What is Project Controlling? Definition and meaning
Project controlling is an element of project management that is responsible for the monitoring of the project process and for ensuring the achievement of the project goal.
It is based on the recording of target and actual states, as well as analyses and evaluations of possible deviations. It also ensures the correct execution of the project.
The foundation of project controlling lies in traceable, transparent planning. The criteria of time, resources and results play an important role here. Key figures, such as costs, should always be recorded promptly and clearly assigned to a cost centre, so that project costs can ultimately be traced without ambiguity.
With the help of the Gantt chart, network diagram technique or other analysis methods, effective controlling can be achieved.
Tasks and objectives of project controlling
Project controlling pursues one overarching objective: to guide the project to success within the planned framework of time, costs and performance. To achieve this objective, it takes on several tasks throughout the entire course of the project.
- Setting planned values: Deadlines, budgets and results are defined as measurable target figures at the start of the project.
- Recording actual values: Effort, costs and progress are documented continuously and promptly.
- Identifying deviations: Comparing plan and actual reveals deviations in schedule, budget and performance at an early stage.
- Analysing causes: For every relevant deviation, the reason behind it is investigated.
- Initiating countermeasures: Based on the analysis, corrections are triggered so that the project stays on course.
- Creating transparency: Clients, project management and the team gain a traceable overview of the project status.
Effective project controlling is therefore less a matter of pure after-the-fact review than of continuous steering that accompanies the project throughout its entire duration.
The target-actual comparison as the core of project controlling
At the heart of every instance of project controlling lies the target-actual comparison. Here, the values planned at the start of the project (target) are set against the values actually achieved (actual). Three dimensions above all are compared: progress against the schedule, the costs incurred against the budget, and the performance delivered against the planned result.
This comparison produces deviations, which project controlling assesses and classifies. A positive deviation can point to reserves, a negative one to imminent schedule or budget overruns. What matters is that the actual values are available promptly, because only then can countermeasures be initiated while they still have an effect.
Key figures in project controlling
Key figures make the project status objective and comparable. They condense the recorded data into values from which project success can be read. Particularly meaningful are:
- Planned and actual costs: Comparing planned and actually incurred costs shows whether the budget is being kept.
- Contribution margin: The contribution margin indicates the amount that, after deducting variable costs, contributes to covering fixed costs and to the result, thereby making the profitability of a project visible.
- Earned value: The earned value assesses the performance progress actually delivered in monetary units. The earned value analysis combines the schedule, cost and performance perspectives in a shared view.
- Schedule adherence: Comparing planned and achieved milestones shows whether the project is on schedule.
It is important that key figures are not considered in isolation. Only in their interplay and over time do they provide a reliable picture of the state of a project.
Operational and strategic project controlling
Project controlling can be divided into an operational and a strategic level. Both complement each other and look at the project from different perspectives.
Operational project controlling steers the ongoing project. It works with short-term target-actual comparisons of time, costs and results and ensures that the project stays within the given framework. Its time horizon is the individual project and its duration.
Strategic project controlling looks beyond the individual project. It asks what long-term value contribution a project delivers and how well it fits the overarching company objectives. In doing so, it supports the selection and prioritisation of projects and bridges to the general controlling of the company.