part 3 project control and evaluation
TRANSCRIPT
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Part 3
Project
Control and Evaluation
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*Project Control
• Every step taken up to now has been for one
purpose: to achieve control of the project, this is
what is expected from a project manager, to
control (manage) the project.
• Project Control is to compare project progress
status against project plan, when deviations
(variances) occur, corrective action must be taken
to bring progress back on target.
• If a control system does not use deviation data
to initiate corrective action, it is not really a
control system but simply a monitoring system.
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• The response to deviations (variances)
must be timely, if corrective action occurs
too late, it will be ineffective.
• Also information (data) about project
progress status should be accurate, if data is
not accurate, corrective action might be
wrong.
• Every member of the project team should
encouraged to provide accurate feedback
data, as will as practicing self-control.
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*Project Evaluation
• Project evaluation is to analyze progress
deviations, to determine their cause and
effect.
• That evaluation provides the basis for
management decisions on how to proceed
with the project.
• The primary tool for project evaluation is the
project process review, which is usually
conducted periodically at major time intervals
(milestones) throughout the life of the project.
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• Reasons for conducting periodic project
process reviews is to discover progress
problems early, so that action can be taken.
• periodic project process reviews provide
periodic feedback to the project team about
their performance.
• Without feedback you cannot learn,
whether you are doing is right or wrong.
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• A formal process review should be conducting by
external reviewer and followed by a report, that
should contain:
– Current and Future project Status, using “Earned Value
Analysis”, as presented in the following section.
– Status of critical tasks
– Limitations of the process review, any factors that affect
the validity of review such as : missing or contaminated
data, uncooperative in providing data, ..etc.
• Report information should be organized so that
planned versus actual results can be easily
compared, and significant deviations should be
highlighted and explained.
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Project Control Using
Earned Value Analysis
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• One of the hardest things to do in managing
projects is to actually measure progress.
• Well-defined work, such as construction
projects, can be accurately measured,
and controlled to tight tolerances (± ).
• Poorly-defined work, such as knowledge
work, has to allow larger tolerances.
• Managers must recognize and accept the
fact that: we cannot have control unless
we measure progress.
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Earned value analysis
• Earned value analysis, was developed in the 1960s to
allow the government to decide whether a
contractor should receive a progress payment for
work done.
• The method is also called simply variance analysis
and it is considered the correct way to monitor and
control almost any project.
• Two variances (deviations) are considered:
– Cost variance: Compares earned and actual cost of work.
– Schedule variance: Compares earned and scheduled
(planned) cost of work.
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Definitions
• BCWS: (Budgeted Cost of Work Scheduled): The cost of work scheduled to be done in a given time period.
• BCWP: (Budgeted Cost of Work Performed): The cost of work performed in a given time period.
Note: BCWP is usually called (Earned Value), and given by:
(BCWP = BCWS x percentage% of work performed)
• ACWP: (Actual Cost of Work Performed): The actual cost spent for work done in a given time period.
Note:
percentage% of work performed, and actual spending values are reported from the field of work.
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Considered variances
Cost Variance (Earned – Actual)
CV = BCWP − ACWP
deviation of earned cost from actual cost
Schedule Variance (Earned – scheduled)
SV = BCWP − BCWS
deviation of earned cost from scheduled cost
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Spending Curves
• Variances are often plotted using spending curves, a
curve of scheduled cost (BCWS curve) that shows
the cumulative spending planned for a project, is
presented below:
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BCWS Curve
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• The pervious BCWS Curve of Planned (Scheduled)
cost was drawn using the cumulative $/Wk data from
the following Bar Chart :
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Progress Tracking Using Spending Curves
• Consider the following curve:
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Project behind schedule & overspent
cv = - 20 k$
sv = -10 k$
ACWP
BCWP
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• Until the date of review (analysis), the previous
figure indicates that:
o The Scheduled cost of work (BCWS) is $50,000 (50K).
o The Performed (earned) cost of work (BCWP) is $40,000
o The Actual cost of work performed (ACWP) is $60,000
o CV = BCWP − ACWP = 40 – 60 = -20 K
o SV = BCWP − BCWS = 40 – 50 = -10K
• Cost Variance (CV) and Schedule Variance (SV) are
both negative indicating that the project would be
behind schedule and overspent.
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• The following spending curves indicating different
status:
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Project ahead schedule & spending correctly
cv = 0 k$
sv = 10 k$
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Project behind schedule & spending correctly
cv = 0 k$
sv = -10 k$
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Project ahead schedule & underspent
cv = 20 k$
sv = 10 k$
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Responding to Variances
• It is not enough to simply detect a variance, you
should understand what it means and what
caused it, then you have to decide what to do to
correct for the deviation.
• Following are some general guidelines:
– When both ACWP and BCWP are equal, and
above BCWS, it means that more work done
than expected, at the correct cost, thus you are
ahead schedule and spending correctly.
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– When both ACWP and BCWP are equal, and below
BCWS, it means that less work done than
expected, at the correct cost, thus you are behind
schedule and spending correctly, (being behind
might get the project to overspent later on).
– When BCWP above BCWS, and ACWP below
BCWS, it means that more work and less cost,
(being lucky because the schedule expected that
the work would be harder and expensive than it
was)
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Using Percentage Complete to Measure Progress
• The most common way to measure progress is to
compare the project total Budget At Completion
(BAC), to BCWS, BCWP, and ACWP at review time,
this gives the following results of percentage of
completion at review time :
% BCWS = (BCWS / BAC) x 100
% BCWP = (BCWP / BAC) x 100
% ACWP = (ACWP / BAC) x 100
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Example 1:
Given the following scheduled and field data, calculate
the followings at day7:
CV, and SV
Percentage Complete of BCWS, BCWP, and ACWP
State the status of the project progress
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Task ID Pre. Du. (day) Cost/Day
A - 2 300
B A 3 400
C B 3 400
D B 2 200
E D 3 100
Field report at end of day 7
Task ID % Performed Actual Cost
A 100 % 600
B 100 % 1400
C 33 % 500
D 50 % 200
E 0 % 0
Scheduled
Data
Field
Data
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Report Date
Bar Chart
Solution:
Draw the Bar Chart to indicate the given scheduled data
Use the field data to mark the percentage% of work performed for each task
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For the period from start to end of day7:
Use the Bar Chart to calculate: BCWS: total cost for work scheduled in the given time interval
BCWP : total cost for work performed in the given time interval
Then calculate SV: (SV = BCWP - BCWS)
From the field data calculate: ACWP : total cost for work actually spent in the given time interval
Then calculate CV: (CV = BCWP - ACWP )
From the scheduled data calculate: BAC: total cost for work scheduled in the whole time of the project
Then calculate %completion of ACWP, BCWP, and BCWS
%ACWP = (ACWP / BAC) x 100
%BCWP = (BCWP / BAC) x 100
% BCWS = (BCWS / BAC) x 100
as calculated in the next slide:
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Task ID BCWS BCWP ACWP SV CV
BAC
%
BCWS
%
BCWP
%
ACWP
A 600 600 600
B 1200 1200 1400
C 800 400 500
D 400 200 200
E 0 0 0
Total 3000 2400 2700 -600 -300 3700 81% 64% 72%
Calculated Results
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• From the previous table, the status of the project progress
at day 7 is :
– Behind schedule : the cost of performed work is less than the
cost of scheduled work by 600 $
– Over spent : the spending cost is more than the cost of
performed work by 300 $
• From the scheduled data, the budget at completion (BAC) is
3700 $, and the percentage of completion at day 7 are:
- %BCWS = (3000 / 3700) x 100 = 81%
- %BCWP = (2400 / 3700) x 100 = 64%
- %ACWP = (2700 / 3700) x 100 = 72%
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Task
ID
Immediate
Predecessors
Duration
(week)
Cost ($/week)
A - 1 100
B - 2 400
C A, B 2 500
D C 3 300
E C 1 300
F D 2 200
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### Example 2: Given the following scheduled data, and field data at end of
week 6:
Calculate the followings at end of week 6:
- Cost Variance CV, and Schedule Variance SV
- Percentage complete of BCWS, BCWP, and ACWP
- State the Status of the project progress
Task ID % Performed Actual Cost
A 100 % 100
B 100 % 1000
C 50 % 400
D 33 % 200
E 0 % 0
F 0 % 0
Scheduled Data Field Data
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Bar Chart Report Date
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Task
ID
BCWS BCWP ACWP SV CV
BAC
%
BCWS
%
BCWP
%
ACWP
A 100 100 100
B 800 800 1000
C 1000 500 400
D 600 300 200
E 300 0 0
F 0 0 0
Total 2800 1700 1700 -1100 0 3500 80% 48% 48%
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Project progress status : Behind schedule & correct Spending
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Assignment• Given the following scheduled data, and field data at end of week 5:
Calculate the followings at end of week 5:
– Cost variance CV, and schedule variance SV
– Percentage complete of BCWS, BCWP, and ACWP
– State the status of the project progress
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Scheduled Data Field Data
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Good Luck
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