Project Monitoring www.AssignmentPoint.com
What Should be Monitored? Resources Mobilization Utilization Problems observed or anticipated Activities Volume of project activities (with description) Progress of activities (with dates of major milestones) Performance of efforts www.AssignmentPoint.com
Volume and date of output and results (with description) Target reached, quality and specifications of the outputs Problems observed or anticipated Overall results and performance Extent of achievement of the project objectives Potential impacts Others Environment changes including regulations and laws Stakeholders’ priorities, needs, perceptions, and reactions www.AssignmentPoint.com
Project Cost/Schedule Control Purpose Assess the project progress and cost performance Forecast the future performance Measuring project progress Actual starting and completion dates Dates of major milestones % of the work done Measuring the project costs Cost accounts are established for (groups of) work packages in WBS that are managed and accounted for individually www.AssignmentPoint.com
Project Cost Control Using Earned Value One way of measuring overall performance is by using an aggregate performance measure called earned value A serious difficulty in comparing actual expenditures against budgeted 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 is to combine cost reporting and aggregate performance reporting into one comprehensive chart www.AssignmentPoint.com
Terminologies for Earned Value Analysis Budgeted Cost of the Work Scheduled (BCWS) or Scheduled Cost: The estimate of total costs for the project activities scheduled to be done in a given period, based on: the baseline schedule (including the percentage of the work scheduled to be completed in the given period) the itemized project budget, including the time-phased cost schedule for all the direct (labor, equipment, materials) and indirect costs www.AssignmentPoint.com
Actual Cost of the Work Performed (ACWP) or Actual Cost of Work Done: The actual cost (for labor, equipment, materials and OH) incurred for the work performed in the given time period. ACWP includes: the cost of the labor, equipment and materials actually used in the work done the proportional part of the overhead the cost transactions provided for the work done on credit as account payable www.AssignmentPoint.com
Budgeted Cost of the Work Performed (BCWP) or Earned Value: The cost of all works performed by the project within a given time period, which is calculated based on: the budgeted costs of the project activities the percentage of the activities that have been completed in the time period under review General formula: BCWP = Budgeted cost × % of work done Thus, BCWP for a completed task is the budgeted cost of this task BCWP of partially completed work package is estimated more subjectively, using an actual tally of the work completed so far www.AssignmentPoint.com
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Performance Analysis Schedule Variance (SV) BCWP - BCWS Shows the amount in dollar terms that the total work completed to date is less or more than planned, suggesting that project is behind or ahead schedule SV < 0 means project being behind schedule Cost Variance (CV) BCWP –ACWP Measures the cost performance of the project CV < 0 means cost over-run www.AssignmentPoint.com
Performance Indices Schedule Performance Index (SPI) BCWP/BCWS Cost Performance Index(CPI) BCWP/ACWP Cost-Schedule Index (CSI) CPI*SPI Values of SPI and CPI greater than 1.0 indicate work is ahead of schedule and under budget Values less than 1.0 represent the opposite www.AssignmentPoint.com
Forecasting Future Cost Performance Estimated Cost to Complete the Project (ETC) ETC = Remaining work/CPI = (BAC –BCWP)/CPI Estimate Cost At Completion (EAC)/ Forecast At Completion (FAC) EAC = ACWP + ETC www.AssignmentPoint.com
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Earned Value Rule In practice how do we estimate the “% of work done”? Using subjective judgments (supported by pre-established procedural guidelines) Based on number of units of output completed Using fixed formula (0-100, 50-50, % of the total project value rule) www.AssignmentPoint.com project management
Example Fiberoptic Ltd. is installing fiber-optic lines into one state of United States. The manger wants to monitor the progress of the project at the end of day 5. He found him in the position given in the following table regarding the project progress. a) Develop a baseline plan for the project. b) Prepare a status report of the project at the end of day 5. c) Is the project experiencing cost overrun or underrun? Will the project finish on time? www.AssignmentPoint.com project management
Activity Predecessor Duration (Days) Budget ($’000) % complete to date Actual cost ($’000) A - 2 20 100 B 3 12 C 10 80 D 1 5 E 4 16 F C, D 24 G E, F 9 www.AssignmentPoint.com project management