Monitoring and controlling
project
Sr. Ts. Muhamad Zaihafiz bin Zainal Abidin
Learning objective
• Describe how to monitor & control a project
• Reporting progress
• Communication
• Formal and informal
• To identify what to track on a project
• Cost - s curve – earned value
• Progress
• quality
• Demonstrate change management on the project
• Record proposed changes
• Evaluate the changes
• Authorize changes
• Implemented change
• To review method for getting back on project plan
• What can we do?
Introduction
• Why plan?
• To understand what needs to be done and when and by whom and how much
• To have a map to monitor progress as the project happen
• To compare actual progress
• To mitigate corrective action
Why project plan failed?
• Create plan but not monitoring the project closely enough to realise
that you have gone of plan, an then its too late or doing nothing
about getting back to original plan
• Unclear objective
• Poor communication
Monitoring and control
• Controlling procedure
• Establish a robust procedure
• Project manager or senior manager
• When to report?
• Involvement of SM
• Level of project management
• Formal and informal monitoring
• Project filing system
• Managing changes
• Corrective actions
Control procedure
• Create a plan
• Create a baseline
• Copy of estimate cost,work and duration to actual value
• Monitoring & track progress
• Compare what actual happen with baseline forecast
Correction measures
• Identify variance to plan
• Forecast outcomes
• Whether is overbudget or etc..
Planned
• Determine criticality Actual
• Take corrective action
• Report progress
• Robust description
Step 1- Creating project baseline
• Create baseline
• Copy of estimates
• When we enter actual data, we do not overwrite the estimates, they
preserved in the baseline
Project manager vs senior manager
Project manager Senior manager
• Small cost/ time deviation • Quality issues
• Small forecast cost/time changes • Force majeur
• Contractual issues • Legislation
• Change variation • Competition
• Markets changes
When do you involved the senior managers?
What are the limit?
What level of project management?
• Runner, repeater or stranger?
• The level or extent of project management should be suited to the
size , risk, value, degree of complexity etc. of the project
Monitor progress
• Formal
• Official meetings
• Report (report endorsement etc.)
• Informal
• Social chat
• discussion
Forms of communication
Project filling system
• Any team member should be able to find any relevant document
quickly and easily
• The project filing system should
• Be consistence across project and throughout and organization
• Allow for confidentiality / restricted access as required
• Be immune to staff absence
• Include disaster provision 9software backup, storage or copies of site)
What to track?
• Decide what to track
• Decide how and who measures and track chosen parameter
• Decide frequency of measurement
• Depends on the scale of project
forecast
Correction measures
Planned
Actual
What to track
• Time
• Cost
• Quality/ functionality
• Resources
• Never got enough!!
• Change
• Always happens!!
• Risk
• If a risky project
What to track - time
• Time
• Time delays on project
• Time to profit
• How long making profit –payback graph
• Timing vs target
• How many task on schedule?
• How many task start late
• How many percentage between start late vs on time
• How many delivery from supplier on time?
What to track - time
• Task
• Not start
• In progress
• Completed (work or duration?)
• In progress
• Work done & work remaining
• Percentage complete
• Profile of work and duration profile?
• Work or duration?
Tracking cost
• Cost
• Actual cost vs plan cost
• Rate of spend to forecast
• One off unplanned costs
• Profit vs plan
• Quality cost
• Overtime cost
• Exchange rates
Typical spending profile
Cash flow for
Physical progress for
IBS project
conventional project
Cash flow for
conventional
Physical progress for
IBS
What to track cost?
• Money spent Quotation
Order
• Money being spent
delivery
• Money yet to spend
Invoice
cost
payment
Cash outflow
How to Tracking time and schedule
• Projects need to be monitored for project managers to know the
status of the project – behind schedule, ahead of schedule, under
budget or over budget – and therefore make corrective actions to
control the project to be within budget, scope and schedule.
• Monitoring projects involves checking that the planned and scheduled
activities and resource allocation are being followed and satisfied. The
monitoring of project activities also involves making reference to
project documents such as WBS, Gantt Chart, Project Schedule
Network Diagram, cost distribution and S-curve.
1. checklist
2. spreadsheet
3. gantt chart
4. Integrated cost/schedule/work system
• Project managers may develop an integrated cost/schedule/work
system that provides a meaningful feedback during the project to
determine the project status so that corrective actions can be taken
without delay and at the least cost.
• Figure 6 is an example of an integrated cost/schedule/work graph that
links costs, time and work. The upper curve is the financial S-curve that
shows the relationship between cost and time throughout the duration
of the project. Similarly the lower curve is the work S-curve that shows
the relationship between work and time throughout the duration of the
project. The actual cost and work accomplished to date are
superimposed onto the curves for comparison and analysis to be made.
example
Discussing the situation
Example behind schedule
• The project is behind • It is not good for a project to be behind schedule because
the owner would not be able to own the facility and the end
schedule because, user of the project would not be able to make use of the
• on the report date facility by the planned date.
• Possible reasons for a project to be behind schedule are
• the actual completed work poor project planning and implementation, and unforeseen
circumstances for example workers’ strike or shortage of
• is supposed to be achieved supply of resources and bad weather.
• Possible ways to get the project back to schedule are to
at an earlier date completely review and revise the project planning and
• based on the planned implementation, not to be dependent only on certain
suppliers, improve the project’s human resource
work graph. management in terms of workers motivation and job
satisfaction, and have an effective contingency plan for any
unforeseen circumstances.
overbudget
• The project is over budget
because, on the report date the • A project that is over budget would indicate that the
utilization of monetary resources for the project is more
accumulated actual than what was planned for at the beginning of the project.
construction cost • An implication is a possibility of having to apply for
additional resources that were supposed to be planned and
• is more than applied for before the start of the project. This means that
there would be additional costs in terms of paying the
• the accumulated planned financing charges from the financial institutions for money
construction cost which is the that the project needs or other additional resources such as
budget for the planned work construction materials and equipment.
• Therefore the project’s planning and implementation,
that corresponds to the same particularly with regards to resource allocation need to be
amount of actual completed completely and thoroughly reviewed and revised.
work
Under budget and ahead
Ahead schedule
• The project is ahead of schedule because,
• on the report date the actual completed work is supposed to be
achieved at a later date based on the planned work graph.
• It is generally acceptable but not necessarily preferable for the project
to be ahead of schedule. It is important for a project to be on
schedule in order that the planned resource allocation and utilization
are satisfied accordingly. If the owner accepts the project that is
ahead of schedule, the project resources can be allocated to other
projects that may need them.
Under budget
• The project is under budget • A project that is under budget would indicate that the
utilization of resources for the project is less than what was
because, on the report date the planned for at the beginning of the project.
accumulated actual • An implication is a possibility of having excess resources that
were not supposed to be applied for the project. This means
construction cost is less than that there would be losses in terms of paying for the
• the accumulated planned financing charges from the financial institutions and
suppliers for resources that the project does not need.
construction cost which is the Therefore the project manager may have to negotiate with
budget for the planned work the financial institution to refinance the project to avoid
unnecessary financing charges.
that corresponds to the same • However another possible reason for the project to be
amount of actual completed under budget is the possibility that the project was done
work using lower quality materials with lower cost and not done
according to the design drawing and specification. Hence, an
investigation need to be done to check and make sure that
this has not happened.
5. Overall project status: Percent Matrix method
• The overall status of a project may be based on cost, work-hours or
physical quantity of work. The percent matrix method is a very simple
method for determining the overall status of a project. Spreadsheet can
be utilized for this method.
• Cost is used as the basis for the following example. The information
that is required and available in the matrix is listed in Figure 11. Figure
12 illustrates the percent matrix method in a spreadsheet for a project
that is comprised of 5 buildings; A, B, C, D and E. Reference is made to
four work packages for each building – foundation/structural,
mechanical/electrical, finishes/furnishings and special equipment – to
determine the overall status of the project.
6. Earn value analysis
Earned value analysis (EVA) is an integrated cost-schedule approach used to monitor and
analyze the progress of a project. Popescu and Charoenngam (1995) defined it as ‘‘the
performance measurement to report the status of a project in terms of both cost and
time at a given data date’’
1. Determine how much work you have done and how much you should have done
according to the plan.
2. Determine how much money you have earned and how much money you have spent.
3. Calculate the time (schedule) and money (budget) deviations (variances) so far.
4. Analyze the causes for the major deviations and determine possible remedies.
5. Extrapolate these deviations to the end of the entire project.
Component of eva
1. Measuring the deviation
• Cost and schedule variance CV,SV
2.Measuring the performance
• Cost and schedule performance index CPI,SPI
3.Forecasting at completion
• Estimate to complete, ETC (BAC-BCWP/CPI)
• Estimate at completion EAC
Earn value analysis
Example
• Task is to build a brick wall
• 4 day to estimate to complete
• 1000 bricks
• Rm 2 per brick
Earn value analysis
• Planned progress
• progress day 1 – 250 bricks RM 500
• progress day 2 – 500 bricks RM 1000
• progress day 3 – 750 bricks RM 1500
• progress day 4 – 1000 bricks RM 2000
• Budget at completion Rm 5000
This does not according to planed
• Progress after day 1
• Don’t have material so buy material at cost of RM1000 on material
• Only 150 bricks
• Day 2
• 350 bricks
• Day 3
• Rm 2000
• 700 bricks
• Day 4
• 1000 bricks
Earn value analysis
1) Cost and schedule deviation
• Progress after 1 day Cost variance = BCWP-ACWP
= 300-1000
• Progress is 150 bricks
=Rm-700
A negative value of CV represents a cost
• Planned (BCWS)= Rm 500 overrun. Based on the status report the actual
cost is greater than earned by Rm-700
• Earned (BCWP)= Rm 300
Schedule variance = BCWP-BCWS
• Actual = (ACWP) Rm 1000 =300-500
• BAC original project estimate = =-Rm 200
Rm 2000 A negative value of SV represents a Schedule
slippage. The project is behind the planned
schedule
2)Cost and schedule performance
CPI = BCWP/ACWP
= 300/1000
=0.3
The CPI is less than 1, which indicates a poor cost performance. The earned value is less than the
actual costs.
SPI= BCWP/BVWS
= 300/500
=0.6
The CPI is less than 1, which indicates a poor schedule performance. The project is behind
schedule
Forecasting cost at completion
• Estimate to complete ETC= BAC-BCWP/CPI
= 5000-300/0.3
= Rm 15666.67
Based on the analysis of status report, the remaining cost to complete the project
is RM 15666.67
Estimate at completion, EAC = ACWP+ETC
=1000+15666.67
=16666
1) Cost and schedule deviation
• Progress after 2 day Cost variance = BCWP-ACWP
= -1000
• Spent RM 1000 on material
=Rm-700
• Progress is 350 bricks A negative value of CV represents a cost
• Cost variance is RM - 300 overrun. Based on the status report the actual
cost is greater than earned by Rm-700
• Earned value is 350 bricks or
Schedule variance = BCWP-BCWS
RM 700
=300-500
• Should have done 500 bricks =-Rm 200
or RM 1000
A negative value of SV represents a Schedule
• Schedule variance RM -300 slippage. The project is behind the planned
schedule
• Progress after 3 day
• Spent RM 2000 on material
• Progress is 700 bricks
• Cost variance is RM - 600
• Earned value is 700 bricks or RM 1400
• Should have done 750 bricks or RM 1500
• Schedule variance RM -100
• Progress after 4 day
• Spent RM 2000 on material
• Progress is 1000 bricks
• Cost variance is RM 0
• Earned value is 1000 bricks or RM 2000
• Schedule variance RM -0
Ahead schedule
Ahead of cost
Underspent?
Ideal
PM should finished on time
Disaster scenario
Corrective measure
terminology
• ACTUAL – how much money actual spend in accomplishing the work
• Performance – the budget applicable to work actually completed
(EARNED VALUE)
• Schedule variance (SV) – difference between earned value and the
plan
SV = Performance – plan
• Cost variance (CV) – difference between earned value and the actual
CV = Performance - actual
Definitions
• Budgeted cost of work schedule B.C.W.S (Planned)
• 250 bricks per day or RM 500 per day
• Budgeted cost of Work performed B.C.W.P (Earned)
• Relating to the number of bricks actually laid
• Actual cost of work performed A.C.W.P (actual)
• Actual spend at that point in time
More than 1 ok.
< 1 is unfavorable
ETC
The estimate to complete (ETC) is the estimated cost to complete the
remaining work from time now
The SM are very interested in this
ETC = (BAC-EV)/CPI
Case study of EVA application
• Case study
Track quality
• Quality and functionality
• Customer satisfaction
• Par per million defect
• How many things being rejected?
• How many changes that we have done?
Track resources
• Resources will never be enough!
• Measure resources plan vs actual
• Man hours of project
• No of resources conflict
• Staff turnover? (less 5%)
• Staff morale
Track risk
• Risk
• Risk log
• Risk exposure value?
• New risk?
• Triggered risk?
Information management
• Whatever you track – communicate the results
• Good news increase motivation
• Bad news need to be dealt with (changes made)
• Use visual display to encourage communication
Issues management
• The project will not run to plan
• Issue will raised
• Issues are problem or concerns that exist today that will affect the
project objective if not resolved
• These may or may not lead to a change in the project – Risk
Issues management
• Issues are logged
• Because they are important
• So that they are not forgotten
• To provide traceability
Managing change
• Steps in managing changes
1. Record proposed changes
2. Analyze the proposed change
3. Authorize the changes
4. Manage the changes
1. Update the new plan
2. Communicate the change
Analyse the change
• What is the change? Why change? Why don’t we consider do
nothing?
• What are the impact toward changes – time, cost ,resources, quality,
risk, contractual etc…
• What are the commercial benefits?
• Effect on the opinion of stakeholders
• Effect on the project object?
Authorise the changes
• Who should do this?
• Qualification?
• Up to what value?
• When and how are they available to authorize?
Manage the changes
• Amend the plan
• Revise the budget and time scale
• Resources analysis
• Inform the project team and stakeholder
• Make sure everyone aware with the changes
Corrective action
1. Change objective
2. Change method
3. Change resources
4. Change logic of the plan
1. Change objective
• Extend project duration
• Start ealier
• Consider partial deliveries
• Change delivery schedule
• Change budget
• Change cash flow requirement
• Change quality or specification
• Renegotiate with client
• Don’t DO IT!
Change resources
• Increase resources
• Transfer resources from other project/ departments
• Employ additional resources 9contract/permanet0
• Sub-contract/staff agency
• Overtime / holiday working hour
• Reschedule other work
• Provide training
• Relocate task 9eg to experienced staff0
• Hire machinery and equipment
Change the logic of the plan
• Check the wbs
• Study the logic, sequence etc..
• Implemented task in parallel
• Overlap task (lead time)
• Check for task dependencies
• Utilise total float to solve resources problems
Project reporting
• At set time
• At every milestones
• At project meetings
• Issue log
• Change log
• Risk log
• Reporting by exception
• Only those task/resources with problems
• Use the project KPI’s that have decided earlier
Learning objective
• Describe how to monitor & control a project
• Reporting progress
• Communication
• Formal and informal
• To identify what to track on a project
• Cost - s curve – earned value
• Progress
• quality
• Demonstrate change management on the project
• Record proposed changes
• Evaluate the changes
• Authorize changes
• Implemented change
• To review method for getting back on project plan
• What can we do?
• Change resources,change the logic
Conclusion
• Project can be time , cost or quality critical
• how does that affect monitoring and control?
tutorial
