Project Monitoring (Tung)

7/31/2019 Project Monitoring (Tung)

1/20

Topics for Today

Cycle of planning-monitoring-control

Report process

The concept of earned value (EV) EV, PV, AC

CPI, SPI

Purposes and types of control Practice of project control


2/20

The basic feedback loop ofcontrol

PLAN ACTUAL

Find

cause

Corrective action

VARIANCE?

New Plan

Forecast to

complete

yesno


3/20

Control SystemExample

1. Periodic status checking will be performed monthly2. Labor costs will be collected manually and estimated where

necessary from discussion with Group engineeringmanagement.

3. Out-of-pocket costs will be collected through commitments

and/or invoice payment records.4. Monthly status reports will be issued by the PM&C Program

project manager including:a. Cost to date summariesb. Cost variances.

c. Schedule performance relative to schedule in Ganttformat.d. Changes in scope or other modifications to plan.

5. Informal control will be exercised through milestoneanticipation in the PM&C Program project manager


4/20

Gantt Schedule Chart

Example

Figure 15.4

JobDay

1Day

2Day

3Day

4Day

5Day

6Day

7Day

8

A

B

C

Now

Maintenance

Start of anactivity

End of anactivity

Scheduledactivity timeallowed

Actual workprogress

Nonproductiontime

Point in timewhen chart isreviewed


5/20


6/20


7/20

Earned Value (EV or BCWP) is thebudgeted value of work performed.

Planned Value (PV) is also called BCWS budgeted cost of work scheduled.

Actual Cost (AC) is also called ACWP actual cost of work performed.


8/20

SV (schedule variance) = EV PV a negative value isbad (behind schedule)

SPI (schedule performance index) = EV/PV a value less

than 1 is bad

CV (cost variance) = EV-AC a negative value is bad(over cost)

CPI (cost performance index) = EV/AC a value less than1 is bad; equal to 1 suggests being on target; over 1says under budget.


9/20

The Earned Value Calculations

50-50 rule

0-100 percent rule

Critical input use rule The proportionality rule


10/20

Management Information System


11/20

Designing the MonitoringSystem

1. Identify key factors to be controlled

Performance

Cost

Time

2. Information to be collected must beidentified


12/20


13/20


14/20

Test your knowledge

1. What does a cost performance index(CPI) of 1.0 suggest?


15/20

That the project is on budget


16/20

2. What does a schedule Performance Index(SPI) of 0.80 mean?


17/20

We are only progressing at 80% of theschedule.


18/20

How do you interpret the CPI (costperformance index) = 0.7?


19/20

CPI = EV/AC = 0.7

It means that for each $1 actually spent,only $0.7 worth of work has beencompleted cost inefficient.


20/20

Group Discussion Assignments

G1&2: Discuss the benefits of timely, appropriate, detailed information. Howcan a value be assigned to these characteristics?

G3&4: What are the advantages for a PM of having a computerized systemover a manual one? The disadvantages?

G5&6: A project is usually a one-time activity with a well-defined purpose.What is the justification of setting up a PMIS for such a project?

G7&8: The earned value chart is an attempt to put the three-dimensionalconcept of Figure 1.1 (see Chap 1) into a two-dimensional format. Is itsuccessful?What is missing?

G9&10: How might a variance be traced back to its source?

Documents

Project Monitoring (Tung)