1. Project Management in Practice
Initiate
Plan
Execute
Monitor
And
Control
Close
Monitoring & Controlling the Project

2. Outline: Overview Earned value analysis
Project control / tracking techniques
Scope creep and change control
Quality / collection and presentation of project data.
Homework: 25, 26, 27, 28
#27 end of 6th week = MSP date 2/10/01 (end of 6th week), do not compute critical ratio
use the default 5-day work week
use start date 1/1/01
#28 Repeat problem 27 using MSP

3. Overview:
Monitoring
Project Plan
Control

4. Schedule Variance & Cost/Spend Variance:PV AC EV EV PV AC

5. Earned Value Chart 1 Dollars Time Performance Sched. bad Now
Schedule
variance
Cost
Cost schedule plan
(baseline)
ACWP
BCWP
BCWS
Actual cost
Value completed (Earned Value)
Performance
Sched.
bad

6. Earned Value Chart 2 Dollars Time Performance Cost Sched. bad good Now
BCWS
baseline
ACWP
BCWP
=EV
Performance
Cost
Sched.
bad
good

7. Earned Value Chart 3 Dollars Time Performance Cost Sched. good Now
BCWS
baseline
ACWP
BCWP = EV
Performance
Cost
Sched.
good

8. Earned Value Chart 4 Dollars Time Performance Cost Sched. bad Now BCWS
baseline
ACWP
BCWP = EV
Performance
Cost
Sched.
bad

9. Earned Value Chart 5 Dollars Time Performance Cost Sched. good bad Now
BCWS
baseline
ACWP
BCWP = EV
Performance
Cost
Sched.
good
bad

10. Earned Value Chart 6 Dollars Time Performance Cost Sched. good Now
BCWS
baseline
ACWP
BCWP
=EV
Performance
Cost
Sched.
good

11. 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/input for project control.
Popular project management software computes these metrics.
Project EV is calculated by summing up the individual task EV’s.

12. Task Earned Value
Expert estimated value of work performed to date, if available.
There are a variety of rules (see page 248).
Work off budget / schedule values, if available.
EV = BAC X (portion of work completed)
EV = BAC X (actual work completed / total amount of work)

13. Task Earned Value - Examples
Expert believes value of work performed to date is $120,000.
Task is complete, expected to cost $1,500 (budgeted), best estimate is the task is 2/3 finished.
Day 50 of 100 day, $100,000 budgeted task, manager estimated value of work performed is $40,000.
Project X is at the end of its 5th week. Activity D is 30% complete. Activity D budgeted cost is $1000. 3 8 D5 3

14. Task Planned Value/Cost, PV
Planned cost of work on a task or project up to a given point in time.
PV = BAC X (portion of time that has elapsed)
PV = BAC X (time passed / total time scheduled)
Budgeted / scheduled amount, to date.
Determined from the baseline plan or budget.
Works off budgeted cost numbers.
BCWS.

15. Task Planned Value/Cost, PV Examples
Activity was scheduled to have spent $100,000 at this point in the plan / budget.
Work on a project task was expected to cost $1500 and the workers were originally scheduled to have the task compete today.
Work on a project task is uniformly distributed, total task budget is $ The task is scheduled to last 8 weeks, the current time is end of week 5. Task is scheduled to begin end of week 2.

16. Variances / Indicies Cost/Spending Variance
earned value (EV) – actual cost (AC)
Schedule Variance
earned value (EV) – planned cost (PV)
CPI (Cost Performance Index)
earned value (EV)/actual cost (AC)
SPI (Schedule Performance Index)
earned value (EV)/planned cost (PV)

17. Example
Day 75 of a 75 day task, Task “data conversion of payables for external vendors”.
Task planned cost total on day 75, $100, ($100,000 = PV).
Actual spend to date, $90,000.
Best estimate 50% complete.
Earned Value (EV) =0.50 X $100,000 = $50,000.
Cost/spending variance = EV – AC = $50,000 - $90,000 = - $40,000.
Schedule variance = EV – PV = $50,000 - $100,000 = - $50,000.
CPI = EV/AC = 50/90 = Cost Performance Index
SPI = EV/PV = 50/100 = Schedule Performance Index (we are worse on schedule than cost)
ETC = (BAC – EV) / CPI = (100,000 – 50,000) / .56 = $90,000.
EAC = ETC + AC = $90,000 + $90,000 = $180,000.
ETC = Estimated cost To Completion
EAC = Estimated total cost At Completion
BAC = Budget At Completion
AC = Actual Cost to date

18. Example AON Diagram: b a f e g c d Current date = end of day 18 8 14
Activity
Duration (days)
Pred a 8 b 6 c 4 d 9 e 11 f 3 g 1
d,e,f b a f e g c d

19. Gantt Chart: Task e Task e = 11 days, current date is end of day 18
At end of day 18, we are scheduled/planned to be 10/11 complete.
This is used in the PV computation.

20. Excel Given & Solution:
% of planned
Activity
Duration (days)
Budget ($)
Actual ($)
% Complete ES EF
finish on 2/1/01 a 8
250
300
100.00% 1 b 6
100 14 c 4
200 d 9
500
600 13 e 11
400
450
50.00% 19
10/11 f 3
350
375
20.00% 17 g
0.00% 20
BAC
$2,350.00 AC
$2,025.00 EV
$1,420.00
PV (budget)
$1,863.64
Current Date
2/1/01
For activity e notice the duration is 11 days
Beg of day
at the end of day 18, 1/11 is scheduled to remain (since the task EF is 19)
End of day 18
10/11 of the task is scheduled/planned complete.
Project Start
1/15/01
Cost/Spend var
$(605.00)
Schd var
$(443.64)
CPI
0.70
more has been spent than the baseline plan
SPI
0.76
given what has been spent, less progresss has been made than should have been
ETC
$1,326.23
(BAC-EV) / CPI
EAC
$3,351.23
ETC + AC
Break task into 11 (its duration)
parts. End of day 18 we are 10/11 finished.
notice

21. MSP Notes: Put end of day date here for MSP calculations
Current Date Line
Beg of day 2/1
Double Click
Put end of day date here for MSP calculations
Current Date Line
End of day 2/1
Used in MSP
Calculations

22. Enter Project Basic Information Start Here
MSP
Enter Project Basic Information
Start Here
Enter activity names, predecessors, durations.
Start of the project is 01/15/2001.
Steps:
Enter tasks and durations
Project Information
Start date: 1/15/01
3. Project, Change Working Time
Work weeks, Details
to 7-day work week
set day(s) to these specific working times
8am to 12pm and 1pm to 5pm
4. Enter Predecessors

23. View the Network Diagram
MSP
View the Network Diagram
Helpful Notes:
Also, under project information, statistics check that duration is 20d.
Look at the Gantt chart and make sure activity a’s duration days count up to 8.

24. Budget Amounts Entered
MSP
Enter Budgeted Data for Each Task
View, Table, Cost
Enter budget amounts as Fixed costs
Budget Amounts Entered

25. MSP Save the Baseline Data
1. So progress at a date can be compared to the planned and budgeted data.
Tools, Tracking, Set and Save Baseline, OK.
2. Turn off MSP automatic calculation of actual costs to date.
Tools, Options, Calculations.
MSP 2010
Project
Set Baseline
MSP 2010
File
Help
Options
Schedule (scroll down)
Calculation options
Un-check Actual costs
Un-check
Un-check

26. Enter Project Progress Data
MSP
Enter Project Progress Data
View, Table, Tracking
Enter % Comp amounts and Act. Costs

27. View automatically calculated project metrics.
MSP
View automatically calculated project metrics.
Enter current project date.
Project menu, Project Info., enter current date.
View, Table, More Tables, Earned Value, Apply.

28. MSP Summary of Tasks Enter base information, activities, durations.
Set the start date.
Set a 7 day work week.
Project Guide, Tasks, Define general working times.
Enter predecessor(s).
Enter task budget amounts as fixed costs.
View, Table, Cost
Save Baseline
Tools, Tracking, Set Baseline.
Enter Project Progress Data
Turn off auto actual cost calculations
Tools, Options, Calculations
Enter Actual Costs and Task Percent Complete
View, Table, Tracking
Enter current project progress date
Project menu, Project information
Get Metrics
View, Table, More Tables, Earned Value
MSP 2010
Project
Set Baseline
MSP 2010
File
Help
Options
Schedule (scroll down)
Calculation options
Un-check Actual costs
Un-check

29. Project Control:
Project control  taking corrective actions to keep the project on target toward meeting its performance goals (time, cost, deliverables).
There are many ways to exert control; the PM must decide which is most appropriate.
Process Reviews
Reports
Personnel Assignment

30. Scope Creep & Change Control:
Order
Approved
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

31. Quality Management Processes The Big Picture
Quality is the degree to which our deliverables and objectives fulfill the project requirements.
Assuring
Change requests
Corrective actions
Training
Planning
measurements
Controlling

32. Some Common Project Quality Tools/Data Collection:
Controlling
Some Common Project Quality Tools/Data Collection:
Check sheets, frequency counts
Histograms
Pareto chart
Control charts
Cause and effect diagram
Others

33. Check Sheets
Log-in
Lock up
Speed
Use

34. Problem
Type f p P
Log-in
110
0.26
Lock up
105
0.25
0.51
Speed
103
0.24
0.75
Use 35
0.08
0.83

36. Pareto Chart

37. Cause-and-effect diagram

38. Source: http://cokepm.com/pmbok3/premium/8.3PerformQualityControl.htm

40. Control Chart

42. Schedule Variance
a quantitative measure used by project management personnel to determine schedule performance during or after the completion of a project. It is calculated using a simple algebraic equation where the earned value (EV) represents the actual amount of time taken to either complete the project or progress to the project’s current stage. The planned value (PV) represents the amount of time which reaching the project’s current progress should have taken to achieve according to the project management’s schedule. Schedule variance (SV) is found by subtracting PV from EV. EV-PV=SV
Schedule variance and its exact number may indicate many possible things to project management. A number approaching zero would indicate that the scheduling and timeframes generated by project management were accurate within a small margin of error. A figure that is well into negative numbers would mean that either project management over estimated the amount of time needed or they overestimated the budget and workforce measured in raw man hours that would necessary to complete the project. This is not a good thing either as it represents an unnecessary expenditure of resources. A schedule variance figure high in positive numbers could represent many things. It could indicate that project management underestimated the amount of time needed to complete the project, or it might indicate that the budget and workforce was insufficient. It could also mean that project management or the workforce suffered setbacks, foreseen or otherwise, which may or may not have been avoidable.
This term is defined in the 3rd edition of the PMBOK but not in the 4th.
Source:

43. Cost Variance
The term cost variance, also known by the abbreviation of CV, refers specifically to the true measurement of cost performance on a particular project. The cost variance represents the algebraic difference between the earned value of a project (also known by the abbreviation of EV), and the actual cost of the project (also known by the abbreviation AC). The equation to determine the cost variance would be broken down as follows: CV = EV minus AC. If the resulting value for the cost variance is a number greater than zero (or “positive value”), then it is considered to be a favorable cost variance condition. A value that is less than zero, or a resulting “negative” value, represents a cost variance that is considered less than favorable. Because the cost variance is so dependent on the earned value and the actual cost, in order to maintain a favorable cost variance, it is to the project team’s advantage to minimize actual costs to the extent possible.
This term is defined in the 3rd and the 4th edition of the PMBOK.
Source:

44. 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