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Integrated ERP Systems that companies use to capture spent hours and cost, beginning from time sheets all the way to employee payroll and project invoicing are great. And they provide fantastic visibility into how an organization is performing  on a certain project. However, once you have a joint venture with multiple partners forming a special purpose vehicle to undertake a project,getting that data visibility across all partners, to obtain project wide performance visibility; things get complicated. Some of the challenges that I have either experienced or could think of are: - Each partner of a joint venture use their own ERP System (i.e. Oracle, ...
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Managing Black Swans?

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The phrase “science in managing black swans” can be contentious, as there is none yet. I guess it is a statement anticipating a future where the science to successfully predict these events becomes available. The core of any black swan discussion these days is finding a way to identify it by using big data, so that risk managers can manage the risk the moment black swans become known. The intention is practically removing the black swan status.There is great potential for successfully foretelling black swan events through science. We are not there yet, but it is bound to happen. If those unknown events suddenly become visible, known, and predictable ...
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I can almost imagine risk as a hollow trapezoidal solid floating in space while hundreds in attendance (with varying coordinates in space) observe and try to describe it. Each spectator has a different perspective right from the get-go. Unless each one manages to see the other’s perspective, an agreement becomes impossible. For risk-based management to work properly in an organization, management has to be willing to listen. Messengers who bring unwanted but factual news must be appreciated, not placed on a chopping block. The question often thrown on the table is to whom should management listen? How can management be sure they are getting the ...
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The journey of learning risk and how to manage it is most rewarding to the curious thinker. Curiosity generates interest. Interest produces efforts that result in good education. The 2009 PMI Global Practice Standard for Project Risk Management, Chapter 2, Section 2.2 (page 9) defines risk as an uncertain future event or condition that could have a positive or negative effect on objectives if it occurs. In a project environment, the definition goes like this: project risk is an uncertain future event or condition that, if it occurs, could have a positive or negative effect on project objectives. The same line of thinking will be true when one talks about ...
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Definition of estimate

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What is an estimate? A prediction or forecast of the resources (i.e., time, cost, materials, etc) required to achieve or obtain an agreed upon scope (i.e., for an investment, activity, project, etc.) Is that a good definition? Readers, please give your opinion.
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​ One of our own, Mark Nagata, of Trauner Consulting Services Inc. wrote a wonderful and concise Viewpoint featured in the October 23, 2017 ENR. It is a public counter-point to a new ASCE guideline granting time extensions for non-critical delays that occur after required project completion date.  Schedulers of all ilks should find out more on this subject and Mark is one of the best from whom to learn.  Recommended read!
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Depletion of rivers

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California was created 80 years ago via federal and state mandates resulting in an enhanced water supply system for a population of 20 Million citizens in the state.  Today, the state has 40 million citizens.   More information is being generat
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All of us have seen the aftermath of those who defied the traffic sign “Drive slowly! Do not exceed the speed limits" or "Slow down, dangerous curve."   As you drive on the highway, you begin to recognize that many drivers just ignore the speed limit and drive 10, 20, or sometimes 30 kilometers per hour over the limit. Everyone knows that speed kills, and seeing someone traveling above the limit makes us question how any intelligent person can commit such a reckless act. It is the number one way to cause or get into a car accident.  Let’s quickly go to statistics. There are 150,000 collisions, 350 traffic deaths, and 20,000 injuries every year in Alberta, ...
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A good estimator is difficult to find. Not all take-offs can be done by software. To interpret what field condition will apply in what case requires good judgement. Not all pricing can be done by software. To price a unit of complete work requires development of crew. You have to develop a crew find out the prevailing wage for the location. Determine the productivity. Then price the labor element of the unit. The material cost for a unit is not the available market price alone. A unit of material could be a composite of more than one material unit. The equipment cost i.e. the cost of construction equipment required for that unit. It's not enough to know the ...
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Order of Magnitude Estimating - quick tool for budget This paper discusses a very important phase of estimating called conceptual estimate. It's used at the inception phase where the goal is known but physical information is scanty, say 10% design. However a budget number is required by the client to arrange for funds. The quickest method is Order of Magnitude Estimate where the project cost is based on historical data of similar projects based on price per room for hotels, price per bed for hospitals and price per student for schools. The estimate requires good information and good estimator experience. In this paper the author has taken as an example a 200 ...
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When I led a team of estimators I asked my team to take a recess every time I saw that they need one. The day ended after reviewing where we were till then . The next day we started talking about last night's game. Then we returned to the number crunching exercise . When the entire estimate was complete in draft we invited the design team to have a look . This could be the last day so we finalized the estimate , the basis of the estimate and necessary backups . When I was told that the fedex guy has been scheduled, then I made an announcement that the estimate should be placed on my desk and I went home . The last morning with a fresh cup of coffee and a fresh ...
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The world is being depleted of its rivers. What are the causes? What is the remedy? Can we individually and collectively combat this problem ? Join in a conversation . A river is a natural flowing watercourse, usually freshwater, flowing towards an ocean, sea, lake or another river. In some cases a river flows into the ground and becomes dry at the end of its course without reaching another body of water. Small rivers can be referred to using names such as stream, creek, brook, rivulet, and rill. There are no official definitions for the generic term river as applied to geographic features,[1] Rivers are part of the hydrological cycle. Water generally collects ...
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Cost Digest

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Recently there was a tremendous opportunity to learn from one of today’s premier project-control advocates and thought leaders on a topic most project professionals may very well be occupied with on a daily basis.  Lessons from experience have taught this author that every opportunity to hear Chris Carson – Vice President Finance at AACE International and Guild of Project Controls Fellow – speak or present is well worth the investment of time, and this occasion was absolutely no different. In fact, the flawless planning and execution of Shohreh Ghorbani’s vision of greater online, global and immensely valuable training and education made this particular ...
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​When I was a Wet Utilities Superintendent, I wasn’t the best one in the world. Luckily for me, Mike and Gilbert were good foremen; if I could make sure they had something to do, they were pretty good at doing it. The challenge was making sure they had something to do. Our project was a light rail job in Los Angeles County, and as you can imagine our alignment crossed city streets—and the publicly and privately owned utilities they contained—in numerous places. All we needed to do to install a new storm drain line under the railway was make sure we had pipe, a completed design, permits, inspectors (for the client, City, and County) ready to come out, survey ...
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​I just received the feedback forms from my 2017 conference papers...which should mean it's time to take a break.  But as those of you who make a habit of presenting papers know, it's a year-round process.  The first draft of PS-2428 quickly metastasized into something that was not going to fit into one container.  Most writers have a hard time 'murdering their darlings', so I saved this first draft in a file renamed "Manifesto" and put it away for later consumption before excising most of the work to hone in on the updating process. And now I've gone and peeked under the rug at that earlier work and found a few critters scrambling to get out. The liveliest ...
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This blog is provided in reference to the presentation titled Cost Estimate Review Simulation that I provided at the 2017 AACE International Annual Meeting held in Orlando, FL. This presentation was unique in that it involved part presentation, part panel discussion, and part simulation of estimate review scenarios. It was also aided by great audience participation with perceptive questions and attendee comments on similar situations that they have experienced in reviews of cost estimates. During the presentation, I was aided by the panel of Peter Bredehoeft CEP, Bruce Elliott CCP, and Todd Pickett CCP CEP. Please note that the files provided in this blog ...
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​ A few years ago, I returned from the past. This past was not the romanticized version of life at Downton Abbey, but rather a land where nature is raw and unrefined with not many plants or animals, but plenty of fire and ice.  The land is a lot like it was millions of years ago:  geysers, glaciers, moss, lichens, fields of rocks, volcanoes, lava flows and torrential rivers.  Luckily this place is reachable by airplane, only five hours from NYC.  Iceland sits on the Mid-Atlantic Ridge, just south of the Arctic Circle. It was reputedly named Iceland in an effort to persuade Norwegian settlers to adventure to a more “enticing” place optimistically and inaccurately ...
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Best Conference in the World! It was great to see so many passionate members at the Annual Meeting!  I cannot imagine anyone attending who doesn't get excited about the great information.  Thank you all for participating, and thanks especially for those of you sharing your knowledge, skills, and ideas. I met a lot of fascinating people, and loved to see the large Spanish-English bilingual membership. Glen and I had a fun time with our presentation, as did Mark and I.  We thank everyone for the turnout in our sessions, it's always more exciting when the room is full. I would do better in this blog if I knew what a "Meta of the Blog Entry" or a "canonical URL" ...
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