Project Monitoring & Control

Monitoring and Information

Systems

Evaluation and control of projects are the opposite

sides of project selection and planning
Logic of selection dictates the components to be
evaluated
The details of the planning expose the elements to be
controlled
Monitoring is the collecting, recording, and reporting
information concerning any and all aspects of project
performance

The Planning - Monitoring Controlling Cycle

The key things to be planned, monitored, and

controlled are time (schedule), cost (budget), and

specifications
The planning methods require a significantly
greater investment of time and energy early in the
life cycle of the project
These methods significantly reduce the extent and
cost of poor performance and time/cost overruns

The Planning - Monitoring Controlling Cycle

The control process should be perceived as a

closed loop system
In a closed loop system, revised plans and
schedules should follow corrective actions
The planning-monitoring-controlling cycle is
continuously in process until the project is
complete

Designing the Monitoring

System

Information Flow for the Planning Monitoring - Controlling Cycle

The first step in setting up any monitoring system is

to identify the key factors to be controlled
The project manager must define precisely which

Designing the Monitoring

System

The best source of items to be monitored is

the project action plan
The monitoring system is a direct connection
between planning and control
It is common to focus monitoring activities on
data that are easily gathered - rather than
important
Monitoring should concentrate primarily on
measuring various facets of output rather
than intensity of activity

specific characteristics of performance, cost, and

time should be controlled
Exact boundaries must then be established, within
which control should be maintained

Designing the Monitoring

System

The measurement of project performance usually

poses the most difficult data gathering problem
Performance criteria, standards, and data collection

procedures must be established for each of the

factors to be measured
Information to be collected may consist of
accounting data, operating data, engineering test
data, customer reactions, specification changes and
the like

How to Collect Data

It is necessary to define precisely what pieces

of information should be gathered and when
A large proportion of all data collected take
one of the following forms:

Frequency counts
Raw numbers
Subjective numeric ratings
Indicators
Verbal measures

How to Collect Data

A count of bugs found during a series of

tests run on a new piece of software:

How to Collect Data

After data collection has been completed,

reports on progress should be generated
These reports include project status reports,
time/cost reports, and variance reports
Causes and effects should be identified and
trends noted
Plans, charts and tables should be updated on
a timely basis

How to Collect Data

Percent of specified performance met during

repeated trials

How to Collect Data

Monitoring can serve to maintain high morale

on the project team
Monitoring can also alert team members to
problems that will have to be solved
The purpose of the monitoring system is to
gather and report data
The purpose of the control system is to act on
the data

How to Collect Data

The project manager is often dependent on team

members to call attention to problems
The project manager must make sure that the

bearer of bad news is not punished; nor the

admitter-to-error executed
The hider-of-mistakes may be shot with impunity and then sent to corporate Siberia

How to Collect Data

Significant differences from plan should be

highlighted or flagged so that they cannot be

overlooked by the controller
Some care should be given to the issues of honesty
and bias
An internal audit serves the purpose of ensuring all
information gathered is honest
No audit can prevent bias - all data are biased by
those who report them

Information Needs and the

Reporting Process

The monitoring system ought to be constructed so

that it addresses every level of management
Reports do not need to be of the same depth or at the
same frequency for each level
The relationship of project reports to the project

action plan or WBS is the key to the determination of

both report content and frequency

Information Needs and the

Reporting Process

Reports must contain data relevant to the control of

specific tasks that are being carried out according to

a specific schedule
The frequency of reporting should be great enough to
allow control to be exerted during or before the
period in which the task is scheduled for completion
The timing of reports should generally correspond to
the timing of project milestones

Information Needs and the

Reporting Process

The nature of the monitoring system should be

consistent with the logic of the planning, budgeting,

and scheduling systems
The primary objective is to ensure achievement of the
project plan through control
The scheduling and resource usage columns of the
project action plan will serve as the key to the design
of project reports

Information Needs and the

Reporting Process

Benefits of detailed, timely reports delivered to the proper

people:

Mutual understanding of the goals of the project

Awareness of the progress of parallel activities
More realistic planning for the needs of all groups
Understanding the relationships of individual tasks to one
another and the overall project
Early warning signals of potential problems and delays
Faster management action in response to unacceptable or
inappropriate work
Higher visibility to top management

Report Types

For the purposes of project management, we

can consider three distinct types of reports:

Routine
Exception
Special analysis

Routine reports are those issued on a regular

basis

Report Types

Exception reports are useful in two cases:

First, they are directly oriented to project

management decision making and should be

distributed to the team members who will have a
prime responsibility for decisions

Second, they may be used when a decision is

made on an exception basis and it is desirable

to inform other managers as well as to
document the decision

Report Types

Special analysis reports are used to

disseminate the results of special studies

conducted as a part of the project

These reports may also be used in response to

special problems that arise during the project
Usually they cover matters that may be of interest

to other project managers, or make use of analytic

methods that might be helpful on other projects

Meetings

Most often, reports are delivered in face-to-face

meetings, and in telephone conference calls
Some simple rules can lead to more productive
meetings:

Use meetings for making group decisions

Have preset starting and stopping times
Make sure that homework is done prior to the
meeting

Meetings

Some simple rules for more productive meetings

(cont.):

Avoid attributing remarks or viewpoints to

individuals in the meeting minutes

Avoid overly formal rules of procedure

If a serious problem or crisis arises, call a meeting
for the purpose of dealing with that issue only

The Earned Value Chart

Common Reporting Problems

There are three common difficulties in the

design of project reports:

There is usually too much detail, both in the

reports themselves and the input being solicited

from workers
Poor interface between the project information
system and the parent firms information system
Poor correspondence between the planning and
the monitoring systems

The Earned Value Chart

The earned value of work performed (value

completed) for those tasks in progress is found by

multiplying the estimated percent completion for each
task by the planned cost for that task
The result is the amount that should have been spent
on the task so far
The concept of earned value combines cost reporting
and aggregate performance reporting into one
comprehensive chart

One way of measuring overall performance

is by using an aggregate performance

measure called earned value
A serious difficulty with comparing actual
expenditures against budgeted or baseline is
that the comparison fails to take into account
the amount of work accomplished relative to
the cost incurred

The Earned Value Chart

Graph to evaluate cost and performance to

date:

The Earned Value Chart

Variances on the earned value chart follow two primary

guidelines:

1. A negative is bad
2. The cost variances are calculated as the
earned value minus some other measure

BCWP - budgeted cost of work performed

ACWP - actual cost of work performed
BCWS - budgeted cost of work scheduled
STWP - scheduled time for work performed
ATWP - actual time of work performed

The Earned Value Chart

BCWP - ACWP = cost variance (CV, overrun is negative)

BCWP - BCWS = schedule variance (SV, late is negative)
STWP - ATWP = time variance (TV, delay is negative)
If the earned value chart shows a cost overrun or performance

underrun, the project manager must figure out what to do to get the
system back on target
Options may include borrowing resources, or holding a meeting of
project team members to suggest solutions, or notifying the client that
the project may be late or over budget

Cost/Schedule Control System

Criteria (C/SCSC)

The Earned Value Chart

Variances are also formulated as ratios

rather than differences

C/SCSC was developed by the U.S. Department of

Cost Performance Index (CPI) = BCWP/ACWP

Schedule Performance Index (SPI) =

Time Performance Index (TPI) = STWP/ATWP

BCWP/BCWS

Use of ratios is particularly helpful when

comparing the performance of several
projects

One note, Microsoft Project 98 does not calculate cost variance as

defined by the PMI. They do it in reverse.

Defense in the late 1960s and was required for defense

projects
It was an extension of the earned value analysis
It spelled out a number of standards of organization,
accounting, budgeting, etc. that firms must meet if they
are to be considered acceptable for government contracts
It is usually not required on government projects, but still
is required by some businesses

Cost/Schedule Control System

Criteria (C/SCSC)

For purposes of control, it is just as

important to emphasize the need to relate the

realities of time, cost, and performance with
the projects master plan
To do this, the set of action plans (the project
master plan) must be kept up to date

Cost/Schedule Control System

Criteria (C/SCSC)

Differences between work scheduled and work

planned can develop from several different causes:

Official change orders in the work elements

Informal alterations in the methods used
Official or unofficial changes in the tasks to be
accomplished

If the plan is not altered to reflect such changes,

comparisons between plan and actual are not
meaningful

Milestone Reporting

Milestone reports serve to keep all parties

up to date on what has been accomplished

If accomplishments are inadequate or late,

these reports serve as starting points for
remedial planning

Project Baseline

Baseline duration
Baseline Start
Baseline Finish
Baseline duration
Baseline Cost

Actuals

Actual duration
Actual Start
Actual Finish
Actual duration
Actual Cost

In-progress

Percent Completion
Weighted % completion
Remaining duration

Monitoring

Tracking Table
Entering Progress data

An Example

5 day job
Review after 3 days
40 % complete (remaining duration = ?)
Suppose remaining duration is 4 days
(duration value increases)

10

Variance Analysis

Plan vs. Actual

Limitations

Earned Value Analysis

Budgeted Cost of Work Scheduled

Budgeted Cost of Work Performed
Actual Cost of Work Performed
Cost Overrun = ACWP - BCWP

S-Curve

Earned Value graph

For total project
For every department

Milestones

Achieving milestones
Project successful completion

11

Project Control

Control is the last element in the

Project Control

implementation cycle of planning-monitoringcontrolling

Control is focused on three elements of a
project

Performance
Cost
Time

Controlling Performance

There are several things that can cause a projects

performance to require control:

Unexpected technical problems arise

Insufficient resources are available when needed
Insurmountable technical difficulties are present
Quality or reliability problems occur
Client requires changes in specifications
Interfunctional complications arise
Technological breakthroughs affect the project

Controlling Cost

There are several things that can cause a projects

cost to require control:

Technical difficulties require more resources

The scope of the work increase
Initial bids were too low
Reporting was poor or untimely
Budgeting was inadequate
Corrective control was not exercised in time
Input price changes occurred

12

Controlling Time

There are several things that can cause a projects

schedule to require control:

Technical difficulties took longer than planned to resolve

Initial time estimates were optimistic
Task sequencing was incorrect
Required inputs of material, personnel, or equipment were
unavailable when needed
Necessary preceding tasks were incomplete
Customer generated change orders required rework
Governmental regulations were altered

Purposes of Control

There are two fundamental objectives of control:

1. The regulation of results through the alteration of
activities
2. The stewardship of organizational assets

The project manager needs to be equally attentive to

both regulation and conservation
The project manager must guard the physical assets of

the organization, its human resources, and its financial

resources

Physical Asset Control

Requires control of the use of physical assets

Concerned with asset maintenance, whether preventive or

corrective
Also the timing of maintenance or replacement as well as the
quality of maintenance
Setting up maintenance schedules in such a way as to keep the

equipment in operating condition while minimizing interference

to ongoing work
Physical inventory whether equipment or material must also be
controlled

Human Resource Control

Stewardship of human resources requires

controlling and maintaining the growth

and development of people
Projects provide fertile ground for
cultivating people
Because projects are unique, it is possible
for people working on projects to gain a
wide range of experience in a reasonably
short period of time

13

Financial Resource Control

The techniques of financial control, both

conservation and regulation, are well known:

Current asset controls

Project budgets
Capital investment controls

These controls are exercised through a series of

analyses and audits conducted by the
accounting/controller function

Financial Resource Control

Representation of the accounting/controlling

function on the project team is mandatory
The parent organization is responsible for the

conservation and proper use of resources owned

by the client or charged to the client
Due diligence requires that the organization
proposing a project conduct a reasonable
investigation, verification, and disclosure of all
material facts relevant to the firms ability to
conduct the project

Control of Change and Scope

Creep

The project managers best hope is to control the

process by which change is introduced and

accomplished
This can be done with a formal change control
system that is able to:

Review all requested changes and identify all task impacts

Translate those impacts into project performance, cost,
and schedule
Evaluate the benefits and costs of the requested changes
Accept or reject the changes and communicate to all
concerned parties
Ensure that changes are implemented properly

Effective Change Control

Procedure

The following guidelines, applied with reasonable

rigor, can be used to effectively control changes:

1. All project contracts or agreements must include a

description of how requests for a change in the

projects plan, budget, schedule, and/or
deliverables, will be introduced and processed
2. Any change in a project will be in the form of a
change order that will include a description of the
agreed-upon change together with any changes in
the plan, budget, schedule, and/or deliverables that result
from the change

14

Effective Change Control

Procedure

3. Changes must be approved, in writing, by the

clients agent as well as by an appropriate

representative of senior management of the firm
responsible for carrying out the project
4. The project manager must be consulted on all
desired changes prior to the preparation and
approval of the change order. The project
managers approval, however, is not required
5. Once the change order has been completed and
approved, the project master plan should be
amended to reflect the change, and the change
order becomes part of the master plan

Thank You

15