Module 04 : Knowing Where the Project Is

*Project Management (x470)

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*Class Road Map

Session 1

Foundational Concepts

Sessions 2 & 3

Knowing WHAT the

Project Is

Session 4

Knowing WHERE the Project Is

Session 5

Closure, Group

Presentation, Advance

Topics

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*Session 4 Agenda

Short Quiz 3

• Questions / Review• Homework• Short Quiz

Knowing

WHERE the Project Is

• Metrics• Traffic Light Reporting• Status Reporting Templates• Earned Value Reporting• Change Control

Team Sessio

ns

• Continue Project Plan Development

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*Project ExecutionMonitoring and Control

Project Approval

• Formal “Go” decision

• Project Charter• Project Manager

assigned

Project Plan

• Clear and approved project or phase definition

• Stakeholders• Scope

(Deliverables)• Schedule• Cost

Project Execution

• Complete deliverables per the project management plans

• Determine and communicate project status

• Knowing Where the Project Is

Knowing What the Project IsDeliverables completed, Status Report, Issues and Action Item Log, Meeting Minutes

Change Request Approval / Rejection

Continual Team Development & Conflict Management

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*Knowing Where the Project Is:Why Metrics?To provide goal-centered feedback to detect and correct the

course

Guide• Course correction

Forewarn• Issue Detection

Inform• Collective meaning

Act• If you don’t act, don’t measure

Measurements mated with analysis and action!

What data is relevant?

Where is it best collected?

Who should analyze and act on it?

When should it be done?

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*Knowing Where the Project Is:Project Performance Data

Backward Looking• Project status-to-

date: schedule, cost, scope/quality

• Significant milestones completed

Forward Looking• Projected project

status• Milestones for the

next reporting cycle• Significant issues

and planned corrective actions / recommendations

• Project environment changes / reviewTraffic Light

ReportingEarned Value Reporting

Traffic Light Reporting

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Metric Status Trend

Schedule Green Green

Cost Yellow Red

Scope / Quality Green Green

Others Green Yellow

Overall Health Green Red

*Knowing Where the Project Is:

Traffic Light Reporting

Need to define what the colors mean!

*Knowing Where the Project Is:Sample Metric Status Definition

Scope

Green No scope change.

Yellow Change within 10% of original scope

Red Change over 10% of original scope. Need re-baseline.

Schedule

Green On track for scheduled completion

Yellow Within 10% of scheduled completion

Red Over 10% scheduled completion. Need re-baseline.

Cost

Green Completion within budget

Yellow Completion within 10% of budget

Red Completion over 10% of budget. Need re-baseline.

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* Knowing Where the Project Is:Sample Metric Status Definition 2

Parameter Red Yellow Green Comments

Scope

Some “must have” deliverables cannot be delivered

Some “must have” deliverables are at risk

All “must have” deliverables on track to be delivered

Indicator reflecting approved functionality to be delivered by the project

Schedule Variance > 4 weeks

Variance > 1 weekVariance < 4 weeks

Project on track

Measured as variance of current Critical Path completion date to approved date

Cost Variance >10%

Variance > 5%Variance < 10%

Variance < 5%

Measured as variance of (actuals + forecast to complete) to approved budget

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*Knowing Where the Project Is:Sample Metric Trend DefinitionColor Definition

GreenLess than 20% probability that a change that adversely impacts a parameter target (scope, time, cost) will occur

Yellow20% to 50% probability that a change that adversely impacts a parameter target (scope, time, cost) will occur.

RedGreater than 50% probability that a change that adversely impacts a parameter target (scope, time, cost) will occur

*Knowing Where the Project Is:Project Dashboard

Project Metric Status Trend Problem Statement Corrective Action

  Scope        

Schedule        

Cost        

Overall Health

       

Executive Summary

Results

   

Next Steps

Working

   

Challenges

Significant results for the reporting period.

Significant work to be started for the next reporting period.

Significant work in progress for the reporting period.

Major issues, constraints, etc .

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*Knowing Where the Project Is:Simplified Project Dashboard

Project Status Trend Significant Results for the Period

Significant Work To Be Started or In-Progress for

the Period

Challenges and Corrective

Actions

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*Knowing Where the Project Is:Multiple Project ReportingProj IDProject Name

Project Manage

r

Major Issues

Sched Status

Tech Status

Budget Savings StaffingCust Satis.

Sched Comp.

Overall

DISRUPTED PROJECTS

      R R Y Y Y Y Y R R

      Y G Y Y G G G G Y

TOP INITIATIVES (TI)

      G G G G G G G G G

      G G G G G G G G G

INFRASTRUCTURE IMPERATIVES

      G G G G G G G G G

      G G G G G G G G G

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*Knowing Where the Project Is:Flexibility Matrix and Status Trigger

• Trigger point for Schedule ‘color’ can be tighter

• Trigger point for Cost color can be looser

Parameter High Medium Low

Scope Yes

Schedule Yes

Cost Yes

*Knowing Where the Project Is:

Earned Value Management

Planned Value (PV) – the physical work scheduled to be performed, including the estimated value of this work. (a.k.a. Budgeted Cost of Work Scheduled - BCWS)

Earned Value (EV) – the physical work actually accomplished, including the estimated value of this work. (a.k.a. Budgeted Cost of Work Performed - BCWP)

Actual Cost (AC) - the actual cost incurred to accomplish the earned value. (Actual Cost of Worked Performed - ACWP)

Schedule and cost status reporting tool!

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*Knowing Where the Project Is:

Earned Value ExampleA work on a project task is expected to cost $1500 to complete and the workers were scheduled to finish today. As of today however, the workers have actually expended $1350 and the best estimate is the task is 2/3 complete. Determine the Planned Value, Actual Cost and Earned Value at this point in time.

Task Budget = $1500

Money Spent = $1350% Complete = 2/3

Today

PV = 1500

AC = 1350

EV = (2/3)(1500) = 1000

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*Knowing Where the Project Is:

Earned Value FormulaeCost Variance CV = EV - AC

Cost Variance in % CVP = (CV/EV) 100%

Cost Performance Index CPI = EV / AC

Schedule Variance SV = EV - PV

Schedule Variance in % SVP = (SV/PV) 100%

Schedule Performance Index SPI = EV / PV

*Knowing Where the Project Is:

Estimate at CompletionEAC = AC

EVX

The estimate at completion is the best estimate of the total cost at the completion of the project.

The EAC is a periodic evaluation of the status of the project - usually on a monthly basis or until a significant change has been identified.

(BAC)Other Formulae1. Actual plus new Estimate

To Complete EAC = AC + ETC

• Actual plus budget (PV) for remaining deliverablesEAC = AC + (BAC – EV)

• Actual plus budget for remaining deliverables modified by the performance indexEAC = AC + (BAC – EV)/CPI

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*Knowing Where the Project Is:Earned Value Status Reporting

SV

CV

PV

EV

AC

Time of measurement

CU

MM

UL

AT

IVE

CO

ST,

$

TIME19

*Knowing Where the Project Is:

Using Earned Value IW

k PV AC % Done EV SV=

EV-PVCV=EV-AC

SPI=EV/PV

CPI= EV/AC

EAC= AC*BAC /

EV

1 400 420 23 368 -32 -52 0.92 0.88 1826

2 800 880 50 800 0 -80 1.00 0.91 1760

3 1200 1380 85 1360 160 -20 1.13 0.99 1624

4 1600 1500 100 1600 0 100 1.00 1.07

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*Knowing Where the Project Is:

Using Earned Value II

Project: Software enhancement for a drug company

Baseline: Entire effort priced at $200K and scheduled for completion June 10th

As of June 10: Project cost to date is $195K. One activity is left in the project estimated to cost S25K.

Find cost and schedule variance amounts, cost and schedule variance percentages, cost and schedule performance indexes, and estimate at completion amount.

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*Knowing Where the Project Is:

Using EV II SolutionGiven:BAC = $200K, PV = $200K, AC = $195KLast Activity Cost = $25K

Solution:EV = 200K – 25K = $175K

CV = EV – AC = 175K- 195K = -$20KSV = EV – PV = 175K – 200K = -$25KCV% = (CV / EV) 100% = (-20/175) 100% = -11%SV % = (SV / PV) 100% = (-25/200) 100% = -12.5%CPI = EV / AC = 175 / 195 = .897SPI = EV / PV = 175 / 200 = .875

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*Knowing Where the Project Is:

Using EV II Solution (cont.)

EAC1 = (AC/EV) x BAC = (195/175)200K = $223K

EAC2 = AC + (BAC – EV) = 195K + 200K – 175K = 220K

EAC3= AC + (BAC – EV)/CPI = 195K + (200K-175K)/.897 = $223K

ETC = EAC – AC= 223 – 195 = 28K

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*Knowing Where the Project Is:

Using Earned Value III

Project: Construction of a new house

Baseline: Entire effort priced at $1.2M and scheduled for completion January next year.

As of July 1: First project activity is a site survey with a budget of $80K. By July 1st, half of the site survey is expected to be completed. Cost to date is $60K and work is already 80% complete.

Find cost and schedule variance amounts, cost and schedule variance percentages, cost and schedule performance indexes, and estimate at completion amount.

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*Knowing Where the Project Is:

Using Earned Value IV

Deliverable Predecessor

Duration

ScheduledCost /

Day

A - 3 $1,000

B - 5 $2,000

C A 4 $4,000

D B 7 $1,000

E C 6 $2,000

F D 8 $3,000

Deliverable

End of Week 1

Actual % Completed

CumulativeActual Cost

A 60% $1,500

B 30% $3,000

C 10% $2,000

D 0% 0

E 0% 0

F 0% 0

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A

C

E

B

D

F

1 2 3 4 5 6 7 8 9 10

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12

13

14

15

16

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18

19

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Week 1

Schedule and Cost End of Week 1

Task Pred. Duration (Days)

Scheduled Cost /

Day

Actual % Done

Cumulative Actual Cost PV EV

A   3 $1,000 60% $1,500 $3,000 $1,800

B   5 $2,000 30% $3,000 $10,000 $3,000

C A 4 $4,000 10% $2,000 $8,000 $1,600

D B 7 $1,000 0% $0 $0 $0

E C 6 $2,000 0% $0 $0 $0

F D 8 $3,000 0% $0 $0 $0

          $6,500 $21,000 $6,400

Using Earned Value IV

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Schedule and Cost End of Week 1

Task Pred.Duration (Days)

Scheduled Cost / Day

Actual % Done

Cumulative Actual Cost

PV EV

A   3 $1,000 60% $1,500 $3,000 $1,800

B   5 $2,000 30% $3,000 $10,000 $3,000

C A 4 $4,000 10% $2,000 $8,000 $1,600

D B 7 $1,000 0% $0 $0 $0

E C 6 $2,000 0% $0 $0 $0

F D 8 $3,000 0% $0 $0 $0

          $6,500 $21,000 $6,400

Using Earned Value IV

*Knowing Where the Project Is:

Using Earned Value IV (cont…)Task PV EV AC SV =

EV-PVCV = EV-AC

SPI = EV/PV

CPI = EV/AC

EAC = AC*BAC/EV

A 3000 1800 1500 -1200 300 0.6 1.2

73125

B 10000 3000 3000 -7000 0 0.3 1

C 8000 1600 2000 -6400 -400 0.2 0.8

D 0 0 0

E 0 0 0

F 0 0 0

21000 6400 6500 -14600 -100 0.305 0.98

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*Knowing Where the Project Is:Using Earned Value: HW Gantt Chart

A C

EB

DF

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Week 1 Week 229

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*Knowing Where the Project Is:

Project Change ControlObjective

Manage changes to project via an approved change control process

Deliverable

Approved / rejected change request document

Updated project and product process deliverables

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*Project Team Development

* Enhancement of stakeholders’ ability to contribute as individual and team’s ability to function as a team

* Team building activities

* Reward and recognition

* Training

Projects are managed through its people!

Deliverables

Project Manager

Resources

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*Knowing Where the Project Is:Monitor & Control “Best Practices”* Formalized review process with

participation from management on issue resolution

– Gate review– Status review

* Check-in, stay in-touch* Maintain an open environment* Tracking intensity proportionate to

project importance / priority