An excellent solution for major construction projects – optimised construction cost controlling at Gewobag
Project Waterkant in the Berlin district of Spandau
About Gewobag and its construction projects
Gewobag Wohnungsbau-Aktiengesellschaft Berlin is one out of a total of six state-owned Berlin housing companies and, with around 74,000 flats and more than 130,000 tenants, one of the largest real estate companies in Germany. The existing housing stock is constantly being expanded with new buildings and acquisitions. Alongside the Waterkant project, Gewobag is currently working on a number of other major construction projects in Berlin. Adding extra storeys to residential buildings as well as renovation, modernisation and neighbourhood development projects or periodic maintenance are part of everyday working life, especially for the technology team at the company. Manuela Howe is responsible for commercial coordination as well as construction cost controlling. Together with Jan Kramer, Expert Consultant at PROMOS consult, she took over the project management for the introduction of the PROMOS construction account and project cockpit.
At Gewobag, there are coordinated processes within the company for every type of project – from periodic maintenance to major modernisation and new construction projects for which the specific design determines the construction volume. Every project involves a varied range of stakeholder groups. For example, Portfolio Management coordinates the customers’ wishes, the Purchasing department is responsible for commissioning the construction companies and Portfolio and Asset Management takes on the role of object owner. External parties, such as authorities and planning offices, are also important contact groups during the course of the overall project cycle.
The complexity of the projects makes constant, multi-layered exchange of information essential – whether for the purpose of obtaining approval or distributing monthly reports. In the past, Gewobag primarily used Microsoft® Excel to prepare its construction-related information. The Controlling team did not enter budgets in the system directly, but imported them through an Excel upload. Above all in the event of budget increases, the effort and lost time was immense, as both the requester and the approving department had to manually upload their data to SAP®. As a result, in the worst case it could take several days for the approval. “We wanted to move away from having to send our data via e-mail in various Excel spreadsheets. For everything from sending milestones, monthly reports to our board members or even liquidity planning to our Accounting team – we were certain that an end-to-end solution in our leading system, i.e. SAP®, would significantly ease the workload for all those involved,” says Howe, explaining the motivation behind the project’s initiation. She then adds: “With PROMOS, we decided on an experienced service provider with whom we could implement our individual requirements conscientiously with a focus on solutions.” The project started in September 2021 and was successfully completed in February 2023.
Manuela Howe, commercial coordinator in the Technology department
Requirements for the solution
The start of every project involves an individual requirements analysis together with the customer. Jan Kramer describes this process at Gewobag as follows: “we quickly realised that the PROMOS project cockpit and construction account essentially cover all the aspects that the technology team at Gewobag desired.” Above all, this included implementation of a transparent solution. The wish was that this should allow everyone with the correct authorisation to easily look in the system and determine the current project status. Furthermore, the solution should enable users to flexibly switch between the required applications and information. The introduction of the solution should make it easier and faster for project managers – who are generally not responsible for just one or two modernisation projects but often several maintenance projects or ongoing measures – to gain an overview of the data that is relevant for them. The solution description demonstrates how well these requirements were met.
About the solution and process optimisations
Generally speaking, with the introduction of the new solution, Gewobag employees have been given an optimal tool to access their data quickly and clearly. The construction account bundles together all the important information and makes it particularly easy to jump to more in-depth or overarching information. From within the project cockpit, it is particularly easy for project managers to jump to other applications or processes in the SAP® system. The IT project team has also implemented specific requirements of Gewobag, which are explained in more detail below.
Figure 1: All master and cost-related data for a project is presented clearly in the project cockpit.
Digitalisation of the supplements process
The supplements process for budget supplements was fully digitalised during the course of the project. Gewobag distinguishes between supplements that are already covered by a previously planned budget for “unexpected events” and supplements that go beyond this. If the budget for unexpected events is used up, a simple budget adjustment is required, which can be approved internally using a simple form. Budget overruns going beyond this require multi-level approval, which may even go as high as the Board. “We have a special tool for this, which we can use to maintain supplements directly in SAP®. This automatically initiates an approval process that involves up to six steps. Of course, employees can see the progress of this workflow at any time digitally and, following approval, the budgets are updated automatically. We are extremely pleased with the implementation, as we no longer need to send a separate approval form by e-mail. This saves us many additional work steps and also a significant amount of time,” Howe notes with satisfaction. As is usual for easysquare workflow processes, substitute rules can be used for the approval process. What’s more, a pool solution was implemented for some areas, which allows several users at the different levels to provide the approval.
Implementation of digital monthly reporting
In the case of major construction projects that the Management Board or Supervisory Board approved, monthly reports on the construction progress are created. For the first time, these can be called up directly in SAP®. While the costs for construction projects were already mapped via SAP® previously, now appointments, project participants, the project type, object data, living and floor space, the individual project phases, risk assessments and much more important information is also recorded here and automatically presented accordingly.
Figure 2: Now anyone with the correct authorisation can generate the monthly reports for the Management Board and Supervisory Board directly from within SAP® as a PDF.
Gewobag uses linear cost distribution for budget planning. The project managers plan their budgets, which are then automatically distributed across the entire construction planning period. This budget planning can then be used to automatically generate a liquidity plan. Howe observes with satisfaction: “We no longer need to complete separate Excel spreadsheets from the Accounting department and enter the forecast for the next six months there. Luckily the system does this on its own.”
Another particularly useful feature is the new maintenance profiles that PROMOS created for budget planning. Alongside the budget, cost calculation and quotation, there are further profiles for forecasts, the current approval and the Supervisory Board approval that may be required. Howe explains the advantages: “The cost monitoring across the individual maintenance profiles is a real highlight for us. For example, when we start with the budget, we can see the cost development via the individual nodes. Have the costs increased or did we stay within the planning horizon? We also use this overview to look back on completed projects.”
Summary and conclusion
The implementation of the PROMOS construction account and the project cockpit placed Gewobag in the position to effectively link its project data to cost controlling and analyse it. “Our processes are significantly more efficient since the introduction of the solution and we have also achieved much greater transparency. All our construction-related data is now available in SAP® at all times and can be analysed. This is extremely convenient for all project participants and we have received only positive feedback from our project managers so far,” says Howe, summing up the successfully completed project. The project team will evaluate the processes again in a year’s time to identify any potential areas that require fine-tuning. We’ll be eagerly waiting!