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  • PST0287
    Cost Engineering, Risk Management and Earned Value Management




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Cost Engineering and Risk Management (Day 1 - 3) program will cover the latest techniques and practical methodologies of project cost engineering and risk management to successfully manage project cost and risk, in order to maximize business ROI in the long run. You will gain the combination of unmatched risk analysis skills, cost engineering and thorough knowledge of your project parameters and uncertainties.


Earned Value Management (Day 4 - 5) program will cover the principles, methodologies and industry best practices in Earned Value Management. Using the knowledge to analyze project performance and to provide accurate cost and schedule forecasting, you will be able to contribute to your project’s increased performance and success.


Delegates will be guided through step by step exercises on real oil and gas project case studies

The course is designed for:

Cost Engineers, Cost Estimators, Cost Controllers, Project Managers, Project Engineers, Project Planners, Finance Managers & Executives.

  • Develop a sound understanding of the principles, methodologies and industry best practices in Cost Engineering and Earned Value Management.
  • Understand the business context, the project life cycle and the purpose of Cost Engineering in Oil & Gas projects.
  • Learn to prepare cost estimates, from high level factor estimating to very detailed equipment and bulk material cost.
  • Learn to develop and work with work breakdown structures, work packages, project baselines and project forecasts.
  • Understand the impact of project location, market environment and project execution strategy on project cost.
  • Know how to apply Earned Value to analyse project performance and forecast cost and schedule at project completion.
  • Learn how to control, forecast and report the cost and progress during project execution.
  • Develop the skills and knowledge to review and reconcile cost estimates.
  • Understand the principles and methodologies of risk analysis and execute risk mitigation.

Day One - 17th March 2014

Estimating Definitions

  • Project Life Cycle
  • Purpose of Estimates
  • Accuracy and Probability
  • Allowances
  • Contingency and Escalation
  • Money of the Day / Real Term
  • Estimating Plan
  • Basis of Estimate

Factor Estimating

  • Definitions, advantages and disadvantages
  • Exponent method
  • Cost per capacity method
  • Lang, Hand and Chilton method
  • Peter-Timmerhaus method
  • Specific factor method

Case study: Factor estimating


Quantity Ratio Estimating

  • Definitions, advantages and disadvantages
  • Quantity ratios for piping
  • Quantity ratios for electrical & instrumentation
  • Quantity ratios for structural steel
  • Quantity ratios for civil, painting & insulation

Case study: Quantity ratio estimating

 

Parametric and Range Estimating

  • Nomenclature
  • Pareto’s Law
  • Critical elements and key questions
  • Range estimating input and simulation
  • Detailed Estimating
  • Discipline estimating
  • Unit rates & sources of pricing
  • Estimating of equipment
  • Piping estimate
  • Insulation estimate
  • Civil estimate

Case study: Detailed estimating

 

Day Two - 18th March 2014

Location Factors and Market Factors

  • How to set up a location factor
  • Location cost surveys
  • Steel and commodity prices
  • Benchmarks
  • Indices
  • Cost modeling

Case study: Analyzing differences between locations and markets

Budgeting

  • Setting up a project budget
  • Project baseline
  • Contingency allocation
  • Work breakdown structure
  • Cost breakdown structure
  • Code of accounts
  • Interaction with Contracting & Procurement

Case study: From estimate to budget

Project Control

  • Why Cost Control
  • Potential influences on costs
  • Pre-requisites for effective cost control
  • Cost control plan and procedures
  • Schedule control
  • Progress measurement
  • Earned value analysis / management
  • Project controls best practices
  • Integrated cost & schedule control
  • Project control tools

Case study: Earned value analysis

Advanced Project Control

  • Management of change
  • Re-baseline
  • Monthly reports
  • Forecasting
  • Cashflow analysis
  • Controlling cost of quality and safety
  • Project close-out & lessons learned
  • How to manage project control
  • Total Cost Management

Case study: Advanced project control

 

Day Three - 19th March 2014

Project Assurance

  • Estimate verification and assurance
  • Estimate assurance reviews
  • Client vs contractor estimate reconcilliation

Case Study: Project assurance

Risk Analysis Introduction and Definitions

  • Definitions and terminology
  • Risk register
  • Cost risk analysis
  • Schedule risk analysis
  • Deterministic methodology
  • Probabilistic methodology
  • Risk analysis tools
  • Risk management

Case study: Setting up a risk analysis model

 

Risk Management

  • Risk mitigation
  • Project risk management
  • Case study: Risk management
  • Schedule Risk Analysis
  • Uncertainties in duration
  • PERT
  • Critical path
  • Critical chain

Case study: Schedule risk analysis

Integrated Cost and Schedule Risk Analysis

  • Correlation between cost and schedule risks
  • Essentials of cost and schedule risk analysis
  • Methodology

Case study: Integrated cost / schedule risk analysis

 

Day Four - 20th March 2014

Definitions, Objectives, Methodologies and Analysis

  • Course objectives
  • Course program
  • Case studies

 

Definitions and Principles

  • Cost Engineering definitions
  • Estimates, budgets and value
  • Budget and Contingency allocation
  • Project baseline
  • Work Breakdown Structure
  • Cost Breakdown Structure
  • Work packages
  • Allocation of budget to WBS and work packages
  • Basic Earned Value terminology

Case Study: Budget allocation

Project Control

  • Project Control objectives
  • Project Control variables
  • Project Control methodologies
  • Project Control cycle
  • Project Control plan and procedures
  • Project Control best practices
  • Schedule Control
  • Integrated Cost & Schedule Control

Case Study: Project baseline and control sheet

 

Earned Value Analysis

  • Earned Value Analysis overview
  • Evaluate Earned Value techniques
  • Define and assess Earned Value
  • Cost Variance (CV) and Schedule Variance (SV)
  • Cost and Schedule Performance Indicators (CPI and SPI)
  • Forecasting on Cost and Schedule
  • Different forecasting methodologies and formulas
  • Accuracy of Cost and Schedule forecasts
  • Generate and Validate Estimate at Completion
  • Cost and Schedule performance curves
  • Trend analysis
  • Productivity analysis
  • Earned Schedule analysis

Case Study: Earned Value Analysis

 

Day Five - 21st March 2014

Monitoring

  • Elements of monitoring
  • Productivity
  • Progress measurement
  • Progress milestones
  • Monitoring plan
  • Cost and Schedule performance
  • Identify the steps used in updating the project status
  • Understand how predictive performance data is used
  • Controlling/managing engineering cost & schedule
  • Controlling/managing equipment cost & schedule
  • Controlling/managing bulk materials cost & schedule
  • Controlling/managing construction cost & schedule
  • Baseline Schedule date vs Forecast date

Case Study: Earned Value Monitoring

 

Reporting

  • Reporting requirements
  • Reporting calendar
  • Reporting templates
  • Report on Program Performance Using EVMS
  • Best Practices
  • Project dashboards

Case Study: Project Controls Report and Dashboard

 

Advanced Earned Value Management

  • Management of Change
  • Problems and pitfalls
  • Pro’s and con’s of Earned Value Management
  • Alternatives to Earned Value Management
  • Earned Value vs Value of Work Done
  • Managing change and re-baseline
  • How to manage Project Control
  • Implementing Earned Value Management
  • Earned Value Management tools
  • Identify appropriate Work Authorization Levels
  • Use CPI and SPI in project management
  • EVM and related management responsibilities
  • Total Cost Management
  • Project close-out & lessons learned

Case Study: Advanced Earned Value Management

WorldOils