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Chapter 9
Project Monitoring and Control
Project Management Process
Groups
Chapter 9 Project Monitoring & Control 3
Project Monitoring and Control
 Monitoring – collecting, recording, and
reporting information concerning project
performance that project manger and others
wish to know
 Controlling – uses data from monitor activity
to bring actual performance to planned
performance
 Outputs include performance reports,
requested changes, and updates to various
plans
Chapter 9 Project Monitoring & Control 4
Why do we monitor?
 Simply because we know that things
don’t always go according to plan (no
matter how much we prepare)
 To detect and react appropriately to
deviations and changes to plans
5
Project Control
 Ongoing effort to keep your project on track
 4 primary activities:
 1. Planning performance

schedule, and a control process
 2. Measuring status of work performed

Actuals
 3. Comparing to baseline

Variances
 4. Taking corrective action as needed

Response
 Prerequisite to good control is a good plan
6
Project Control
 “Control”

Power, authority, domination. No.

Guiding a course of action to meet an objective. Yes.
 Principles

Work is controlled, not workers
 Control helps workers be more effective & efficient

Control based on work completed

Balance
 Appropriate level between too much and too little
 Includes:

Micro-managing vs. neglect

Too much tracking detail vs. too little
7
Progress Monitoring
 The 3 key Progress Monitoring
Questions
 What is the actual status?
 If there’s a variance, what is cause?
 What to do about it?
 Possible responses

1. Ignore

2. Take corrective action

3. Review the plan
8
Progress Monitoring
 Monitoring rates
 Daily, weekly, monthly
 If problems occur – then adjust

You may have to monitor problem areas more closely

For some period of time

Almost always there’s one or more areas under closer
scrutiny
 Status Reporting
 Part of the communications management plan
9
Status Reports
 From team to PM, from PM to stakeholders
 Typical format for letter
 Summary
 Accomplishments for this period (done)

Tasks, milestones,

Plans for next period (to-do)
 Risk analysis and review
 Issues & Actions
 Shoot for weekly updates
 Email notes, then hold brief meeting
 More frequently during crises
Traffic Light Assessment
 Identify the key element
 Break these key element in constitute element
 Access each second level element
 Green (on target)
 Amber (not on target but recoverable)
 Red (not on target but recoverable with difficulties)
 Review all the second level assessment to arrive at
first level assessment
Chapter 9 Project Monitoring & Control 10
Chapter 9 Project Monitoring & Control 11
Project Control Cycle
PLAN
Specifications
Project Schedule
Project budget
Resource plan
Vendor contracts
MONITOR
Record status
Report progress
Report cost
COMPARE
Actual status
against plan
-Schedule
-Cost
ACTION
Correct
deviations
from plan
RE-PLAN as
necessary
Chapter 9 Project Monitoring & Control 12
Project Control
 Control – process and activities needed to
correct deviations from plan
 Control the triple constraints
 time (schedule)
 cost (budget, expenses, etc)
 performance (specifications, testing results, etc.)
Chapter 9 Project Monitoring & Control 13
Techniques for monitoring and
control
 Earned Value Analysis
 Critical Ratio
Chapter 9 Project Monitoring & Control 14
Earned Value Analysis (EVA)
 Earned Value analysis is a method of performance
measurement
 EVA is also called Variance Analysis
 Metric of project tracking
 “What you got for what you paid”
 Physical progress
 Pre-EVA ‘traditional’ approach
 1. Planned time and costs
 2. Actual time and costs
 Progress: compare planned vs. actual
 EVA adds third dimension: value
 Planned, actual, earned
Chapter 9 Project Monitoring & Control 15
Earned Value Analysis
 If total value of the work accomplished is in balance
with the planned (baseline) cost, and actual cost then
top mgmt has no particular need for a detailed
analysis of individual tasks
 Old models include cost & expenditure
 EVA adds schedule estimation
 Measured in dollars or hours
16
Earned Value Analysis
 3 major components

BCWS: Budgeted Cost of Work Scheduled
 Now called “Planned Value” (PV)
 “Yearned”
 How much work should be done?

BCWP: Budgeted Cost of Work Performed
 Now called “earned value” (EV)
 “Earned”
 How much work is done?
 BCWS * % complete

ACWP: Actual Cost of Work Performed
 Now called “Actual Cost” (AC)
 “Burned”
 How much did the work done cost?
17
Derived EVA Variances

SV: Schedule Variance
 BCWP – BCWS
 Planned work vs. work completed

CV: Cost Variance
 BCWP – ACWP
 Budgeted costs vs. actual costs
 Negatives are termed ‘unfavorable’

“What is the project status”?
 You can use variances to answer this
18
Derived EVA Ratios
 SPI: Schedule Performance Index
 BCWP / BCWS
 CPI: Cost Performance Index
 BCWP / ACWP
 Interpretation of Indexes
19
Earned Value Analysis
 Other Derived Values

BAC: Budget At Completion
 Sum of all budges (BCWS). Your original budget.
 Planned Value (PV) at the end of the project

EAC: Estimate At Completion
 Forecast total cost at completion
 EAC = ((BAC – BCWP)/CPI) + ACWP
 Unfinished work divided by CPI added to sunk cost
 If CPI < 1, EAC will be > BAC

CR: Critical Ratio
 SPI x CPI
 1: everything on track
 > .9 and < 1.2 ok
 Can be charted
EVA Example-1
 You have a project to be completed in 12 months and total cost of
project is $100,000. Six months have been passed (and schedule says
that 50% of work should be completed).
 Six months have been passed and $60,000 is spent but on closer look
you find that only 40% of work is completed so far.
 Planned Value (BCWS)
 Project duration – 12 months
 Project Cost (BAC) = $100,000
 Percent complete – 50% (as per the schedule)
 Planned Value = 50% of value of total work
 = 50% of BAC
 = 50% of $100,000
 = (50/100)X $100,000
 = $50,000
 Chapter 9 Project Monitoring & Control 20
EVA Example-1
 Earned Value (BCWP)
 Hence, Earned Value is = 40% of value of total work
 = 40 % of BAC
 = 40% of $100,000
 = 0.4X$100,000
 = $40,000
  Therefore, Earned Value (EV) is $40,000
 Actual Cost (ACWP)
And in our question, you have spent $60,000 on the project so far.
 Hence, Actual Cost is $60,000
 Calculate SPI and CPI?
Chapter 9 Project Monitoring & Control 21
22
Earned Value Analysis
 Benefits
 Consistent unit of measure for total progress
 Consistent methodology

Across cost and completed activity

Apples and apples comparisons
 Ability to forecast cost & schedule
 Can provide warnings early
 Success factors
 A full WBS is required (all scope)

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Ch 9 project monitoring &amp; control updated

  • 3. Chapter 9 Project Monitoring & Control 3 Project Monitoring and Control  Monitoring – collecting, recording, and reporting information concerning project performance that project manger and others wish to know  Controlling – uses data from monitor activity to bring actual performance to planned performance  Outputs include performance reports, requested changes, and updates to various plans
  • 4. Chapter 9 Project Monitoring & Control 4 Why do we monitor?  Simply because we know that things don’t always go according to plan (no matter how much we prepare)  To detect and react appropriately to deviations and changes to plans
  • 5. 5 Project Control  Ongoing effort to keep your project on track  4 primary activities:  1. Planning performance  schedule, and a control process  2. Measuring status of work performed  Actuals  3. Comparing to baseline  Variances  4. Taking corrective action as needed  Response  Prerequisite to good control is a good plan
  • 6. 6 Project Control  “Control”  Power, authority, domination. No.  Guiding a course of action to meet an objective. Yes.  Principles  Work is controlled, not workers  Control helps workers be more effective & efficient  Control based on work completed  Balance  Appropriate level between too much and too little  Includes:  Micro-managing vs. neglect  Too much tracking detail vs. too little
  • 7. 7 Progress Monitoring  The 3 key Progress Monitoring Questions  What is the actual status?  If there’s a variance, what is cause?  What to do about it?  Possible responses  1. Ignore  2. Take corrective action  3. Review the plan
  • 8. 8 Progress Monitoring  Monitoring rates  Daily, weekly, monthly  If problems occur – then adjust  You may have to monitor problem areas more closely  For some period of time  Almost always there’s one or more areas under closer scrutiny  Status Reporting  Part of the communications management plan
  • 9. 9 Status Reports  From team to PM, from PM to stakeholders  Typical format for letter  Summary  Accomplishments for this period (done)  Tasks, milestones,  Plans for next period (to-do)  Risk analysis and review  Issues & Actions  Shoot for weekly updates  Email notes, then hold brief meeting  More frequently during crises
  • 10. Traffic Light Assessment  Identify the key element  Break these key element in constitute element  Access each second level element  Green (on target)  Amber (not on target but recoverable)  Red (not on target but recoverable with difficulties)  Review all the second level assessment to arrive at first level assessment Chapter 9 Project Monitoring & Control 10
  • 11. Chapter 9 Project Monitoring & Control 11 Project Control Cycle PLAN Specifications Project Schedule Project budget Resource plan Vendor contracts MONITOR Record status Report progress Report cost COMPARE Actual status against plan -Schedule -Cost ACTION Correct deviations from plan RE-PLAN as necessary
  • 12. Chapter 9 Project Monitoring & Control 12 Project Control  Control – process and activities needed to correct deviations from plan  Control the triple constraints  time (schedule)  cost (budget, expenses, etc)  performance (specifications, testing results, etc.)
  • 13. Chapter 9 Project Monitoring & Control 13 Techniques for monitoring and control  Earned Value Analysis  Critical Ratio
  • 14. Chapter 9 Project Monitoring & Control 14 Earned Value Analysis (EVA)  Earned Value analysis is a method of performance measurement  EVA is also called Variance Analysis  Metric of project tracking  “What you got for what you paid”  Physical progress  Pre-EVA ‘traditional’ approach  1. Planned time and costs  2. Actual time and costs  Progress: compare planned vs. actual  EVA adds third dimension: value  Planned, actual, earned
  • 15. Chapter 9 Project Monitoring & Control 15 Earned Value Analysis  If total value of the work accomplished is in balance with the planned (baseline) cost, and actual cost then top mgmt has no particular need for a detailed analysis of individual tasks  Old models include cost & expenditure  EVA adds schedule estimation  Measured in dollars or hours
  • 16. 16 Earned Value Analysis  3 major components  BCWS: Budgeted Cost of Work Scheduled  Now called “Planned Value” (PV)  “Yearned”  How much work should be done?  BCWP: Budgeted Cost of Work Performed  Now called “earned value” (EV)  “Earned”  How much work is done?  BCWS * % complete  ACWP: Actual Cost of Work Performed  Now called “Actual Cost” (AC)  “Burned”  How much did the work done cost?
  • 17. 17 Derived EVA Variances  SV: Schedule Variance  BCWP – BCWS  Planned work vs. work completed  CV: Cost Variance  BCWP – ACWP  Budgeted costs vs. actual costs  Negatives are termed ‘unfavorable’  “What is the project status”?  You can use variances to answer this
  • 18. 18 Derived EVA Ratios  SPI: Schedule Performance Index  BCWP / BCWS  CPI: Cost Performance Index  BCWP / ACWP  Interpretation of Indexes
  • 19. 19 Earned Value Analysis  Other Derived Values  BAC: Budget At Completion  Sum of all budges (BCWS). Your original budget.  Planned Value (PV) at the end of the project  EAC: Estimate At Completion  Forecast total cost at completion  EAC = ((BAC – BCWP)/CPI) + ACWP  Unfinished work divided by CPI added to sunk cost  If CPI < 1, EAC will be > BAC  CR: Critical Ratio  SPI x CPI  1: everything on track  > .9 and < 1.2 ok  Can be charted
  • 20. EVA Example-1  You have a project to be completed in 12 months and total cost of project is $100,000. Six months have been passed (and schedule says that 50% of work should be completed).  Six months have been passed and $60,000 is spent but on closer look you find that only 40% of work is completed so far.  Planned Value (BCWS)  Project duration – 12 months  Project Cost (BAC) = $100,000  Percent complete – 50% (as per the schedule)  Planned Value = 50% of value of total work  = 50% of BAC  = 50% of $100,000  = (50/100)X $100,000  = $50,000  Chapter 9 Project Monitoring & Control 20
  • 21. EVA Example-1  Earned Value (BCWP)  Hence, Earned Value is = 40% of value of total work  = 40 % of BAC  = 40% of $100,000  = 0.4X$100,000  = $40,000   Therefore, Earned Value (EV) is $40,000  Actual Cost (ACWP) And in our question, you have spent $60,000 on the project so far.  Hence, Actual Cost is $60,000  Calculate SPI and CPI? Chapter 9 Project Monitoring & Control 21
  • 22. 22 Earned Value Analysis  Benefits  Consistent unit of measure for total progress  Consistent methodology  Across cost and completed activity  Apples and apples comparisons  Ability to forecast cost & schedule  Can provide warnings early  Success factors  A full WBS is required (all scope)

Notas del editor

  1. Planned Value is the authorized budget assigned to the scheduled work to be accomplished for a schedule activity or a work breakdown structure component Earned Value is the value of completed work expressed in terms of the approved budget assigned to that work for a schedule activity or work breakdown structure component.
  2. Budgeted cost of work scheduled (BCWS) : the approved budget that has been allocated to complete a scheduled task during a specific time period. Actual Cost of Work Performed (ACWP) : the actual cost that has been spent, rather than the budgeted cost. Budgeted cost of work performed (BCWP), or &amp;quot;earned value&amp;quot; (EV), in project management is the budgeted cost of work that has actually been performed in carrying out a scheduled task during a specific time period
  3. The SV is calculated in terms of the difference in dollar value between the amount of work that should have been completed in a given time period and the work actually completed. Cost Variance (CV) – The difference between the planned cost of work performed (BCWP) and actual cost incurred for the work (ACWP). This is the actual dollar value by which a project is either overrunning or underrunning its estimated cost.
  4. BAC Budgeted cost at completion. The total budgeted cost of the baseline or project cost accounts. EAC Estimated costs at completion. Includes costs to-date plus revised estimated costs for the work remaining.