Project Progress and Performance Evaluation Class 9 Questions

1. Class 9 Progress and Performance Measurement and Evaluation

2. Project Questions to be Answered Class 9 • What is the current status of the project in terms of scheduling and cost? • How much will it cost to complete the project? • When will the project be completed? • Are there potential problems that need to be addressed now? • What, Who and Where are the causes for cost or schedule overruns. • What did we get for the dollars spent? • If there is a cost overrun midway in the project, can we forecast the • overrun at completion? Control is the most neglected areas of project management

3. Structuring Project Monitoring Info System Class 9 • What Data are Collected • focus on variances to cost & schedule (actual vs planned) • Duration • Resources • Cost • Collecting Data and Analyzing • Who, when and how is data collected • responsibility • method of collecting • source of data • What Reports and How to Report • Who gets what • How frequently is it updated • How is it transmitted

4. Types of Reports Class 9 • Change reports: Progress since last report • Status reports: Comparison of current to anticipated • schedule • cost • scope • Trend reports • Problem reports: • Status of previous reported problems • Problems since last report • Corrective Action • planned response • who is responsible for correction • impact on project

5. Project Control Process Class 9 • Step 1: Setting up a Baseline Plan • logic and technical durations and relationships (WBS) • time and resource constraints • Step 2: Measuring Progress and Performance • comparing actual duration to planned • budget comparison is based on time-phased costs • Earned Value • Step 3: Comparing Plan against Actual • does a variance have an impact on the project cost & completion? • Step 4: Taking Action • if variance is significant, what is the corrective action • who will lead • does it change the scope or priority matrix

6. Tracking Gantt Chart Class 9

7. Earned Value Acronyms Class 9 EV – earned value is the percent of the original budget that has been earned by actual work completed PV – planned time-phased baseline of the work-scheduled. Approved cost estimate of resources in a time phased cumulative baseline (BCWS) AC – Actual cost of the work completed to date. ( ACWP) CV – Cost Variance (CV = EV – AC) SV - Schedule Variance (SV = EV – PV) BAC – Budgeted cost at completion ( sum of all project cost accounts) EAC – Estimated Cost at Completion ETC - Estimated cost to complete remaining work VAC – Cost variance at completion ( anticipated over or under cost)

8. Earned Value Cost/Schedule System Class 9 • Step 1: Define the work using WBS • Scope; WP; Deliverables; Organization units; Resources; WP Budgets • Step 2: Develop work and resource schedule • Schedule resources to activities • Time phase WPs into network • Step 3: Develop a time-phase budget using work packages (WP) • PV is the sum of these budgets and the baseline • Step 4: Collect the actual costs for the work performed at WP level • Collect percentage complete and multiply times the original budget value • of the work actually completed. • This is Earned Value (EV) • Step 5: Compute the schedule variance • SV = EV – PV (schedule) • CV = EV – AC (cost)

9. Earned Value Cost/Schedule System Class 9 • Percent Complete Rule • Knowledgeable person estimates the task percent complete • Establish frequent checkpoints • keep times short • Establish common units of measure • Costs included in Baseline • Labor • Equipment • Materials • Overhead costs and profit are added by accounting, later • consider establishing a separate cost account for labor, equipment, • material, if costs are significant.

10. AC EV EV AC PV PV $ $ $ PV EV AC Time Time Time Variance Analysis Methods Class 9 • Comparing earned value with the expected schedule value (SV) • time-phased planned cost of the work scheduled, to date. • overall assessment of all WPs schedule • measures progress in dollars not time • no critical path info • useful in assessing direction ( after 20% complete) • Comparing earned value with the actual costs (CV) • Percent of activity complete times the budgeted time phased cost • Fig 1 Fig 2 Fig 3 • Positive variance is considered desirable; • Negative Variance not desirable

11. Progress Indexes Class 9 • Performance Index • Cost Performance Index (CPI) = EV /AC • CPI = .65; 65 cents of work planned has been completed for every $1 spent ( behind) • CPI = 1.15; $1.15 of work planned has been completed for every $1 spent (ahead) • Scheduling Performance Index (SPI) = EV/PV • Project Percent Complete Index • PCIB = EV / BAC • indicates the work accomplished, to date, represents % of total budgeted $ • PCIC = AC / EAC • % complete in terms of actual dollars spent to accomplish the work to date Indexes can be preferred over absolute values as they depict relativity and show trends

12. Forecasting Final Project Costs Class 9 • Based on Expert opinion • typically on smaller projects • Actual costs to date plus a revised estimate of work yet to be completed EAC – revised estimated cost to complete AC - Actual Costs ETC – revised estimated cost to complete remaining work EAC = AC + ETC • Based on an efficiency index • used on larger less accurate original estimates • Actual costs plus index estimated time for remaining work EAC – revised estimated cost to complete AC - Actual Costs ETC – revised estimated cost to complete remaining work BAC – total budget of the baseline EV – cumulative budgeted cost of work completed to date (BAC – EV) EV/AC EAC = AC +

13. To Complete Performance Index Class 9 • TCPI measure the value of each remaining dollar in the budget must earn to stay within budget. • TCPI > 1.00 : more work must be accomplished for all future dollars spent. • TCPI = 1.00 :on track to complete on budget • TCPI < 1.00 : some changes in scope or features are allowed & stay on budget. TCPI = BAC – EV BAC - AC • Assumptions: • no changes in conditions • cost database is accurate • EV and AC are cumulative • past project progress is representative of future

14. Project Definition Example Chap 4 Boulangerie Fashion Show European Restaurant

15. Class 9 Questions