Lecture Project management in practice - Chapter 9: Progress and performance measurements

Lecture Project management in practice - Chapter 9: Progress and performance measurements. This chapter presents the following content: Structure of a project-monitoring system, what data is collected, the collection and analysis of this data, reporting of the data,...

CHAPTER 9

Progress and Performance Measurements

Structure of a

Project-monitoring System

Creating a project monitoring system involves determining:

• What data is collected

• The collection and analysis of this data

• The reporting of the data and types of

reports

Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd

Pearson, Larson, Gray, Project Management in Practice, 1e

What Data is Collected

•C urrent status of project (schedule and cost)

•R emaining cost to compete project

•D ate that project will be complete

•P otential problems to be addressed now

•O ut-of-control activities requiring intervention

•C ost and/or schedule overruns

•F

The Collection and Analysis

of this Data

• Who will collect the project data?

• How will the data be collected?

• When will the data be collected?

• Who will compile and analyse the data?

Reporting of the Data

• Who will receive the reports?

• How will the reports be transmitted?

• When will the reports be distributed?

Types of reports

• Full

• Exception

Controlling Project Costs, Resources and Schedules

Step 1: Setting a baseline plan

Step 2: Measuring progress and

performance

Step 3: Comparing plan against actual Step 4: Taking action

Step 1: Setting a Baseline Plan

• The baseline plan provides the anchor

point for measuring performance

• The baseline is derived from the cost and duration information found in the Work

Breakdown Structure (WBS) and

time-sequence data from the network and

resource scheduling decisions.

• The first baseline plan is usually the

approved PMP prior to project Execution.

Step 2: Measuring Progress

and Performance

• Time and budgets are quantitative

measures of performance that readily fit into the integrated information system.

• Additionally, think about qualitative

measures and stakeholder satisfaction.

Step 3: Comparing Plan

Against Actual

• Because plans seldom materialise as

expected, it becomes imperative to

measure deviations from the plan to

determine if action is necessary.

• Being able to compare planned values

(PV) against actual values (AC) is key.

Step 4: Taking Action

• If deviations from plans are significant,

corrective action will be needed to bring the project back in line with the original or

revised plan.

• Leverage the change/variation process to control change in the project environment.

Monitoring Time (Schedule)

Performance

Tracking Gantt Chart

Monitoring Time (Schedule)

Performance (cont.)

Project Schedule Control Chart

Per cent Complete Rule

Per cent Complete Rules used to

assess actual status

• Actual % complete.

• 0/100 % complete rule.

• Interval % complete.

• 50/50 rule.

Developing an Earned Value Cost/Schedule System (cont.)

1 Define the work using a WBS

a Scope

b Work packages

c Deliverables

d Resources

e Budgets

2 Develop work and resource

schedules

a Schedule resources

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 original budget (EV)

5 Compute the schedule

Developing an Earned Value

Cost/Schedule System (cont.)

Review Sir Ganttalot Media Clips

• http://www.youtube.com/watch?v=UggTFk2EiUg

• http://www.youtube.com/watch?v=jJi1FxC2e64

• http://www.youtube.com/watch?v=-MJEYc48Cjs

Developing an Earned Value

Cost/Schedule System ( cont.)

Comparing Earned Value

• With the expected schedule value

• With the actual costs

Assessing Status of a Project

Required data elements

• Data 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

Other Control Issues

• Scope creep

– Remember its one of the key reasons for project failure

• Baseline changes

– Keeping track of Scope plus agreed

changes to baseline in order to make an accurate report on final project

performance and deliverables.

Further Project Performance

Considerations

Not just constrained to scope, time, cost and

earned value consider:

• Quality

• Safety

• Environment

• Human dimension

• Customer

Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd

Pearson, Larson, Gray, Project Management in Practice, 1e

Key Terms

•c

ontrol chart

•C

ost Performance Index (CPI)

•C

ost Variance (CV)

•E

arned Value (EV)

•e

stimated cost at completion—forecasted (EACf)

•e

stimated cost at completion—revised estimates (EACre)

•e

xception report

•f

ull reporting

•m

ilestones

•P

er cent Complete Index—actual costs (PCIC)

•P

er cent Complete Index—budget costs (PCIB)

•p

lanned value (PV)

•q

uality

•S

chedule Performance Index (SPI)

•S

chedule Variance (SV)

•s

cope creep

•T

o Complete Performance Index (TCPI)

•t