Case Study

Cost Reduction & Performance Improvement Aiken Group Case Study

Gareth James (IT Manager)

Agenda
Introduction to Aiken Group Pains / Problems faced by Aiken Group Solution outline what was used to address the pains / problems Reasons to select the specific solution How is HD Job Costing being used Benefits gained from using solution

Who are we
Aiken Group is a leading provider of construction, engineering, maintenance and project management services within the Oil and Gas Industries. Aiken Group recognized that investing in a fully integrated Project Cost Management system would strengthen their competitive advantage to respond and report to customers. This case study will explain how HD Cost Management and Primavera were implemented and used by Aiken Group to provide dynamic data integration and project cost controls throughout its worldwide operations resulting in - improved accuracy and response time to customer pricing queries ,improved performance & profitability, real time estimation & scheduling integration to accurately model cash flow and Earned Value Reporting, real time production control and productivity reporting, greater project portfolio visibility and reporting to project and senior management regionally & globally.

Aiken Group
Over the past 22 years the Aiken Group has evolved to become an international engineering and specialist group. Aiken Groups premises occupy 10,000ft2 of office space and 30,000ft2 of warehouse facilities. Yard storage at Marywell Training facility

OFFSHORE SURVEYS CONCEPTUAL STUDIES

DETAILED DESIGN / FEED STUDIES 3D DESIGNS

ENGINEERING PROCUREMENT CONSTRUCTION

ARCHITECTURAL UPGRADES

PRECOMMISSIONING & COMMISSIONING

HAND-OVER TO OPERATIONS

MAINTENANCE
FACILITIES MANAGEMENT

Divisions

Aiken Group Architectural Services

Aiken Group can provide the full range of services required for the successful design and realisation of new builds, upgrades, modifications and the refurbishment of living quarters and associated facilities.
Service provision covers: Offshore Surveys Conceptual studies FEED (Front-End Engineering Design) studies Detailed design 3D graphics Engineering, procurement and construction Project management Construction support engineering and labour

Situation
As we started to grow Aiken Group determined that it needed to change the way that it handled many aspects of its business, especially in the area of project management. The processes used at Aiken Group varied widely, based on the preferences and habits of the individuals who worked in individual departments. We wanted to establish consistent processes across the organisation so that our clients could experience the same service and success regardless of where the consultants and groups they worked with were located,

Pains / Problems faced by Aiken Group

Costs associated with quoting
Our architectural department had recently quoted for 6 new similar jobs over a 2 month period and we calculated that the average cost for each of these quotes was 80K per quote

Time and resources used by quoting process

Our engineers were having to work overtime just keep up with the number quotes going out

Multiple sources of information

Each quote or actual job had multiple MS Excel spreadsheets usually split over different engineering disciplines, with each discipline using different methodologies and different spreadsheets

 Both Primavera and MS Project

Because of our place in the supply chain our client usually dictates which Project Planning tool we use, this makes portfolio management difficult across different jobs.

No Knowledge capture
We where unable to reuse prior quotes or jobs easily, with information being hidden away inside a spreadsheet somewhere

Inconsistent quoting methods

Different departments use different Project Management Methodologies, we needed something that could cope with this.

 Difficult to analyse profitability across divisions / no portfolio analysis

We were relying on our accounts information to let us know what was happening with our projects and this was coming in after the fact.

Unable to track hidden costs

With large amounts of costs being put to general overhead it was impossible to look at the direct costs associated with a job.

Poor Project Planning and Management

Frequently Project plans werent even being create unless a client asked for one, the justification being used its only a small job we dont need to

Selection Criteria
Proven Solution ROI Flexibility to integrate into how we work Work within multiple methodologies Work with both Primavera and MS Project Software Architecture User Interface Planning integration Closed Loop Scalability Deployment / Support

Solutions
Benchmarked against our competitors Reviewed marketplace Developed our own systems Reviewed marketplace again
HD Cost Management

Implementation
Installation
Remotely installed on our already virtualised server infrastructure

Training
An implementation team was selected and in-depth training given from both HD and Milestone. Training is now being given to each department aligned with roll out plan also now utilising our new training facility.

Integration
With all backend systems, Primavera, MS Project Server, SharePoint, Accounts

Rollout status
Now all our major departments have started using HD Job Costing. All new quotes are being carried out in HD Job costing, we are now running 2 large jobs using HD Job Costing

Training roll-out via IC Training

Project Lifecycle

User Interface

Price Breakdown Structure

Price Breakdown Structure

PBS
Indirect Cost Markup Target Profit Direct Cost Markup Business Overhead Indirect Costs Job Overhead
The purpose of the Price Breakdown Structure (PBS) is to analyze and Target Profit is a summary finalize your Target Price of byDirect and Indirect Cost adding profit.

Markup on which the Proposed Profit can be based.

Bid Costs are a summary of Direct and Indirect Cost.

Target Price Bid Costs

Cost Items with no Pay Item The Target Price is a Assignment. They represent Costs summary of Bid overhead costs that are not directly related to the and Target Profit on completion of a Pay Item. Costs that have a direct relationship to the completion of Pay Items. Cost Items with a Pay Item Assignment are considered Direct Cost.

which the Proposed Price can be based.

Direct Costs

Cost Breakdown Structure

Benefits
Aiken Group has found that its new technology solutions help it achieve its goals of increased productivity, improved client service, and decreased costs. Change takes time, but our efforts are already making people better at their individual jobs, says Danny Donald Aiken Group MD. Were using HD Job Costing to give people information, achieve greater accountability, and positively change employee behaviour over time, all of which improve our ability to serve our clients.