Project controls are necessary to manage both variances (actual changes in planned items) and trends (anticipated changes or risk) for elements of scope, cost and timing. (For purposes of this Module, scope is defined as the equipment, materials, and labor required in the design basis, for a designer, or the design documents, for a contractor, and the means and methods required to complete the work.) Because variance and risk management require the elements of identification, analysis, and attenuation (the minimizing of potential problems), the focus of project management must be on communication (and, therefore, understanding) by each party of the issues and risks involved. Tools must be in place to evaluate completion progress against the initial, or "baseline," plan to the satisfaction of each party.

Identification and analysis of cost and schedule issues (which often are the result of scope changes) begin with an evaluation of variances from the baseline plan, at the smallest definable task. For example, tasks such as the work of an engineer include the labor means and methods to develop a drawing, specification, etc. These tasks can cause problems in timely completion, due to changes in the scope of work or to the planned design sequence.

Attenuation requires an understanding of contractual requirements to rapidly respond to project scope or other changes, as well as frequent/periodic monitoring of cost and schedule variances and trends, implementation of effective safety and quality assurance plans, and also flexibility in the application of resources. Flexibility must be built into a project budget (additional contingency to recover lost time) and schedule (ability to re-sequence work to recover lost time without increasing costs). With early application of a "semi-continuous" process to address positive and negative impacts to budget procurement activities, the progress of critical tasks, and potential or pending scope changes, these variances and risks can be managed. It should be noted that positive variances are also important because it may be possible to exceed the goals or provide offsetting allowances as the project progresses.

The focus of controls is not only on issues, but also on the timeliness of the decision-making process. To avert costly delays, issues must be resolved as soon as possible within a phase, and certainly prior to moving to the succeeding phase. This is shown via the dotted line "loop" shown in Figure 1.