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Turner Construction Company: Project Management

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Fina Hanif

on 28 September 2015

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Transcript of Turner Construction Company: Project Management

Turner Construction Company:
Project Management Control System

Project Management, Financial Control and the IOR System
The IOR Updating Process
The value Of the IOR system depends on the quality of the data it contains and the IOR updating process provides the necessary thoroughness
The IOR Cover Letter
Senior Management's View
The majority of the senior team has worked at one time in the Cost (IOR) Department, So they have learned a real respect for the cost end of the business.
The $500,000 Dilemma
The ultimate decision would be made by the TGM, TOM, and project executive.
Turner should release contingency so that keep relationship with owner Kent Square office tower
Company Background and Structure
A Project Executive's View
A Project Manager's View
Andi Muhammad Raihan
Lala Lahiyatul Uyun
Fina Hafnika
Muhammad Andi Setiawan
Rahmi Afida
Parceka Wijaksani
R. Indra Adika

Syndicate 6
Bill Rantanen
"IOR system is more forward-looking than the historical accounting-oriented systems of most of our competitors... The team meetings create overlap knowledge of the job, so that nothing falls through the cracks.. IORs have to be updated regularly."
Kent Square Office Tower - construction project at Philadelphia
Each territory is headed by a territory general manager (GPM).
Decentralized structure:

Group Vice President
Division Executive Vice Presidents

IOR Cover Letter gives territory and corporate management a concise outline of financial position on project.
Focus on changes in the IOR detail form prior report.
IOR Cover Letter
Financial Summary of project earning and volume
Current earning-to cost ratio
Description and schedule of project milestones
Description of contract agreement with owner
Estimated dollar volume of completed project (Explanation of changes)
Discussion of major changes in earnings
Discussion of major changes in Direct & Indirect Costs
Breakdown of Uncommitted dollars (type of Contingencies, Unbought item, etc)
IOR Cover Letter Contents
Evaluation of the overall level of construction contingency holds.
Giving consideration to the type of owner, experience of job staff, type of architect and subcontractors, and state of contract document

IOR Cover Purpose

We produce an IOR for every construction project on a quarterly basis, with six week updates or st least once each month updates informal.
The TFS consolidates IORs on a monthly basis, at every level up the organization all the way to corporate.

Project Executive’s View

Contingency holds and exposure holds.
2,5% of total project costs that serves as a bottom line reserve againts scope change and cost increase.
The holds and the Construction Cotinggency represent uncommitted “buffer” dollar.
Project Executive’s View in Major Risk

Ability to develop and share accurate information with the owner while project progress.
Expert manage their money efficiently
We’ll share all of the IOR cost detail with owners
Financial reports must be updated constantly
Project Executive’s View in Managing The Project

The project is $29 million. The job is 80% complete and our remaining Construction Contingency is $ 511.000 or 1,8% of total job costs. We also have $328.000 in C holds and $ 471.000 in E holds, with five months to completion. We can release $500.000 from the Contingency because the job has been going so smoothly.
Project Executive’s View to bring $500.000 issue
Concerns and consideration
1. Possibility of local strike in one of the trades  Overtime Labor.

2. The architect tends to submit a constant flow of new drawing and specification changes  release of $500.000 Construction Contingency.

3. The owner psychology and motives.
Help to build and maintain good client relationship
Help to determine exactly how the information shared with each client

4. The bottom line, $5000.000 released, Should discuss this with Gary Thompson and few other people beforehand.

Decision Made
1. Produce a final IOR-style cost report that breaks down the whole history of the job in detail and hand it to Gary Thompson.

2. If Gary say YES
The owner would get spending money he is asking for
Turner’s 25% share of the savings would help to offset a loss that has been projected.
Full transcript