1. Project Monitoring

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

10. 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

11. 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

12. 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

13. www.AssignmentPoint.com project management

14. 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)
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15. 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?
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16. 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
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