1. OPMA 5364 Project Management Part 6 Project Control

2. Topic Outline: Project Control
Project control steps
Measuring and monitoring system
Resource allocation and resource conflicts
Project accelerating/crashing
Resource loading and leveling
Project control exercise
Project tracking tools
Earned value analysis
Microsoft Project example
Scope creep and change control system
Part 6 - Project Control

3. Project Control
Project control  taking corrective actions to keep the project on target toward meeting its performance goals (time, cost, deliverables)
The project manager has final responsibility for project control
There are many ways to exert control; the PM must decide which is most appropriate
Resource allocations, funding decisions, personnel assignments, change in priorities
Part 6 - Project Control

4. Project Control – 3 Steps
Measuring & Monitoring
Identifying/tracking key performance metrics
Evaluating
Analyzing causes of problems and potential corrective actions
Correcting
Taking corrective actions to bring project performance back in line with goals
Part 6 - Project Control

5. Measuring & Monitoring System
Many issues must be decided for a good measuring and monitoring system
What should be measured and monitored?
How should it be measured?
Who should monitor it?
How should it be monitored?
When should it be monitored?
Where should info be stored?
Who should have access to info?
Part 6 - Project Control

6. Project Reports as a Control Tool
Reports are one way to give many different people a chance to look for potential problems
They also can keep everyone updated about the current project status
Everyone concerned with the project should receive reports containing info. relevant to issues under their control
What types of info. should an engineer working on a project receive, vs. senior management?
When should these reports be provided?
Part 6 - Project Control

7. Resource Allocation
Resource allocation can be used as a control mechanism
Allocating more, less, or different physical resources can affect the progress of activities, and can affect their cost and/or the quality of outputs/deliverables as well
Assigning more, less, or different employees also can affect project performance
Allocating more or less funds to an activity is yet another way to affect project performance
Part 6 - Project Control

8. Resource Conflicts
Sometimes a limited resource is needed (at the same time) by several activities in one project or by different activities in multiple projects (so some of the activities must wait)
Setting priority rules for which activity get the constrained resource first can be a means of project control
In the case of multiple projects, the goals and importance of all the projects should be considered
Part 6 - Project Control

9. Resource Conflict Rules
Example: Suppose two tasks from different projects need to use the radiation testing lab chamber at the same time. Which gets it first?
task with the least slack time
task that needs the least time in the lab
task that needs the most time in the lab
task with the most following activities
task from the more important or profitable project
arbitrary—flip a coin
Part 6 - Project Control

10. Project Accelerating/Crashing
Project crashing (or accelerating a project) is another way to exert project control
“Crashing” a project means shortening its duration, or speeding it up (doing it quicker)
Unfortunately, this almost always costs more
Sometimes crashing is done because earlier activities were delayed; other times it is done because the customer is willing to trade a higher cost for a shorter project time frame
Part 6 - Project Control

11. Project Crashing Rules: only crash critical activities
crash the cheapest critical activity first
assume each task can be crashed one day at a time (simplifying assumption, but not necessary)
all critical paths must decrease by one day, in order for the project duration to decrease by one day
Crashing example
Part 6 - Project Control

12. Resource Loading
For each resource during each time period, determine the total amount of resource time required by all activities combined
Compare this total time with the capacity of the resource during each time period
Identify resources that are over-utilized (or overloaded) during any time period
What should be done about it?
Part 6 - Project Control

13. Resource Leveling
Re-scheduling some activities to eliminate resource overloading in certain time periods
Try to delay activities that have extra slack time first—this will not delay the project
If that doesn’t work, then activities must be delayed which will delay the project due date
Popular project management software will identify resource overloading and will perform resource leveling automatically if requested
Part 6 - Project Control

14. Microsoft Project Example
Activity
Predecessor
Duration
Resources a -- 5
Tim b 3
Joe c
Gus d
a,b 4
Amy e 2
Amy, Joe f 6
Sue g
c,d
Done
f,g
Part 6 - Project Control

15. Microsoft Project Example
a.) Enter all data
b.) Resource Loading: Look at Resource Sheet, Resource Usage, and Resource Graphs (Amy is the only overloaded resource)
c.) Perform resource leveling (Tools..Resource Leveling..Level Now)
What changed? Why?
d.) Suppose activity c needed Sue instead of Gus.
Do resource leveling again.
Part 6 - Project Control

16. Project Control Exercise
Envirosafe Project case (30 minutes)
Divide into small groups
Read case
Discuss why the project was late and over budget; root causes
Recommend control procedures and other changes that should prevent future problems
Part 6 - Project Control

17. Project Tracking Tools
Popular project management software allows you to easily track cost and schedule performance as the project progresses
This provides a useful tool for project control
The current cost and schedule status must be entered routinely (daily or weekly)
For each activity, you must estimate: actual cost so far, and percent complete
Earned Value Analysis is a common tracking tool that provides performance metrics
Part 6 - Project Control

18. Earned Value Analysis
Earned Value Analysis compares the current project status with the original (baseline) plan
It computes several performance metrics for individual activities and for the entire project
It focuses on cost and schedule performance
It’s a useful tool for project control
Popular project management software computes these metrics
Part 6 - Project Control

19. Earned Value
Earned Value for a task = (budgeted cost of task)*(% completion of task)
It’s often difficult to estimate % completion of a task; 4 approaches once task is started:
assume 50% completion until task is finished
assume 0% until task is finished
use % of budgeted cost or time used so far
best guess of knowledgeable person (best)
Earned Value for the entire project is the summation of earned values for all tasks
Part 6 - Project Control

20. Earned Value Metrics BCWS—Budgeted Cost of Work Scheduled (PV)
baseline cost of scheduled work
ACWP—Actual Cost of Work Performed (AC)
actual cost of work actually performed so far
BCWP—Budgeted Cost of Work Performed (EV)
budgeted cost of work actually performed so far
Cost variance (CV) = BCWP – ACWP
Schedule variance (SV) = BCWP – BCWS
BAC—Budgeted cost At Completion
Part 6 - Project Control

21. Earned Value Chart 3 lines on chart:
Baseline—planned cost over time (BCWS)
Actual Cost line (ACWP)
Earned Value line (BCWP)
Schedule variance (negative is bad)
Cost variance (negative is bad)
Example chart on next slide
describe project performance in this example
Part 6 - Project Control

22. Earned Value Chart 1 Dollars Time Performance Sched. Now
Schedule
variance
Cost
Cost schedule plan
(baseline)
ACWP
BCWP
BCWS
Actual cost
Value completed (Earned Value)
Performance
Sched.
Part 6 - Project Control

23. Earned Value Chart 2 Dollars Time Performance Cost Sched. Now
BCWS
baseline
ACWP
BCWP
=EV
Performance
Cost
Sched.
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24. Earned Value Chart 3 Dollars Time Performance Cost Sched. Now
BCWS
baseline
ACWP
BCWP = EV
Performance
Cost
Sched.
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25. Earned Value Chart 4 Dollars Time Performance Cost Sched. Now
BCWS
baseline
ACWP
BCWP = EV
Performance
Cost
Sched.
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26. Earned Value Chart 5 Dollars Time Performance Cost Sched. Now
BCWS
baseline
ACWP
BCWP = EV
Performance
Cost
Sched.
Part 6 - Project Control

27. Earned Value Chart 6 Dollars Time Performance Cost Sched. Now
BCWS
baseline
ACWP
BCWP
=EV
Performance
Cost
Sched.
Part 6 - Project Control

28. Earned Value Metrics BCWS—Budgeted Cost of Work Scheduled (PV)
baseline cost of scheduled work
ACWP—Actual Cost of Work Performed (AC)
actual cost of work actually performed so far
BCWP—Budgeted Cost of Work Performed (EV)
budgeted cost of work actually performed so far
Cost variance (CV) = BCWP – ACWP
Schedule variance (SV) = BCWP – BCWS
BAC—Budgeted cost At Completion
Part 6 - Project Control

29. CPI and SPI
CPI and SPI give the same information as cost variance and schedule variance, except as a ratio instead of as a $ difference
Cost Performance Index (CPI)
CPI = BCWP / ACWP (or EV / AC)
Schedule Performance Index (SPI)
SPI = BCWP / BCWS (or EV / PV)
Values less than 1.0 are undesirable
Part 6 - Project Control

30. Example Example: Budgeted cost for finished task = $850;
Actual cost to date = $550; Task is 70% complete,
but was scheduled to be 80% complete by now
BCWS = 0.8*($850) = $680 PV (baseline)
BCWP = 0.7*($850) = $595 EV
ACWP = $ AC
Cost variance = BCWP – ACWP = +$45 (good)
Schedule variance = BCWP – BCWS = -$85 (bad)
CPI = BCWP / ACWP = (good)
SPI = BCWP / BCWS = (bad)
Part 6 - Project Control

31. ETC and EAC Two more cost metrics are ETC and EAC
Estimated (remaining cost) To Completion
ETC = (BAC – BCWP) / CPI
(note: Microsoft Project does not divide by CPI)
BAC = budgeted cost at completion = $850
ETC = (850 – 595) / = $235.67
Estimated (total cost) At Completion
EAC = ETC + ACWP
EAC = = $785.67
Part 6 - Project Control

32. Microsoft Project Example
Activity
Prede-cessors
Duration (weeks)
Budget ($)
Actual Cost ($)
% Complete a -- 2
300
400
100 b 3
200
180 c
250 d 5
600 20 e
b,c 4
It is currently the end of week 6, so activity d should be 80% complete and activity e should be 50% complete
Part 6 - Project Control

33. Microsoft Project Example
a.) Input activities, durations, and predecessors
b.) Set the project start date at 1/5/04 (Project..Project Information)
c.) Enter the budgeted cost of each activity as the Fixed Cost on the cost view of MS Project (View..Table: Cost)
d.) Save the baseline information (Tools..Tracking..Save Baseline)
e.) Update the project to show work completed through 2/15/04 (Tools..Tracking..Update Project)
f.) Update each task to show % completion (View..Table: Tracking)
g.) Enter the actual cost for each activity as of 2/15/04 in the Cost view of MS Project. To do this you will need to uncheck the option button that reads ‘Actual costs are always calculated by Microsoft Project’ (Tools..Options..Calculation)
i.) Print the Earned Value report (View..Reports..Costs..Earn.Val.)
Part 6 - Project Control

34. Scope Creep PM must be cautious of scope creep. Why?
Most common cause is due to the client or project team wanting to enhance the project’s deliverables
The later that changes are made, the more difficult and costly they become
Scope creep is welcome if it lowers costs or enhances the firm’s competitiveness
A change control system allows the PM to assess the impacts and desirability of potential changes before deciding to implement them
Part 6 - Project Control

35. Change Control System Review suggested changes
Assess all impacts to project goals
Evaluate advantages and disadvantages
Consider alternative changes that are better
Allow responsible parties to make decision in light of all information
Communicate changes to everyone involved
Implement changes
Summarize all changes and impacts in report
Part 6 - Project Control