Project Management Project Execution Daniel Blouin, PMP Define Plan Execute Close Execute
Project
Management
Project
Execution
Daniel Blouin, PMP
Define Plan Execute Close
Execute
1–2
FIGURE 1.1
----------------- Continuous improvement -----------------
Executing
1. Status reports 2. Changes 3. Quality 4. Forecasts
Project Management - Execution
One of the most important aspect of
Project Management during the
Execution phase is Monitoring
Progress.
The Project Manager must be able to
Control if things are moving according
to the planned schedule and budget.
3
Monitoring Progress
4
Activity Duration
Days 18 19 20 21 22 23
A 3
B 1
C 1
D 1
Regularly control if the actual work is
moving according to the plan
Monitoring Progress
5
Activity Duration
Days 18 19 20 21 22 23
A 3
B 1
C 1
D 1
Always identify the date that the state
of the progress is reported on :
Monitoring Progress
6
Activity Duration
Days 18 19 20 21 22 23
A 3
B 1
C 1
D 1
Identify the activities that have been
started : (task in progress)
Monitoring Progress
7
Activity Duration
Days 18 19 20 21 22 23
A 3
B 1
C 1
D 1
Identify the activities that have been
completed : (task completed)
Monitoring Progress
8
Activity Duration
Days 18 19 20 21 22 23
A 3
B 1
C 1
D 1
Identify the activities that have been
completed : (task completed)
Monitoring Progress
9
Activity Duration
Days 18 19 20 21 22 23
A 3
B 1
C 1
D 1
Identify the revised
completion dates : estimated completion
Monitoring Progress
10
Example:
You have been asked to do a
Research on internet about the Parks
in your city. You plan to work on it for
3 days.
Activity Duration
Days 18 19 20 21 22 23
A 3
Monitoring Progress
11
Example:
You begin to work…
After 2 days you evaluate what you
have accomplished.
Activity Duration
Days 18 19 20 21 22 23
A 3
Monitoring Progress
12
Example:
• In 2 days you have only gathered
information about 5 parks.
•You realize that you will need to be
more efficient.
•You also realize that 1 day will not be
enough to complete your research.
Activity Duration
Days 18 19 20 21 22 23
A 3
Monitoring Progress
13
Example:
You estimate that even if you change
your approach to be more efficient,
you will still need another 3 days to
finish the internet research.
Activity Duration
Days 18 19 20 21 22 23
A 3
Estimate to complete
Monitoring Progress
14
Task Status : –Task started as planned
–Task is in progress
–Task is not expected to finish as planned
– New estimated completion date is : 22
Activity Duration
Days 18 19 20 21 22 23
A 3
Monitoring Progress
15
Example:
Planned duration = 3 days
Activity Duration
Days 18 19 20 21 22 23
A 3
Actual work done to date = 2 days
Estimate to complete : 3 days
Monitoring Progress
16
Example:
Task Duration
Days
Actual
Days
Worked
Estimate
to
complete
18 19 20 21 22 23
A 3 2 3
Monitoring Progress
17
Task Duration
Days
Actual
Days
Worked
Estimate
to
complete
18 19 20 21 22 23
A 3 2,5 0
B 1 1,0 0
C 1 1,3 1,6
D 1 0 1
Planned Actual Estimate to complete
Status
of tasks
Completed
Completed
In Progress
Not Started
Monitoring Progress
18
Task Duration
Days
Actual
Days
Worked
Estimate
to
complete
18 19 20 21 22 23
A 3 2,5 0
B 1 1,0 0
C 1 1,3 1,6
D 1 0 1
Planned Actual Estimate to complete
Project Status : • In progress.
• Tasks A, B are
completed
• Tasks B and C
started late
• Task C is estimated
to take much longer
than planned
• The Project
completion date is
now estimated to be
the 23.
Gantt Chart
Project Status
• Preparation is completed
• “Purchase of Material” is
In progress but is expected to
finish late on September 29
• Estimated project completion
date is October 7
20
Build a Storage shed Time Phased Budget
Monitoring Progress – Cost Control
21
Milestone Report
Project : Build a Storage Shed
Milestone Progress Report 2012-09-25
22
Milestone Planned
Start
Date
Actual
Start
Date
Planned
Finish
Data
Actual
Finish
Date
Planned
Budget
Cumulative
Actual
Expense
Preparation 09/17 09/17 09/23 09/25
1 070 000
1 070 000
1 470 000
1 470 000
Purchase
Material
09/21 09/22 09/26 7 450 000
8 520 000
Construction 09/23 10/02 2 880 000
11 400 000
Milestone Report
Project : Build a Storage Shed
Milestone Progress Report 2012-09-25
23
Milestone Planned
Budget
Cumulative
Actual
Expense
Difference %
Preparation 1 070 000
1 070 000
1 470 000
1 470 000
400 000
400 000
+ 37%
+ 37%
Purchase
Material
7 450 000
8 520 000
Construction 2 880 000
11 400 000
+ 4%
Monitoring Progress
24
Cost Control :
Planned Value (PV) is
The Total cost of the work scheduled
for given tasks at a given reporting date
PV = Hourly Rate X
Total Hours Planned or Scheduled
Monitoring Progress
25
Cost Control Example:
•The Task A planned work hours = 24
•The Direct cost per hour = 25 VND
•The total Planned Value (PV) of this
activity is 24 X 25 = 600 VND Task Duration
Days
Actual
Days
Worked
Estimate
to
complete
Panned
Work
hours
18 19 20 21
A 3 2 3 24
Monitoring Progress
26
Cost Control Example:
• The Task A planned work hours = 24
• The Direct cost per hour = 25 VND
•The Planned Value (PV) on the 18
for this task is 8 X 25 = 200 VND Task Duration
Days
Actual
Days
Worked
Estimate
to
complete
Panned
Work
hours
18 19 20 21
A 3 2 3 24
Monitoring Progress
27
Cost Control Example:
•The Earned Value (EV)
is the Planned Value (PV)
multiplied by the % of completion.
•EV : 200 VND X 50% = 100 VND Task Duration
Days
Actual
Days
Worked
Estimate
to
complete
Panned
Work
hours
18 19 20 21
A 3 2 3 24
Monitoring Progress
28
Cost Control Example:
•As of the Status date, the Actual work hours used for Task A is 4
•The Actual cost per hour is 30 VND
•The Actual Cost (AC) of this activity is 4 X 30 = 120 VND
Task Duration
Days
Actual
Days
Worked
Estimate
to
complete
Panned
Work
hours
18 19 20 21
A 3 2 3 24
Monitoring Progress
29
Cost Variance (CV) is a very important factor to measure project performance.
Cost Variance (CV) indicates how much over or under budget the project is.
Cost Variance can be calculated using the following formula
Cost Variance (CV) = Earned Value (EV) - Actual Cost (AC)
Monitoring Progress
30
Cost Control Example: Cost Variance (CV) =
Earned Value (EV) 100
- Actual cost (AC) 120 -
20 –
Task Duration
Days
Actual
Days
Worked
Estimate
to
complete
Panned
Work
hours
18 19 20 21
A 3 2 3 24
• A Positive Cost Variance
Indicates that the project is under budget
• A Negative Cost Variance
Indicates that the project is over budget
Monitoring Progress
31
Cost Variance % indicates how much over or under budget the project is in terms of percentage.
Cost Variance % can be calculated using the following formula
CV % = Cost Variance (CV) / Earned Value (EV)
Positive Variance % indicates % under Budget.
Negative Variance % indicates % over Budget.
Monitoring Progress
32
Cost Control Example: Cost Variance % (CV%) =
Cost Variance (CV) / Earned Value (EV)
- 20 / 100 = - 20 %
« 20 % over budget »
Task Duration
Days
Actual
Days
Worked
Estimate
to
complete
Panned
Work
hours
18 19 20 21
A 3 2 3 24
Monitoring Progress
33
Cost Performance Indicator (CPI) Cost Performance Indicator is an index showing the efficiency of the utilization of the resources on the project.
CPI can be calculated using the following formula:
CPI = Earned Value (EV)
/ Actual Cost (AC)
• CPI value above 1 indicates efficiency in utilizing the resources allocated to the project is good.
• CPI value below 1 indicates efficiency in utilizing the
resources allocated to the project is not good.
Monitoring Progress
34
Cost Control Example: Cost Performance Indicator (CPI) =
Earned Value (EV) / Actual cost (AC)
100 / 120 = 0,833
Task Duration
Days
Actual
Days
Worked
Estimate
to
complete
Panned
Work
hours
18 19 20 21
A 3 2 3 24
• CPI value above 1 indicates good efficiency in
utilizing the resources allocated to the project
• CPI value below 1 indicates poor efficiency in
utilizing the resources allocated to the project.
Monitoring Progress
35
Schedule Variance (SV) indicates how much ahead or behind schedule the project is.
Schedule Variance can be calculated as using the following formula
Schedule Variance (SV) =
Earned Value (EV) - Planned Value (PV)
• Positive Schedule Variance Indicates we are ahead of schedule
• Negative Schedule Variance Indicates we are behind of schedule
Monitoring Progress
36
Cost Control Example: Schedule Variance (SV) =
Earned Value (EV) 100 -
- Planned Value (PV) 200
100 –
Task Duration
Days
Actual
Days
Worked
Estimate
to
complete
Panned
Work
hours
18 19 20 21
A 3 2 3 24
• Positive Schedule Variance
Indicates we are ahead of schedule
• Negative Schedule Variance
Indicates we are behind of schedule
Monitoring Progress
37
Schedule Variance % (SV%)
indicates how much ahead or behind schedule the project is in terms of percentage.
Schedule Variance % can be calculated as using the following formula
SV % = Schedule Variance (SV) / Planned Value (PV)
• Positive Variance % indicates % ahead of schedule.
• Negative Variance % indicates % behind of schedule.
Monitoring Progress
38
Cost Control Example: Schedule Variance % (SV%) =
Schedule Variance (SV) - 100
/ Planned Value (PV) / 200
- 50%
Task Duration
Days
Actual
Days
Worked
Estimate
to
complete
Panned
Work
hours
18 19 20 21
A 3 2 3 24
• Positive Variance % indicates % ahead of
schedule.
• Negative Variance % indicates % behind of
schedule.
Monitoring Progress
39
Schedule Performance Indicator (SPI) is an index showing the efficiency of the time utilized on the project.
Schedule Performance Indicator can be calculated using the following formula:
SPI = Earned Value (EV) /Planned Value (PV)
• SPI value above 1 indicates project team is very efficient in utilizing the time allocated to the project.
• SPI value below 1 indicates project team is less efficient in utilizing the time allocated to the project.
Monitoring Progress
40
Cost Control Example: Schedule Variance (SV) =
Earned Value (EV) 100 /
/ Planned Value (PV) 200
0,5
Task Duration
Days
Actual
Days
Worked
Estimate
to
complete
Panned
Work
hours
18 19 20 21
A 3 2 3 24
• SPI value above 1 indicates project team is very efficient
in utilizing the time allocated to the project.
• SPI value below 1 indicates project team is less efficient
in utilizing the time allocated to the project.
13–41
Structure of a Project Monitoring
Information System
•Establishing the project monitoring
system involves determining:
–What data to collect
–How, when, and who will collect the data
–How to analyze the data
–How to report current progress to
management
13–42
Project Monitoring Information System
•What data are collected? –Current status of project (schedule, cost)
–Remaining cost to compete project
–Date that project will be complete
–Potential problems to be addressed now
–Out-of-control activities requiring intervention
–Cost and/or schedule overruns and the reasons for them •Forecast of overruns at time of project completion
13–43
Project Monitoring System… (cont’d)
•Collecting data and analysis
–Who will collect project data?
–How will data be collected?
–When will the data be collected?
–Who will compile and analyze the data?
•Reports and reporting
–Who will receive the reports?
–How will the reports be transmitted?
–When will the reports be distributed?
13–44
The Project Control Process
• Control : The Process of comparing actual
performance against plan to identify
deviations, evaluate courses of action, and
take appropriate corrective action.
• Project Control Steps 1.Setting a baseline plan.
2.Measuring progress and performance.
3.Comparing plan against actual.
4.Taking action.
• Tools : Tracking and baseline Gantt charts
Budget control charts
Developing an Integrated Cost/Schedule System
1.Define the work using a WBS. a.Scope
b.Work packages
c. Deliverables
d.Organization units
e.Resources
f. Budgets
2.Develop work and resource schedules. a.Schedule resources to activities
b.Time-phase work packages into a network
13–46
Developing an Integrated Cost/Schedule System
3. Develop a time-phased budget using
work packages included in an activity.
Accumulate budgets (PV).
4. At the work package level, collect the
actual costs for the work performed
(AC). Multiply percent complete times
by original budget (EV).
5. Compute the schedule variance (EV-
PV) and the cost variance (EV-AC).
13–47
Development of Project Baselines
• Purposes of a Baseline (PV)
– An anchor point for measuring performance
•Planned cost and expected schedule against which actual cost and schedule are measured.
•Basis for cash flows and Progress payments.
•A summation of time-phased budgets along a project timeline. Cost accounts representing summed work packages
• What Costs Are Included in Baselines? – Labor, equipment, materials, project direct
overhead costs (DOC)
48
Development of Project Baselines (cont’d)
•Rules for Placing Costs in Baselines
–Costs are placed exactly as they are
expected to be “earned” in order to track
them to their point of origin.
–Percent Complete Rule
• Costs are periodically assigned to a baseline as units of work are completed over the duration of a work package.
13–49
Methods of Variance Analysis
• Comparing Earned Value
– With the expected schedule value.
– With the actual costs.
13–50
Methods of Variance Analysis
Assessing Status of a Project
• Required data elements
– Budgeted cost of the work scheduled (PV)
– Budgeted cost of the work completed (EV)
– Actual cost of the work completed (AC)
• Calculate schedule and cost variances
–A positive variance indicates a desirable
condition, while a negative variance
suggests problems or changes that have
taken place.
13–51
Developing A Status Report:
A Hypothetical Example
• Assumptions
–Each cost account has only one work package,
and each cost account will be represented as
an activity on the network.
–The project network early start times will serve
as the basis for assigning the baseline values.
–From the moment work an activity begins,
some actual costs will be incurred each period
until the activity is completed.
13–52
Indexes to Monitor Progress
• Performance Indexes
– Cost Performance Index (CPI) •Measures the cost efficiency of work accomplished to date.
•CPI = EV/AC
– Scheduling Performance Index (SPI) •Measures scheduling efficiency
•SPI = EV/PV
– Percent Complete Indexes • Indicates how much of the work accomplished represents of the total budgeted (BAC) and actual (AC) dollars to date.
•PCIB = EV/BAC
•PCIC = AC/EAC
13–53
Additional Earned Value Rules
• Rules applied to short-duration activities
and/or small-cost activities –0/100 percent rule
•Assumes 100 % of budget credit is earned at once and only when the work is completed.
–50/50 rule
•Allows for 50% of the value of the work package budget to be earned when it is started and 50% to be earned when the package is completed.
–Percent complete with weighted monitoring gates
•Uses subjective estimated percent complete in combination with hard, tangible monitoring points.
13–54
Forecasting Final Project Cost
• Methods used to revise estimates of future
project costs:
–EACre •Allows experts in the field to change original baseline durations and costs because new information tells them the original estimates are not accurate.
–EACf •Uses actual costs-to-date plus an efficiency index to project final costs in large projects where the original budget is unreliable.
4–55
Project Scope: Terms and Definitions
•Scope Creep
– The tendency for the
project scope to expand
over time due to
changing requirements,
specifications, and
priorities.
4–56
Project Management - Execution
Change Control
• Identifying, documenting, approving or rejecting, and controlling Changes to the project baselines (schedule and budget)
Not to be confused with “Change Management”
which covers aspects like organizational change
planning and acceptance, communication of
changes and formal training.
57
Milestone
Activity
Task
Deliverable
Work
Package
Responsibility
Department
Person
Preparation
Obtain local authority
approval
Authorization
Me
Local Authority
Select or make a
construction plan
Construction plan Me
Purchase Material
Purchase Required
Material
List of Material to buy
Me
Hardware store
Construction
Build the Shed
Shed
Foundation
Walls
Roof, Finish
Me
Help
Specialists
in scope out of scope
Requirements
Project Charter
Work Breakdown Structure
Objectives Constraints
Who, what, why, where, when, how
Schedule Budget Baseline
58
Milestone
Activity
Task
Deliverable
Work
Package
Responsibility
Department
Person
Preparation
Obtain local authority
approval
Authorization
Me
Local Authority
Select or make a
construction plan
Construction plan Me
Purchase Material
Purchase Required
Material
List of Material to buy
Me
Hardware store
Construction
Build the Shed
Shed
Foundation
Walls
Roof, Finish
Me
Help
Specialists
Scope out of scope
Requirements
Project Charter
Work Breakdown Structure
Objectives Constraints
Who, what, why, where, when, how
Schedule Budget Baseline
59
Milestone
Activity
Task
Deliverable
Work
Package
Responsibility
Department
Person
Preparation
Obtain local authority
approval
Authorization
Me
Local Authority
Select or make a
construction plan
Construction plan Me
Purchase Material
Purchase Required
Material
List of Material to buy
Me
Hardware store
Construction
Build the Shed
Shed
Foundation
Walls
Roof, Finish
Me
Help
Specialists
Scope out of scope
Requirements
Project Charter
Work Breakdown Structure
Schedule Budget Baseline
Objectives Constraints
Who, what, why, where, when, how
60
Milestone
Activity
Task
Deliverable
Work
Package
Responsibility
Department
Person
Preparation
Obtain local authority
approval
Authorization
Me
Local Authority
Select or make a
construction plan
Construction plan Me
Purchase Material
Purchase Required
Material
List of Material to buy
Me
Hardware store
Construction
Build the Shed
Shed
Foundation
Walls
Roof, Finish
Me
Help
Specialists
Scope out of scope
Requirements
Project Charter
Work Breakdown Structure
Schedule
Objectives Constraints
Who, what, why, where, when, how
Budget Baseline
7–61
Change Control System Process
1. Identify proposed changes.
2. List expected effects of proposed changes
on schedule and budget.
3. Review, evaluate, and approve or disapprove
of changes formally.
4. Negotiate and resolve conflicts of change,
condition, and cost.
5. Communicate changes to parties affected.
6. Assign responsibility for implementing change.
7. Adjust master schedule and budget.
8. Track all changes that are to be implemented
7–62
Benefits of a Change Control System
1. Inconsequential changes are discouraged
by the formal process.
2. Costs of changes are maintained in a log.
3. Integrity of the WBS and performance measures
is maintained.
4. Allocation and use of budget and management
reserve funds are tracked.
5. Responsibility for implementation is clarified.
6. Effect of changes is visible to all parties involved.
7. Implementation of change is monitored.
8. Scope changes will be quickly reflected in
baseline and performance measures.
13–63
Key Terms
• Baseline budget
• Progress Monitoring
• Tracking Gantt Chart
• Started
• In Progress
• Estimate to complete
• Completed
• Cost Control Chart
• Actual Cost
• Difference and %
• Scope creep
• Change control
13–64
Key Terms
Control parameters
Planned Value (PV)
Cost variance (CV)
Earned value (EV)
Schedule variance (SV)
Cost performance index (CPI)
Schedule performance inder (SPI)
Schedule performance index (SPI)
Estimated Cost at Completion
Forecasted (EACf)
Revised Estimates (EACre)
Variance at Completion (VAC)
65
Project Definition