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Advantages of
Separate Structures for
Cost and Schedule Integration

Integrating cost and scheduling is something the engineering and construction industry has been pursuing for many, many years. Stakeholders on all sides of a project, from owner to contractor, have coveted an integrated approach on their projects. Cost and schedule are not unique in this sense. What makes cost-schedule integration such an attractive challenge is the current lack of progress toward achieving a method that is easy to setup, understand, maintain and replicate.

One solution that is often seen in the industry is the duplication of the cost or schedule structure from one system to another within the Organization Breakdown Structure (OBS). So, as loosely portrayed in the figure below, this means simply duplicating a project’s Cost Breakdown Structure (CBS) as the schedule’s Work Breakdown Structure (WBS), or vice versa, duplicating the schedule WBS to the project CBS. This solution, and the reason it isn’t widespread as a solution in the industry, is that it has inherent disadvantages. Let’s look at some of these, then see what other alternatives may hold more promise of success.

 

cost-schedule integration

 

 

Duplication Model Disadvantages in Cost-Schedule Integration

For our first example of a possible disadvantage, one system, either the cost or schedule system, is likely being dictated to a structure that may not lend itself to how the stakeholders can effectively operate the project controls needed for a given project. Stated another way the CBS is normally not how a scheduler on a project or the project team itself would want to organize the project schedule.

Another disadvantage inherent with the duplication of structures is the level of details required are not often aligned. So, when a project tries to force alignment, it can be like trying to fit a square peg into a round hole.

Which brings us to why it is more advantageous to attempt cost-schedule integration on a project without the need to duplicate the cost and schedule structures. Using metadata alignment, cost and schedule can be integrated while allowing the project stakeholders to develop and maintain structures that allow for practical maintenance, reporting and usage.

 

The Benefits of Independent Structuring with Cost-Schedule Integration

By allowing the cost system to keep an independent structure, users can add, edit, delete and adjust the cost structure as they normally would on a project and, using metadata, still allow for cost-schedule integration to be maintained and updated. A big advantage here can be seen from the separate structure approach in the scheduling process and procedures on a project.

By allowing the project team to build and maintain a structure that is advantageous to the schedule stakeholders, it often decreases the amount of detail to be maintained on a project schedule. It also decreases the number of schedules themselves being maintained on a project many times and allows supervisors and superintendents who run the work to have input on how best to represent their plan to build the project. In addition, it allows for a seamless transition to short-interval planning on a project. All these advantages impact the bottom line of a project. The last advantage that I want to mention next comes with reporting.

 

Getting the Balance Right with Cost-Schedule Integration

The amount of reporting being done in the industry requires that systems be able to be integrated, but not replicated, which a lot of the time is what happens when you duplicate elements in different systems (as we previously discussed). Schedule is a measure of time and capacity, while control is a measure of cost, the combining factor between the two is earned value. So, by keeping the structures separate and integrating through metadata, this allows projects to track and utilize sets of data and gives project teams more tools at their disposal to better manage their projects. Forecasting, time phasing, resource planning, risk simulations, etc. can all have additional data points that can be measured, analyzed, reviewed and acted upon throughout the life cycle of a project.

Organizations have seen the need for integrated systems for a long time. A lot of work hours and effort have been spent trying to solidify a solution that works and can be replicated with minimal effort. Pressing the “easy button” and duplicating between systems may save time and effort but will set up organizations for inherent risks down the road.

By conducting cost-schedule integration of systems through metadata, this allows for organizations and projects to let their teams use the structures that best suits their needs while still providing a path to integration and solutioning that the project team can benefit from throughout the life cycle of the project. And these benefits will impact all aspects of an organization from the estimating, control and schedule system to risk, to reporting and contract administration.

Ready to take a deeper dive? InEight can help get your projects where they need to go and help you create a solution or view that matches your needs while leveraging your teams’ existing strengths. Let us show you how.

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