How Does Project Control Software Maximize and Improve the Use of SAP?

Frequently, we receive inquiries from people looking to fill gaps in the functionality of their existing Enterprise Resource Planning (ERP) systems. One common question we get asked is: “How does a project control system, like Coreworx Cost and Performance Management (CPM), maximize and improve the use of SAP?”

There is no doubt SAP is a hugely powerful system, but there are gaps when trying to use it for all project related information. Put simply, Coreworx complements ERP systems like SAP by filling in the project specific holes. Most of our capital project clients run SAP software today.

One of the fundamental issues of trying to use SAP for project control functionality is that it’s geared to a monthly accounting cycle. In comparison, a project control solution, like Coreworx Cost and Performance Management, provides project level budgeting, incurred and accrued costs, work complete measurement, scope of work, and change management information on a weekly, daily, and/or shift by shift basis.  By integrating with SAP and Primavera, a project control system can pull pertinent information from SAP and scheduling data from P6 into one place where project managers and their teams can see what happened in the past, what’s happening now, and what’s going to happen tomorrow.

The idea is to give project managers close to real-time visibility into and tight control over all aspects of their projects.  Essentially, a project control system will act as an integrator of information from various relevant systems in order to provide informative dashboards that help project teams make decisions based on complete and up to date information. 

A system set up with this level of integration imports the schedule from P6, captures cost data from SAP or time entry systems, manages the budget, and analyzes performance.  It supports field cost capture, Labor, Equipment, Material (LEMS) entry, S-curves, and performance reporting, all during execution.  It then presents the information in a dashboard to manage the execution of the project.  Integrating a project control solution, such as Coreworx CPM, with SAP and Primavera is key to providing project teams with the full project picture.

The confusion around project control software typically comes from the misunderstanding that ERP systems can provide full project control functionality.  Many large corporations have tried (with little or no success) to make it work; given enough time and money, perhaps project level information could be provided through SAP, but a project control system like Coreworx Cost and Performance Management can provide that functionality out of the box, at a small fraction of the cost. Choosing a project controls system will not only protect your existing ERP investments, but also make them better by taking the data contained in that system and turning it into actionable information for your projects. 

Mark Anderson is responsible for Business Development at Coreworx. Being involved with project stakeholders around the world, Mark has a keen awareness of the trials and opportunities, as well as the economic and social impact of capital projects. His past experience includes running several companies in the Oil and Gas industry, as well as over 10 years sales experience in Software and the Oil and Gas industries. He is always interested in listening to and learning from project experts and passing his learned observations and experience on to help others. 

The Honest Broker

Recently, we’ve been engaged with a number of large projects where an owner’s goal is to have contracts setup in such a way that contracted organizations are required to not only design and build the project, but also operate and maintain the asset over a long period of time. As a result, few EPCs have the skills, resources, and manpower to manage the entire scope and have approached these projects by proposing joint ventures with a number of EPC partners. The purpose of these joint ventures is to spread the risk and provide the best skillset possible to meet the contract requirements over the long term.     

Joint ventures have become the de-facto standard for both owners and EPC companies involved in mega projects where the level of risk, capital investment, and management effort are too great for a single company to take on. As projects grow, the ability to employ successful joint ventures is critical to success.

In most cases, each individual contractor brings their own methods, processes, and tools to the project and to the joint venture. From the perspective of project information management and document information control, combining the efforts of contracted parties often causes difficulties, delays, and legal risks to a project. With so many disparate ways of reporting, transferring knowledge, and sharing information, involved parties must agree on a method to achieve a ‘single source of truth’ if the project is going to succeed. 

With mega projects in mind, a central system built to manage risk and establish compliance will help ensure the project is successful and also protect the interests of all joint venture partners. In the everyday world, joint venture partners may be partners on this project, but competitors on another project. Having a system that aligns all partners around one master source of project related information helps reduce their overall shared risk exposure, protect sensitive IP, and help the entire team realize project success.      

From a project information perspective, a system like Coreworx should be implemented to act as that ‘honest broker’ that provides everyone with a master source of project information. Created for complex projects with many stakeholders, out-of-the-box Coreworx software includes processes to manage risk and establish compliance through transmittals, version control, approval processes, and workflows, as well as change management, RFIs and TQs, Interface Management, and Deliverables. Using a tool that automates and enforces these processes helps to ensure the right people get the right information at the right time and empowers project teams to make strategic decisions and take actions to mitigate risk. Consistent transparency of information ownership and flow is essential to supporting successful joint ventures and successful project execution.

Mark Anderson is responsible for Business Development at Coreworx. Being involved with project stakeholders around the world, Mark has a keen awareness of the trials and opportunities, as well as the economic and social impact of capital projects. His past experience includes running several companies in the Oil and Gas industry, as well as over 10 years sales experience in Software and the Oil and Gas industries. He is always interested in listening to and learning from project experts and passing his learned observations and experience on to help others. 

Topnotch Industry Event at TopGolf

Last week, we hosted our 5th Project Excellence industry event at TopGolf in Houston, Texas.  It was a well-balanced day of learning, networking, and fun. For those of you unfamiliar with Project Excellence, it’s an event that brings together oil and gas experts for a full day conference dedicated to capital project information management. This year’s theme was Driving Project Performance and we had 4 guest speakers to help us drive the message home (pun intended).



Michael Matthews, Director of PwC’s Capital Projects & Infrastructure group kicked off the day with his talk on Energy Project Trends in North America. Michael’s presentation focused on the challenges with unconventional oil and gas projects including:

• Scope: scale, geography, complexity
• Technology: reliance on Excel, lack of integration between planning and execution
• Portfolio Management: inaccurate forecasting, no clear line of sight for decision making
• Resources: stretched labour supply, complex and strained supply chain

Given the scope of work and projected expansions within this industry over the next decade, traditional management approaches cannot be sustained long term. An integrated planning approach to shale development requires the ability to manage the full portfolio of projects and should be a tightly integrated process. Michael reinforced the importance of project systems that ensure timely and accurate data flow, cost and schedule forecast accuracy, as well as transparency and accountability.

John Fish, Director of Project Support Services at Ford, Bacon & Davis followed Michael with an eye-opening presentation on the Strategic Value of Front End Planning (FEP). A little up-front work goes a long way on major capital projects. His Construction Industry Institute (CII) research shows that by spending less than 5% of total installed value on FEP, owners gain up to 25% in cost savings and 39% in schedule reductions. John outlined his “Nine Rules of the Game,” including a defined Front End Planning process which incorporates automated systems in Deliverables Management, FEED Oversight, Interface Management and Change Management.

There were lots of great questions for Michael and John around how Owners and EPCs should go about implementing processes to ensure information is being captured and communicated property, so SGC Energia’s presentation was timely, giving the group some insight into an owner’s perspective on the processes they just went through to select a project information control system.  Senior Vice President, Jim Davis and Document Control Specialist, Morgan Street explained SGC’s business challenges as a small independent energy company, including:

• Managing contracts
• Documentation security
• Communication with contractors & investors
• Budget and time constraints
• Change management
• Limited personnel and resources

Morgan explained SGC’s review process and all the system attributes and requirements they were looking for, including:

• Usability – A system that would provide easy access to the right information when they needed it.
• Availability - A web-based collaboration platform that would allow communication and access to global stakeholders .
• Affordability –A system that didn’t require a large upfront investment in hosting infrastructure, and that would grow with them by letting them license the software on a per-user basis.
• Flexibility - A tool that could handle many file types and engineering documents.
• Extensibility – A system that could be easily integrated with their existing applications.

It was clear that SGC did their homework when it came to choosing a project information management system, and we’re excited to work with them as they grow and add more projects.

Our final guest speaker was Kamil Sheikh, Technical Interface Manager for Suncor Energy’s $8B Fort Hills Oil Sands project. Kamil started his presentation with some interesting statistics around workflow management:  “In offshore projects, interface issues have long been identified as accounting for up to 20% of total installed costs;”  and “mismanaged documents due to lack of coordination, procedures, and workflow has resulted in real impacts – up to $130M in settlements.” It is a long acknowledged problem that large, complex, modular-based projects struggle to achieve on-time, on-budget project performance. This is largely due to interface dependencies. Without established work processes to manage interface-related issues, the risk of schedule delays and cost overruns increases dramatically.

Kamil defined an “Interface” as “the boundary between two parties involved on the project” and described the challenges he faced on the Fort Hills project, including the need for:

• Centralized information
• Transparency
• Standard practices
• Contract commitment
• Global operations
• Confidentially
• Interface accountability

Kamil shared his Commandments of Interface Management and spent some time explaining his interface mantra, “Sophisticated communications over sophisticated tools.” Suncor’s philosophy is to enhance project performance and lower total costs. Investing in a tool dedicated to Interface Management helped Suncor:

• Create a one stop shop for Interface Points, Interface Agreements, and Action Items
• Eliminate backdoor email exchanges and handshake deals
• Improve project planning
• Build a deep understanding of project complexity
• Monitor detailed information exchange
• Identify shortcomings and critical issues early
• Reduce uncertainties

All of our presenters invoked good conversation and opportunities to gain from project professionals’ experiences, but the day wasn’t just about learning. Project Excellence is also a great opportunity to network with peers, and this year, we had the chance to meet new faces while practicing our golf swing on what turned out to be a gorgeous sunny day.

If you missed out this year, don’t worry, Project Excellence will be coming to Calgary on June 6, 2013 and we’ll be back in Houston soon. For more details on Coreworx Project Excellence or for copies of the presentations, please contact Terezinha Hignett at thignett@coreworx.com or 713-963-3628 x3193.

Terezinha Hignett is responsible for Business Development at Coreworx. Working with Owners, EPCs and contractors in the oil and gas industry, Terezinha understands the challenges and opportunities associated with planning and managing capital projects. She looks forward to learning from the experiences of project experts and helping companies reach their project goals.

Fiatech Technology Conference 2013

At the end of March, Fiatech held its annual Technology Conference in beautiful San Antonio, Texas. The theme of this year’s conference echoed the overall mandate of the Fiatech organization and focused on exploring how today’s innovations can be used to solve issues throughout the capital project life cycle from planning and design through operations &adrmp; maintenance, asset management, and sustainable practices. With the goal to help solve many of these very same issues through our software solutions, Coreworx is an active participant within the Fiatech community. 

Fiatech
If you’re not familiar with Fiatech as an organization, it is made up of industry and academic organizations involved in the construction world with a focus on providing visionary leadership for developing best practices and advancing technology for the capital projects industry.

Fiatech and Coreworx
As long-time, active members and supporters of the Fiatech organization, Coreworx has provided and acquired many benefits from partnering with this group. Coreworx supports Fiatech and its affiliate organization, the Construction Industry Institute (CII) in many ways: through board membership with Ray Simonson, Coreworx CEO, on Fiatech’s Board of Advisors; through active participation within Fiatech and CII initiatives; and through the support of much needed research that helps to advance and demonstrate the value of technology for the capital projects industry. With access to valuable research relating to the real ongoing challenges faced by members of the capital projects community, as well as insights into the future technological innovations being developed to meet these challenges, Coreworx has gained a great deal from their participation at Fiatech. Knowledge gained through trusted sources, such as Fiatech, is one of the ways we can ensure all functionality within our software is driven by a true need from the industry we are serving.

Highlights from Fiatech Technology Conference 2013

As with past Fiatech events, this year’s annual conference did not disappoint. Some personal highlights from the show include:

Improving Project Management Efficiency Project – This new Fiatech project aims to investigate new technologies that can be used to address ongoing issues related to the hurdles construction project parties have with effectively and efficiently sharing data and other information with each other across disciplines and between companies.  The project will include a multi-year, two track approach:

• Track One – takes a high level approach of addressing issues associated with Project Management Information Exchange and inefficiencies in scheduling and risk management that can be reduced or eliminated through standards that end mismatched coding structures and methodologies. 
• Track Two – zeros in on Integrated Project Awareness looking at ways in which the next generation communicates and develop realistic approaches to making maximum use of social media to reduce costs associated with schedule delays, cost over-runs, and other resource wastes. 

During this session, I was immediately struck by the passion and willingness of the initiative’s participants to collaborate for the benefit of the entire industry.  I look forward to seeing these tracks evolve over time and the insights they provide into next generation project communications. 

Keynote Dr. John Grotzinger – chief scientist for the Mars Science Laboratory Rover mission, opened the conference inspiring the audience with his amazing stories of ‘out of this world’ challenges his project team faced and overcame to achieve the Mars mission. At Coreworx, we look to support the largest, most complex projects, so hearing the enormous challenges faced and overcome by Dr. Grotzinger’s team really put the importance of quality project execution into perspective.

Keynote Dan Roam – author of the international bestseller, ‘The Back of the Napkin: Solving Problems and Selling Ideas with Pictures,’ presented an alternative to dealing with complex problems using pictures instead of words. The napkin I drew on during his keynote now hangs at my computer as a constant reminder of this simple, yet highly effective solution. Accompanying the napkin is a key quote from Dan’s presentation that really resonated with me, "Whoever best describes the problem is the most likely to solve it."

Knowledge Sharing – In addition to the inspiring keynote speakers and informative breakout sessions, this conference also offered me the ability to acquire invaluable information through the discussion of current industry challenges with related stakeholders and industry experts. Speaking with project members and other vendors stimulated ideas and opportunities while providing details on the real issues specific projects are facing.

Indeed, the Fiatech conference fulfilled the goal of turning our brains to technologies and how these technologies will positively influence the successful delivery of capital projects. Coreworx greatly values the opportunity to be a part of this great organization which provides substantial benefits to members through intelligent discussion and knowledge sharing. For more information on how you can get involved, visit their website at: http://www.fiatech.org/membership

"Fiatech's goal is to make a difference. The more organizations that are willing to contribute through active participation, the greater the results will be.” 

Yvonne is a product manager with Coreworx for the core Project Information Controls product. With more than 8 years of experience delivering enterprise software solutions, she is involved in delivering Coreworx products from planning through development and ongoing support. Yvonne works at Coreworx headquarters in Kitchener, Ontario, Canada.

Coreworx Receives Top Employer Award

Recently, Coreworx received a Top Employer Award from the University of Waterloo as recognition of our commitment to the Co-op Education program.  Coreworx regularly employs students from the University for 4 and 8-month work terms. We typically have 2 or 3 students working in software development or quality assurance.

We view this as an extremely positive experience in that Coreworx has the opportunity to work with and mentor great talent from uWaterloo and get exposed to the latest and greatest ideas coming out of the university.  We often have students return for more than one term, which is a great benefit and even better when they join our team full-time after graduation.

University of Waterloo’s co-op students have a big impact at Coreworx. From day one they have specific roles and responsibilities within the company and they are always up to the task. The contributions of co-op students from the University of Waterloo help to make us a leader in software innovation.

We value our participation in the co-op program and will proudly display our award in the reception area of our Head Office in Kitchener.

The Shale Revolution

If you’ve been reading the news over the last few months, you’ve probably come across the term “energy independence”. It’s incredible to think that in less than a decade the U.S. has gone from fears of energy shortages to talk of overtaking Saudi Arabia to become the world's biggest oil producer by 2020! What changed? U.S. energy production, driven by new technologies including improvements in horizontal drilling and hydraulic fracturing (fracking) have spurred drilling across North America in places like Texas, Louisiana, North Dakota, Oklahoma, Colorado, Pennsylvania, and Ohio, as well as in less talked about areas with significant shale plays like California, Michigan, Alaska, Quebec, New Brunswick, Alberta and British Columbia. (See North American Shale Plays Map: http://www.eia.gov/oil_gas/rpd/northamer_gas.jpg)

Although we’re also starting to hear about shale plays in the UK, Australia, Africa, and other parts of the world, the U.S. and Canada have been trail blazers when it comes to shale gas technology and exploration. Every day the news is filled with headlines about the shale revolution:  “Fracking threatens OPEC as U.S. output at 20-year high”, “Texas is on its way to being 'Saudi Texas”, “McKenna says shale gas could mean $7B in royalties, taxes”, “Shale gas supports more than 600,000 American jobs, study says”.  There’s no doubt the U.S. oil and gas industry is changing dramatically, but extracting oil and gas from these new shale plays isn’t easy, and there are a number of painstaking issues companies need to address in order to mitigate project risk. 

One area where stringent businesses processes should be applied is around information management. Regulatory and field development laws are a time consuming and tedious part of any shale project. Many projects encounter significant delays and cost increases due to increased public scrutiny and substantial regulatory burden.  Other pertinent details that need to be properly documented and easily accessed for future auditability include:

• Land leases 
• Permits
• Environmental studies
• Health and safety
• Water usage
• Well spacing 
• Fracking chemicals lists

With all of these project assets and participants in mind, projects of this magnitude need an effective way to communicate documented information with both internal and external stakeholders. The public and regulatory sensitivities previously mentioned drive the need for consistent and accurate stakeholder communication. The results of this communication not only impacts project cost, schedule and quality, it also impacts the owner’s market credibility and external opinion on sustainability issues and environmental concerns. 

External stakeholders are not limited to public and regulatory bodies either; they include vendors and subcontractors as well. With so many participants involved in the overall project, Owners need a way to control information distribution to specific audiences.  A system must be developed to handle a high volume of changes and approvals to avoid the detrimental impact of poorly executed contractor information. Like any other capital project, shale projects are best executed when information is readily available and stakeholders are well informed. 

And then there’s the pressure of meeting the expectations of internal stakeholders including shareholders and/or creditors. Company managers and directors need to ensure that a company’s portfolio of shale projects are profitable. Nobody likes surprises. Setting up business processes and automated systems that provide close to real-time information to provide in-depth project insight will allow managers to take corrective action quickly, reduce rework and increase project quality and profitability. Margins are tight in this business and in order to be effective, project Owners need tools and processes that will not only provide a rear view mirror to benchmark against the past, but also provide up to date information offering guidance during conditions of turbulence and uncertainty. 

As Clarence Cazalot, CEO of Marathon Oil said in his Eagle Ford Consortium Speech in March 2013, “The shale revolution is in fact one of the greatest triumphs in the history of American oil and natural gas, and certainly one of the greatest economic success stories this nation has seen in decades.” The worries from the energy crises of the 70’s seem to be well behind us as oil and gas companies are moving as fast they can to unlock profitable new resources and get them to several energy-thirsty parts of the world. This hustle takes a coordinated effort, which must include proper documentation, communication, and accountability on the part of Owners, operators and project teams. These projects are evolving very quickly, but the good news is that there are technologies available today evolving at the same pace to help manage and control these game-changing projects and make them a success.

Terezinha Hignett is responsible for Business Development at Coreworx. Working with Owners, EPCs and contractors in the oil and gas industry, Terezinha understands the challenges and opportunities associated with planning and managing capital projects. She looks forward to learning from the experiences of project experts and helping companies reach their project goals.

Effective Project Information Management in SAGD Oil Sands Projects – Part 2

**View the On-Demand Webinar: Click Here**

Oil sands projects continue to grow in scope and complexity. The average oil sands project is well over $1 billion with several projects approaching $10 billion. On large-scale projects, easy access to up-to-date data is critical for achieving project success and meeting  the triple constraints of cost, schedule, and scope, as well as the  3 additional factors mentioned in the previous blog:

• Management and control of engineering deliverables
• Project management processes refined from large capital project experience
• Transparent communication with contractors 

Along with scope expansion comes a need for companies to deliver process improvements to effectively respond to increased public engagement, regulatory issues, and environmental compliance requirements.
To address these additional factors, five project information management lessons learned should be considered:

Lessons Learned in Project Information Control

1. Evolving Technologies & Managing Information
   The technologies used in-situ are in a constant state of change and improvement. Oil sands projects are challenged by a lack of reuseable technical information from current projects and operations. In addition, there has traditionally been limited project information sharing both internally by Owners between projects, and externally with contractors.
   
   
   
   Summary: Project information management practices are advancing in oil sands projects, and have proven to be essential in addressing both the information sharing, change management, and interface management challenges that result in part from the evolving technology in use by oil sands projects. Adopting a web based Project Information Control system will help address these issues. Successful project information management practice assists managing evolving technical design, managing change, identifying risk and equipping project stakeholders with actionable information.


2. External Stakeholder Management - Public and Regulatory
   Oil sands projects face a massive burden from managing many program environments - drilling, infrastructure, competing stakeholder interests, overlapping permitting authorities, and local procurement pressures. As a result, companies require effective governance, risk, and compliance processes, as well as effective stakeholder communication. Companies involved in process improvements require ways to effectively respond to increased public engagement, regulatory issues, and environmental compliance requirements.
   
   Summary:  Leveraging automation and collaboration tools to achieve project transparency helps remove time consuming and costly communication barriers.


3. Internal Stakeholder Management - Project and Operations
   
   
   
   Oil sands projects are complex and cultivate a challenging environment in which to track decisions, deliverables, deficiencies, and ownership. Disparate geographic locations with multiple stakeholders further increase the complexity of decision making. Owners engage contractors at all phases of a project, and are another internal audience on a project.
   
   Summary: The combination of granular and high-level reports allow for efficient management of large volumes of data by focusing on exceptions or problem areas. Workflow and collaborative work models applied to, for example, HSE, where daily reporting is often completely manual, provides immediate project efficiency gains.


4. Asset Management for Efficient Maintenance and Operations – Looking at the Full Asset LifecycleResource-based industries like oil & gas are constantly looking for efficiencies in project execution and asset management. Owners who have delivered wells, processing plants or distribution systems in one location consistently look to repeat success by applying the same design or practice to new leases and facilities. This is a challenge because although the high level deliverables are reasonably well understood by stakeholders, the details have often not been systematically managed, recorded or communicated resulting in confusion from the multiple different document revisions.
   
   For this to occur, there needs to be keen focus right from the project’s design phase on the full lifecycle of the asset. SAGD plants, for example, have very different lifecycle characteristics than managing traditional assets. Therefore, effective management of the asset lifecycle from an information deliverable perspective is integral. The goal is full reuse of all the project information, not just engineering and design.
   
   Summary: Enforcing traceability of project purchasing activities, contracts, revisions and related workflows ensures all asset information is current and accessible for all project stakeholders.


5. Vendor Data ManagementOnce an oil sands plant is commissioned, focus turns to the information handover, and in particular the quality of the information. The better the vendor data handover, the better equipped maintenance departments are to plan work, hire staff and manage costs. Operations also benefit from high quality vendor data handover, and will also find itself with more accurate data to manage work.
   
   Vendor Data Management strategies and programs must be developed when the project is in design. Vendor data handover plans must be blended with all aspects of a project’s physical deliverables.
   
   Summary: When a vendor deliverables framework is applied for successful design, support, management, and handover of vendor data along with physical deliverables, the owner’s long-term operations costs can be reduced substantially.  

For a more in depth look at managing Vendor Data here is some additional information:

• VendorDeliverables: You get what you ask for. Ask for the right stuff – Paul Sunderland
• Webinar: Managing Vendor Deliverables with Coreworx – Paul Sunderland

Mark Anderson is responsible for Business Development at Coreworx. Being involved with project stakeholders around the world, Mark has a keen awareness of the trials and opportunities, as well as the economic and social impact of capital projects. His past experience includes running several companies in the Oil and Gas industry, as well as over 10 years sales experience in Software and the Oil and Gas industries. He is always interested in listening to and learning from project experts and passing his learned observations and experience on to help others. @MarkatCoreworx