Project Monitoring And Control- Eva.pdf 225v6l
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Copyright 2013-2014
Project Monitoring and Control
1
Project Monitoring and Control
Copyright 2013-2014
• 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
2
Project Monitoring and Control Why do we monitor? What do we monitor? When to we monitor? How do we monitor?
Copyright 2013-2014
• • • •
3
Why do we monitor?
Copyright 2013-2014
• Simply because we know that things don’t always go according to plan (no matter how much we prepare) • To detect and react appropriately to deviations and changes to plans
4
What do we monitor? Outputs
Inputs • Time • Money • Resources • Material Usage • Tasks • Quality/Technical Performance
§Progress §Costs §Job starts §Engineering / Design changes
5
Copyright 2013-2014
§Job completion
§ § § § § § § §
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)
6
Copyright 2013-2014
When do we monitor?
Where do we monitor? At head office? At the site office? On the spot? Depends on situation and the ‘whats’
Copyright 2013-2014
• • • •
7
• Through meetings with clients, parties involved in project (Contractor, supplier,etc.) • For schedule – Update A, 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
8
Copyright 2013-2014
How do we monitor
Meetings – Some monitoring issues
Copyright 2013-2014
• 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?
9
Project Control Cycle
Correct deviations from plan RE-PLAN as necessary
COMPARE Actual status against plan -Schedule -Cost 10
MONITOR Record status Report progress Report cost
Copyright 2013-2014
ACTION
PLAN Specifications Project Schedule Project budget Resource plan Vendor contracts
Project Control • Control – process and activities needed to correct deviations from plan • Control the triple constraints
Copyright 2013-2014
– Time (schedule) – Cost (budget, expenses, etc) – Scope (specifications, testing results, etc.)
11
Earned Value Analysis
Copyright 2013-2014
• 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.
12
Earned Value Analysis
Copyright 2013-2014
• 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
13
Earned Value Definitions PV: “Planned Value”
Copyright 2013-2014
Planned cost of the total amount of work scheduled to be performed by the milestone date.
14
PV – Planned Value or Budgeted Cost of Work Scheduled
120000 100000 80000 60000
BCWS
40000 20000
15
Copyright 2013-2014
Dec-03
Nov-03
Oct-03
Sep-03
Aug-03
Jul-03
Jun-03
May-03
Apr-03
Mar-03
Feb-03
Jan-03
0
Earned Value Definitions (cont.)
AC: “Actual Cost of Work Performed”
Copyright 2013-2014
Cost incurred to accomplish the work that has been done to date.
16
17
56000 49000
Copyright 2013-2014
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
ACWP - Actual Cost of Work Performed
120000
100000
80000
BCWP
ACWP
20000
0
Earned Value Definitions (cont.) •EV: Earned value or Budgeted Cost of Work Performed
Copyright 2013-2014
The planned (not actual) cost to complete the work that has been done.
18
EV- Earned Value or Budgeted Cost of Work Performed
120000 100000 80000 BCWP
55000
60000
BCWS
49000 40000 20000
19
Copyright 2013-2014
Dec-03
Nov-03
Oct-03
Sep-03
Aug-03
Jul-03
Jun-03
May-03
Apr-03
Mar-03
Feb-03
Jan-03
0
20
80000 56000
55000 49000
Copyright 2013-2014
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
The Whole Story
120000
100000
BCWS
BCWP
ACWP
20000
0
Some Derived Metrics •SV: Schedule Variance (EV-PV) –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
–A comparison of the budgeted cost of work performed with actual cost. –A negative variance means the project is over budget.
21
Copyright 2013-2014
•CV: Cost Variance (EV-AC)
Schedule Variance & Cost Variance Schedule Variance = EV-PV $49,000 - 55,000 SV = - $ 6,000 = EV-AC $49,000 56,000 CV = - $7,000
22
Copyright 2013-2014
Cost Variance
Some More Derived Metrics •SPI: Schedule Performance Index SPI=EV/PV – If SPI<1 means project is behind schedule
•I: Cost Performance Index
I=
EV/AC
•CSI: Cost Schedule Index (CSI=I x SPI) The further CSI is from 1.0, the less likely project recovery becomes. 23
Copyright 2013-2014
–If I<1 means project is over budget
Performance Metrics SPI: EV/PV 49,000/55,000 = 0.891 I: EV/AC 49,000/56000 = 0.875
Copyright 2013-2014
CSI: SPI x I .891 x .875 = 0.780
24
Earned Value Analysis
Copyright 2013-2014
• Budgeted Cost for Work Scheduled (BCWS) – Planned value of work that should have been completed at the time of monitoring • Budgeted Cost for Work Performed (BCWP) – Estimated cost of work that have been actually completed at the time of monitoring (in monitory ) • Actual Cost for Work Performed (ACWP) –Actual expenditure incurred to accomplish the work as on the time of monitoring
25
• 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)
26
Copyright 2013-2014
Earned Value Analysis Variances
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
Copyright 2013-2014
•
27
Copyright 2013-2014
Earned Value Chart – basis for evaluating cost & performance to date
28
Earned Value Variance - Formula
Copyright 2013-2014
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 (I) = BCWP/ACWP Schedule Performance Index (SPI) = BCWP/BCWS Time Performance Index (TPI) = STWP/ATWP
29
EXAMPLE
CV = BCWP – ACWP = 1500 (2/3) – 1350 = - 350 SV = BCWP – BCWS = 1500 (2/3) – 1500 = - 500 I = 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)
30
Copyright 2013-2014
Assume that operations on a Work Package cost Rs. 1,500 to complete. They were originally scheduled to finish today. At this point, we actually spent Rs.1,350. And we estimate that we have completed two thirds (2/3) of the work. What are the cost and schedule variances?
Copyright 2013-2014
• Possible to have one of indicators to be favorable while the other unfavorable • Might be ahead of schedule and behind costs
31
EXERCISE
Copyright 2013-2014
A project to develop a country park has an actual cost in month 17 of Rs.350,000, a planned cost of Rs.475,000, and a value completed of Rs.300,000. Find the cost and schedule variances and the three indexes.
32
EXERCISE- Solution
$
Time t
Planned (Baseline) – 475,000
BCWS
Actual cost – 350,000
ACWP
Value completed – 300,000
BCWP
Month 17 33
Copyright 2013-2014
A project to develop a country park has an actual cost in month 17 of Rs.350,000, a planned cost of Rs.475,000, and a value completed of Rs.300,000. Find the cost and schedule variances and the three indexes.
Solution
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 (I) = 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 34
Copyright 2013-2014
BCWS = 475,000 BCWP = 300,000 ACWP = 350,000
Assignment Q. Suppose you are managing a software development
Copyright 2013-2014
project. The project is expected to be completed in 8 months at a cost of $10,000 per month. After 2 months, you realize that the project is 30 percent completed at a cost of $40,000. You need to determine whether the project is on-time and on-budget after 2 months. • Calculate the Planned Value (PV) and Earned Value (EV) • Compute the Cost Performance Index (I) and Schedule Performance Index (SPI)
35
Project Monitoring and Control
1
Project Monitoring and Control
Copyright 2013-2014
• 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
2
Project Monitoring and Control Why do we monitor? What do we monitor? When to we monitor? How do we monitor?
Copyright 2013-2014
• • • •
3
Why do we monitor?
Copyright 2013-2014
• Simply because we know that things don’t always go according to plan (no matter how much we prepare) • To detect and react appropriately to deviations and changes to plans
4
What do we monitor? Outputs
Inputs • Time • Money • Resources • Material Usage • Tasks • Quality/Technical Performance
§Progress §Costs §Job starts §Engineering / Design changes
5
Copyright 2013-2014
§Job completion
§ § § § § § § §
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)
6
Copyright 2013-2014
When do we monitor?
Where do we monitor? At head office? At the site office? On the spot? Depends on situation and the ‘whats’
Copyright 2013-2014
• • • •
7
• Through meetings with clients, parties involved in project (Contractor, supplier,etc.) • For schedule – Update A, 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
8
Copyright 2013-2014
How do we monitor
Meetings – Some monitoring issues
Copyright 2013-2014
• 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?
9
Project Control Cycle
Correct deviations from plan RE-PLAN as necessary
COMPARE Actual status against plan -Schedule -Cost 10
MONITOR Record status Report progress Report cost
Copyright 2013-2014
ACTION
PLAN Specifications Project Schedule Project budget Resource plan Vendor contracts
Project Control • Control – process and activities needed to correct deviations from plan • Control the triple constraints
Copyright 2013-2014
– Time (schedule) – Cost (budget, expenses, etc) – Scope (specifications, testing results, etc.)
11
Earned Value Analysis
Copyright 2013-2014
• 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.
12
Earned Value Analysis
Copyright 2013-2014
• 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
13
Earned Value Definitions PV: “Planned Value”
Copyright 2013-2014
Planned cost of the total amount of work scheduled to be performed by the milestone date.
14
PV – Planned Value or Budgeted Cost of Work Scheduled
120000 100000 80000 60000
BCWS
40000 20000
15
Copyright 2013-2014
Dec-03
Nov-03
Oct-03
Sep-03
Aug-03
Jul-03
Jun-03
May-03
Apr-03
Mar-03
Feb-03
Jan-03
0
Earned Value Definitions (cont.)
AC: “Actual Cost of Work Performed”
Copyright 2013-2014
Cost incurred to accomplish the work that has been done to date.
16
17
56000 49000
Copyright 2013-2014
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
ACWP - Actual Cost of Work Performed
120000
100000
80000
BCWP
ACWP
20000
0
Earned Value Definitions (cont.) •EV: Earned value or Budgeted Cost of Work Performed
Copyright 2013-2014
The planned (not actual) cost to complete the work that has been done.
18
EV- Earned Value or Budgeted Cost of Work Performed
120000 100000 80000 BCWP
55000
60000
BCWS
49000 40000 20000
19
Copyright 2013-2014
Dec-03
Nov-03
Oct-03
Sep-03
Aug-03
Jul-03
Jun-03
May-03
Apr-03
Mar-03
Feb-03
Jan-03
0
20
80000 56000
55000 49000
Copyright 2013-2014
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
The Whole Story
120000
100000
BCWS
BCWP
ACWP
20000
0
Some Derived Metrics •SV: Schedule Variance (EV-PV) –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
–A comparison of the budgeted cost of work performed with actual cost. –A negative variance means the project is over budget.
21
Copyright 2013-2014
•CV: Cost Variance (EV-AC)
Schedule Variance & Cost Variance Schedule Variance = EV-PV $49,000 - 55,000 SV = - $ 6,000 = EV-AC $49,000 56,000 CV = - $7,000
22
Copyright 2013-2014
Cost Variance
Some More Derived Metrics •SPI: Schedule Performance Index SPI=EV/PV – If SPI<1 means project is behind schedule
•I: Cost Performance Index
I=
EV/AC
•CSI: Cost Schedule Index (CSI=I x SPI) The further CSI is from 1.0, the less likely project recovery becomes. 23
Copyright 2013-2014
–If I<1 means project is over budget
Performance Metrics SPI: EV/PV 49,000/55,000 = 0.891 I: EV/AC 49,000/56000 = 0.875
Copyright 2013-2014
CSI: SPI x I .891 x .875 = 0.780
24
Earned Value Analysis
Copyright 2013-2014
• Budgeted Cost for Work Scheduled (BCWS) – Planned value of work that should have been completed at the time of monitoring • Budgeted Cost for Work Performed (BCWP) – Estimated cost of work that have been actually completed at the time of monitoring (in monitory ) • Actual Cost for Work Performed (ACWP) –Actual expenditure incurred to accomplish the work as on the time of monitoring
25
• 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)
26
Copyright 2013-2014
Earned Value Analysis Variances
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
Copyright 2013-2014
•
27
Copyright 2013-2014
Earned Value Chart – basis for evaluating cost & performance to date
28
Earned Value Variance - Formula
Copyright 2013-2014
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 (I) = BCWP/ACWP Schedule Performance Index (SPI) = BCWP/BCWS Time Performance Index (TPI) = STWP/ATWP
29
EXAMPLE
CV = BCWP – ACWP = 1500 (2/3) – 1350 = - 350 SV = BCWP – BCWS = 1500 (2/3) – 1500 = - 500 I = 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)
30
Copyright 2013-2014
Assume that operations on a Work Package cost Rs. 1,500 to complete. They were originally scheduled to finish today. At this point, we actually spent Rs.1,350. And we estimate that we have completed two thirds (2/3) of the work. What are the cost and schedule variances?
Copyright 2013-2014
• Possible to have one of indicators to be favorable while the other unfavorable • Might be ahead of schedule and behind costs
31
EXERCISE
Copyright 2013-2014
A project to develop a country park has an actual cost in month 17 of Rs.350,000, a planned cost of Rs.475,000, and a value completed of Rs.300,000. Find the cost and schedule variances and the three indexes.
32
EXERCISE- Solution
$
Time t
Planned (Baseline) – 475,000
BCWS
Actual cost – 350,000
ACWP
Value completed – 300,000
BCWP
Month 17 33
Copyright 2013-2014
A project to develop a country park has an actual cost in month 17 of Rs.350,000, a planned cost of Rs.475,000, and a value completed of Rs.300,000. Find the cost and schedule variances and the three indexes.
Solution
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 (I) = 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 34
Copyright 2013-2014
BCWS = 475,000 BCWP = 300,000 ACWP = 350,000
Assignment Q. Suppose you are managing a software development
Copyright 2013-2014
project. The project is expected to be completed in 8 months at a cost of $10,000 per month. After 2 months, you realize that the project is 30 percent completed at a cost of $40,000. You need to determine whether the project is on-time and on-budget after 2 months. • Calculate the Planned Value (PV) and Earned Value (EV) • Compute the Cost Performance Index (I) and Schedule Performance Index (SPI)
35
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