Project controlling and project control systems

Project controlling (also known as Cost Engineering) should be established as an independent function in project management. It implements verification and controlling function during the processing of a project in order to reinforce the defined performance and formal goals. The tasks of project controlling are also:

• the creation of infrastructure for the supply of the right information and its update

• the establishment of a way to communicate disparities of project parameters

• the development of project information technology based on an intranet or the determination of a project key performance indicator system (KPI)

• divergence analyses and generation of proposals for potential project regulations

• the establishment of methods to accomplish an appropriate project structure, project workflow organization, project control and governance

• creation of transparency among the project parameters

Fulfillment and implementation of these tasks can be achieved by applying specific methods and instruments of project controlling. The following methods of project controlling can be applied:

• investment analysis

• cost–benefit analysis

• value benefit analysis

• expert surveys

• simulation calculations

• risk-profile analysis

• surcharge calculations

• milestone trend analysis

• cost trend analysis

• target/actual-comparison

Project control is that element of a project that keeps it on track, on-time and within budget. Project control begins early in the project with planning and ends late in the project with post-implementation review, having a thorough involvement of each step in the process. Projects may be audited or reviewed while the project is in progress. Formal audits are generally risk or compliance-based and management will direct the objectives of the audit. An examination may include a comparison of approved project management processes with how the project is actually being managed. Each project should be assessed for the appropriate level of control needed: too much control is too time consuming, too little control is very risky. If project control is not implemented correctly, the cost to the business should be clarified in terms of errors and fixes.

Control systems are needed for cost, risk, quality, communication, time, change, procurement, and human resources. In addition, auditors should consider how important the projects are to the financial statements, how reliant the stakeholders are on controls, and how many controls exist. Auditors should review the development process and procedures for how they are implemented. The process of development and the quality of the final product may also be assessed if needed or requested. A business may want the auditing firm to be involved throughout the process to catch problems earlier on so that they can be fixed more easily. An auditor can serve as a controls consultant as part of the development team or as an independent auditor as part of an audit.

Businesses sometimes use formal systems development processes. These help assure systems are developed successfully. A formal process is more effective in creating strong controls, and auditors should review this process to confirm that it is well designed and is followed in practice. A good formal systems development plan outlines:

• A strategy to align development with the organization's broader objectives

• Standards for new systems

• Project management policies for timing and budgeting

• Procedures describing the process

• Evaluation of quality of change