Project Monitoring and Control

Introduction

• Goal: ensuring that the project is on time and on budget and/or highlight any deviation from the plan

• Areas– Scope– Schedule– Costs– Risks– Quality– Human Resources

Monitoring

• Scope– Scope creep… request for changes,

rework, …

• Risks– Risk monitoring and control

• Human Resources– Informal talks, set goals, …

Monitoring (II)

• Time and Costs?

• Monitoring the schedule– Baselining– “Actual” values

• Monitoring costs– Earned Value

Basic Concepts

• Baselining– (values at t1, all values at t2, …)

• Planned versus real Values– (Planned Start, Planned Effort, Planned

End, …)– (Actual Start, Actual Effort, Actual End, …)

Planned Value

• The cumulative cost of the approved costs

• PV(t) = planned value at time t

• BAC = Budget at completion

t

BAC

PV(t)

PlannedEnd

Actual Cost

• The actual cumulative cost of the work done so far + estimation to end

t

AC(t)

ActualEnd

Earned Value

• Measures real achieved results (in terms on earnings)

• The sum of the approved cost estimates for activities completed up to a specified date

• At the end of the project, EV = PV

t

Computing Earned Value

• Rule 1. Earned value should be determined by physically examining products

• Rule 2.– Finished activities:

• Planned Value

– Unstarted activities• 0

– For unfinished activities earned value is usually just a guess

• 50/50 Rule (50 at start and 100 at end)• 20/80 Rule (20 at start and 100 at end)• 0/100 Rule (0 at start and 100 at end)

Example

Analysis at date, some values

• Expresses project progress (in terms on monetary values)

• Used to compute performances

• Some simple values– CV = EV - AC– SV = EV - PV

– a = T - Ta– b = T - Tb– c

BAC

AC

EV

T

CPV

ab

TaTb

c

Cost Performance Index (CPI)

• Compares budgeted cost of work performed to actual cost

• Indicated the efficiency of the project– CPI = EV/AC

How much we are actually getting for each euro we thought we would spend.

Schedule Performance Index (SPI)

• Compares work performed to work planned

– SPI = EV/PV

• How fast does the project progress w.r.t. how fast we expected it to be?

Interpreting EV-indicators

• Typically indicators are stable after 20% of the project

• CPI > 1 project is on budget

• CPI < 1 project is over budget

• SPI > 1 project is ahead of time

• SPI < 1 project is behind schedule

To Complete Performance Index

• The efficiency that must be achieved to complete the remaining work with the remaining money

– TCPI = (BAC - EV) / (BAC - AC)