In my past, I worked in Central Engineering for a large worldwide company. One day myself and another project manager got a call to attend a meeting with a Senior VP at one of our facilities. The project had purchased a used paper machine in the UK and were to install it in their plant. The facility engineering manager was running the project and they were $10 million over budget. As we found out later, they had done some planning and scoping but not nearly enough.
Senior management were fed up and wanted Central Engineering to take over the project. At the meeting the engineering manager informed the VP the project had overrun by another $5 million in the past week plus the contractor in the UK removing the equipment wanted more money than what was in his contract. He was holding up shipping the equipment until he got what he wanted.
White As A Sheet
When the VP heard that, his face went white. He walked over to a window, looked out, and thought about what he had just heard, after about five minutes, turned around, told the engineering manager Central Engineering was taking over and ended the meeting. By the end of the week the engineering manager was no longer with the company. He had been with the company for about 20 years and there he was gone. It took a lot of effort to sort out the mess. If management had known up front what the scope and cost of the project was, they would never have approved it. Senior management were not happy campers.
How Do You Control A Project?
That project caused a lot of pain and discomfort for senior management, facility management, and the facility. This was a serious case of an out of control project which leads to the question of “How Do You Control A Project?”. In theory, it’s quite simple, you;
- Define the scope
- Budget and plan the execution of the scope
- Execute the scope per the plan
- Control the scope
- Manage the budget variance
As you know, scope is the single most important variable in defining & controlling the cost of a project. As the with the above project, not planning and developing the scope lead to their downfall.
Like you, I know in practice developing the scope difficult to do. However, when it comes to managing a project, it’s “garbage in equals garbage out.”
Scope wrong = estimates wrong.
Scope wrong = schedule wrong.
Scope wrong - resource allocations wrong
The wrong scope can cause a lot of difficulty and discomfort to a project manager. I didn’t like it when I started out, so I took steps to successfully develop scopes for various size projects. So if you are suffering the pain and discomfort from scope definition problems, and you want to sleep well at night, you need to put in the time, money and effort in determining your total scope.
Workshops & Consulting
Do you, or someone you know, need the services of a Senior Project Manager? I have over 35 years of complex industrial project management experience and can help you with all your project needs such as scope development, estimate reviews, engineering office procedures, tender documents, bid documents and bidding, construction management, and project management training.
Fundamentals of Project Management
Start planning now to take your Project Management Survival Skills in April 2015 in Houston with our ‘Fundamentals of Project Management’ workshop.
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Calgary AB September 1 - 3, 2015
Houston TX October 20 - 22, 2015
Calgary AB November 18 - 20, 2015
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Certificate In EPC Project Management
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