week 9-performance-management-1222266539427090-9
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Project ManagementProject Management9. Performance Management9. Performance Management
Week 9
Performance management
Once you have selected a project
Once you have selected a project
And planned it
Once you have selected a project
And planned it
And hired the team
Once you have selected a project
And planned it
And hired the team
And started the work
Once you have selected a project
And planned it
And hired the team
And started the work
How do you stay on track?
How do you even know if you are progressing to plan?
Gray & Larson, 2006, Ch 13.
What is a Project Monitoring System
Examples of Progress Reports
What is the Project Control Process and why is it useful?
How do I Monitor Time Performance
The shortcomings of monitoring Systems
Earned Value Management – a silver bullet?
Integrated Cost/Schedule System
Project Baselines
What is a Project Monitoring System?
It involves determining what data to collect, how, when an who will collect the data; analysis of the data; and reporting progress
Monitoring System
Gather Analyse Report
You need to know what information is needed to satisfy you and your stakeholders.
Think about the Information System Structure
What data are collected?
current status of project (schedule and 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 & their reasons
Forecasting overruns at time of completion
What data are collected?
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?who will receive the reports?
how will the reports be transmitted?
when will the reports be distributed?
Photo by germanium
What is a Project Monitoring System
Examples of Progress Reports
What is the Project Control Process and why is it useful?
How do I Monitor Time Performance
The shortcomings of monitoring Systems
Earned Value Management – a silver bullet?
Integrated Cost/Schedule System
Project Baselines
Progress Report FormatProgress since last report
Current status of projectScheduleCostScope
Problems and issues since last report
Actions and resolution of earlier problems
New variances and problems identified
Corrective action planned
How long should a project status report be?
1 page
<example>
office.microsoft.com/en-us/templates/TC011417231033.aspx
http://saulcarliner.home.att.net/idbusiness/statusreport.htm
http://www.projectperfect.com.au/info_status_report.php
More info
www.ic.arizona.edu/~profcomm/writing/samples/stat_samp_s1.htm
www.projectconnections.com/knowhow/subsets/sample-templates/StatusReports.doc
What is a Project Monitoring System
Examples of Progress Reports
What is the Project Control Process and why is it useful?
How do I Monitor Time Performance
The shortcomings of monitoring Systems
Earned Value Management – a silver bullet?
Integrated Cost/Schedule System
Project Baselines
Project Control Process
The process of comparing actual performance against plan to identify deviations, evaluate courses of action, and take appropriate corrective action
Pensiero
Project Control Steps
Set and baseline a
plan
Measuring progress and performance
Comparing the plan to the facts
Taking Action
What is a Project Monitoring System
Examples of Progress Reports
What is the Project Control Process and why is it useful?
How do I Monitor Time Performance
The shortcomings of monitoring Systems
Earned Value Management – a silver bullet?
Integrated Cost/Schedule System
Project Baselines
Monitoring Time Performance
Monitoring Time PerformanceTools used to catch negative variances from plan and communicate project schedule status:
Monitoring Time PerformanceTools used to catch negative variances from plan and communicate project schedule status:
Tracking and baseline Gantt charts
show expected, actual, and trend data for event duration performance
Figure 13.1 Baseline Gantt Chart(Gray & Larson, 2006, p414)
Time
A Gantt Chart
Monitoring Time PerformanceTools used to catch negative variances from plan and communicate project schedule status:
Tracking and baseline Gantt charts
show expected, actual, and trend data for event duration performance
Control chartsplot the difference in
scheduled time on the critical path with the actual point on the critical path
Figure 13.2 Project Schedule Control Chart(Gray & Larson, 2006, p415)
A Control Chart
What is a Project Monitoring System
Examples of Progress Reports
What is the Project Control Process and why is it useful?
How do I Monitor Time Performance
The shortcomings of monitoring Systems
Earned Value Management – a silver bullet?
Integrated Cost/Schedule System
Project Baselines
Corrects the failure of most monitoring systems to connect a project’s actual performance to its schedule and forecast budget
Picture by Pensiero
Systems that measure only cost variances do not identify resource and project cost problems associated with falling behind or progressing ahead of schedule
Picture by Pensiero
Earned Value Cost/Schedule System
An integrated project management system based on the earned value concept that uses a time-phased budget baseline to compare actual and planned schedule and costs
Picture by airgap
What is a Project Monitoring System
Examples of Progress Reports
What is the Project Control Process and why is it useful?
How do I Monitor Time Performance
The shortcomings of monitoring Systems
Earned Value Management – a silver bullet?
Integrated Cost/Schedule System
Project Baselines
Earned Value Management
What is Earned Value Management (EVM)?
What is Earned Value Management (EVM)?
A project performance measurement technique that integrates scope, time, and cost data.
What is Earned Value Management (EVM)?
A project performance measurement technique that integrates scope, time, and cost data.Given a baseline (original plan plus approved changes), you can determine how well the project is meeting its goals.
You must enter actual information periodically to use EVM.
What is Earned Value Management (EVM)?
A project performance measurement technique that integrates scope, time, and cost data.Given a baseline (original plan plus approved changes), you can determine how well the project is meeting its goals.
You must enter actual information periodically to use EVM.
Terms to learn
PV
AC
EV
Planned Value
Actual Cost
Earned Value
CV Cost Variance
SV Schedule Variance
CPICost Performance Indicator
SPISchedule Performance Indicator
(Also called the budget)
This is that portion of the approved total cost estimate planned to be spent on an activity during a given period
PV Planned Value
The total of direct and indirect costs incurred in finishing work on an activity during a given period
AC Actual Cost
An estimate of the value of the physical work actually completedEV Earned Value
Earned value minus the actual cost. Shows the difference between the estimated cost of an activity and the actual cost of that activity
TABLE 13.1
CV Cost Variance
Earned value minus the planned value. Shows the difference between the schedule completion of an activity and the actual completion of that activity
TABLE 13.1
SV Schedule Variance
The ratio of earned value to actual cost and can be used to estimate the projected cost of completing the project. If the CPI is equal to 1 or 100% then the planned and actual costs are equal, or the costs are as budgeted. If the CPI is less than 1 or less than 100%, the project is over budget. If the CPI is greater than 1 or more than 100%, the project is under budget
CPICost Performance Indicator
The ratio of earned value to planned value and can be used to estimate the projected time to complete the project. Similar to the CPI, an SPI of 1 or 100% means the project is on schedule. If the SPI is greater than 1 or 100% then the project is ahead of schedule. If the SPI is less than 1 or 100%, the project is behind schedule
SPISchedule Performance Indicator
TABLE 13.1
Quick EVM quizWhat can we say if CPI > 1
Quick EVM quizWhat can we say if CPI > 1
If the CPI is greater than 1 or more than 100%, the
project is under budget
Quick EVM quizWhat is EV minus AC?
Quick EVM quizWhat is EV minus AC?
EV – AC = SVEarned Value (what was done)
MinusActual Cost (what has been
paid)=
Schedule Variance
Scenario Example
“Purchasing & Installing Web Server”
Duration 1 week,
Budget $10,000.
Scenario Example
“Purchasing & Installing Web Server” Duration 1 week, Budget $10,000.
PV – Planned Value – for that activity for that week = $10,000
AC – Actual Cost – suppose it actually took 2 weeks and cost $20,000. Assume $15,000 were incurred in week 1, and $5,000 in week 2. These costs are the actual costs for that activity each week
EV – Earned Value – earned value after one week is $7,500. (10,000 * 75%)
Example: CP829_Lecture_Week9_EarnedValue.xls
Scenario Example
Earned Value Chart for Project after 5-MonthsEarned Value Chart for Project after 5-Months
Max WidemanMax Wideman
Rules for Earned Value Numbers
Negative numbers for cost and schedule variance indicate problems in those areas
The project is costing more than planned or taking longer than planned
CPI and SPI less than 100% indicate problems
Table 13.3 Interpretation of Indexes(Gray & Larson, 2006, p429)
An alternative
Source: http://www.mountaingoatsoftware.com/release_burndown
Week 2 lecture
So, what do you do when your plan changes?
There are methods used to revise estimates of future project costs
EVM allows experts in the field to change original baseline durations and costs because new information tells them the original estimates are not accurate
EVM uses actual costs-to-date plus an efficiency index to project final costs in large projects where the original budget is unreliable
What is a Project Monitoring System
Examples of Progress Reports
What is the Project Control Process and why is it useful?
How do I Monitor Time Performance
The shortcomings of monitoring Systems
Earned Value Management – a silver bullet?
Integrated Cost/Schedule System
Project Baselines
Developing an Integrated Cost/Schedule System
Compute
Calculate
Collect
Schedule
Resource plan
WBS
Budget
Plan
Mon
itor
Define the work using a WBSScopeWork packagesDeliverablesOrganization unitsResourcesBudgets
Develop work and resource schedules
Schedule resource to activities
Time-phase work packages into a network
Photo by shimonkey
Develop a time-phased budget using
work packages
included in an activity.
Accumulate budgets (PV)
At the work package level, collect the actual costs for the work performed (AC)
Multiply percent complete times original budget (EV)
Compute the schedule variance (EV-PV) and the cost variance (EV-AC)
Figure 13.3 Figure 13.3 Project Management Information Systems OverviewProject Management Information Systems Overview(Gray & Larson, 2006, p419)(Gray & Larson, 2006, p419)
Integrated Cost/ Schedul
es
What is a Project Monitoring System
Examples of Progress Reports
What is the Project Control Process and why is it useful?
How do I Monitor Time Performance
The shortcomings of monitoring Systems
Earned Value Management – a silver bullet?
Integrated Cost/Schedule System
Project Baselines
Project Baselines
Week 4 lecture
a Baseline is an anchor point for measuring performance
Photo by _Robert C_ @
flickr
a planned cost and expected schedule against which actual cost
and schedule are measured
Gold by Куртис Перри
a basis for cash flows and awarding progress payments
Photo by quaziefoto @ flickr
a summation of time-phased budgets (cost accounts as summed work packages) along a project timeline
Picture by Network Osaka @ flickr
What Costs Are Included in Baselines?LaborEquipmentMaterialsProject direct overhead costs (DOC)
Figure 13.14 Scope Changes to a Baseline(Gray & Larson, 2006, p436)
What is a Project Monitoring System
Examples of Progress Reports
What is the Project Control Process and why is it useful?
How do I Monitor Time Performance
The shortcomings of monitoring Systems
Earned Value Management – a silver bullet?
Integrated Cost/Schedule System
Project Baselines
ReviewProject monitoring system include; data collection; analysis and reporting.Project control steps include; baseline plan, progress measurement, comparing actual against projected plan, and actions.Performance can be monitored using tools such as; tracking Gantts, control charts, baseline plans and earned value management.Earned value management (EVM) is a technique which incorporated scope, time and cost data to determine the health of the project.Integrated Cost/Schedule systems are developed creating; WBS, work/resource schedules, budget, and EVM.Project baselines are an anchor point for measuring performance.
ReferencesHorodyski, K. (1995). Managing and developing teams. Footscray, Vic.: Open Training Services.Greenberg, J. & Baron, R. (1993). Behavior in organizations (4th ed.). Syd., NSW: Allyn and Bacon. Robbins, S., et al. (1998). Organisational behaviour (2nd ed.). Sydney: Prentice-Hall
BetterProjects.net
Awesome title page picture by Derek Farr ( DetroitDerek )