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Futura@SAP

Continuous Controlling of Construction Projects Enhances Budget Stability

Wiesbaden, January 2014

The Wiesbaden-based software company Futura Solutions is getting down to business with a continuous controlling program for construction projects / Futura AVA bridges the gap between purchasing and planning with a deep integration into SAP systems.


Stuttgart21, Elbphilharmonie in Hamburg, Berlin-Brandenburg Airport – everywhere the costs of construction projects are running off course. It doesn’t have to be that way: Offering an integrated controlling of construction projects, Futura AVA helps consumers and designers to keep a tight hold of their costs. The highlight of the process: An intense interconnectedness of controlling and SAP.  

Clients are attaching great importance to controlling now more than ever. And they did so well before too much went wrong with spectacular construction projects in which the actual costs differed significantly from the scheduled costs. The Wiesbaden-based software developers address this issue with their market-leading, SAP-integrated AVA-solution: Their solution bridges the gap between the designing and the purchasing agent; thanks to its deep integration into SAP. It also ensures a continuous process, verifiable by every participant department at any time. Thus, for construction departments, controlling has become an established fact instead of an unfulfilled requirement.


Even to this very day, in many cases the process of construction planning and execution works as follows:

  • rudimentary cost estimation, thus incomplete budgeting
  • undocumented changes in planning without a preview of the monetary consequences
  • lacking continuous cost estimation and no constant calculation of profitability or the overall return of the investment
  • incomplete supplementary claim management
  • lacking controlling of all costs in construction projects

Often a continuous, transparent controlling can be challenging when different systems are involved (MS Excel, AVA-programs, SAP, etc.) and many media breaks occur. Furthermore, in many cases controlling provides only a retrospective view on what already happened (coping with the past). An effective control of the costs is seldom possible.    

The consumer defines a project. The budget for the project must be determined and approved. The calculation is usually done with MS Excel. In the specialist departments the designers in charge, possibly with the involvement of external technical planners, create the complex lists of prices and services by using conventional AVA programs. Each list-item must describe the design at length. The negotiations with the tenderers are based on the proposals made for the published specifications.

The first changes in planning occur already during the tendering procedure. The purchasing department intends to negotiate the changes during meetings. From this moment on the proposals made by each tenderer are no longer comparable. Due to the first changes in planning the contractual basis becomes “particular”. Even though minutes of the negotiations are written, the list of prices and services is seldom adjusted. Thus originates the first difference between planning and the current status which leads to the first gap in documentation.  

For the sake of simplicity the package of services is generalized, and a payment schedule for the execution and billing is created. So far so good, but not well done: Once transparency is abandoned, the further execution and controlling can take a disastrous turn. The disadvantages of this procedure are self-evident: A continuous documentation is lacking, transparency gets lost and – above all – the procedure runs past the SAP system. Orders are fixed in AVA and simultaneously they are registered in SAP. For this end the purchasing department gathers only the cumulated order data in order to spare the effort to record every single item of the order.  

Things get critical when changes have to be made which happens regularly in construction projects for many reasons. In the procedure mentioned above there is no supplementary claim management, therefore controlling is lacking transparency. For the sake of simplicity illustrated above, they employ unlimited over fulfillment which thwarts controlling and project management especially. Apart from that, neither AVA nor SAP can depict all costs transparently and continuously. Thus a halfway precise cashflow management planning is nearly impossible.

 

There is a better way.

Thanks to its AVA process integrated in SAP, Futura renders complete controlling possible. That way budget and estimated values can be exchanged between different systems and actual costs can be adjusted. The open items set up in SAP are constantly updated in the process making an integrated cashflow management possible in the first place. Supplementary claim management too ceases to cause problems. Supplementary claims are transmitted to SAP at the push of a button and induce an automatic change of order. A manual correction is dispensed with.  

In other words: Futura AVA not only spares all construction project participants an enormous amount of time – its SAP-integration makes the whole construction planning and handling process more transparent and facilitates thereby a continuous and secure construction project controlling.

         

Advantages of Futura AVA

  • Cost calculation, economic efficiency calculation and calculation of overall return of an investment.
  • Exchange of project structures, estimated values and budget values respectively with SAP.
  • Solicitation of offers at the push of a button online over Futuras supplier portal.
  • Depicting the process of change, supplementary claim management.
  • Users, purchasing agents, examiners and site managers respectively can supervise every single step of the SAP-integrated process in Futura AVA exclusively. This facilitates the handling. There are status feedbacks for monitoring purposes.
  • By embracing the workspaces of the businessman (SAP system) and the construction managers (AVA system) the process integration dispenses with double entries of data and prevents input errors.
  • Activity recordings are to be made by the contractor. Manual input of data or manual imports in SAP and AVA are not necessary. That makes the work much easier and contributes to more safety.
  • The examination process of a work performed takes place online in communication with the contractor. The expenditure of time for examination is considerably reduced.
  • The billing of services is thereby very much simplified, auditing can be dispensed with.
  • Its integrated depiction of all costs makes continuous cashflow management and secured controlling of construction projects possible in the first place.
  

About Futura Solutions  

The Wiesbaden-based company has been developing continuous, cross-departmental software solutions and is running applications for the planning, procurement and billing of construction works and other services since 1997. Futura Solutions software-development focuses on innovative means of improvement regarding the cooperation of procurement and engineering, the junction of suppliers and service providers, and the integration of procurement and billing processes into the SAP system of the clients.

20 percent of the companies listed in DAX30, the most important German stock index, are ranking among the clients of Futura Solutions, in addition many medium-sized enterprises. Over 50.000 people world-wide are using Futura solutions. By now it is available in 7 languages, among them is also Chinese.