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Project Quoting & Management

Track Your Way to Project Profitability

Solution

VISIBILITY Project Accounting & Management

Solution Benefits

By taking advantage of VISIBILITY’S configuration and product attribute capabilities, the customer was able to:

• Establish budgets and monitor project performance with a clear view of actual costs vs. estimates

• Manage project work break down structure at any level of detail

• Assure tight integration for all project related transactions across the enterprise

Customer Background

A Visibility customer located in the western United States with annual revenues of $500M manufactures large capital equipment for the oil and gas industry. More specifically, they build equipment for refining plants and operate as a major sub contractor for the developer of the entire refining plant. Their core competency is the manufacture of highly engineered products.

Key Challenges

• Complex engineering design changes

• Lengthy pre-proposal design work

• Considerable engineering collaboration

• Inadequate cost capture

• Poor tool sets for analyzing project profitability

Detailed Challenges

The business process begins with the Request-for-Proposal. The preliminary work leading to the proposal generation is considerable and requires the interaction of many departments such as, internal engineering, estimating, sales, design, and production. Together they need to effectively collaborate to generate a substantial, yet cost effective proposal and quote. The project timeframe can be 6-8 months for proposal generation and production may extend beyond a year.

The client’s previous MRP system consisted of traditional standard cost, period-based accounting and did not provide for the administration of costly, complex, multi-year projects. Without improvement on the front end process and accurate collection of project costs, there was little hope for their continued profitable growth.

Solution Details

Project budgets are established immediately during the proposal stage - All departments participate to insure estimates are accurate. Project estimate budgets can easily be converted to live project budgets upon winning the contract. Project history retention adds reusable data that speeds the creation of estimates. This streamlines the entire estimating process.

The integrated data that flows from the VISIBILITY Enterprise system facilitates collaboration - Operationally, all internal departments and contracted resources can easily communicate with one another. They can respond quickly and effectively to the next phase of engineering and production since they now have the right information, at the right time and in the right place. A comprehensive production plan is established with engineering to begin the procurement and fabrication of long lead-time components while design work continues on other elements.

Work Breakdown Structure (WBS) - Using VISIBILITY Project Accounting, the enterprise now develops early estimates, final proposal and working budgets in a WBS that matches the upcoming collection of actual material and labor expenses. The project includes early estimating and design tasks in their WBS providing cost control for these phases as well as for traditional production tracking. Change orders, installation and service are also budgeted. Each Project Manager can develop unique WBS structures or use pre-existing templates.

Time phase management of projects are planned and tracked using Primavera© or Microsoft® Project - The client maintains WBS templates in Microsoft Project and initiates WBS structures via the VISIBILITY Project Link interface. Operating managers download project information into Microsoft Project (including budgets, actual costs and timelines) for portable viewing and operational meetings.

Working budgets are easily revised - Using the project budget loader (Visibility’s linked, pre-formatted Microsoft Excel spreadsheet product), schedule changes developed in Microsoft Project are synchronized into Project Accounting via the VISIBILITY Project Link interface.

The dual bookkeeping aspect of Project Accounting - Using this capability, eliminate the friction between financial accountants who need to prepare period end financial data and project cost accountants who need to track key cost drivers of each project along with comparisons against the budgets.

Clear view of estimate to actual - As work progresses from the design activity into the production phases, through change orders and into the installation and service phases, tracking reports in Project Accounting keeps the estimate-to-actual view in front of the operating managers.

Tight integration throughout the Enterprise - The VISIBILITY ERP system integrates all business functions throughout the enterprise while Project Accounting capabilities dramatically improve project execution and profitability.