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SUPREME MANAGEMENT CONSULTANTS
CHARLES COTTER
11-12 OCTOBER 2013
RANDBURG TOWERS
PROJECT PERFORMANCE TRACKING, ANALYSIS AND
REPORTING
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TRAINING PROGRAMME OVERVIEW
The Project Performance Framework Key Performance Indicators and Monitoring of Outcomes:
Guide to Identification and Selection Developing and Analyzing Project Performance Objectives:
Outputs and Outcomes Project Performance Benchmarking Measuring and Monitoring Project Performance Reporting & Documenting Project Performance Research Methods in Project Performance Management Establishing Baselines and Gathering Data Project Information Management Systems in Project
Performance Management
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THE FUNDAMENTAL CONCEPTS
Defining Project/Project Management
Defining Performance Management
The Project Management Triple Constraint
The Project Management Life-cycle
The Performance Management process/cycle
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DEFINING PROJECT/PROJECT MANAGEMENT
According to Gray & Larson (2008) a project is defined as a complex, non-routine, one-time effort limited by time, budget, resources and performance specifications designed to meet specific needs.
PMBOK (2000) define project management as the application of knowledge, skills, tools and techniques to project activities to meet project requirements.
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DEFINING PERFORMANCE MANAGEMENT
Performance management can be seen as a comprehensive management system aimed at constantly improving and monitoring the performance of others.
It therefore concerns itself with improving productivity, delivering a better quality service/product and is aimed at achieving the goals of both the institution and the employee.
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PROJECT MANAGEMENT TRIPLE CONSTRAINT
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PROJECT MANAGEMENT LIFE- CYCLE
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THE PERFORMANCE MANAGEMENT CYCLE
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MODEL OF VALUE
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MEASURES TO DETERMINE THE VALUE OF A PROJECT – BALANCED SCORECARD
PERSPECTIVE
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PHASES OF PROJECT PERFORMANCE MONITORING AND TRACKING
• Preventative - Prior to Initiation
Project Selection Risk Management
• Concurrent – Project Implementation
Project Monitoring Information System Project Control Process Earned Value Management Control Charts
• Reactive – Post Project Evaluation
Post project metrics
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PROJECT SELECTION TOOLS – NUMERIC MODELS
Financial Models:
Payback period
Return on Investment (ROI)
Net Present Value (NPV)
Internal Rate of Return (IRR)
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PROJECT SELECTION TOOLS – NUMERIC MODELS
Scoring Models:
Factor model
Decision Matrix
Cost Breakeven Analysis
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RISK MANAGEMENT PROCESS
Risk Identification
Risk Analysis
Risk Control
Risk Evaluation
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LEARNING ACTIVITY
Syndicate Group Discussion
Complete the activity
Provide feedback
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PROJECT MONITORING INFORMATION SYSTEM
Creating a Data Collection structure and process
Analysis of the data
Reporting current process
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DATA COLLECTION
Data collection determined by which metrics will be used for project control
What data to collect?
How will data be collected?
Who will collect the data?
When will data be collected?
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DATA ANALYSIS
Methods – electronic and/or manual
Process
Collation
Analysis
Interpretation
Verification
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DATA REPORTING
Form – written or oral
Format:
Progress since last reportCurrent status of project – schedule, cost and scopeCumulative trendsProblems and issues – new variances and
resolutionsCorrective action planned
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PROJECT CONTROL PROCESS
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LEARNING ACTIVITY
Syndicate Group Discussion
Complete the activity
Provide feedback
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DEFINING EARNED VALUE MANAGEMENT (EVM)
Earned Value Management (EVM) is a project management technique for measuring project performance and progress.
It integrates scope, cost and schedule measures to assess the performance of a project.
Based on the three measures a baseline cost and schedule is developed and actual performance is measured with regards to the baseline values.
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EARNED VALUE MANAGEMENT
Mastering the terminology:
Planned Value (PV)Earned Value (EV)Actual Cost (AC)Schedule Variance (SV)Cost Variance (CV)Schedule Performance Index (SPI)Cost Performance Index (CPI)Critical Ratio (CR)
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EARNED VALUE MANAGEMENT - CONCEPTS
Budget at Completion (BAC): The original cost estimate, budget or quotation.
Planned Value (PV): This is the authorized budget allocated to the work to be accomplished for an activity. It is also known as budgeted cost of work scheduled (BCWS)
Earned Value (EV): This is the value of work performed expressed in terms of the approved budget assigned to work for an activity. It is also known as budgeted cost of work performed (BCWP). BCWP = % complete X BAC
Actual Cost (AC): This is the actual cost incurred in accomplishing the work performed for an activity. It is also known as Actual Cost of Work Performed (ACWP).
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WORKED EXAMPLE
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EARNED VALUE MANAGEMENT - CONCEPTS
Schedule Variance (SV): Schedule variance is calculated as SV = EV –PV
Cost Variance (CV): Cost variance is calculated as CV = EV-AC
Schedule Performance Index (SPI): This represents efficiency of the time utilized on the project. It is calculated as measure of progress achieved compared to progress planned for a project. SPI = EV/PV
Cost Performance Index (CPI): This represents the efficiency of the resource (cost) utilized on the project. It is calculated as measure of value of work completed compared to the actual cost or progress made on the project. CPI = EV/AC
Estimate at completion (EAC) is the expected total cost of a task or project, based on performance as of the status date. EAC is also called forecast at completion, and is calculated like this: EAC = ACWP + (BAC - BCWP) / CPI.
Critical Ratio (CR): This indicator combines both the cost performance index (CPI) and schedule performance index (SPI) to represent the project status. This indicator takes care of cost and schedule trade-offs.
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THE SIGNIFICANCE OF THE CRITICAL RATIO
Indicates whether project performance is stable or not over project duration.
Predicts future performance from a stable project performance.
Indicates whether project has experienced special cause variation during the project duration.
Indicates any special trend or pattern observed in project performance.
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TUTORIAL VIDEO CLIPS
http://www.youtube.com/watch?v=7WsfuvHegxE
http://www.youtube.com/watch?v=UggTFk2EiUg
http://www.youtube.com/watch?v=jJi1FxC2e64
http://www.youtube.com/watch?v=-MJEYc48Cjs
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WORKED EXAMPLE
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WORKED EXAMPLE
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LEARNING ACTIVITY
Syndicate Group Discussion
Complete the activity
Provide feedback
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LIMITATIONS OF EVM
EVM indexes are point estimates; they represent the performance of the project at a particular reporting instance. They do not provide information about project performance over a period of a time.
They do not capture the trend of project performance.
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CONTROL CHARTS
Control Charts are a quality tool which displays process data over time against the process control limits. Control limits define the area three standard deviations (by default) on either side of the centerline, or mean, of data plotted on a control chart where expected variation is observed.
A control chart is used to determine whether a given process is stable (contains only common cause variation) or it is subjected to special cause variation.
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BASIC COMPONENTS OF A CONTROL CHART
Centerline representing the mean value of the data points
Horizontal border lines, Upper Control Limit (UCL) and Lower Control Limit (LCL) that define the limits of common cause variations
Data points plotted over time
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TYPES OF VARIATION
Common Cause Variation (or Controlled Variation): These variations are present in the process due to its inherent nature. These are predictable and expected variations.
Special Cause Variation (or Uncontrolled Variation): These variations are introduced in the process by non–random events /factors external to process. If special cause variation is present in the process then process is said to be in unstable state.
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LEARNING ACTIVITY
Syndicate Group Discussion
Complete the activity
Provide feedback
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POST-PROJECT EVALUATION
Perform a Post Implementation Review of the project
Close-out report
Assessment of the project against actual performance, quality of management (focusing on quality and risk management)
The lessons learnt that can be applied to future projects
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CONCLUSION
Summary
Questions
Contact details:
Charles Cotter +27 84 562 9446 [email protected] Linked In Twitter: @Charles_Cotter