Chapter 10
Project Monitoring and Control
Chapter10 Project Monitoring & Control
Project Monitoring and Control
Monitoring collecting, recording, and
reporting information concerning project
performance that project manger and
others wish to know
Controlling uses data from monitor
activity to bring actual performance to
planned performance
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Project Monitoring and Control
Why do we monitor?
What do we monitor?
When to we monitor?
How do we monitor?
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Why do we monitor?
Simply because we know that
things dont always go according
to plan (no matter how much we
prepare)
To detect and react appropriately
to deviations and changes to plans
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What do we monitor
?
Men (human
resources)
Machines
Materials
Money
Space
Time
Tasks
Quality/Technical
Performance
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What do we monitor?
Inputs
Time
Money
Resources
Material Usage
Tasks
Quality/Technical
Performance
Outputs
Progress
Costs
Job starts
Job completion
Engineering / Design
changes
Variation order (VO)
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When do we monitor?
End of the project
Continuously
Regularly
Logically
While there is still time to react
As soon as possible
At task completion
At pre-planned decision points (milestones)
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Where do we monitor?
At head office?
At the site office?
On the spot?
Depends on situation and the
whats
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How do we monitor
Through meetings with clients, parties involved
in project (Contractor, supplier,etc.)
For schedule Update CPA, PERT Charts,
Update Gantt Charts
Using Earned Value Analysis
Calculate Critical Ratios
Milestones
Reports
Tests and inspections
Delivery or staggered delivery
PMIS (Project Management Info Sys) Updating
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Meetings Some monitoring issues
What problems do you have and what is being
done to correct them?
What problems do you anticipate in the future?
Do you need any resources you do not yet
have?
Do you need information you do not have yet?
Do you know anything that will give you
schedule difficulties?
Any possibility your task will finish early/late?
Will your task be completed under/over/on
budget?
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Project Control Cycle
ACTION
Correct
deviations
from plan
PLAN
Specifications
Project Schedule
Project budget
Resource plan
Vendor contracts
RE-PLAN as
necessary
MONITOR
Record status
Report progress
Report cost
COMPARE
Actual status
against plan
-Schedule
-Cost
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Project Control
Control process and activities needed
to correct deviations from plan
Control the triple constraints
time (schedule)
cost (budget, expenses, etc)
performance (specifications, testing results,
etc.)
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Techniques for monitoring and
control
Earned Value Analysis
Critical Ratio
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Earned Value Analysis
A way of measuring overall performance (not
individual task) is using an aggregate
performance measure - Earned Value
Earned value of work performed (value
completed) for those tasks in progress found by
multiplying the estimated percent physical
completion of work for each task by the planned
cost for those tasks. The result is amount that
should be spent on the task so far. This can be
compared with actual amount spent.
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Earned Value Analysis
Methods for estimating percent completion
The 50-50 estimate. 50% is assumed when task is
begun, and remaining 50% when work completed.
0-100% rule. This rule allows no credit for work until
task is complete, highly conservative rule, project
always seem late until the very end of project when
everything appears to suddenly catch up
Critical input rule. This rule assigns progress according
to amount of critical input that has been used. Labor or
skilled dependent, machine critical input buy machine
complete task may be misinformation
Proportional rule. This rule divides planned (or actual)
time-to-date by total scheduled time(or budgeted (or
actual ) cost-to-date by total budgeted cast] to calculate
percent complete. This is commonly used rule.
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Earned Value Analysis
Refer to earned value chart basis for
evaluating cost and performance to date
If total value of the work accomplished is in
balance with the planned (baseline) cost, and
actual cost then top mgmt has no particular
need for a detailed analysis of individual tasks
Earned value concept combines cost
reporting & aggregate performance reporting
into one comprehensive chart
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Earned Value Analysis
Baseline cost to completion referred to as
budget at completion (BAC)
Actual cost to date referred to as
estimated cost at completion (EAC)
Identify several variances according to two
guidelines
1.
2.
A negative variance is bad
Cost and schedule variances are calculated as
earned value minus some other measure
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Earned Value Chart basis for evaluating
cost & performance to date
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Earned Value Analysis - Variances
4 types of variances;
Cost (spending) variance (CV) difference
between budgeted cost of work performed
(earned value) (BCWP) and actual cost of that
work (ACWP)
Schedule variance (SV) difference between
earned value (BCWP) and cost of work we
scheduled to perform to date (BCWS)
Time variance (TV) difference between time
scheduled for work performed (STWP) and
actual time to perform it (ATWP)
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Earned Value Variance - Formula
CV = BCWP ACWP (negative value - cost overrun)
SV = BCWP BCWS (negative value - behind
schedule)
TV = STWP ATWP (negative value - delay)
Index (Ratios)
Cost Performance Index (CPI) = BCWP/ACWP
Schedule Performance Index (SPI) = BCWP/BCWS
Time Performance Index (TPI) = STWP/ATWP
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EXAMPLE
Assume that operations on a Work Package cost RM
1,500 to complete. They were originally scheduled to
finish today. At this point, we actually spent RM1,350.
And we estimate that we have completed two thirds (2/3)
of the work. What are the cost and schedule variances?
CV = BCWP ACWP = 1500 (2/3) 1350 = - 350
SV = BCWP BCWS = 1500 (2/3) 1500 = - 500
CPI = BCWP/ACWP = 1500(2/3)/1350 = 0.74
SPI = BCWP/BCWS = 1500(2/3)/1500 = 0.67
Spending higher than budget, and given what we have
spent, we are not as far along as we should be (have not
completed as much work as we should have)
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Possible to have one of indicators
to be favorable while the other
unfavorable
Might be ahead of schedule and
behind costs
Six possibilities (see figure next
slide)
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6 Possibilities Earned Value Analysis
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EXERCISE (Text P.544 Problem 4)
A project to develop a country park has an actual cost in
month 17 of $350,000, a planned cost of $475,000, and
a value completed of $300,000. Find the cost and
schedule variances and the three indexes.
Time t
Planned (Baseline) 475,000
BCWS
Actual cost 350,000
ACWP
Value completed 300,000
BCWP
Month 17
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Solution
BCWS = 475,000
BCWP = 300,000
ACWP = 350,000
CV = BCWP ACWP
SV = BCWP BCWS
CV = 300,000 350,000 = -50,000 (negative value - cost overrun)
SV = 300,000 475,000 = -175,000 (negative value - behind
schedule)
Cost Performance Index (CPI) = BCWP/ACWP = 300/350 = 0.86
Schedule Performance Index (SPI) = BCWP/BCWS = 300/475 = 0.63
Time Performance Index (TPI) = STWP/ATWP
Scheduled Time Work Performed (STWP) can be estimated
Time t = Schedule Variance/Slope of Planned costs =
-175,000/ (475,000/17) = - 6.26 months
Time Difference= 17- 6.26 = 10.74
TV = 10.74/17 = 0.63
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Critical ratio
Sometimes, especially large projects, it
may be worthwhile calculating a set of
critical ratios for all project activities
The critical ratio is
actual progress
x budgeted cost
scheduled progress
actual cost
If ratio is 1 everything is probably on target
The further away form 1 the ratio is, the more
we may need to investigate
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Critical ratio example
Calculate the critical ratios for the following activities
and indicate which are probably on target and need
to be investigated.
Activity
Actual
progress
Scheduled
Progress
Budgete
d Cost
Actual
cost
4 days
4 days
60
40
3 days
2 days
50
50
2 days
3 days
30
20
1 day
1 day
20
30
2 days
4 days
25
25
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Critical
ratio
(CR)
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Critical ratio example
Can be on schedule and below budget
(Act A) Why so good? Cutting corners?
Can be behind schedule but below
budget (Act C)
Can be on budget but physical progress
lagging (Act E)
Can be on schedule but cost running
higher than budget (Act D)
On budget ahead of schedule (Act B)
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Summary
Need proper project monitoring and
control mechanisms
Tools available to help in monitoring and
controlling activities
There are human control and
management aspects not covered here
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