Project Management: A Managerial Approach

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Project Management: A Project Management: A Managerial ApproachManagerial Approach

Chapter 10 – Monitoring and Chapter 10 – Monitoring and Information SystemsInformation Systems

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OverviewOverview

• Closed-loop SystemClosed-loop System

• Monitor System DesignMonitor System Design

• Data CollectionData Collection

• Project ReportsProject Reports

• Earned Value ChartsEarned Value Charts

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Monitoring and Information Monitoring and Information SystemsSystems

• Evaluation and control of projects are the Evaluation and control of projects are the opposite sides of project selection and planningopposite sides of project selection and planning

• Logic of selection dictates the components to Logic of selection dictates the components to be evaluatedbe evaluated

• The details of the planning expose the elements The details of the planning expose the elements to be controlledto be controlled

• Monitoring is the collecting, recording, and Monitoring is the collecting, recording, and reporting information concerning any and all reporting information concerning any and all aspects of project performanceaspects of project performance

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The Planning - Monitoring - The Planning - Monitoring - Controlling CycleControlling Cycle

• The key things to be planned, monitored, The key things to be planned, monitored, and controlled are time (schedule), cost and controlled are time (schedule), cost (budget), and specifications(budget), and specifications

• The planning methods require a significantly The planning methods require a significantly greater investment of time and energy early greater investment of time and energy early in the life cycle of the projectin the life cycle of the project

• These methods significantly reduce the These methods significantly reduce the extent and cost of poor performance and extent and cost of poor performance and time/cost overrunstime/cost overruns

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The Planning - Monitoring - The Planning - Monitoring - Controlling CycleControlling Cycle

• The control process should be The control process should be perceived as a closed loop system perceived as a closed loop system

• In a closed loop system, revised In a closed loop system, revised plans and schedules should follow plans and schedules should follow corrective actionscorrective actions

• The planning-monitoring-controlling The planning-monitoring-controlling cycle is continuously in process until cycle is continuously in process until the project is completethe project is complete

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Project Control Closed-LoopProject Control Closed-Loop

“Project PlanAnd Schedule”

“Customer”IDs Need

DevelopFunctional

Specs

Verify Specs w/“Customer

“Ballpark”ResourceEstimates

FunctionalSpecs to

Design Specs

Design Specsto Engineer-

ing Specs

StakeholderFeedback

PLANNING/SCHEDULING FEEDBACK LOOPS

PM TEAM FEEDBACK LOOPS

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Implement,Monitor, &

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Information Flow for the Planning - Information Flow for the Planning - Monitoring - Controlling CycleMonitoring - Controlling Cycle

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Designing the Monitoring Designing the Monitoring SystemSystem

• The first step in setting up any monitoring The first step in setting up any monitoring system is to identify the key factors to be system is to identify the key factors to be controlledcontrolled

• The project manager must define precisely The project manager must define precisely which specific characteristics of performance, which specific characteristics of performance, cost, and time should be controlledcost, and time should be controlled

• Exact boundaries must then be established, Exact boundaries must then be established, within which control should be maintainedwithin which control should be maintained

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Designing the Monitoring Designing the Monitoring SystemSystem• The best source of items to be monitored is The best source of items to be monitored is

the project action planthe project action plan

• The monitoring system is a direct connection The monitoring system is a direct connection between planning and controlbetween planning and control

• It is common to focus monitoring activities on It is common to focus monitoring activities on data that are easily gathered - rather than data that are easily gathered - rather than importantimportant

• Monitoring should concentrate primarily on Monitoring should concentrate primarily on measuring various facets of output rather measuring various facets of output rather than intensity of activitythan intensity of activity

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Designing the Monitoring Designing the Monitoring SystemSystem

• The measurement of project performance The measurement of project performance usually poses the most difficult data usually poses the most difficult data gathering problemgathering problem

• Performance criteria, standards, and data Performance criteria, standards, and data collection procedures must be established for collection procedures must be established for each of the factors to be measuredeach of the factors to be measured

• Information to be collected may consist of Information to be collected may consist of accounting data, operating data, engineering accounting data, operating data, engineering test data, customer reactions, specification test data, customer reactions, specification changes and the likechanges and the like

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Monitoring for EffectivenessMonitoring for Effectiveness

• Monitoring can serve to maintain high Monitoring can serve to maintain high morale on the project team morale on the project team

• Monitoring can also alert team members Monitoring can also alert team members to problems that will have to be solvedto problems that will have to be solved

• The purpose of the monitoring system is The purpose of the monitoring system is to gather and report datato gather and report data

• The purpose of the control system is to The purpose of the control system is to act on the dataact on the data

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Data Collection SourcesData Collection Sources

• It is necessary to define precisely what It is necessary to define precisely what pieces of information should be gathered pieces of information should be gathered and whenand when

• A large proportion of all data collected A large proportion of all data collected take one of the following forms:take one of the following forms:– Frequency countsFrequency counts– Raw numbersRaw numbers– Subjective numeric ratingsSubjective numeric ratings– IndicatorsIndicators– Verbal measuresVerbal measures

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Data Collection ReportsData Collection Reports

• After data collection has been completed, After data collection has been completed, reports on progress should be generatedreports on progress should be generated

• These reports include These reports include project status project status reports, reports, time/cost time/cost reports, and reports, and variancevariance reportsreports

• Causes and effects should be identified Causes and effects should be identified and trends notedand trends noted

• Plans, charts and tables should be Plans, charts and tables should be updated on a timely basisupdated on a timely basis

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How to Collect DataHow to Collect Data

• A count of “bugs” found during a series A count of “bugs” found during a series of tests run on a new piece of software:of tests run on a new piece of software:

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• Percent of specified performance met Percent of specified performance met during repeated trialsduring repeated trials

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Data DiagnosisData Diagnosis

• Significant differences from plan should be Significant differences from plan should be highlighted or “flagged” so that they cannot highlighted or “flagged” so that they cannot be overlooked by the controllerbe overlooked by the controller

• Some care should be given to the issues of Some care should be given to the issues of honesty and biashonesty and bias

• An internal audit serves the purpose of An internal audit serves the purpose of ensuring all information gathered is honestensuring all information gathered is honest

• No audit can prevent bias - all data are No audit can prevent bias - all data are biased by those who report thembiased by those who report them

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• The project manager is often dependent The project manager is often dependent on team members to call attention to on team members to call attention to problemsproblems

• The project manager must make sure that The project manager must make sure that the bearer of bad news is not punished; the bearer of bad news is not punished; nor the admitter-to-error executednor the admitter-to-error executed

• The hider-of-mistakes may be shot with The hider-of-mistakes may be shot with impunity - and then sent to corporate impunity - and then sent to corporate SiberiaSiberia

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Reporting ProcessReporting Process

• The monitoring system ought to be The monitoring system ought to be constructed so that it addresses every level constructed so that it addresses every level of managementof management

• Reports do not need to be of the same depth Reports do not need to be of the same depth or at the same frequency for each levelor at the same frequency for each level

• The relationship of project reports to the The relationship of project reports to the project action plan or WBS is the key to the project action plan or WBS is the key to the determination of both report content and determination of both report content and frequencyfrequency

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Reporting Process EffectivenessReporting Process Effectiveness

• Reports must contain data relevant to the Reports must contain data relevant to the control of specific tasks that are being carried control of specific tasks that are being carried out according to a specific scheduleout according to a specific schedule

• The frequency of reporting should be great The frequency of reporting should be great enough to allow control to be exerted during enough to allow control to be exerted during or before the period in which the task is or before the period in which the task is scheduled for completionscheduled for completion

• The timing of reports should generally The timing of reports should generally correspond to the timing of project correspond to the timing of project milestonesmilestones

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Monitoring System DriversMonitoring System Drivers

• The nature of the monitoring system should The nature of the monitoring system should be consistent with the logic of the planning, be consistent with the logic of the planning, budgeting, and scheduling systemsbudgeting, and scheduling systems

• The primary objective is to ensure The primary objective is to ensure achievement of the project plan through achievement of the project plan through controlcontrol

• The scheduling and resource usage columns The scheduling and resource usage columns of the project action plan will serve as the key of the project action plan will serve as the key to the design of project reportsto the design of project reports

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Reporting OutcomesReporting Outcomes

• Benefits of detailed, timely reports delivered to Benefits of detailed, timely reports delivered to the proper people:the proper people:– Mutual understanding of the goals of the projectMutual understanding of the goals of the project– Awareness of the progress of parallel activitiesAwareness of the progress of parallel activities– More realistic planning for the needs of all groupsMore realistic planning for the needs of all groups– Understanding the relationships of individual tasks to Understanding the relationships of individual tasks to

one another and the overall projectone another and the overall project– Early warning signals of potential problems and delaysEarly warning signals of potential problems and delays– Faster management action in response to Faster management action in response to

unacceptable or inappropriate workunacceptable or inappropriate work– Higher visibility to top managementHigher visibility to top management

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Report TypesReport Types

• For the purposes of project For the purposes of project management, we can consider three management, we can consider three distinct types of reports:distinct types of reports:– Routine - RegularRoutine - Regular– Exception – Management InterestException – Management Interest– Special analysis – “Lessons Learned”Special analysis – “Lessons Learned”

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• Exception reports are useful in two Exception reports are useful in two cases:cases:– First, they are directly oriented to project First, they are directly oriented to project

management decision making and should management decision making and should be distributed to the team members who be distributed to the team members who will have a prime responsibility for decisionswill have a prime responsibility for decisions

– Second, they may be used when a decision Second, they may be used when a decision is made on an exception basis and it is is made on an exception basis and it is desirable to inform other managers as well desirable to inform other managers as well as to document the decisionas to document the decision

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• Special analysis reports are used to Special analysis reports are used to disseminate the results of special disseminate the results of special studies conducted as a part of the studies conducted as a part of the projectproject– These reports may also be used in These reports may also be used in

response to special problems that arise response to special problems that arise during the projectduring the project

– Usually they cover matters that may be of Usually they cover matters that may be of interest to other project managers, or interest to other project managers, or make use of analytic methods that might make use of analytic methods that might be helpful on other projectsbe helpful on other projects

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MeetingsMeetings

• Most often, reports are delivered in Most often, reports are delivered in face-to-face meetings, and in face-to-face meetings, and in telephone conference callstelephone conference calls

• Some simple rules can lead to more Some simple rules can lead to more productive meetings:productive meetings:– Use meetings for making group decisionsUse meetings for making group decisions– Have preset starting and stopping timesHave preset starting and stopping times– Make sure that homework is done prior to Make sure that homework is done prior to

the meetingthe meeting

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MeetingsMeetings

• Some simple rules for more productive Some simple rules for more productive meetings (cont.):meetings (cont.):– Avoid attributing remarks or viewpoints to Avoid attributing remarks or viewpoints to

individuals in the meeting minutesindividuals in the meeting minutes

– Avoid overly formal rules of procedureAvoid overly formal rules of procedure

– If a serious problem or crisis arises, call a If a serious problem or crisis arises, call a meeting for the purpose of dealing with meeting for the purpose of dealing with that issue onlythat issue only

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Common Reporting ProblemsCommon Reporting Problems

• There are three common difficulties in the There are three common difficulties in the design of project reports:design of project reports:

– There is usually too much detail, both in the There is usually too much detail, both in the reports themselves and the input being reports themselves and the input being solicited from workerssolicited from workers

– Poor interface between the project information Poor interface between the project information system and the parent firm’s information system and the parent firm’s information systemsystem

– Poor correspondence between the planning Poor correspondence between the planning and the monitoring systemsand the monitoring systems

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The Earned Value ChartThe Earned Value Chart

• One way of measuring overall One way of measuring overall performance is by using an aggregate performance is by using an aggregate performance measure called performance measure called earned valueearned value

• A serious difficulty with comparing actual A serious difficulty with comparing actual expenditures against budgeted or baseline expenditures against budgeted or baseline is that the comparison fails to take into is that the comparison fails to take into account the amount of work accomplished account the amount of work accomplished relative to the cost incurredrelative to the cost incurred

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• The earned value of work performed (value The earned value of work performed (value completed) for those tasks in progress is completed) for those tasks in progress is found by multiplying the estimated percent found by multiplying the estimated percent completion for each task by the planned cost completion for each task by the planned cost for that taskfor that task

• The result is the amount that should have The result is the amount that should have been spent on the task so farbeen spent on the task so far

• The concept of earned value combines cost The concept of earned value combines cost reporting and aggregate performance reporting and aggregate performance reporting into one comprehensive chartreporting into one comprehensive chart

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• Graph to evaluate cost and performance Graph to evaluate cost and performance to date:to date:

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• Variances on the earned value chart follow two Variances on the earned value chart follow two primary guidelines:primary guidelines:1. A negative is means there is a deviation from plan - not 1. A negative is means there is a deviation from plan - not

goodgood

2. The cost variances are calculated as the earned value minus 2. The cost variances are calculated as the earned value minus some other measuresome other measure

• EV - Earned Value: budgeted cost of work performedEV - Earned Value: budgeted cost of work performed

• AC - actual cost of work performedAC - actual cost of work performed

• PV - Planned Value: budgeted cost of work scheduledPV - Planned Value: budgeted cost of work scheduled

• ST - scheduled time for work performedST - scheduled time for work performed

• AT - actual time of work performedAT - actual time of work performed

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The Earned Value ChartThe Earned Value Chart• EV - AC = cost varianceEV - AC = cost variance (CV, overrun is negative)(CV, overrun is negative)

• EV - PV = schedule varianceEV - PV = schedule variance (SV, late is negative)(SV, late is negative)

• ST - AT = time varianceST - AT = time variance (TV, delay is negative)(TV, delay is negative)

• If the earned value chart shows a cost overrun or If the earned value chart shows a cost overrun or performance underrun, the project manager must performance underrun, the project manager must figure out what to do to get the system back on figure out what to do to get the system back on targettarget

• Options may include borrowing resources, or Options may include borrowing resources, or holding a meeting of project team members to holding a meeting of project team members to suggest solutions, or notifying the client that the suggest solutions, or notifying the client that the project may be late or over budgetproject may be late or over budget

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• Variances are also formulated as ratios Variances are also formulated as ratios rather than differencesrather than differences– Cost Performance Index (CPI) = EV/ACCost Performance Index (CPI) = EV/AC

– Schedule Performance Index (SPI) = EV/PVSchedule Performance Index (SPI) = EV/PV

– Time Performance Index (TPI) = ST/ATTime Performance Index (TPI) = ST/AT

• Use of ratios is particularly helpful when Use of ratios is particularly helpful when comparing the performance of several comparing the performance of several projectsprojects

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Milestone ReportingMilestone Reporting

• Milestone reports serve to keep all Milestone reports serve to keep all

parties up to date on what has been parties up to date on what has been

accomplishedaccomplished

• If accomplishments are inadequate or If accomplishments are inadequate or

late, these reports serve as starting late, these reports serve as starting

points for remedial planningpoints for remedial planning

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Computerized PMISComputerized PMIS

• New PC or workstation-based project New PC or workstation-based project management information systems (PMISs) management information systems (PMISs) are considerably more sophisticated than are considerably more sophisticated than earlier systemsearlier systems

• Uses computer graphics, color, and other Uses computer graphics, color, and other features more extensivelyfeatures more extensively

• Many systems can handle almost any size Many systems can handle almost any size project, being limited only by the memory project, being limited only by the memory available in the computeravailable in the computer

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Computerized PMISComputerized PMIS

• The PMIS trend of the 1990s has been to The PMIS trend of the 1990s has been to integrate the project management software integrate the project management software with spreadsheets, databases, word with spreadsheets, databases, word processors, communication, graphics, and the processors, communication, graphics, and the other capabilities of Windows-based software other capabilities of Windows-based software packagespackages

• The current trend is to facilitate the global The current trend is to facilitate the global sharing of project information, including sharing of project information, including complete status reporting, through local complete status reporting, through local networks as well as the Internetnetworks as well as the Internet

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Current SoftwareCurrent Software

• The explosive growth of project The explosive growth of project management software during the management software during the early 1990s saw the creation of more early 1990s saw the creation of more than 500 packagesthan 500 packages

• Systems can be easily misused or Systems can be easily misused or inappropriately applied - as can any inappropriately applied - as can any toolstools

• The most common error is managing The most common error is managing the PMIS rather than the project itselfthe PMIS rather than the project itself

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CurrentCurrent Software Software

• In addition to managing the PMIS In addition to managing the PMIS instead of the project, other problems instead of the project, other problems include:include:– Computer paralysisComputer paralysis– PMIS verificationPMIS verification– Information overloadInformation overload– Project isolationProject isolation– Computer dependenceComputer dependence– PMIS misdirectionPMIS misdirection

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Choosing SoftwareChoosing Software

• Characteristics of generally desirable Characteristics of generally desirable attributes in project management attributes in project management software:software:

FriendlinessFriendlinessSchedulesSchedulesCalendarsCalendarsBudgetsBudgetsReportsReportsGraphicsGraphicsChartsChartsMigrationMigration

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Typical Software OutputTypical Software Output

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Typical Software OutputTypical Software Output• Early and late start and finish dates and Early and late start and finish dates and

slackslack

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Typical Software OutputTypical Software Output• Project Cost TrackingProject Cost Tracking

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Typical Software OutputTypical Software Output

• AON NetworkAON Network

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Project Management: A Managerial Approach