Outline

1. Outline • Questions? Comments? • New homework • Lab • Chapter 7 – Monitor and control • Earned Value • Control Tools • Scope Creep

2. Control of change and scope creep • Single most important problem (also irritating) • Natural tendency by all to improve the product or service (or kill it by continuously asking for adjustments) • New technologies become available • The later changes are made, the more costly they become • Continuous interaction between the client and supplier alleviates the problems • Need a Change Control or Configuration Management System • Strictly adhered to procedures – no exceptions • Change control board

3. A note on software projects • All too often the systems developer is preoccupied by the technical demands of the system and is ignorant of the users’ needs. • The client has no real idea on what is involved in changing software to provide another useful feature • The developer is eager to please and agrees to changes without explaining the level of effort required

4. Earned Value Analysis • In theory, the sum of the resources expended at a given time should be directly proportional to the progress made on a project. This includes time. • The assumptions are: • That one has good methods to estimate “percent of project, or activity completion” • That one has a projected resource usage profile for each category of major type of resource • That one has a reasonably accurate way of measuring resource usage • If these things are relatively true, we can do some earned value analysis

5. Definitions • TE – effective progress time – how far along the expected time curve you have progressed – usually less than the TA • TA – Actual time • Note that you can spend resources without making progress!

6. Definitions • SC – Scheduled Cost (at some time t) • AC – Actual Cost (at some time t) • CV - Cost variance = SC – AC • Let’s look at Figure 10-7: • BAC – Budget at completion – The total $ budgeted for the project • EAC – Estimated cost at completion – What we expect to spend • BCWP – Budgeted cost of work performed = earned value • ACWP – the actual cost incurred in performing that work • CV – Cost variance = BCWP - ACWP • BCWS – Budgeted cost of the work we scheduled to be performed to date = PV • SV – schedule variance = BCWP – BCWS = EV - PV

7. Definitions • ETC – estimated cost to complete = (BAC – EV)/CPI • STWP – time scheduled for the work that has been performed • ATWP – actual time used to perform that work • TV – Time variance = STWP – ATWP • Variance are negative when you are behind schedule • Indices: • CPI – Cost performance index = BCWP/ACWP (labor productivity) • SPI – Schedule performance index = BCWP/BCWS • TPI – Time performance index = STWP/ATWP (how long did it take you to take the exam divided how long I allotted) • CSI - Cost schedule index = CPI/SPI ( you want to be greater than 1)

8. Boeing Earned Value Management System (EVMS) • EVMS – The management system that integrates work authorization, scheduling, budgeting, earned value, variance analysis, Estimate at Completion (EAC) and reporting • Control Account Manager responsible for Earned Value Management • Planned Budget – Actual Costs = Variance • Earned Value – Planned budget = Schedule Variance • Earned Value – Actual Costs = Cost Variance • Also track CPI/SPI based on Budgeted Cost for Work Performed, Actual Cost for Work Performed Program Management uses trend analysis (“statistical EACs”) to confirm Control Account Manager Estimate at Completion.

9. Cost control • Reading this week reminded me of projects I have been the PM on in the past. Approximately 15-20% of my projects were overexpended (some only a little, some a lot) due to scope creep, uncontrollable events, and sometimes poor cost estimation on my part. • My biggest complaint was that I did not have full control of the costs hitting my projects, that is, I did not have to approve every invoice that was charged to the project, opening the floodgates for potential abuse. • I backed out numerous incorrect charges on a regular basis....which alleviated a lot of the overexpenditures, but it was a painful process. • CS

10. Project Control • One of the things I did not see in the reading (and I may have just missed it) was the discussion about not having control of everything. • I’m currently working on integrating a new weapon onto the F-15. The development of this weapon is running in parallel to our work, and is being funded by a different government office. But I can’t seem to convince my management that I can’t force the other company to meet our development schedule. The other company and I have an agreement in place so we can discuss technical details. • But their management answers to a different customer. I think a lot of this problem comes from the fact that most systems we integrate are developed by a subcontractor that we control. But no one knows how to deal with a task that is completely out of their control. • I have dealt with it by identifying that I have no control of this. So, I identified it as a risk, and just try to stay in constant communication with the other company. There is nothing more I can do except always expect that I will get a call saying the weapon’s development schedule has slipped. As much as you want to, you just don’t have control on everything in a project. CR

11. In one past experience we had been providing technical direction to a supplier. The supplier would submit technical questions to my organization through a formal information exchange process, and my organization would have to respond to the supplier within a standard amount of time. • However, some technical questions could not be answered in the allotted time, and the supplier would receive a response past the due date. In a program managers meeting, the supplier complained to my management that they were not receiving responses to their technical requests fast enough. In response to the supplier’s complaint, my management created a metric to track my organizations on time responses to the suppliers. • After this response time metric was created, if I or my fellow engineers did not have an answer to the supplier by the response due date, we would respond to the supplier stating we were working the issue and would respond with the final answer at a date To Be Determined. Thus the on time metric was always perfect, but the supplier did not receive better technical support. • -JG

12. Input • At Boeing, the FCS Program uses the following PM software: MS Excel - used to generate/construct IMS and Work Packages COBRA - accounting system that allows you to export WBS, OBS, Budget Elements (BE), and Control Accounts (CA) into OPP. OPP - "Open Plan Professional" is the project management suite to be used to plan tasks and resources on, and track execution of, large scale projects. Large-scale projects are defined as projects involving more than 1,000 tasks or requiring the coordination of more than 100 people. IPAS - "Integrated Planning and Scheduling" is a web-based tool for inputing project status. IMICS - "Integrated Mgt Info Control System" for calculating and generating EVMS reports, charts, graphs, etc.

13. Input • The author raises an interesting issue, and its implications, regarding the monitoring of project data for the purposes of assigning blame when either deviations in the plan are ascertained or when goals/milestones are not met. The author accurately concludes that “If achievement of goals is directly measured and directly rewarded, tremendous pressure will be put on people to understate goals and to generate plans that can met or exceeded with minimal risk and effort”. • Obviously this tactic of assigning blame is counterproductive, as project team members tend to assume a defensive or CYA posture as a result. However, it’s been my experience that the usage of this tactic is commonplace in the industry. So why does this particular project management style seem to endure? • This really was not my experience. We established goals in consultation with our managers and agreed on doable objectives. This was not the case with financial goals – they were set arbitrarily from several levels above the division.

14. MS Project Usage at Boeing • MS Project is used for initial schedule planning. • Resource usage is limited to heads needed per week or task • Other tools are used for progress tracking and financial targets. • These comments only reflect my experiences and other’s may vary by team and site

15. Raytheon Program Tracking Tool: Excel • At Hughes/Raytheon (Fullerton), we used a product called “Ted’s [upgrade to] Management Information Report Generator (TMIRG). • Excel Macro’s that tracked Cost Performance Index (CPI) and Schedule Performance Index (SPI) • Successfully used for ahead of schedule delivery of $1.2B Air Defense System and became standard for all programs. The success meant employees shared a $40M bonus • Required to be run weekly • Provided graphs to allow trend analysis • Credit could not be taken unless strictly adhered to/defined success criteria was completely achieved

16. Project Management Software at Northrop Grumman Most of the project managers use Microsoft Project. They use Earned Value to determine where they stand on time and budget

17. PM Tools • The only tool that is used consistently in my program is Microsoft Project. It is used for Tier I through Tier V levels. As far as I know Project is used to plan, status, track, monitor and control the whole project.