Bailey and Potter, CPA


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December 2009 Newsletter Featured Article

Loading Cost on a Primavera P6 Schedule

Business Challenges:

  • How can project cost be balanced with the time and quality elements on a project?
  • Can project costs be accurately reflected on a periodic and cumulative basis on a project?

Cost loading a schedule and balancing that within what is called the triple constraint; time, money and quality, can be a daunting task for those using spreadsheets or software other than Primavera's planning and scheduling software.  Primavera has been built from the ground up with this intention in mind.  With over six trillion dollars in project value being managed with Primavera software, it has a proven track record.  The traditional user of Primavera uses the software for deadline tracking. That has tremendous value in itself. Inserting cost tracking into the project schedule must be carefully balance with the expected returns. Some of those returns may be a required component to a schedule submission or it may simply be a need to better understand the time phased cost component of a project. Whichever the case, Primavera P6 is a very competent tool to do both.

Project costs can be managed using various methods in Primavera P6 Professional, the flagship of the Primavera project planning/scheduling line.  Cost can be managed using resources or expenses which are assigned to activities in the project plan.  These costs can then be rolled up from the activity details into corresponding work breakdown structure elements then all the way up the project structure.  Cost can be analyzed and reported upon using either tabular reports, layouts or Microsoft Excel exports.

Resource cost are divided into three categories; labor, non-labor and material.  As resources are created in the centralized resource pool, they are assigned the appropriate resource category.  Labor and non-labor costs are assigned to the resources on a units per time basis such as dollars per hour.  Material resources can be assigned a unit of measure.  Material resources can be used to track lump sum dollar values assigned to an activity or they can be used to track specific materials.  Using these resource types, a company can load costs into a project schedule. As the schedule is updated, the costs are updated as well.  Resource consumption can be adjusted to reflect actual performance as needed.

Another way to load cost into a P6 project schedule is to use expenses.  This functionality allows users to add one time cost occurrences to activities.  Examples of this include permits, equipment, or even mobilization costs.  Expenses cost require manual updated as opposed to resources which can be tied directly to an activity's percent complete. For those importing a cost loaded Microsoft Project schedule into Primavera P6, the cost from the MS Project activities are imported as expenses.  If using that schedule for US Army Corp project schedules, the cost must be transitioned to resource costs in order to convert them to the Army Corp SDEF* import standard.

Cost loading a Primavera P6 project is relatively simple. The steps are as follows:

  1. Define the resources in the resource dictionary. The resource dictionary can be found under the Enterprise, Resources. The dictionary is a global dictionary that is shared by all projects in the database. When creating resources, a category is defined as follows:
    • Labor (people) - Measured in units of time with costs being recorded in terms of price per unit such as $800/day
    • Non-labor (equipment) - Measured in units per time with costs being recorded in terms of price per unit such as $1000/day
    • Material - Measured in units other than time such as $50/CY. The material resource can also be used to track cost associated with an activity. The unit of measure can be set at your monetary unit such as a dollar. The default unit per time can then be set to $1/hour.
  2. The resource can then be assigned to the activity. The duration of the activity will be passed into the resource calculation on the activity. If using labor and non-labor resource types, the units per time such as 8 hours per day are then used to calculate the budgeted units for the resource for the activity. And example would be for a labor resource with units per time set at 8 hours multiplied by an activity duration of 10 days giving a result of 80 budgeted hours for the activity. If using a material resource, the budgeted units can be set independent of the units per time or the activity duration. That is why using a material resource to cost load an activity is ideal. It eliminates the need to define each of the resources on an activity and thus simplifies the cost loading process.

This process may be somewhat complicated for the average user looking to only track deadlines on a project. The addition of activity cost to a project schedule can give additional power to manage a project more effectively. The decision to do so must be balanced with desired level of effort that one is willing to expend on inputting the data and the knowledge gained from its output. If no value is gained from this type of monitoring, then one should stick to the basics of the project schedule and that is just for deadline tracking.

*(if you need more information on the US Army Corp SDEF conversion guidelines, please contact us directly at 609-299-1585 for a detailed 12 page guide on the process)


October 2009 Newsletter Featured Article

Merging Schedule Data using the P6 Reflection Process

Data collaborationBusiness Challenges:

  • Consolidate project plans from various project participants with minimal effort
  • Manage changes made by project participants to the project plan

The reflection process in Primavera P6 Professional allows the owner of the schedule to merge inputs from various schedule participants on a selective basis.  The reflection process creates what is called a reflection project.  The project then can be shared with another user allowing them to input schedule additions, modification or even update information into the schedule.  The schedule owner can then merge the reflection project back into the original source project. Creating a reflection project facilitates these workflows and processes:

  • Creating a sandbox area to test different project scenarios
  • Reviewing changes made by team members to activities they own
  • Reviewing changes to a project by exporting a reflection as an .XER file 

Creating a reflection project is relatively simple.  The steps are as follows:

  1. Open Primavera P6 Professional then display the Project window.
  2. Right-click on a project to display a context menu.
  3. From the context menu, select Create Reflection. If the source project has a baseline(s), then an option is available during the reflection creation to copy the baseline as well.
  4. The reflection project will carry the same name as the original project with the word "reflection" appended to the title.
  5. Changes can now be made to the reflection project as needed.

Changes can then be made to the reflection project by users that have access to the project. The project can also be exported to other schedule participants so as to enable their input on the project plan. Once the changes have been made to the reflection project, they can be merged back into the source project using the "Merge Reflection" function. This function is found by right-clicking on the source project in the Project window.

Merge data using the reflection process in P6Click on the image to enlarge the screen capture.

From the Preview changes window, the schedule owner can review the changes made to the reflection project and decide whether to merge them with the source the project. The changes can be grouped by subject area or activity. The reviewer can review the differences and select options for the source project prior to merging. Options can be selected after the merge process is complete such as deleting the reflection project or keeping it for future use.

Many scheduling processes can be managed using this process. It is advise though to review the PM Reference Guide that comes with P6 for more details concerning this process.

Click here to review an example workflow for utilizing the Primavera P6 reflection process. Workflow example



September 2009 Newsletter Featured Article

Sharing Primavera P6 Data with Non-P6 Users using MS Excel

image01Business Challenges:

  • Distribution of project data to non-Primavera P6 users
  • Reduce data entry in project control systems

Primavera users can easily share project data entered into the P6 thick-client or what is known as P6 Professional with other software applications using Microsoft Excel.  Users can even import Primavera P3 and Microsoft Project files in P6 Professional to enable project collaboration.  This Skill Brief will focus on exporting data to MS Excel.
Some of the benefits of importing P6 data into Excel include:


  • Refined graphical reporting and analytics can be performed in Excel.  Users can create the basis for a schedule of values in P6 then import it into Excel for finalization with things such as calculation columns and logos.
  • Search and replace functions can be used on data exported to Excel.  Data can then be imported back into P6.
  • Excel can be used as an interface with other third-party applications such as estimating, HR or financial systems.  As an example, estimates can be created in other applications an imported back into P6 to reduce project creation time in P6.
  • Project updates can be performed using Excel.  Project data to be updated on a periodic basis can exported from P6 into Excel.  The data can then be updated by field staff.  The data can then be validated then imported back into P6.

How can data be exported from P6?  There are two ways.  An Excel Wizard is used to guide users through the process or a layout can be created.  The displayed columns can then be exported to Excel.  To use the Excel Wizard, follow these simple instructions: Click here to download full Skill Brief


August 2009 Newsletter Featured Article

Defining Project Scope with Effective WBS

Business Challenges:
• Communicate project scope to team members and stakeholders
• Find a tool to enable better schedule development

The Project Management Institute states, "successful project management relies on thorough planning" (PMI, 2007). PMI further defines a WBS as “A deliverable-oriented hierarchical decomposition of the work to be executed by the project team to accomplish the project objectives and create the required deliverables” (PMI, 2007). The WBS or work breakdown structure is a globally recognized and proven project management tool used in a project's initiation and planning phase for defining project scope and should be an integral part of the project’s CPM schedule.

What is a work breakdown structure and how can it used? A WBS is a graphical tool used to articulate the project scope. It is considered a critical project management component for things such as activity/task definition, project schedule network diagrams, performance reports and risk analysis just to name a few. The WBS is used in project management for things such as:
• Project scope definition which is broken out into deliverables and further decomposed into sub-deliverables.
• Providing a framework for project status and performance reporting.
• Establishing a communications tool for the project team and its stakeholders for information pertaining to schedule, performance, budget and risk data.

P6 WBSThe work breakdown structure, as key tool used to identify project scope, is made manageable by decomposing or breaking it down into components and sub components. The structure defines work packages that are then completed by associated activities or tasks. The WBS is not a time-phased breakdown identifying the various project phases but a tool that defines the various project components in hierarchical fashion. The WBS defines WHAT the project objective is. It is not a description of a process that defines HOW or WHEN the deliverable will be built or produced.

A project’s work breakdown structure should be started in the initiation phase of the project management lifecycle. It is used to define a clear definition of the scope of work for the project. It can also pave the way for effective scope definition and collaboration between owners, designers, and contractors. How you say? Owners and designers typically define and communicate the scope of a project using drawings and specifications. What if they also developed a deliverable-based work breakdown structure in Primavera P6 Professional that was then distributed with the drawings and specifications to the contractor.

P6 ActivitiesA P6 project template can be made available to contractors bidding the project or at the project kick-off. Contractors can then decompose the work breakdown structure further into work packages and then into the supporting tasks. This enables contractors to build a schedule that more closely aligns to the owner’s expectation of the project.

A WBS can be defined in any number of ways. It can be newly defined for each project, it can be assembled piece-meal from an existing WBS, it can be developed from a template or it can be constructed using predefined WBS standards set forth by the organization or the project contract. Regardless of the method used, the WBS evolves through an iterative process following the project scope. There are two methods for decomposing project scope into a work breakdown structure (WBS). Those methods are top-down and bottom-up. The most popular method of WBS creation is using the top-down method. The top-down WBS method is popular because it can be easily created by a project team that has little or no experience in developing a WBS. Some advantages associated with that method are:

• Structures project conveniently for status reporting
• Helps ensure projects are logically structured
• Valuable when brainstorming project scope
• Can accommodate additional deliverables as they are uncovered

The following steps can be used to develop a top-down WBS:
1. Identify the final products of the project-what must be delivered to achieve project success.
2. Define the project’s major deliverables, which are unique to the project.
3. Decompose major deliverables to a level of detail appropriate for management and integration control. These WBS components are typically tied to clear and discrete stand-alone deliverable products.
4. Review and refine the WBS until project stakeholders agree that project planning can be successfully completed, and that execution and control will successfully produce the desired deliverables.

This is an overview of what a work breakdown structure is and how it can be created. Primavera P6 provides a valuable tool to develop a project’s WBS. The WBS can be created by the design team to define the project scope and to ensure that it meets the owners project objectives. The WBS can be then be distributed to contractors by exporting the project as an XER file. The contractor can then either break the WBS down into additional detail or proceed to add tasks to the WBS components. As a globally recognized tool for project scope definition, work breakdown structure should be considered an integral part of every project schedule.

Click here to download a printable version of this article


July 2009 Newsletter Featured Article

Change Management Best Practices for the Architecture, Engineering and Construction Industry

Construction contracts differ from most legal agreements in that they expect and plan for changes. In order to deal effectively with the changes that might arise on a construction project, the project participants need a comprehensive and workable process for identifying
and managing changes. The purpose of this white paper is to highlight best practices and provide a process to effectively manage changes on construction projects. It is by no means exhaustive or complete, but does present the basics of a workable and proven process for
dealing with changes. Although the terminology used and contract documents referenced are geared toward traditional design-bid-build public improvement projects, the process and principles presented are applicable and adaptable to other kinds of delivery methods or
types of projects.

Because this process is not written for a particular contract or project, readers are urged to review the procedures presented carefully and seek appropriate assistance when adapting to their own project or construction programs. Please contact Trauner Consulting Services, Inc.
if you have any questions regarding this Change Management Process, the intent of its requirements, its implementation, its customization for your construction program, or any other reason related to the development and implementation of a change management system
on your project or construction program.

Click here to download the full white paper.

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