TM 665 Lecture 05 Project Monitoring

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					TM 665: Lecture 05

    Project Monitoring

      TM 665: Project Planning & Control   1
 Assignment 03 Solutions
 Closed-Loop System
 Monitor System Design
 Data Collection
 Project Reports
 Earned Value Charts
 Assignment 04 and Exam I

                    TM 665: Project Planning & Control   2
Monitoring and Information Systems

 Evaluation and control of projects are the opposite
  sides of project selection and planning
 Logic of selection dictates the components to be
 The details of the planning expose the elements to be
 Monitoring is the collecting, recording, and reporting
  information concerning any and all aspects of project

                      TM 665: Project Planning & Control   3
The Planning - Monitoring - Controlling Cycle

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

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

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

                     TM 665: Project Planning & Control    4
The Planning - Monitoring - Controlling Cycle

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

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

 The planning-monitoring-controlling cycle is
  continuously in process until the project is

                   TM 665: Project Planning & Control   5
Project Control Closed-Loop

                            Develop                         Verify
   “Customer”              Functional
    IDs Need                                                Specs w/
                             Specs                          “Customer

     “Ballpark”            Design Specs                     Functional
     Resource              to Engineer-                      Specs to
     Estimates               ing Specs                     Design Specs

                           Implement,                      Stakeholder
  “Project Plan            Monitor, &
 And Schedule”                                              Feedback

                  PM TEAM FEEDBACK LOOPS
                      TM 665: Project Planning & Control                  6
 Designing the Monitoring System

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

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

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

                      TM 665: Project Planning & Control     8
 Designing the Monitoring System

 The best source of items to be monitored is the project
  action plan

 The monitoring system is a direct connection between
  planning and control

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

 Monitoring should concentrate primarily on measuring
  various facets of output rather than intensity of activity
                       TM 665: Project Planning & Control      9
Designing the Monitoring System

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

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

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

                     TM 665: Project Planning & Control   10
Monitoring for Effectiveness

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

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

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

 The purpose of the control system is to act on the data

                      TM 665: Project Planning & Control   11
Data Collection Sources
 It is necessary to define precisely what pieces
  of information should be gathered and when

 A large proportion of all data collected take
  one of the following forms:
      Frequency counts
      Raw numbers
      Subjective numeric ratings
      Indicators
      Verbal measures
                     TM 665: Project Planning & Control   12
Data Collection Reports

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

 These reports include project status reports,
  time/cost reports, and variance reports

 Causes and effects should be identified and
  trends noted

 Plans, charts and tables should be updated on
  a timely basis
                   TM 665: Project Planning & Control   13
How to Collect Data
 A count of “bugs” found during a series of tests
  run on a new piece of software:

                   TM 665: Project Planning & Control   14
How to Collect Data
 Percent of specified performance met during
  repeated trials

                    TM 665: Project Planning & Control   15
Data Diagnosis
 Significant differences from plan should be
  highlighted or “flagged” so that they cannot be
  overlooked by the controller

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

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

 No audit can prevent bias - all data are biased by
  those who report them
                                                          Chapter 10-13
                     TM 665: Project Planning & Control                   16
How to Collect Data

 The project manager is often dependent on team
  members to call attention to problems

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

 The hider-of-mistakes may be shot with impunity - and
  then sent to corporate Siberia

                     TM 665: Project Planning & Control   17
Reporting Process

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

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

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

                     TM 665: Project Planning & Control   18
Reporting Process Effectiveness

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

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

 The timing of reports should generally correspond to
  the timing of project milestones

                     TM 665: Project Planning & Control   19
Monitoring System Drivers

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

 The primary objective is to ensure achievement of the
  project plan through control

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

                      TM 665: Project Planning & Control    20
Reporting Outcomes
 Benefits of detailed, timely reports delivered to the
  proper people:
      Mutual understanding of the goals of the project
      Awareness of the progress of parallel activities
      More realistic planning for the needs of all groups
      Understanding the relationships of individual tasks to
       one another and the overall project
      Early warning signals of potential problems and delays
      Faster management action in response to
       unacceptable or inappropriate work
      Higher visibility to top management

                        TM 665: Project Planning & Control      21
Report Types

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

                   TM 665: Project Planning & Control   22
Report Types
 Exception reports are useful in two cases:
     First, they are directly oriented to project
      management decision making and should be
      distributed to the team members who will have
      a prime responsibility for decisions
     Second, they may be used when a decision is
      made on an exception basis and it is desirable
      to inform other managers as well as to
      document the decision

                     TM 665: Project Planning & Control   23
Report Types

 Special analysis reports are used to
  disseminate the results of special studies
  conducted as a part of the project
     These reports may also be used in response to
      special problems that arise during the project
     Usually they cover matters that may be of
      interest to other project managers, or make use
      of analytic methods that might be helpful on
      other projects

                     TM 665: Project Planning & Control   24
 Most often, reports are delivered in face-to-face
  meetings, and in telephone conference calls
 Some simple rules can lead to more productive
     Use meetings for making group decisions
     Have preset starting and stopping times
     Make sure that homework is done prior to the

                     TM 665: Project Planning & Control   25

 Some simple rules for more productive meetings
     Avoid attributing remarks or viewpoints to individuals
      in the meeting minutes
     Avoid overly formal rules of procedure
     If a serious problem or crisis arises, call a meeting
      for the purpose of dealing with that issue only

                       TM 665: Project Planning & Control   26
 Common Reporting Problems

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

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

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

      Poor correspondence between the planning and the
       monitoring systems

                          TM 665: Project Planning & Control   27
The Earned Value Chart

 One way of measuring overall performance is
  by using an aggregate performance measure
  called earned value
 A serious difficulty with comparing actual
  expenditures against budgeted or baseline is
  that the comparison fails to take into account
  the amount of work accomplished relative to
  the cost incurred
     Resources Expended &Value may be non-linear

                   TM 665: Project Planning & Control   28
The Earned Value Chart

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

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

 The concept of earned value combines cost reporting
  and aggregate performance reporting into one
  comprehensive chart
                       TM 665: Project Planning & Control   29
The Earned Value Chart
 Graph to evaluate cost and performance to date:

                  TM 665: Project Planning & Control   30
The Earned Value Chart
 Variances on the earned value chart follow two
  primary guidelines:
      1. A negative is means there is a deviation from plan—
               not good!
      2. The cost variances are calculated as the
          earned value minus some other measure
 EV - Earned Value: budgeted cost of work performed
 AC - Actual Cost of work performed
 PV - Planned Value: budgeted cost of work
 ST - Scheduled Time for work performed
 AT - Actual Time of work performed
                        TM 665: Project Planning & Control   31
The Earned Value Chart

 EV - AC = Cost Variance (CV, overrun is negative)

 EV - PV = Schedule Variance (SV, late is negative)

 ST - AT = Time Variance (TV, delay is negative)

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

 Options may include borrowing resources, or holding a
  meeting of project team members to suggest solutions,
  or notifying the client that the project may be late or
  over budget
                       TM 665: Project Planning & Control   32
The Earned Value Chart

 Variances are also formulated as ratios (indexes)
  rather than differences
      Cost Performance Index (CPI) = EV/AC
      Schedule Performance Index (SPI) = EV/PV
      Time Performance Index (TPI) = ST/AT

 Use of ratios is helpful when comparing the
  performance of several projects

                        TM 665: Project Planning & Control   33
  Performance Indices

 Overall performance indices may also be formulated as
  composite ratios:
      Cost-Schedule Index (CSI) = (CPI)(SPI)
      Estimate To Completion (ETC) = (BAC – EV)/CPI
           BAC is the expected budget at completion
      Estimate At Completion (EAC) = ETC + AC

 Use of these indices provides an overall view of
  performance that may be helpful when comparing the
  performance of several projects
      Ex: CSI addresses trade-off between cost & schedule
                            TM 665: Project Planning & Control   34
Milestone Reporting

  Milestone reports serve to keep all parties
   up to date on what has been accomplished

  If accomplishments are inadequate or late,
   these reports serve as starting points for
   remedial planning

                   TM 665: Project Planning & Control   35
Computerized PMIS

 New microcomputer-based project management
  information systems (PMISs) are considerably more
  sophisticated than earlier systems

 Uses the microcomputer’s graphics, color, and other
  features more extensively

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

                     TM 665: Project Planning & Control   36
Computerized PMIS

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

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

                       TM 665: Project Planning & Control    37
Current Software

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

 Systems can be easily misused or
  inappropriately applied - as can any tools

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

                   TM 665: Project Planning & Control   38
Current Software

 In addition to managing the PMIS instead of the
  project, other problems include:
     Computer paralysis (paralysis by analysis)
     PMIS verification
     Information overload
     Project isolation
     Computer dependence
     PMIS misdirection

                   TM 665: Project Planning & Control   39
Choosing Software
 Characteristics of generally desirable
  attributes in project management software:
            Friendliness
            Schedules
            Calendars
            Budgets
            Reports
            Graphics
            Charts
            Migration

                   TM 665: Project Planning & Control   40
Typical Software Output

             TM 665: Project Planning & Control   41
Typical Software Output
 Early and late start and finish dates and slack

                      TM 665: Project Planning & Control   42
Typical Software Output
 Project Cost Tracking

                  TM 665: Project Planning & Control   43
Typical Software Output
 AON Network

                TM 665: Project Planning & Control   44
Assignment 04
 CH 10 Problems from textbook:
    pp. 526-527
       # 2, 4, 5
            Briefly interpret the variances and ratios in words
 Review for Exam I (on-campus: 12 MAR)
    Solutions for Ch 10 will post on Mon, 05 MAR
     (during Spring Break!)
    Review (12 MAR: 6:00 – 6:30 PM)
    Exam I     (12 MAR: 7:00 – 9:00 PM)
    Covers Chapters: 1, 2, 8, 9, & 10
        Some multiple choice over readings (slides, mostly)

        Short answer & work out problems on Gantt Charts,

         AOA / AON Netwoks, Critical Path & Time, Crashing,
         Earned Value computations.
                         TM 665: Project Planning & Control        45

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