THE JOURNAL OF AACE® INTERNATIONAL -

COST
TM
THE AUTHORITY FOR TOTAL COST MANAGEMENT

October 2011

ENGINEERING [Link]

PRESIDENT’S
MESSAGE
LEVERAGING PAST
SUCCESSES IN
DEVELOPING A
STUDENT
SECTION THE AACE
SPECIAL FOCUS INTERNATIONAL
WHAT CAN BULLETIN
GUIDE DOGS SECTION NEWS
TEACH MENTORS FROM AROUND
AND THEIR PARTNERS? THE WORLD

COST ENGINEERING
Maturity Model (CEMM)
 CONTENTS

COST ENGINEERING

TECHNICAL ARTICLES
13 Cost Engineering Maturity Model (CEMM)
H. Lance Stephenson, CCC
“Many companies have sought to enhance the performance of their project controls
organization and systems to provide management with more predictable and reliable results in
support of their project decision-making processes [5].” It has been found that little success has
been accomplished for many of those organizations who have attempted to improve those key
elements of Total Cost Management. The Cost Engineering Maturity Model (CEMM), as intro-
duced in this article, is a methodology to support the improvement and development of an in-
tegrated Total Cost Management standard. The Cost Engineering Maturity Model (CEMM)
provides the project team and organization with a complete understanding of their enterprise
capabilities and processes in comparison to industry standards, best practices, and cultural
norms. The CEMM will substantiate the technical adherence to Total Cost Management and pro-
vide organizations with an effective tool for developing or enhancing the project controls systems
(people, processes, and tools) and asset management (life cycle) delivery within the company.
The AACE International Total Cost Management (TCM) Framework, complimented with Hammer
and Company’s Process and Enterprise Maturity Model (PEMM™), will be used as the benchmark
for applying the appropriate level of maturity required for asset development, management,
and project delivery success. This article will provide readers with an understanding of the Cost
Engineering Maturity Model (CEMM) for the purpose of assisting organizations in establishing a
leading position in Total Cost Management effectiveness and delivery. This article was presented
at the 55th AACE Annual Meeting, June 19-22, 2011, at Anaheim, Calif., as presentation
OWN.802.

COST ENGINEERING OCTOBER 2011 1

 CONTENTS

COST ENGINEERING

DEPARTMENTS
5 President’s Message 40 In Memoriam
Leveraging Past Successes in Remembering Lawrence J. Bloch, CCE
Developing a Student Section
43 Article Reprints
8 Women in and Permissions
Project Controls Sharing our Articles and Experience
Spotlight on Bunmi Osazuwa

10 Special Focus 44 Calendar of Events

AACE International Events and More
What Can Guide Dogs Teach
Mentors and Their Partners?

38 The AACE
International Bulletin
Section News from Around the World

ALSO FEATURED
4 AACE International Board of Directors 37 Index to Advertisers
4 Cost Engineering Journal Information 42 AACE’s 2012 Annual Meeting
37 Professional Services Directory

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2 COST ENGINEERING OCTOBER 2011

 y

We
We invite you
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to apply on our website
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 CONTENTS
AACE INTERNATIONAL
BOARD OF DIRECTORS
PRESIDENT
M chae R. Nosb sch, CCC PSP
COST ENGINEERING Established 1958
562.733.2472 / pres dent@aace .org Vo 53, No 0/Oc obe 20

PRESIDENT-ELECT Managing Editor Marvin Gelhausen

mge hausen@aace .org
Mar ene Hyde, CCE EVP
303.940.3200 / prese ect@aace .org Art Director Noah Kinderknecht
nk nderknecht@aace .org
PAST PRESIDENT
Stephen O. Revay, CCC CFCC Advertising Sales Mark Stout
403.777.4900 / pastpres@aace .org Network Med a Partners Inc.
410.584.1966 fax - 410.584.8359
VICE PRESIDENT-ADMINISTRATION mstout@networkmed [Link]
Mart n Dar ey, CCC FRICS
713.372.2426 / vpadm n@aace .org HEADQUARTERS
1265 Suncrest Towne Centre Dr
VICE PRESIDENT-FINANCE Morgantown, WV 26505 1876
800 858 COST fax 304 291 5728
John J. C ccare , PE CCE PSP
609.497.2285 / vpf nance@aace .org TM
AACE® International - The Authority for Total Cost Management
VICE PRESIDENT-TEC
George Whyte, CCC CEP EVP
OUR VISION - To be the recogn zed techn ca author ty n cost and schedu e management
301.957.7434 /vptec@aace .org
for programs, projects, products, assets, and serv ces.
VICE PRESIDENT-REGIONS
OUR MISSION - The members of AACE® enab e organ zat ons around the wor d to ach eve
Ju e Owen, CCC PSP
th er nvestment expectat ons by manag ng and contro ng projects, programs, and port-
213.922.7313 / vpreg ons@aace .org
fo os; we create va ue by advanc ng techn ca know edge and profess ona deve opment.
DIRECTOR-REGION 1
Cost  Engineering  ( SSN 0274-9696/ ) s pub s ed mo y by AACE e a o a, c, 209 a e Ave , Su e 00,
G nette Basak, [Link]. FAACE
Mo ga ow , WV 2650 USA e od ca s pos age pa d a Mo ga ow , WV, a d a add o a ma g off ce POSTMASTER:
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Send address changes to AACE International; 209 Prairie Ave., Suite 100, Morgantown, WV 26501 USA. Customer #7012359
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John C. L vengood, CFCC PSP spec a se s ava ab e o AACE membe s o y Subsc p o a es U ed S a es, US$72/yea ; a o e cou es, US$9 /yea
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AACE e a o a, c A g s ese ved T s pub ca o o a y pa e eof may o be ep oduced a y fo m w ou
DIRECTOR-REGION 3 w e pe m ss o f om e pub s e AACE assumes o espo s b y fo s a eme s a d op o s adva ced by e
James H. Carson, CCC CEP co bu o s o s pub ca o s V ews exp essed by em o e ed o do o ecessa y ep ese e off c a pos o of Cost
770.444.9799 / d rreg on3@aace .org Engineering, s s aff, o AACE e a o a, c Printed in York, PA, USA. Cost Engineering s a efe eed ou a A ec ca
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DIRECTOR-REGION 4 gu de es a www aace o g a d subm a 200 wo d o ess abs ac o ed o @aace o g PHOTOCOPY PERMISSION
Duane R. Meyer, PE CCE Au o za o o p o ocopy a c es e e fo e a o pe so a use, o e e a o pe so a use of spec f c c e s, s
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Rosewood D ve, Da ve s, MA 0 923 USA Te ep o e 978 750 8400 o ose o ga za o s a ave bee g a ed a
DIRECTOR-REGION 5 p o ocopy ce se by CCC, a sepa a e sys em of payme as bee a a ged T e fee code fo use s of e a sac o a
Ear J. Seabrook, III, CCC epo g se v ce s SSN-0274-9696/02 US$4 00 ayme s ou d be se d ec y o CCC Copy g fo o e a pe so a o
e a efe e ce use w ou e exp ess pe m ss o of AACE s p o b ed E-ma eques s fo p o ocopy pe m ss o o bu k
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DIRECTOR-REGION 6
a es Adve se s a d adve s g age c es assume ab y fo a co e ( c ud g ex , ep ese a o , a d us a o s) of
N cho as Ke er, CCC EVP PSP
adve seme s p ed a d a so assume espo s b y fo a y c a ms a s g e ef om made aga s e pub s e T e
d rreg on6@aace .org
pub s e ese ves e g o e ec a y adve s g a s o co s de ed keep g w e pub ca o ’s m ss o a d
s a da ds T e pub s e ese ves e g o p ace e wo d advertisement w copy w c , e pub s e ’s op o ,
DIRECTOR-REGION 7 esemb es ed o a ma e A adve s g accep ed fo pub ca o Cost Engineering  s m ed o sub ec s a d ec y e a e
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+971 50.631.4830 / d rreg on7@aace .org Cos E g ee g mus be ece ved a eas 8 weeks adva ce of e ssue da e Se d o Ed o , 265 Su c es Tow e Ce e
D , Mo ga ow , WV 26505- 876 USA Dead es do o app y o ec ca pape s
DIRECTOR-REGION 8
Ke th Webb
+61.8.93485045 / d rreg on8@aace .org Policy Concerning Published Columns, Features, and Articles
V ewpo nts expressed n co umns, features, and art c es pub shed n Cost Eng neer ng ourna are so e y those
EXECUTIVE DIRECTOR of the authors and do not represent an off c a pos t on of AACE nternat ona AACE nternat ona s not en
Denn s G. Stork dors ng or sponsor ng the author’s work A content s presented so e y for nformat ona purposes Co umns,
304.296.8444 / dstork@aace .org features, and a t c es not des gnated as Techn ca Art c es are not sub ect to the peer rev ew process

4 COST ENGINEERING OCTOBER 2011

 PRESIDENT’S MESSAGE

LEVERAGING PAST
SUCCESSES IN
DEVELOPING
A
STUDENT
SECTION

M
ny dinner meeting with members of the Michael R. Nosbisch, CCC PSP, President
Atlanta Area Section this past month
went very well. In addition to Chris
it, Albert explained that the Atlanta Area Section has about
Schamel and Mark Cundiff from the
seven years of experience in organizing and maintaining the
Section ’s Board of Directors, the meet-
SPSU Student Section. The effort started around 2004, when he
ing was also attended by AACE Past
(as then Section President) and former Region 3 Director Mike
President Bill Kraus, President - Elect Marlene Hyde, and Region
3 Director Jay Carson. Pritchett went to meet with the chair person of the Construc-
One topic of discussion centered on the success the section tion Management Department. It took them a while to get the
has had in developing a student section at Southern Polytechnic student section set up and running, and Albert stressed that
State University (SPSU), which is located just northwest of At- patience, persistence, dedication, and encouragement were all
lanta in Marietta, GA. For those that don’t realize it, AACE has keys to their ultimate success.
not had a great track record in this area over the past several Albert went on to note that Richard Caines is the current
years, so I was definitely interested in learning more about how SPSU Student Section President, and he has really done a great
this section had been able to succeed where others seemingly job in that capacity. In addition to Albert and Bill Kraus, (cur-
have not. rently the Atlanta Area Section’s Communication Director),
Not too long after the dinner meeting, I received a warm Rendy Tendean has also persistently supported and maintained
email from the Atlanta Area Section’s current President, Albert the SPSU Student Section. Knowing this definitely makes me
Kwong, who unfortunately was not able to attend in person. In feel that appointing Rendy as the next Chair of the Diversity

COST ENGINEERING OCTOBER 2011 5

 Task Force was the right decision—thanks to VP - Regions Julie • Local section continued participation;
Owen for recognizing this before I did. • Maintaining a student section; and
In addition to the above information, Albert attached a • Long term planning.
document that he and Rendy have collaborated on – “A Best
Practice for Establishing and Organizing a Student Section.” Albert closed his e-mail by stating that he and the rest of
Since they would like to present it in San Antonio next year I the Atlanta Area Section would definitely be willing to person-
don’t want to give too much away here, but it addresses the ally share their experiences in developing a student section, so
following topics in detail: I’m helping him get that invitation out to rest of the Association
in advance of next year’s Annual Meeting. I definitely encour-
• Establishing a student section; age you to take him up on his generous offer, and please copy
• The first meeting; me when you do at president@[Link]. Good luck! ◆
• Establish[ing] the student section board;
• Student section charter;
EDITOR’S NOTE: To engage n other d scuss ons, check out AACE
Internat ona ’s On ne Forums at [Link] .org/forums.

What is the difference between

reviewing your P6 schedule and
reviewing your P6 XER file?

Everything

See more at
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Interfaces Directly with Database

Hundreds of Reports & Analyses
Advanced Longest Path Analysis
Built-in Report & Editing Facility
Drill-down from Dashboard to P6

6 COST ENGINEERING OCTOBER 2011

 WOMEN IN PROJECT CONTROLS

SPOTLIGHT ON

BUNMI
OSAZUWA
Julie Owen, CCC PSP

B
unmi Osazuwa was born in Northern Nigeria The best thing you can do for
to a father who was a military officer, her
mother was a nurse. Of all her childhood your career and yourself is to be
memories one that stands out above others
was a road tour she went on as a teenager, to a member of a relevant profes-
see the devastation caused to the eastern re-
gion by the Biafra war. The experience awakened in her a pas-
sional association. You will learn
sion to re-build societies. Her childhood was characterized by
a lot of moving and travelling which helped to develop her abil-
and make life-long professional
ity to easily connect with people of all backgrounds and cul- connections that will serve you
tures.
Bunmi’s education spans three continents; she obtained well throughout your career life.
a higher diploma in quantity surveying from the college of en-
vironmental sciences, a diploma in surveying from the College of construction, planning and scheduling.
of Estate Management, she took her APC (assessment of pro- In 1988, Bunmi decided to leave Nigeria for Zimbabwe
fessional competence) and became a Chartered Quantity Sur- where she was employed as a senior quantity surveyor on a
veyor in 1997, she joined AACE international in 1998. During three year contract working mainly on defense, justice and
high school she worked at her uncle’s construction company health projects. She managed and analyzed project require-
in Nigeria, and was intrigued by the work of the quantity sur- ments, prepared control budgets and tender documents. She
veyor. Moreover her parents did not encourage her desire to performed cost and financial risk management from feasibility
be an engineer because it was perceived as a male domain and stage through close-out of projects. Her next move took her
female engineers did not “find husbands.” to Botswana where she was employed for six years as an ex-
Her first job after graduating was with the Nigeria Army patriate chief technical officer in the project controls (quantity
Corp of Engineers where she was exposed to blue prints and surveying) division. She managed, trained and mentored local
on-site measurement, including facilities assessment of mili- staff, worked on more multi-million dollar construction proj-
tary buildings and preparing schedules of dilapidation. This ects in the development of new military and police camps. She
transitioned her to her next role as a consultant quantity sur- advised on procurement and evaluated construction and con-
veyor with Spanquants Associates, a project controls firm in- sultants bids. She was also the lead QS for the first television
volved primarily in the cost management of the construction station built in Botswana.
of high rise buildings and health facilities. At Spanquants she Most of the time her career in project controls, requires
became more adept at take-off and pricing of all elements of traveling to wherever the projects are. She learned to balance
construction and got introduced to post contract management work on diverse projects and home life very quickly and devel-
oped a network support group wherever she was.

8 COST ENGINEERING OCTOBER 2011

 In 1998, she decided that it was time to
pursue her dream to study engineering and
spend more time with her children.
She applied to study engineering at The
University of Texas in Austin, and she moved
with her children to the US. The period in
Austin was very challenging because she had to
juggle studying with raising two teenagers and
working as a research assistant in the construc-
tion engineering and project management de-
partment. She graduated in 2002.
With her son and daughter enrolled at the
university, Bunmi was ready to start the next
phase of her adventure in engineering or proj-
ect controls.
She worked briefly in New York as an envi-
ronmental engineer but realized that her heart
was still in project controls so she kept her re-
lationship with AACE International and RICS ac-
tive. It was at a RICS conference that she met
her late mentor, Kenneth Busby who brought
her back to Houston and project controls.
Bunmi continues to work on commercial
construction, as well as oil and gas projects. She
prepares an initial budget estimate to test fea-
sibility proposals, prepares preliminary cost
plan and cash flow forecast. She advises on the
likely effect of market conditions on bids and
contractual procurement options, prepares
bills of quantities or other pricing documents
for inclusion in bid documents and provides all
post contract project controls services until
close-out of the project. She credits her success
with always having mentors while she worked.
The Houston Gulf Coast Section meetings
are a great source of professional development
and networking opportunities. Members are al-
ways willing to share their knowledge, she en-
joys listening to many wonderful presenters
and learns a new thing at every meeting. The
value she gets from attending meetings and her
participation in AACE/RICS activities is immeas-
urable. If one is in-between jobs, there are al-
ways recruiters at the meeting looking for
project controls people. Bunmi is currently the
vice-president of SAVE (Society for the Ad-
vancement of Value Engineering) international,
Houston chapter.
Bunmi believes that no one knows it all
and no one is an island. Whether you are a new
graduate or you are a veteran professional the
best thing you can do for your career and your-
self is to be a member of a relevant profes-
sional association. Attend meetings and
participate in activities as often as you can. You
will learn and make life-long professional con-
nections that will serve you well throughout
your career life. ◆

COST ENGINEERING OCTOBER 2011 9

 SPECIAL FOCUS

WHAT CAN
GUI D E
D OG S
TEACH
MENTORS
A N D  T H E IR
PARTNERS?
Matt M. Starcevich, Ph.D

A
s a life long dog owner, I have always been in-
trigued with dogs and their abilities, especially toring skills? Can you facilitate the other persons self discovery,
those working dogs that are highly trained for and have you developed a range of activities to engage your
a specific purpose. In observing and reading partner in their journey. What reading have you done to pre-
about dogs that have been trained as com- pare yourself to be an even more effective mentor?
panions for the blind, I am struck with some Guide dogs walk side by side to the destination. As one
lessons both mentors and their partner can learn from this spe- partner stated, "She really taught me to believe in myself." Like
cial group of dog-people partnerships. the guide dog, a good mentor builds the partners confidence
in themselves to try new things, to take risks, and to not be
What Mentors Can Learn afraid of failing. "Mentors must be patient and let a person
A good guide dog, among other things, listens well, is in-
quisitive, trustworthy, adaptable to the needs of their partner,
wants to do a good job, and their only agenda is their owner's
needs. Good mentors are good listeners and build a trusting
“We create a profound partner-
relationship with their partners. It is not about the mentor, but ship between person and dog—
where the partner wants to go, grow, and develop. He needed,
"someone to just care about him as him." and help to unleash the potential
Guide dogs receive 4-5 months training. A Mentor, like
many managers receives little or no training, one day they are
in both of them.”
one. As a mentor are you committed to developing your men-
- [Link]

10 COST ENGINEERING OCTOBER 2011

 “I think dogs are the most amazing
creatures; they give unconditional
love. For me they are the role
model for being alive.”
- Gilda Radner
make mistakes, and learn from them, and discover answers on
their own."
Time is spent getting know one another—their strengths,
habits, and how to communicate with each other. California
law mandates a 28-day training program when a partner is
paired with a guide dog. Mentors and partners need to spend
the time to get to know one another, from this solid foundation
develops the deeper discussions. Honest feedback is a key
building block and can occur only after the two are comfortable
with each other. In support of this mentors have said:
“I 'm very honest with her and I let her know what I
think; I don't mince words.”

“A good mentor is encouraging and a cheerleader for

you, however, they can be your worst critic, but in a
positive and constructive way.”

Each guide dog and their partner are unique; time is spent
matching the guide dog with the right partner. A mentor dis-
cusses their needs and limitations and seeks a similar sharing
from their partner before entering into the mentoring relation-
ships. Do you know when not to enter into a mentoring rela-
tionship, the chemistry or situation is just not right?
Guide dogs can only enable, assist, and anticipate dangers.
Mentors do not make decisions for their partners:
Partners, like the blind, must put forth the effort, be sub-
"He never said, you've got to do it my way, he'd offer ject to the risks, and reach their goals through their own skill
suggestions or say, let's think about it this way...I really
and determination. ◆
admired him for that."
An excellent four minute video on the relationship be-
Guide dogs are very smart—in addition to leading a person
tween a guide dog and their partner, Soul Mates, can be seen
safely around obstacles, they also are trained in "intelligence
at [Link]. Click on the "Soul Mates" video
disobedience," they are taught when not to obey an unsafe
choice.
command. Mentors are chosen based on a record for achieve-
ment and success, they are not passive but have a right to state
Matt Starcevich is the founder of the Center for Coaching
an opinion. The key is to then allow the partner to make the
and Mentoring, Inc. He has written, The Coach: Creating Part-
decision.
nerships  for  a  Competitive  Edge, designed and facilitated
workshops on the coaching process with thousands of leaders
What Partners Can Learn
and employees.
Guide dogs and their partners work as a team. It's your
journey, all the mentor can do is facilitate the trip—trust them,
work with them, be vulnerable in return for their support.
Guide dogs take their cues and commands from their
human partners; it's up to the person to determine the routes
they take and if it is safe to cross a street. All a mentor can do
is facilitate your self discovery and provide you some tips and
clues—don't expect them to set the course or determine the
speed—that's your job.

COST ENGINEERING OCTOBER 2011 11

 Tired of re-inventing the wheel?
AACE International provides you with the latest in transferable techniques and recommended practices
to be on the cutting edge of the total cost management practice. Here are just some of the resources
our members receive to give them a competitive advantage in the workplace:

Virtual Library: An online library of more than 4,500 technical papers on every aspect of total cost
management. Members may download papers for free for their personal use.

Visual TCM Framework: Our members can now access the Visual TCM Framework on the AACE
International website. Visual TCM Framework provides a unique perspective on this highly acclaimed
resource that only members have access to through AACE.

AACE Presents: Monthly online presentations based on the most highly

acclaimed technical presentations at our Annual Meeting.

Cost Engineering journal: Each member receives the Cost Engi-

neering journal as well as access to archived back issues online.
Mentoring: AACE International members can participate in our
mentoring program as a mentor or as a mentee/partner. A
great way to advance your own career or help give back to the
TCM practice community.

Discounts on AACE Programs and Certifications: Members

earn discounts on AACE educational and training programs
such as our Annual Meeting, the International TCM Confer-
ence and our certification programs.
Career Center: Members can register for job alerts, re-
ceive tips on advancing their career and view
job postings from leading companies in the TCM
field as well as have access to our annual
Salary Survey.
For more information on
how we can help your
career evolve to the next
level, contact
AACE International,
1265 Suncrest Towne Ctr,
Morgantown, WV 26505
Phone: +1.304.296.8444
Fax: +1.304.291.5728
Email: info@[Link]
or visit our website at:
[Link].
 TECHNICAL ARTICLE
This definition of maturity does
Cost Engineering Maturity provide some insight; however, there is
an unclear understanding of what full

Model (CEMM) development is! Webster's uses the term

"mature" as part of the definition "having
attained a final or desired state" or “of or
H. Lance Stephenson, CCC relating to a condition of full
Abstract: “Many companies have sought to enhance the performance of their development."
project controls organization and systems to provide management with more pre- In order to further our understanding
dictable and reliable results in support of their project decision-making processes of maturity, we need to define
[5].” It has been found that little success has been accomplished for many of those development. Again, we refer to
organizations who have attempted to improve those key elements of Total Cost Webster's to provide us with a definition,
Management. The Cost Engineering Maturity Model (CEMM), as introduced in which states that development is, "the
this article, is a methodology to support the improvement and development of act or process of going from the simple or
an integrated Total Cost Management standard. The Cost Engineering Maturity
basic to the complex or advanced."
Model (CEMM) provides the project team and organization with a complete un-
derstanding of their enterprise capabilities and processes in comparison to in- Finally, the argument can be made as
dustry standards, best practices, and cultural norms. The CEMM will substantiate to what is considered “desired state,” or
the technical adherence to Total Cost Management and provide organizations more specifically, the “desired advanced
with an effective tool for developing or enhancing the project controls systems state.”
(people, processes, and tools) and asset management (life cycle) delivery within Based on the definitions provided,
the company. The AACE International Total Cost Management (TCM) Framework, the Total Cost Management (TCM)
complimented with Hammer and Company’s Process and Enterprise Maturity Framework and Process and Enterprise
Model (PEMM™), will be used as the benchmark for applying the appropriate Maturity Model (PEMM™), when
level of maturity required for asset development, management, and project de- combined, are considered the “desired
livery success. This article will provide readers with an understanding of the Cost advanced state” to be achieved, and form
Engineering Maturity Model (CEMM) for the purpose of assisting organizations
the basis for the CEMM.
in establishing a leading position in Total Cost Management effectiveness and de-
livery. This article was presented at the 55th AACE Annual Meeting, June 19-22, The CEMM is also considered an
2011, at Anaheim, Calif., as presentation OWN.802. objective assessment that identifies any
deficiencies and gaps of an organization’s
Key Words: Cost engineering, life cycle, management, organizations, and project process and enterprise capabilities and
controls outlines where necessary improvements
are required for future success. To assist

I
n the last 30 years, (specifically at the Along the way, we have lost our in the assessment of the maturity of an
start of the information age), many ability to manage what is closest to us; organization, this CEMM introduces the
organizations were introduced to the project. We can no longer put our CEMM score card, which specifies the
new technology that would provide them projects and organizations on auto pilot, evaluation criteria as defined by the AACE
with the opportunity to improve their nor can we expect web-based, enterprise International TCM Framework and the
efficiency, minimize costs, and increase project management software solutions PEMM.
their competitive advantage. to provide “artificial intelligence,” as a Also, the CEMM provides a
We have seen our society move from form of decision-making capabilities. structured and repeatable approach that
the personal computer and single user The CEMM outlined in this article allows the users to revisit their current
software applications to enterprise provides organizations and cost processes and enterprise to determine if
solutions, and currently, web-based engineering practitioners with a holistic improvements have been made to their
solutions, all with the promise to transfer and integrated overview of strategic assetorganization. These improvements can be
information more freely than what was management and project controls correlated with past maturity
previously offered. process requirements for project success. assessments to see if the changes have
Many organizations have not been This CEMM brings us back to the supported the desired results of
able to decipher the quagmire of necessity of strong enterpriseimproved project delivery within their
competitive technology solutions that capabilities, diligent and efficient organization.
bombard our organizations every day. In processes supported by skilled
most cases, these technology solutions practitioners equipped with integrated Why Is A CEMM Needed?
have only distracted us from achieving software solutions. A CEMM is needed because most
the desired results of project success. The organizations do not have the culture,
technology solutions have dulled our What is Maturity? leadership or governance to drive a
senses by letting the software and Webster’s Dictionary defines process centered behavior. It is needed
systems drive the process. maturity as, "the quality or state of being because processes are broken,
mature; especially: full development." incomplete, irrelevant or outdated.

COST ENGINEERING OCTOBER 2011 13

 Most organizations still do not have identify the maturity of the principles of 3.
“end-to-end integrated processes” or an each individual process. Other Models
enterprise that has the capabilities to Most maturity models cannot
deliver at the highest level of What  Is  Different  About  This  Maturity support the organization in
performance. The processes in use today Model achieving the highest level of
may likely allow organizations to stay When conducting the research for maturity as direction on how to
competitive; however, it has not allowed this article, it became apparent that attain that level is never defined.
them to demonstrate breakthrough many of the maturity models available Part of the reason for this is the lack
performance. today do not provide the user with a of definition of the highest level;
defined solution for improving their other maturity models define the
Who The CEMM Speaks To organization. highest level of maturity as
The method presented in this article Four major differences that “optimizing” or “continuous
can be used by anyone who wants to separate the CEMM from other maturity improvement” (individuals may
improve the delivery of their projects, models include the following. interpret these levels differently).
whether the project is for developing These definitions alone only
software applications or designing and 1. introduce subjectivity as anyone can
constructing process plants and Other Models claim they are in a state of
commercial buildings. Almost all maturity models do not “optimizing” or “continuous
The frameworks, models and provide an industry standard, improvement,” while not moving
methods described in this article recommended practice or the organization toward a true state
complement each other by expediting benchmark of best practices to of maturity.
the maturity assessment, which in turn compare against.
identifies the areas required for The CEMM Difference
improvement. Finally, the concepts The CEMM Difference The PEMM, complimented with
identified within this article are not new. The CEMM uses the TCM the TCM Framework, provide
These “best in class” business models, Framework as the benchmark the defined state of true
when combined, demonstrate the for total cost management. This maturity. The CEMM allows the
unique partnership that compliments allows the organization to gain organization to gain insight on
the process for improved cost insight into it’s owns processes how to achieve the highest level
engineering maturity. compared to that of the defined of maturity by identifying the
"best in class" processes of the desired state.
When Is The CEMM Used TCM Framework. The
The CEMM can be used in any organization can then realize 4.
industry, and in any firm. The CEMM can the necessary improvements Other Models
assist in determining the maturity of the for achieving a higher level of Finally, most maturity models do
organization, a certain project, or more maturity. not demonstrate a driving
specifically, the maturity of its processes. relationship between the enterprise
The CEMM may also be used as a pre- 2. and processes to the key
qualification contractor assessment tool Other Models performance metrics of an
to determine potential contractor's Most maturity models fall short by organization.
“Total Cost Management” capabilities, not allowing the users to define
as well as an audit tool to determine enterprise maturity. If the The CEMM Difference
process compliance. enterprise is not mature, then most The key performance metrics
Finally, the CEMM can be used to likely the processes are not mature need to drive the desired
improve the different elements of the (and vice versa). You need maturity behavior and results of the
TCM Framework (an owner company in both areas to achieve quantum organization through effective
may want to focus on the strategic asset results. and efficient end-to-end
management elements of the TCM, process management.
which provides the necessary processes The CEMM Difference
for life cycle asset management. The The PEMM defines four CEMM Number One Benefit
constructor, on the other hand, may maturity levels for each of the The number one benefit in using
want to focus on the project controls two elements (process enablers this CEMM is awareness. Whether your
process elements of the TCM to improve and enterprise capabilities). organization has mature processes, or is
its project controls processes in order to This enables the organization to new with limited or no work processes,
identify and mitigate project risks while improve both the enterprise, as the CEMM provides the user with an
providing cost certainty). Ultimately, the well as the processes that awareness of their capabilities, favorable
user must understand that the CEMM is support the delivery of its or unfavorable, to what may be
a granular model that allows the user to projects.

14 COST ENGINEERING OCTOBER 2011

considered industry best practices for
total cost management.
The CEMM should generate the
following.

• A structurally sound strategic asset

management and project controls
process built using the AACE
International TCM Framework.
• A streamlined and optimized end-
to-end integrated work process to
assist in effective and efficient asset
delivery and project execution.
• A validated process that is
supported by all levels of
management throughout the
organization.
• An organization with sound
enterprise capabilities that support
Figure 1 — The TCM Framework [4]
further enhancement and
development. And, assets [4].” The TCM Framework is
The  AACE  Total  Cost  Management
• A continuous improvement divided into four sections, as outlined in
Framework
platform for increased effectiveness figure 1. The four sections are further
“AACE International, founded in
and efficiency expanded into sub-sections.
1956, is the largest organization globally
As figure 1 demonstrates, the TCM
serving the entire spectrum of the cost
How This Article is Structured Framework provides a standard
and management profession” (from
This article is divided into four organization structure that identifies the
AACE International’s website,
sections. parts that make up the complete total
[Link]). AACE (Association for
Section  One—introduces the cost management picture.
the Advancement of Cost Engineering
readers to the TCM Framework.
International) is a non-profit
Considered the flagship for cost Process Mapping
professional educational association that
engineering, the TCM Framework We are surrounded by process.
provides numerous Recommended
defines "best in class" processes, Turning raw goods into finished products
Practices (RP’s), Professional  Practice
key inputs and outputs, as well as is a process; and writing a paper is a
Guides (PPG’s), and Skills  and
enabling processes for improved process. We have been entrenched in
Knowledge workbooks for all areas of
TCM delivery. processes for years, from the formal
cost engineering. AACE International
Section  Two—of this article will application to drive business success, to
also provides six industry recognized
introduce Hammer and Company’s the informal process of getting dressed
professional certifications.
PEMM, which defines the two for work. We can never get away from
Most recently (in 2006), AACE
elements; process enablers and process, and we never should. We can,
International unveiled the “Total Cost
enterprise capabilities. The PEMM however, optimize each process to assist
Management Framework (TCM).” As
allows the organization to gain in delivering the product or deliverable
stated in the book, ‘The  TCM
insight into their strengths and in a more effective and efficient manner.
Framework: An Integrated Approach to
weaknesses of their processes and “A process involves steps and
Portfolio,  Program  and  Project
capabilities. decisions in the way work is
Management,’ “Total Cost Management
Section Three—provides the reader accomplished. A sequence of
(TCM) is the effective application of
with a systematic and methodical interdependent and linked procedures
professional and technical expertise to
approach for implementing the which, at every stage, consume one or
plan and control resources, costs,
CEMM. It provides a guideline for more resources (employee time, energy,
profitability and risk. Simply stated, TCM
improved communication, machines, money) to convert inputs
is a systematic approach for managing
collaboration and effectiveness (data, material, parts, etc.) into outputs.
cost throughout the life cycle of any
during the assessment phase of the These outputs then serve as inputs for
enterprise, program, facility, project,
CEMM. the next stage until a known goal or end
product or service. The TCM Framework
Section  Four—Finally, the last result is reached.” [Business
is considered the sum of the practices
section provides the reader with [Link]].
and processes that an enterprise uses to
some examples of the diagnostic As stated earlier, the TCM
manage the total life cycle cost
and reporting capabilities that the Framework is divided into four sections.
investment in its portfolio of strategic
CEMM can provide. Two of the sections, strategic asset

COST ENGINEERING OCTOBER 2011 15

 management and project controls,
provide a series of functional processes
to support the delivery of the asset (each
section contains multiple sub-sections).
The subsection provides a process map
that communicates the “inter-
relationships and sequences of
processes and rudimentary flow of
information [4].”
Each process map and sub-section
within the TCM Framework provides the
users with the following information:

• inputs;
• outputs;
• key concepts; and, Figure 2 — PDCA Model
• further readings and sources.
throughout the process maps of the TCM • Assessing
The process maps are annotated to Framework. 1. asset performance assessment;
identify external relationships to other This section also defines the two 2. asset change management;
processes within the TCM Framework. levels of the TCM process, which are 3. forensic performance
The TCM Framework provides a truly referred to respectively as the strategic assessment;
integrated, end-to-end process, asset management process and project and,
identifying the inputs and outputs that control process. The project control 4. asset historical database
support the total asset and project process is a recursive process nested management.
delivery. within the “do” or project
implementation step of the strategic Within the SAM process map,
Plan-Do-Check-Assess asset management process. The project controls functions are identified
The PDCA (Plan-Do-Check-Assess) following describes these processes in as:
model, developed by Walter A. more detail.
Shewhart, and made popular by Dr. W. • Planning:
Edwards Deming, is an iterative four-step Strategic Asset Management 1. project controls planning
problem solving process. The cyclical “Strategic asset management (SAM) processes; and,
approach allows us to provide feedback refers to the macro process of managing • Doing
to our methods of delivery, which in turn the total life-cycle cost investment of 1. project control.
supports the continuous improvement resources in an enterprise’s portfolio of
strategy for full optimization. The TCM strategic assets [4].” The SAM process The activities within the SAM
Framework is developed around the map (See figure 3) identifies the process map are further developed into
PDCA model. activities and relationships that are sub-process maps (white boxes do not
“The PDCA is an iterative four-step required to successfully move through have corresponding process maps). The
problem-solving process used in the process. The SAM process map is SAM process map is considered a level 2
business process improvement” color-coded as well, identifying whether process map within the TCM Framework.
[Wikipedia]. the related activities are defined as part
The PDCA model, as shown in figure of the planning, doing, checking, or Project Controls
2, is color-coded to visually identify the assessing phase. “Project control is a process for
different aspects of plan, do, check, and The SAM process map is organized controlling the investment of resources
assess. The use of the PDCA model to reflect the PDCA cycle. in an asset. In the TCM Framework,
within the TCM Framework supports the project control is the recursive process
continuous improvement, and therefore, • Planning: cycle nested within the “do” step of the
maturity of total cost management. 1. requirements and elicitation; strategic asset management process
2. asset planning; and, cycle [4].”
Functional Processes for Strategic Asset 3. investment decision making. We have to recognize that the
Management and Project Controls • Doing: project control processes will only
This section of this article further 1. project implementation. support the delivery of the project itself,
builds on the information provided in • Checking and not that of the entire life cycle of the
the previous section by demonstrating 1. asset cost accounting; and, asset. The project controls process (PCP)
how the PDCA model is embedded 2. asset performance measurement. map (See figure 4) identifies the
activities and relationships that are

16 COST ENGINEERING OCTOBER 2011

Figure 3 — Strategic Asset Management Process Map [4]

Figure 4 — Project Controls Process Map [4]

COST ENGINEERING OCTOBER 2011 17

 required to successfully move through
the process.
The PCP map is also color-coded,
identifying whether the related activities
are defined as part of the planning,
doing, checking, or assessing phase.
Similar to the SAM process map, the
PCP map is organized to reflect the PDCA
cycle.

• Planning:
1. project scope and execution
strategy development;
2. schedule planning; and
development.
3. Cost estimating and budgeting. Figure 5 — Building Blocks of TCM
4. Resource planning.
5. Procurement planning. Framework as the founding model for As the old saying goes, “garbage in
6. Value analysis and engineering. enhanced process design and equals garbage out.” Without great
7. Risk management. continuous improvement. inputs, don’t expect great outputs. The
• Doing: maturity of the input of each process will
1. Project control plan carry forward throughout the lifecycle of
implementation. Sub-Processes
the process. This will further support the
• Checking The SAM and PCP maps are
output of the process that subsequently
1. Project cost accounting. considered the total work scope for total
feeds into other processes.
2. Progress and performance cost management. As discussed earlier,
Finally, the inputs must not only
measurement. the strategic asset management and
support the effective and efficient
• Assessing project controls process maps further
delivery of a product or deliverable, but
1. Project performance assessment. subdivide into supporting processes
demand that the required level of quality
2. Forecasting. which include all necessary steps to
is reached. Without proper quality, the
3. Change management. achieve the delivery of total cost
desired outputs and downstream
4. Project historical database management. As an example, figure 6
processes would be affected.
management. describes the activities that support the
Within the PCP map, SAM functions “project cost accounting” (PCA) sub-
Suppliers and Customers
are identified as: process.
For a process to be successfully
The PCA process map is considered
executed, it should identify the suppliers
• Doing a level 3 process map within the TCM
who provide the required inputs, as well
1. Strategic asset management Framework.
as identify the customers who will
processes. As an example, table 1 provides an
provide an understanding of the desired
understanding of the required inputs for
results expected of the process.
Similar to the SAM process map, the executing the PCA process. The table
Designing a process without identifying
activities within the PCP map are further further provides the desired outputs to
the supplier and customer will create an
developed into sub-process maps. The be delivered upon completion of the
inefficient product or deliverable with
PCP map is considered a level 2 process process. The level 2 SAM and PCP maps
of the TCM Framework also identify the undesirable results. As defined by Six
map within the TCM Framework. Sigma’s SIPOC diagram (See figure 7),
Figure 5 demonstrates the input and output requirements for their
and for the purposes of process
relationship within the TCM Framework. respective process.
maturity, the suppliers and customers
The diagram represents the building (and customer requirements) need to be
blocks of the supporting PDCA cycles Inputs and Outputs established. We must remember that a
within each process, and further The inputs that are described by the customer may be defined as another
demonstrates the nested relationship process provide the user with an process, entity, person, group or
that the PCP has with the SAM process. understanding of the necessary function.
The SAM and PCP map provide the requirements for successfully
highest level of requirements for implementing the process and Life Cycles and Stage-Gating
developing a mature total cost completing the required activities. While This article has described the two
management organization. All it is necessary to have a good design of major elements of the TCM Framework:
organizations should use the process the process, it is equally imperative that strategic asset management and project
maps identified within the TCM a defined set of inputs be provided. controls. The TCM Framework further

18 COST ENGINEERING OCTOBER 2011

 Figure 6 — Sub-Process

Table 1 — Examples of Inputs and Outputs of a Process Map

Figure 7 — SIPOC Diagram

COST ENGINEERING OCTOBER 2011 19

 identifies the differences between the
defining stages or phases for both the
asset and that of the project.
While an asset has a beginning and
an end, the sequential groups that
define the life cycle are different than
that of the project life cycle. As
represented in figure 8, the “asset” can
be modified throughout its life cycle, in
some cases many times to support the
changes and improvements to the
existing asset. Similar to the asset life
cycle, the project life cycle has defined
start and finish dates. The difference is
that the project is considered a
temporary endeavor. “The project is
undertaken to meet unique goals and Figure 8 — Building Blocks of Life Cycles
objectives, usually to bring about
beneficial change or added value”
[Wikipedia]. Figure 8 demonstrates the
sequential groupings for both the asset
and project life cycle.
Another concept that has been
introduced as part of the delivery of our
projects is the stage-gate process. The
stage-gate process is defined as a go/no-
go decision making tool (based on
business case and risk). The decision
making process goes from stage to stage,
passing through gates along the way.
Each subsequent stage provides a
greater understanding and viability of
the finished product or deliverable. At
each gate, a committee or entity decides
if the project can continue or be Figure 9 — Building Blocks of Stage-Gate Process
terminated as a result of changing
market or project conditions (ROI, risk, The building blocks identified above Similar to the asset life cycle and
etc.). In some circumstances, the project provide an understanding of the project life cycle, the stage-gate process
is not allowed to proceed because of sequence of stages that a project may go has defined sequential groupings that
insufficient detail. The team must then through in order to complete the desired support the delivery of the asset or
go back and meet the requirements of result. This sequence an be further product. Figure 10-a represents all three
the stage to pass through the gate. demonstrated by using the project arrow aspects of the life cycles and process.
Figure 9 demonstrates the sequential (See figure 10). The stage-gate process can be
groupings for the stage-gate process.

Figure 10 — Project Arrow (Typical)

20 COST ENGINEERING OCTOBER 2011

 Asset Life Cycle Project Life Cycle Stage Gate Process (For Process Industry)
• Ideation • Ideation • Project definition (FEL)
• Creation • Planning • Conceptual design (FEL)
• Operation • Execution • Basic design (FEL)
• Modification • Closure • Detail engineering (execution)
• Termination • Procurement (execution)
• Construction (execution)
• Commissioning/Start Up (Ops)

Note: FEL represents Front End Loading; some may refer to this as the FEED Phase (Front End Engineering and Design)

Figure 10a — A Comparison of the Asset Life Cycle, Project Life Cycle, and the Stage Gate Process

Figure 11 — Relationship of the Building Blocks
considered a more refined and robust cost management section of this article we must realize that the implementation
project life cycle process. provide the reader with an overview of of the TCM Framework alone cannot
what applications drive the maturity of ensure the successful delivery of an
Total Cost Management an organization. asset or project.
The TCM Framework is an effective Figure 11 illustrates the complete Total success can only be realized
application that provides a systematic aspect of the relationships within the when all disciplines (such as project
approach to managing cost throughout TCM Framework. Each component managers, construction managers,
the life cycle of any enterprise, program, represents a building block that further project engineers, supply chain
facility, project, product or service. relates to a bigger picture. specialists, accountants, etc., and their
The TCM Framework provides the The TCM Framework provides the supporting organizations) introduce a
required practices and processes that an cost engineering society with an maturity model similar to the one
organization should use to manage the excellent structure for planning and demonstrated here. Only then can we
total life cycle cost investment in its controlling the strategic asset expect superior results.
portfolio of strategic assets. The management and project controls
references described within the total processes of an organization. However,

COST ENGINEERING OCTOBER 2011 21

 Hammer  and  Company’s  Process  and
Enterprise Maturity Model (PEMM™)
With the advent of process
reengineering in the mid 90's, more and
more organizations are introducing
process management methodologies as
a way to transform their organizations to
deliver greater value and in turn,
generating higher profits.
In 1998, Michael Hammer, along
with James Champy, wrote,
“Reengineering  the  Corporation:  A
Manifest  for  Business  Revolution.” This
book was revolutionary in achieving the
most important aspect in business
today; achieving dramatic performance
improvements.
The authors define reengineering as
"the fundamental rethinking and radical
redesign of business processes to
achieve dramatic improvements in Figure 12 — Process Enablers [3]
critical, contemporary measures of
performance, such as cost, quality,
service, and speed [1].” This book leads
readers through the radical redesign of a
company's processes and organization.
Michael Hammer went on to found
Hammer and Company, a world-leader
of business process design, redesign, and
education. Most recently, Michael
Hammer and Lisa Hershman released a
new book titled, “Faster,  Cheaper,
Better:  The  9  Levers  for  Transforming
How  Work  Gets  Done.” This book
unveiled the PEMM. As stated in the
book, the PEMM is a framework to help
you plan and assess your process-based
transformation efforts” [3].
The PEMM is the effective
application that “identifies nine levers
for action necessary to achieve Figure 13 — Enterprise Capabilities [3]
transformational results [3].” Finally, the
PEMM provides a systematic approach processes, and enterprise capabilities, (P-1 to P-4) and the enterprise
to designing, redesigning, and validating which apply to the entire organization. capabilities (E-1 to E-4).
the maturity of both a company’s The model further defines nine
processes and the enterprise itself. principles that support the two Process Enablers
characteristics of the PEMM. The nine There are many attributes that
Process and Enterprise Maturity Model principles assist in measuring the support the successful implementation
The PEMM is a corporate roadmap maturity of the organization. Figures 12 and sustainability of a mature process.
and benchmarking tool that provides and 13 identify the principles related to One consideration is that each process
companies with the opportunity to the two characteristics. must be developed with the end in mind;
assess the maturity of their own In order to attain an understanding that all processes are connected to the
business processes. of the maturity of the organization, the overall enterprise. In the book, “Faster,
The PEMM identifies two model also identifies strength levels that Cheaper,  Better,” Hammer and
characteristics that support the each of these nine principles must Hershman discuss the key areas of the
understanding of maturity; process achieve. There are four strength levels process enablers that support the end-
enablers, which pertain to individual defined for each of the process enablers to-end process design.

22 COST ENGINEERING OCTOBER 2011

 Figure 12 illustrates the process • Design: The comprehensiveness of • Metrics: The measures the company
enablers within the PEMM. Each the specification of how the process uses to track process performance”
principle and sub-principle as described is to be executed. [2].
in this article provide the requirements • Performers: The people who
for not only process design, but the execute the process, particularly in For an organization to reach the
requirements of performers, the process terms of their skills and knowledge. highest level of process maturity, the
owners, the supporting infrastructure, • Owner: A senior executive who has TCM processes must include all the
and metrics. responsibility for the process and its principles and sub-principles described
The principles and sub-principles results. within the process enablers category.
from figure 12 include the following: • Infrastructure: Information and We must recognize that while the
management systems that support principles of performers, owners and
the process. infrastructure are important, it is even
more important that we ensure the

Table 2 — Process Enablers P-4 Strength Level [3]

COST ENGINEERING OCTOBER 2011 23

 proper design of the process and the requirements for a mature process. The • What works well?;
identification of process performance processes should describe:
• What doesn’t work well?;
metrics. It is because of this importance
that it was deemed necessary to further 1. “Whether and under what • What needs to be added?;
expand on these two driving principles. circumstances something needs to • What needs to be changed?;
be done.” As stated in the book, and,
each step or activity identified in the • What needs to be deleted?
Process Design: The Seven Beliefs process either has to add value or
The seven beliefs described in this not. You may want to consider the 2. “How precisely to perform a step in
article provide readers with the following: a process is a close cousin to
understanding of the fundamental whether to perform it.”

Table 3 — Enterprise Capabilities E-4 Strength Level [3]

24 COST ENGINEERING OCTOBER 2011

 Figure 14 — Building Blocks of PEMM™

3. “What information is needed for the We need to establish metrics that capacities are focused on supporting and
processes to function well. By support and demonstrate accountability sustaining the change, so that it
employing better information, you to the process (process compliance) and becomes business as usual or the way
can help ensure that a process can the desired result expected of the people work” [3].
perform better in many different process. The following list is an example The enterprise capabilities can be
ways”. of key performance metrics that can be used to determine the “health or mature
4. “When to do certain work in a introduced to support the measurement state” of the organization, or the ability
process. There are many ways to of process performance within an of the organization to develop and
change the when of processes: by organization. The organization may want implement a “process design” program.
moving steps earlier or later, by to introduce other key performance Figure 13 illustrates the enterprise
moving activities previously in metrics as well. capabilities within the PEMM. Each
sequence into a parallel category and sub-category as described
arrangement, or by changing the • Improved decision making in this article provides the requirements
relative order of certain activities.” capabilities and reduced risk. necessary to identify and improve the
5. “Who does what work and how they • Improved ROI for an asset. leadership, culture, expertise, and
work with others.” • Improved life cycle costs for an governance of an organization.
6. “Where work is done?” And, asset. The categories and sub-categories in
7. “What should be done? What to do • The project controls cost as a figure 13 include the following.
is the most fundamental aspect of percentage of the total project’s
process design. It poses the central cost. • “Leadership: Senior executives who
question underlying all work: what • Improved quality on schedule support the creation (and
do we need to do to deliver what design, estimating and cost continuous improvement) of their
the customer wants?” budgeting. processes.
• Improved cash flow. • Culture: The values of customer
We need to ensure that our process • Customer satisfaction. And, focus, teamwork, personal
design is not only efficient and effective • A reduction in rework. accountability, and a willingness to
in the delivery of our projects, but also change.
that our process design allows us to The key performance metrics need • Expertise: Skills in, and
identify and mitigate risk and improve to drive the desired behavior and results; methodology for, process redesign.
the opportunity for success. therefore, when designing metrics, And,
please keep in mind the “S.M.A.R.T. • Governance: Mechanisms for
Process Metrics: principle” (specific, measureable, managing complex project and
When establishing the design of the achievable, realistic, timely). change initiatives.” [2]
process, we need to consider all aspects
of the total process, thereby keeping the Enterprise Capabilities For the purposes of the CEMM, the
end in mind in order to meet overall “While the process enablers are enterprise capabilities are used to
expectations and objectives. focused on process design, execution, determine the health of the
and making the change, the enterprise organization. If a process improvement

COST ENGINEERING OCTOBER 2011 25

 Figure 15 — Process Map for Cost Engineering Maturity Assessment

program is required, the enterprise strength levels (P-4 and E-4) and their simply by ad-hoc methodologies, the
capabilities can be used to assess an respective strength level statement. PEMM™ focuses on the nine key process
organization’s own capabilities for The purpose of the strength level principles that allow us to dig deeper
transforming the maturity for improved statements is to provide narrative into the “workings” of an organization.
process efficiency. explanations of what the principle Figure 14 demonstrates the
The enterprise capabilities will should exhibit at each level of maturity. relationship within the PEMM. The
identify where the organization will be Using the process and enterprise diagram represents the supporting
required to improve if it wants to maturity model tables provides the users principles within each category, and
undertake a process improvement with the opportunity of identifying the further demonstrates the relationship
strategy on its own or use a third party areas that require improvement, that the process enablers have with the
consultant to complete the endeavor. whether it is a specific process, a specific enterprise capabilities.
principle, or a specific attribute.
Strength Levels CEMM Assessment
Each of the nine principles within Weightings The CEMM provides organizations
the PEMM “have four numerically The intent of the CEMM is to define and cost engineering practitioners with a
designated levels of maturity [3].” These the maturity of the enterprise and its holistic and integrated overview of SAM
levels of maturity, also known as end-to-end processes. Therefore, all and PCP requirements for project
strength levels, provide the basis for aspects of the TCM Framework and success.
assessing the maturity of the principles PEMM are considered equal in weighting The TCM Framework, complimented
within the PEMM. (no driving or influential sections, with the PEMM, provides the benchmark
The four levels of maturity for the categories, processes, etc., are defined). for applying the CEMM assessment. The
process enablers section are identified Every process in the TCM CEMM assessment is the method for
as P-1 to P-4. Similarly, the four levels of Framework contributes to the design of comparing an organization’s “actual
maturity for the enterprise capabilities an overall, integrated, end-to-end process and enterprise maturity” against
section are identified as E-1 to E-4. A process (if an individual process does not an industry standard and identifying the
rating of four indicates the highest level contribute to the desired end result, variances from these standards.
achieved, and subsequently, a rating of then the process should not be included The CEMM assessment also includes
one indicates the lowest level. as part of the overall design). the evaluation of process compliance
The book refers to level one as “just within completed projects. These
getting started” and level four as “best in Process  Enterprise  Maturity  Model evaluations will determine whether the
class.” The PEMM also provides a (PEMM) project teams implemented and used
narrative “statement” for each strength The PEMM is an excellent tool to use the corporate processes designed for the
level for each principle to assist in the when embarking down the road to execution of their projects.
understanding of the maturity level. process improvement. Unlike other It would be unfair to assume that
Table 2 and table 3 identifies the highest maturity models that define maturity the lack of success in an organization is

26 COST ENGINEERING OCTOBER 2011

 Diagram 1 - Process of Evaluation Form

completely dependent on the design of map helps demonstrate the external to the organization and its
the process itself. Many times, processes requirements necessary for measuring processes.
are not followed simply because of the the variances and gaps of the SAM and Finally, the organization must
lack of discipline, the lack of insufficient PCP, as well as the capabilities of the provide the PIL with defined roles,
or inadequate resources, or the lack of enterprise. The process map also centers responsibilities, and accountabilities that
ability (training or knowledge) to on the steps that drive the planning, reflect the objectives and expectations
perform the process. These evaluations analysis and reporting of the CEMM of the CEMM assessment.
will allow the organization to understand assessment. Once the PIL has been identified, he
the behavior, compliance and drivers of The following eight points briefly or she will need to engage the customer
the process that leads to project success describe the steps in the CEMM (management) to understand and
or project failure. assessment process. finalize the objectives and goals in order
Finally, the CEMM assessment is to support the completion of the process
considered an objective, quantitative 1.     Plan for Maturity Assessment plan (the objectives should include an
and effective approach that identifies The process for the CEMM understanding of the metrics required to
not only the variances or gaps of the assessment starts with planning for the measure end-to-end performance).
processes and enterprise, but also where assessment. The organization will need Depending on the scope of work
the risks and opportunities lie. to identify a Process Improvement Lead defined by the customer’s requirements,
The process for the CEMM (PIL) to execute the maturity the team will need to communicate
assessment should be implemented as a assessment. whether the assessment shall include all
continuous improvement effort that The PIL should be a technical aspects of the TCM Framework, or
supports the optimization of end-to-end specialist in the area of SAM and project portions of; the organization may want
process design and enterprise controls. Also, the PIL should be to assess the SAM processes separately
capabilities. knowledgeable in the area of process from the PCP or it may want to assess
redesign. To support an objective the high level processes separately from
Process  Map  of  Cost  Engineering approach for determining the maturity the sub-processes offered by the TCM
Maturity Assessment of the organization, the management Framework.
Figure 15 illustrates the process map should identify an individual who is Please remember, the CEMM is a
for the CEMM assessment. This process granular model that allows the user to

COST ENGINEERING OCTOBER 2011 27

 Diagram 2 - Example of Process Evaluation Form

Diagram 3 - CEMM Scorecard

identify the maturity of the principles of timelines of the deliverables to be responsibilities, corporate vision and
each individual process, and therefore, it completed. The assessment plan should mission statements, and any
is recommended that all aspects of the define the list of people who will be organizational charts (this will assist in
organization and its processes be interviewed. determining who performs the work as
assessed. Once this information has Finally, the assessment plan should well as the corporate drivers).
been determined, the lead will be also define how the information will be Also, the team will need to gather all
required to develop a timeline of the gathered, documented, reported and existing processes and procedures, as
events of the assessment and identify communicated to the management team well as identify any requirements that
the resources and their responsibilities and organization. are either imposed on the system, or are
required to perform the work. driven by the system (desk top
One of the key outputs from the 2. Gather Information instructions, systems enterprise
planning effort is the CEMM assessment Once the plan has been approved, requirements, etc.).
plan, which should identify the scope of the process improvement team (PIT) can The team will also need to gather
work, the roles and responsibilities, the start the task of gathering information. any background information, such as
budget, and the schedule identifying the The team should gather the roles and industry information, type of work,

28 COST ENGINEERING OCTOBER 2011

 Figure 16 - Speedo Diagrams

geographical locations and market

conditions.
Finally, the PIT will need to gather
information such as progress reports,
estimates, schedules, contract
documents, etc. as necessary to support
the analysis. The “gather information”
process provides valuable insight into
the performance of the process, the
personnel, and the organization.
Figure 17 - Bar Chart 1
3. Analyze Enterprise Capabilities
Once the information has been industry benchmarking would support basis (assumptions, inclusions,
gathered, the PIT can start to analyze the the project performance analysis. exclusions, etc.).
information. The intent of analyzing the Finally, as part of the project
enterprise capabilities is to provide an performance analysis, the team must 8. Develop and Maintain Maturity
awareness of the maturity of the assess the projects for process Assessment Tools
organization. compliance to determine if the team was As part of the CEMM assessment,
The PIT will quantify, assess and actually using the existing prescribed the process improvement team will want
analyze the maturity based on the processes. to maintain the methods, processes and
parameters described in the enterprise tools used during the assessment. In
capabilities of the PEMM, which 6. Review and Validate Findings order for future assessments to be
provides insight into the leadership, Once all the data has been delivered in an efficient and effective
culture, expertise and governance of the processed and analyzed, the PIT should manner, the process improvement team
organization. review the findings to ensure that the and stakeholders should conduct a
information meets the stakeholder’s lessons learned exercise as part of a
4. Analyze Process Enablers objectives, expectations and continuous improvement program.
Similar to the analysis of the requirements. Once the review has been
enterprise capabilities, the process completed, the maturity assessment will Inputs to CEMM Assessment
improvement team will quantify, assess provide the benchmark for future 1. “Stakeholder Input/Customer
and analyze the maturity based on the maturity assessments. Requests—Stakeholder needs,
parameters described in the process wants, or expectations are elicited.
enablers of the PEMM. This exercise will 7. Report Findings A need is something that is required
provide insight into the maturity of the Requirements for communicating for a system to function; a want is a
design of the processes, the skills and the maturity assessment should be demand or motivation by the
knowledge of the performers, process considered in the planning segment of customer; a request is not
ownership, supporting infrastructure, the CEMM assessment process. necessarily a requirement [4].”
and metrics usage. Stakeholders and other members of the 2. “Imposed Requirement—Some
team or organization may require requirements (typically constraints)
5. Analyze Project Performance different levels or types of reports. are already documented and
The historical information provided The executive or management team imposed on the system. These may
by past projects will provide the will likely be interested in the maturity of be a matter of enterprise policy [4].”
necessary insight into where the their organization, while the teams and 3. Benchmarking Information—
execution of past projects has project management group will be more Information such as industry
demonstrated success or not. interested in the maturity of the process performance norms based on
The PIT must analyze all aspects of delivery. Any maturity assessment geographical location, project type,
past projects. A forensic analysis and any reports should include the documented

COST ENGINEERING OCTOBER 2011 29

 and market conditions are gathered maturity assessment plan will also practitioners equipped with integrated
as needed to support the analysis. define all reporting requirements. software solutions.
4. Existing  Documentation— 2. Basis  for  CEMM  Assessment—The The CEMM is an excellent tool to
Information such as procedures, basis identifies the corporate and assist in identifying areas that require
processes and practices, code of process information used for the improvements. The process evaluation
accounts, work and organization assessment. The basis will also form and the scorecard are considered
breakdown structures. This should include the any assumptions, two key contributing aspects of the
also include roles and exclusions, etc. CEMM that assist in defining and
responsibilities of practitioners and 3. Performance  Variance  Causes  and communicating the areas that require
corporate personnel. Potential  Correction  Actions—The improvement.
5. Historical  Asset  Management  and documented variances to the
Project  Controls  Information— established benchmarks and the The Process Evaluation Form
Information on past performance of corrective actions as identified by The process evaluation form is the
projects (business intent, scope of the maturity model assessment. collection tool used for gathering all the
work), including baseline and as- 4. Historical  Information—The information for each particular TCM
built schedules, change order logs, documented maturity assessment process. As an example, diagram 1
original estimates and final cost and other deliverables from the represents the process evaluation form
reports. assessment process are captured in for “project cost accounting.”
a database to support future A process evaluation form is
Outputs to CEMM Assessment comparisons and analysis. provided for each of the TCM process
1. CEMM  Assessment  Plan—A plan maps. A similar evaluation form is
that identifies the objectives, The  Process  Evaluation  Form  and provided for consolidating the enterprise
expectations and requirements of Scorecard capabilities findings and information.
the maturity assessment. This will The CEMM brings us back to the To determine the maturity of each
include a schedule, scope of work, necessity of building strong enterprise TCM process map, the process
deliverables, estimates, and roles capabilities and developing diligent and improvement team will need to populate
and responsibilities, etc. The efficient processes supported by skilled the evaluation form. The right side of the
form allows the user to populate the

Figure 18 - Radar Chart 1 Figure 19 - Radar Chart 1

Figure 20 - Bar Chart 2 Figure 21 - Bar Chart 3

30 COST ENGINEERING OCTOBER 2011

findings based on the strength level “Companies do not live by process and its tools provides “game-changing
statements. The statements on the right alone. High-performance processes and breakthrough innovation and results
side of the form are also color-coded to require supportive environments in in efficiency, effectiveness and growth
visually enhance the areas that require order to sustain the changes to succeed. [3].”
improvement. The color-coding is as The more successful your organization is
follows: at developing its enterprise capabilities, Diagnostics and Reporting
the more effective any end-to-end The CEMM is a simple tool that
o Largely true, green; change will be[3].” The use of the CEMM offers information to assist you and your
o Somewhat true, yellow; and,
o Largely untrue, red.

Diagram 2 is a snap shot of the

“process design” requirements of the
process evaluation form.
The PIT will be required to evaluate
each process in order to support the
total analysis required for identifying the
areas that require improvement.

The Scorecard
The CEMM scorecard is used as a
strategic performance management
tool. It is a structured report used by the Figure 22 - Bar Chart 4
process improvement team to
communicate to management the
performance of the process and
enterprise activities within the
organization.
Finally, it is considered a non-
financial measurement tool that
compares current state to industry
benchmark “target values.” The design
of the scorecard provides a summarized
view of the strategic asset management
and project controls evaluations,
identifying the process maturity by
comparing them against best practices.
Diagram 3 represents the CEMM
scorecard.
Figure 23 - Radar Chart 3

Figure 24 - Radar Chart 3

COST ENGINEERING OCTOBER 2011 31

 Figure 25 - Radar Chart 4

organization in understanding the Based on the example provided, the each of the principles as shown in figure
maturity of your processes and user can understand the overall maturity 21.
enterprise. of the organization. From this The bar chart can also be sorted by
This tool can be of tremendous information, one can realize that the the lowest to highest score, representing
benefit to you and your company, enterprise capabilities has been assessed the data by rank order.
allowing you to carefully observe the at 1.9, well below the maturity level of
behavior of your organization in order to 4.0 (E-4 rating). We can also see that the Total Cost Management Reports
recognize its strengths and weaknesses. process enablers is assessed at 2.4, also The diagnostic reporting capabilities
This recognition is greatly enhanced well below the maturity level of 4.0 (P-4 also allow the user to understand the
through graphical reporting. Graphical rating). See figure 17. maturity of the TCM Framework, and
reports are visually striking, and can One can see from figure 18 that the therefore identify where improvements
enhance the interpretation of the “performers” principle within the are required.
tabular data presented. A graphical process enablers portion of the PEMM is Figure 22 represented allows the
report can identify dominating variables, scoring higher than its counterparts, user to understand the overall total cost
similarities and comparisons, pattern while the “infrastructure” principle has management maturity of the
recognition, outliers, correlations and scored the least (on the maturity scale). organization. From this information, one
relationships. Similar to the process enablers radar can realize that strategic asset
The CEMM is a diagnostic tool that chart, the enterprise capabilities radar management is assessed at 1.8, well
supports the assessment of causality chart (shown in figure 19), identifies the below the maturity level of 4.0 (P-4
(cause and effect), based on scores of each principle. As one can see, rating). One can also see that project
independent and dependent variables the “governance” principle has scored controls is assessed at 2.7, also well
through observational studies. the lowest, while the “leadership” below the maturity level of 4.0 (P-4
Figure 16 represents a small sample principle has scored the highest. rating).
of the graphical diagnostic assessment The bar chart, shown in figure 20, One can see from figure 23 that the
tools available from the CEMM. represents an alternate choice in “implementation” phase within the TCM
presenting the comparative data of the Framework is scoring higher than its
Process  Enablers  and  Enterprise principles. The bar chart can further counterparts, while the “assessment”
Capabilities Reports expand on the comparative data and phase has scored the least.
identify the score of the attributes of

32 COST ENGINEERING OCTOBER 2011

 There are many ways to view may reflect the level of effort required to Based on figure 26, one can see that
information. Using the best chart assists complete the process. there are more planning activities than
the team in determining correlations, The blue portion of the graph implementation activities.
root causes, and discrete patterns. indicates the expected activity count to Figure 27 identifies that the project
Another useful chart is the frequency be completed. The red portion identifies is approximately 80 percent compliant
graph, which allows you to identify the the number of activities that have in the implementation phase, and
tendency (number of occurrences) that actually been completed, indicating the approximately 50 percent compliant in
the data portrays. compliance of the process, and exposing the remaining three phases. Each chart
The information provided in figure where adherence is required. provides its own interpretation of the
24 indicates that 29 percent of the In the example shown in figure 25, data.
processes have only achieved a P-2 we can see that 7 out of the 15 As stated earlier, the CEMM is a
rating. The graph also provides the “forecasting” activities were completed diagnostic tool that supports the
cumulative values of the data. From this, (a 47 percent compliance rating). assessment of causality (cause and
one can realize that 90 percent of the Figures 26 and 27 represent a higher effect). The use of a graphical diagnostic
strength levels of the processes fall level of information compared to the assessment tool can provide valuable
below the P-4 rating. chart shown figure 25. This information insight into your organizations behavior.
Like other graphs, the frequency can be presented in many ways, two of
graph can be further dissected into which are shown in figures 26 and 27. Conclusion
smaller, more refined parts, i.e., strategic Figure 26 identifies the number of The intent of this article was to
asset management compared to project activities required to be completed provide the reader with an
controls, or process enablers to within each phase of the PDCA cycle, as understanding of the CEMM (CEMM) for
enterprise capabilities, etc. well as what was actually completed. the purposes of assisting organizations in

Compliance Reports
The maturity of the organization
may be in a state where minimal changes
are required. In other words, the
organization and its people have
achieved an advanced state. Therefore,
the issue of maturity (and not reaching
the desired results) may not lie in what
has been developed, but the choice to
follow.
The validation of compliance allows
you to understand whether the people
of the organization want to do the work
(individuals notoriously take the shortest
route or path of least resistance) or are
not equipped to do the work
(responsibility, accountability, authority,
time availability, etc.). Figure 26 - Radar Chart 5
Figure 25 demonstrates the
compliance behavior of the project being
assessed.
To validate the compliance of the
activities within the process, the radar
chart (shown in figure 25) overlays the
multi-variant information of the planned
requirements to what was actually
completed. This provides a visual aid for
demonstrating the adherence to the
process, standard, or regulation.
As we can see from figure 25,
“forecasting” has the largest amount of
activities (15) to be completed for the
entire process to be considered
complete. The number of activities does
not necessarily state importance, but

COST ENGINEERING OCTOBER 2011 33

 Figure 28 - Cost Engineering Maturity Model

establishing a leading position in total introduced Hammer and Company’s Finally, the article provided some
cost management effectiveness and PEMM, an effective tool for gaining examples of diagnostic analysis and
delivery. insight into an organization’s strengths reporting techniques to assist in
The article introduced the AACE and weaknesses regarding their understanding the maturity of one’s
International TCM Framework and how processes and capabilities. It also processes and enterprise.
this framework could assist in defining provided the reader with a systematic Figure 28 graphically illustrates the
"best in class" processes, and key inputs and methodical approach for developing complete aspect of the relationships
and outputs for the cost engineering and implementing the CEMM for within the CEMM. Each component
practitioners and the organization. It also assessing their own organization. represents a building block that further

34 COST ENGINEERING OCTOBER 2011

supports the development,
implementation and assessment of the Findings: Overall Maturity Maturity
CEMM. Process Enablers 31%
In conclusion, the CEMM provides Enterprise Capabilities 21%
organizations and cost engineering
practitioners with the opportunity to Findings: TCM Maturity Maturity
optimize their strategic asset Strategic Assessment Management * 26%
management and project controls Project Controls 35%
processes for project and organizational
success. Findings: SAM Maturity Maturity
Strategic Asset Planning 38%
Findings Project Implementation 18%
The CEMM was refined over the last Strategic Asset Performance Measurement 39%
couple of years to better provide an Strategic Asset Performance Assessment 12%
understanding of the maturity within an
organization. The release of the latest Findings: PC Maturity Maturity
version was tested against nine Planning 38%
companies. Implementation 17%
Measurement 44%
• 9 companies were assessed; 2 Assessment 28%
owner companies, 3 engineering
firms, 4 constructors. Process Enablers Maturity
• SAM capabilities were assessed SAM PC Overall
for the 2 owner companies. Design 25% 36% 31%
• PC capabilities were assessed Performers 40% 49% 45%
for all companies. Owner 27% 33% 30%
Infrastructure 21% 34% 29%
See figure 29. Metrics 12% 14% 13%

• Companies were ranked in order of * Only owner companies were assessed

the projects they executed (based
on project value); 3 Tier 1
companies, 4 Tier 2 companies, 2 Figure 29 - Nine Company Testing Results
Tier 3 companies. fragmented (lack TCM 3. Hammer, Michael and Lisa W.
integration and system support. Hershman. Faster  Cheaper  Better;
The 9 Levers for Transforming How
• Tier 1 = mega projects; Interesting Note: Three companies Work  Gets  Done, 1st Edition, New
• Tier 2 = large projects; and, were tested using only the PEMM as a York: Crown Publishing Group, a
• Tier 3 = small projects. determining factor for maturity. These division of Random House, Inc.,
companies scored significantly higher 2010.
• Observations without using the TCM Framework as 4. Hollmann, John, (Editor) AACE
• Tier 1, most sophisticated, the benchmark (scored 40 percent International,  Total  Cost
struggled with process higher on average). This finding only Management  Framework;  An
compliance. supports the need to compliment the Integrated  Approach  to  Portfolio,
• Tier 2, wanted to be PEMM with the TCM Framework in order Program, and Project Management,
sophisticated, struggled in to properly assess an organization’s 1st Edition, 2006.
application, and leadership. maturity. 5. Stephenson, Lance and Christopher
• Tier 3, did not care, found it to F. Michalak., Revitalizing Project
be a hindrance. REFERENCES Controls: A Roadmap to Excellence,
• Owner companies struggle with 1. Hammer, Michael and James AACE  Transactions, 50th AACE
the application of SAM, mimic Champy., Reengineering  the International Annual Conference,
engineering and constructors Corporation:  A  Manifesto  for Las Vegas Nevada, 2006.
project controls (owner Business  Revolution, Revised
companies did not define the Edition, New York: HarperCollins RECOMMENDED READING
role of “investment engineering Publishers, Inc., 2003. 1. Amos, Dr. Scott J., (Editor), AACE
or asset life cycle 2. Hammer, Michael. The Process International, Skills & Knowledge of
management”). Audit, Cambridge, Massachusetts: Cost Engineering, 5th Edition, 2004.
• In general, project controls Harvard Business Review, 2007.

COST ENGINEERING OCTOBER 2011 35

 2. Kerzner, Dr. Harold,, Advanced
Project  Management, 2nd Edition,
New Jersey: John Wiley & Sons, Inc.
2004.
3. Kerzner, Dr. Harold, Using  the
Project  Management  Maturity
Model, 2nd Edition, New Jersey: Expertise. Technology. Results.
John Wiley & Sons, Inc. 2005. Energy and Sustainability
4. Lewis, James P., Project  Planning, Management
Scheduling  and  Control, Revised
Edition, New York: McGraw-Hill, Inc. Capital Budgeting and
1995. Programming
5. Watkins, Michael. The First 90 Days,
1st Edition, Boston: Harvard Sustainable Planning and
Business School Publishing, 2003. Design

H. Lance Stephenson is Program and Construction

an employee of Management
Enbridge, located in
Edmonton, Alberta, Capital Asset Management
Canada. He is an AACE
International member
and he currently is a
member of the AACE
Technical Board, serving as director of [Link]
product integration. He can be contacted
by sending e-mail to:
[Link]@[Link].

CONSTRUCTION
C O N S U LT I N G S E R V I C E S

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ƋƵĂůŝƚLJ ŽĨ ƵƚŵŽƐƚ ŝŵƉŽƌƚĂŶĐĞ͕ ŝƚ͛Ɛ Ăůů ŝŶ ƚŚĞ ĚĞƚĂŝůƐ͘
DW ŝƐ ĚĞĚŝĐĂƚĞĚ ƚŽ ƉƌŽǀŝĚŝŶŐ ƚŚĞ ŚŝŐŚĞƐƚ ůĞǀĞů ŽĨ
ƐƵƉƉŽƌƚ ĂƐ ŽǁŶĞƌ͛Ɛ ƌĞƉƌĞƐĞŶƚĂƟǀĞ ŽŶ LJŽƵƌ ĐŽŶƐƚƌƵĐƟŽŶ
ƉƌŽũĞĐƚ͘ tĞ ƐƚĂŶĚ ƌĞĂĚLJ ƚŽ ƚĂĐŬůĞ ƚŚĞ ĚĞƚĂŝůƐ ĂŶĚ
[Link] | 800-898-9088 ĚĞůŝǀĞƌ ƚŚĞ ƌĞƐƵůƚƐ͘

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F O R I N A M E R I C A F O R 2010 TO P 100 C O N S T RU C T I O N M A N AG E M E N T FI R M

36 COST ENGINEERING OCTOBER 2011

 PROFESSIONAL SERVICES DIRECTORY

RECENTLY REVISED RECOMMENDED PRACTICES
Recommended Practice No. 17R-97  Recommended Practice No. 42R-08 
Cost Estimate Classification System Risk Analysis and Contingency Determination Using Parametric
Estimating
Recommended Practice No. 18R-97 
Cost Estimate Classification System: As Applied in Engineering, Recommended Practice No. 43R-08  
Procurement, and Construction for the Process Industries Risk Analysis and Contingency Determination Using Parametric
Estimating - Example Models as Applied for the Process Indus-
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visit: [Link]/resources/rp

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Infinitrac, this page
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Ron Winter Consulting, page 6 AACE International members face to face.

Skire, Inc., page 6
CONTACT
U.S. Cost, inside back cover Mark Stout at Network Media Partners Inc.
phone  410-584-1966   fax  410-584-8359  
For additional information about the listed advertisers or about adver- e-mail  mstout@[Link]   
tising with us, please phone Mark Stout at Network Media Partners,
(410) 584-1966, or e-mail him at mstout@[Link]
OR GO ONLINE AT [Link]

COST ENGINEERING OCTOBER 2011 37

 THE AACE® INTERNATIONAL BULLETIN

SECTION NEWS FROM AROUND

THE WORLD

Arizona Section “Outstanding Woman in Project Controls,” and Julian Anderson

The Arizona Section's board m e e ti n g received a “Lifetime Achievement” award.
was on Thursday, Aug. 25, at the Hill Inter- At the August section meeting, Section President, Hannah
national offices in Phoenix. The board was pleased Schumacher, reviewed the "AACE Duties and Responsibilities"
to receive a plaque as an AACE International 2011 “Outstanding for each board member position for the 2011-2012 year. The
Section” at the Annual Meeting in June at Anaheim, Calif. board discussed efforts and systems to expand section activities
At the Annual Meeting, two section members were also in- by reaching out to universities and community college programs
dividually recognized. Hannah Schumacher was awarded the and raising awareness of student membership.

Subm tted photo

Arizona Section Board Members are shown above with their 2011 Outstanding Section plaque that was awarded at the Annual
Meeting in Anaheim, Calif. in June. Shown from left to right are Chris Hudson, CCC, CEP; Cindy King; Daisy Culanag, Sunitha Jain,
LEED AP; Hannah Schumacher, LEED AP, PSP, PMI-SP; Marina Sominsky, PMP; and Gary Robertson, CCC, PSP.

38 COST ENGINEERING OCTOBER 2011

 In upcoming events, the board plans to extend Nov. 9 dinner meeting.
invitations/announcements to other Phoenix project profes- The Great Lakes Section was pleased to receive an “Out-
sional organizations about the Arizona Section monthly presen- standing Section” award at this year’s Annual Meeting in Ana-
tations that may be of interest to them. Other topics of heim, CA. This was the third straight year the section has
discussion included finalizing a calendar of events and setting achieved and received an award at the Annual Meeting. ◆
up a new website for the section. the goal for the new website
is to provide section members with easy access and updates on
all section activities. HOW TO SUBMIT SECTION NEWS 
TO THE COST ENGINEERING JOURNAL
Great Lake Section All submissions should be e-mailed to editor@[Link].
Elections for the Great Lakes Section were conducted in Information may be included in the body of the e-mail or as
April. In addition to the re-election of existing officers and board an attachment. Microsoft Word files are the preferred
members, Brennan Cagney was elected vice president from di- format. All photos should be sent as PC tiff or jpg files at 300
rector. Two new faces, Ken Krill, CPC, PSP, president of [Link] dpi. If submitting at only 72 dpi, please send the photo as
& Associates, and Paul Wasinski, PMP, PSP, president of Sched- large as possible as conversion will reduce its size. Include the
ulePro, LLC, were elected to the section board of directors. Re- names and titles of each person shown in any photos.
turning section officers are: Jim Krebs, PE, CCE, PMP – president; Many times AACE International Sections have been
Bob Gansen, PMP, CMA – secretary; and Scott Trowbridge, PE, referred to as chapters. The correct reference should always
CCE – treasurer. In addition to the newly elected board mem- be to a Section. AACE International does not have chapters.
bers, returning board members are: Dale Burke; Brett Houpt, Please do not refer to Sections as chapters.
PSP, EVP and Kris Ostermiller, CCC, PSP. The section extends spe- If an event is during the month of publication, it will be
cial thanks to outgoing Vice President Jeffery Borowicz, and Di- listed as an upcoming event even if members will not receive
rector Jeff Taylor for their service during the 2010-2011 year. their journal in the mail until after the listed event. The
The Great Lakes Section conducted two meetings over the journal goes to press about one months in advance of the
summer to develop the 2011-2012 dinner meeting program. issue date, which is always the first of each month, at which
Arrangements were finalized to have author and president of time the electronic version should be posted.
ICS-Global, Murray Woolf, speak Sept. 15, on the topic of, “Bring- AACE International reserves the right to edit all
ing Balance and Sanity Back to Construction Project Manage- submissions and to refuse to publish any submissions
ment.” determined by the editor or executive director to not meet
Arrangements were also finalized to have Mohamed El- the standards of the journal.
mehalawi of Faithful & Gould, speak Oct. 12, on the topic of, Anyone with questions on submitting copy or photos
“Implementing Enterprise Project Controls Systems.” Addition- may contact:
ally, Kurt Winkel of Marathon Oil has been scheduled to discuss,
Managing Editor - Marvin Gelhausen,
“Marathon DHOUP Project Controls” at the Great Lakes Section’s
mgelhausen@[Link]

October to December Member Recruitment Drive Set

N
ew members joining AACE International after Octo- 14-15, 2012, in Dubai, United Arab Emirates. The two-day
ber 1, 2011, will pay 2012 dues and receive the re- meeting will have a distinct international flavor.
mainder of 2011 for free. This means that new Other Improved Membership Features
members will experience 15 months of membership benefits A redesigned Cost Engineering journal and AACE website;
before making their first renewal decision. To assist members an enhanced Career Center; an expanded Virtual Library; re-
in recruiting new members, AACE offers an online recruiting vised Canons of Ethics; improved resources for section lead-
presentation featuring interactive narration of the numerous ers: expanded International Scholarship Program; and an
career advantages to new members. New members-only ben- improved membership infrastructure.
efits added recently are: Members wishing to recruit a new member can refer po-
• AACE International Presents: This monthly online pres- tential members to the membership recruitment presentation
entation is a great way for members to keep up with new on the AACE website. Members may also download an online
ideas without leaving the office! membership brochure to use in promoting membership.
• Visual Total Cost Management Framework: An interac- Members who sponsor a new member will be automati-
tive visual rendition of the total cost management con- cally entered into a drawing held for an all expenses paid trip
cept. to the next Annual Meeting. In addition, a drawing will be con-
• Mentoring: A comprehensive mentoring program using ducted on a quarterly basis from among sponsors. The winner
resources by a leading mentoring expert. of the drawing will receive $250 toward the purchase of AACE
• International Total Cost Management Conference: Nov. International logo clothing from Lands End.

COST ENGINEERING OCTOBER 2011 39

 IN MEMORIAM

Lawrence J. “Larry” Daughter Adrienne affectionately reminiscences on the

Fluor years, “Dad and I would have our weekly lunches at his
Bloch, CCE  (1932-2011) place of work. During the summer, Fluor sponsored concerts at
Lawrence J. “Larry” Bloch, CCE, lunch time. We would enjoy the live bands each week, Dad loved
AACE International’s 25th Presi- music. I’ll never forget Dad giving me ‘ballroom style’ dance les-
dent, who served from 1982-1983, sons before my wedding. We would glide around the room; I
died July 16, 2011, in Cypress, Calif. was floating on air in his arms. It was magical.”
A small family service was con- While employed at Fluor, Bloch developed several computer
ducted at Forest Lawn Memorial programs for estimating the cost of energy related programs.
Park in Cypress on July 20. It kept His expertise led to membership in 1969, in the American Asso-
with his faith that he be buried ciation of Cost Engineers which later became AACE International,
within three days following his the Association for the Advancement of Cost Engineering Inter-
death. The service was presided over by Rabbi Rebecca Schorr national. Bloch’s activism in AACE lead to many honors, including
from Temple B’nai Tzedek. the Award of Merit (1998) and Honorary Life membership (2000)
Bloch was born to Jules and Ethel Bloch on Jan. 8, 1932, in and being named as an AACE Fellow. He was recipient of the
Brooklyn, NY. He spent his youth in Miami Beach, Fla. Prior to O.T. Zimmerman Founder’s Award (1990); recipient of the Frank
being drafted into the Army, Bloch worked with his father and M. Russell Award for outstanding service (1989) and Technical
brother, Robert, in the construction business. Presentation Awards from Fluor Corporation (1972 and 1979);
As an Army draftee, Bloch was stationed in Columbia, SC, and he was selected for Who’s Who in Engineering and Who’s
where he met the love of his life, Bobbie Mielke, at a USO dance. Who in Engineering Worldwide.
He was immediately smitten with the nursing student, describ- As an AACE member, he served as an Association Director
ing his future bride as an “Elizabeth Taylor look alike.” (1977-1979); technical VP (1980-81); Administrative VP (1981-
Bloch actually met the violet-eyed actress in Miami Beach, 1982); Association President (1982-1983); and Past President
when he offered a lift to a young woman who was having car (1983-1984). Bloch went on to serve as Southern California Sec-
trouble. Upon arriving at a repair shop, his passenger looked at tion President (1986-1987). He continued to work for the Asso-
him and asked, “You know who I am don’t you?” He replied, ciation in numerous positions over the years, culminating with
“You’re Elizabeth Taylor.” his designation as Membership Committee Chairman from 1986
Bobbie lovingly remembers their whirlwind courtship. The through 1992.
couple was married on Oct. 26, 1952, just six weeks after they Bobbie looks back on the Association years as a time of jour-
met. Bobbie recalled “Larry was living in a tent with other non- neys and camaraderie with the many friends they made in the
commissioned officers and sought marriage to escape the field engineering world. She describes that time as one of, “world-
for the comforts of apartment living with his bride.” wide travel and friendship. We shared the ‘Good Life’ and I will
He returned to Florida and the family business following his never forget the happiness of our Association days. I will miss
Army stint. His Florida years were productive ones, considering Larry. We had wonderful times together but I am content to stay
he graduated from the University of Miami with a degree in home now.”
structural engineering. He and Bobbie’s family also grew from Bloch’s professional credentials were impeccable but he did
two to four—son Curtis and daughter Adrienne were born in not limit his talent to the professional arena alone. He was an
Miami Beach during that time. active participant in Civic affairs. He was also one of five mem-
In 1962, Bloch moved to California with his family, where bers of a Cypress Fiscal Advisory Committee that explored ways
he moved from general construction to heavy construction, to avoid raising taxes within the city. This was the result of the
working on power plants and refineries for Holmes and Narver. state withholding taxes and other funds from the city. The group
He spent five years with the Los Angeles-based company, where spent over 1,800 hours examining every department in the city
his experience earned him a position with Fluor Corporation, the and provided the city council with a list of things that needed to
world’s largest engineering and construction company. be done to avoid raising taxes. As a result, the city adopted al-
Bloch also continued his education by taking classes through most all of the recommendations and there were no new taxes
his job at Fluor; he received Three Master Certificates from UC imposed.
Fullerton in mechanical engineering and design; metallurgy; and Bloch was active in several Cypress organizations and re-
industrial management. His career with Fluor lasted 30 years; ceived a resolution from the City of Cypress commending him
and he continued as a consultant for another two and a half for his civic involvement. Among the organizations in which
years. Bloch held membership status are the Cypress Kiwanis Club,

40 COST ENGINEERING OCTOBER 2011

Board of Directors, Cypress Civic Theatre, Friends of Cy-
press Cultural Arts, Cypress Chamber of Commerce (14
years), Miss Cypress Pageant Committee, and Cypress
College Patron of the Arts. Bloch served Orange County
as chairman of the Citizen’s Leadership Advisory Group.
The OC Board of Supervisors also honored him with a res-
olution recognizing his civic involvement.
Bloch will be fondly remembered by the people in
Cypress whose lives were touched by his endeavors for
the betterment of the community.
“These are the words that come to mind when de-
scribing Larry—kind, gentle, integrity, wisdom, intellectu-
alism, and loving,” friend Leo Friedland said. Friedland
then added, “may the Force be with you.”
All who knew Bloch agree that he was a brilliant en-
gineer, a conscientious citizen, and a loving family man.
But the highest tribute paid to him was expressed best by
Adrienne, who said, “My dad was a very soft spoken, gen-
tle man. Dad was the hardest working person I’ve ever
met. His work and life ethics, the way he lived his life and
the way he treated people has greatly influenced my life.
I have so much respect for him as a person.”
May his memory be a blessing. ◆
Reprinted from the Cypress Event News.

COST ENGINEERING OCTOBER 2011 41

 ARTICLE REPRINTS AND PERMISSIONS

COST ENGINEERING Vol. 53, No.10/October 2011

Members of AACE Internat ona have access to free down oads of se ected art c es
that are pub shed w th an AACE Internat ona reference number. These art c es are
ava ab e at the on ne V rtua L brary at [Link] .org. E ectron c f es of each
month’s techn ca art c es are posted and members can down oad an Adobe Acrobat
(PDF) vers on of any of the techn ca art c es for free. You can search for art c es
us ng the reference numbers sted n the Cost Engineering journa . Non-members
can subscr be to the AACE V rtua L brary at an annua cost of US $100.00. AACE In-
ternat ona no onger offers repr nts of nd v dua art c es.

Pages 13-36
Cost Engineering Maturity Model (CEMM)
H. Lance Stephenson, CCC
“Many compan es have sought to enhance the performance of the r project
contro s organ zat on and systems to prov de management w th more pred ctab e
and re ab e resu ts n support of the r project dec s on-mak ng processes [5].” It
has been found that tt e success has been accomp shed for many of those or-
gan zat ons who have attempted to mprove those key e ements of Tota Cost
Management. The Cost Eng neer ng Matur ty Mode (CEMM), as ntroduced n
th s art c e, s a methodo ogy to support the mprovement and deve opment of
an ntegrated Tota Cost Management standard. The Cost Eng neer ng Matur ty
Mode (CEMM) prov des the project team and organ zat on w th a comp ete un-
derstand ng of the r enterpr se capab t es and processes n compar son to n-
dustry standards, best pract ces, and cu tura norms. The CEMM w substant ate
the techn ca adherence to Tota Cost Management and prov de organ zat ons
TO ORDER w th an effect ve too for deve op ng or enhanc ng the project contro s systems
Contact: AACE International Publications Sales (peop e, processes, and too s) and asset management ( fe cyc e) de very w th n
the company. The AACE Internat ona Tota Cost Management (TCM) Framework,
at pubsales@[Link]
comp mented w th Hammer and Company’s Process and Enterpr se Matur ty
Mode (PEMM™), w be used as the benchmark for app y ng the appropr ate
Photocopying Prices: eve of matur ty requ red for asset deve opment, management, and project de-
For permission to photocopy individual articles very success. Th s art c e w prov de readers w th an understand ng of the Cost
for personal use, or to request permission for Eng neer ng Matur ty Mode (CEMM) for the purpose of ass st ng organ zat ons
bulk photocopying, please contact the Copy- n estab sh ng a ead ng pos t on n Tota Cost Management effect veness and de-
right Clearance Center at 978.750.8400, and very. Th s art c e was presented at the 55th AACE Annua Meet ng, June 19-22,
pay the required photocopying fees. For any 2011, at Anahe m, Ca f., as presentat on OWN.802.
other use or reprint requests, please e-mail: Article Reference Number - 21963
editor@[Link].

Contact Us
AACE International
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Phone: 304.296.8444
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For Information Concerning

Other Reuse Requests
If you are seeking permission to quote or
translate into another language any material
from any issue of the Cost Engineering journal,
please contact our Managing Editor, Marvin
Gelhausen at mgelhausen@[Link]

COST ENGINEERING  OCTOBER 2011 43

 CALENDAR OF EVENTS
OCTOBER 2011 JULY 2012 NOVEMBER 2012
16-20 ACI Fall 2011 Convention, 5-8 AACE International 14-15 AACE International’s
The American Concrete Institute (ACI), Education Seminars, International Total Cost Manage-
Millennium Hotel and AACE International ment Conference,
Duke Energy Center Marriott Rivercenter Hotel AACE International
Cincinnati, OH San Antonio, TX Hyatt Regency Dubai and Galleria 
Contact: [Link] Contact: phone 1-800-858-COST Dubai, United Arab Emirates
fax (304) 291-5728 Contact: phone 1-800-858-COST
26-22, Nov 2 Qualified SWPPP info@[Link] fax (304) 291-5728
Practitioner (QSP) Qualified SWPPP [Link] info@[Link]
Developer (QSD) Training for Califor- [Link]
nia General Permit 8-11 AACE International’s
Southern California Chapter of the 56th Annual Meeting, Please submit items for future
Construction Management Associa- AACE International calendar listings at least 60
tion of America, Marriott Rivercenter Hotel
The Grand Conference Center days in advance of desired
San Antonio, TX publication.
Long Beach, CA
Contact: [Link]
Contact: phone 1-800-858-COST
fax (304) 291-5728 AACE International,
sccmaa@[Link]
info@[Link] 1265 Suncrest Towne Centre Dr,
[Link] Morgantown, WV 26505-1876
NOVEMBER 2011
USA
11-17 2011 ASME Mechanical 12-13 AACE International
Engineering Congress and Exposition,
phone: 304-296-8444
The American Society of Mechanical Education Seminars, fax: 304-291-5728
Engineers (ASME), AACE International e-mail: editor@[Link]
Hyatt Regency Denver and Colorado Marriott Rivercenter Hotel website: [Link]
Convention Center San Antonio, TX
Denver, CO Contact: phone 1-800-858-COST
Contact: [Link] fax (304) 291-5728
info@[Link]
12 AACE International [Link]
Leadership Conference,
AACE International
Magnolia Hotel
Houston, TX
Contact:
[Link]/mtgs/ldrconf/

MARCH 2012
15-18 2012 Western Winter
Workshop,
San Francisco Bay Area Section of
AACE International
Harrah’s & Harveys Casino Resort
Lake Tahoe, NV
Contact:
[Link].2012@[Link]
[Link]

44 COST ENGINEERING OCTOBER 2011

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