02/26/2004 MGT/437 #4 -- Brian Smithson 1

MGT/437

Project ManagementSession #4 – Managing Projects to Achieve Optimal ResultsUniversity of Phoenix, San José Learning Center02/26/2004Brian Smithson

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AgendaReview/QuestionsSession content

Performance measurementWhat to measureHow to measure itHow to represent it

Earned Value Analysis

How to communicate it

Review and preparation for #5

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Review/QuestionsHomework/GradesComputer/NETg issuesIndividual AssignmentLearning Team AssignmentAssigned Reading

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Performance measurementWhy measure performance?

“if you can’t measure it, you can’t manage it”Stakeholders want to knowYou want to knowNobody likes surprises on projectsYou, your team, and/or your project, may be getting paid based on performance

Typical reportsProgress since last reportActual status versus plan (or baseline)

Schedule, Cost, and ScopeProblems identified, action plans, resultsRisks identified, occurred, mitigated

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What to measure

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How to measurePlanned, baselines, and actuals

Planned is the plan as originally approvedBaseline is the plan with approved changes

There should be few baselinesOnly for significant changesThere should be a good reason for measuring against a new baseline instead of against the original plan

Actual is the actual status at a particular dateVariances

Deviations from what was planned (or baselined)

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Representing performanceTracking Gantt charts

Shows progress toward milestonesIndicates original plan and/or baseline plan, plus actual progress

Control chartsShows accumulated variances and overall trends

Earned ValueSimple cost or schedule variances don’t tell you enoughEarned Value accounts for the value of the work performed and the cost of performing the work at a particular dateEarned Value is often a basis for progress payments on projects

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Tracking Gantt chart

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Control chart

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Earned ValueComponents

Work packages, schedules, and budgetsEV status calculations

BCWS = budgeted cost of work scheduled (more modern: PV)BCWP = budgeted cost of work performed (more modern: EV)ACWP = actual cost of work performed (more modern: AC)Schedule variance SV = BCWP – BCWSCost variance CV = BCWP – ACWP

EV planning calculationsBAC = budgeted cost at completion, total BCWS for the projectEAC = estimated cost at completion (we’ll talk about this)VAC = BAC – EAC, variance at completionETC = EAC = ACWP, estimated amount remaining to complete

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EV Charts

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EV IndexesCost Performance Index

CPI = BCWP / ACWP

Schedule Performance IndexSPI = BCWP / BCWS

Percent Complete IndexPCI-B = BCWP / BACPCI-C = ACWP / EAC

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Techniques for estimating “AC”EAC = ACWP + ETC

Used when past estimates were not correct

EAC = ACWP + (BAC - BCWP)Used when current variances are not typical and are not expected to continue

EAC = ACWP + (BAC - BCWP)/CPIUsed when current variances are typical and expected to continue

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Communicating performanceHave a communication plan as part of your overall project plan

What information will be collected, from whom, how often, etc.What reports and analyses will be performed, by whom, how often, etc.Who will receive reports and/or have access to collected information, on what schedule, under what circumstances, etc.

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ClosingQuestions?Assignments

See the Course Syllabus for assignmentsIndividual:

reading assignmentProblem identification assignment (to be discussed in class) Study for final exam

Learning team:Part 4 of project: Project Evaluation, Reporting, and TerminationFinal project paperPresentation

See you next week!