project management a managerial approach chapter 10 monitoring and information systems

Project ManagementA Managerial Approach

Chapter 10

Monitoring and Information Systems


Evaluation and control of projects are the opposite sides of project selection and planning

Logic of selection dictates the components to be evaluated

The details of the planning expose the elements to be controlled

Monitoring is the collecting, recording, and reporting information concerning any and all aspects of project performance

The Planning - Monitoring - Controlling Cycle

The key things to be planned, monitored, and controlled are time (schedule), cost (budget), and specifications

The planning methods require a significantly greater investment of time and energy early in the life cycle of the project

These methods significantly reduce the extent and cost of poor performance and time/cost overruns

The Planning - Monitoring - Controlling Cycle

The control process should be perceived as a closed loop system

In a closed loop system, revised plans and schedules should follow corrective actions

The planning-monitoring-controlling cycle is continuously in process until the project is complete

Information Flow for the Planning - Monitoring - Controlling Cycle

Designing the Monitoring System

The first step in setting up any monitoring system is to identify the key factors to be controlled

The project manager must define precisely which specific characteristics of performance, cost, and time should be controlled

Exact boundaries must then be established, within which control should be maintained


The best source of items to be monitored is the project action plan

The monitoring system is a direct connection between planning and control

It is common to focus monitoring activities on data that are easily gathered - rather than important

Monitoring should concentrate primarily on measuring various facets of output rather than intensity of activity


The measurement of project performance usually poses the most difficult data gathering problem

Performance criteria, standards, and data collection procedures must be established for each of the factors to be measured

Information to be collected may consist of accounting data, operating data, engineering test data, customer reactions, specification changes and the like

How to Collect Data

It is necessary to define precisely what pieces of information should be gathered and when

A large proportion of all data collected take one of the following forms: Frequency counts Raw numbers Subjective numeric ratings Indicators Verbal measures

How to Collect Data

After data collection has been completed, reports on progress should be generated

These reports include project status reports, time/cost reports, and variance reports

Causes and effects should be identified and trends noted

Plans, charts and tables should be updated on a timely basis

How to Collect DataA count of “bugs” found during a series

of tests run on a new piece of software:

How to Collect DataPercent of specified performance met

during repeated trials

How to Collect Data

Monitoring can serve to maintain high morale on the project team

Monitoring can also alert team members to problems that will have to be solved

The purpose of the monitoring system is to gather and report data

The purpose of the control system is to act on the data

How to Collect Data

Significant differences from plan should be highlighted or “flagged” so that they cannot be overlooked by the controller

Some care should be given to the issues of honesty and bias

An internal audit serves the purpose of ensuring all information gathered is honest

No audit can prevent bias - all data are biased by those who report them

How to Collect Data

The project manager is often dependent on team members to call attention to problems

The project manager must make sure that the bearer of bad news is not punished; nor the admitter-to-error executed

The hider-of-mistakes may be shot with impunity - and then sent to corporate Siberia

Information Needs and the Reporting Process

The monitoring system ought to be constructed so that it addresses every level of management

Reports do not need to be of the same depth or at the same frequency for each level

The relationship of project reports to the project action plan or WBS is the key to the determination of both report content and frequency


Reports must contain data relevant to the control of specific tasks that are being carried out according to a specific schedule

The frequency of reporting should be great enough to allow control to be exerted during or before the period in which the task is scheduled for completion

The timing of reports should generally correspond to the timing of project milestones


The nature of the monitoring system should be consistent with the logic of the planning, budgeting, and scheduling systems

The primary objective is to ensure achievement of the project plan through control

The scheduling and resource usage columns of the project action plan will serve as the key to the design of project reports


Benefits of detailed, timely reports delivered to the proper people: Mutual understanding of the goals of the project Awareness of the progress of parallel activities More realistic planning for the needs of all groups Understanding the relationships of individual tasks to

one another and the overall project Early warning signals of potential problems and delays Faster management action in response to

unacceptable or inappropriate work Higher visibility to top management

Report Types

For the purposes of project management, we can consider three distinct types of reports: Routine Exception Special analysis

Routine reports are those issued on a regular basis

Report TypesException reports are useful in two

cases: First, they are directly oriented to project

management decision making and should be distributed to the team members who will have a prime responsibility for decisions

Second, they may be used when a decision is made on an exception basis and it is desirable to inform other managers as well as to document the decision

Report Types

Special analysis reports are used to disseminate the results of special studies conducted as a part of the project These reports may also be used in

response to special problems that arise during the project

Usually they cover matters that may be of interest to other project managers, or make use of analytic methods that might be helpful on other projects

MeetingsMost often, reports are delivered in

face-to-face meetings, and in telephone conference calls

Some simple rules can lead to more productive meetings: Use meetings for making group decisions Have preset starting and stopping times Make sure that homework is done prior to

the meeting

Meetings

Some simple rules for more productive meetings (cont.): Avoid attributing remarks or viewpoints to

individuals in the meeting minutes Avoid overly formal rules of procedure If a serious problem or crisis arises, call a

meeting for the purpose of dealing with that issue only

Common Reporting Problems

There are three common difficulties in the design of project reports:

There is usually too much detail, both in the reports themselves and the input being solicited from workers

Poor interface between the project information system and the parent firm’s information system

Poor correspondence between the planning and the monitoring systems

The Earned Value Chart

One way of measuring overall performance is by using an aggregate performance measure called earned value

A serious difficulty with comparing actual expenditures against budgeted or baseline is that the comparison fails to take into account the amount of work accomplished relative to the cost incurred


The earned value of work performed (value completed) for those tasks in progress is found by multiplying the estimated percent completion for each task by the planned cost for that task

The result is the amount that should have been spent on the task so far

The concept of earned value combines cost reporting and aggregate performance reporting into one comprehensive chart

The Earned Value ChartGraph to evaluate cost and performance

to date:

The Earned Value ChartVariances on the earned value chart follow

two primary guidelines: 1. A negative is “bad” 2. The cost variances are calculated as the

earned value minus some other measure

BCWP - budgeted cost of work performedACWP - actual cost of work performedBCWS - budgeted cost of work scheduledSTWP - scheduled time for work performedATWP - actual time of work performed


BCWP - ACWP = cost variance (CV, overrun is negative)

BCWP - BCWS = schedule variance (SV, late is negative)

STWP - ATWP = time variance (TV, delay is negative)

If the earned value chart shows a cost overrun or performance underrun, the project manager must figure out what to do to get the system back on target

Options may include borrowing resources, or holding a meeting of project team members to suggest solutions, or notifying the client that the project may be late or over budget

One note, Microsoft Project 98 does not calculate cost variance as defined by the PMI. They do it in reverse.


Variances are also formulated as ratios rather than differences Cost Performance Index (CPI) = BCWP/ACWP Schedule Performance Index (SPI) =

BCWP/BCWS Time Performance Index (TPI) = STWP/ATWP

Use of ratios is particularly helpful when comparing the performance of several projects

Cost/Schedule Control System Criteria (C/SCSC)

C/SCSC was developed by the U.S. Department of Defense in the late 1960s and was required for defense projects

It was an extension of the earned value analysis It spelled out a number of standards of

organization, accounting, budgeting, etc. that firms must meet if they are to be considered acceptable for government contracts

It is usually not required on government projects, but still is required by some businesses


For purposes of control, it is just as important to emphasize the need to relate the realities of time, cost, and performance with the project’s master plan

To do this, the set of action plans (the project master plan) must be kept up to date


Differences between work scheduled and work planned can develop from several different causes: Official change orders in the work elements Informal alterations in the methods used Official or unofficial changes in the tasks to be

accomplished

If the plan is not altered to reflect such changes, comparisons between plan and actual are not meaningful

Milestone Reporting

Milestone reports serve to keep all

parties up to date on what has been

accomplished

If accomplishments are inadequate or

late, these reports serve as starting

points for remedial planning

Computerized PMIS

New microcomputer-based project management information systems (PMISs) are considerably more sophisticated than earlier systems

Uses the microcomputer’s graphics, color, and other features more extensively

Many systems can handle almost any size project, being limited only by the memory available in the computer

Computerized PMIS

The PMIS trend of the 1990s has been to integrate the project management software with spreadsheets, databases, word processors, communication, graphics, and the other capabilities of Windows-based software packages

The current trend is to facilitate the global sharing of project information, including complete status reporting, through local networks as well as the Internet

Current Software

The explosive growth of project management software during the early 1990s saw the creation of more than 500 packages

Systems can be easily misused or inappropriately applied - as can any tools

The most common error is managing the PMIS rather than the project itself

Current Software

In addition to managing the PMIS instead of the project, other problems include: Computer paralysis PMIS verification Information overload Project isolation Computer dependence PMIS misdirection

Choosing SoftwareCharacteristics of generally desirable

attributes in project management software:

– Friendliness– Schedules– Calendars– Budgets– Reports– Graphics– Charts– Migration

Typical Software Output

Software evaluation action plan


Early and late start and finish dates and slack


Gantt Chart


AON Network


Gantt Chart Tracking progress

Summary

It is important that the planning-monitoring-controlling cycle be a closed loop cycle based on the same structure as the parent system

The first task in designing the monitoring system is to identify key factors in the project action plan to be monitored and to devise standards for them

The factors should concern results, rather than activities

Summary

The data collected are usually either frequency counts, numbers, subjective numeric ratings, indicators, or verbal measures

Project reports are of three types: routine, exception, and special analysis

Project reports should include an amount of detail appropriate to the target level of management

Summary

Three common reporting problems are too much detail, poor correspondence to the parent firm’s reporting system, and a poor correspondence between the planning and monitoring systems

The earned value chart depicts scheduled progress, actual cost, and actual progress (earned value) to allow the determination of spending, schedule, and time variances

Summary

There exist a great number of computerized PMIS’s that are available for project managers, with software evaluations occurring regularly in various magazines

Project managers’ preferred PMIS features are friendliness, schedules, calendars, budgets, reports, graphics, networks, charts, migration, and consolidation


Questions?


Picture Files


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Table Files

project management a managerial approach chapter 10 monitoring and information systems

Documents

planning monitoring

cycle slide

data zit

like slide

complete slide

data zafter data collection

difficult data

operating data