Project Management (x470) Module 04 : Knowing Where the Project Is

Class Road Map Foundational Concepts Knowing WHAT the Project Is Session 1 Foundational Concepts Sessions 2 & 3 Knowing WHAT the Project Is Session 4 Knowing WHERE the Project Is Session 5 Closure, Group Presentation, Advance Topics

Knowing WHERE the Project Is Session 4 Agenda Short Quiz 3 Questions / Review Homework Short Quiz Knowing WHERE the Project Is Metrics Traffic Light Reporting Status Reporting Templates Earned Value Reporting Change Control Team Sessions Continue Project Plan Development

Monitoring and Control Project Execution Monitoring and Control Project Approval Formal “Go” decision Project Charter Project Manager assigned Project Plan Clear and approved project or phase definition Stakeholders Scope (Deliverables) Schedule Cost Project Execution Complete deliverables per the project management plans Determine and communicate project status Knowing Where the Project Is Deliverables completed, Status Report, Issues and Action Item Log, Meeting Minutes Change Request Approval / Rejection Continual Team Development & Conflict Management Knowing What the Project Is

Knowing Where the Project Is: Why Metrics? To provide goal-centered feedback to detect and correct the course Guide Course correction Forewarn Issue Detection Inform Collective meaning Act If you don’t act, don’t measure What data is relevant? Where is it best collected? Who should analyze and act on it? When should it be done? Measurements mated with analysis and action!

Knowing Where the Project Is: Project Performance Data Backward Looking Project status-to-date: schedule, cost, scope/quality Significant milestones completed Forward Looking Projected project status Milestones for the next reporting cycle Significant issues and planned corrective actions / recommendations Project environment changes / review Traffic Light Reporting Earned Value Reporting Traffic Light Reporting

Knowing Where the Project Is: Traffic Light Reporting Metric Status Trend Schedule Green Cost Yellow Red Scope / Quality Others Overall Health Need to define what the colors mean!

Knowing Where the Project Is: Sample Metric Status Definition Scope Green No scope change. Yellow Change within 10% of original scope Red Change over 10% of original scope. Need re-baseline. Schedule On track for scheduled completion Within 10% of scheduled completion Over 10% scheduled completion. Need re-baseline. Cost Completion within budget Completion within 10% of budget Completion over 10% of budget. Need re-baseline.

Knowing Where the Project Is: Sample Metric Status Definition 2 Parameter Red Yellow Green Comments Scope Some “must have” deliverables cannot be delivered Some “must have” deliverables are at risk All “must have” deliverables on track to be delivered Indicator reflecting approved functionality to be delivered by the project Schedule Variance > 4 weeks Variance > 1 week Variance < 4 weeks Project on track Measured as variance of current Critical Path completion date to approved date Cost Variance >10% Variance > 5% Variance < 10% Variance < 5% Measured as variance of (actuals + forecast to complete) to approved budget

Knowing Where the Project Is: Sample Metric Trend Definition Color Definition Green Less than 20% probability that a change that adversely impacts a parameter target (scope, time, cost) will occur Yellow 20% to 50% probability that a change that adversely impacts a parameter target (scope, time, cost) will occur. Red Greater than 50% probability that a change that adversely impacts a parameter target (scope, time, cost) will occur

Knowing Where the Project Is: Project Dashboard Metric Status Trend Problem Statement Corrective Action   Scope Schedule Cost Overall Health Executive Summary Results Next Steps Working Challenges Significant results for the reporting period. Significant work to be started for the next reporting period. Significant work in progress for the reporting period. Major issues, constraints, etc .

Knowing Where the Project Is: Simplified Project Dashboard Status Trend Significant Results for the Period Significant Work To Be Started or In-Progress for the Period Challenges and Corrective Actions

Knowing Where the Project Is: Multiple Project Reporting Proj ID Project Name Project Manager Major Issues Sched Status Tech Status Budget Savings Staffing Cust Satis. Sched Comp. Overall DISRUPTED PROJECTS   R Y G TOP INITIATIVES (TI) INFRASTRUCTURE IMPERATIVES

Knowing Where the Project Is: Flexibility Matrix and Status Trigger Parameter High Medium Low Scope Yes Schedule Cost Trigger point for Schedule ‘color’ can be tighter Trigger point for Cost color can be looser

Knowing Where the Project Is: Earned Value Management Schedule and cost status reporting tool! Planned Value (PV) – the physical work scheduled to be performed, including the estimated value of this work. (a.k.a. Budgeted Cost of Work Scheduled - BCWS) Earned Value (EV) – the physical work actually accomplished, including the estimated value of this work. (a.k.a. Budgeted Cost of Work Performed - BCWP) Actual Cost (AC) - the actual cost incurred to accomplish the earned value. (Actual Cost of Worked Performed - ACWP)

Knowing Where the Project Is: Earned Value Example A work on a project task is expected to cost $1500 to complete and the workers were scheduled to finish today. As of today however, the workers have actually expended $1350 and the best estimate is the task is 2/3 complete. Determine the Planned Value, Actual Cost and Earned Value at this point in time. Task Budget = $1500 Money Spent = $1350 % Complete = 2/3 Today PV = 1500 AC = 1350 EV = (2/3)(1500) = 1000

Knowing Where the Project Is: Earned Value Formulae Cost Variance CV = EV - AC Cost Variance in % CVP = (CV/EV) 100% Cost Performance Index CPI = EV / AC Schedule Variance SV = EV - PV Schedule Variance in % SVP = (SV/PV) 100% Schedule Performance Index SPI = EV / PV

Knowing Where the Project Is: Estimate at Completion Other Formulae Actual plus new Estimate To Complete EAC = AC + ETC Actual plus budget (PV) for remaining deliverables EAC = AC + (BAC – EV) Actual plus budget for remaining deliverables modified by the performance index EAC = AC + (BAC – EV)/CPI AC EAC = X (BAC) EV The estimate at completion is the best estimate of the total cost at the completion of the project. The EAC is a periodic evaluation of the status of the project - usually on a monthly basis or until a significant change has been identified. EAC = AC + (BAC-EV)/CPI EAC = AC + (BAC-EV)/(EV/AC) EAC = AC + (BAC-EV)*(AC/EV) EAC = AC + BAC*AC/EV - AC EAC = BAC*AC/EV

Knowing Where the Project Is: Earned Value Status Reporting Time of measurement PV SV AC CV CUMMULATIVE COST, $ EV TIME

Knowing Where the Project Is: Using Earned Value I Wk PV AC % Done EV SV= EV-PV CV= EV-AC SPI= EV/PV CPI= EV/AC EAC= AC*BAC / EV 1 400 420 23 368 -32 -52 0.92 0.88 1826 2 800 880 50 -80 1.00 0.91 1760 3 1200 1380 85 1360 160 -20 1.13 0.99 1624 4 1600 1500 100 1.07

Knowing Where the Project Is: Using Earned Value II Project: Software enhancement for a drug company Baseline: Entire effort priced at $200K and scheduled for completion June 10th As of June 10: Project cost to date is $195K. One activity is left in the project estimated to cost S25K. Find cost and schedule variance amounts, cost and schedule variance percentages, cost and schedule performance indexes, and estimate at completion amount.

Knowing Where the Project Is: Using EV II Solution Given: BAC = $200K, PV = $200K, AC = $195K Last Activity Cost = $25K Solution: EV = 200K – 25K = $175K CV = EV – AC = 175K- 195K = -$20K SV = EV – PV = 175K – 200K = -$25K CV% = (CV / EV) 100% = (-20/175) 100% = -11% SV % = (SV / PV) 100% = (-25/200) 100% = -12.5% CPI = EV / AC = 175 / 195 = .897 SPI = EV / PV = 175 / 200 = .875

Knowing Where the Project Is: Using EV II Solution (cont.) EAC1 = (AC/EV) x BAC = (195/175)200K = $223K EAC2 = AC + (BAC – EV) = 195K + 200K – 175K = 220K EAC3= AC + (BAC – EV)/CPI = 195K + (200K-175K)/.897 = $223K ETC = EAC – AC = 223 – 195 = 28K

Knowing Where the Project Is: Using Earned Value III Project: Construction of a new house Baseline: Entire effort priced at $1.2M and scheduled for completion January next year. As of July 1: First project activity is a site survey with a budget of $80K. By July 1st, half of the site survey is expected to be completed. Cost to date is $60K and work is already 80% complete. Find cost and schedule variance amounts, cost and schedule variance percentages, cost and schedule performance indexes, and estimate at completion amount.

Knowing Where the Project Is: Using Earned Value IV Deliverable Predecessor Duration Scheduled Cost / Day A - 3 $1,000 B 5 $2,000 C 4 $4,000 D 7 E 6 F 8 $3,000 Deliverable End of Week 1 Actual % Completed Cumulative Actual Cost A 60% $1,500 B 30% $3,000 C 10% $2,000 D 0% E F

Cumulative Actual Cost Week 1 A C E B D F 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Using Earned Value IV Schedule and Cost End of Week 1 Task Pred. Duration (Days) Scheduled Cost / Day Actual % Done Cumulative Actual Cost PV EV A   3 $1,000 60% $1,500 $3,000 $1,800 B 5 $2,000 30% $10,000 C 4 $4,000 10% $8,000 $1,600 D 7 0% $0 E 6 F 8 $6,500 $21,000 $6,400

Cumulative Actual Cost Using Earned Value IV Schedule and Cost End of Week 1 Task Pred. Duration (Days) Scheduled Cost / Day Actual % Done Cumulative Actual Cost PV EV A   3 $1,000 60% $1,500 $3,000 $1,800 B 5 $2,000 30% $10,000 C 4 $4,000 10% $8,000 $1,600 D 7 0% $0 E 6 F 8 $6,500 $21,000 $6,400

Knowing Where the Project Is: Using Earned Value IV (cont…) Task PV EV AC SV = EV-PV CV = EV-AC SPI = EV/PV CPI = EV/AC EAC = AC*BAC/EV A 3000 1800 1500 -1200 300 0.6 1.2 73125 B 10000 -7000 0.3 1 C 8000 1600 2000 -6400 -400 0.2 0.8 D E F 21000 6400 6500 -14600 -100 0.305 0.98

Knowing Where the Project Is: Using Earned Value: HW Gantt Chart B D F 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Week 1 Week 2 29

Knowing Where the Project Is: Project Change Control Objective Manage changes to project via an approved change control process Deliverable Approved / rejected change request document Updated project and product process deliverables

Project Team Development Project Manager Enhancement of stakeholders’ ability to contribute as individual and team’s ability to function as a team Team building activities Reward and recognition Training Resources Deliverables When is an ideal time to start project team development? Projects are managed through its people!

Knowing Where the Project Is: Monitor & Control “Best Practices” Formalized review process with participation from management on issue resolution Gate review Status review Check-in, stay in-touch Maintain an open environment Tracking intensity proportionate to project importance / priority