1. Controlling Project Costs 10/26/2012
SoTecConference 2012
Controlling Project Costs
Jon Grunzweig
Vision Business Systems
Leading IT to Business Excellence
Jon Grunzweig 1

2. Controlling Project Costs 10/26/2012
SoTecConference 2012
Ever Happen?
• Great project plan, good resources, design
• Before you know it…..
– Delivery date slipping
– Going over budget
• Project keeps going along
– Start ignoring the budget, so far overspent
– Timeline goes into oblivion…
Shuttle Route
Endeavor’s Last Mission
• Great preparation
Things happen….
• $$
Jon Grunzweig 2

3. Controlling Project Costs 10/26/2012
SoTecConference 2012
Credibility Issues….
Blame game starts……
Which leads to…….
Jon Grunzweig 3

4. Controlling Project Costs 10/26/2012
SoTecConference 2012
Why ?
• Many moving parts (very few fixed parts)
• Circumstances occur different
• Things left out / Estimates incomplete
• Poor cooperation within business, people
• Events and changes
• Issues with service providers
• Outside uncontrolled events
• Unknowns….
Most Projects
• Predictability
• Been done, or very similar (not one of a kind)
• Experienced resources
• Therefore:
– Should be on time and on schedule
(or very near)
What’s the disconnect?
• Good plan, design, resources, project mgt
but……..
• Poor alignment of Accountability Cycle
• Poor hours accountability
• Elements unplanned for
Jon Grunzweig 4

5. Controlling Project Costs 10/26/2012
SoTecConference 2012
Our focus today….
• Alignment of Accountability Cycle
• Accountability of hours
• Areas short-changed in estimates
Foundation for Control
Project Execution Cycle
Project Planning & Agreements
Governance & Project Management
Contract & Vendor Management
Methodologies & Processes:
Design, Project, Change Control
Technology Vision and Strategy
Spend & Execution Cycles
Spend Execution
Authority Cycle Cycle
Project
Budgets
Plans
Timesheets/
Proposals
Billing
Status
SOWs
Reporting
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6. Controlling Project Costs 10/26/2012
SoTecConference 2012
Accountability Cycle
Methodology
Status
Proposals
Reporting
Billing SOW’s
Project Plan /
Time Sheets
Est
Accountability Alignment
Prop SOW Plan Time Invoice Status
Total 120 120 120 90 70 130
Task 1 40 40 40 30 20 35
Task 2 80 80 80 60 50 95
Accountability Hours
How Much ---> A B C
Remain
Plan Actual A-B
Total 120 90 30
<----- What
Task 1 Rsc 1 40 30 10
Task 2 Rsc 2 80 60 20
Jon Grunzweig 6

7. Controlling Project Costs 10/26/2012
SoTecConference 2012
Accountability Hours – Plan
How Much ---> A B C
Remain
(Plan -
Plan Actual Act)
Total 120 90 30
<----- What
Task 1 Rsc 1 40 30 10
Task 2 Rsc 2 80 60 20
Accountability Hours – Actual
How Much ---> A B C
Remain
(Plan -
Plan Actual Act)
Total 120 90 30
<----- What
Task 1 Rsc 1 40 30 10
Task 2 Rsc 2 80 60 20
Accountability Hours - ETC
How Much ---> A B C D
Remain
(Plan -
Plan Actual Act) ETC
Total 120 90 30 40
<----- What
Task 1 Rsc 1 40 30 10 5
Task 2 Rsc 2 80 60 20 35
Jon Grunzweig 7

8. Controlling Project Costs 10/26/2012
SoTecConference 2012
Accountability Hours – Proj Total
How Much ---> A B C E D F G
Proj
Remain Total Var
Plan Actual A-B ETC B+D A-E Billing
Total 120 90 30 40 130 (10) 70
<----- What
Task 1 Rsc 1 40 30 10 5 35 5 20
Task 2 Rsc 2 80 60 20 35 95 (15) 50
Accountability Hours - Summary
How Much ---> A B C E D F G
Proj
Remain Total Var
Plan Actual A-B ETC B+D A-E Billing
Total 120 90 30 40 130 (10) 70
<----- What
Task 1 Rsc 1 40 30 10 5 35 5 20
Task 2 Rsc 2 80 60 20 35 95 (15) 50
Accountability Hours - Keys
• Must do it timely (daily or weekly)
– With additional early warning protocol
• Accountability at the resource level
• Accountability of the group
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9. Controlling Project Costs 10/26/2012
SoTecConference 2012
Problems with Estimates
• More than initial coding or configuration
• Testing Unit, integration, system,
regression
• Rework It will occur
• Deployment (prepare, deploy, verify)
• Post live support (immediate)
Summary - Key Elements
• Appropriate Project Plan
– Watch out for common items left out
– Resources own estimates & updates
• Accountability Cycle lines up
• Solid relationship with vendors
• Timely reporting (within 1-2 days of cutoff)
• Stick to methodologies/processes
• Plan for contingencies and issues
• Measure your success rate
If control costs…..
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10. Controlling Project Costs 10/26/2012
SoTecConference 2012
Footnotes
• Types of Projects: ERP vs. Development
• Not Covered: All other types of issues
• Hard Costs (hardware, equipment, etc.)
• Challenges
– Putting time in without regard to estimate
– Getting systems, processes aligned
Questions / Discussion
?
Jon Grunzweig 10

11. Controlling Project Costs 10/26/2012
SoTecConference 2012
Controlling Project Costs
Jon Grunzweig
Thank You!
Jon Grunzweig 11