Transcript Module 13: Control Project Performance

PROJECT MANAGEMENT
CERTIFICATE PROGRAM
CONTROL PROJECT
PERFORMANCE
Module 13
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Module Objectives
By module end, you will be able to:
• Understand how performance is
managed on the project
• Understand the purpose for
monitoring and managing
performance closely
• Understand what tools will be used to
manage project performance
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Control Project Performance
In Control Project Performance, the
project manager will:
• Continue to manage project work
• Focus on controlling the project
performance
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Control Project Performance
In Control Project Performance,
4 PMBOK processes are used:
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Report Performance
Verify Scope
Perform Quality Control
Monitor & Control Project Work
Report Performance
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• Communications process of providing
project stakeholders with performance
information, through status reporting,
progress reporting and forecasting
• The level and detail of reporting should
be appropriate to the intended
audience.
• Many times, performance reports rely
heavily on earned value analysis,
presented in the form of bar charts, Scurves, histograms and/or
spreadsheets.
Report Performance
This process collects and distributes status reports and
forecasts
Inputs



Variance Analysis

Performance Reports
Plan

Forecasting Methods

Organizational Process

Communication
Work Performance
Work Performance
Measurements

Organizational Process
Assets

Outputs
Project Management
Information

Tools and Techniques
Budget Forecasts
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Methods

Reporting Systems
Assets Updates

Change Requests
Report Performance
Think about the practical application of
this process:
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Process Documents
Document Templates
Process Tasks
Think About It Exercise
MUST KNOW CONCEPTS
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EARNED VALUE
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Four Key Data Points
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Planned Value
Earned Value
Actual Cost
Budget at Completion
Planned Value
• Planned Value
(PV = Budgeted Cost of Work
Scheduled = BCWS)
• The budget that has been authorized
for work scheduled that is to be
completed for a scheduled activity or
WBS component.
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Earned Value
• Earned Value
(EV = Budgeted Cost of Work
Performed - BCWP)
• The value received/recognized for the
expense or use of approved
funds/hours in order to complete
scheduled work or WBS element(s).
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Actual Cost
• Actual Cost
(AC = Actual Cost of Work Performed
= ACWP)
• Cost incurred for completed work
(EV) during a given time period.
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Schedule Variance
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• Schedule Variance Example:
– In a 3 day period, we planned to
complete 24 hours of work at
$100/hr. The value of the work we
planned to complete is $2,400 .
– At the end of 3 days we have
completed 18 hours of work at
$100/hr. The means we have
earned $1,800 hours worth of the
work. The actual cost is $1,800.00.
– SV = $1,800 - $2,400 = ($600)
Cost Variance
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• Cost Variance Example:
– In a 3 day period, we planned to
complete 24 hours of work at
$100/hr. The value of the work we
planned to complete is $2,400.
– At the end of 3 days we have
completed 18 hours of work at
$100/hr. The means we have
earned $1,800 worth of the work.
The actual cost is $1,800.00.
– CV = $1,800 - $1,800 = ($0)
Cost Performance Index
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• Cost Performance Index is a measure
of our cost efficiency. It is a ratio of
Earned Value to Actual Cost.
• For every dollar we spend, how much
work (in dollars) do we receive?
• CPI = EV/AC
• If the value is greater than 1, we
have a favorable CPI.
• If the value is less than 1, we have an
unfavorable CPI.
Using Earned Value – CPI involves
taking a measurement of the project at
a specific point in the project – like a
stake in the ground…
Measurement Point
PV = $42,000
Begin
Project
CPI < 1.0
“BAD”
CPI > 1.0
“GOOD”
CPI = 1.0
“PERFECT”
If the conditions is
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PV = $42,000
EV = $40,000
AC = $45,000
End
Project
Total Project
BAC = $70,000
Using Earned Value – CPI involves
taking a measurement of the project at
a specific point in the project – like a
stake in the ground…
Measurement Point
PV = $42,000
Begin
Project
CPI < 1.0
“BAD”
CPI > 1.0
“GOOD”
CPI = 1.0
“PERFECT”
If the conditions is
PV = $42,000
EV = $40,000
AC = $45,000
CPI = .888
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End
Project
Total Project
BAC = $70,000
Schedule Performance Index
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• Schedule Performance Index measures
our schedule efficiency. It is a ratio of
Earned Value to Planned Value.
• For every time unit we spend, how
many time units of work do we
receive?
• SPI = EV/PV
• If the value is greater than 1, we have
a favorable SPI.
• If the value is less than 1, we have an
unfavorable SPI.
Using Earned Value – SPI involves taking a
measurement of the project at a specific
point in the project – like a stake in the
ground…
Measurement Point
PV = $42,000
Begin
Project
SPI < 1.0
“BAD”
SPI > 1.0
“GOOD”
SPI = 1.0
“PERFECT”
If the conditions is
PV = $42,000
EV = $40,000
SPI = .9523
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End
Project
Total Project
BAC = $70,000
Additional Calculations
• Estimate to Complete (ETC)
• Estimate at Complete (EAC)
• Variance at Complete (VAC)
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Estimate to Complete
• Estimate to Complete = The
expectation of what is needed to
complete the work remaining on a
scheduled activity/WBS element, etc.
• More simply, how much still has to be
done.
• This is done when evaluating and
making revisions on your estimates
for project cost and/or time.
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Estimate to Complete - 1
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• ETC = BAC - EV
• Example:
– In our schedule, we planned to have
$800 worth of work completed in 1
day.
– Halfway through the day, we have
completed only or $200 worth of
work.
– We have $600 of the work remaining
to complete during the day.
– ETC = $800 - $200 = $600
Estimate to Complete - 2
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• Halfway through the day we have
spent $400 to complete $200 worth
of work.
• CPI = EV/AC = $200/$400 = .5 (over
budget)
• ETC = (BAC-EV)/CPI
• ETC = ($800 - $200)/.5
• ETC = $600/.5 = $1,200
• It will cost us $1,200 to complete the
project.
Estimate at Completion
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• Estimate at Completion is the
expected total cost for completing a
project, scheduled activity, WBS item,
etc.
• It represents the actual cost to date
plus the Estimate to Complete
• EAC with new estimate
– EAC = AC + ETC
• EAC = $200 + $600 = $800
Estimate at Completion - 1
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•
•
•
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EAC
EAC
EAC
EAC
with remaining budget
= AC + BAC - EV
= $400 + $800 - $200
= $1,000
Estimate at Completion - 2
• Halfway through the day we have spent
$400 to complete $200 worth of work.
• CPI = EV/AC = $200/$400 = .5 (over
budget)
• EAC = AC + ((BAC-EV)/CPI)
• EAC = $400 + (($800 - $200)/.5) =
$400 + (600/.5) =
$400 + $1200 = $1600
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Variance at Completion
• Variance at Completion forecasts what the
final cost variance will be when the work is
completed.
• If the VAC is >=0, then we are under
budget.
• If the VAC is <=0, then we are over budget.
• VAC = BAC - EAC
• VAC = $800 - $1,600 = - $800
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TCPI: To Complete Performance
Index
• TCPI (based on BAC): TCPI = (BAC – EV / (BAC –
AC). TCPI based on BAC is the forecast of how
efficient future project performance must be in order
to conform to the planned BAC for the project.
• BAC= $3,000
• EV= $2,000
• AC = $2,400
• TCPI =
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($3,000 - $2,000) / ($3,000 - $2,400) or
($1,000) / ($600) = 1.666
TCPI: To Complete
Performance Index
• TCPI (based on EAC): TCPI = (BAC – EV / (EAC –
AC). TCPI based on EAC is the forecast of how
efficient future project performance must be in order
to conform to the planned EAC (based on new
outcome predictions) for the project.
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•
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BAC= $3,000
EV= $2,000
AC = $2,400
EAC = $3,400
• TCPI =
•
($3,000 - $2,000) / ($3,400 - $2,400) or
($1,000) / ($1,000) = 1.0
MUST KNOW CONCEPTS
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Verify Scope
• Obtaining formal acceptance of
project deliverables
• Project deliverable is not complete
until it has been formally accepted
• Formal acceptance must be
documented
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Verify Scope
This process formalizes acceptance of completed project deliverables
Inputs

Project Management
Plan

Requirements
Documentation

Requirements
Traceability Matrix
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Tools and Techniques

Inspection
Outputs

Accepted Deliverables

Change Requests

Project Document
Updates
Verify Scope
Think about the practical application of
this process :
•
•
•
•
Process Documents
Document Templates
Process Tasks
Think About It Exercise
MUST KNOW CONCEPTS
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Perform Quality Control
• Process of monitoring specific project
results to ensure they comply with
the project’s quality standards
• Also intended to identify ways to
eliminate quality problems such as
causes of weak processes or poor
product quality
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Perform Quality Control
• Quality control monitors both
product-related deliverables (work
packages) and project management
deliverables (cost/schedule/scope
performance).
• This process focuses on outputs and
uses tools that measure these
outputs.
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Perform Quality Control
This process monitors project results against relevant quality
standards
Inputs

Project Management
Tools and Techniques

Plan

Quality Metrics

Quality Checklists

Work Performance
Cause and Effect
Outputs

Diagrams
Quality Control
Measurements

Control Charts

Validated Changes

Flowcharting

Validated Deliverables

Histogram

Change Requests
Approved Change

Pareto Chart

Organizational Process
Requests

Run Chart

Deliverables

Scatter Diagram

Organizational Process

Statistical Sampling

Inspection

Approved Change
Measurements

Assets
Request Review
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Assets Updates

Project Management
Plan Updates

Project Document
Updates
Run Chart Example
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Time
Delivery Time
Day of Week
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35
30
25
20
15
10
5
0
M
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21
25
28
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14
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35
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Minutes
Date
M
T
W
TH
F
S
SU
M
T
W
TH
F
S
SU
M
T
W
TH
F
S
SU
Scatter Diagram Example
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Value
40,000
33000
30,000
29,000
29,000
28,000
25,000
26,000
23,000
22,000
20,000
19,000
18,000
15,000
14,000
13,000
9,000
10,000
8,000
6,000
Car Age/Value
Value
Age
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
0
2
4
Age of Car
6
8
10
Perform Quality Control
Think about the practical application of
this process :
•
•
•
•
Process Documents
Document Templates
Process Tasks
Think About It Exercise
MUST KNOW CONCEPTS
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Monitor & Control Project Work
• Monitor all other processes through
initiation, planning, executing and
closing
• Take/make corrective/preventive
actions
• It is the project manager’s
responsibility to continuously monitor
project work
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Monitor and Control Project Work
This process monitors and controls the processes used by the team
Inputs

Project Management
Plan

Performance Reports

Enterprise
Environmental Factors

Organizational Process
Assets
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Tools and Techniques

Expert Judgment
Outputs

Change Requests

Project Management
Plan Updates

Project Document
Updates
Monitor & Control Project Work
Think about the practical application of
this process :
• Process Documents
• Document Templates
• Process Tasks
• Think About It Exercise
MUST KNOW CONCEPTS
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MODULE REVIEW