1. Monitoring and Information Systems
Project monitoring defined
The plan-monitor-control cycle
Designing the monitoring system
Behavioral aspects of monitoring
Earned value analysis
Earned value examples

2. Project Monitoring Defined
Collecting, recording, and reporting information concerning any and all aspects of project performance that the project manager or others wish to know

3. Effective Monitoring Precedes Control
In Chapter 11, we’ll look at Project Control
Ensuring that actuals mesh with the plan
But effective control requires good information
Such pertinent and timely information comes from an accurate monitoring system

4. Monitoring Has Several Uses
The primary use is project control
Ensuring that decision-makers have timely information enabling effective control over the project
Project Monitoring has secondary uses
Project auditing
“Lessons learned”
Reporting to client and senior management

5. The Planning-Monitoring-Controlling Cycle
Effective monitoring and control begins with good project planning
What are the critical areas?
How and when can progress be measured?
Who gathers and reports info, to whom?
The plan-monitor-control cycle continues through the entire project

6. Project Control Information Flow, Figure 10-1

7. Designing the Monitoring System
1. Start with the key factors to be controlled
Pareto analysis: a relatively few activities determine most of the project’s success
Use the project plan to identify items to be monitored
Although other areas might be added also

8. Designing the Monitoring System (cont’d)
2. Develop measurement systems
Measure results, not activity; outputs, rather than inputs
Extract performance, time and cost goals from project plans
Avoid tendency to focus on that which is easily measurable

9. Designing the Monitoring System (cont’d)
3. Collecting Data: Most data falls into one of five categories, as follows (with examples)
Frequency counts: tally of occurrences . . .
Raw numbers: dates, dollars, percents, specs . . .
Subjective ratings: numerical ranking, red-yellow-green assessments . . .
Indicators: surrogate measures of merit . . .
Verbal measurement: oral or written characterizations . . .

10. Designing the Monitoring System (cont’d)
4. Reporting on Data Collected: To turn data into information, it must be contextualized:
Reporting must be timely
Data must be analyzed
Trends: Getting better or worse?
Comparables: Performance compared to specs, past performance, standard hours, etc.
Statistical analysis
Causation and correction

11. Reporting and Information Flows, Figure 10-5

12. Some Behavioral Aspects of Monitoring Systems
Effective monitoring reduces surprises, and this can increase trust, morale
Some reporting bias is inevitable, but dishonesty is unacceptable
“Shooting the messenger” today just creates concealment tomorrow

13. Earned Value Analysis (EVA)
Needed: An objective way to measure overall project performance
The problem comparing actual expenditures to baseline plan is that it ignores the amount of work actually completed
Thus, Earned Value Analysis
A sort of cost accounting for projects

14. Estimating Percent Complete
The estimate
The percent rule
Critical input use
The proportionality rule

15. Five Important Terms BCWS: The plan, integrating schedule and budget
BCWP: What you planned to spend for work actually done
ACWP: Actual dollars spent at a point in time, for the work actually done
STWP: Time scheduled for work performed
ATWP: Actual time for work performed

16. More Terms BAC: Budget at completion EAC: Estimated cost at completion
ETC: Estimated cost to complete

17. Indices Help Visualize Performance
Projects on cost, on schedule will have indices = 1.0
Indices below 1.0 are unfavorable
Cost Performance Index (CPI) = BCWP/ACWP
Schedule Performance Index (SPI) = BCWP/BCWS
Cost-Schedule Index (CSI) = CPI X SPI

18. Five Relationships Cost Variance (CV) = BCWP - ACWP
Schedule Variance (SV) = BCWP - BCWS
Time Variance (TV) = STWP - ATWP
Estimated Cost to Complete (ETC) = (BAC – BCWP)/CPI
Estimate Cost at Completion (EAC) = ACWP + ETC

19. Possible Arrangements, Figure 10-8

20. Example
Assume a work package expected to be finished today, at cost of $ But you’re only 2/3 complete, and you’ve spent $1350.
CPI = BCWP/ACWP = $1000/$1350 = .74
SPI = BCWP/BCWS = $1000/$1500 = .67
CSI = CPI X SPI = .74 X .67 = .49

21. Example (cont’d)
Then you can calculate the estimated cost to complete the project (ETC) and the estimated cost at completion (EAC)
ETC = (BAC – BCWP)/CPI = $(1500 – 1000)/ = $676
EAC = ACWP + ETC = $ $ = $2026

22. Another Earned Value Example
A 10-day project, today is day 7
Activity
Predecessor
Duration (Days)
Budget ($)
Actual Cost(s)
% Complete a - 3
600
680
100 b 2
300
270 c 5
800 80 d 4
400 25 e

23. PERT AON Diagram, Figure 10-9

24. Example Baseline Budget Using 50-50 Rule, Figure 10-10

25. Example Status at Day 7, Figure 10-11

26. Example Earned Value Chart Day 7, Figure 10-12

27. MSP Budget Sheet, Figure 10-13

28. Case: Earned Value at Texas Instruments

29. Case: Earned Value at Texas Instruments (cont’d)
Graphic presentation clearly depicts project’s history
More crucial, though, is using EVA as a management tool. This requires:
Timely, accurate data collection
Expeditious data analysis
Appropriate and efficient corrective action