GLEN’S SOAPBOX – You know about Expert Estimation…
But have you heard about its twin, Expert Project?
Expert Project is a dedicated financial project management package which can track daily costs and earned budget. It isn’t designed to replace accounting software, but rather, to augment it.
“Why have both?” I hear you ask. “Why not just manage my costs through my accounting package?”
Well, you can, and you will have 100% accurate information on how much your actual versus budget differs. But that could be a month or six weeks after the work has been done. By that time, your million dollar project might be 30% down.
Expert Project, on the other hand, prioritises the value of timely information. Your site foreman or superintendent takes the timesheets (on a daily or weekly basis, whatever you choose) and inputs the costs associated with labour, plant and other resources.
These costs form the basis of your Cost To Date or Actual Cost of Work Performed (ACWP). By comparing this to your Budget To Date or Budgeted Cost of Work Performed (BCWP), Expert Project will tell you to a very high level of confidence whether you are under or over your budget.
The Budgeted Cost of Work Performed comes from your estimate (hello Expert Estimation!) and represents the portion of the items that have been completed. As long as the frequency for BCWP and ACWP is the same (both daily, weekly etc.), Expert Project will give you the comparison then and there, so a project manager can take corrective action if required. We all know there are a plethora of reasons projects can be held up, such as bad weather, machinery issues, not to mention unanticipated delays with labour.
Expert Project gives you the data to identify a problem long before a traditional accounting package normally would. The cost is captured when the resource is consumed, rather than when it is invoiced or paid for. While it is possible for accounting software to do this, they tend not to be used as a daily progress bar, and they rely on data being sent to and received back from the accounts department.
If the project is over budget at any time, the skilled project manager will use their lateral thinking to turn things around. In order to do that, however, they need the right information at the right time. For that, they need Expert Project.
Glen Townsley is the founder of Pronamics, and has spent over 30 years building estimating software after a successful career as a civil estimator and project manager.