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Implementing Project ControlsPreparing for the establishment of the Integrated (Cost and Schedule) Baseline in the Earned Value Management Process
Matthew T. Gonzales, Jet Propulsion LaboratoryManager, Program and Project Business Leadership
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Introduction
• The establishment of the Integrated (Cost and Schedule) Performance Measurement Baseline is the result of a systematic approach that steps the project through each phase of the planning process.
• Each phase results in a set of tangible products
• Each subsequent phase builds on the previous phase such that at the end of the planning cycle, all required documents are completed and integrated
• The approach is documented in Project Planning Guidelines, a project specific document that describes programmatic, cost and schedule assumptions, constraints and planning guidelines. Guidelines are developed as early as possible in Phase B and issued to the project team.
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What is
• Project Management: The discipline of planning, organizing, and managing resources to bring about the successful completion of specific project goals and objectives.
• How can we get on track• Total impacts to reserves
• Project Controls (Cost and Schedule): Consists of those processes performed to observe project execution so that potential problems can be identified in a timely manner and corrective action can be taken.
Project Controls asks: • Where we are• Where we should be
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Cost (Budget) versus Funds
Budgeting is NOT Funding• Budgeting is the time-phased planning of the total resources required to satisfy the project’s contractual requirements
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‘If you can't describe what you are doing as a process, you don't know what you're doing.’
W. Edward Deming
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The End to End Planning Process
The business lead develops the overall process and obtains concurrence from project manager.
The documented process will be your communication vehicle to the entire project team.
• Keep it simple. The process is the road map from Authorization to Proceed to establishment of a performance measurement baseline.
• Keep it serial. The recipe is simple when each the phase is executed in the correct order. Modifying the sequence will result in “redo’s” or a non integrated baseline
• Keep it real.Although each project is unique, the process to develop a baseline is not. Adapt the core serial process to your specific application
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The Planning Process
Major planning phase/emphasis Product
1. Scope of the project Statement of WorkIntegrated Management Plan
2. Development Approach Integrated Product Team (IPT)Organization Breakdown Structure
3. Organize the work Work Breakdown Structure (WBS)WBS Dictionary
4. Assign the Work Responsibility Assignment Matrix
5. Schedule the Work Integrated Critical Path NetworksIntegrated Master ScheduleKey Interfaces(Receivables/Deliverables)
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The Planning Process
Major planning phase/emphasis Product
6. Identify Resources Work Packages/Planning PackagesLabor, Material, ODC, Subcontract,
7. Estimate the Cost the Work Current forward pricing rates,Time-phased (monthly) cost profile
8. Negotiate and approve plan Control Account Plan concurred by Project Control Account Manager(PCAM), Project Manager and LineManager (or IPT lead)
9. Develop Earning Methodology BCWP ‘algorithmic earning’ consistent with BCWS profile
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Sample 1 Project Planning Process
Figure 1. Project that employed Integrated Product Teams and Integration Master Plans and Integrated Master Schedules
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Sample 2 Project Planning Process
Figure 2. Project that employed tradition ‘matrix’ approach
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‘In preparing for battle I have always found that plans are useless, but planning is indispensable.’
Dwight D. Eisenhower
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Schedule the Process
• Develop an end-to-end schedule for the planning cycle
• Schedule should show interdependencies between phases and phase products
• Determine appropriate period of performance for the phases based on customer requirements
• First submittal of performance reports• IBR date
• Schedule is a communication vehicle• Ensure responsibilities are delineated• Clearly identify due dates• Include data review and approval cycle in planning process
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‘Waterfall’ Planning Schedule
Task Name Responsible Time Line
Set-up
Bus team (people, process, tools) in place Bus Lead
Develop Phase CD Planning Guidelines Bus Lead
Approval of Phase CD Planning Guideline Project Mgr
Issue Phase CD Planning Guidelines Bus Lead
Conduct Planning Kick-off Meeting Bus Lead
Planning Infrastructure
Identify Project Team and CAMS Project Mgr
Map team to Initial Project WBS Bus Lead
Develop Responsibility Assignment Matrix Bus Lead
Develop/Refine Statement of Work PCAM
Develop WBS to Control Account Level PCAM
Develop WBS Dictionary to Control Account Level PCAM
Schedule Development
Obtain Master Schedule Sched Analyst
Develop CA End-to-End Critical Path Network Sched Analyst/PCAM
Reconcile with Project Master Schedule Sched Analyst
Identify External Hand-offs (REC/DEL) Sched Analyst/PCAM
Negotiate External Hand-offs Sched Analyst/PCAM
Integrated all Control Account Schedule Sched Analyst
Develop and Analyze End-to-End Project Critical Path Sched Analyst
Issue Final Project Schedules to Control Account Level Sched Analyst
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‘Waterfall’ Planning Schedule
Task Name Responsible Time Line
Resource Development
Develop Work Packages Sched Analyst/PCAM
Identify Resources required to execute Work Packages Sched Analyst/PCAM
Develop Time-Phase Resource Plans Sched Analyst/PCAM
Negotiate Resource Availability with Line Organizations Sched Analyst/PCAM
Cost Development
Develop Basis of Estimates for Resources PCAM
Apply current forward pricing rates and factors Cost Analyst
Review WP and CA time-phase cost profiles Cost Analyst/PCAM
Modulate to support project constraints Cost Analyst/PCAM
Review, Negotiate, Approve Plan
Review Control Account Plans PM/PCAM/Line Mgr
Approve Control Account Plans PM/PCAM/Line Mgr
Develop final Phase CD Work Agreements Cost Analyst
Finalize Plan
Develop BCWP plans PCAM
Verify BCWP plans consistent with BCWS plans Cost Analyst/PCAM
Set Cost and Schedule Baseline Cost Analyst
Reserves Analysis Cost Analyst
Establish Management Reserve Log Cost Analyst
Commence Change Control Bus Lead
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The People
The project team needs to be in place prior to developing the Performance Measurement Baseline (PMB)
The Players Roles and Responsibility
Project Manager - Approve project plan- Proactive leadership during planning- Review and approve PMB
Project Business Manager - Develop planning process(aka Deputy PM for Resources) - Brief and obtain PM approval
- Responsible for all planning products for Integrated Baseline
Project Control Analyst - Develop and maintain projects integrated cost database- Work with Control Account Managers in developing integrated baseline data- Produce integrated baseline cost reports- Produce cost performance reports
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The People
The project team needs to be in place prior to developing the Performance Measurement Baseline (PMB)
The Players Roles and Responsibility
Project Schedule Analyst - Develop and maintain the project’s integrated schedule database- Develop and report project critical path- Work with Project Control Account
Managers in the development of an integrated project schedule. Including REC/DELs
Acquisitions/Subcontracts - Ensures contracts contain DRDs for submittal of integrated baseline- Negotiate deliverables to support project baseline requirements
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The People
The project team needs to be in place prior to developing the Performance Measurement Baseline (PMB)
The Players Roles and Responsibility
Project Control Account Manager - Responsible for the technical, cost and(PCAM) schedule plans for control account
- Develop and submit integrated schedule and cost plans (with project control and project schedule analyst support- Ensure plan is realistic and achievable- Identify cost and schedule risks
IPT or Line/Resource Management - Review plan resource requirements - Work with CAM to develop an achievable resource plan- Demonstrated approval of plan
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The Processes
The basic processes that are utilized during the life cycle of the project
0.0 Project Formulation Phase A 1.0 Organization Phase B 2.0 Scheduling Phase B 3.0 Work/Budget Authorization Phase B 4.0 Accounting Phase BCD 5.0 Indirect Management Phase BCD 6-1.0 Managerial Analysis Phase CD 6-2.0 Comprehensive Estimate-at-Completion Phase CD 7-1.0 Change Management (External) Phase BCD 7-2.0 Change Management (Internal) Phase CD 8.0 Material Management Phase BCD 9.0 Contract Management Phase BCD
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The Process Timeline
0.0 Project Formulation
1.0 Organization2.0 Scheduling (develop)3.0 Work/Budget Authorization
KDP-BPhase A Phase B
6-1.0 Managerial Analysis6-2.0 Comprehensive EAC 7-2.0 Change Management
(Internal)
4.0 Accounting (accounts set up Ph B, ACWP in Ph CD)5.0 Indirect Management (planning and EACs)7-1.0 Change Management (External)8.0 Material Management9.0 Contract Management
Phase CDKDP-C
Phase EKDP-E
2.0 Scheduling (status)
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The Tools
The basic planning and management tools needs to be in place prior to developing the Performance Measurement Baseline (PMB)
The Tool Function
Scheduling Control Module - Repository for projects integrated schedule- Reports project critical path- Stores and reports REC/DELs- Support JCL requirements
Cost Control Module - Repository for projects integrated cost - Baseline, ACWP, ETC, EAC- Calculates BCWP- Produce integrated baseline cost reports- Produce cost performance reports
Accounting System - Official book of accounts- Captures all actual costs by project
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The Tools
Additional planning and management tools needed to be in place prior to developing the Performance Measurement Baseline (PMB)
The Tool Function
Quantifiable Back-up Data - Derive EV % complete(QBD) - Used when schedule is not used to derive %
- Under baseline control
Front End Planning Aides - Budgetary planning tools that act as a feeder to cost control system module
Risk Management Tool - Repository for project risks- Used in developing Management Reserve position for the project
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The Tools (data sets)
Standard ‘global files’ should be in place prior to developing the Performance Measurement Baseline (PMB)
The Tool Function
Resource Breakdown Structure - Resource structure from line organization or IPTs(RBS) - Standard resource classifications
- Standard direct rates
Indirect Rate Structure - Standard/approved forward pricing rates/factors- Appropriate burdening scenarios (overhead/g&a)
Organization Breakdown Structure - Line Management Structure or IPTs(OBS) - Skill centers and service centers
Accounting Calendar - Common monthly calendar for Account System and Cost Control Module
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Business Products for Phase A
Phase A
Preliminary Project Plan • Cost and schedule controls
Phase A Work Agreements
Preliminary Integrated Baseline• NASA Standard WBS (to WBS Level 3)• WBS Dictionary• Integrated Master Schedule• Life cycle cost estimate
• Preliminary life-cycle cost estimates includes reserves• Workforce estimate
Phase B Work Agreements
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Business Products for Phase BPhase B
Final and approved Project Plan• Cost and schedule controls
Integrated Baseline Reviews for all contractors with life cycle cost greater than $20M
• Includes Prime contractors second tier subcontractors
Phase C Work Agreements
Final Integrated Baseline• NASA Standard WBS to Control Account/Work Package• WBS Dictionary to Control Accounts• Integrated Master Schedule
• Includes Tier 1 Master Schedule• End-to-end integrated Critical Path Network
• Life cycle cost estimate• Preliminary life-cycle cost estimates includes reserves
• Workforce estimate
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Implementation 15 Month Timeline
KDP-CPhase B Phase C
Transitioning from Phase B to Phase CThe first year of Phase C
Qtr 1 Qtr 2 Qtr 3 Qtr 4Qtr -1
• Project PDR
• Integrated Baseline Reviews of contractors
• Adjustments to final integrated baseline
• Prepare Phase CD Work Agreements
• Establish budget logs
• Data and process normalization period
• Begin monthly cadence Incorporate ACWP Incorporate BCWP
• Process and review for anomalies
• Generate CPR Format 1
• Run through three monthly cycles
• Make corrections as required
• Commence customer reporting
• Analyze performance trends (CPI SPI)
• Commence ETC maintenance
• Review variances
• Exercise cost and schedule change control process
• Variance Analysis Reporting
• Analyze performance trends (CPI SPI)
• Estimate to Complete (ETC) maintenance
• Budget to Complete (BTC) Maintenance
• Reserve utilization and attrition analysis
• VAR Correction Actions Tracking
• Analyze performance trends (CPI SPI)
• Comprehensive annual EAC
• Variance at Complete analysis
• Reserve utilization and attrition analysis
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0
20000
40000
60000
80000
100000
120000
140000
160000
180000
JUN
FY
06
JUL
FY
06
AU
G F
Y06
SE
P F
Y06
OC
T F
Y07
NO
V F
Y07
DE
C F
Y07
JAN
FY
07
FE
B F
Y07
MA
R F
Y07
AP
R F
Y07
MA
Y F
Y07
JUN
FY
07
JUL
FY
07
AU
G F
Y07
SE
P F
Y07
OC
T F
Y08
NO
V F
Y08
DE
C F
Y08
JAN
FY
08
FE
B F
Y08
MA
R F
Y08
AP
R F
Y08
MA
Y F
Y08
JUN
FY
08
JUL
FY
08
AU
G F
Y08
SE
P F
Y08
OC
T F
Y09
NO
V F
Y09
DE
C F
Y09
Budgeted Cost of Work Sheduled
Budgeted Cost of Work Performed
Actual Cost of Work Performed
0
20000
40000
60000
JUNFY06
JULFY06
AUGFY06
SEPFY06
OCTFY07
NOVFY07
Total ProjectEarned Value Performance Trends
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0.60
0.87
0.91
0.55
0.60
0.65
0.70
0.75
0.80
0.85
0.90
0.95
1.00
1.05
Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07
Cost PerformanceIndex (CPI)Performance Trend
CPI Goal at ProjectReplan
CPI Goal at 100% ofReserve Consumption
Total ProjectEarned Value Performance Trends
SPI TRACKING - STARTING JU '06lY
0.82
0.940.96
0.50
0.60
0.70
0.80
0.90
1.00
1.10
Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07
SchedulePerformance Index(SPI) PerformanceTrend
SPI Goal at ProjectReplan
Cost Performance Index (CPI)
Schedule Performance Index (SPI)
$224M
$253M
$233M IEAC
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‘Efforts and courage are not enough without purpose and direction’
John F. Kennedy
