Web scheduling for simple projects: Part 3 - Subcontractor

Management

In part 1 of this series, I described the need for Enterprise Project and Portfolio Management of simple
projects. Specifically, I described the ability to adapt P6 EPPM and its web user interface for the
purpose. Also, in that post, I explained some of the project management problems that small projects
face, and listed out specific challenges that cost real money. Finally, I provided a sample business
background that Ill use in this and following posts as a basis for a simple business case.
In this posting, I dive into one of the three specific use cases I suggested, which is Subcontractor
Management, which allows you visibility to a contractors work and the ability to help the contractor to
be more efficient.

Managing a Subcontractors performance with an Enterprise Project &

Portfolio Management System
Subcontractors often dont have their own project management system. In this case, if you ask for a
schedule you might end up with something as simple as a print-out of a spreadsheet, or some scribbles
on the back of a napkin. OR, they do have a project management system, but they deliver you a
schedule in hard copy. Either way, you end up without the ability to validate the schedule by working
with it. For example, how can you check accurate predecessor relationships, and how can you easily see
the impact of an activity running late on the remainder of the project?
In these cases you can allow access to your schedule by contractors. In the example shown in the
picture below, the Owner organization has P6 EPPM hosted in the cloud (Software as a Service /
SaaS). The Owner provides permissions for contractors to access various plans. With permissions, the
Owner can also allow access only to specific data and functions.

In the example, two contracting companies are working together to create a deliverable (for example,
A is framing a shed, and B is putting on the siding). Contractor A doesnt have a scheduling system,
so is going directly into the Owners P6 EPPM to create and update his schedule. Meanwhile,
Contractor B has created his schedule perhaps in his own version of P6 or Microsoft Project and
imports the plan into the Owners P6 instance. As part of the import, Contractor B filters out
unnecessary data (like his own activity codes and resource information). The Owner can link the
contractors schedules together, so that one schedule drives the other. The Owner gets full visibility to
the end-to-end project, and the impact of interdependent work, and can manage the symbiotic project
environment.
[NOTE: There are several ways this can be achieved, including with On-premise implementations of
P6.]
How do you put a value on this? Whats the value of good information from contractors? The answer is
the ability of the Owner to find savings in the contractors schedules.
Assume that about half of the projects in our example will require subcontractors 250 projects
(in reality, it is usually substantially higher). Also, lets assume that the value of the labor on
those projects (vs. materials and equipment) is about 50%. So, the value locked in the
contractors schedules is about 250 x $3 million x 50% = $375 million. The value comes in
knowledge, and the ability to act on the information.
If a Project Manager can have visibility to an accurate schedule and can use it in real-time to
check it and to do what-if analysis with it, the Project Manager might (very conservatively) be

able to save at least a week of contractors time on a 6-month project. In our example, each
contractors week is worth ($3 million x 50%)/(6 months x 4 weeks) = $62,500. So, if we save
$62,500 on 250 projects, the benefit is $15,625,000. Thats a good chunk of change!
If you implement P6 EPPM for small projects, you just found $15,000,000 that your company can
invest in more value-added projects, or maybe a great bonus for you this year :^).
If youre keeping track, in the last post I demonstrated how you can find $18 million in improved
performance by using your people better for managing projects and reducing project delays. Add to
that the $15 million in this benefit that is delivered by improving the performance of your contractors
and you now have $33 million in benefits to mull over. Again, you can argue this number down
a long, long, long way, and you still have all sorts of great reasons to put in place enterprise
management of your small projects (as soon as possible).
--------------Quick-link to this series:
Introduction: Web scheduling for simple projects with P6 EPPM
EPPM Saving #1: Small Projects / Operations Projects / Sustaining Projects
EPPM Saving #2: Contractors
EPPM Saving #3: Executives (Coming soon)
--------------Quick-link to some of my related posts:
Risk management to reduce and eliminate unexpected events,
Issue management to increase projects successes,
Steps to add granular details to your activities and simplify status updates,
Document management to increase the document collaboration and value
--------------Full disclosure Im an Oracle Primavera Solutions Consultant. I educate customers about Primavera
products and recommend Oracle and Primavera solutions for them.