Attention project control professionals! Are you tired of the extensive time and effort required to aggregate all your project labor, equipment, and materials (LEMs) time tracking information and calculate all that data against complex rates in order to close your project and invoice your clients?
Look no further – the following case study details how an EPC company managing a large oil and gas project implemented Mpower Project Controls software to overcome the typical issues faced when managing a project with a heavy focus on time and materials billing. While this case study is EPC-focused, project owners will also see parallels and gain insights they can apply to improve their own related project controls process.
This case study focuses on an EPC contractor who was a joint venture partner on a significant construction project in the global oil and gas sector. The project included one of the world’s deepest oil fields that, paired with a related field, were estimated to produce over 1 billion tons of total recoverable crude oil.
Due to the sheer size of the project, the EPC required the collection, validation, and invoicing of over 5000 personnel and equipment items. The project included a mobilization plan of nearly 5000 time entries per shift, consisting of almost 3000 people and 2000 equipment items.
In addition to the volume of personnel and equipment items, many different rules and rates were applied for the calculation of the cost and price of the entered hours. For each timesheet entered, the following needed to be calculated:
Labour Rates |
Equipment Rates |
COVID-19 Isolation – any timesheet entered for isolation should use these rates and ignore any others |
Standby in Warehouse – when not in use, equipment has a reduced standby rate that should be applied |
Cost + for Subcontracts – subcontracts are managed via cost + rates (cost + 22%) |
By Consecutive Usage – hourly, daily, weekly, monthly. Different rates apply if an equipment item is used for:
The correct rate must be applied according to the usage of the equipment over the invoice period. |
Training – any timesheet entered against a training code should use the training rate and ignore any other |
By Consecutive Usage for 24 Hours – hourly, daily, weekly, monthly. As above, but another set of rates for equipment like generators which may be in use for 24 hours a day |
If none of the override rates are applied, then the rate which corresponds to the employee will be used:
|
Managing the extensive volume of hours (i.e. LEMs) data, in addition to managing the complexity of rates and calculations, was beyond the basic capabilities of manual tools such as spreadsheets. A comprehensive project controls software solution was essential to managing this level of data.
In terms of project controls software, the team needed a system that could:
After careful consideration, Mpower Project Controls & Cost Management Software was selected as the only solution capable of managing the complexity. Mpower’s Time Management process helps project-based organizations get control of timesheets for labor, equipment, and materials (LEMs) with multiple validation and approval stages available. With Mpower Time Management, actual hours data is available through the project hierarchy and easily integrated with third-party systems such as scheduling, payroll, and ERP systems.
Mpower’s Time Management software met the EPC’s ultimate requirements for a solution to accommodate the sheer size of their project. With the introduction and implementation of this solution, its features and modules benefited every step of the time writing process. The following sections outline how Mpower Time Management software helped improve the EPC’s tracking and processing of LEMs data for the project.
The following sections outline how Mpower Time Management helped improve the EPC’s tracking and processing of LEMs data for the project.
Using Mpower’s integration tool, LEMs data was refreshed weekly with start date, position, skill, and location data being regularly updated. Mpower also auto-generated weekly timesheets for all equipment using movement applications, resulting in a timekeeper only needing to review the resulting data before submission.
Mpower’s HR/Employee application was beneficial too, allowing personnel data such as certifications or training requirements to be managed and tracked.
Mpower’s timesheet data reports process helped ensure the end of the monthly period only had one week’s worth of data to be reviewed and approved, reducing the time between period end and the invoice issued.
Figure 1: Operating Unit Status for Timesheets
Mpower’s calculations of cost rates resulted in cost calculations that allowed the EPC to compare the value with the price of time and analyze which areas were the most profitable.
Following the weekly timesheet process ensured they had one week from period end to validate, letting them generate an invoice quickly with what they knew was quality data.
Within Mpower, charge rates, which allowed the calculation of the price of time, were defined in line with the schedule of rates agreed with the client.
Figure 3: Labour Charge Rates Dashboard
Using approved and priced timesheets, invoices could be created and reports issued from the single data set entered by a timekeeper or material coordinator. With timesheet data completed in time for the period end, the project team could look forward and react to performance. They now had the time to be proactive.
This blog post provides an overview summary of this case study. For an in-depth look at how this EPC company implemented time writing on their project to get better control of their LEMs data and ultimately accelerate project close and invoicing, watch the Streamline Time Writing & Accelerate Invoicing webinar now.
Looking to learn more about how Mpower Project Controls and Cost Management software helps teams manage volumes of complex cost and performance data across major projects? Contact us or request a demo to get a custom tour of our Mpower software.