the project management process - week 9 performance management

Project ManagementProject Management9. Performance Management9. Performance Management

Week 9

Performance management

Once you have selected a project


And planned it


And planned it

And hired the team


And planned it

And hired the team

And started the work


And planned it

And hired the team

And started the work

How do you stay on track?

How do you even know if you are progressing to plan?

Gray & Larson, 2006, Ch 13.

What is a Project Monitoring System

Examples of Progress Reports

What is the Project Control Process and why is it useful?

How do I Monitor Time Performance

The shortcomings of monitoring Systems

Earned Value Management – a silver bullet?

Integrated Cost/Schedule System

Project Baselines

What is a Project Monitoring System?What is a Project Monitoring System?

It involves determining what data to collect, how, when an who will collect the data; analysis of the data; and reporting progress

It involves determining what data to collect, how, when an who will collect the data; analysis of the data; and reporting progress

Monitoring SystemMonitoring System

GatherGather AnalyseAnalyse ReportReport

You need to know what information is needed to satisfy you and your stakeholders.

Think about the Information System Structure

What data are collected?

current status of project (schedule and cost)

current status of project (schedule and cost)

remaining cost to compete project

remaining cost to compete project

date that project will be complete

date that project will be complete

potential problems to be addressed now

potential problems to be addressed now

out-of-control activities requiring intervention

out-of-control activities requiring intervention

Cost and/or schedule overruns & their reasons

Cost and/or schedule overruns & their reasons

Forecasting overruns at time of completion

Forecasting overruns at time of completion

What data are collected?What data are collected?

Collecting data and analysis

who will collect project data?

how will data be collected?

when will the data be collected?

who will compile and analyze the data?

who will receive the reports?

how will the reports be transmitted?

when will the reports be distributed?

Photo by germanium

http://www.flickr.com/photos/germanium/








Project Baselines

Progress Report FormatProgress since last report

Current status of project

ScheduleCostScope

Problems and issues since last report

Actions and resolution of earlier problems

New variances and problems identified

Corrective action planned

How long should a project status report be?

1 page

office.microsoft.com/en-us/templates/TC011417231033.aspx

http://saulcarliner.home.att.net/idbusiness/statusreport.htm

http://www.projectperfect.com.au/info_status_report.php

More info

www.ic.arizona.edu/~profcomm/writing/samples/stat_samp_s1.htm

www.projectconnections.com/knowhow/subsets/sample-templates/StatusReports.doc








Project Baselines

Project Control Process

The process of comparing actual performance against plan to identify deviations, evaluate courses of action, and take appropriate corrective action

Pensiero

http://www.flickr.com/photos/pensiero/

Project Control Steps

Set and baseline a

plan

Measuring progress and performance

Comparing the plan to the facts

Taking Action








Project Baselines

Monitoring Time Performance

Monitoring Time PerformanceTools used to catch negative variances from plan and communicate project schedule status:


Tracking and baseline Gantt charts

show expected, actual, and trend data for event duration performance

Figure 13.1 Baseline Gantt Chart(Gray & Larson, 2006, p414)

Time

A Gantt Chart


Tracking and baseline Gantt charts

show expected, actual, and trend data for event duration performance

Control chartsplot the difference in

scheduled time on the critical path with the actual point on the critical path

Figure 13.2 Project Schedule Control Chart(Gray & Larson, 2006, p415)

A Control Chart








Project Baselines

Monitoring Systems Disparities

Picture by Pensiero


Time-Phase Baseline Plan

Picture by Pensiero


Corrects the failure of most monitoring systems to connect a project’s actual performance to its schedule and forecast budget

Picture by Pensiero


Systems that measure only cost variances do not identify resource and project cost problems associated with falling behind or progressing ahead of schedule

Picture by Pensiero


Earned Value Cost/Schedule System

An integrated project management system based on the earned value concept that uses a time-phased budget baseline to compare actual and planned schedule and costs

Picture by airgap

http://www.flickr.com/photos/airgap/








Project Baselines

Earned Value ManagementEarned Value Management

What is Earned Value Management (EVM)?


A project performance measurement technique that integrates scope, time, and cost data.


A project performance measurement technique that integrates scope, time, and cost data.

Given a baseline (original plan plus approved changes), you can determine how well the project is meeting its goals.

You must enter actual information periodically to use EVM.

Terms to learn

PV

AC

EV

Planned Value

Actual Cost

Earned Value

CV Cost Variance

SVSchedule Variance

CPICost Performance Indicator

SPISchedule Performance Indicator

(Also called the budget)

This is that portion of the approved total cost estimate planned to be spent on an activity during a given period

PV Planned Value

The total of direct and indirect costs incurred in finishing work on an activity during a given period

AC Actual Cost

An estimate of the value of the physical work actually completedEV Earned Value

Earned value minus the actual cost. Shows the difference between the estimated cost of an activity and the actual cost of that activity

TABLE 13.1

CV Cost Variance

Earned value minus the planned value. Shows the difference between the schedule completion of an activity and the actual completion of that activity

TABLE 13.1

SVSchedule Variance

The ratio of earned value to actual cost and can be used to estimate the projected cost of completing the project.

If the CPI is equal to 1 or 100% then the planned and actual costs are equal, or the costs are as budgeted.

If the CPI is less than 1 or less than 100%, the project is over budget.

If the CPI is greater than 1 or more than 100%, the project is under budget

CPICost Performance Indicator

The ratio of earned value to planned value and can be used to estimate the projected time to complete the project.

Similar to the CPI, an SPI of 1 or 100% means the project is on schedule.

If the SPI is greater than 1 or 100% then the project is ahead of schedule.

If the SPI is less than 1 or 100%, the project is behind schedule

SPISchedule Performance Indicator

TABLE 13.1

Quick EVM quiz

What can we say if CPI > 1

Quick EVM quiz

What can we say if CPI > 1

If the CPI is greater than 1 or more than 100%,

the project is under budget

Quick EVM quiz

What is EV minus AC?

Quick EVM quiz

What is EV minus AC?

EV – AC = SVEarned Value (what was done)

MinusActual Cost (what has been

paid)=

Schedule Variance

Scenario Example

“Purchasing & Installing Web Server”

Duration 1 week,

Budget $10,000.

Scenario Example

“Purchasing & Installing Web Server” Duration 1 week, Budget $10,000.

PV – Planned Value – for that activity for that week = $10,000

AC – Actual Cost – suppose it actually took 2 weeks and cost $20,000. Assume $15,000 were incurred in week 1, and $5,000 in week 2. These costs are the actual costs for that activity each week

EV – Earned Value – earned value after one week is $7,500. (10,000 * 75%)

Example: CP829_Lecture_Week9_EarnedValue.xls

Scenario Example

Earned Value Chart for Project after 5-MonthsEarned Value Chart for Project after 5-Months

Max WidemanMax Wideman

Rules for Earned Value Numbers

Negative numbers for cost and schedule variance indicate problems in those areas

The project is costing more than planned or taking longer than planned

CPI and SPI less than 100% indicate problems

Table 13.3 Interpretation of Indexes(Gray & Larson, 2006, p429)

An alternative

Source: http://www.mountaingoatsoftware.com/release_burndown

Week 2 lecture

Week 2 lecture

So, what do you do when your plan changes?

There are methods used to revise estimates of future project costs

EVM allows experts in the field to change original baseline durations and costs because new information tells them the original estimates are not accurate

EVM uses actual costs-to-date plus an efficiency index to project final costs in large projects where the original budget is unreliable








Project Baselines

Developing an Integrated Cost/Schedule System

Compute

Calculate

Collect

Schedule

Resource plan

WBS

Budget

Pla

nM

on

itor

Define the work using a WBS

ScopeWork packagesDeliverablesOrganization unitsResourcesBudgets

Develop work and resource schedules

Schedule resource to activities

Time-phase work packages into a network

Photo by shimonkey

http://www.flickr.com/photos/shimonkey/

Develop a time-phased budget using

work packages

included in an activity.

Accumulate budgets (PV)

At the work package level, collect the actual costs for the work performed (AC)

Multiply percent complete times original budget (EV)

Compute the schedule variance (EV-PV) and the cost variance (EV-AC)

Figure 13.3 Figure 13.3 Project Management Information Systems OverviewProject Management Information Systems Overview(Gray & Larson, 2006, p419)(Gray & Larson, 2006, p419)

Integrated Cost/ Schedul

es








Project Baselines

Week 4 lecture

Week 4 lecture

a Baseline is an anchor point for measuring performance

Photo by _Robert C_ @

flickr

http://flickr.com/photos/r_catalano/

a planned cost and expected schedule against which actual cost

and schedule are measured

Gold by Куртис Перри

http://flickr.com/photos/curtisperry/



a basis for cash flows and awarding progress payments

Photo by quaziefoto @ flickr

http://flickr.com/photos/quazie/

a summation of time-phased budgets (cost accounts as summed work packages) along a project timeline

Picture by Network Osaka @ flickr

http://flickr.com/photos/networkosaka/

What Costs Are Included in Baselines?LaborEquipmentMaterialsProject direct overhead costs (DOC)

Figure 13.14 Scope Changes to a Baseline(Gray & Larson, 2006, p436)








Project Baselines

ReviewProject monitoring system include; data collection; analysis and reporting.Project control steps include; baseline plan, progress measurement, comparing actual against projected plan, and actions.Performance can be monitored using tools such as; tracking Gantts, control charts, baseline plans and earned value management.Earned value management (EVM) is a technique which incorporated scope, time and cost data to determine the health of the project.Integrated Cost/Schedule systems are developed creating; WBS, work/resource schedules, budget, and EVM.Project baselines are an anchor point for measuring performance.

ReferencesHorodyski, K. (1995). Managing and developing teams. Footscray, Vic.: Open Training Services.Greenberg, J. & Baron, R. (1993). Behavior in organizations (4th ed.). Syd., NSW: Allyn and Bacon. Robbins, S., et al. (1998). Organisational behaviour (2nd ed.). Sydney: Prentice-Hall

BetterProjects.net

Awesome title page picture by Derek Farr ( DetroitDerek )

http://flickr.com/photos/detroitderek/



the project management process - week 9 performance management

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