Project Management Cost Control

World's Most Expensive Electricity Just Went Online (Why It Matters) 💡 Remember when a gallon of gas cost 99 cents? Now imagine if one gas station spent 15 years building a "next-generation" pump that made gas cost $50 per gallon. You'd probably have questions. That's basically what just happened with electricity in Georgia. The state spent 15 years and $37 billion building new nuclear power plants that will force every resident to pay an extra $420 on their electric bills each year - forever. Let's break this down in simple terms: 1. What Happened - Georgia decided to build new nuclear plants in 2009 - Promised it would be cheap and quick - Took twice as long as planned - Cost three times more than promised - Now customers are stuck with the bill 2. Why It Matters - Everyone's electric bills going up $35/month - That's double what people were told - No way to opt out or switch providers - Payments continue for decades 3. The Alternatives They Passed Up - Solar power costs 90% less - Wind power costs 90% less - Takes months to build, not decades - No radioactive waste to deal with Here's what makes this important: Imagine if your town was deciding between two roads to the same destination. One takes 15 years to build and costs 10 times more. Which would you choose? That's the energy choice Georgia made, and now everyone has to pay for it. The kicker? For the same money, Georgia could have built enough solar and batteries to power every home in the state—with money left over. Question for readers: Should customers have more say in these decisions? #Energy #ConsumerRights #Utilities #CleanEnergy

𝗪𝗵𝗮𝘁 𝗗𝗼𝗲𝘀 𝗠𝗩𝗣 𝗺𝗲𝗮𝗻 𝗶𝗻 𝘁𝗵𝗲 𝗖𝗼𝗻𝘁𝗲𝘅𝘁 𝗼𝗳 𝗮𝗻 𝗘𝗥𝗣 𝗣𝗿𝗼𝗷𝗲𝗰𝘁? If you are an CEO or CFO implementing a new ERP system you may be worried about the complexity and financial risks. One option is to consider an MVP (Minium Viable Product) Approach. This approach can significantly reduce your risks by focusing the initial deployment on 70% - 80% of core ERP functionality. The emphasis is on ensuring the essential business requirements are delivered in Release 1 followed by the non-essential features as part of subsequent continuous improvement releases. This staged approach offers the following key advantages: 1️⃣ Early validation that the ERP solution will meet the business needs before customizations are introduced. 2️⃣ Reduced licensing costs by only implementing essential functionality. 3️⃣ Shorter implementation time and thereby less business disruption during the transition to the new ERP. 4️⃣ Faster time-to-value as the organization will benefit from the new system sooner. 5️⃣ Lower upfront implementation costs. 𝗞𝗲𝘆𝘀 𝘁𝗼 𝗠𝗩𝗣 𝗦𝘂𝗰𝗰𝗲𝘀𝘀 To make an MVP approach work, you will need: ✅ Unwavering executive commitment. ✅ Business agreement to defer non-critical features. ✅ Detailed planning with your ERP Vendor. ✅ Willingness to leverage pre-built templates and best practices. ✅ Strong change management support. ✅ Laser focus on the “go-live” date through rigorous scope control. 𝗧𝗵𝗲 𝗣𝗮𝘆𝗼𝗳𝗳 By starting with core functionality, you allow users to familiarize themselves with new processes and workflows. This experience provides invaluable insights for future enhancements, enabling more informed decisions about customizations in subsequent releases. 𝗜𝘀 𝗠𝗩𝗣 𝗿𝗶𝗴𝗵𝘁 𝗳𝗼𝗿 𝘆𝗼𝘂? If you're looking to reduce risk, accelerate time-to-value, and gain early user adoption, an MVP approach to ERP implementation deserves serious consideration. It could be the strategy that sets your project up for long-term success. What are your thoughts on MVP for ERP? Have you had experience with an MVP approach? I am keen to hear your pros and cons. #sap #microsoft #netsuite #pronto #infor #ifs #epicor #oracle #syspro

According to S&P Global Market Intelligence, the MENA region remains exposed to growing trade-policy and tariff risks, even though it is not the direct target of most new tariffs. Many companies in the Gulf region still depend heavily on imports from tariff affected markets such as the US, East Europe and China. a dependence that introduces significant structural risk. For instance, the reintroduction of U.S. steel and aluminum tariffs is already reshaping global supply dynamics, impacting Middle Eastern industries that rely on these materials outsourcing. We are witnessing not just rising costs but heightened volatility. Recent Reports from PricePedia highlight that recent geopolitical tensions in the ME region have re-fueled oil and industrial metal price fluctuations, while global supply instability continues to squeeze manufacturers and contractors. Despite this awareness, many organizations across the Middle East have yet to fully adapt their procurement strategies to these evolving conditions.!! The reality is that procurement maturity in the ME region still tends to prioritize immediate cost savings over long term resilience. S&P Global warns that MENA economies closely pegged to the U.S. dollar could face tighter monetary conditions and declining export competitiveness if U.S. tariffs expand further. Meanwhile, construction and infrastructure sectors in the ME already reporting higher material and import costs. So, what can we do? Drawing from international best practice and tailoring it to the Middle Eastern context, 6 key levers emerge for strengthening procurement resilience. First, dual or multi sourcing critical materials to reduce dependency on any single country or supplier. Second, regionalizing supply chains by sourcing or assembling within the Middle East or neighbouring export friendly regions such as Asia and Africa. Third, collaborating closely with R&D teams to introduce material substitution early in design and product development, especially for Gulf manufacturing hubs like Qatar, Saudi Arabia, and the UAE. Fourth, integrating procurement strategy into innovation and industrial transformation programmes to secure long term sourcing at an early stage. Fifth, establishing robust trade risk governance supported by digital monitoring tools and scenario planning to anticipate shocks. finally, adopting pricing models that absorb volatility such as index linked contracts and hedging mechanisms to cushion against rapid swings in raw material and freight costs - Firaz Cassim- MCIPS ,FCIOB, MRICS , MCIArb, MAIQS, CMILT, FCMI

Paying a professional a low fee can lead to several pitfalls, both in terms of the quality of work you receive and the overall relationship with the professional. Here are some key risks: 1. Lower Quality Work: Professionals who are underpaid may not put in the effort, time, or resources required to deliver high-quality work. They might rush through the project, cut corners, or not invest in the necessary tools or training to do the job well. 2. Lack of Motivation - When professionals feel they are being underpaid, their motivation and commitment to the project can decrease. They may prioritise higher-paying clients or projects, leading to delays or subpar work. 3. High Turnover - A professional paid a low fee may be more likely to leave for better opportunities, causing disruptions in your project and requiring you to spend time and resources finding a replacement. 4. Damage to Professional Relationship - Underpayment can lead to resentment and tension between you and the professional. This can harm communication, collaboration, and trust, which are critical for successful outcomes. 5. Limited Availability - Low fees may result in the professional not being readily available for questions, revisions, or ongoing support, as they might need to take on multiple clients to make ends meet. 6. Reduced Creativity and Innovation - Professionals may feel less inclined to go above and beyond, such as offering creative solutions or innovative ideas, if they perceive the compensation as inadequate. 7. Reputation Risk - Paying low fees can signal to other professionals that you undervalue their work, potentially making it difficult to attract high-quality talent in the future. 8. Hidden Costs - If the work delivered is subpar, you may end up incurring additional costs for revisions, corrections, or even hiring another professional to redo the work. 9. Legal and Ethical Concerns - In some cases, paying below-market rates can be seen as exploitative or unethical, which might harm your reputation or even lead to legal issues, particularly if the professional is in a vulnerable position. 10. Missed Deadlines - Professionals juggling multiple low-paying gigs may struggle to meet deadlines, causing delays in your project timeline. Paying professionals a fair rate helps ensure that they are motivated, dedicated, and able to deliver the high-quality work you need. What do you think?

𝐅𝐢𝐧𝐎𝐩𝐬 𝐟𝐨𝐫 𝐄𝐑𝐏 𝐎𝐩𝐭𝐢𝐦𝐢𝐳𝐚𝐭𝐢𝐨𝐧: 𝐃𝐫𝐢𝐯𝐢𝐧𝐠 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐄𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐜𝐲 𝐢𝐧 𝐂𝐥𝐨𝐮𝐝 𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐬 FinOps is reshaping how organizations manage ERP systems in the cloud, bridging IT, finance, and business teams to enhance cloud spending accountability and optimize costs. By applying FinOps to ERP environments, organizations can gain visibility, reduce waste, and align financial outcomes with strategic objectives. 🔑 𝐊𝐞𝐲 𝐅𝐢𝐧𝐎𝐩𝐬 𝐀𝐩𝐩𝐫𝐨𝐚𝐜𝐡𝐞𝐬 𝐟𝐨𝐫 𝐄𝐑𝐏 📋 Analyzing ERP Cloud Usage: - Inventory all ERP-related cloud services to uncover redundancies - Identify underutilized licenses and services to eliminate waste - Optimize resource usage to maximize return on investment 📊 ERP Cloud Spending Analysis: - Review cloud spending trends to detect patterns and anomalies - Evaluate high-cost services for performance vs. cost trade-offs - Categorize spending by department for better accountability 📈 Key ERP FinOps KPIs: - License Utilization Rate: Measures cloud license efficiency - ERP Cloud Spend per Active User: Tracks cost-effectiveness per user - Underutilized Service Rate: Identifies unproductive expenses - SaaS Spend Growth for ERP: Monitors month-over-month increases 🛠 𝐓𝐡𝐞 𝐏𝐚𝐭𝐡 𝐅𝐨𝐫𝐰𝐚𝐫𝐝 Integrating FinOps with ERP is essential for organizations aiming to balance financial efficiency with operational excellence. By adopting these practices, companies can achieve better visibility, accountability, and cost optimization across their ERP landscapes. What’s your biggest challenge in managing ERP cloud costs? Let us know in the comments! #FinOps #ERPOptimization #CloudFinance #CostEfficiency #SaaS

“We budgeted for an ERP at $500K. We’re at $850K now, and it’s still not live.” A CFO told me this recently. And unfortunately, it’s not the first time I’ve heard this story. ERP projects rarely fail because of technology. They fail because of decisions made (or not made) before the system even goes live. 💸 Where does the budget spiral out of control? 🔴 Scope Creep: "Can we also add this?" "What if the system could do that?" A few ‘small’ changes here and there, and suddenly, you're paying for customizations you never planned for. 🔴 Poor Planning: The team underestimated how much time and effort ERP implementation takes. Now, they’re hiring extra resources, delaying timelines, and paying for extended vendor hours. 🔴 Vendor Misalignment: The ERP provider is focused on selling licenses. The implementation partner is focused on going live. But who’s making sure the system actually works for your business? By the time businesses realize this, they’re too deep into the project to turn back. The best way to avoid budget overruns? 💡 Have someone who keeps the project in check from Day 1. Someone who: ✅ Locks the project scope before it gets out of hand. ✅ Ensures planning is realistic, not just optimistic. ✅ Aligns vendors with your business goals—not theirs. 📌 Most ERP projects don’t fail in implementation. They fail in decision-making. ♻️ We, at Affility Consulting, are a team of independent ERP advisors with the expertise and experience to support you through digital and business transformation. 💬 Have you seen ERP budgets spiral out of control? What went wrong? Let’s talk.

Energy Islands in Denmark: An Economic Disaster in Slow Motion   Last week, Denmark’s two energy island projects, North Sea and Bornholm, were once again deemed uneconomical. Now, with Germany showing interest, the projects are further confirmed as potential disasters.   Previously, I reported that the North Sea energy island had been postponed by at least three years after Belgium withdrew its interest in the project. The Danish Minister of Climate Lars Aagaard informed the press that Denmark would now seek to involve Germany as a co-investor.   On Friday, the Danish business media outlet Børsen released statements from the German Federal Ministry for Economic Affairs and Climate Action. According to the ministry, Germany has a strong interest in the project, and it fits well into the future German energy transition.   The German ministry cited Denmark’s other energy island project at Bornholm as an example of why such a partnership could be beneficial. However, this is where the problems begin, as Energy Island Bornholm is already known as an economic disaster in its own right.   A senior economist Frederik Læssøe Nielsen at Kraka Economics called it "window-dressing" to suggest that there is a realistic chance of Germany covering the expected billion-dollar deficit from the North Sea Energy Island. Why would they do so when the Belgians have already backed out?   Earlier this week, the well-renowned think tank Kraka Economics published a report titled "Energy Island Bornholm: An Economic Disaster in Slow Motion." Kraka also criticized the North Sea project back in 2021, recommending that the government should pull the plug.   The Danish Energy Agency has estimated that Energy Island Bornholm will require around $5 billion in state aid to become a reality, while Energy Island North Sea will need $7.5 billion. This brings the total state aid requirement for the energy islands to $12.5 billion.   Denmark has already poured several billion dollars into renewable energy over the last two decades. Between 2000 and 2023, renewable energy received $16.5 billion in state aid. From 2024 to 2035, an additional $7.5 billion will be provided in state aid for renewables, bringing the total to $24 billion.   Considering the existing state aid, the energy islands will bring the total state aid for renewables in Denmark to $36.5 billion since 2000.   At the same time, there is no longer a financial incentive to build offshore wind farms in Denmark. Earlier this year, PwC Danmark released a report stating that costs have risen by 30-40% since 2021, making offshore projects unprofitable for investors.   Where does this leave us? 1. The Energy Islands will require billions in state aid.   2. Germany is unlikely to agree to cover the costs of the North Sea Energy Island.   3. Offshore wind has already received billions in state aid, but is still unable to deliver on market terms.

The tariff storm is here. And if it’s not on your risk register yet—add it now. - Supply chains are shaking. - Material prices are increasing. - Budgets are getting squeezed. Looks like we have an escalating trade war on our hands... 📈 Steel & aluminum up 10-25% ⚡ Electrical & HVAC costs jumping 15%+ 🛑 Labor shortages driving wages higher Is your project protected? If you’re not prepared, you’re at risk of unnecessary budget overruns, supply chain issues, and profit loss. That's why I put together a free Tariff Preparedness Checklist—so you can: ✅ Assess your risk exposure ✅ Identify contract gaps ✅ Communicate better with stakeholders Here are the 9 contract provisions you must review immediately: 1. Material Price Escalation ↳ Check if your contract allows price adjustments for rising material costs due to tariffs. 2. Changes in Laws & Regulations ↳ Look how your contract accounts for cost or schedule adjustments when new tariffs or laws impact the project. 3. Delays & Force Majeure ↳ Verify if tariffs and supply chain disruptions qualify as excusable delays under your contract. 4. Change Orders for Tariff-Related Impacts ↳ Confirm whether you can request additional time or money for unexpected tariff costs. 5. Preservation of Rights for Additional Remedies ↳ Know the deadlines and documentation required to claim compensation for tariff-related expenses. 6. Contingency ↳ Determine if contingency funds can be used to offset increased material costs from tariffs. 7. Insurance & Bonds ↳ Check if your contract requires additional insurance or bonding to cover tariff-related cost fluctuations. 8. Termination & Suspension Rights ↳ Understand if you have the right to pause or cancel work if tariffs significantly impact costs or schedules. 9. Dispute Resolution ↳ Study the process (mediation, arbitration, or litigation) for handling tariff-related cost disputes. This is how you protect your project from tariff risks. Most won’t prepare. The ones who do will turn risk into opportunity. I compiled everything I know—compliance tips, risk strategies, and safeguard resources—into a short guide for project managers. It just went out to 6,400+ project leaders in my newsletter. Inside, I break down: - Why these risks matter - What to watch for in your contracts - How to safeguard your project today And more... Don’t wait for tariffs to impact your bottom line. 📩 Grab the checklist here: [Link in comments] How are tariffs affecting your projects? What are you seeing out there? Let’s talk. 👇

🚀 Tracking Physical Progress and Costs in Primavera P6 for a High-Stakes Fast-Track Project Managing a fast-track project presents a major challenge: keeping progress and costs under control without having the full engineering package finalized. In these cases, precise tracking in Primavera P6 is essential to mitigate cost overruns and schedule slippages. Here’s how to execute it effectively, along with the key personnel responsible for each phase. ✅ 1. Structuring the WBS and Planning in a High-Uncertainty Environment 📌 Responsible: Project Planner / Project Controls 📌 Develop a Work Breakdown Structure (WBS) with a modular and adaptable approach. 📌 Utilize placeholder activities to account for pending design releases. 📌 Implement smart activity coding to differentiate engineering, procurement, and construction (EPC) phases. ✅ 2. Measuring Physical Progress with an Evolving Engineering Scope 📌 Responsible: Project Planner / Site Supervisor 📌 Select the most appropriate progress measurement methodology: 🔹 Physical % Complete for tangible construction activities. 🔹 Units % Complete for resource-intensive operations. 🔹 Weighted Steps for multi-deliverable work packages. 📌 The engineering team must update deliverables based on actual site progress. 📌 With an incomplete design, progress tracking must be dynamically recalculated as new engineering packages are released. ✅ 3. Cost Tracking in a Constantly Evolving Scope 📌 Responsible: Cost Controller / Finance Team 📌 Implement Earned Value Management (EVM) with adjustable cost assumptions. 📌 Maintain a parallel control system comparing budgeted vs. actual costs per work package. 📌 Key Performance Indicators (KPIs): 🔹 CPI (Cost Performance Index): Measures cost efficiency. 🔹 SPI (Schedule Performance Index): Assesses schedule adherence. 🔹 TCPI (To-Complete Performance Index): Predicts future cost deviations. ✅ 4. Real-Time Data Tracking with Dynamic Reporting Tools 📌 Responsible: Project Planner / Data Analyst / IT Support 📌 Integrate Primavera P6 with Power BI to generate real-time dashboards. 📌 Leverage “What-If” scenario analysis in P6 to anticipate design-related delays. 📌 Develop dynamic Excel-based reports with macros for cost forecasting adjustments. 💡 Conclusion: In a high-stakes fast-track project, the key to success lies in flexible planning and real-time data-driven decision-making. Applying these strategies in Primavera P6 enables project teams to stay ahead of risks and maintain cost control. 🔹 How do you manage control in high-uncertainty projects? Share your insights in the comments! #ProjectManagement #ProgramManagement #ConstructionPlanning #EngineeringManagement #PMO #PMP #PMI #ProjectControls #EPCM #PlanningEngineer #FastTrackProjects #CostControl #RiskManagement #KPI #ScheduleTracking #BudgetManagement #PerformanceMonitoring #EPCProjects #ConstructionManagement #HeavyCivilEngineering #InfrastructureProjects #MegaProjects #OilAndGas

Your CRO is profitable on your study. Nothing to be angry about. That is actually good news! What happens when you push CROs to break-even margins:  - You get their C-team while A-team works on profitable accounts  - You get standard solutions instead of creative problem-solving - You get reactive service instead of proactive management  - You get rigid contract compliance instead of partnership flexibility What CRO profitability actually buys you:  - Senior staff who aren't constantly job hunting  - Buffer for unexpected challenges without immediate change orders  - Proactive thinking instead of reactive firefighting  - Partnership mentality instead of vendor behavior The counterintuitive truth: Profitable CROs deliver better value because they can afford to invest in your success. The race-to-the-bottom pricing hurts everyone. You get worse service, and good CROs stop competing for small pharma business. The smart approach should be to pay fair prices to profitable CROs and get partnership-level service. If you pay minimum prices to desperate CROs, you get exactly what you paid for. Your CRO's success enables your success. How do you balance cost control with ensuring your CRO can deliver quality service? Share your approach to fair pricing. #CROPartnership #SmallPharma #ClinicalTrials #Pricing #Value