Chapter 13 Control

1. Chapter 13 Control Introduction The concept of control Techniques of control Limits of control Summary Project management in practice: The Lifter project

2. Chapter 13 Control (Continued) Conversation between Sir Richard (SR) and Sir Humphrey (SH) in Yes, Prime Minister by Anthony Jay SR: ‘Standard Foreign office response in a time of crisis. In Stage One we say that nothing is going to happen.’ SH: ‘Stage Two, we say something may be going to happen but we should do nothing about it.’ SR: ‘Stage Three, we say that maybe we should do something about it, but there is nothing we can do.’ SH: ‘Stage Four, we say maybe there is something we could have done, but it’s too late now.’

3. Introduction How is it going? Are there deviations from expected performance? Is it possible to correct these deviations in good time? What is the effect on the stakeholders? • Low complexity projects: apply basic control measures • Medium and high complexity projects: role of project manager paramount in establishing and maintaining a control system • Nature of control • Characteristics that require controlling • Selection of what to control • Development of control devices • Maximise visibility of progress • Total control widely promoted but not simple and may not be desirable

4. 13.1 The concept of control • A project runs late, is over budget, does not deliver to requirements • Question: How did this happen? • Answer: Very gradually • Need system in place to • detect occurrences • offer opportunity to instigate corrective activities • Caveat • If there has been poor planning, there may be considerable confusion • Projects are rarely static • Controlling by conformance to plan that may not be relevant is unlikely to be beneficial

5. 13.1 The concept of control (Continued) • Control activity predominately during execution phase • Needs careful consideration during planning phase The control system: • Based on easy and simple measures that reflect the objectives of the project • Basic requirements are • Defining system characteristics of importance • Defining limits to their variation • Measurement of those characteristics • Making progress visible • Feedback of performance to the team • Instituting corrective action where required

6. 13.1 The concept of control (Continued) • The output of a process • Monitor to determine characteristics of the output • Interpret data • Feed back to make changes to the process • Acceptable deviations from desired performance defines corrective action Figure 13.1 Basic model of control

7. 13.1 The concept of control (Continued) Defining system characteristics of importance • Typically: time, cost, quality • Dependent on project strategy and available resources • One constraint could be sacrificed rather than compromise the other two? • Other issues of strategic importance (Chapter 2) • Examples • Legal, ethical, environmental, etc. • Other concerns possible

8. 13.1 The concept of control (Continued) Defining limits to their variation • Performance will vary across people and activities (Chapter 7) • When does a deviation become a problem? • Examples • Health and safety – zero tolerance • For some organisations, 1% on cost acceptable whilst one day’s delay is unacceptable • Always some variation expected • Should expect positive and negative • In theory: the positive’s benefits should cancel the negatives • In reality: the former are difficult to harness, the latter accumulate • Negatives should trigger further monitoring to ensure keeping on track

9. 13.1 The concept of control (Continued) Measurement of characteristics • When to measure? • Balance: too late to take action vs permanently harassing people to find out progress • Need to satisfy control process vs project team’s work/report ratio • How often to measure? • Continuously sense activity, assess feedback, take action • Control failures • time delay in receiving information • time delay in implementing reaction • When do key characteristics take place? • Input: designs, labour, materials • In process: work methods, checks • Output: number of defects, customer/user sign-off

10. 13.1 The concept of control (Continued) Making progress visible and feedback of performance • The principle if visible signs • lights on indicate a problem • display of quantity of output relative to target • Section 13.2 Instituting corrective action • What to do about the deviation? • ‘You can only manage the future, what has happened is history’ • ‘Whilst knowing where you are is important, what you do next will make the difference’

11. 13.1 The concept of control (Continued) Figure 13.3 Stable system Figure 13.2 Instability

12. 13.1 The concept of control (Continued) Instituting corrective action • A single event is the product of many linked smaller events • All smaller events should • have progress monitored • appropriate action taken to keep them on track • The system for overall control can be viewed as a system of smaller systems of control • Feedforward • Look for problems or situations that will/may be faced • Make changes to protect the project outcomes • Risk management (Chapter 10) • should be performed at the start of the project • and be on-going

13. 13.1 The concept of control (Continued) Figure 13.4 Hierarchy of control systems

14. 13.1 The concept of control (Continued) Configuration control • Change happens… • It costs • Technology, requirements, markets, people change • Change control systems (Chapter 5) need to be established early • Not to constrain change • But to recognise it, accommodate it, plan for it • Need to ensure that everyone is working on the latest (current) version of the designs and specifications • Fundamental even in smallest project • Can be undertaken centrally by project office

15. 13.2 Techniques of control Quality: Conformance 1 • Objective: ‘to provide a formalised system within the project system which ensures that the needs of the customer or the stated objectives of the system are continually being met’ • Concerns conformance of product and process to actual and implied agreements Policies: • Organisational policy or contractual agreements System description: • Formal system to meet requirements of policies Procedures: • What people at all levels of the organisation carry out on a day-to-day basis for the external and internal customer

16. 13.2 Techniques of control (Continued) Quality: Conformance 2 • Reasons for quality conformance systems • Protect the organisation • From legal liability • From professional negligence and product liability claims • Demonstration of every reasonable precaution • Prerequisite for obtaining business • Examples: aerospace, defence, public procurement • Projects/organisations have become more complex • The role of the quality specialist has emerged

17. 13.2 Techniques of control (Continued) Quality systems assure Quality of product (output) and Quality of process (by which output is delivered) Quality standards ISO 9000: 2005, Quality Management Systems Fundamentals and vocabulary

18. 13.2 Techniques of control (Continued) Quality: Performance • The control of stakeholder expectations and perceptions (Chapter 9) is vital for achieving customer satisfaction • Managing expectations and perceptions are an on-going challenge • Don’t create expectations that cannot be delivered • ‘It does exactly what it says on the tin’ • Measure expectations and perceptions • Where deviations are seen, small changes will often bring perceptions back into line • Timing (observations and actions) are crucial

19. 13.2 Techniques of control (Continued) Cost and time • Attributes interlinked • Practical tools to identify when corrective action needed • The role of the project manager: • Setting up the cost control systems • Allocating responsibilities for administration and analysis • Ensuring costs are allocated properly • Ensuring costs incurred are genuine • Ensuring contractors payments are authorised • Checking other projects are not using the budget • Progress often considered in terms of ‘sunk costs’ • What has been spent to a particular point in time • Can be unreliable • ‘Earned value’ more meaningful

20. 13.2 Techniques of control (Continued) Earned Value 1 • Brings together time and cost performance into a monetary quantity • Process • Set the budget • For each activity, include time, materials and overheads • Measure progress for each activity • What has been spent (actual spend) • What should have been spent (planned spend) • Compare actual with planned • What is the value earned by completion of each activity (earned value) • Calculate: for cost and time • Variances • Performance indicators • Estimates to completion

21. 13.2 Techniques of control (Continued) Table 13.1 Tasks and budgets

22. 13.2 Techniques of control (Continued) Earned Value 3 – What is the progress at week 5? What has been spent? Actual spend is £36 000 What has been completed? Activities 1 to 4 What should have been spent? Activities 1 to 5 should be complete; therefore planned spend should be £5000 + 8000 + 7000 + 12000 + 14000 = £46 000 What is the earned value? Activities 1 to 4 are complete; therefore earned value is £5000 + 8000 + 7000 + 12000 = £32 000

23. 13.2 Techniques of control (Continued) Earned Value 4 – What is the progress at week 5? What are the variances? Cost variance = earned value less actual spend = £32000 − 36000 = −£4000 Schedule variance = earned value less planned spend = 32000 − 46000 = −£14000 What is the performance? Cost performance indicator = earned value/actual spend = 32/36 = 0.889 Schedule performance indicator = earned value/planned spend = 32/46 = 0.696

24. 13.2 Techniques of control (Continued) Earned Value 5– What is the progress at week 5? What is the effect on the project if nothing is changed? Estimated cost at completion = Original budget/cost performance indicator = £100 000/0.889 = £112 500 Estimated time of completion = Original time estimate/schedule performance indicator = 10 weeks/0.696 = 14.4 weeks

25. 13.2 Techniques of control (Continued) Earned Value 6 • Data must be reliable • Data can be obtained for calculations by: • Verbal reports from each section • Sending out and retrieving a progress questionnaire • An assessor, as semi-independent arbiter, measuring progress • External assessor performing an audit • Information from earned value calculations • Summarised in reports showing clear deviations • Provides input into problem-solving processes (Chapter 15) • Timeliness critical

26. 13.2 Techniques of control (Continued) Control using critical chain • Monitor the buffer • How long to finish can be interpreted in terms of the buffer • Early finish adds days, late finish take days away • Divide buffer into three regions/zones, monitor erosion Figure 13.5 Buffer penetration

27. 13.2 Techniques of control (Continued) Visual control • Theoretically: if you can see it you can monitor it • Or can you? • Writing software? • Scientific research project? • Control of process rather than outcome • The Gantt Chart • A visual that highlights the progress of the critical path • Traffic lights • Digital dashboards • All rely on timeliness and veracity of data

28. 13.2 Techniques of control (Continued) Real-time control • Network communications • Control information can be reported as it happens • Data fed to central processing unit • Data from all activities added together • Less formal • Immediate feedback • Small corrective measures can be applied • Use whiteboard • List on-going activities • Tick off when complete • Apply traffic lights (project within or not within percent)

29. 13.2 Techniques of control (Continued) Last planner (lean construction) • Detailed planning by a central planning office remote from the work gives an independent and more accurate estimate • Conversely planning by those who will perform has become popular • Last planner used in lean construction • ‘Look ahead’ schedules for 4–6 weeks in advance • Weekly schedules contain work activities in half-day units • Allows for exploration of dependencies (frequently overlooked) • Review the following week • Measure using ‘planned percent complete’ PPC = activities complete/intended completed activities × 100 • Discuss causes if not 100% complete • PPC expected to improve as estimating gets better

30. 13.2 Techniques of control (Continued) Table 13.2 Weekly plan

31. 13.2 Techniques of control (Continued) Table 13.3 Weekly review

32. 13.2 Techniques of control (Continued) Communicating control information • A cycle of events generates reports • Measure – record – analyse – act • Attributes measured should always be recorded • Records should be ‘as measured’ not interpreted • Combine measures to analyse before action • Not using this cycle produces waste • If data does not contribute to analysis and action don’t collect

33. 13.2 Techniques of control (Continued) Communicating control information • PMIS – Project Management Information Systems • Computer based • Bar charts allow continuous monitoring and updating • Work completed shown as visual • Reliance on computers can lead to problems • Computer paralysis • PMIS verifications • Data overload • Isolation • Dependence • Misdirection

34. 13.2 Techniques of control (Continued) Figure 13.6 Bar chart showing work completed

35. 13.2 Techniques of control (Continued) Figure 13.7 Control limits applied to progress in budget spend

36. 13.3 Limits of control The concept of control • Assess status of activity or set of activities • Compare position with desired position • Make adjustments to change the state of the system to reduce the gap • To PM’s it means ‘well being’ or ‘having influence’ The nature of the base line • Assumptions • a project knows what is required of it • a project has a good estimate of its time and costs • Possible guess work, to fill the gap in the plan! • Inherent uncertainties in estimates mean controlling actions will be different • May need to revisit the basis for proceeding with the project as it develops

37. 13.3 Limits of control (Continued) The nature of the system being controlled • Traditional approach to control based on a closed mechanical system • Projects should be considered as • Open systems, subject to influence from outside parties • Social systems, people respond to stimuli in a unique and sometimes unexpected fashion The limits of measurement and assessment • Assessing the degree of completion may be a challenge – more art than science • Information may not be real-time • Assessments susceptible to optimism bias

38. 13.3 Limits of control (Continued) Control as a paradox • For human systems [Gittell J, 2000] • The more control exerted by the management over the system • The less real control the management has over its performance • Large organisations • Bureaucracy and good documentation to maintain • Indicates (apparent) control • In reality: staff find bureaucracy stifling, spend time finding ways around the system, ignore due process, cherry-pick

39. Control as a negative idea We want to be ‘in control’ but we don’t like ‘being controlled’ Management style: cooperation or coercion Different levels of control at different times Control can lead to reductions in creativity Control may lead to identifying and maximising positive deviations from plan (benefit lost unless PM notices) 13.3 Limits of control (Continued)

40. Summary • Projects generally fail incrementally • Control of activities needs attention • New approaches such as ‘last planner’ appear to generate benefits • The ‘feedback control system’ is a basic approach • Monitor activities, determine significant variations from desired performance, instigate corrective action • Feedback determines stability of system, timeliness is essential, focus of control depends on project strategy • Earned Value techniques: monitor cost and progress • PMIS: measure-record-analyse-act system • Change control: check effects of changes before implementation • Clearly undesirable to deny change, ignore it, deny anything can be done about it, recognise it is too late to do anything about it • Social systems: control is often a paradox, needs to be applied intelligently