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Project Management in Practice
7-1Monitoring & Controlling the Project
Initiate Plan ExecuteMonitor
AndControl
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Outline:
7-2
Overview Earned value analysis Project control / tracking techniques Scope creep and change control Quality / collection and presentation of project data.
Homework: 25, 26, 27, 28
#27 end of 6th week = MSP date 2/10/01 (end of 6th week), do not compute critical ratio use the default 5-day work week
use start date 1/1/01#28 Repeat problem 27 using MSP
Overview:
7-3
Project PlanProject Plan
MonitoringMonitoring
ControlControl
Schedule Variance &Cost/Spend Variance:
7-4
PV
AC
EV
PV
AC
EV
Earned Value Chart 1
7-5
TimeNow
Dol
lars
Schedulevariance
Costvariance
Cost schedule plan(baseline)
ACWP
BCWP
BCWSActual cost
Value completed (Earned Value)
PerformanceCostSched.
badbad
Earned Value Chart 2
7-6
TimeNow
Dol
lars
BCWSbaseline
ACWP
BCWP=EV
PerformanceCostSched.
badgood
Earned Value Chart 3
7-7
TimeNow
Dol
lars
BCWSbaseline
ACWP
BCWP = EV
PerformanceCostSched.
goodgood
Earned Value Chart 4
7-8
TimeNow
Dol
lars
BCWSbaseline
ACWP
BCWP = EV
PerformanceCostSched.
badbad
Earned Value Chart 5
7-9
TimeNow
Dol
lars
BCWSbaseline
ACWP
BCWP = EV
PerformanceCostSched.
goodbad
Earned Value Chart 6
7-10
TimeNow
Dol
lars
BCWSbaseline
ACWP
BCWP=EV
PerformanceCostSched.
goodgood
Earned Value Analysis
Earned Value Analysis compares the current project status with the original (baseline) plan.
It computes several performance metrics for individual activities and for the entire project.
It focuses on cost and schedule performance It’s a useful tool/input for project control. Popular project management software computes these metrics. Project EV is calculated by summing up the individual task EV’s.
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Task Earned Value
7-12
Expert estimated value of work performed to date, if available.
There are a variety of rules (see page 248).
Work off budget / schedule values, if available.
EV = BAC X (portion of work completed)EV = BAC X (actual work completed / total amount of work)
Task Earned Value - Examples
7-13
Expert believes value of work performed to date is $120,000.
Task is complete, expected to cost $1,500 (budgeted), best estimate is the task is 2/3 finished.
Day 50 of 100 day, $100,000 budgeted task, manager estimated value of work performed is $40,000.
Project X is at the end of its 5th week. Activity D is 30% complete. Activity D budgeted cost is $1000.
D5
3 8
3
Task Planned Value/Cost, PV
7-14
Budgeted / scheduled amount, to date. Determined from the baseline plan or budget. Works off budgeted cost numbers. BCWS.
Planned cost of work on a task or project up to a given point in time.
PV = BAC X (portion of time that has elapsed)PV = BAC X (time passed / total time scheduled)
Task Planned Value/Cost, PVExamples
7-15
• Activity was scheduled to have spent $100,000 at this point in the plan / budget.
• Work on a project task was expected to cost $1500 and the workers were originally scheduled to have the task compete today.
• Work on a project task is uniformly distributed, total task budget is $2000. The task is scheduled to last 8 weeks, the current time is end of week 5. Task is scheduled to begin end of week 2.
Variances / Indicies
7-16
Cost/Spending Variance
earned value (EV) – actual cost (AC) Schedule Variance
earned value (EV) – planned cost (PV) CPI (Cost Performance Index)
earned value (EV)/actual cost (AC) SPI (Schedule Performance Index)
earned value (EV)/planned cost (PV)
Example
7-17
Day 75 of a 75 day task, Task “data conversion of payables for external vendors”.
Task planned cost total on day 75, $100,000 ($100,000 = PV).Actual spend to date, $90,000.Best estimate 50% complete.
Earned Value (EV) =0.50 X $100,000 = $50,000.
Cost/spending variance = EV – AC = $50,000 - $90,000 = - $40,000.Schedule variance = EV – PV = $50,000 - $100,000 = - $50,000.
CPI = EV/AC = 50/90 = 0.56 Cost Performance Index SPI = EV/PV = 50/100 = 0.50 Schedule Performance Index (we are worse on schedule than cost)
ETC = (BAC – EV) / CPI = (100,000 – 50,000) / .56 = $90,000.EAC = ETC + AC = $90,000 + $90,000 = $180,000.
ETC = Estimated cost To CompletionEAC = Estimated total cost At Completion
BAC = Budget At Completion AC = Actual Cost to date
ExampleAON Diagram:
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Activity Duration (days) Preda 8 b 6 ac 4 d 9 ce 11 af 3 bg 1 d,e,f
a
c
b
e
f
d
g
0 8
19 20
4 13
14 17
8 19
8 14
0 4
Current date = end of day 18
Gantt Chart:
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Task e
Task e = 11 days, current date is end of day 18
At end of day 18, we are scheduled/planned to be 10/11 complete.This is used in the PV computation.
Excel Given & Solution:
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% of planned
Activity Duration (days) Budget ($) Actual ($) % Complete ES EF finish on 2/1/01
a 8 250 300 100.00% 0 8 1
b 6 100 100 100.00% 8 14 1
c 4 300 200 100.00% 0 4 1
d 9 500 600 100.00% 4 13 1
e 11 400 450 50.00% 8 19 10/11
f 3 350 375 20.00% 14 17 1
g 1 450 0 0.00% 19 20 0
BAC $2,350.00
AC $2,025.00
EV $1,420.00
PV (budget) $1,863.64
Current Date 2/1/01 For activity e notice the duration is 11 days
Beg of day 17 at the end of day 18, 1/11 is scheduled to remain (since the task EF is 19)
End of day 18 10/11 of the task is scheduled/planned complete.
Project Start 1/15/01
Cost/Spend var $(605.00)
Schd var $(443.64)
CPI 0.70 more has been spent than the baseline plan
SPI 0.76 given what has been spent, less progresss has been made than should have been
ETC $1,326.23 (BAC-EV) / CPI
EAC $3,351.23 ETC + AC
Break task into 11 (its duration)parts. End of day 18 we are 10/11 finished.
notice
MSP Notes:
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Double Click
Cu
rren
t D
ate
Lin
e
Cur
rent
Dat
e Li
ne
Beg
of d
ay 2
/1
En
d o
f d
ay 2
/1
Used in MSPCalculations
Put end of day date here for MSP calculations
7-22
Enter activity names, predecessors, durations.Start of the project is 01/15/2001.
MSPEnter Project Basic Information
Steps:1. Enter tasks and durations2. Project Information
Start date: 1/15/013. Project, Change Working Time Work weeks, Details
to 7-day work week set day(s) to these specific working times 8am to 12pm and 1pm to 5pm
4. Enter Predecessors
Start Here
7-23
MSPView the Network Diagram
Helpful Notes:Also, under project information, statistics check that duration is 20d.Look at the Gantt chart and make sure activity a’s duration days count up to 8.
7-24
View, Table, CostEnter budget amounts as Fixed costs
MSPEnter Budgeted Data for Each Task
Budget Amounts EnteredBudget Amounts Entered
7-25
1. So progress at a date can be compared to the planned and budgeted data. Tools, Tracking, Set and Save Baseline, OK.
2. Turn off MSP automatic calculation of actual costs to date. Tools, Options, Calculations.
MSPSave the Baseline Data
Un-checkUn-check
MSP 2010Project Set Baseline
MSP 2010FileHelpOptions Schedule (scroll down) Calculation options Un-check Actual costs Un-check
7-26
View, Table, TrackingEnter % Comp amounts and Act. Costs
MSPEnter Project Progress Data
7-27
1. Enter current project date.Project menu, Project Info., enter current date.
2. View, Table, More Tables, Earned Value, Apply.
MSPView automatically calculated project metrics.
7-28
Enter base information, activities, durations.Set the start date.Set a 7 day work week.
Project Guide, Tasks, Define general working times.Enter predecessor(s).Enter task budget amounts as fixed costs.
View, Table, Cost
Save BaselineTools, Tracking, Set Baseline.
Enter Project Progress DataTurn off auto actual cost calculationsTools, Options, Calculations
Enter Actual Costs and Task Percent CompleteView, Table, Tracking
Enter current project progress dateProject menu, Project information
Get MetricsView, Table, More Tables, Earned Value
MSPSummary of Tasks
MSP 2010Project Set Baseline MSP 2010
FileHelpOptions Schedule (scroll down) Calculation options Un-check Actual costs Un-check
Project Control:
Project control taking corrective actions to keep the project on target toward meeting its performance goals (time, cost, deliverables).
There are many ways to exert control; the PM must decide which is most appropriate. Process Reviews Reports Personnel Assignment
7-29
Scope Creep & Change Control:
Review suggested changes Assess all impacts to project goals Evaluate advantages and disadvantages Consider alternative changes that are better Allow responsible parties to make decision in light of all information Communicate changes to everyone involved Implement changes Summarize all changes and impacts in report 7-30
ChangeOrder
ChangeOrder
Approved
Approved
Quality Management ProcessesThe Big Picture
7-31
Quality is the degree to which our deliverables and objectives fulfill the project requirements.
Planning
Controlling
Assuring
measurements
Change requests
Corrective actions
Training
Some Common Project Quality Tools/Data Collection:
7-32
• Check sheets, frequency counts• Histograms• Pareto chart• Control charts• Cause and effect diagram• Others
Controlling
Check Sheets
7-33
Log-in
Lock up
Speed
Use
7-34
ProblemType
f p P
Log-in 110 0.26 0.26
Lock up 105 0.25 0.51
Speed 103 0.24 0.75
Use 35 0.08 0.83
7-35
Pareto Chart
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Cause-and-effect diagram
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7-38Source: http://cokepm.com/pmbok3/premium/8.3PerformQualityControl.htm
7-39
7-40
Control Chart
7-41
Schedule Variance
7-42
a quantitative measure used by project management personnel to determine schedule performance during or after the completion of a project. It is calculated using a simple algebraic equation where the earned value (EV) represents the actual amount of time taken to either complete the project or progress to the project’s current stage. The planned value (PV) represents the amount of time which reaching the project’s current progress should have taken to achieve according to the project management’s schedule. Schedule variance (SV) is found by subtracting PV from EV. EV-PV=SVSchedule variance and its exact number may indicate many possible things to project management. A number approaching zero would indicate that the scheduling and timeframes generated by project management were accurate within a small margin of error. A figure that is well into negative numbers would mean that either project management over estimated the amount of time needed or they overestimated the budget and workforce measured in raw man hours that would necessary to complete the project. This is not a good thing either as it represents an unnecessary expenditure of resources. A schedule variance figure high in positive numbers could represent many things. It could indicate that project management underestimated the amount of time needed to complete the project, or it might indicate that the budget and workforce was insufficient. It could also mean that project management or the workforce suffered setbacks, foreseen or otherwise, which may or may not have been avoidable.This term is defined in the 3rd edition of the PMBOK but not in the 4th.
Source: http://project-management-knowledge.com
Cost Variance
7-43
The term cost variance, also known by the abbreviation of CV, refers specifically to the true measurement of cost performance on a particular project. The cost variance represents the algebraic difference between the earned value of a project (also known by the abbreviation of EV), and the actual cost of the project (also known by the abbreviation AC). The equation to determine the cost variance would be broken down as follows: CV = EV minus AC. If the resulting value for the cost variance is a number greater than zero (or “positive value”), then it is considered to be a favorable cost variance condition. A value that is less than zero, or a resulting “negative” value, represents a cost variance that is considered less than favorable. Because the cost variance is so dependent on the earned value and the actual cost, in order to maintain a favorable cost variance, it is to the project team’s advantage to minimize actual costs to the extent possible.This term is defined in the 3rd and the 4th edition of the PMBOK.
Source: http://project-management-knowledge.com
1-44
Project Control Exercise
Envirosafe Project case (30 minutes) Divide into small groups Read case Discuss why the project was late and over budget; root causes Recommend control procedures and other changes that should
prevent future problems
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