Project

Management

Project

Execution

Daniel Blouin, PMP

Define Plan Execute Close

Execute

1–2

FIGURE 1.1

----------------- Continuous improvement -----------------

Executing

1. Status reports 2. Changes 3. Quality 4. Forecasts

Project Management - Execution

One of the most important aspect of

Project Management during the

Execution phase is Monitoring

Progress.

The Project Manager must be able to

Control if things are moving according

to the planned schedule and budget.

3

Monitoring Progress

4

Activity Duration

Days 18 19 20 21 22 23

A 3

B 1

C 1

D 1

Regularly control if the actual work is

moving according to the plan

Monitoring Progress

5

Activity Duration

Days 18 19 20 21 22 23

A 3

B 1

C 1

D 1

Always identify the date that the state

of the progress is reported on :

Monitoring Progress

6

Activity Duration

Days 18 19 20 21 22 23

A 3

B 1

C 1

D 1

Identify the activities that have been

started : (task in progress)

Monitoring Progress

7

Activity Duration

Days 18 19 20 21 22 23

A 3

B 1

C 1

D 1

Identify the activities that have been

completed : (task completed)

Monitoring Progress

8

Activity Duration

Days 18 19 20 21 22 23

A 3

B 1

C 1

D 1

Identify the activities that have been

completed : (task completed)

Monitoring Progress

9

Activity Duration

Days 18 19 20 21 22 23

A 3

B 1

C 1

D 1

Identify the revised

completion dates : estimated completion

Monitoring Progress

10

Example:

You have been asked to do a

Research on internet about the Parks

in your city. You plan to work on it for

3 days.

Activity Duration

Days 18 19 20 21 22 23

A 3

Monitoring Progress

11

Example:

You begin to work…

After 2 days you evaluate what you

have accomplished.

Activity Duration

Days 18 19 20 21 22 23

A 3

Monitoring Progress

12

Example:

• In 2 days you have only gathered

information about 5 parks.

•You realize that you will need to be

more efficient.

•You also realize that 1 day will not be

enough to complete your research.

Activity Duration

Days 18 19 20 21 22 23

A 3

Monitoring Progress

13

Example:

You estimate that even if you change

your approach to be more efficient,

you will still need another 3 days to

finish the internet research.

Activity Duration

Days 18 19 20 21 22 23

A 3

Estimate to complete

Monitoring Progress

14

Task Status : –Task started as planned

–Task is in progress

–Task is not expected to finish as planned

– New estimated completion date is : 22

Activity Duration

Days 18 19 20 21 22 23

A 3

Monitoring Progress

15

Example:

Planned duration = 3 days

Activity Duration

Days 18 19 20 21 22 23

A 3

Actual work done to date = 2 days

Estimate to complete : 3 days

Monitoring Progress

16

Example:

Task Duration

Days

Actual

Days

Worked

Estimate

to

complete

18 19 20 21 22 23

A 3 2 3

Monitoring Progress

17

Task Duration

Days

Actual

Days

Worked

Estimate

to

complete

18 19 20 21 22 23

A 3 2,5 0

B 1 1,0 0

C 1 1,3 1,6

D 1 0 1

Planned Actual Estimate to complete

Status

of tasks

Completed

Completed

In Progress

Not Started

Monitoring Progress

18

Task Duration

Days

Actual

Days

Worked

Estimate

to

complete

18 19 20 21 22 23

A 3 2,5 0

B 1 1,0 0

C 1 1,3 1,6

D 1 0 1

Planned Actual Estimate to complete

Project Status : • In progress.

• Tasks A, B are

completed

• Tasks B and C

started late

• Task C is estimated

to take much longer

than planned

• The Project

completion date is

now estimated to be

the 23.

Gantt Chart

Project Status

• Preparation is completed

• “Purchase of Material” is

In progress but is expected to

finish late on September 29

• Estimated project completion

date is October 7

20

Build a Storage shed Time Phased Budget

Monitoring Progress – Cost Control

21

Milestone Report

Project : Build a Storage Shed

Milestone Progress Report 2012-09-25

22

Milestone Planned

Start

Date

Actual

Start

Date

Planned

Finish

Data

Actual

Finish

Date

Planned

Budget

Cumulative

Actual

Expense

Preparation 09/17 09/17 09/23 09/25

1 070 000

1 070 000

1 470 000

1 470 000

Purchase

Material

09/21 09/22 09/26 7 450 000

8 520 000

Construction 09/23 10/02 2 880 000

11 400 000

Milestone Report

Project : Build a Storage Shed

Milestone Progress Report 2012-09-25

23

Milestone Planned

Budget

Cumulative

Actual

Expense

Difference %

Preparation 1 070 000

1 070 000

1 470 000

1 470 000

400 000

400 000

+ 37%

+ 37%

Purchase

Material

7 450 000

8 520 000

Construction 2 880 000

11 400 000

+ 4%

Monitoring Progress

24

Cost Control :

Planned Value (PV) is

The Total cost of the work scheduled

for given tasks at a given reporting date

PV = Hourly Rate X

Total Hours Planned or Scheduled

Monitoring Progress

25

Cost Control Example:

•The Task A planned work hours = 24

•The Direct cost per hour = 25 VND

•The total Planned Value (PV) of this

activity is 24 X 25 = 600 VND Task Duration

Days

Actual

Days

Worked

Estimate

to

complete

Panned

Work

hours

18 19 20 21

A 3 2 3 24

Monitoring Progress

26

Cost Control Example:

• The Task A planned work hours = 24

• The Direct cost per hour = 25 VND

•The Planned Value (PV) on the 18

for this task is 8 X 25 = 200 VND Task Duration

Days

Actual

Days

Worked

Estimate

to

complete

Panned

Work

hours

18 19 20 21

A 3 2 3 24

Monitoring Progress

27

Cost Control Example:

•The Earned Value (EV)

is the Planned Value (PV)

multiplied by the % of completion.

•EV : 200 VND X 50% = 100 VND Task Duration

Days

Actual

Days

Worked

Estimate

to

complete

Panned

Work

hours

18 19 20 21

A 3 2 3 24

Monitoring Progress

28

Cost Control Example:

•As of the Status date, the Actual work hours used for Task A is 4

•The Actual cost per hour is 30 VND

•The Actual Cost (AC) of this activity is 4 X 30 = 120 VND

Task Duration

Days

Actual

Days

Worked

Estimate

to

complete

Panned

Work

hours

18 19 20 21

A 3 2 3 24

Monitoring Progress

29

Cost Variance (CV) is a very important factor to measure project performance.

Cost Variance (CV) indicates how much over or under budget the project is.

Cost Variance can be calculated using the following formula

Cost Variance (CV) = Earned Value (EV) - Actual Cost (AC)

Monitoring Progress

30

Cost Control Example: Cost Variance (CV) =

Earned Value (EV) 100

- Actual cost (AC) 120 -

20 –

Task Duration

Days

Actual

Days

Worked

Estimate

to

complete

Panned

Work

hours

18 19 20 21

A 3 2 3 24

• A Positive Cost Variance

Indicates that the project is under budget

• A Negative Cost Variance

Indicates that the project is over budget

Monitoring Progress

31

Cost Variance % indicates how much over or under budget the project is in terms of percentage.

Cost Variance % can be calculated using the following formula

CV % = Cost Variance (CV) / Earned Value (EV)

Positive Variance % indicates % under Budget.

Negative Variance % indicates % over Budget.

Monitoring Progress

32

Cost Control Example: Cost Variance % (CV%) =

Cost Variance (CV) / Earned Value (EV)

- 20 / 100 = - 20 %

« 20 % over budget »

Task Duration

Days

Actual

Days

Worked

Estimate

to

complete

Panned

Work

hours

18 19 20 21

A 3 2 3 24

Monitoring Progress

33

Cost Performance Indicator (CPI) Cost Performance Indicator is an index showing the efficiency of the utilization of the resources on the project.

CPI can be calculated using the following formula:

CPI = Earned Value (EV)

/ Actual Cost (AC)

• CPI value above 1 indicates efficiency in utilizing the resources allocated to the project is good.

• CPI value below 1 indicates efficiency in utilizing the

resources allocated to the project is not good.

Monitoring Progress

34

Cost Control Example: Cost Performance Indicator (CPI) =

Earned Value (EV) / Actual cost (AC)

100 / 120 = 0,833

Task Duration

Days

Actual

Days

Worked

Estimate

to

complete

Panned

Work

hours

18 19 20 21

A 3 2 3 24

• CPI value above 1 indicates good efficiency in

utilizing the resources allocated to the project

• CPI value below 1 indicates poor efficiency in

utilizing the resources allocated to the project.

Monitoring Progress

35

Schedule Variance (SV) indicates how much ahead or behind schedule the project is.

Schedule Variance can be calculated as using the following formula

Schedule Variance (SV) =

Earned Value (EV) - Planned Value (PV)

• Positive Schedule Variance Indicates we are ahead of schedule

• Negative Schedule Variance Indicates we are behind of schedule

Monitoring Progress

36

Cost Control Example: Schedule Variance (SV) =

Earned Value (EV) 100 -

- Planned Value (PV) 200

100 –

Task Duration

Days

Actual

Days

Worked

Estimate

to

complete

Panned

Work

hours

18 19 20 21

A 3 2 3 24

• Positive Schedule Variance

Indicates we are ahead of schedule

• Negative Schedule Variance

Indicates we are behind of schedule

Monitoring Progress

37

Schedule Variance % (SV%)

indicates how much ahead or behind schedule the project is in terms of percentage.

Schedule Variance % can be calculated as using the following formula

SV % = Schedule Variance (SV) / Planned Value (PV)

• Positive Variance % indicates % ahead of schedule.

• Negative Variance % indicates % behind of schedule.

Monitoring Progress

38

Cost Control Example: Schedule Variance % (SV%) =

Schedule Variance (SV) - 100

/ Planned Value (PV) / 200

- 50%

Task Duration

Days

Actual

Days

Worked

Estimate

to

complete

Panned

Work

hours

18 19 20 21

A 3 2 3 24

• Positive Variance % indicates % ahead of

schedule.

• Negative Variance % indicates % behind of

schedule.

Monitoring Progress

39

Schedule Performance Indicator (SPI) is an index showing the efficiency of the time utilized on the project.

Schedule Performance Indicator can be calculated using the following formula:

SPI = Earned Value (EV) /Planned Value (PV)

• SPI value above 1 indicates project team is very efficient in utilizing the time allocated to the project.

• SPI value below 1 indicates project team is less efficient in utilizing the time allocated to the project.

Monitoring Progress

40

Cost Control Example: Schedule Variance (SV) =

Earned Value (EV) 100 /

/ Planned Value (PV) 200

0,5

Task Duration

Days

Actual

Days

Worked

Estimate

to

complete

Panned

Work

hours

18 19 20 21

A 3 2 3 24

• SPI value above 1 indicates project team is very efficient

in utilizing the time allocated to the project.

• SPI value below 1 indicates project team is less efficient

in utilizing the time allocated to the project.

13–41

Structure of a Project Monitoring

Information System

•Establishing the project monitoring

system involves determining:

–What data to collect

–How, when, and who will collect the data

–How to analyze the data

–How to report current progress to

management

13–42

Project Monitoring Information System

•What data are collected? –Current status of project (schedule, 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 and the reasons for them •Forecast of overruns at time of project completion

13–43

Project Monitoring System… (cont’d)

•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?

•Reports and reporting

–Who will receive the reports?

–How will the reports be transmitted?

–When will the reports be distributed?

13–44

The Project Control Process

• Control : The Process of comparing actual

performance against plan to identify

deviations, evaluate courses of action, and

take appropriate corrective action.

• Project Control Steps 1.Setting a baseline plan.

2.Measuring progress and performance.

3.Comparing plan against actual.

4.Taking action.

• Tools : Tracking and baseline Gantt charts

Budget control charts

Developing an Integrated Cost/Schedule System

1.Define the work using a WBS. a.Scope

b.Work packages

c. Deliverables

d.Organization units

e.Resources

f. Budgets

2.Develop work and resource schedules. a.Schedule resources to activities

b.Time-phase work packages into a network

13–46

Developing an Integrated Cost/Schedule System

3. Develop a time-phased budget using

work packages included in an activity.

Accumulate budgets (PV).

4. At the work package level, collect the

actual costs for the work performed

(AC). Multiply percent complete times

by original budget (EV).

5. Compute the schedule variance (EV-

PV) and the cost variance (EV-AC).

13–47

Development of Project Baselines

• Purposes of a Baseline (PV)

– An anchor point for measuring performance

•Planned cost and expected schedule against which actual cost and schedule are measured.

•Basis for cash flows and Progress payments.

•A summation of time-phased budgets along a project timeline. Cost accounts representing summed work packages

• What Costs Are Included in Baselines? – Labor, equipment, materials, project direct

overhead costs (DOC)

48

Development of Project Baselines (cont’d)

•Rules for Placing Costs in Baselines

–Costs are placed exactly as they are

expected to be “earned” in order to track

them to their point of origin.

–Percent Complete Rule

• Costs are periodically assigned to a baseline as units of work are completed over the duration of a work package.

13–49

Methods of Variance Analysis

• Comparing Earned Value

– With the expected schedule value.

– With the actual costs.

13–50

Methods of Variance Analysis

Assessing Status of a Project

• Required data elements

– Budgeted cost of the work scheduled (PV)

– Budgeted cost of the work completed (EV)

– Actual cost of the work completed (AC)

• Calculate schedule and cost variances

–A positive variance indicates a desirable

condition, while a negative variance

suggests problems or changes that have

taken place.

13–51

Developing A Status Report:

A Hypothetical Example

• Assumptions

–Each cost account has only one work package,

and each cost account will be represented as

an activity on the network.

–The project network early start times will serve

as the basis for assigning the baseline values.

–From the moment work an activity begins,

some actual costs will be incurred each period

until the activity is completed.

13–52

Indexes to Monitor Progress

• Performance Indexes

– Cost Performance Index (CPI) •Measures the cost efficiency of work accomplished to date.

•CPI = EV/AC

– Scheduling Performance Index (SPI) •Measures scheduling efficiency

•SPI = EV/PV

– Percent Complete Indexes • Indicates how much of the work accomplished represents of the total budgeted (BAC) and actual (AC) dollars to date.

•PCIB = EV/BAC

•PCIC = AC/EAC

13–53

Additional Earned Value Rules

• Rules applied to short-duration activities

and/or small-cost activities –0/100 percent rule

•Assumes 100 % of budget credit is earned at once and only when the work is completed.

–50/50 rule

•Allows for 50% of the value of the work package budget to be earned when it is started and 50% to be earned when the package is completed.

–Percent complete with weighted monitoring gates

•Uses subjective estimated percent complete in combination with hard, tangible monitoring points.

13–54

Forecasting Final Project Cost

• Methods used to revise estimates of future

project costs:

–EACre •Allows experts in the field to change original baseline durations and costs because new information tells them the original estimates are not accurate.

–EACf •Uses actual costs-to-date plus an efficiency index to project final costs in large projects where the original budget is unreliable.

4–55

Project Scope: Terms and Definitions

•Scope Creep

– The tendency for the

project scope to expand

over time due to

changing requirements,

specifications, and

priorities.

4–56

Project Management - Execution

Change Control

• Identifying, documenting, approving or rejecting, and controlling Changes to the project baselines (schedule and budget)

Not to be confused with “Change Management”

which covers aspects like organizational change

planning and acceptance, communication of

changes and formal training.

57

Milestone

Activity

Task

Deliverable

Work

Package

Responsibility

Department

Person

Preparation

Obtain local authority

approval

Authorization

Me

Local Authority

Select or make a

construction plan

Construction plan Me

Purchase Material

Purchase Required

Material

List of Material to buy

Me

Hardware store

Construction

Build the Shed

Shed

Foundation

Walls

Roof, Finish

Me

Help

Specialists

in scope out of scope

Requirements

Project Charter

Work Breakdown Structure

Objectives Constraints

Who, what, why, where, when, how

Schedule Budget Baseline

58

Milestone

Activity

Task

Deliverable

Work

Package

Responsibility

Department

Person

Preparation

Obtain local authority

approval

Authorization

Me

Local Authority

Select or make a

construction plan

Construction plan Me

Purchase Material

Purchase Required

Material

List of Material to buy

Me

Hardware store

Construction

Build the Shed

Shed

Foundation

Walls

Roof, Finish

Me

Help

Specialists

Scope out of scope

Requirements

Project Charter

Work Breakdown Structure

Objectives Constraints

Who, what, why, where, when, how

Schedule Budget Baseline

59

Milestone

Activity

Task

Deliverable

Work

Package

Responsibility

Department

Person

Preparation

Obtain local authority

approval

Authorization

Me

Local Authority

Select or make a

construction plan

Construction plan Me

Purchase Material

Purchase Required

Material

List of Material to buy

Me

Hardware store

Construction

Build the Shed

Shed

Foundation

Walls

Roof, Finish

Me

Help

Specialists

Scope out of scope

Requirements

Project Charter

Work Breakdown Structure

Schedule Budget Baseline

Objectives Constraints

Who, what, why, where, when, how

60

Milestone

Activity

Task

Deliverable

Work

Package

Responsibility

Department

Person

Preparation

Obtain local authority

approval

Authorization

Me

Local Authority

Select or make a

construction plan

Construction plan Me

Purchase Material

Purchase Required

Material

List of Material to buy

Me

Hardware store

Construction

Build the Shed

Shed

Foundation

Walls

Roof, Finish

Me

Help

Specialists

Scope out of scope

Requirements

Project Charter

Work Breakdown Structure

Schedule

Objectives Constraints

Who, what, why, where, when, how

Budget Baseline

7–61

Change Control System Process

1. Identify proposed changes.

2. List expected effects of proposed changes

on schedule and budget.

3. Review, evaluate, and approve or disapprove

of changes formally.

4. Negotiate and resolve conflicts of change,

condition, and cost.

5. Communicate changes to parties affected.

6. Assign responsibility for implementing change.

7. Adjust master schedule and budget.

8. Track all changes that are to be implemented

7–62

Benefits of a Change Control System

1. Inconsequential changes are discouraged

by the formal process.

2. Costs of changes are maintained in a log.

3. Integrity of the WBS and performance measures

is maintained.

4. Allocation and use of budget and management

reserve funds are tracked.

5. Responsibility for implementation is clarified.

6. Effect of changes is visible to all parties involved.

7. Implementation of change is monitored.

8. Scope changes will be quickly reflected in

baseline and performance measures.

13–63

Key Terms

• Baseline budget

• Progress Monitoring

• Tracking Gantt Chart

• Started

• In Progress

• Estimate to complete

• Completed

• Cost Control Chart

• Actual Cost

• Difference and %

• Scope creep

• Change control

13–64

Key Terms

Control parameters

Planned Value (PV)

Cost variance (CV)

Earned value (EV)

Schedule variance (SV)

Cost performance index (CPI)

Schedule performance inder (SPI)

Schedule performance index (SPI)

Estimated Cost at Completion

Forecasted (EACf)

Revised Estimates (EACre)

Variance at Completion (VAC)

65

Project Definition