Essam Shehab, Ahmad Wasim Editors

The Association of Cost Engineers Conference 2012

Sponsored by

Essam Shehab, Ahmad Wasim Editors Cranfield University Cranfield Bedfords MK43 0AL UK

The Association of Cost Engineers Conference 2012

Conference Committees

Conference Chair: Mr. Alan Barltrop, President of ACostE

Organising Committee Chair: Dr. Essam Shehab, Cranfield University

Trade Stands Chair: Mr. Andy Langridge, PRICE Systems

Conference Secretary: Mrs Anne Fairless and Mrs Vanessa Tattersall, ACostE

Organising Committee:

Dr. Wasim Ahmad, Cranfield University

Mr. Mohamed Badawy, Cranfield University

Dr. Paul Baguley, Cranfield University

Dr. Yuchun Xu, Cranfield University

Advisory Board:

Mr. Graham Bailey, Bentley Motors Limited

Mr. Carl Dalton, Polaris Consulting

Mr. Phil Dunphy, Aston Martin

Mr. Shane Forth’ AMEC

Mr. Alan Jones, BAE Systems

Mr. Bob Mills, Jaguar Land Rover

Ms. Angela Pammenter, Foster Wheeler

Mr. Ken Phillips, AMEC

Mr. Tony Reid, ACostE

Mr. Dave Reuss, Rolls-Royce

Prof. Raj Roy, Cranfield University

Mr. Dave Simms, Galorath

Mr. Dave Smee, GKN Aerospace

FOREWARD On behalf of the Association of Cost Engineers I would like to

extend an invitation to our 2012 Conference “Cost Matters”

which is aimed at specialists in Cost Engineering Cost/

Schedule Control, Project Controllers and Project Managers &

Programme Managers.

Last year we celebrated 50 years of excellence in Cost Engineering and this

conference continues this theme, focusing on best practice with speakers from

industry and academia together with “hands on” workshops for continuing

professional development, led by leading practitioners. There will also be

opportunity to learn about the routes which are available through the Association

for Professional Accreditation.

I believe that it is vital to continue our learning processes in order to maintain and

improve our capability to successfully identify, evaluate and manage the costs,

which drive our business processes. Tools, techniques and skills must constantly

develop to meet the challenges presented by the rapidly changing industries, new

technologies and economic climate in which we practice.

All of our specialities are well provided for in the morning programme with

presentations for example on key aspects of programme and portfolio

management, value trade-offs and the cost of long term digital preservation. In the

afternoon we have a varied choice of workshops providing opportunities to gain

knowledge of leading change effectively, understanding cost modelling in the

manufacturing process, ACostE Tiered Accreditation & Company Accreditation.

There will be opportunities for networking and visiting our trade stands during the

day. Conference delegates are encouraged to take an active part in the sessions

and to ask questions of any of the organising committee during the day.

I look forward to seeing you on the day.

Alan Barltrop

President of Association of Cost Engineers

BIOGRAPHIES

BIOGRAPHIES Alan Barltrop

Alan Barltrop is currently the President of the

Association of Cost Engineers. He also held the

positions of vice president of the Association of Cost

Engineers. Other positions which have been held within

ACostE are Chairman of the TASC Board, Chairman of

the Marketing Committee, Chairman of the Legal

Committee, Chairman of the Estimating Special Interest

Group.

He also received the Life Member of the American Association for the

Advancement of Cost Engineering. Alan is Incorporated Engineer and

Accredited Assessor in Project Controls Vocational.

Alan's experience over many years includes working with leading Engineering

Companies & Consultancies and in the Oil & Gas Exploration Industry in senior

project and cost planning roles, which has also involved development and

implementation of estimating methodologies and project controls systems. Alan

is a recognised industry expert and consultant in cost engineering

"troubleshooting, estimate reviews and cost forecasting for major capital

projects.

Essam Shehab

Dr. Essam Shehab is a Reader and Head of Cost

Engineering at Cranfield University. He has developed

a strong research track record in cost engineering by

leading (as principal investigator) a €11.7m EU-FP7

project, 4 EPSRC EngD/PhD research projects with

Rolls-Royce, 50 MSc projects with industry and one

EPSRC Centre in Through-Life Engineering Services

(TES) project. Dr Shehab’s research group comprises 13 members. He has

successfully completed the supervision of 65 MSc theses, 3 MSc by Research

theses and 7 PhD theses. He has developed a strong track record of applied

research with leading companies including Airbus, Rolls-Royce, BAE Systems

Lotus Cars, Cosworth & Lockheed Martin. He has published extensively in his

research career with 127 publications. He is a Fellow of the Institute of

Engineering and Technology (IET), the Higher Education Academy (HEA), and

the Association of Cost Engineers (ACostE).

David Birch

David Birch has 35 years experience in the

delivery of high profile UK and international project

portfolios for world leading engineering contractors.

He has responsibility for the CLM Programme

Controls group within the CLM Joint Venture

delivering the London 2012 Olympic Games

programme on behalf of the UK Olympic Delivery

Authority (ODA). Mr Birch’s priorities are to ensure

that the London 2012 programme is delivered to or ahead of schedule and

within the funding levels and budgets established by the ODA.

Since joining CH2MHill in 2008 Mr Birch has served as CLM Head of

Programme Controls for from December 2008 to today and was CLM Deputy

Programme Controls Manager from May to December 2008.

Prior to joining CH2MHill, Mr Birch was UK Operations Manager for

URS/Washington Group Energy and Environmental Group executing projects

and programmes within UK Nuclear decommissioning and clean-up. Previous

experience includes 10 years with Bechtel working on International projects in

the Oil and Gas, Water and Telecom Business Lines located in Kuwait,

Kazakhstan, India and a number of European countries.

Ben Sissons

Ben Sissons is a Benefits Realisation and Cost

Management consultant and founder of BRM Fusion Ltd.

that provides professional services and software for

assuring Project and Portfolio success. Ben studied,

lectured and researched in Business Information and

Computer Science at Cardiff University before making the

leap into industry.

For job 1, Ben leads the effort to ensure a multi-billion pound public sector

programme delivers everything expected of it and more. For job 2, Ben runs a

software and service company, BRM Fusion ltd. that provides the innovative

Realisor Programme assurance tool. At BRM Fusion, Ben works closely with

professional organisations (such as the association of project managers),

fortune 500 companies (such as Atos, BT, IBM, Fujitsu and Thales) and the

public sector (including the UK Cabinet Office) to define, measure and manage

success at the programme, project and portfolio levels.

Steve Wake

Steve Wake has an MA in Organisational Behaviour.

He's worked in the print, automotive, aerospace,

defence, FMCG, insurance, and I.T. industries as a

project manager and consultant. He is an internationally

acknowledged expert on Earned Value Project

Management. He is a core author of the newly published

PMI Global Practice Standard, Chief examiner for

Earned Value with APMG and chairman of the EV SIG for the APM whose EV

guideline is used for major contracts and is reciprocal with the US ANSI 748

standard. He also is the producer of large profile PMIUK Synergy events as well

as the national and international EV conferences.

Eric Druker

Eric Druker has 7 years' experience performing cost

and schedule risk analysis for a varied range of clients

across the DoD, Intelligence and Civil Arena. He

currently serves as lead for Booz Allen's Real-time

Analytics capability and technical lead for Booz Allen's

Cost Estimating support to NASA Headquarters. A

recognized industry expert in cost estimating and risk

analysis, in 2009 Eric was named National Cost Estimator/Analyst of the Year

for Technical Achievement by the Society of Cost Estimating & Analysis

(SCEA). As an author of over a dozen industry papers, including one best paper

award, he is an internationally recognized expert in cost estimating and risk

analysis having been an invited speaker or panellist at conferences including,

but not limited to, Department of Defense Cost Analysis Symposium (DoDCAS),

Naval Postgraduate School's Acquisition Research Symposium (NPS-ARS),

Space Systems Cost Analysis Group (SSCAG) Meeting, Australian Department

of Defence Cost Analysis Symposium and NASA's Project Management

Challenge. Eric's works are also cited in the GAO's Cost Estimating &

Assessment Best Practices guide.

Nick Fewings

Nick Fewings, Director of The Colour Works

International Ltd. whose background has included senior

change management roles in Barclays and the provision

of change management consultancy to global

organisations will open your eyes to the potential that

lies within you and your team to ensure your project is

not one of the unfortunate statistics.

Nigel Hibberd

Nigel is a member of ACostE Council and a Director of

ACostE. Nigel started working life in the manufacturing

industry on production and tooling design progressing

into production management, before moving into major

Project Planning with BNFL. It was during this stage as

a team leader and later Head of Project Planning he

started creating his own occupational standards for recruiting contract staff,

which later he applied to the internal staff. After becoming Head of Cost

Engineering and Planning for BEL he learned about the National Occupational

Standards for Project Control and introduced these into BNFL, along with the

Associated NVQ’s.

As BNFL was a user of the National Standards and NVQs, Nigel was invited

(1997) to join the National User Group for Project Control NVQ’s and

occupational standards, ProVoc, where he eventually became Chairman.

Under Nigel’s chairmanship ProVoc became a committee of ACostE. ProVoc

has supported ECITB (The Engineering Construction Industries Training Board)

in all development and re-evaluation of the standards since the original launch

of the standards in the mid-1900s and has now become the ACostE

Accreditation Committee, as ACostE could see a wider use for the standards.

Since retiring in 2006 Nigel has been active in Risk Management, Project

Control Occupation Standards development, lecturing on Project Control and

Management, and developing the Tiered Accreditation for the professional, Accreditation of the Company skills and development framework and

Accreditation of company or college Courses in Project Control.

Dr Stuart Wicks

Stuart leads a team of business analysts in the

Submarines Business of Rolls-Royce, based in Derby

in the UK. This team provide cost estimating, cost

analysis and cost management expertise to the

business in addition to developing new business

cases and undertaking Value Analysis in support of

strategy development and business improvement.

Stuart began his career as an engineering officer in Royal Navy Submarines.

On leaving the navy he spent 6 months as a commissioning engineer at a civil

nuclear power station before joining Rolls-Royce to work in Integrated Logistic

Support (ILS). Stuart quickly became Team Leader and then ILS Manager for

the Astute Project, developing the support solution for the nuclear reactor plant.

In 2000, Stuart was promoted to Head of Support for the new Naval Marine Gas

Turbine Business set up to market Rolls-Royce gas turbine engines into naval

applications around the world. He led the creation of the first naval Total Care

Package for the engines of the navies of the UK, Netherlands, Belgium and

France and laid the foundations for the support of the WR21 engine in the Type

45 Destroyers.

In 2006 he returned to the Submarines business to help set up the Flotilla

Reactor Plant Support (FRPS) programme, a Total Care type arrangement for

the UK Submarine Flotilla. Currently, Stuart is engaged in a collaborative

programme with the MoD, BAE Systems Submarine Solutions and Babcock

Marine to reform the UK Submarine Enterprise.

Stuart completed his PhD in the application of Lean techniques in the UK MoD

at Newcastle University in 2009 and maintains a keen interest in value theory

and value analysis and its practical applications in government and business.

He has presented papers to various conferences in the UK and overseas and

continues to write and develop ideas on the subject.

Stuart lives in Derby with his wife and two daughters and enjoys orienteering

and painting, although he is not particularly good at either.

Nick Brown

Nick Brown is a Senior Principal Consultant with

ARES Software UK Limited, a subsidiary of ARES

Corporation. For 15 years Mr Brown has worked

with some of the world’s largest projects developing

and implementing industry best practices and

project controls systems. Nick has been involved

with project control systems for many years where

he provides advice on: project controls, policies and procedures, processes,

system integration, and work scope development and structuring a project

correctly to provide the critical information that management requires to run its

business and its projects. As a Senior Cost Management Consultant for ARES,

Nick has recently overseen the roll out of an Earned Value Management

System (EVMS) and a Strategic Change Management solution on a major

capital programme. In addition to his day-job, Nick is a lecturer at Cranfield

University and has delivered talks all over the world, including South Africa,

Siberia, Kazakhstan, Malaysia, Australia and the USA.

Mohamed Badawy

Mohamed Badawy is a PhD researcher at the

Manufacturing and Materials Department in Cranfield

University. He received his MSc in Electronic

Communications and Computer Engineering from the

University of Nottingham in 2009 and his BEng (Hons.)

from De Montfort University in 2003. His research

interests include cost modeling, digital preservation,

cloud computing, uncertainty and obsolescence.

Alan Jones

Alan joined BAE Systems in 1976 with a Mathematics

degree (which explains a lot), and worked for five

years in the Production Project Office as a Scheduler

and Project Controller for five years. After that he

transferred to Industrial Engineering where he

embroiled himself in the development and application

of Learning Curve Theory, and to develop his competence as an estimator (a

never-ending task). Since then Alan’s career has seen him in a number of roles

including that of Production Estimator, Operations Planning Development

Manager, and Finance Analyst amongst others – some people just can’t seem

to hold down a steady job! In 2004, Alan returned to an estimating role, in his

current position within Commercial Estimating where he has responsibility for

developing and delivering estimating capability in the terms of processes,

methods, techniques, toolsets, training and accreditation.

Dave Reuss

Dave Reusshas worked at Rolls-Royce Plc for over 35 years. During this time,

he has worked within Manufacturing Engineering, Design Engineering as an

Integrated Team Leader, and Cost Engineering roles.

He is now responsible for developing cost estimation

systems and their maintenance for use by Cost

Engineers, Designers and Manufacturing Engineers and

Buyers. He is a Visiting Fellow of Cranfield University; a

past Vice President of the Association of Cost

Engineers; is an active member of the Engineering-

Manufacturing Committee, the Council, and is a current

Director of the ACostE.

PRESTIGE LECTURE London 2012 – Baselining and Controlling Delivery

David Birch & Alan Willby -

CH2MHill

The challenge was great – to provide a stage for the world’s best athletes to

compete in the world’s greatest sporting events and in the process to create

sustainable venues, infrastructure and parklands that would benefit the

communities living and working in the area for generations to come.

To achieve this a major programme of construction works had to be planned,

estimated, contracted for and delivered on a largely derelict and polluted site in

east London. The timescale for delivery was fixed, and public scrutiny of the

entire project was intense.

This presentation will focus on how the Baseline was established and how

programme and project control played a key part in delivering the Olympic Park

and Offsite venues on or before time and under the budget established from the

risk loaded baseline cost plan.

The lessons learned will show that there was no single magic ingredient but

rather highlight that a collective management approach, use of recognised best

practices and fit for purpose processes/tools/systems worked in achieving

successful delivery of the London 2012 programme.

TRACK1 Abstract

Value Trade-offs

Dr Stuart Wicks, Head of Business Analysis, Rolls-Royce Submarines

Increasingly, success is defined not just by delivering hardware but by creating

and sustaining high value capabilities. Defence programmes on both sides of

the Atlantic have been criticised for focusing too much on hardware delivery and

not enough on value outcomes, sometimes long after the original requirement

has become obsolete.

Delivering value requires the whole value stream, including the customer

procurement agencies, to be flexible to changing circumstances and focused on

real value, not just a fair price for goods and services.

Estimating for value delivery in Hardware, Partnering and Services requires the

cost estimator to go beyond Product Cost Estimating:

- The range of solution options explodes

- The subtlety of cost drivers and benefits increases -Trade-offs between

options require more than just a cost balance -The Value-for-Money

challenge must be addressed

We need to compare the real Value of the different options, even as that value

changes with time and circumstances. This presentation provides some

solutions to these problems with techniques that can unpick the question of real

value and help achieve stakeholder consensus on trade-offs that optimize

value-for-money rather than simply cost.

Applied Value Analysis and Portfolio Management

Steve Wake, APM

What if a method that had international recognition as the best way to control a

project were used on all your projects? It would not guarantee success because

project methods can be poorly executed. But at least a commonly used and well

documented method is easier to inspect and put right. The use of Earned Value

provides management with the best available method to assure the accuracy of

the project information being published for use up and down the organisation.

So the challenge is to understand the theory. Check that the theory is in place

and being correctly executed. Ensure that management understand and use the

information. If the method is not in place or in use then you should at least

challenge the way things are being done. It might be OK, but if it isn’t OK then

start a change programme.

Knowing the theory will not make you a good manager. Knowing what to do with

theory and the context of the theory will make you a better manager. The

discussion that arises from the theory will give it a context, a meaning. It will

become real. Solid, accurate project data should be the foundation of all our

management conversations. You have heard of the house built on sand? You

are always vulnerable to uninformed challenge if you are not sure of your

project status. This is an area where you must and can be in control. You will

then be able to contribute meaningfully and with value in other management

conversations. Your knowledge will boost your credibility in this. Here is just one

example.

In a recent conversation with a Portfolio Management expert we are working on

a description of how Earned Value and Portfolio Management can work

together. Portfolio Management has emerged as the new ‘fashionable’ subject.

It is easier to get a conversation with senior management on this topic because

it seems to be more closely related to business and finance. This worries me.

Portfolio Management is only the ‘tip of the iceberg’. I want to establish an

explicit mandatory link between the project budget value held at the project level

and profiled in the baseline with the value and spread of benefits held at the

portfolio level.

I am looking for a simple way to show people the relationship between the

project budget and the effect it has on the business benefits. I describe 2

scenarios.

1. A project budget where there is no change to scope but where extra

costs are identified.

2. A project budget where there are changes to scope, as well as extra

costs to existing scope.

I am aware that there are many more scenarios and complexities but I want to

keep it simple in order to get going. I want to be able to show to any stakeholder

a visual example of what happens to the spread or realisation of benefits at the

portfolio level when there are changes to the project budget. I want to

demonstrate that cost increases will affect the rate of delivery of these benefits.

Sometimes the extra costs and extra scope will exceed the benefits. What do

we do then?

My belief is that a simple tool is needed to help visualise and model the

relationship between project and portfolio. Users at the portfolio level must

ensure that the project information is correct for decision making. My hope is

that a simple visual tool will aid understanding and become an essential

managerial tool. My fear is that users of portfolios are making the assumption

that all is well at the project level.

My friend responded and said that my assumptions were theoretically correct,

but in the real world he had little evidence that the theory had been turned into

practice. Firstly, projects and portfolios were not dynamically linked. Secondly,

the project plans are often very poor in quality. Yet the project plan is the

foundation upon which decision making is based. A weak plan makes for weak

decisions. The project plan has to be strong for the portfolio plan to be strong.

None of this is in place.

I am worried that the people who describe themselves as Portfolio Managers

will have no concern or sense of ownership of the projects which support the

portfolio. It is a very perilous position to be in. We have to remind them that the

data in the project plans has to be good if the portfolio is to be managed well

and this is where Earned Value and this workshop comes in.

Analytical Program Management: An Approach for Integrating Cost,

Schedule and Risk

Eric Druker, Booz Allen Hamilton, USA

One of the greatest challenges to managing costs is the lack of cost, schedule

and risk integration on programs. Schedule growth, should it come to pass,

almost always implies cost growth. Cost growth almost always implies schedule

growth. Additionally, risks identified as part of the risk management process

often lead to both cost and schedule growth. Despite the inter-connectedness of

these disciplines, rare is the case where the cost estimates, schedules and risk

registers are fully integrated artefacts. Analytical Program Management (APM)

is a methodology, pioneered by Booz Allen on highly complex programs such

as NASA's James Webb Space Telescope (JWST) and Landsat Data Continuity

Mission (LDCM), for fully integrating cost, schedule and risk. APM ensures a

program has compatible cost, schedule and risk artefacts and allows projects to

immediately determine the cost impacts of schedule growth and vice versa.

Additionally, since the cost estimate and risk register are fully integrated with

the schedule, the secondary and tertiary effects are uncovered. This provides a

far more complete view of critical risks affecting cost and schedule risk and

enables program managers to proactively manage their risks with an eye

towards reducing cost and schedule growth. Through the use of a Monte Carlo

simulation tool, Dice, the risk adjusted cost estimate and schedule are

uncovered; allowing program managers to budget and plan their programs

using statistical confidence levels while uncovering the near-critical paths in the

schedule that should be closely monitored. Additionally, this methodology

identifies actions that program managers can take, either by accelerating tasks,

mitigating risks, or removing scope, to ensure their program fits within a

constrained budget and schedule. This presentation will cover the

methodologies behind APM including lessons learned from applications on

multiple complex programs. A demonstration will show how an APM model is

constructed and the results interpreted.

Right People, Right Result – Leading Change Effectively

Nick Fewings, The Colour Works International

70% of projects fail to achieve their desired goals and 3 of top reasons relate to

people. In this interactive, colourful and memorable presentation find out why

this occurs.

Whether the changes being implemented are organisational, procedural or

driven by new technology, success is largely dependent on your leadership

style, harnessing the skills of your project team and effectively engaging with

those affected by the changes being implemented.

Nick Fewings, Director of The Colour Works International Ltd. whose

background has included senior change management roles in Barclays and the

provision of change management consultancy to global organisations will open

your eyes to the potential that lies within you and your team to ensure your

project is not one of the unfortunate statistics.

This session will draw on Nick’s experience of leading change which has

impacted up to 5,000 people combined with his knowledge of behavioural

psychology. A co-founder of The Colour Works, Nick’s sensitivity to the needs

of others, combined with his fun and engaging approach to learning, make him

a hit with clients across all industry sectors. His ability to deliver stimulating

learning programmes for clients helps them to get the best from their most

valuable asset – their staff.

His understanding of change management and behavioural psychology sees

him regularly called upon to speak at UK conferences on the human impact of

change and achieve ‘top presenter’ feedback with a style of presentation termed

as ‘infotainment’. He also writes articles on this topic for various UK

publications. A Helping Inspirer, Nick’s Discovery profile describes him as

gregarious, sociable and focused on others’ needs. He radiates goodwill and

enthusiasm and is optimistic about life in general and human potential in

particular.

Working globally, The Colour Works delivers personal and team development

solutions in leadership, team-working, change management, communications

and personal and team effectiveness.

Tiered accreditation and Company accreditation

Nigel Hibbred  

Since the launch of Tiered accreditation at the 2011 conference, the

Accreditation Board have been actively involved in running the Tiered

Accreditation process, have learned lessons during the pilot phase and the

paper will discuss some of these issues.

Tiered accreditation and Company accreditation has gained full approval from

ICEC in April 12

Besides running the pilot tiered accreditation, the board had been requested to

develop Company Skills and Development Accreditation scheme. This has

been piloted on a large company and delivered in March 2012. It has been

shown to be a very effective and an exciting development for ACostE.

The main thrust of the paper will be

o Improved awareness of the Tiered Accreditation programme to

individuals, and their employers (even though some of this may be a

repeat from last year).

• Reminder of the Tiered Accreditation Process and levels

• The number of candidates in the process, and completed

• Key Changes to the process from LFE during the pilot

• Fee structure?

o The development of Company Skills and Development Accreditation

process and a case study how it was delivered and (subject to client

agreement). The presentation will cover :

• Development of the Company Skills and Development standards

and factors considered

• Development of the Company Skills and Development award

levels and factors considered

• Strategy for review of the company Skills and Development and

factors considered

o The Company Skills and Development delivery process and

framework review

o The capture of people’s views on the effectiveness

throughout the organisation and at all levels and

locations/functions

• The collation into a report of the above, and the delivery of this to

the client organisation

• How Organisations can use this to enhance the delivery of their

Company Skills and Development processes and Profile w.r.t

o Recruiting new employees CEE&P resources

o Improving CEE&P resources moral

o Accelerating Accreditation of employees CEE&P resources

o Ensuring quality of Supply chain CEE&P resources

o Convincing Potential clients of the value/quality of CEE&P

resources used by the organisation

• Where possible we will use Sellafield Ltds materials from the

TASC Seminar in June for the Company accreditation

• Contacts for more information on Tiered Accreditation and

Company Skills Framework Accreditation, N. Hibberd - June 2012

TRACK2 Abstract

3 Questions to Assure Programme Success

Ben Sissons, BRM Fusion Ltd

In many industries it is standard for programmes to run over- time, to run over-

budget and to under-deliver. Whilst there are lots of potential reasons for each

specific failure, being able to answer three simple questions will greatly increase

the probability of programme success. These questions are:

1. What does measurable success look like for the programme (i.e. what is

it trying to achieve)?

2. What changes will the programme make, what will those changes cost

and how will they each contribute to success?

3. How will the programme measure success through-life, spot problems

and act to ensure success?

This paper describes a visual mapping approach to illustrate how these

questions can be answered for any programme, project or portfolio, regardless

of complexity.

To answer questions 1 and 2 the visual mapping approach begins with:

• Capturing the objectives of the programme in a simple visual map;

• Fleshing the high-level map out to agree the activities, effects and

outcomes that key stakeholders and experts believe are needed to

achieve success;

• Adding measures of success, contribution of activities to success and

high-level activity costs;

• Achieving consensus and acceptance of the joined-up programme map

through simple, visual communication and discussion of the insights

provided.

To answer question 3 the visual map is maintained and adapted throughout the

life of the project. Requirements, risks, assumptions, dependencies,

stakeholders and more are captured and combined with costs, outcomes and

objectives in the visual map.

Schedules are generated from the data that was captured in the initial

workshops (in answering questions 1 and 2). These schedules show the

activities, costs and benefits throughout the programme; providing clear

definition of how the programme must perform to achieve success.

The paper describes how, at early stages of the programme, the approach

maintains requirements, costs, risks, assumptions, dependencies,

responsibilities and more on the visual map and in the accompanying data. As

the Programme Management functions required become increasingly more

sophisticated, the visual map provides a hub for integrating major Programme

Management tools, advanced costing tools, MS Excel and Enterprise

Architecture tools; allowing visual mappings to be easily maintained between all

the different disciplines involved in planning and delivery.

Actual activities, costs and benefits are analysed as the programme schedule is

delivered and simple scorecards maintained that quickly identify where delivery

is failing to achieve expected successes. When failure is identified, the

information contained in the visual map allows quick identification of the causes

and re-planning to get the delivery back on track (or assessment of where

delivery should be halted).

The paper further describes how, at a portfolio level, the approach adapts to

identify how programmes interact, impact each other and collaboratively

contribute to an organisation’s overall strategic goals.

The approach described allows quick, visual understanding of any programme,

its goals, how it will achieve them and its on-going performance. The approach

provides end to end assurance for programmes, projects and portfolios to

ensure success.

Change management – a cost manager’s prospective

Nick Brown, ARES Software UK Limited

Today’s capital projects are increasing in size, scope, costs, and complexity. In

today’s economic environment, the project management team is under financial

scrutiny over its ability to control costs and track changes.

In recognition of the importance of project management, companies are

investing heavily in people, processes and tools that bring industry best

practices techniques into their organisations.

A key specific process that is often not as effective as it needs to be is Change

Management and having effective control over budget, forecast, and funding

changes in a timely manner.

Common change control processes rely on paperwork, couriers, ‘wet’

signatures, complex spread sheet and disparate silos of information to interpret

project data. Change control is the number 1 reason why monthly reports are

issued late, inaccurate, and giving false information.

By effectively integrating change control into the cost control function, projects

can implement a real-time, accurate, complete, consistent and auditable

Change Management function. This presentation will cover the specific aspects

to consider when implementing risk mitigation capabilities like Change

Management.

Estimating Costs of Protecting Valuable Digital Assets

Mohamed Badawy, Cranfield University

Dependency on digital information is increasing rapidly within many industries

and business sectors. Rapid evolution of technologies, ease of handling, cost

efficiency and edit-ability are some of many factors driving the increased move

to digital information and the rapid increase in the volume of digital data. Like

any technology, digital based information is prone to obsolescence issues, such

as hardware, software and/or human skills obsolescence, which prevent this

technology from being sustainable forever. To protect these valuable digital

assets from many obsolescence factors, some techniques have been

developed to enable the preservation of this valuable information for as long as

they hold value to the owning organisation.

Digital preservation provides a solution for many companies and businesses

with information that need to survive for a long period of time. Long Term Digital

Preservation is the active management of digital information, over time, to

ensure its accessibility. Many projects have been initiated to enable digital

preservation for many governmental archives and libraries, ENSURE project is

one of the pioneering projects to try to serve the business sector needs in digital

preservation.

Cranfield University is part of the ENSURE consortium, which is 13 companies

strong and with a budged from the EU-FP7 of €11.73 million. Cranfield

University’s role is to generate a cost model that can estimate the costs of

carrying out long term digital preservation activities on the cloud for three

business sectors, financial, healthcare and clinical trials. Cranfield University’s

cost model is a novel estimation tool handling costs of carrying out digital

preservation activities for the specified business sectors, on the computing and

storage clouds and estimating costs of uncertainties impact.

This presentation will show the need for digital preservation for most

businesses, provide coverage of the main digital preservation principles, explain

the main targets of ENSURE, the benefits of utilising cloud computing for the

field of digital preservation and show the progress of the cost model design.

Unlocking and Exploiting the Power of the Humble Moving Average

Alan R Jones, BAE Systems

Do you use Moving Averages? Do you find their use a bit limited? Do you use

them as part of a predictive technique?

Is your data really suitable for Moving Average analysis? How do you deal with

underlying trends and changes in trends? Ever tried alternatives such as

Weighted Moving Averages, Exponential Smoothing or Cumulative Moving

Averages?

This hands-on workshop aims to give you some practical advice on when and

when not to use Moving Averages or their alternatives, and also on how to

simply create a Moving Three-Point Estimate to supplement your analysis.

Manufacturing Process Cost Modelling

Dave Reuss, Rolls-Royce

When evaluating the cost of new gas turbine engines or component parts at

Rolls-Royce, it is often important to investigate the cost of manufacturing at a

fine level of detail. This is especially the case when the link between the

components (e.g. geometry), their engineering technologies being considered

and ‘cost driver’ parameters of the material or manufacturing processes, is not

well documented or considered ‘novel’. In such cases, attempting to predict the

cost of the part or process by ‘precedence’ may simply be not accurate enough

perhaps due to uncertainty in the engineering specification in early stages of

design, or even in our knowledge of the process activity rates for the technology

being considered. Although this presentation will not talk about technology

readiness levels in any detail, it is true that whenever novelty exists (in either

the component application, materials, processing methods, component or

feature sizes and tolerances) then it may be more important to predict and

analyse the cost of a part at a resolution of understanding that touches the

science of the processes being considered. This clearly means that there are

many occasions when it is important to have knowledge of why the sequence of

‘manufacturing process operations’ can be a cost driver and what is it that

causes the processing times of operations to be what they are.

Within the Engineering departments of Rolls-Royce, we are increasingly using

this resolution of thinking within our product cost models, which take account of

the science behind cost drivers and documents uncertainty where it is apparent.

We are doing this through the creation of generic Component Family cost

models and generic Manufacturing Process Cost Models, which have a defined

scope of applicability. In addition to setting the scene of application, this

presentation will talk about the process used to develop Manufacturing Process

Cost Models; verification, validation and buy-off, storage and maintenance; how

they are used; plus, will touch on the system which enables our end-user

functionality.

The presenter will end by inviting attendees to share their own experiences in

discussion, – with a view to stimulate some documentation of what constitutes

best practice (post conference).

TRADE STANDS

aPriori Product Cost Management

Cost engineers, are under tremendous

pressure to create highly accurate cost

estimates for a growing portfolio of products with fewer resources than ever

before. aPriori’s Product Cost Management platform can amplify the impact of

the cost engineering organization by capturing their experience and knowledge

of manufacturing and the supply chain within a single costing system that is

easy enough to be used by engineering and sourcing. aPriori enables it’s users

to perform a precise, real-time analysis of any 3D Solid CAD model design, and

generate a detailed cost estimate in seconds. Any time a change is made to

the CAD design, the product material, the manufacturing process, the

production volume or the location of manufacture, aPriori immediately

regenerates the cost estimate to factor in the new information. Target costs can

be set early in the design phase, and entire engineering teams can have a

realistic shot at hitting these targets because they will instantly understand the

cost of each and every tradeoff decision they make as their design matures.

Visit the aPriori booth to learn more about how this exciting new technology can

help expand the influence of the cost engineering team, and significantly reduce

product costs for your company.

Contact Details:

Rick BurkeContact Person

200 Baker Avenue, Concord, MA 01742, USA Address

Office: 978-371-2006Mob: 617-633-9015Contact No.

rburke@apriori.comEmail

www.apriori.comURL

ARES Software UK Ltd.

ARES Software UK Ltd., a subsidiary of ARES Holding

Company is a world-class provider of integrated project

management solutions. Organisations in more than 50

countries rely on PRISM to manage the engineering and

construction of capital projects and lower cost, mitigate risk and improve project

performance. Our customers include 4 of the 5 top defense agencies, 8 of the

top 10 mining companies and countless energy, oil and gas, aerospace and

engineering and construction firms from around the world. With more than 95%

repeat business each year, ARES is a results-oriented business partner with a

drive towards 100% customer satisfaction.

Contact Details:

Kim DonohueContact Person

08452870714 or 07599 479 671Contact No.

kdonohue@arescorporation.comEmail

www.arescorporation.com/prismURL

BMT Hi-Q Sigma- Welcome to clear thinking

BMT Hi-Q Sigma provides specialist support

through the lifecycle of complex programmes.

We utilise the breadth of our Programme

Management and Systems Engineering capability to ensure you receive a

tailored and objectively defined solution, maintain a clear picture of your goals

and how they are being realised, with the coherence you need to make

informed decisions.

Expertise in Cost Management

BMT Hi-Q Sigma provides an independent and impartial cost management

capability that delivers robust, soundly based programme cost estimates. We

support all stages of the procurement lifecycle from concept through to, and

including, the in-service phases of the project.

Our advice helps you to find the optimum balance between capability and

affordability and provides sound and complete financial information to inform

your business case:

• Cost Estimating and Modelling: Clear, concise and auditable.

• Investment Appraisal: Cost management and strategic advice to help

you use market forces to the best advantage; the search for ‘value for

money’ against formal criteria such as defined in the ‘Green Book’.

• Affordability: The generation of cash flows with appropriate financial

treatments to judge the affordability of a project.

• Through life costing: The generation of whole life costs that provide a

complete picture of the true cost of a project.

• Cost Benefit Analysis/Cost Capability Trade-off: To identify affordable

solutions.

• Financial risk identification and quantification: To capture financial

uncertainty and risk (including opportunities). Our Services and

Capabilities.

Feasibility Studies and Due Diligence: Providing financial assessments of

ports and terminals, as part of a due diligence process or in the context of

business consultancy. This includes financial services on behalf of the asset

owners, potential vendors or any financial institution involved in an acquisition

or merger process.

Business Planning and Forecasting: Business Planning support to Ports and

Public Transport Authorities.

Project Controls and EVM Support: Earned Value Management systems that

enable profound understanding of project performance.

Portfolio Management: Setting the direction and scope of your portfolio of

projects, to ensure outcome are compatible with the overall business direction

and objectives.

Project Diagnostics: Independent and impartial advice to provide assurance

and confidence in the deliverability of your project.

Enterprise Architecture: Enabling you to understand, document, communicate

and manage the components of your business to the optimum levels.

Risk and Opportunity Management: Creating the environment, the processes

and tools for risk management and opportunity exploitation.

Business Process Management: Delivering high value insight and expertise

across the business processes.

Requirements Definition: are mapped to project outcomes and provide

assurance that the expected benefits are quantifiable and measurable.

Planning and Schedule Management: Help in correlating and integrating

schedules to enhance reliable decision-making and forecasting.

Training and Mentoring: A range of public and bespoke programmes from

highly-skilled and experiences practitioners.

Contact Details:

Anne ChristieContact Person

Tel: +44 (0)1225 820980Mob: +44 (0)7795 831264Fax: +44 (0)1225 820981

Contact No.

anne.christie@hiqsigma.comEmail

www.hiqsigma.comURL

Cranfield University

Cranfield University is unique in its

entirely postgraduate focus. The Cost

Engineering research team leads

industrial research and development, training, and commercial contracts for

many industry sectors like aerospace, automotive, and defence equipment

manufacturing industries. Cranfield has also extended its capabilities to the

domain of Affordability Engineering, which is a process that enables companies

to reduce costs and improve value throughout the whole life cycle of a product

by the use of cost estimating and risk information, especially at the conceptual

design stage.

Within the field of Cost and Affordability Engineering, The Manufacturing and

Materials Department offers an Industrial Masters Programme, Post Graduate

Certificate of Education, Short Courses, and a wide range of Research

activities. Such activity can be diverse, from PhD, Engineering Doctorate,

bespoke training and Group Projects from our Masters Programs. The Industrial

Masters is a two-year part-time flexible Programme that aims to promote Cost

and Affordability Engineering practices as well as improve recognition of the

profession within UK industry. The Short Courses cover a broad range of

concepts and are available to all levels of Cost Engineer from novice to expert.

They are also open to engineers, purchasers, suppliers, and project managers

who want to gain a greater understanding of Cost Engineering practices and

procedures. Hands-on training is also provided within the COST STUDIO®

which is located within The School of Applied Sciences. Research is carried out

in a wide range of areas, including Software Cost estimating, Knowledge

Capture for Cost Modelling, Risk Analysis of Cost Estimates, and Cost

Modelling for Asset Management.

Contact Details:

Dr. Paul BaguleyContact Person

Department of Manufacturing and MaterialsBuilding 50, Cranfield University

Cranfield, Bedfordshire, MK43 0AL, UKAddress

Tel: +44 (0) 1234 750 111 Ext 5658, 2166Fax: +44 (0) 1234 754 605

Mobile: 07792595251Contact No.

p.baguley@cranfield.ac.ukEmail

www.cranfield.ac.uk/sas/costURL

Galorath International: Empowering Project Estimation,

Planning & Control for Managers, Engineers and

Cost Analysts Since 1988

Galorath’s mission is to empower its clients to prepare

and execute successful projects. We assist world

class organizations with process improvement to

achieve successful projects based upon realistic plans derived from credible

estimates which forecast the cost, schedule, effort, risk and reliability associated

with a contemplated project.

Estimating project costs and schedules is one of the toughest analytical

challenges faced by project professionals. Galorath has invested nearly three

decades developing solutions that assist organizations to better estimate, plan

and control project costs, schedule and risk. SEER® products have been proven

to accurately replicate real-world outcomes. Galorath's applications enable

project managers, cost analysts and engineers to make timely, accurate and

insightful decisions to achieve on-time, on-budget performance. SEER

applications provide reliable estimates for your Software, IT,

Hardware/Electronics/Systems, and Manufacturing projects from the start and

throughout the life of your project.

SEER for Hardware, Electronics and Systems provides total cost of

ownership estimates of components, systems and integrated product

assemblies.

SEER for Manufacturing estimates manufacturing labour, material and tooling

for parts and assemblies.

SEER for Software provides a systematic approach for estimating the

resources and scheduling that software development and maintenance projects

require.

SEER for IT enables organizations to develop an early, accurate assessment of

costs, schedules and risks for IT projects and their operations.

Professional Services   Galorath consultants collectively have hundreds of

years of combined experience in project estimation, process design, cost

analysis, project management and best practices. This diversity of experience

enables us to offer both broad and deep industry, project, and organizational

awareness.

Contact Details:

David SimmsContact Person

Suite 10, Basepoint Business Centre, Andover,Hampshire, SP10 3FG, United Kingdom Address

Office: +44 (0) 207 788 9042Fax: +44 (0) 207 138 2642Contact No.

dsimms@Galorath.comEmail

www.galorath.comURL

The IET and ACostE Technical and Professional Network

The IET/ACostE Project Controls Network is

jointly operated by the Association of Cost

Engineers and the Institution of Engineering

and Technology (IET). Its purpose is to advance

the knowledge and understanding of Project

Controls, and to establish an on-line Project

Controls Community

It is for those, with responsibilities at all levels,

for the estimating, prediction, planning and control of resources and costs for

activities that involve engineering, manufacturing and construction.

Its Vision is to:

1. Promote sharing and understanding of techniques and knowledge

associated with Project Controls and its methodologies, for the benefit of

the IET and ACostE members, potential members and the wider

community

2. To provide services to enable community members to advance in, and to

promote the application of, scientific principles and techniques in the

disciplines of Estimating; Monitoring Controlling, Forecasting and

Reporting Costs, Resources & Logistics; Planning and Scheduling Risk

Management; Investment Appraisal and Profitability of Engineering

Activities, Products and Projects.

Contact Details:

Mark MillsAlec RayContact Persons

mark@straightforward-pmc.comray.alec@gmail.comEmail

http://mycommunity.theiet.org/communities/home/27URL

PRICE Systems – Cost Engineering Framework providers

PRICE Systems was the pioneer in the science of

parametric modelling and has been the world leader

in parametric estimation of complex projects for over

40 years. For the last five years, PRICE Systems has extended its delivery

capability in response to demands from our clients to help them achieve

consistency and transparency across the project life cycle, thus today PRICE

Systems prides itself on being the first end to end Cost Engineering Solution

Provider for projects and programmes. Within our new capability, we provide

our customers with solutions to control the cost and schedule of projects, from

concept to through delivery and into operation and support.

Our expertise covers many sectors including Defence, Aeronautics, Space,

Energy, Automotive and Information Systems, areas where our customer base

consists of major players of industry and Governments. In these sectors PRICE

has worked with a large number of Blue Chips clients’ delivering mentoring

training, process improvement and estimation capability.

Our approach is in line with the recommendations of the GAO (US Government

Accountability Office) that noted a large number of Defence projects are at risk

of experiencing cost overruns due to poor quality of initial estimate and the

challenges of ongoing project control

Our strategy is to leverage the best in class toolset, many already owned by our

clients, within our Cost Engineering Framework (CEF).

The PRICE Systems CEF has been developed in response to the growing

requirement within all types of organisation to reliably predict and manage all

aspects of Costing and Project Control from the initial decision on whether to

bid for a contract, through the production of the resulting proposal, design,

development, delivery, operation and support.

Contact Details:

Andrew LangridgeContact Person

PRICE House, Meridian Office Park, Osborn Way, Hook, Hampshire, England RG27 9HYAddress

Tel: +44 7977 431234Contact No.

Andrew.langridge@pricesystems.comEmail

www.pricesystems.co.ukURL

QinetiQ

QinetiQ is the leading provider of services and tools to

support the procurement lifecycle and the successful

delivery of projects. QinetiQ’s understanding and knowledge has been gained

in working with some of the world’s leading procurement and support

organisations. QinetiQ provides proven technical and commercial services for

every phase of the procurement lifecycle from requirements capture to justified

business case and support planning.

QinetiQ deliver financial analysis, using tools including FACET, regarding the

affordability of business cases as well as economic analysis of the options

available to a customer. This insight enables value for money decisions to be

made by customers and savings realised.

In addition to Procurement Lifecycle Services, QinetiQ has a broad portfolio of

products and services includes specific aerospace and force-protection

products, the provision of dedicated testing ranges, aircraft certified release to

service activities and extensive maritime, C4ISTAR and security domain

knowledge.

Contact Details:

Contact Person Dale Shermon

Contact no +44 7785522847

Email dshermon@qineti.com

URL www.QinetiQ.com/als

Solitech 3iBlue

Solitech facilitate integrated business processes,

roles and software, an essential point of departure for

reducing risk in large engineering project environments.

It new 3iBlue cloud or onsite Microsoft Project Accounting software based

solution for capital projects aims to raise the bar in integrated projects and the

qualitative meta data in the project through the focus on integrated software,

processes and knowledge development, dissemination and management. The

solution is supported by a team of professional specialist with a track record in

the large project resources sector, providing costing, project controls and

engineering skills on multibillion dollar industrial projects.

The keystone in the 3iBlue software solution is visual software for concept to

FBS and WBS development and costing, conversion to a project baseline WBS,

integrated RFQ, procurement contracting, invoicing, retentions, certificates,

budgeting and bills of materials. Combined with integrated change

management, earned value and risk analysis it provides a singular integrated

cloud based platform for large engineering projects. Supporting modules include

such as HR, time and attendance, time sheets management, workflow

SharePoint and integrated Project Server 2010 with Program and Portfolio

management. The scope and diversity of the platform is supported by over 250

standardised business process model (BPM) templates, reflecting roles,

processes and the integrated software functions. Reporting includes project

back-office support and front office Excel extracts, allowing the cost s-curves to

be offline and portable.

The singular objective of the cloud software is to reduce project IT cost and time

lines, whilst the 3iBlue solution offer integrated project controls solution at

Enterprise scale. Future capabilities will include QS support and discreet and

Monte Carlo simulation capabilities.

This cloud Project solution is backed up by certified project cost engineers,

project managers, project accountants, HR and community specialists provide

the best practice capability of bringing stakeholders on-board. These specialist

bring to bear experiences from diverse backgrounds in defence, aerospace,

commercial product design, software design, mining and oil and gas. The

common factor being engineering, large capital projects and an integrated

people, technology and process centric approach.

The 3iBlue solution span the full enterprise lifecycle from exploration, feasibility,

development to operate and maintain. This means the project artefacts and

capitalised costs may feed into the fixed asset register and maintenance system

for operational support. Throughout there is a strong emphasis on a systems

engineering approach for functional modelling and analysis and an human

resource centric organisational development capability.

Contact Details:

Contact Person John Wilson

Contact no +44 7968 123061

Email John@solitech-blue.com

URL www.solitech-blue.com