Most scheduling or project control experts are experiencing difficulties when they want to tie the cost to the schedule, mainly when different levels of detail or different levels of breakdown have been used for the cost estimate and the schedule development.
The best practice to integrate time and cost in projects is having a unique work breakdown structure (WBS). As a result of a unique WBS, work packages for estimating time & cost will be the same, which will facilitate the development of resource loaded schedule in P6. Still, due to different requirements of project stakeholders for scheduling and cost estimation, usually two different approaches are being followed for developing the construction schedule and the cost schedule.
The breakdown structure in the construction schedule (WBS) might differ from the breakdown structure in the cost schedule (CBS). More often, construction schedules involve much more details of work compared to the cost schedule. Another reason is that controlling the actual resource usage at the same level of detail as the schedule is somehow not practical. The problem is that capturing all data at the site floor for labors, equipment, and materials for all detailed tasks is almost impossible or need huge administration cost. So, companies prefer to set up a simple cost schedule with limited cost centers to avoid the high administration cost and increasing level of accuracy for the actual resource usage data.
Having two separate cost and schedule systems that are not linked together will make the calculation of budget/revenue distribution profile and cash flow analysis very time-consuming and labour-intensive for the companies. In addition, companies will miss the opportunity of applying Earned Value (EV) key indicators such as ‘Schedule Performance Index (SPI)’ to measure the schedule performance for different work packages.
There is an innovative solution for this issue, which converts it to an automated process using Primavera P6. It will save time and effort to maintain budget/revenue distribution and cash-flow updates during project execution. PM ERA expert is here to assist your team in this matter.
