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Hi,
My client is a major utility company and for capital construction project they are managing the work in Maximo.
However, they are not capturing any costs in Maximo.. Only planning and estimation part is done in Maximo and then actuals (labor, material ,service) are reported in ERP (Oracle). The actuals that are reported in ERP are not brought in to Maximo and they are reported at higher level which is against the project and not at individual tasks (work orders in Maximo) level.
I am trying to see what do they miss by not having actual captured in Maximo and also by not having actuals reported at detail task level.
I am looking for few points on disadvantages of this approach ?
It depends on how the costs were estimated on the work orders, and how these work orders were contracted. If the majority of work is on fixed-price contracts and the contractors overhead and profit is factored in to the work order budget, then the actual cost in ERP should equal the budget cost in Maximo assuming the contractor is only paid for work orders completed. If the contractor is paid for work in progress, then they will often "front-load" their invoices by increasing the percent complete to cover their cash flow. Smart project management keeps the duration of work orders to be less than a single reporting cycle (1 month) to prevent this, and only pays for work orders completed. The contractor's invoice will typically cover several work orders, so his actual cost for each work order is not as important to the total project. The downside is that no record is available at the work or task level on which to base future estimating.If the work orders are contracted at cost plus overhead and profit, and no actual costs are being recorded at the work order or task level, then there is very limited control of costs except by the accountants at the end of the project. There is no incentive for the contractor to do the work within the estimate or budget. The same is true for work completed by the company's maintenance people and their contracted crafts.
Costs can only be controlled before they are incurred.
Regards,
Grant Utter
From: "hiren2878@yahoo.com [MAXIMO]" <MAXIMO@yahoogroups.com>
To: MAXIMO@yahoogroups.com
Sent: Wednesday, July 20, 2016 4:26 PM
Subject: [MAXIMO List] Actual Costs in Maximo
Hi,
My client is a major utility company and for capital construction project they are managing the work in Maximo.
However, they are not capturing any costs in Maximo.. Only planning and estimation part is done in Maximo and then actuals (labor, material ,service) are reported in ERP (Oracle). The actuals that are reported in ERP are not brought in to Maximo and they are reported at higher level which is against the project and not at individual tasks (work orders in Maximo) level.
I am trying to see what do they miss by not having actual captured in Maximo and also by not having actuals reported at detail task level.
I am looking for few points on disadvantages of this approach ?
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Integration process should be set up between maximo and oracle (B2B) taking in to account business rules...
Consider this... It comes down to with what granularity your client wants control over their costs. If they are happy controlling at the overall project level (not likely or advisable), then stay put. If they want to be able to control at a more granular level, say by craft, by sub-project / sub-contractor, by labor v. materials, then reporting these actual costs in Maximo provides significant value. The key always with a system as powerful as Maximo is to only use it to the level that you want value. Otherwise it eventually becomes a chore to the users and results in a lot of junk data input.