Is Cost Control the most important thing in Turnarounds ?

As an expert of professional services at Cost Engineering Consultancy, Jos van der Stelt has been applying his business development experience to help companies that need turnaround and project controls solutions including digital tools and services.

After major business development within the information technology and services industry, Jos is now the main point of contact for consultancy services ranging from Cost Estimating and Cost Control to Benchmarking.

With this blog, Jos is sharing his insights on the problems that professionals face in turnaround project management environment.

“With over 20 years’ experience of CAPEX projects, shutdowns and turnarounds, at Cost Engineering we have been providing expert and independent advice on over 2000+ projects worldwide. Most interesting projects are the ones dealing with time pressure. Shutdowns, Turnaround, and Outages are most common projects for professional services in our field of expertise.

I read a post on LinkedIn last weekend about Cost Control in Turnarounds.

It stated that with good insights on turnaround project controls, costs could be reduced, with both software and well-trained professionals.

I hear more of these calls in the industry lately. However, I am still dazzled by this promise. Yes, professional Cost Controllers will see cost overruns upfront and report them. Yes, professional Cost Controllers are guiding Project Managers by showing Earned Value. Yes, professional Cost Controllers are (in combination with the right software tools) able to continuously monitor the progress of projects.

However, are we forgetting about the 3 essential steps before a Cost Controller starts working on a Turnaround?

1  Benchmarking

Don’t forget the past, learn from it: By extracting metrics from executed and running STO’s, it is possible to discover trends in key cost drivers and improve future turnarounds.

Now the question for the Project Cost Controller is: Are you controlling the right baseline, which contains the lessons learned from earlier projects/STO’s?

2  Cost Estimating

Don’t forget project experience, incorporate it into your estimate: Most estimating and preparation work has been done when the project controls specialist starts with his duties. However, the key of each STO’s is to define your budget accurately to predict cost, time, and resources. This forms the basis of project controls.

Now the question for the Project Cost Controller is: Are you controlling the right baseline, which is based upon the right information/scope derived from the right documents? In other words, do you know your estimate by heart, and do you trust it or do you have to deal with it?

3  Turnaround Planning

Don’t forget project efficiency & risks, use it to plan ahead: All preparation work is done when the project controls specialist starts with his duties. However, the key of each STO is to check if your schedule is up for the task. Know the efficiency and risks within the schedule, in order to complete your shutdowns and turnarounds on time and within budget.

Now the question for the Project Cost Controller is: Are you controlling the right cost integrated schedule, which itself is based upon the right information/scope derived from the right documents? In other words: Do you know your planning and related risks by heart, and do you trust it, or do you have to deal with it?

All in all, key things to remember:

1. Control a baseline which contains the lessons learned from the earlier projects or STO’s
2. Control the right value based on the right information from the right documents
3. Control the right cost integrated schedule, based on the right information derived from the scope and estimate

Proper Cost Controls is something to consider in order to get a hold of projects. However, businesses that have a strong focus on all the above could easily improve upcoming STO’s.