management: This is one of the biggest challenges. Control does not mean supervision. While monitoring is passive, control refers to active decision-making based on analysis and reporting. Hence, this cannot be achieved without sufficient authority provided by the leadership. In the absence of independence and support, controllers cannot achieve their goals. Many project control teams are understaffed or underfunded to invest in the right tools.
Considering project control as just another cost: Because control is not considered, it is usually considered an overhead cost. However, this is far from the truth. Studies show that while project control performance costs range from 0.5 to 3 percent of the project, cost improvement costs can range from 6 to 20 percent. Organizations can solve this problem by training project teams and potential managers.
Resistance to accepting the controlling role: People focused on delivery and timelines often have a skeptical view of functions such as controlling and auditing. This issue can be overcome by creating partnerships. It is also important for organizations to integrate the function with other areas of project management. A project controller is not someone who brings bad news every few weeks or months. Instead, this role should fit seamlessly into the project lifecycle.
Manual and Outdated Processes: Even when there is sufficient support from management and awareness in teams about the importance of project control, actual execution may not keep pace with the difficult challenges of projects. Many organizations still use cumbersome spreadsheets to track and manage risk matrices and change requests. Manual systems produce mixed data rather than comprehensive insights. They also don’t provide the required view of the big picture.
Project control encompasses multiple processes and interacts with multiple roles to ensure project success. Control requires constant attention to detail throughout the duration of the project, and some can run for years.
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