Enterprise Project Management
Enterprise Project Management (EPM)
EPM aims at improving management effectiveness beyond a single project and the strict domain of an individual PM. These include consolidation of multiple projects using advanced PM software. Further elements of the EPM are the establishment of an decentralized Project Management Office (PMO) to foster PM competency and a defined overall delivery approach.
The most recent step in advancing EPM systems in risk-based methods was to add full risk-based critical path schedule and cost integration.
Elements of an EPM system:
- Clear Commitment to the Delivery Approach
- Probabilistic Risk Analysis (Cost and Schedule)
- Risk-Base Cost Estimating
- Alternative Contracting Methods
- Cyclic Project Validation
- Team Training and Team Alignment
- System Integration Plan and Product Validation
- Structured Information Transfer (Dashboards)
EPM benefits include:
- Higher quality due to more consistent project management and delivery approach.
- Transparent and continually updated project risk profile.
- Decentralized independent delivery organisation (PMO) with defined delivery approch.
- Improved productivity due to Team Alignment processes.
- Supported by advance PM software products...
Probabilistic Risk Analysis and Risk-Based Cost Estimating
PM software RIAAT fully supports the EPM approach. Key features include:
- Hierarchical project tree (WBS)
- Full integration of uncertainties for all cost components on all WBS levels
- Live results and simulation updates within seconds
- Fully integrated cost and schedule model
RIAAT combines a clear project structure and a convenient work flow with vast modeling and simulation capacities.
RIAAT Software Interface and sample Dashboard.
Cost Definition and Budget Validation
Probabilistic Prediction, Contract Cost and Budget
Probabilistic Results and Budget Validation
Alternative Contracting Methods - Sample: Fixed Price Incentive Fee
A fixed-price incentive fee contract specifies a target cost, a target profit, a ceiling price and a profit adjustment formula. These elements are all negotiated at the outset.
The profit earned by the Contractor varies inversely with the project cost, by application of a Pain/Gain Mechanism. When the final project cost is negotiated, the Contractor profit is calculated, and the price paid by the Owner is the final project cost plus the socalculated Contractor profit.
Sample below depicting the model and mechanism.
Sample for System Integration: SAP, Cost Control, P6 and RIAAT. Data can be transferred to a platform that provides dashboards.
RIAAT and BIM Integration
Hornby, R. (2000). Building effective enterprise project management (EPM) Paper presented at Project Management Institute Annual Seminars & Symposium, Houston, TX. Newtown Square, PA: Project Management Institute.
Jeffrey R. Cuskey (2015), Understanding the Mechanics of FPIF Contracts, Bozeman PTAC at Montana State University