project management c53pm
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Session 8 Russell Taylor Lecturer in Computing & Business Studies E-mail: [email protected]. Project Management C53PM. Session 8. Project Monitoring & Control Chapter 8 Earned Value Analysis Exam question. Summary - Session 8. Difference between monitoring and control - PowerPoint PPT PresentationTRANSCRIPT
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Project Management C53PM
Session 8
Russell TaylorLecturer in Computing & Business Studies
E-mail: [email protected]
Business Department 2
Session 8
• Project Monitoring & Control– Chapter 8
• Earned Value Analysis– Exam question
Business Department 3
Summary - Session 8
• Difference between monitoring and control
• Discussed processes for change management
• Considered appropriate project control systems
• Discussed two different methods of project control
– Milestone & EVA
• Identified three most important variables to measure in project control
– ACWP, BCWP & BCWS
• Explained EVA spreadsheet
Business Department 4
Major Budgeting Processes
1. Resource Planning– People, Equipment, Materials, Overheads
2. Cost Estimating– Developing approximate cost for each
resource
3. Cost Budgeting– Relating cost estimates to schedule
– Producing time-phased cost & cash-flow predictions
4. Cost Control– Controlling cost in relation to project schedule
Business Department 5
Project Monitoring & Control
• Monitoring– Comparison of actual costs & schedule with planned cost & schedule.
• Control– Setting control limits– Deviation outside limits– Corrective action
• Effectiveness of project control systems– Response time– Traceability
Business Department 6
Project Monitoring & Control Systems
• What control measures to select
• What data to collect to estimate the current value of each control measure
• How to collect the data
• What analysis to perform on data collected to detect deviations
• Who needs it, in what format and how often
Business Department 7
Project monitoring & control Areas
• Critical tasks not started or finished on time– Schedule
• Non-critical tasks becoming critical– Schedule
• Milestones / key dates missed– Schedule
• Price changes, cost over-runs, cash flows– Costs
Business Department 8
Project monitoring & control Areas
• Long supply lead times – Resources, Schedule
• Resource availability problems– Resources, Schedule, Costs,
• Insufficient technical information – Resources, Schedule, Costs,
• Changes in project scope– Performance, Resources, Schedule, Costs,
Business Department 9
Typical types of change
• Scope creep
• Increase level of effort
• Quality creep
• New technologies or tools
• Personnel changes
• Schedule improvement
• Client discretion
Business Department 10
Change Management
1. Identify the change
2. Analyse the effects of change
3. Develop a response strategy
4. Communicate the strategy and gain endorsement for the change
5. Revise the work plan and monitor the effects of change
Business Department 11
Cost Control
• Two methods– Milestone Monitoring
– Earned Value Analysis
• Exam Question
Business Department 12
Milestone Monitoring
• A milestone is a key event in a project– Clear and well defined (Concrete)– Related to deliverables in the Gantt chart
• Milestones mark progress– Either achieved or not achieved – Have a target completion date– Have a budgeted cost
• Milestone monitoring– Simple & effective method– Plotted Deliverables on graph
Business Department 13
Figure 8.1: Milestone monitoring
0
50
100
150
200
250
0 10 20 30 40 50 60
Week No.
Cos
t/£ Planned budget
Actual cost
1.10 1.15 1.201.25 1.30 1.35
1.401.45 1.50
1.55 1.60
1.651.70
Milestone Monitoring
Business Department 14
Example
0
50
100
150
200
250
0 10 20 30 40Week No.
Co
st/£
Planned budget
Actual cost
1.10 1.15 1.201.25 1.30 1.35
1.401.45 1.50
1.55 1.60
Business Department 15
Earned Value Analysis (EVA)
• Earned Value Analysis (EVA)– also called Cost/Schedule Control System (C/SCS)
– or Baseline Performance Measurement (BPM)
– or Integrated Baseline Review (IBR)
• Comparison of the value actual work completed (earned value) against planned progress & actual expenditure of each activity
• Time-phased plan
Business Department 16
Earned Value Analysis (EVA)
• Actual cost of work performed (ACWP)– Actual costs incurred & recorded
– Progress reports
• Budget costs of work scheduled (BCWS)– The value of the work scheduled to be
accomplished at a given period in time.
• Budget cost of work performed (BCWP)– Earned Value (EV)
– Budgeted value of work completed to date
Business Department 17
BCWS & BCWP
Actual progress 70%
• Budget costs of work scheduled:BCWS = £1000,000 x 60% = £600,000
• Budget costs of work Performed: BCWP = £1000,000 x 70% = £700,000
Total Activity Budget = £1000,000
0 10 weeks6
Scheduled progress 60%
Business Department 18
Scheduled Variance
• Schedule variance (SV)– Indicates the difference between work content
performed and work content scheduled – Monitory units– Difference between BCWP and BCWS
• SV = BCWP – BCWS= £700,000 - £600,000= +£100,000
• Project ahead of schedule by £100,000 (1week)
Business Department 19
ACWP
Actual progress 70%
• Budget costs of work scheduled:BCWS = £1000,000 x 60% = £600,000
• Budget costs of work Performed: BCWP = £1000,000 x 70% = £700,000
Total Activity Budget = £1000,000
0 10 weeks6
Scheduled progress 60%ACWP = £750,000
Business Department 20
Cost Variance
• Cost variance (CV)– Identifies deviations in costs on work content
actually performed – Difference between BCWP and ACWP
• CV = BCWP – ACWP= £700,000 - £750,000= -£50,000
• Project has a cost overrun of £50,000
Business Department 21
CV & SV
Actual progress 70%
• SV = + £100,000• CV = - £50,000
Total Activity Budget = £1000,000
0 10 weeks6
Scheduled progress 60%ACWP = £750,000
Business Department 22
Performance Indices
• Schedule Variance (SV) & Cost Variance (CV) – Absolute measures in monitory units
• Schedule Performance Index (SPI)
• Cost Performance Index (CPI)
Business Department 23
Schedule Performance Index (SPI)
• SPI value = 1 indicates activity is on schedule
• SPI value >1 indicates activity ahead of schedule
• SPI value <1 indicates schedule overrun
SPI =BCWPBCWS
SPI =£700,000£600,000
= +1.16
• SPI defined as the ratio between BCWP & BCWS
Business Department 24
Cost Performance Index (CPI)
• CPI value = 1 indicates activity is on budget• CPI value > 1 indicates better than planned
cost performance• CPI value <1 indicates cost overrun
CPI =BCWPACWP
CPI =£700,000£750,000
= 0.93
• CPI defined as the ratio between BCWP & ACWP
Business Department 25
Earned Value Analysis
Actual progress 70%
• SV = + £100,000• CV = - £50,000• SPI = 1.16• CPI = 0.93
Total Activity Budget = £1000,000
0 10 weeks6
Scheduled progress 60%ACWP = £750,000
Business Department 26
Cost Estimate at Completion (EAC)
• Budget at Completion (BAC)– BAC = BCWS at completion = £1000,000
• Estimate at Completion (EAC)
EAC =BACCPI =
£1000,0000.93
= £1075,268
EAC = ACWP + (BAC – BCWP)
EAC = £750,000 + (£1000,000 - £700,000) = £1050,000
Business Department 27
Variance at Completion (EAC)
• Variance at Completion (VAC)– VAC = BAC - EAC
– VAC = £1000,000 - £1075,286
= -(£75,286)– VAC = £1000,000 - £1050,000
= -(£50,000)
Business Department 28
Schedule at completion
• Schedule at Completion (SAC)
• Project will have a cost overrun of £75,286, but will finish 1.4 weeks ahead of scheduled
SAC =Original estimated duration
SPI
=10 weeks
1.16= 8.62 weeks
Business Department 29
Summary - Session 8
• Difference between monitoring and control
• Discussed processes for change management
• Considered appropriate project control systems
• Discussed two different methods of project control
– Milestone & EVA
• Identified three most important variables to measure in project control
– ACWP, BCWP & BCWS
• Explained EVA spreadsheet