Project Management Session 7
Project Management Control
Project Management Control
Preamble
Project Management Control
How do I manage the
following:
The overall health of
the project;
Scope;
Acquisition of goods
and services;
Value.
Project Management Control
Project Health
Project planning:
Milestones
Schedule;
Human resources;
Budget;
Responsibilities;
Contingencies.
Ownership:
Stakeholder input;
Conditions for
satisfaction;
Stakeholders feel
their interest
accommodated.
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Project Management Control
Project Health
Expertise:
Have expertise;
Members understand their
responsibilities;
Adequate training for team
members;
Top level support:
Project sponsor share
responsibility;
TOR agreed;
Sponsor and management
support when required;
Communication.
Resources:
Available HR;
Technology available;
Task management effective.
Project Management Control
Project Health
Justifiable case:
Project fully costed and
budgeted;
Also agreed with sponsor;
ROI clear and acceptable;
Metrics in place and
methods to measure;
Adequate funding;
Specification:
Objectives clear;
Strategic and business
alignment;
Enthusiasm;
Adequate documentation
reports; budget; specs;
deviations; delegations.
Project Management Control
How do I manage the
following:
The overall health of
the project;
Scope;
Acquisition of goods
and services;
Value.
Project Management Control
Scope Management
Project Management Control
Scope Management
There are three basic causes
for change in projects:
Planners erred in their
initial assessment about
how to achieve a given end
or erred in their choice of
the proper goal for the
project;
The client/user or project
team learns more about the
nature of the project
deliverable or about the
setting in which it is to be
used;
Change in the environment
in which the project is being
conducted.
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Project Management Control
Scope management
Scope is defined at various
levels:
Project charter;
Breakdown of deliverables,
tasks etc (this is were the
Work Breakdown Structure is
important);
The baseline plan and the
budget also part of the
scope.
Underlying the issue of scope
management is change control:
Formal system of change
control;
Impact of changes should be
motivated;
Where it affects scope, client
signoff should be sought and
relevant documents updated.
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Project Management Control
Scope management
Scope related dilemmas:
Scope creep:
Changes that are changing
the base plan. Inevitable but
the project manager needs
to keep these changes
manageable ;
Hope creep:
Falling behind schedule, with
the hope that one could
catch up. The project
manager needs to be very
careful as this can have
severe consequences for the
project;
Effort creep:
Similar to hope creep.
Activity that does not
produce results;
Feature creep:
Adding features rather than
sticking to the original
agreement about
deliverables.
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Project Management Control
How do I manage the
following:
The overall health of
the project;
Scope;
Acquisition of goods
and services;
Value.
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Project Management Control
Procurement
PMBOK the processes
required to acquire goods
and services;
Procurement schedule
(as such) should only be
considered after the
network diagram and
schedule bar chart has
been finalized but before
the resource histograms
and cash flow statements
thus what, when before how
much and how much
when.
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Project Management Control
Procurement
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Project Management Control
How do I manage the
following:
The overall health of
the project;
Scope;
Acquisition of goods
and services;
Value.
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Project Management Control
Context
70% of projects are:
Over budget
Behind schedule
52% of all projects finish at
189% of their initial budget
And some, after huge
investments of time and money,
are simply never comple
Source: The Standish Group
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Project Management Control
What is Earned Value?
Earned Value is an approach for understanding
and assessing what a project is achieving with
budgeted money.
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Project Management Control
What Do You Need for EVA?
1. Define the Work
Contract Budget Base
2. Schedule the Work
PM Baseline
3. Allocate Budgets
100
40
60
15
Time
25
30
30
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Project Management Control
Managing Without EVA
Example you budget 100 hours to assemble bridge
Pillars and at the end of the period you have achieved the 100 hours
Budget
Actual
Variance
100 hours @ R 300
R 100 hours @ R 300
R0
Wow we are
on budget !
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Project Management Control
Managing Without EVA
Does this mean we
have achieved 100
hours worth of work ?
Actual cost is not an indication of progress, Only an indicator of
hours/money spent.
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Project Management Control
Important Terms
BCWS - Budgeted Cost of Work Scheduled:
Planned cost of the total amount of work scheduled
to be performed by the milestone date;
ACWP - Actual Cost of Work Performed:
Cost incurred to accomplish the work that has
been done to date;
BCWP - Budgeted Cost of Work Performed:
The planned (not actual) cost to complete the work
that has been done.
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Dec-03
Nov-03
Oct-03
Sep-03
Aug-03
40000
Jul-03
Jun-03
60000
May-03
Apr-03
Mar-03
Feb-03
Jan-03
Project Management Control
Example
120000
100000
80000
55000
BCWP
49000
BCWS
20000
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Project Management Control
Example
SV - Schedule Variance:
(BCWP-BCWS):
A comparison of
amount of work
performed during a
given period of time to
what was scheduled to
be performed.
A negative variance
means the project is
behind schedule
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Dec-03
Nov-03
Oct-03
Sep-03
40000
Aug-03
60000
Jul-03
Jun-03
May-03
Apr-03
Mar-03
Feb-03
Jan-03
Project Management Control
Example
120000
100000
80000
56000
BCWS
55000
49000
BCWP
ACWP
20000
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Project Management Control
Example
CV - Cost Variance:
(BCWP-ACWP)
A comparison of the
budgeted cost of work
performed with actual
cost.
A negative variance
means the project is
over budget.
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Project Management Control
Example
Schedule Variance = BCWPBCWS:
$49,000
- 55,000
SV = - $ 6,000
Cost Variance
= BCWPACWP:
$49,000
56,000
CV = - $7,000
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Project Management Control
Earned Value?
BCWP - Budgeted Cost of
Work Performed:
The planned (not actual)
cost to complete the work
that has been done.
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Project Management Control
In Simple Terms
Time Now
Budget Plan (21)
Actual Cost (26)
Schedule variance
Earned Value (16)
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Project Management Control
In Simple Terms
Time Now
Budget Plan (21)
Actual Cost (26)
Cost Variance
Earned Value (16)
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Project Management Control
In Simple Terms
Time Now
Budget Plan (21)
Actual Cost (26)
Earned Value (16)
Time variance
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Project Management Control
Important Metrics
SPI: Schedule Performance Index:
SPI=BCWP/BCWS
SPI<1 means project is behind schedule
CPI: Cost Performance Index:
CPI= BCWP/ACWP
CPI<1 means project is over budget
CSI: Cost Schedule Index (CSI=CPI x
SPI):
The further CSI is from 1.0, the less likely project
recovery becomes.
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Project Management Control
Important Metrics
SPI: BCWP/BCWS:
49,000/55,000 =
0.891
CPI: BCWP/ACWP:
49,000/56000 =
0.875
CSI: SPI x CPI:
.891 x .875 = 0.780
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Project Management Control
Making Projections
Once a project is 10% complete, the
overrun at completion will not be less
than the current overrun;
Once a project is 20% complete,
the CPI should not vary from its current
value by more
than 10%.
The CPI and SPI are statistically accurate
indicators of final cost results.
Source: Defense Acquisition University
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Project Management Control
Summary
Know where you are in
terms of the Schedule;
Know where you are in
terms of the Budget;
Know where you are in
terms of Work
Accomplished.
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Project Management Control
Summary
Earned Value Analysis integrates all three:
It compares the planned work with what has
actually been completed,
completed to determine if cost,
schedule and work accomplished are
progressing as planned.
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Project Management Control
