• Project control is a process to guarantee that the

design requirements, budget and schedule are met by

the project team.
•Project control is an action based process that
requires the continual monitoring of the project’s
operation.
•If any project objective begins to slip, the project
control system should identify this deviation early
and allow a correction to be made.
•Project controlling ensures that right things are
done in right manner at right time.
•Monitoring is collecting, recording and
reporting information concerning any or all
aspect performance that the project
manager or others in the organization wish
to know.

•It is primarily aimed tracking and

improving project implementation.
•It is a systematic judgmental process for
determining efficiency, effectiveness and
impact of project performance.

•It is an assessment of project during

implementation.
•Monitoring is usually ongoing activity
through out the life of project where as
evaluation is periodic.
Control of progress, time
(according to Bar chart, CPM, PERT)

Control of quality of works

(according to Specification)

Control of cost
(according to Planned Budget)
• Cost is given prime importance which
results in slippage of time and poor
workmanship.
•Inappropriate/ Partial reporting system.

• Delayed release of budget.

•Departmental and management gaps.

•Other factors such as culture, norms and
values, and attitude of people.
 Work
Plan

Outside
input
Project
Use to
compa
Field
Operati
Manager
re to
actual
data
on

Actual field
Cost/

data
Schedule
Engineer

Historical data
base
 The project control cycle begins with the
initial project plan
Project plan includes a budget, schedule and
other planning information such as staffing and
administrative procedures.
It identifies the resources such as equipment,
people and materials that are needed at job site.

The project plan is used to initiate the field

operations. The field supervisors are responsible
for the productive utilization of resources.
External factors represents the factors such as
labor strike, vandalism, bad weather or other
events that are difficult to predict and affect the
field operations.
The arrow between field operation and cost/schedule
engineers block represents the processing of the
actual information from the field.

The cost/schedule engineer block represents the

coordination of data from the field and
comparison with the initial plan. The technical
people who established the initial work plan are
responsible for recommending the adjustment to
plans based on their analysis of actual field
operations
Historical data base represents the permanent
storage of information for use by the company in
future job planning.
The arrow between the cost/schedule engineers and
project manager block represents the distribution
(spreading) of status reports to the project team. For
the reporting process to be useful, it must deliver
accurate information to the right people on time. The
reports should also be sorted to indicate the more
important activities first with key variances noted.
Project Manager block represents the final decision
point in the control process. The goal of the project
control system is to deliver to the decision makers
accurate and timely project status information so that
intelligent decisions can be made. A plan has been set
and actual progress has been measured. Management
must now decide the best course of action to take.
Outside input should come in the form of technical
staff or consultant support.
The arrow from the project manager back to field
operation represents the completion of project
control cycle. Management has made a decision
and final instructions are now being given to the
field. Adjustment may be made in a project plan,
or the instruction may be continue on as originally
scheduled. For these instructions to be effective, it
must be delivered soon enough to be smoothly
implemented.

The project control cycle is a feedback loop

providing all the participants with a measure as to
the success of their past decision.
 Cost control measure should start right
from the inception of the project.
 In the CPM/PERT system, costs are
calculated for individual activity or group of
activities i.e. work packages, as they appear
in network .
 Costs for these activities are broadly
classified in two parts.
 Direct cost: includes expenses for labor, job
materials and consumables which are directly
consumed to perform an activity.

 Indirect cost: includes overhead items such as staff

salary, rentals, expenses for developing
infrastructure facilities, traveling etc.
 Decision making process
◦ Prompt decision making is one of the
prerequisite for project cost control.
◦ Decision made by the project manager
should be discriminated to the lower lever
so that workers or agencies involved in
implementation of the activities get
information correctly and timely.
 Project
Manager

Deputy
Manager

Supervisors

Workers

Fig: Decision making process and discrimination

 Financial control
The following are the various elements of
control which plays vital role for overall
cost control of a project.

Observation : regular observation should be made

on
◦ material consumed
◦ manpower consumed
◦ equipment employed
◦ Other direct cost.
 Comparison: The observed data must be compared
with design standard which includes various planned
data and estimates. Also variance is calculated.

 Identify reason for variance; if the variance is large, it

is important to know reason behind. For that it is
essential to check
◦ the purchase price of material
◦ quality of material
◦ use of material and wastage quantity
◦ efficiency of equipment
◦ Work condition if it is different from anticipated.

 Take corrective action: if the variance is in

unacceptable limit and if the reason for variance is
identified, it is important to take corrective action if
necessary.
 The effective cost control can also be
achieved through:
◦ Thorough planning of the work items.
◦ Good estimate of time, labor, material and cost.
◦ Clear communication of the scope of required
task
◦ A disciplined budget and authorization of
expenditure
◦ Periodic assessment of time and cost of
remaining work.
◦ Frequent comparison of actual progress and
expenditure against plan.
•Short term planning and control
•Project cost models (S-curve or earned
value analysis (EVA))
•Accounting method of control
a)Overall profit/loss account
b)Profit –loss on valuation date
c)Unit costing
•If your budget spend plan shows you over
spending and your schedule shows
milestones slipping, you can know you may
be in trouble.
•But you will have no way to make a
quantitative assessment of how bad the
trouble is?
•EVMS solves this problem by providing an
accurate picture of spending and
accomplishments related to a baseline plan.
•EVA is a standard method of measuring a project’s
progress (performance) at any given point in time,
forecasting its completion date and final cost and analyzing
variances in the schedule and budget as the project
proceeds.

•It compares the planned amount of work with what has

actually been completed, to determine if the cost, schedule
and work accomplished are progressing in accordance with
the plan.

•As the work is completed, it is considered “earned”.

1. Budgeted Cost of Work Scheduled (BCWS) / Planned
Value

It is the budgeted amount of cost of the work

scheduled to be accomplished in a given time
period

2. Actual cost of work performed (ACWP) /Actual Value

It is the amount actually expended in completing

the particular work accomplished within a given
time period.
3. Budgeted cost of work performed (BCWP)/Earned
value

The value, in terms of your baseline budget, of

the work accomplished by now (in dollars or
hours), called the Earned Value!
COST VARIANCE (CV)
 It is the budgeted cost of the work to date
minus the actual cost of the work done to
date.
 CV = BCWP – ACWP
(-ve sign implies cost overrun)

Schedule/Performance Variance (SV)

 It is the value of the work done minus the
value to the work that should have been done.
 SV = BCWP – BCWS
(-ve sign implies work is behind schedule)
The percentage overrun (under run) can also be
computed using the following formula:

% overrun (under run) = (ACWP-BCWP)

BCWP
+ve value gives the cost overrun
Cost Performance Index (CPI) = BCWP/ACWP
(< 1 indicates cost is over budget)
Schedule Performance index (SPI) =
BCWP/BCWS
(<1 indicates project is behind schedule)
New Cost Estimate
= Original Cost/CPI

New Time Estimate

= Original Time/ SPI
 Suppose that an activity had 5-day duration
and was expected to cost $10,000. Set into
the project, and prior to finishing an
activity, the following data were obtained
about the progress done to that activity:

 Have so far worked for 3.5 days on activity.

 60% of an activity has been accomplished
 $8000 already spent on it.

Perform the earned value analysis and

comment on the result
The following quantities can be easily
computed:
 ACWP =$8000,
 BCWP = 60%*10000 = $6000
 BCWS = 3.5*10000/5 = $7000
Cost variance = $6000-$8000
= - $2000(cost overrun)
Schedule variance = $6000- $7000
= -$1000 (behind schedule)
CPI = 6000/8000 = 0.75(<1) (cost overrun)
SPI = 6000/ 7000 = 0.86 (<1) (behind
schedule)
% overrun = (8000-6000) / 6000
= 33.33% (+ve) (cost overrun)
From the above, a new activity duration estimate
can be computed as:
New activity duration = original time estimate/ SPI
= 5/0.86= 5.8 (i.e. 6 days)
New cost estimate = original cost estimate/ CPI
= 10,000/0.75 = $13,333.34
IT can be concluded that if the project
performance goes in this way the cost and
schedule both are increased by $3,333.34 and 1
day respectively.
 Definition of quality
 Quality is about doing thing right
 The totality of features and characteristics of
product, service and process, which bears on its
ability to satisfy a given needs.
 The total composite product and service
characteristics of marketing, engineering,
manufacturing and maintenance through which
the product or service in use will meet
expectations of the customers.