week 9 performance management erletshaqe

Project 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?

It involves determining what data to collect, how, when an who will

collect the data; analysis of the data; and reporting progress

Monitoring System

Gather Analyse Report

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)

remaining cost to compete

project

date that project will be

complete

potential problems to be

addressed now

out-of-control activities

requiring intervention

Cost and/or schedule overruns

& their reasons

Forecasting overruns at time

of completion

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








Project Baselines

Progress Report Format

Progress since last report

Current status of project

Schedule

Cost

Scope

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

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


Tools 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 charts

plot 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 projects 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








Project Baselines

Earned 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

SV Schedule 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

SV Schedule 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 = SV

Earned Value (what was done)

Minus

Actual 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-Months

Max 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

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

onit

or

Define the work using a WBS

Scope

Work packages

Deliverables

Organization units

Resources

Budgets

Develop work and resource

schedules

Schedule resource to

activities

Time-phase work packages

into a network

Photo by 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 Project Management Information Systems Overview(Gray & Larson, 2006, p419)

Integrate

d Cost/

Schedules








Project Baselines

Week 4

lecture

a Baseline is an anchor

point for measuring

performance

Photo by

_Robert C_ @

flickr

a planned cost and expected schedule

against which actual cost and schedule

are measured

Gold by

a basis for cash flows and

awarding progress payments

Photo by quaziefoto

@ flickr

a summation of time-phased

budgets (cost accounts as

summed work packages) along a

project timeline

Picture by Network

Osaka @ flickr

What Costs Are Included in Baselines?

Labor

Equipment

Materials

Project 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

www.dualibra.com

Awesome title page picture by Derek Farr ( DetroitDerek )

week 9 performance management erletshaqe

Documents

project data

project management9

project status report

data analysis

time of completionwhat

control activities

silver bullet

planmeasuring progress