Effective Project Management: Traditional, Agile, Extreme Managing Complexity in the Face of Uncertainty Ch06: How to Monitor & Control a Project Presented by (facilitator name)

Ch06: How to Monitor & Control a Project Summary of Chapter 6 Establishing your progress reporting system Applying graphical reporting tools Deciding on reporting level of detail Managing project status meetings Managing scope change Managing problem escalation Explain how each of these contributes to the growing importance of project management in the business world.

Ch06: How to Monitor & Control a Project Tools, Templates & Processes Used to Monitor & Control Current period reports Cumulative reports Exception reports Stoplight reports Variance reports Gantt charts Burn charts Milestone trend charts Earned value analysis Integrated milestone trend charts and earned value analysis Project status meetings Problem escalation strategies

Ch06: How to Monitor & Control a Project How to Keep a Project on Schedule Hold daily team meetings Complete tasks ASAP Report problems ASAP Don’t fall victim to the “creeps” Don’t guess – ask questions Good enough is good enough Meet but do not exceed requirements Be open and honest with your team mates

Ch06: How to Monitor & Control a Project Characteristics of Effective Progress Reporting Timely, complete, accurate and intuitive Doesn’t add so much overhead time as to be counterproductive Readily acceptable to senior management Readily acceptable to the project team An effective early warning system Is easily understood by those who have a need to know

Ch06: How to Monitor & Control a Project Five Types of Project Status Reports Current period reports Cumulative reports Exception reports Stoplight reports Variance reports

Ch06: How to Monitor & Control a Project Exception Report – Stoplight Reports

Variance Reports The report has the following three columns: The planned number The actual number The difference, or variance, between the two

Five reasons why you should measure duration and cost variances: Catch deviations from the curve early. The cumulative actual cost or actual duration can be plotted against the planned cumulative cost or cumulative duration. As these two curves begin to display a variance from one another, the project manager should put corrective measures in place to bring the two curves together. Dampen oscillation. Planned versus actual performance should display a similar pattern over time. Variance reports can provide an early warning that such conditions are likely, giving the project manager an opportunity to correct the anomaly before it gets serious.

Five reasons why you should measure duration and cost variances: Allow early corrective action. Determine weekly schedule variance. Determine weekly effort (person hours/day) variance: The difference between the planned effort and actual effort has a direct impact on both planned cumulative cost and the schedule. If the effort is less than planned, it may suggest potential schedule slippage if the person is not able to increase his or her effort on the activity in the following week. Alternatively, if the weekly effort exceeded the plan and the progress was not proportionately the same, a cost overrun situation may be developing.

Ch06: How to Monitor & Control a Project How and What Information to Update Determine a set period of time and day of week Report actual work accomplished during this period Record historical and re-estimate remaining Report start and finish dates Record days of duration accomplished and remaining Report resource effort spent and remaining Report percent complete

Positive variances and negative variances. Positive variances are deviations from the plan indicating that an ahead-of-schedule situation has occurred or that an actual cost was less than a planned cost. Negative variances are deviations from the plan indicating that a behind-schedule situation has occurred or that an actual cost was greater than a planned cost. In most cases, negative time variances affect project completion only when they are associated with critical-path activities or when the schedule slippage on noncritical-path activities exceeds the activity’s slack.

Applying Graphical Reporting Tools Gantt Chart Project Status Report Figure 06-01

Milestone Trend Charts Milestones are significant events that you want to track in the life of the project. These significant events are zero-duration activities For example, a milestone event might be the approval of several different component designs. The completion of this milestone event may be the predecessor of several build-type activities in the project plan. They typically have finish-to-start (FS) relationships with the activities that are their predecessors and their successors.

Ch06: How to Monitor & Control a Project Cumulative Reports - Milestone Trend Charts Successive slippages A run up or down of four or more successive data points The horizontal lines represent one, two, and three standard deviations above or below the forecasted milestone date. Figure 06-02

Ch06: How to Monitor & Control a Project Cumulative Reports - Milestone Trend Charts Radical change A change of more than three standard deviations Figure 06-03 There may be a data error. The situation requires further investigation.

Ch06: How to Monitor & Control a Project Cumulative Reports - Milestone Trend Charts Successive runs a permanent schedule shift. Seven or more successive data points above or below the planned milestone date Figure 06-04

Ch06: How to Monitor & Control a Project Cumulative Reports - Milestone Trend Charts Schedule shift The cause must be isolated and the appropriate corrective measures taken. Two successive data points outside three standard deviations from the planned milestone date Figure 06-05

Earned value analysis (EVA) Earned value analysis (EVA) is used to measure project performance and by tradition, uses the dollar value of work as the metric. As an alternative, resource person hours/day can be used.

Ch06: How to Monitor & Control a Project Earned Value – The Standard S-Curve Time Progress 2/3 Time - 3/4 Progress 1/3 Time - 1/4 Progress Figure 06-06 represents the baseline progress curve for the original project plan

Ch06: How to Monitor & Control a Project Earned Value – The Aggressive Curve No ramp up - no learning time Time Progress

Ch06: How to Monitor & Control a Project Earned Value – The Curve to Avoid About 30% of the work done 70% to 80% of the time gone by Time Progress

Ch06: How to Monitor & Control a Project Earned Value – Cost Variance Figure 06-07

Earned Value – Cost Variance Activities that should have been done have not been, and thus the dollars or person hours/day that were planned to be expended are unused.

Ch06: How to Monitor & Control a Project Earned Value – Schedule Variance Figure 06-08

Ch06: How to Monitor & Control a Project How to Measure Earned Value Figure 06-09

How to Measure Earned Value The left of the figure: The budgeted $500 value of the work is planned to be accomplished within 5 days. This is the planned value (PV). The middle of the figure: the actual work that was done. you were able to complete only $300 of the scheduled work. This is the earned value (EV). The right part of the figure: the actual schedule, you see the actual dollars that were spent to accomplish the three days’ work. This $400 is the actual cost (AC).

Variances The PV, EV, and AC are used to compute and track two variances: Schedule variance (SV): is the difference between the EV and the PV, which is –$200 (EV – PV) for this example. That is, the SV is the schedule difference between what was done and what was planned to be done, expressed in dollar or person hours/day equivalents. Cost variance (CV): is the difference between the EV and the AC, which is $100 in this example. That is, (AC – EV) the cost of the work completed, was overspent by $100.

Ch06: How to Monitor & Control a Project Earned Value – The Full Story Schedule Variance Cost Variance PV AC EV Time Progress Figure 06-10

Earned Value – PV, EV and AC curves In addition to measuring and reporting history, EVA can be used to predict the future of a project.

Ch06: How to Monitor & Control a Project Earned Value – PV, EV and AC curves Figure 06-11

Ch06: Project Portfolio Management Earned Value – Basic Performance Indices Schedule Performance Index (SPI) A measure of how close the project is to performing work as it was actually scheduled. SPI = EV/PV Cost Performance Index (CPI) A measure of how close the project is to spending on the work performed to what was planned to have been spent. CPI = EV/AC INDEX VALUES < 1: over budget or behind schedule > 1: under budget or ahead of schedule

Ch06: Project Portfolio Management Earned Value Example Suppose you have a budgeted cost of a project at $900,000. The project is to be completed in 9 months. After a month, you have completed 10 % of the project at a total expense of $100,000. The planned completion should have been 15 %. Now, let’s see how healthy the project by computing the CPI index and SPI index. Solution From the scenario, you can extract the following: Planned total cost= $900,000 AC = $100,000

Ch06: Project Portfolio Management Earned Value Example The Planned Value (PV) and Earned Value (EV) can then be computed as follows: Planned Value = Planned Completion (%)* planned cost = 15 % * $ 900,000 = $ 135,000 Earned Value = Actual Completion (%) * planned cost = 10 % * $ 900,000 = $ 90,000 Cost Performance Index (CPI index) = EV / AC = $90,000 / $100,000 = 0.90. This means for every $1 spent, the project is producing only 90 cents in work. Schedule Performance Index (SPI index) = EV / PV = $90,000 / $135,000 = 0.67. This means for every estimated hour of work, the project team is completing only 0.67 hours (approximately 40 minutes). Interpretation: Since both Cost Performance Index (CPI index) and Schedule Performance Index (SPI index) are less than 1, it means that the project is over-budget and behind schedule

Ch06: How to Monitor & Control a Project Earned Value – Performance Indices Project Week 8 7 6 5 4 9 3 2 1 1.0 0.8 0.6 0.4 1.2 1.4 1.6 C S under budget ahead of schedule over budget behind schedule Project: ALPHA Figure 06-12

Integrating Milestone Trend Data The presentation of the SPI and CPI data over time can be represented using the same format that was used to report milestone trend data. The project has gotten behind schedule (denoted by the ‘‘S’’ in the figure) but is under budget (denoted by the ‘‘C’’ in the figure). That is probably due to the fact that work that was scheduled has not been done and hence the labor costs associated with those tasks have not been incurred.

Ch06: How to Monitor & Control a Project Earned Value – Performance Indices Project: ALPHA C S under budget ahead of schedule over budget behind schedule 1.0 0.8 0.6 0.4 1.2 1.4 1.6 Project Week 8 7 6 5 4 9 3 2 1 Figure 06-13

Integrating Milestone Trend Data On rare occasions, you might experience the situation shown in Figure 6-13. The project is ahead of schedule and under budget. Less costly ways were found to complete the work, and the work was completed in less time than was planned.

Ch06: How to Monitor & Control a Project Earned Value – Performance Indices Project: ALPHA C S under budget ahead of schedule over budget behind schedule 1.0 0.8 0.6 0.4 1.2 1.4 1.6 Project Week 8 7 6 5 4 9 3 2 1 Figure 06-14 Figure 6-14 is the worst of the worst.

Ch06: How to Monitor & Control a Project Earned Value – Performance Indices Portfolio: BETA Program 1.6 1.4 1.2 ahead of schedule 1.0 0.8 behind schedule 0.6 0.4 1 2 3 4 5 6 7 8 9 Figure 06-15 Project Week Portfolio average

Integrating Milestone Trend Data The graph (figure 6.15) shows the SPI values of the individual projects that comprise the portfolio. This is also a useful graphic for summarizing the practice changes from your process improvement program.

Ch06: How to Monitor & Control a Project Managing the Scope Bank Initial deposit of 10% of total labor days All of the unfinished functions and features and the labor time to develop them are also deposited in the Scope Bank. The time to process and integrate a Scope Change request draws time from the Scope Bank. To add time to the Scope Bank remove unfinished functions and features and deposit their labor time in the Scope Bank. Client should continuously reprioritize contents of the Scope Bank

Ch06: How to Monitor & Control a Project Maintaining the Issues Log The Issues Log is a dynamic document that contains all of the problems that have arisen during the course of the project and have not yet been resolved. ID Number Date logged Description of the problem Impact if not resolved The problem owner Action to be taken Status Outcome

Ch06: How to Monitor & Control a Project Problem Escalation Strategies – Who Controls What? Scope and Quality Time Cost Resource Availability

Ch06: How to Monitor & Control a Project Problem Escalation Strategies Project Manager-Based Strategies No action required. Problem will self-correct (using available slack) Schedule compression techniques (Examines FS dependencies ) Can some resources be reassigned from noncritical-path activities to assist with the problem activity? Resource Manager-Based Strategies Negotiate additional resources Client-Based Strategies Negotiate multiple release strategies Request schedule extension

Ch06: How to Monitor & Control a Project Escalation Strategy Hierarchy No action required (schedule slack will correct the problem) Examines FS dependencies for schedule compression opportunities Reassign resources from non-critical path tasks to cover the slippage. Negotiate additional resources Negotiate multiple release strategies Request schedule extension from the client

Gaining Approval to Close the Project The client decides when the project can move to the Closing Phase. This is not an arbitrary decision, but one based on the acceptance criteria initiated during project planning and maintained throughout the project. The acceptance criteria are nothing more than a checklist that reflects the client requirements. After all of the items have been checked as satisfactorily completed, the project is ready to move to the closing activities