project control farrokh alemi, ph.d.. course on project management purpose monitor progress monitor...

Project ControlFarrokh Alemi, Ph.D.

Course on Project Management

PurposeMonitor progressCorrective action


Why Projects FailComplexityRegulation oversightPoor communicationResistance to changeCreeping scopeLack of project ownershipShifting organizational prioritiesFailure to meet customer needs


MetricsEstimated time to completionBudget at completion


MetricsEstimated time to completionBudget at completionImpact on patientsSatisfaction with careHealth statusCost of care


Metrics for IT Help Desk


Earned Value ManagementDefinition of termsCalculation of earned valueReporting of earned value


Definition of TermsBaseline


Definition of TermsBaselinePlanned value

Chart6

0

10

28

60

85

110

125

135

138

Planned value

Months since start

Cost in Thousands of Dollars

Sheet1

Actual costPlanned valueEarn valueCPI

1000

25107.51.5

31528211.4

42560451.8

Time Now40854063.751.5937563.75

6110101.60156251.5937582.5

7125131.4843751.5937593.75

8135149.41406251.59375101.25

Planned End138161.36718751.59375103.5

Actual End164.9531251.59375

Sheet1

00000

00000

00000

00000

00000

00000

00000

00000

00000

0000

Actual cost

Planned value

Earn value

Months since start


Sheet2

Sheet3


Definition of TermsBaselinePlanned valueProject end

Chart6

0

10

28

60

85

110

125

135

138

Planned value

Months since start


Sheet1


1000

25107.51.5

31528211.4

42560451.8

Time Now40854063.751.5937563.75

6110101.60156251.5937582.5

7125131.4843751.5937593.75

8135149.41406251.59375101.25

Planned End138161.36718751.59375103.5

Actual End164.9531251.59375

Sheet1

00000

00000

00000

00000

00000

00000

00000

00000

00000

0000

Actual cost

Planned value

Earn value

Months since start


Sheet2

Sheet3


Definition of TermsBaselinePlanned valueProject end$60,000 planed up to month 4

Chart6

0

10

28

60

85

110

125

135

138

Planned value

Months since start


Sheet1


1000

25107.51.5

31528211.4

42560451.8

Time Now40854063.751.5937563.75

6110101.60156251.5937582.5

7125131.4843751.5937593.75

8135149.41406251.59375101.25

Planned End138161.36718751.59375103.5

Actual End164.9531251.59375

Sheet1

00000

00000

00000

00000

00000

00000

00000

00000

00000

0000

Actual cost

Planned value

Earn value

Months since start


Sheet2

Sheet3


Definition of TermsBaselinePlanned valueActual cost


Definition of TermsBaselinePlanned valueActual cost

Chart7

001

5102

15283

25604

408540

6110101.6015625

7125131.484375

8135149.4140625

Planned End138161.3671875

Actual EndActual End164.953125

Actual cost

Planned value

Months since start


Sheet1


1000

25107.51.5

31528211.4

42560451.8

Time Now40854063.751.5937563.75

6110101.60156251.5937582.5

7125131.4843751.5937593.75

8135149.41406251.59375101.25

Planned End138161.36718751.59375103.5

Actual End164.9531251.59375

Sheet1

00000

00000

00000

00000

00000

00000

00000

00000

00000

0000

Actual cost

Planned value

Earn value

Months since start


Sheet2

Sheet3


Definition of TermsBaselinePlanned valueActual costSolid line shows experience to date

Chart7

001

5102

15283

25604

408540

6110101.6015625

7125131.484375

8135149.4140625



Actual cost

Planned value

Months since start


Sheet1


1000

25107.51.5

31528211.4

42560451.8

Time Now40854063.751.5937563.75

6110101.60156251.5937582.5

7125131.4843751.5937593.75

8135149.41406251.59375101.25

Planned End138161.36718751.59375103.5

Actual End164.9531251.59375

Sheet1

00000

00000

00000

00000

00000

00000

00000

00000

00000

0000

Actual cost

Planned value

Earn value

Months since start


Sheet2

Sheet3


Definition of TermsBaselinePlanned valueActual costSolid line shows experience to dateDashed line shows forecast

Chart7

001

5102

15283

25604

408540

6110101.6015625

7125131.484375

8135149.4140625



Actual cost

Planned value

Months since start


Sheet1


1000

25107.51.5

31528211.4

42560451.8

Time Now40854063.751.5937563.75

6110101.60156251.5937582.5

7125131.4843751.5937593.75

8135149.41406251.59375101.25

Planned End138161.36718751.59375103.5

Actual End164.9531251.59375

Sheet1

00000

00000

00000

00000

00000

00000

00000

00000

00000

0000

Actual cost

Planned value

Earn value

Months since start


Sheet2

Sheet3


Definition of TermsBaselinePlanned valueActual costBudget at completion

Chart7

001

5102

15283

25604

408540

6110101.6015625

7125131.484375

8135149.4140625



Actual cost

Planned value

Months since start


Sheet1


1000

25107.51.5

31528211.4

42560451.8

Time Now40854063.751.5937563.75

6110101.60156251.5937582.5

7125131.4843751.5937593.75

8135149.41406251.59375101.25

Planned End138161.36718751.59375103.5

Actual End164.9531251.59375

Sheet1

00000

00000

00000

00000

00000

00000

00000

00000

00000

0000

Actual cost

Planned value

Earn value

Months since start


Sheet2

Sheet3


Definition of TermsBaselinePlanned valueActual costEarned value


Definition of TermsBaselinePlanned valueActual costEarned valueRate of performance


Definition of TermsBaselinePlanned valueActual costEarned valueRate of performance

Chart8

00101

51027.52

15283213

25604454

40854063.7563.75

6110101.6015625682.5

7125131.484375793.75

8135149.41406258101.25

Planned End138161.3671875Planned End103.5

Actual EndActual End164.953125Actual EndActual End

Actual cost

Planned value

Earn value

Months since start


Sheet1


1000

25107.51.5

31528211.4

42560451.8

Time Now40854063.751.5937563.75

6110101.60156251.5937582.5

7125131.4843751.5937593.75

8135149.41406251.59375101.25

Planned End138161.36718751.59375103.5

Actual End164.9531251.59375

Sheet1

Actual cost

Planned value

Earn value

Months since start


Sheet2

Sheet3


Definition of TermsBaselinePlanned valueActual costEarned valueRate of performanceVarianceCostSchedule



Cost variance

Chart9

00101

51027.52

15283213

25604454

40854063.7563.75

6110101.6015625682.5

7125131.484375793.75

8135149.41406258101.25



Actual cost

Planned value

Earn value

Months since start


Sheet1


1000

25107.51.5

31528211.4

42560451.8

Time Now40854063.751.5937563.75

6110101.60156251.5937582.5

7125131.4843751.5937593.75

8135149.41406251.59375101.25

Planned End138161.36718751.59375103.5

Actual End164.9531251.59375

Sheet1

00000

00000

00000

00000

00000

00000

00000

00000

00000

0000

Actual cost

Planned value

Earn value

Months since start


Sheet2

Sheet3



Schedule variance

Chart9

00101

51027.52

15283213

25604454

40854063.7563.75

6110101.6015625682.5

7125131.484375793.75

8135149.41406258101.25



Actual cost

Planned value

Earn value

Months since start


Sheet1


1000

25107.51.5

31528211.4

42560451.8

Time Now40854063.751.5937563.75

6110101.60156251.5937582.5

7125131.4843751.5937593.75

8135149.41406251.59375101.25

Planned End138161.36718751.59375103.5

Actual End164.9531251.59375

Sheet1

00000

00000

00000

00000

00000

00000

00000

00000

00000

0000

Actual cost

Planned value

Earn value

Months since start


Sheet2

Sheet3


Definition of TermsBaselinePlanned valueActual costEarned valueRate of performanceVarianceIndexCost performance indexSchedule performance index


Estimate at Completion


Estimate Time to Complete


Example

Week 1Rate of performance50%Planned value10000Actual cost15000Earned value?Cost variance?Schedule variance?Cost performance index?Schedule performance index?


Example

Week 1Rate of performance50%Planned value$10,000Actual cost$15000Earned value$5,000Cost variance?Schedule variance?Cost performance index?Schedule performance index


Example

Week 1Rate of performance50%Planned value$10,000Actual cost$15000Earned value$5,000Cost variance-$10,000Schedule variance?Cost performance index?Schedule performance index


Example

Week 1Rate of performance50%Planned value$10,000Actual cost$15000Earned value$5,000Cost variance-$10,000Schedule variance-$5,000Cost performance index?Schedule performance index


Example

Week 1Rate of performance50%Planned value$10,000Actual cost$15000Earned value$5,000Cost variance-$10,000Schedule variance-$5,000Cost performance index33%Schedule performance index


Example

Week 1Rate of performance50%Planned value$10,000Actual cost$15000Earned value$5,000Cost variance-$10,000Schedule variance-$5,000Cost performance index33%Schedule performance index50%


Taking ActionReconfirm planAssess project performanceTake corrective actionKeep people informed

Take Home LessonProject control requires monitoring progress using earned value

*This is the lecture on project control by Professor Alemi narrated by Lee Baliton*During this phase, project manager monitors project outcomes and associated risks. When a problem arises or is likely to arise, the project manager takes corrective action and reports progress to stakeholders*Projects fail for many reasons. Health care organizations are complex, with professional players who have semi-independent roles. In multi-year projects, changes in regulations is a factor. In almost all failures, poor communication is a key factor. When communication is poor, organizational resistance to change is high. Other reasons mentioned on why projects fail include constant and seemingly small changes in scope that affect the long term effectiveness of projects. Projects may fail when no one is clearly responsible for its success and when organizational priorities are shifting. Finally projects fail because they were bad ideas that did not reflect the customers needs. *In order to monitor projects progress, project managers often have to forecast Estimated Time to Completion and Budget at Completion. These two measures tell us how efficiently the project is being run. *A key impact to measure is patient satisfaction with care. Other factors to measure is patients health status, including impact on mortality or morbidity with care. Still another factor to measure is cost of care. *Lets look at an example. What should we monitor while we are implementing an IT help desk. We can start with the obvious two measures of project efficiency, that is estimated time to completion and budget at completion. *Measurement of progress in the project is often done using the earned value management method. We will start with some terminology about earned value, then show how various terms are related to each other and end with how the project manager uses the earned value to improve project control. *The baseline budget of a project is the original planned budget plus approved new items. *Planned value refers to the total cost planned to be spent on an activity. This is the same as the budget amount for an activity plus approved adjustments. In the plot we see an example of expenditures in various months for a project. The X-axis shows months since start of the project and the Y-axis shows total expenditures up to each month. *For example, the plot shows that we had planned to finish in 9 months*For example, the plot shows that we had spend $60,000 by month 4.*Actual cost refers to the total direct and indirect costs incurred by the project. *This plot shows actual and planned costs of a project together. *This plot shows actual and planned costs of a project together. *The dashed line shows the forecast of actual cost passed current date if we continue to perform on the project at the same rate. *The forecast of actual expenditures to projects end is referred to as budget at completion or BAC. This is a key variable that project managers track in their projects and report to their stakeholders.*Earned value is the value of work completed to date. It can be calculated from planned value times rate of performance. *Rate of performance is the ratio of actual work completed to the percentage of worked planned to be completed. *This figure shows the planned cost, actual cost and earned value on the same scale. Note how earned value is shown in solid green up to time now and how the green dashed line shows the earned value up to planned end date. The actual cost is shown in blue and continues till end of project which is a month later. *Cost variance is the earned value minus the actual cost. If cost variance is negative it means that it cost more to do the work than it was planned. Schedule variance is earned value minus the planned value. A negative schedule value means that it took longer than planned to perform the task. *This graph shows the cost variance as the difference of earned and actual cost.*This graph shows the schedule variance as the difference of earned and planned value.*The cost performance index is the ratio of earned value to actual cost. It can be used to project cost overruns. The schedule performance index is the ratio of earned value to planned value and can be used to project time overruns. *The estimate cost at completion is calculated as the ratio of the projects entire budget divided by cost performance index. This estimate assumes that we progress with the project at the same rate as last calculated rate of performance. *The estimate time to complete the project is calculated by dividing the original time estimate by the schedule performance index. Again, this estimate assumes that we continue to perform in the rest of tasks of the project at the current rate. *Lets look at an example where the rate of performance is 50%, i.e. 50% of the planned work is actually done in week one. The planned value was 10,000 dollars and the actual cost was 15000 dollars. The question is what is the earned value? *The earned value is calculated from multiplying the $10,000 dollar planned value by the rate of performance, which is 50 percent. The earned value is $5,000 dollars. *The cost variance is calculated as earned value minus the actual cost, in this case it is minus $10,000 dollars. *The Schedule Variance is calculated as the difference of earned and planned value. In this case, Schedule Variance is minus $5,000 dollars. *The Cost Performance Index is calculated as the ratio of earned and actual value. In this case this is calculated as 33 percent. *The Schedule Performance Index is calculated as the ratio of earned and planned values. In this case, the Schedule Performance Index is 50%. *When monitoring a project, it is important to start the effort by reconfirming the plans. Then projects progress is assessed and at designated intervals reported to key people through status reports. When necessary a corrective action is taken. If more resources are necessary to get the project back on target, then a formal request needs to be made. If the project cannot finish on time and under budget, it is important to figure out the consequences of the delay on remaining activities of the organization. *The take home lesson is that project control requires monitoring progress using earned value.