Chapter 10Chapter 10Control, closure and Control, closure and

continuous improvementcontinuous improvement

After reading this chapter you should be able to:• explain the difference between monitoring and control• identify appropriate variables to measure in project control• design a control system for a given project• explain the purpose of and describe a process for change management in a

project• apply a variety of project control methods• discuss the importance and benefits of project closure• explain the purpose of a final project review• discuss reasons for project success and failure• explain the principles of critical chain project management• identify several approaches to continuous improvement

Learning objectives

Project monitoring and control• Project monitoring is about collecting sufficient data

to make sure that the project team implements the plan correctly

• Project control is the process of ensuring that the project delivers everything it is supposed to, such that there is complete assurance on delivery integrity– ‘everything’ it is supposed to deliver includes:

• physical products and assets• quality products• documentation and deliverables

Elements that make up project monitoring are:

• selection of control measures

• observation of activities

• collection of control data

• comparison of control data with planning information, such as that contained in schedule, budget and risk management plans

Project control systems• Project control can be exercised through formal or informal

mechanisms• Small projects performed by small teams located in the same place

under a single organisational unit may not need a formal control system

• The decision to introduce a formal control system and the selection of a specific system should be based largely on two aspects of the project: – The risk involved– The cost of the control system and its expected benefits

• Project control systems compare actual cost and progress to planned cost and progress as laid down in the baseline cost curves and baseline schedule charts

Control limits

• Established for important parameters and any deviations outside these limits are flagged

• Corrective action is taken when the deviations are considered significant

Designing a project monitoring and control system

• A monitoring and control system should address the following questions:– What control measures should be selected?– What data should be used to estimate the current value of each

control measure?– How should raw data be collected, from which sources and in

what frequency?– How should the data be analysed to detect current and future

deviations?– How should the results of the analysis be reported, in what

format, to whom and how often?

Change management and control

• Change control is concerned with (PMI, 2000: 47):– influencing the factors which create changes to ensure that changes are

beneficial – determining that a change has occurred– managing the actual changes when and as they occur

• Sometimes a project plan needs to be changed as part of the action recommended when a project starts to deviate from its plan

• Managing change requires planning, discipline and communication among team members and client representatives

Benefits of effective change management

• Occurs when early identification of the source of change and its effect on a project are realised

• Next, a plan to manage change is developed, communicated to all parties and implemented

• If these steps have all taken place, the following outcomes are likely:– Enhanced client relationships– Improved financial performance– Reduced project delays – Better project teamwork– Improved management of project quality

Types and sources of changeChange arising from the project team:

Scope creep New technologies and toolsIncreased level of effort Personnel changesQuality creep Schedule improvements

Client-initiated change:Personnel changesScope creepScope leap

Changes originating from external sources:Mandated changesAvailability changesImplementation cost changes

Milestone monitoring• Simple method that project managers can use to

control a project

• Less effective and less detailed than other methods, but has the advantage of needing only a modest amount of management effort to set up and maintain

• Requires less sophisticated cost and accounting techniques and can be used even when the project plans or schedules are not particularly detailed

Project control using earned value analysis (EVA)

• Widely used cost and schedule control system• Also known as ‘cost/schedule control system’ (C/SCS)

and ‘baseline performance measurement’ (BPM)• Basic principle of EVA is to compare the value of

actual work completed (known as the earned value) against planned progress and actual expenditure

• Technique requires the project manager to schedule and budget project work using a time-phased plan and monitor progress against this plan

The primary measurement variables in EVA

1. Value of actual work done - earned value; the value of completed work expressed in terms of the budget assigned to that work. More formally, it is called the ‘budgeted cost of work performed’(BCWP).

2. Value of planned work - planned value or, more formally, the ‘budgeted cost of work scheduled’(BCWS).

3. Actual expenditure - the ‘actual cost of work performed’(ACWP).

Schedule variance (SV)SV = BCWP - BCWS

Cost variance (CV)CV = BCWP - ACWP

Project closure

• Should begin during the planning phase of a project when the work plan is developed, not in the final stages

• Should be ongoing throughout the life of a project• Essentially combines 2 processes (IPMA, 1999: 40):

– Commissioning of the project deliverables and their acceptance by the sponsor

– To document all experiences in the project

Benefits of efficient project closure

• Provides a unique opportunity for the project manager to capture and distribute the experience, skills and knowledge that have been developed during a project

• Provides benefit to all the project stakeholders

• Paves the way for the project team members’ feelings of personal accomplishment

The closure plan• The project must have well-defined tasks in the WBS and an adequate

budget for closure activities• Most closure plans will contain procedures for the following activities:

– Phased closure based on tasks in the work breakdown structure – Demobilising staff and resources – Recommending staff development opportunities– Closing the technical elements of the project– Conducting a project closure meeting with the client and reconciling the client’s

vision with the final product and service – Closing the financial elements of the project– Evaluating, rewarding, and recognising project team members – Archiving project material – Supplying information to the firm’s business development database

Final project evaluation• The processes of review and evaluation are applied at different stages

throughout a project

• The end of a project marks the last major milestone and provides an important opportunity to capture lessons learned during the project

• The end of a project is an opportunity to revisit the project’s critical success factors

• There are often business development opportunities to explore with clients in terms of follow-on work or new services associated with the completed facility or asset

Determinants of project success(based on study by Pinto and Slevin [1988b])

• Project mission• Top management support• Project schedule and plans

• Client consultation• Personnel

• Technical tasks• Client acceptance

• Monitoring and feedback • Communication• Troubleshooting

There are an additional four factors largely ‘beyond the control of the project team’ but still regarded as critical to project success:

• Characteristics of the project team leader

• Power and politics

• Environmental events

• Urgency

Project failure(12 ‘tongue-in-cheek’ methods compiled by Pinto and

Kharbanda [1996])

1. Ignore the project environment (including stakeholders)

2. Push a new technology to market too quickly

3. Don’t bother building in fallback options

4. When problems occur, shoot the one most visible

5. Let new ideas starve to death from inertia

6. Don’t bother conducting feasibility studies

12 methods to ensure project failure continued…

7. Never admit a project is a failure

8. Overmanage project managers and their teams

9. Never, never conduct post-failure review

10. Never bother to understand project trade-offs

11. Allow political expediency and infighting to dictate crucial project decisions

12. Make sure the project is run by a weak leader

Performance measurement

• The goal of making measurements is to permit managers to see their company more clearly, from many perspectives, and hence to make wiser long-term decisions

• Establishing the right performance measures is the key to successful performance improvement

• A good way of doing this is to develop performance measures that are cross-functional and which are linked to strategies, objectives and performance criteria