Project

Management
and Control
Project Monitoring and Evaluation

Jean Ebuzor
Learning objectives
By the end of the session, students will be able to:

• Define project monitoring and control, highlight their significance in project

management, identify key processes involved, and understand their crucial role in
ensuring project success and achieving objectives.
• Define EVM, elucidate its components and importance in project management, and
grasp its fundamental principles and concepts for effective application.
• Explain calculation methods for EVM metrics, analyse results to assess
performance, identify variances, and forecast project costs and schedules using
EVM techniques.
• Outline and apply steps for EVM implementation in project monitoring and control,
identify integration best practices, and explain how EVM supports effective project
management through monitoring, control, and decision-making.
• Analyse real-world EVM applications, evaluate effectiveness in project performance
and cost control, and extract lessons for future project management from case
studies.
• Identify pitfalls, explore challenges and limitations, and develop strategies to
overcome obstacles in effectively implementing EVM.
• Discuss emerging trends, evaluate potential impacts of new technologies, and
predict future advancements in EVM, considering their implications for project
management.
 Lecture Plan
Lecture Workshop 1 (Classroom) Workshop 2 (Lab/ MS Project 2016 Tutorial)

Week 1 Introduction & Fundamentals of Project Gas infrastructure project discussion Introduction to MS Project Software+
Management and Project Control Download and Installation
Week 2 Project Management Tools and Techniques Gas infrastructure project presentation Garden Project Part 1 & 2
(PMTT)
Week 3 Project and Project Management Success, Conditions for project success discussion Garden Project Parts 3 & 4
methods, tools, and techniques
Week 4 Project Initiation Project definition discussion Garden Project Part 5 - Project Execution &
Project Closeout
Week 5 Project Planning SODOR Oil Terminal Project - Introduction SODOR Oil Terminal briefing

Week 6 Project Execution and Control schedule Project Planning Case Study: Lemming SODOR Oil Terminal - Project Planning
management + resource + cost management Television Case
Week 7 Project Monitoring and Evaluation SODOR Oil Terminal – Vendor selection SODOR Oil Terminal – Resource Management

Week 8 Project Risk Management APM competence framework: Risk & Quality SODOR Oil Terminal – Procurement
Management Management & Project plan updates
Week 9 Project Closure and Evaluation Olympic games - Project Resource & Cost SODOR Oil Terminal – Plan consolidation
Management
Week 10 Recap and Revision SODOR Oil Terminal – Project plan tracking SODOR Oil Terminal – Plan baseline

3
Project Control
Process
Meetings occur regularly

Gather data on actual

performance

Record changes

Monitor progress

@ Cengage, 2018
 Project lifecycle activities and deliverables
Monitoring
Benefits
Initiation Planning Execution and Closing
Phase

Realisation
Controlling
•Define the project •Detailed planning •Put the project •Track, review, and •Formalize project •Transition from
at a broad level, to guide project plan into motion, regulate project completion, project delivery to
identify execution, scope manage performance and obtain customer realizing the
Activities

stakeholders, and definition, resources, and progress to ensure or stakeholder intended

establish the resource deliver the project goals are met. acceptance, and outcomes and
project's allocation, and deliverables. release project value outlined (in
feasibility. resources. the project
initiation and
planning stages)
for the
organisation.

•Preliminary Scope •Work Breakdown •Completed •Performance •Project Closure •Benefits

Statement Structure (WBS) Project Work Reports Report Realisation Plan
Deliverables

•Project Charter •Project + •Status Reports •Issue Log •Lessons Learned •Benefits
•Business Case Schedule •Change Requests •Change Requests Document Monitoring and
•Feasibility study Resource+ •Deliverables (if any) •Formal Measurement
Financial + •Quality Control Acceptance by
•Project office set Framework
Quality + Risk + Measurements Stakeholders
up Acceptance + • Benefits
•Handover of
•Identified Communications Realisation Report
Deliverables
Stakeholders + Procurement •Lessons Learned
•Project team Plan Documentation
appointed
 Project Monitoring
• Project monitoring and control involve
tracking project performance, identifying
variances from the project plan, and taking
corrective actions to ensure project
objectives are achieved.
• It's crucial for ensuring projects stay on track,
within budget, and meet quality standards.
• Effective monitoring and control help in
managing risks, optimizing resources, and
delivering projects successfully within the
defined scope, schedule, and budget.
Monitoring and Controlling Processes
Monitoring and controlling processes encompass various activities to keep a project on course:

Performance Measurement: Tracking progress against the project plan, including milestones, deliverables, and
schedule.

Variance Analysis: Comparing actual performance to planned performance to identify discrepancies.

Change Control: Managing changes to project scope, schedule, and budget to ensure alignment with project
objectives.

Risk Management: Identifying, assessing, and mitigating risks that may impact project success.

Quality Control: Ensuring project deliverables meet quality standards through inspections, reviews, and testing.

Communication: Regularly communicating project status, issues, and changes to stakeholders to maintain
transparency and alignment.
 Earned Value Management (EVM)
overview and role
• Earned Value Management (EVM) is a Performance Measurement: EVM integrates cost, schedule, and scope
measurements to provide a comprehensive view of project
project management technique used to performance.
assess a project's performance in terms of
schedule, cost, and scope.
Variance Analysis: EVM calculates cost and schedule variances (CV and
• It integrates project scope, cost, and SV) to identify deviations from the project plan.
schedule measurements to help project
managers evaluate and control project
performance effectively. Forecasting: EVM techniques like Estimate at Completion (EAC) help
forecast the final project cost based on current performance.
• It helps project managers identify variances
from the project plan, forecast future
Performance Metrics: EVM metrics such as Cost Performance Index
performance, and take corrective actions if (CPI) and Schedule Performance Index (SPI) provide objective measures
necessary. of project efficiency and effectiveness.

• Key roles include:

Decision Support: EVM data enables informed decision-making by
identifying trends, risks, and opportunities for improvement.
EVM Contd.
• Planned Value (PV): Also known as Budgeted Cost of Work Scheduled (BCWS), PV represents the authorized budget assigned to scheduled work to be accomplished within a
specific time frame. It indicates how much work was planned to be done at a certain point in time.
• Earned Value (EV): Also referred to as Budgeted Cost of Work Performed (BCWP), EV represents the value of the work completed at a specific point in time. It is measured in
Key Components
terms of the budget assigned to the work actually accomplished.
• Actual Cost (AC): Also known as Actual Cost of Work Performed (ACWP), AC represents the actual cost incurred to complete the work during a specific period. It includes all
direct and indirect costs associated with the project.

• Cost Performance: Cost performance is typically measured using the Cost Performance Index (CPI), which compares the value of work accomplished to the actual cost
incurred. Cost Performance Index (CPI): CPI is a measure of cost efficiency on a project, indicating how much value is being earned for each dollar spent. It is calculated as the
Performance ratio of EV to AC (CPI = EV / AC). A CPI value greater than 1 indicates that the project is under budget, while a value less than 1 suggests that the project is over budget.
Metrics • Schedule Performance: Schedule performance is typically measured using the Schedule Performance Index (SPI), which compares the value of work accomplished to the
planned value. . Schedule Performance Index (SPI): SPI is a measure of schedule efficiency, indicating how efficiently the project team is using time. It is calculated as the ratio
of EV to PV (SPI = EV / PV). An SPI value greater than 1 indicates that the project is ahead of schedule, while a value less than 1 suggests that the project is behind schedule.

• Cost Variance (CV): Cost Variance is a measure of the variance between the earned value (EV) and the actual cost (AC) of work performed. It indicates whether the project is
under or over budget at a specific point in time. CV is calculated as CV = EV - AC. A positive CV indicates that the project is under budget, while a negative CV suggests that the
project is over budget.
Variance Analysis
• Schedule Variance (SV): Schedule Variance is a measure of the variance between the earned value (EV) and the planned value (PV) of work performed. It indicates whether the
project is ahead of or behind schedule at a specific point in time. SV is calculated as SV = EV - PV. A positive SV indicates that the project is ahead of schedule, while a negative
SV suggests that the project is behind schedule.

• Estimate at Completion (EAC): Estimate at Completion is a forecasted total cost of the project based on performance to date. There are various methods to calculate EAC,
including:
• EAC = AC + (BAC - EV): This formula assumes that the original budget (BAC) will remain accurate for the remaining work.
Forecasting • EAC = AC + [(BAC - EV) / CPI]: This formula adjusts the original budget based on cost performance to date.
• EAC = AC + [(BAC - EV) / (CPI * SPI)]: This formula adjusts the original budget based on both cost and schedule performance to date.
• To Complete Performance Index (TCPI): TCPI is a measure of the efficiency required for the remaining work to achieve a specific project goal, such as completing within budget
or on schedule. There are different TCPI formulas depending on the desired project goal:
• TCPI for Budget (TCPI-B): TCPI-B = (BAC - EV) / (BAC - AC): This formula represents the cost performance required to complete the remaining work within the original budget.
• TCPI for Schedule (TCPI-S): TCPI-S = (BAC - EV) / (EAC - AC): This formula represents the efficiency required to complete the remaining work within the remaining schedule.
 Earned Value Formulas and descriptions
VARIANCES
ABB. TERM CALCULATION INDICATION
PV(BCWS) Planned Value – (Budgeted Cost of Planned % Complete X Budget at Completion What is the planned value of the work scheduled to be
Work Scheduled) completed at this point in time?
EV (BCWP) Earned Value Actual % Complete X Budget at Completion What is the value of the work completed at this point in
(Budgeted Cost of Work Performed) time?
AC(ACWP) Actual Cost Actual Labor Cost + Actual Nonlabor Cost + Actual Expense Cost What is the cost of the work completed at this point in
(Actual Cost of Work Performed) time?
BAC Planned Labor Cost + Planned Nonlabor Planned Labor Cost + Planned Nonlabor Cost + Planned Expense Cost What is the overall total budgeted cost of the project?
Cost + Planned Expense Cost
EAC Actual Cost + Estimate to Complete Actual Cost + Estimate to Complete What do we expect the overall total cost of the project
be to completion?
ETC Performance Factor X (Budget at Performance Factor X (Budget at Completion – Earned Value) How much more will the project take to complete the
Completion – Earned Value) project?
*ETC is set at the WBS Level, Earned Value tab.
VARIANCES
ABB. TERM CALCULATION DEFINITION INDICATION
AV Accounting Planned Value – Actual How much more/less did you actually spend than was budgeted? Positive number indicates spending under
Variance Cost budget Negative number indicates spending
over budget
CV Cost Variance Earned Value – Actual Cost How much more/less did you spend to complete work than was Positive number indicates spending under
budgeted? budget Negative number indicates spending
over budget
SV Schedule Earned Value – Planned How much more/less of the scheduled work has been finished Positive number indicates ahead of scheduled
Variance Value than was planned? work Negative number indicates behind
scheduled work
VAC Variance at Budget at Completion – How much more/less should we expect to add to Positive number indicates project is under
Completion Estimate at Completion the total project to complete the project? How much budget Negative number indicates project is
under/over budget will the project be at completion? over budget

INDICES
ABB. TERM CALCULATION DEFINITION INDICATION
CPI Cost Performance Index Earned Value / Actual Cost Is the work being completed costing more/less < 1 indicates you spent more than planned
than what was planned? > 1 indicates you spent less than planned
CVI Cost Variance Index Cost Variance / Earned Value Is the work being earned costing more/less < 0 indicates you spent more than completed
than what was planned? > 0 indicates you spent less than completed
SPI Schedule Earned Value / Planned Value Is the work being completed more/less than < 1 indicates that less work was performed
Performance Index what was scheduled? > 1 indicates that more work was performed
SVI Schedule Variance Index Schedule Variance / Planned Value Is the work being earned more/less than what < 0 indicates you earned less than scheduled
was scheduled? > 0 indicates you earned more than schedued
TCPI To Complete (Budget at Completion – Earned What cost performance must be achieved for < 1 indicates that you will require lower
Performance Index (BAC) Value) / (Estimate at Completion – the project to meet the estimated cost to performance to meet EAC
> 1 indicates you will require higher
Actual Cost) completion (EAC)? performance to meet EAC
 Earned Value Case: Community Centre Construction
Background: A construction company has been contracted to build a community centre in the
neighbourhood. The project involves various activities such as site preparation, foundation laying, structural
construction, interior finishing, and landscaping. The total budget for the project is £500,000.

Activity Scenario: The project has been underway for 6 months, and the following data has been collected:
• Planned Value (PV/BCWS): £300,000
• Earned Value (EV/BCWP): £250,000
• Actual Cost (AC/ACWP): £280,000
Task: Calculate the following:
Read the following exercise 1. Cost Variance (CV)
and complete the tasks. 2. Schedule Variance (SV)
3. Cost Performance Index (CPI)
4. Cost Variance Index (CVI)
5. Schedule Performance Index (SPI)
6. Budget at Completion (BAC)
7. Estimate at Completion (EAC)
8. Estimate to Complete (ETC)
9. Variance at Completion (VAC)
15 minutes 10. Schedule Variance Index (SVI)
11. To Complete Performance Index (TCPI)
EVM Implementation in Project Monitoring and Control

• Setting Baselines: Establishing baseline plans for cost, schedule, and scope is the first step in EVM
implementation. This involves defining the planned value (PV), earned value (EV), and actual cost (AC) for
each work package or activity.
Setting Baselines and
Performance Measurement: • Performance Measurement: Once baselines are set, performance is measured by comparing actual progress
against the planned baseline. PV represents the authorized budget for planned work, EV measures the value
of work completed, and AC reflects the actual cost incurred. These metrics provide a basis for assessing
project performance and identifying variances.

• Data Collection: Collecting data on actual progress, costs, and schedule performance is essential for EVM.
This may involve regular updates from project teams, timesheets, expense reports, and other sources.
• Calculating EVM Metrics: Using the collected data, EVM metrics such as Cost Performance Index (CPI) and
Tracking Progress and Schedule Performance Index (SPI) are calculated to assess project performance. CV (Cost Variance) and SV
Identifying Variances: (Schedule Variance) are also computed to measure the variance between planned and actual performance.
• Interpreting Variances: Variances are analysed to understand their causes and implications for the project.
Positive variances indicate favourable performance, while negative variances signal potential issues or
delays.

• Identifying Root Causes: Understanding the reasons behind cost and schedule variances is crucial. This may
involve analysing resource constraints, scope changes, risks, or inefficiencies in project execution.
• Taking Corrective Actions: Based on the analysis, corrective actions are implemented to address variances
Taking Corrective Actions and and bring the project back on track. These actions may include reallocating resources, adjusting schedules,
Revising Plans: renegotiating contracts, or revising scope.
• Revising Plans: As corrective actions are implemented, project plans may need to be revised to reflect
changes in scope, schedule, or budget. Baselines may be adjusted, and new forecasts for project completion
and cost may be generated using techniques like Estimate at Completion (EAC).
Lessons Learned and Best Practices

Early Adoption: Implement Stakeholder Communication: Regular Monitoring:

EVM early in the project Communicate EVM results Continuously monitor project
lifecycle to establish baseline transparently to stakeholders, performance using EVM metrics
plans and performance fostering trust and to identify variances and take
measurement systems. accountability. timely corrective actions.

Training and Education: Provide Adaptability: Be prepared to

training to project teams on adapt project plans based on
EVM principles and techniques EVM analysis and lessons
to ensure effective learned to improve project
implementation. outcomes.

Recommendations for Successful EVM Implementation

• Ensure clear understanding and alignment of EVM principles and objectives among project team members.
• Invest in robust EVM training and education to build competency and proficiency within the organization.
• Foster a culture of continuous improvement and adaptability to embrace emerging technologies and best practices in EVM.
• Regularly review and refine EVM processes and methodologies to address evolving project requirements and industry trends.
• Foster collaboration and communication among stakeholders to ensure effective implementation and utilization of EVM.
 Benefits, Challenges and Solutions
Identifying the following benefits and addressing the challenges and limitations can help organizations to enhance the effectiveness of EVM
implementation and improve project control, ultimately increasing the likelihood of project success.
Importance of EVM in Project Monitoring Overcoming Challenges for Effective Project
Challenges Addressing Issues in EVM Implementation
and Control Control
•EVM provides a systematic approach to •Overemphasis on Metrics: Focusing solely •Clear Communication: Ensure stakeholders •Integrated Project Management: Integrate
monitor project performance against on EVM metrics like CPI and SPI without understand the purpose and benefits of EVM with other project management
planned objectives. considering the underlying causes of EVM, and provide training and support to techniques and tools, such as risk
•It enables stakeholders to assess cost and variances can lead to misinterpretation of project teams for effective implementation. management and change control, to
schedule performance, identify variances, project performance. •Standardization: Develop standardized enhance overall project control.
and take corrective actions. •Scope Changes: EVM assumes a stable processes and procedures for EVM •Proactive Risk Management: Anticipate
•EVM enhances project transparency, project scope, making it challenging to implementation to ensure consistency and potential challenges and risks that may
accountability, and decision-making, leading account for scope changes that may impact reliability of results. impact project performance and develop
to improved project outcomes. cost and schedule performance. •Data Quality Assurance: Implement mitigation strategies accordingly.
•Data Accuracy: Inaccurate or incomplete measures to verify the accuracy and •Regular Monitoring and Review:
data collection can undermine the reliability completeness of data collected for EVM Continuously monitor project performance
of EVM results and lead to incorrect analysis, such as regular audits and using EVM metrics and conduct regular
decision-making. validation checks. reviews to identify issues early and take
•Complexity: EVM implementation can be •Adaptability: Recognize that EVM is not a corrective actions promptly.
complex, especially for large and multi- one-size-fits-all approach and be willing to •Stakeholder Engagement: Engage
faceted projects, requiring significant time adapt methodologies to suit the unique stakeholders throughout the project
and resources. characteristics of each project. lifecycle, solicit feedback, and address
•Resistance to Change: Resistance from •Continuous Improvement: Foster a culture concerns to ensure alignment and support
project teams or stakeholders to adopt EVM of continuous improvement by regularly for EVM implementation.
practices and methodologies can hinder reviewing EVM practices, identifying areas •Leadership Support: Secure leadership buy-
effective implementation. for enhancement, and implementing lessons in and support for EVM implementation,
learned from past projects. emphasizing its importance in achieving
project objectives and delivering value to
the organization.
 Future Trends and Innovations in EVM
Trends can be classified into the following categories:

Emerging Technologies and Tools for EVM Integration with Agile and Lean Continuous Improvement in EVM Practices
Methodologies
• Adoption of Artificial Intelligence (AI) and • Agile EVM Frameworks and Practices • Focus on Data Analytics and Predictive
Machine Learning (ML) in EVM Software • Incorporating EVM principles into Agile Modelling
• Utilization of AI algorithms for predictive project management methodologies • Leveraging big data analytics for
analysis and risk management • Agile-friendly metrics and dashboards advanced performance forecasting and
• Integration of ML models for enhanced for real-time performance monitoring risk analysis
forecasting accuracy • Lean EVM Techniques for Waste Reduction • Continuous refinement of EVM models
• Implementation of Blockchain Technology in • Applying Lean principles to streamline and algorithms for better decision-
EVM Systems making
EVM processes and eliminate
• Leveraging blockchain for secure and inefficiencies • Emphasis on Stakeholder Engagement and
transparent project data management • Integration of value-stream mapping Collaboration
• Enhancing trust and accountability in and continuous improvement practices • Involving stakeholders in EVM processes
EVM reporting and audits in EVM implementation to ensure alignment with project
objectives
• Encouraging feedback and participation
for continuous learning and
improvement in EVM practices
 Project Cost Management
Tony Prince and his team are working on the Recreation and Wellness Intranet Project. They have been asked to refine the
existing cost estimate for the project so they can evaluate supplier bids and have a solid cost baseline for evaluating project
performance. Recall that your schedule and cost goals are to complete the project in six months for under £200,000.
Tasks

Activity 1. Prepare and print a one-page cost model for this project using spreadsheet software. Use the following WBS and be sure to
document your assumptions in preparing the cost model. Assume a labour rate of £100/hour for the project manager and
£60/hour for other project team members. Assume that none of the work is outsourced, labour costs for users are not
included, and there are no additional hardware costs. The total estimate should be £200,0
1 Project management
2 Requirements definition 2. Using the cost model you created in Task 1, prepare a cost
3 Web site design baseline by allocating the costs by WBS for each month of
3.1 Registration for recreational programs the project.
3.2 Registration for classes and programs
3.3 Tracking system
Read the following exercise 3.4 Incentive system
and complete the tasks. 4 Web site development
4.1 Registration for recreational programs
4.2 Registration for classes and programs
4.3 Tracking system
4.4 Incentive system
5 Testing
6 Training, rollout, and support
3. Assume that you have completed three months of the project. The BAC was £200,000 for this six-month project. You can also
make the following assumptions:
• PV = £120,000
• EV = £100,000
• AC = £90,000
a) What is the cost variance, schedule variance, cost performance index (CPI), and schedule performance index (SPI) for the
project?
b) How is the project doing? Is it ahead of schedule or behind schedule? Is it under bud get or over budget?
35 minutes c) Use the CPI to calculate the estimate at completion (EAC) for this project. Is the project performing better or worse than
planned?
d) Use the SPI to estimate how long it will take to finish this project.
e) Sketch an earned value chart using the preceding information.
Reflection
Having completed this session, you should be able to:

• Define project monitoring and control, highlight their significance in project

management, identify key processes involved, and understand their crucial role in
ensuring project success and achieving objectives.
• Define EVM, elucidate its components and importance in project management, and
grasp its fundamental principles and concepts for effective application.
• Explain calculation methods for EVM metrics, analyse results to assess performance,
identify variances, and forecast project costs and schedules using EVM techniques.
• Outline and apply steps for EVM implementation in project monitoring and control,
identify integration best practices, and explain how EVM supports effective project
management through monitoring, control, and decision-making.
• Analyse real-world EVM applications, evaluate effectiveness in project performance and
cost control, and extract lessons for future project management from case studies.
• Identify pitfalls, explore challenges and limitations, and develop strategies to overcome
obstacles in effectively implementing EVM.
• Discuss emerging trends, evaluate potential impacts of new technologies, and predict
future advancements in EVM, considering their implications for project management.