SPM-UNIT IIIRISK MANAGEMENT

MONITORING & CONTROL

Prof. Kanchana Devi

Prof. Kanchana Devi

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Introduction After scheduling , project will start and

then attention must be focused on progress.

Progress needs monitoring What is happening Comparison of actual achievement against the

schedule Revision of plans and schedules (wherever

necessary)

Prof. Kanchana Devi

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Creating Framework Exercising control over a project and

ensuring that targets are met is a matter of regular monitoring.

Finding out what is happening and comparing it with targets

Re-planning also sometimes required

Prof. Kanchana Devi

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Project control cycle

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Responsibility The overall responsibility

Ensuring satisfactory progress on a project It is the role of “Steering Committee”,

project management board or Project Board.

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Project Reporting Structure

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Reporting

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Reporting may be Oral/Written Formal/Informal Regular/Ad-hoc

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Assessing Progress Information should be collected routinely Information should be objective and

tangible Whether or not a particular report has been

delivered Sometimes the assessment depends on

estimates of proportion of current activity that has been completed

Prof. Kanchana Devi

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Setting Checkpoints Necessary to set a series of check points

in the initial activity plan. Checkpoints may be:

Regular(Monthly) Tied to specific events (production of report)

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Collecting the Data Rule: Manager will breakdown the long

activities into more controllable tasks of one or two weeks.

It is necessary to gather information about partially completed activities, forecasts of how much work is left to be completed.

Prof. Kanchana Devi

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Example of partial completion reporting

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Risk Reporting One way to overcome the objections of

partial completion report is to avoid asking for completion dates. (instead ask for likelihood of meeting the target)

Called “Traffic Light Method”.

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Consists of following steps13

Identify the key elements for assessment in a piece of work

Break these key elements into constituent element Assess each of the second level element on the

scale Green for target, Amber for ‘not on target but recoverable’Red for ‘not on target and recoverable

only with difficulty’ Review second level assessment to arrive at first

level Review first level assessment to produce an

overall assessment

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Example

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Visualizing Progress Gantt Chart Slip Chart Ball Chart Timeline Chart

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Cost Monitoring

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Expenditure monitoring is an important component of project control

A project might be on time but only because more money has been spent on activities than originally budgeted

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Tracking cumulative expenditure

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Cumulative Expenditure Chart

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Earned Value Analysis is based on assigning a ‘value’ to

each task or work package based on expenditure forecasts.

The assigned value is the original budgeted cost for the item and is known as the ‘baseline budget’ or ‘budgeted cost of work scheduled’(BCWS)

The total value credited to a project at any point is known as the ‘earned value’ or ‘budgeted cost of the work performed’(BCWP)

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Actual Cost By recording the “Earned Value”, the

actual cost of each task can be collected as “Actual Cost” or ACWP-Actual Cost of Work Performed.

There are three types of Variance: Schedule Variance(SV) Time Variance(TV) Cost Variance(CV)

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Schedule Variance(SV) The Schedule Variance is measured

in cost terms as EV-PV It indicates the degree to which the

value of the completed work differs from the planned work.

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Example: A work with a PV of $40,000 should have

been completed by now. In fact, some of that work has not been done so that the EV is only $35,000. Calculate SV. SV=EV-PV 35000-40000= - 5000 A negative SV means the project is behind

schedule

Prof. Kanchana Devi

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Time Variance (TV) Difference between the time when the

achievement of the current earned value was planned to occur and the time now.

Eg: The current EV should have been achieved

in the early part of month 9 and as the time now is end of month 11, the TV is about -1.75 months from graph.

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Cost Variance (CV) This is calculated as EV-AC. It indicates the difference between the

earned value or budgeted cost and the actual cost of the completed work.

Let Actual Cost for previous example is $ 55,000

CV=35000-55000 = -20000 A negative CV means that the project is over

cost

Prof. Kanchana Devi

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Prioritizing Monitoring List of priorities

Critical Path Activities Activities with no free float Activities with less than a specified float High Risk Activities Activities using critical resources