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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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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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 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!