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Project Management Solution for E&C Industry

Daniel Daniel Daniel Daniel NimmoNimmoNimmoNimmo

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Oracle Corporation, APACOracle Corporation, APACOracle Corporation, APACOracle Corporation, APAC

Agenda

� Definition of E&C

� State of the Industry

� The Oracle Solution

– E&C and ETO

� Summary

� References

Definition of E&C

http://www.pcl.com/gateway.html

Agenda




– E&C and ETO

� Summary

� References

Fixed Price ContractingChanging Conditions

High ProjectRisk

High ProjectRisk

Competitive Pricing PressureProject Mgmt Execution

LowMargins

LowMargins

Industry ConsolidationJoint Venture Partnerships

Full ServiceProviders

Full ServiceProviders

Need for CollaborationWeak Project Controls

InformationVisibility

InformationVisibility

Owner /Customer

GeneralContractor

Architecture /Engineering

Firms

ConstructionCompanies

SubcontractorsSuppliers:

Materials, ETO

Labor:Internal & External

Equipment Usage:Own, Rent, Lease

Industry Drivers

• Growing Operational Complexity & long term Partnerships

• Requirements for Business Partners to Have “Skinin the Game” (e.g. Risk Ownership)

• Industry Consolidation

• Extended Offerings to Include Facilities Management -Design Build Operate (DBO) Model

• Increasing Collaboration and need for critical Information Visibility

Industry Trend

� Increase Customer Satisfaction

Industry Goals

•On-Time, On-Budget, Within Scope

•Ensure High Quality Delivery

� Increase Margins

•Drive Efficiencies into Bid Process

•Improve Project Controls and Schedule

Mgmt

� Effectively Manage Risks

�Provide Timely, Accurate Information to

Everyone

�Improve Productivity of All Resources

�Budgeting, Forecasting, Workplan Execution

�Change Management

�Project Templates: Lessons Learned, Standards for WBS & Estimates


�Project Execution, Issue & Change Management, Resource Management, Performance Reporting

SOLUTION AREAGOALS

Walter J. Erb, Bechtel, IT Manager,

CIO Magazine 12/1/2000

“Oracle was instrumental in

keeping track of where cost

overruns were and giving good

indications as to where

reductions could be made. At

anytime you can run a report

[from the Oracle CIS] to see

where we are cost-wise."

Maurice Tayeh, Technip, Group CIO,

EBN Interview, 2001

“When we do engineering work

for projects that are $500M to

$2B, there’s a lot of collaboration

that needs to take place. Oracle

is well integrated. That’s one of

the main drivers to why we chose

the products of Oracle."

What Industry Leaders Say:

http://www.technip.com/english/index.htm

“We chose Oracle E-Business Suite to help improve our overall processes and procedures, streamline reporting and increase datasharing within our organization. We are starting to see return on our investment and have already minimized the time we spend managingour back-end processes. The net result is more time and resources to serve our customers’ needs without cutting into our margins.”

- Mike Azarela, executive vice president and chief financial officer, Suffolk Construction.


“A flexible, integrated project accounting system is critical to our business because we run so many projects and employees track allhours against projects.”

- Frank Malangone, VP of Info Systems, CDM

“Oracle enables us to get all construction project info to the finance department and project managers, allowing them visibility into timelines and costs to manage the project more effectively.”

- Robert Mawrey, American Tower CIO


� Increased merge and acquisition after IMF

� Improve business efficiency through Standardization of code structures (WBS,CBS etc.) and document collaboration

� Change area of responsibility from Build to CM (Design-Build-Service)

� Increased focus on reliability/availability of Cost and Financial data and its management

Industry Trend in Korea

Agenda




– E&C and ETO

� Summary

� References

WorkResourcesFinances


• Progress• Documents

• Issues • Actuals

• Workplans

• Resources• Budget

Bid / PlanningPhase

Project ExecutionProject Control

• Metrics

• KPI’s• Reports

Analysis /Close-out

Project Selection

• Objectives• Scenarios• Portfolios

The Project Lifecycle : Core Process

• Updates

• Forecasting

• Changes

• Billings

• Capitalization


• Updates

• Forecasting

• Changes

• Billings

• Capitalization

• Progress

• Documents

• Issues

• Actuals

• Workplans

• Resources

• Budget

Bid / PlanningPhase


Analysis /Close-out

Project Selection

• Objectives

• Scenarios

• Portfolios

The Project Lifecycle : EnC Core Process

• Metrics

• KPI’s• Reports

The Project Lifecycle : Bid/Planning Phase


• Updates

• Forecasting

• Changes

• Billings

• Capitalization

• Progress

• Documents

• Issues

• Actuals

• Workplans

• Resources

• Budget

Bid / PlanningPhase

Bid / PlanningPhase


• Metrics

• KPI’s

• Reports

Analysis /Close-out

Project Selection

• Objectives

• Scenarios

• Portfolios

� Leverage historical data (Project

Templates):

– Update Templates from lessons

learned during close-out

– Update standard WBS and schedules

– Include updated resources &

estimates

� Quickly assemble new bid/estimate

– Schedule and rapidly adjust plan

– Roll estimate data into budget for

project execution phase

Historical Bid Historical Bid & Project & Project InformationInformation

RollRoll--up up WorkplanWorkplan

resources to resources to budgetsbudgets

Generate Generate Bid/EstimateBid/Estimate

The Project Lifecycle : Bid/Planning PhaseStreamlined Bid Preparation

The Project cycle starts and

ends by leveraging historical

data such as lessons learned.

Project Templates address

standardization of

Work Definition, Progressing &

Reporting

In an ETO environment, Project

Deliverables drive integration to

Manufacturing through links to

items (sub-assemblies).

� Leverage historical data (Project

Templates):

– Include existing estimates

– Linked to Manufacturing BOM

– Roll-up resources from BOM*

� Quickly assemble new

bid/estimate

– Schedule and rapidly adjust plan

– Roll estimate data into budget for

project execution phase

Historical Bid & Project Information

Roll-up Workplan

resources to budgets

Generate Bid/Estimate

The Project Lifecycle : Bid/Planning Phase-ETOStreamlined Bid Preparation & BOM Integration

Bid/Planning Phase-ETO

ITEM/BOM/Routing

WBS

Activity

Resource

R

R

Resource

Plan/Actual

Plan/Actual

Forecast

Budget

Estimation

ResourceSchedule

Activity

SchedulingTool

Resource

Oracle

For Project Scheduling

Bid/Planning Phase-ETO

Manufacturing BOM and

Routing rolled up to Project

Resources via End Item Linkage

Resource Detail

Bid/Planning Phase

Top Down/Bottom up Simulation

Bid/Planning Phase

Flexible Resource Breakdown

Structure

Bid/Planning Phase

Bid/Planning Phase

The Project Lifecycle : Project Execution


• Updates

• Forecasting

• Changes

• Billings

• Capitalization

• Progress

• Documents

• Issues

• Actuals

• Workplans

• Resources

• Budget

Bid / PlanningPhase

Project ExecutionProject ExecutionProject Control

• Metrics

• KPI’s

• Reports

Analysis /Close-out

Project Selection

• Objectives

• Scenarios

• Portfolios

� Support All Operational Structures– Shared workplan and financial

structure

– Partially shared workplan and financial structure

– Mapped workplan and financial structures

– Separate workplan and financial structures

� Rollup of Workplan and Financial Structure

– Rollup Effort (Planned, Remaining Effort) from Workplan to Financial Structure for Budgeting and Forecasting

– Rollup Progress from Workplan to Financial Structure

� Definition and updates of structures in web interface

WorkplanStructure

Tasks

FinancialStructure

Categories

Shared Mapped Separate

The Project Lifecycle : Project ExecutionWorkplan and Financial Structure Support

Planning & Execution

Progressing of ETC and %

Complete supports Earned

Value & Forecasting

Configurable Project

Manager’s Workbench

• Secure, Role-based Collaboration

• Work in real time with

customers/suppliers

• Collaborate on deliverables,

documents and tasks

� Track Deliverables, Status and

Associated Tasks

• Store files on a secure project

document repository

– Oracle Files Online

– Any system using WebDav protocol

– Foldering, Versioning, and Locking

Executives

Project

Managers

Team

Members

Documents

Deliverables

Tasks

The Project Lifecycle : Project ExecutionCollaboration on Assigned Work

View and update of

owned tasks

View and update of

resource-level progress

Documents stored and

shared via the project

and task structure

Collaboration via CAD

Viewer

The Project Lifecycle : Project Control


• Updates

• Forecasting

• Changes

• Billings

• Capitalization

• Progress

• Documents

• Issues

• Actuals

• Workplans

• Resources

• Budget

Bid / PlanningPhase

Project ExecutionProject ControlProject Control

• Metrics

• KPI’s

• Reports

Analysis /Close-out

Project Selection

• Objectives

• Scenarios

• Portfolios

� Forecast (EAC) = Actuals + ETC

� ETC based on:

– Earned value

– Percent complete

– Future budget amounts

– Future resource schedule

– Work quantity

– Workplan

– Remaining effort

– Open commitments

– Change documents

� Compare variances to prior forecasts

� Automatic creation of initial forecast on baseline of approved budget

� Adjust quantity, rates, cost or revenue by percentage across planning elements

Actual & Future Costs

Percent Complete

Changes

Initial Budget

Forecast

The Project Lifecycle : Project ControlStreamlined Forecast

Comparison of

Forecast & Budget

Versions

Plan type/Version

Actual Costs vs Budget

vs Forecast


vs Forecast – by

WBS/Task


vs Forecast - by

Resource

Earned Value Analysis

supports trends and

Forecasting

Project Control

Change

Request

IssueChange

Order

• Define Issue

• Collaborate

• Resolve

• Does Issue result in Project Change?

• Create Change Request

• Copy Issue

• Define Impact

• Approve

• Create Change Order

• Include Change Requests

• Approve

• Implement Impact

Project Control

The Project Lifecycle : Analysis & Close-out


• Updates

• Forecasting

• Changes

• Billings

• Capitalization

• Progress

• Documents

• Issues

• Actuals

• Workplans

• Resources

• Budget

Bid / PlanningPhase


• Metrics

• KPI’s

• Reports

Analysis /Close-outAnalysis /Close-out

Project Selection

• Objectives

• Scenarios

• Portfolios

� Visibility across all levels of project

� Multiple reports– Report Financial Info and Earned Value

– Configurability with Graphs and Drilldown

– Analysis by WBS, RBS, Period

– Report Project and Project Functional

Currencies

� Drilldown from Project Intelligence

� Enhanced Project Status Inquiry in

web interface

ResourcesWork

Project

The Project Lifecycle : Analysis/Close-outPerformance Reporting

Analysis/Close-out

Agenda




– E&C and ETO

� Summary

� References

� Increase Customer Satisfaction

Industry Goals

•On-Time, On-Budget, Within Scope

•Ensure High Quality Delivery

� Increase Margins

•Drive Efficiencies into Bid Process

•Improve Project Controls and Schedule

Mgmt

� Effectively Manage Risks

�Provide Timely, Accurate Information to

Everyone

�Improve Productivity of All Resources

�Budgeting, Forecasting, Workplan Execution


�Project Templates: Lessons Learned, Standards for WBS & Estimates


�Project Execution, Issue & Change Management, Resource Management, Performance Reporting

SOLUTION AREAGOALS

Project Management Through Lifecycle


• Updates

• Forecasting

• Changes

• Billings

• Capitalization

• Progress

• Documents

• Issues

• Actuals

• Workplans

• Resources

• Budget

Bid / PlanningPhase


• Metrics

• KPI’s

• Reports

Analysis /Close-out

Project Selection

• Objectives

• Scenarios

• Portfolios

Agenda




– E&C and ETO

� Summary

� References

E&C Global References

http://www.technip.com/english/index.htm

E&C Local References

http://www.worldro.co.kr/client/index.html

YEARS

2001 20021998 1999 2000 2003

S**

Oracle

2004

Reference

2005

Package Selection Statistics

http://www.worldro.co.kr/client/index.html

Q U E S T I O N SQ U E S T I O N SQ U E S T I O N SQ U E S T I O N SA N S W E R SA N S W E R SA N S W E R SA N S W E R S