Chapter 13 Progress and Performance Measurement

1. Chapter 13Progress and Performance Measurement

2. Structure of a Project Monitoring Information System • Creating a project monitoring system involves determining: • What data to collect • How, when, and who will collect the data • How to analyze the data • How to report current progress to management

3. Project Monitoring Information System • Information System Structure • What data are collected? • Current status of project (schedule and cost) • Remaining cost to compete project • Date that project will be complete • Potential problems to be addressed now • Out-of-control activities requiring intervention • Cost and/or schedule overruns and the reasons for them • Forecast of overruns at time of project completion

4. Project Monitoring System…(cont’d) • Information System Structure (cont’d) • Collecting data and analysis • Who will collect project data? • How will data be collected? • When will the data be collected? • Who will compile and analyze the data? • Reports and reporting • Who will receive the reports? • How will the reports be transmitted? • When will the reports be distributed?

5. The Project Control Process • Control • The process of comparing actual performance against plan to identify deviations, evaluate courses of action, and take appropriate corrective action. • Project Control Steps • Setting a baseline plan. • Measuring progress and performance. • Comparing plan against actual. • Taking action. • Tools • Tracking and baseline Gantt charts • Control charts

6. Development of an Earned Value Cost/Schedule System • Time-Phase Baseline Plan • Corrects the failure of most monitoring systems to connect a project’s actual performance to its schedule and forecast budget. • Systems that measure only cost variances do not identify resource and project cost problems associated with falling behind or progressing ahead of schedule. • Earned Value Cost/Schedule System • An integrated project management system based on the earned value concept that uses a time-phased budget baseline to compare actual and planned schedule and costs.

7. Development of Project Baselines • Purposes of a Baseline (PV) • An anchor point for measuring performance • A planned cost and expected schedule against which actual cost and schedule are measured. • A basis for cash flows and awarding progress payments. • A summation of time-phased budgets (cost accounts as summed work packages) along a project timeline. • What Costs Are Included in Baselines? • Labor, equipment, materials, project direct overhead costs (DOC)

8. Methods of Variance Analysis • Comparing Earned Value • With the expected schedule value. • With the actual costs. • Assessing Status of a Project • Required data elements • Data Budgeted cost of the work scheduled (PV) • Budgeted cost of the work completed (EV) • Actual cost of the work completed (AC) • Calculate schedule and cost variances • A positive variance indicates a desirable condition, while a negative variance suggests problems or changes that have taken place.

9. Methods of Variance Analysis • Cost Variance (CV) • Indicates if the work accomplished using labor and materials costs more or less than was planned at any point in the project. • Schedule Variance (SV) • Presents an overall assessment in dollar terms of the progress of all work packages in the project scheduled to date.

10. Indexes to Monitor Progress • Performance Indexes • Cost Performance Index (CPI) • Measures the cost efficiency of work accomplished to date. • CPI = EV/AC • Scheduling Performance Index (SPI) • Measures scheduling efficiency • SPI = EV/PV • Percent Complete Indexes • Indicate how much of the work accomplished represents of the total budgeted (BAC) and actual (AC) dollars to date. • PCIB = EV/BAC • PCIC = AC/EAC

11. Forecasting Final Project Cost • Methods used to revise estimates of future project costs: • EACre • Allows experts in the field to change original baseline durations and costs because new information tells them the original estimates are not accurate. • EACf • Uses actual costs-to-date plus an efficiency index to project final costs in large projects where the original budget is unreliable.

12. The equation for this forecasting model: Forecasting Model: EACf

13. Other Control Issues Issues In Maintaining Control Of Projects Scope Creep Baseline Changes Data Acquisition Costs and Problems

14. Key Terms Baseline budget Budget at completion (BAC) Control chart Cost performance index (CPI) Cost variance (CV) Earned value (EV) Estimated Cost at Completion—Forecasted (EACf) Estimated Cost at Completion—Revised Estimates (EACre) Percent complete index—budget costs (PCIB) Percent complete index—actual costs (PCIC) Schedule performance index (SPI) Schedule variance (SV) Scope creep To complete performance index (TCPI) Tracking Gantt chart Variance at completion (VAC)

15. Chapter 14Project Closure

16. Types of Project Closure Normal Premature Perpetual Failed Project Changed Priority Close-out Plan: Questions to be Asked What tasks are required to close the project? Who will be responsible for these tasks? When will closure begin and end? How will the project be delivered? Project Closure

17. Implementing Project Closedown • Getting delivery acceptance from the customer. • Shutting down resources and releasing them to new uses. • Evaluating the team, team members and the project manager; and reassigning project team members. • Closing accounts and paying all bills. • Delivering the project to the customer. • Creating a final report.

18. Executive Summary Project goals met/unmet Stakeholder satisfaction with project User reactions to quality of deliverables Review and Analysis Project mission and objective Procedures and systems used Organization resources used Recommendations Technical improvements Corrective actions Lessons Learned Reminders Retrospectives Appendix Backup data Critical information Creating the Final Report

19. Pre-Implementation Conditions: Team • Are standards and goals for measuring performance clear, challenging, and attainable? Lead to positive consequences? • Are responsibilities and performance standards known by all team members? • Are team rewards adequate? Management believes teams are important? • Is there a career path for successful project managers • Does the team have discretionary authority to manage short-term difficulties? • Is there a high level of trust within the organization culture? • Are there criteria beyond time, cost, and specifications?

20. Project Performance Evaluation: Individual • Performance Assessment Responsibilities: • Functional organization or functional matrix: the individual’s area manager. • The area manager may solicit the project manager’s opinion of the individual’s performance on a specific project. • Balanced matrix: the project manager and the area manager jointly evaluate an individual’s performance. • Project matrix and project organizations: the project manager is responsible for appraising individual performance.

21. Conducting Performance Reviews • Begin by asking the individual to evaluate his or her own performance. • Avoid drawing comparisons with other team members; rather, assess the individual in terms of established standards and expectations. • Focus criticism on specific behaviors rather than on the individual personally. • Be consistent and fair in treatment of all team members. • Treat the review as one point in an ongoing process.

22. Individual Performance Assessment • Multiple rater appraisal (“360-degree feedback) • Involves soliciting feedback concerning team members’ performance from all of the peoplethat their work affects. • Project managers, area managers, peers, subordinates, and customers.

23. Retrospectives • Lessons Learned • An analysis carried out during and shortly after the project life cycle to capture positive and negative project learning—“what worked and what didn’t?” • Goals of Retrospectives • To reuse learned solutions • To stop repetitive mistakes

24. The Value of Retrospective Analyses • Making Retrospectives Effective: • Use an independent facilitator to guide the project team through the analysis project activities. • Include a minimum of three in-process learning gates during the life project cycle. • Designate a team member as owner for each point in the retrospective. • Develop an easy-to-use learning repository to ensure future utilization of retrospective lessons. • Mandate use of retrospectives as part of the normal process for all projects.

25. Characteristics of a Closure Facilitator • No direct involvement or direct interest in the project. • Perceived as impartial and fair • Respect of senior management and other project stakeholders. • Willingness to listen. • Independence and authority to report audit results without fear of recriminations from special interests. • Perceived as having the best interests of the organization in making decisions. • Broad-based experience in the organization or industry.

26. Initiating the Retrospective Review • Have automatic times or points when audits will take place. Avoid surprises. • Conduct audits carefully and with sensitivity. • Audit staff must independent from the project. • Audit reports need to be used and accessible. • Audits support organizational culture. • Project closures should be planned and orderly. • Certain “core conditions” must be in place to support team and individual evaluation. • Conduct individual and team evaluations separate from pay or merit reviews.

27. Archiving Retrospectives • Classifying of Projects: • Project type • Size • Staffing • Technology level • Strategic or support • Issues and problems • Project mission and objectives • Procedures and systems used • Organization resources used