abb pm council project execution tracking & … execution tracking & reporting ......

Project Execution Tracking & Reporting

ABB PM Council

Course Objectives & Overview

After this course, the participants know

how to reviews project activities

how to track project activities and respond

Prerequisite Course

APM7 Project Planning & Scheduling

© ABB GroupFebruary 24, 2012 | Slide 2

TopicsPerformance Reporting

Project Reviews


Title AuthorFast Forward MBA in Project Management Eric Verzuh

Critical Chain Eliyahu M Goldratt

Recommended Resources


People demonstrating this competency communicates appropriate information to customer and other stakeholders timely and to achieve desired understanding.

© ABB Group February 24, 2012 | Slide 3

Project Planning & Scheduling

Customer Satisfaction

Management in Projects

Project Financial & Cost

Management

Legal & Contract Management for

Projects

Project Execution Tracking and

Reporting

Scope & Change Management in

Projects

Project Risk and Opportunity

Management

Procurement Management for

Projects

ABB Project Management Competencies


Performance Reporting

Involves collecting, disseminating performance information to project stakeholders.

Status Reporting Where the project standsProgress Reporting What the project team has accomplishedForecasting Predict future project status and progress

Reporting tools & techniquesWork Break-down Structure (WBS)Project Schedule Network DiagramMilestone chartsGantt chartsBAR chartsS CurveEarned Value AnalysisCash-flow graphsSpreadsheets based on traffic-light philosophy

PERFORMANCE REPORTING

Objectives:

Project Baseline

Performance Reporting Tools


Project Baseline

Project Baseline is the original project plan as approved by the stakeholders. It is changed only in response to an approved scope of work or deliverable change.

Baseline is a comparison point. Compare the actual performance and the baseline. Take appropriate actions if shows any variance.

One of the ways of holding the focus on project objectives is by keeping the baseline schedule and cost goals visible.

WBS facilitates the communication among various stakeholders related to scope.

Project Schedule Network Diagram, Gantt chart and S-Curve are examples for tracking the schedule goals.

Earned value reporting is an example for tracking the schedule and cost variances.

Customer SatisfactionQuality

Scope

Costs / Resources

Time


Reference : Fast Forward MBA in Project Management, Eric Verzuh


Work Breakdown Structure (WBS)

Monitor the work accomplished, and work that still need to be done utilizing the WBS.

Communicate the status on WBS to the project team and explain how their work can impact the project as a whole.

Monitor any work that is slipping through cracks

Monitor the Job Status Reports (JSR) from the SAP or local Business System, and identify the Cost Opportunities by Perfecting Quality (COPQ).

Critical Path

Monitor the project activities that have zero or negative float.

Monitor if there are more than one critical path. This situation may lead to increase in project risk.

Take appropriate actions such as crashing or fast-tracking a project if the project has negative float.


B C

H K

I

J

FE

A GD

Reference : PMBOK® Guide, Third Edition, Project Management Institute


Project Schedule and Status on 39th Day

B C

H K

I

J

FE

A GD

Monitor the actual and planned dates for starting and completing project activities and milestones.

Assure a minimum but sufficient project float for tasks on non- critical path before they meet the tasks on the critical path. Take appropriate actions if the tasks on the non critical path have zero or negative float.

Actively strive to optimize overall resource planning and utilization

Task Description Days 05 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85

Kick-off Meeting with Customer (A) 1

Basic Design (E) 10

Procurement, Manufacturing, Shipment and Receipt of Material (F)

45

Software Design (B) 10

Software Development (C) 15

Site Start-up (D) 1

Inspection of Material at Site (I) 2

Installation (G) 5

Commissioning (H) 5

Final Documentation (J) 20

Preliminary Acceptance/PAC (K) 5

100%

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60%

25%

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0%

0%


S-Curve

S-Curve is a method for measuring progress in a graphical way utilizing the cumulative data for plan vs. actual.

The analysis can predict whether the project is progressing as per plan or not.

SCURVE for 400/220 KV Subs tation Project at Narendra

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% Cummulat ive I n t er n al P lan

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% Cummulat ive P lan as per A ppr oved S chedule

P r o g r e s s

A s o n

Earned Value Management (EVM) 1/2

EVM is a method for integrating scope, schedule and resources and for measuring project performance.

Earned value analysis can predict:

whether the project is on-time & on-cost and

what is estimate at completion of the project.

EVM Terminology

Planned Value (PV)Estimated value of the work planned.

Earned Value (EV)Estimated value of the work actually accomplished or performed.

Actual Cost (AC)Actual cost incurred.

Budgeted at Completion (BAC)Budgeted value for the work.

Term Formula InterpretationSchedule Variance (SV) SV = EV - PV Positive means ahead of schedule

Negative means behind schedule.

Cost Variance (CV) CV = EV - AC Positive means under the budget.

Negative means there is a cost overrun.

Schedule Performance Index (SPI)

SPI = EV / PV > 1 means ahead of schedule

< 1 means behind schedule

Cost Performance Index (CPI)

CPI = EV / AC > 1 means under the budget

< 1 means there is a cost overrun.


Earned Value Management (EVM) 2/2

Term Formula NotesEstimate at Completion (EAC)

EAC = BAC/CPI Used when no variances from BAC have occurred or we continue at the same rate of spending.

Estimate at Completion (EAC)

EAC = AC + ETC Used when original estimate is fundamentally flawed.


EAC = AC + (BAC – EV) Used when current variances are thought to be atypical of future


EAC = AC + (BAC-EV)/CPI Used when current variances are thought to be typical of future

Estimate to Complete (ETC)

ETC = EAC – AC How much do we need to spend for completing the remaining work?

Variance at Completion (VAC)

VAC = BAC - EAC


Resource Levelling

The project team adjusts the project schedule to account for resource constraints. Project activities and tasks are rescheduled in order to optimize the resource utilization on the project.

Assign and level resources:

Estimate the resource requirements throughout the project at each reporting period once more.

Identify the resource peaks.

At each project activity or task, delay the non-critical tasks within their float.

Reevaluate the work package estimates to eliminate the remaining peaks.


Reference : Fast Forward MBA in Project Management, Eric Verzuh


Project Cash-flow

Cash comes out of our Business Processes.

Monitor the project cash-flow and take appropriate actions throughout the execution phase.

CommissioningPreliminaryAcceptance

FinalAcceptance

Tender

Custom er paymen t

Supp lier paymen t

A/R

A /P

Offer &Contract

Assembly

G oods in transit

DeliveryCivil w orks, erection &

subcontrac ting

Invoicing Acceptancetest?

2 1Janua ry

Project M anagem ent &

S cheduling

Purchasing & subcontrac ting

Engineering


How to shorten the project duration?

How to shorten the project duration? Revisit the estimates once more. Consider moving the estimates to “Optimistic” or “Most Likely”, instead of “Pessimistic”.Review the waiting period between different tasks.Reward the project team if they can meet the “On Time Delivery” by reducing the estimate

O P

M

Value-added time Non-value-added time

Start End


Delay analysis and corrective action

Following are the steps for keeping the project on track, and these steps needs to be repeated throughout the project:

Monitor the project scope utilizing the project contract and it subsequent amendments for any scope changes and the WBS.

Montitor the project cost with Full Cost Calculation/FCM and/or Business System.

Monitor the project schedule and cost performance utilizign the project Gantt chart, S-curve and/or Earned value reporting.

Identify the sources for the problems causing the schedule and/or cost variances.

Develop a solution.

Communicate the impacts of the problem and the solution to all affected stakeholders.

Update the project plan and implement it.

SCURVE for 400/220 KV Substation Proje ct at Narendra

0 03

58

11

2 0

2 9

3 4

3 9

4 7

6 1

0 03

67

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2 0

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T im e in M o n t h s

% Cummulat ive I n t er n al P lan

% Cummulat ive A ct ual Pr ogr ess

% Cummulat ive P lan as per Appr oved Schedule

P r o g r e s s

A s o n

Term Formula InterpretationSchedule Variance (SV) SV = EV - PV Positive means ahead of schedule

Negative means behind schedule.

Cost Variance (CV) CV = EV - AC Positive means under the budget.

Negative means there is a cost overrun.

Schedule Performance Index (SPI)

SPI = EV / PV > 1 means ahead of schedule

< 1 means behind schedule

Cost Performance Index (CPI)

CPI = EV / AC > 1 means under the budget

< 1 means there is a cost overrun.

PROJECT REVIEWS

Objectives:

Focus/Process of Management Review

Project Review Content



What is Review

“A critical re-examination and reconsideration of a work or performance”Determines the health and performance in meeting the objectives

Assists Management in maintaining effective control

Supports the project manager in executing the project to enhance ABB profit opportunities and risk mitigation, in compliance with Group Directives, Instructions & Guidelines.

Ensures customer’s satisfaction in line with ABB contractual obligations

Project Review Content (1/6)

Project Status and Progress

Critical Issues to be reviewedProject contractual issues/ Customer relationship & deliverables/Claims

Review of contractual milestone deliverables status & summary project schedule

Overall project cumulative curves and histograms and break down for engineering, procurement and construction ( bulk quantities).Incremental per cent complete ( planned versus actual) for the period for engineering, procurement. manufacturing & construction

Root cause analysis for any shortfall in project accomplishments and planned remedial actions for acceleration in the next period

Project forecast, major cost variances & Change order log with current status

COPQ status & CCRP accomplishment for the period

Project Status and Progress

Tools & Sample ReportsS-Curves

Project summary schedule with identified critical path

Project cost report & Change order control log

COPQ & CCRP reports



Project Health & Safety

Critical Issues to be reviewedProject Safety plan & goals & performance

Sub-contractor safety program

Safety training status – ABB / Sub-contractor’s personnel

Incident / Lost time investigations process

Recognition and communication of successful performance

Tools & Sample ReportsMonthly Project safety report with incident & loss time reporting

Remedial action report

Safety training status report

Project Planning, Scheduling & Resources

Critical Issues to be reviewedOverall summary project schedule and critical path

Schedule progress update procedure & status reporting including vendors and sub-contractors

Critical activities –Engineering, Procurement ( Vendor schedule) , Manufacturing, Construction impacting project completion date

Critical sub-contractor activities

Resource allocation procedure

Tools & Sample ReportsProject summary schedule report with critical path

Target Schedule ( Baseline) versus Actual Schedule comparison

Planned resource allocations versus Actual resource expenditures



Engineering and Quality

Critical Issues to be reviewedFinalized engineering scope – Drawing list, Specification & Procurement list ,work breakdown structure (WBS) elements with clear scope definition

Approved budgets for engineering consistent with WBS

Engineering schedule with interdependencies for long lead delivery of equipment, manufacturing & erection

Freezing of conceptual design & customer buy out prior to start of detail design

Recalculation / review of performance guarantee criteria internally & with customer

Monitoring & approval of sub-contracted engineering

Tools & Sample ReportsTypical Engineering WBS with budget allocation

Engineering schedule

Formal notification to customer for freezing of conceptual design

Procurement & Deliveries

Critical Issues to be reviewedUse of a “Procurement Plan” for all materials and sub-contracts

Good base of approved sources of supply that have been qualified through a supplier qualification process.

Tools & Sample ReportsProject Procurement Plan

Supplier qualification assessment form

Supplier metrics

Bid tabulations for major contracts



Site and Logistics Management

Critical Issues to be reviewedArrangements for temporary facilities / utilities at site

Site warehouse/material storage

Site transportation logistics– highways, railroad & other

Site communications/ computer support for transmittal of correspondence and technical documentation

Site security/ medical care & food service

Drawing revision control ( ABB & vendor drawings) for “Approved for Construction” drawings

Availability of site labor – union / non-union

Site sub-contract award & monitoring of sub-contract production & productivity

Tools & Sample ReportsSite mobilization check list

Drawing revision control log

Equipment & Material delivery schedule

Construction progress reports

Project Warranty and Close Out

Critical Issues to be reviewedClear definition for the start and finish of warranty period in the contract

Avoidance of “Ever Green” clause during the warranty period

Basis of calculation of the warranty provision

Project close out protocol and associated customer acceptance criteria for FAT ( Factory Acceptance Test) & SAT ( Site Acceptance Test)

Contractual Document submittal requirement ( As-Built drawings & ABB supplied equipment manuals, vendor drawings/manuals etc)

Guideline for closing the project in the ERP system

Tools & Sample ReportsMonthly report for warranty management

Project cost report for use of the warranty provision on an ongoing basis

Check list for project document submittal

Check list for project close out in ERP© ABB Group February 24, 2012 | Slide 22


Customer & Internal Changes

Critical Issues to be reviewedProcess/procedure of maintaining the integrity of project baselines – configuration, scope, cost and schedule. Review and formal approval of all changes prior to incorporation in the project

Documentation of all design review by customer and supplier coordination meetings for potential change in scope

A good system of logging all instances and deviations from the contractual agreed scope and associated cost/schedule impact on the project

Pro-active scope control in analyzing the contract in terms of “grey” areas of scope and/or possible areas of additional scope increases

Tools & Sample ReportsChange order form and change Order Control log

Claims

Critical Issues to be reviewedCustomer’s claims – basis evaluation with reference to contract terms & conditions

Sub-contractor’s claims – basis evaluation with reference to contract terms & conditions

Technical / Legal review ( internal ABB) and proposed claim disposition strategy

Tools & Sample ReportsOverall claim status log– Customer / Sub-contractors & ABB’s claim with cost & schedule impact analysis



Project Calculation

Critical Issues to be reviewedAs-Sold budget, Approved Change orders and Revised Control budget

Accuracy& integrity of the reported Actual Cost

Basis of Estimate At Completion calculations and cost forecast

Use of Risk provision and Contingency

Hedging for any purchase/payment in foreign currency

Use of proper calculated interest

Variance reporting and root cause analysis

Invoicing, payment & cash flow monitoring

Tools & Sample ReportsProject cost report with Accompanying cost variance & risk/opportunity analysis report

Risks and Opportunities

Critical Issues to be reviewedScope growth due to poor definitions

Technical & performance guarantee related

Potential Schedule delay

Potential cost overrun & other project financial risks

Contractual T & Cs related risk elements ( warranty, indemnification, liabilities, cancellation, payment schedule)

Inappropriate customer demand/involvement

Material /Labor cost savings

Change orders

Contractual Incentive payments

Tools & Sample ReportsRisk mitigation check list

Opportunity list.


PROJECT EXECUTION TRACKING & REPORTING



Focus/Process of Management Reviews

“Bad news fast . . . good news later”

Critically evaluate Actual or Potential deviations to Scope, Plan and Budget

A ‘tough & challenging’ inquiry focused on risks & potential risks to project’s success

Actions to resolve current issues & risks and potential issues & risks

Questions should not be viewed as challenging a person’s capability or performance, rather questions are focused on business processes


Focus/Process of Management Reviews

Project Status- Actions from previous review(s)- Risk mitigation status vis-à-vis

orig. risk assessment- Variances: schedule milestones - Variances: deliverables- Variances: financials vs. budget

Improvement Opportunities- Schedule- Margin- Follow-on work

Management support

Top new issues since last review- Impact on scope- Impact on costs / schedule- Actions taken

• Change management - Scope, deliverables,

resources, schedule, cost, other

Risks or potential risks and actions to mitigate risks- Technical / design- Resources, customer,

suppliers, schedule

Actions w/ dates and responsible

10% of time 10% of time80% of time

Illustrative


Guidelines for Reviewers

Provide an objective rather than subjective status evaluation of the project status.

Ensure the report information is consistent across time.

Seek the relevant information on timely basis.

Request the use of appropriate graphics and figures to condense and streamline the project information.

Critically evaluate actual or potential deviations to scope, plan and budget.

A ‘tough & challenging’ inquiry focused on risks & potential risks to project’s success. Questions should not be viewed as challenging a person’s capability or performance rather, questions are focused on business processes.

Define actions to resolve current issues & risks and potential issues & risks.


Execute with Project Closure in Mind

It is difficult to know whether you can build the product that the customer wants in the desired time frame, until you have a detailed understanding of what the customer really wants.

Acceptance criteria should be clearly defined, i.e.

The customer knows what we will deliver for the money

We know what we must deliver to satisfy the customer and receive contractual payment

Any open action item including agreed upon time for completion should be listed and acted upon.

Signs of a Challenged Project

Lack of clear understanding of the work to be accomplished to complete the project.

Reports that assume a higher productivity rate for the future than is really being accomplished now.

Overly complex plans that cannot be understood by the entire project team.

Overly simple plans that do not give adequate guidance to meet the project objectives and delivering benefits of the project.

High Rate of Change Requests with low rate of closure on changes

Excessive rework being performed and little actual progress on planned work.

Surprises with new work that scope is expanding or is not understood.

Project team members are uncertain as to their work to be performed in the future.

Project team members waiting for instructions on what to do next.

Project team members stressed and fatigued from working on excessive number of hours.

Reference : Project Manager’s Portable Handbook by David I Cleland / Lewis R. Ireland


GG/LC-055 Project Reviews

Periodic project reviews are key for successful project executionPM will present project status-to-date to the LBU project review committeeConduct joint project reviews for projects with more than one LBU (SteCo) & for large and/or critical projects – with BU managementDocument Project Review Content

Project H&S, status & progressProject planning, scheduling & resourcesEngineering, quality & procurement statusChange, Site & Logistics managementProject calculation (CTC forecasting)Risks, Opportunities & ClaimsProject warranty, closeout & action plan

Project Review FrequencyConduct minimum bi-weekly reviews, monthly LBU project reviews, quarterly joint LBUs‘ project reviews



People demonstrating this competency communicates appropriate information to customer and other stakeholders timely and to achieve desired understanding.

Project Planning & Scheduling

Customer Satisfaction

Management in Projects

Project Financial & Cost

Management

Legal & Contract Management for

Projects

Project Execution Tracking and

Reporting

Scope & Change Management in

Projects

Project Risk and Opportunity

Management

Procurement Management for

Projects

ABB Project Manager shall:

Be fully aware of financial and schedule status of assigned projects and thus, at any time be able to make a verbal or written report, with a minimum of effort

Forthrightly present an account of project status/issues in project reviews.

Report status/ progress to customer and other stake holders with appropriate detail for desired understanding, e.g. to assure payment, set expectation, etc.

Raise potential project issues to relevant stake holders

Effectively report project progress or other situations either verbally or in writing to assure desired understanding.

Development Plan

Research has demonstrated that most learning comes from work and life experiences. Consider the following model while developing your own Personal Leadership Development Plan to develop this competency.

It is important to ensure that there is an appropriate balance of development actions in the development plan


• Self-directed learning• Training & other off-the-job events

Off-the-Job (10%)

• Mentoring & support from others • Coaching• Assessment

Along-the-Job (20%)

• On-the-job activities • Short-term assignments• Expanding/ modifying job• Outside own workplace

On-the-Job (70%)

Are most effective, if the required behavior is already (partially) shown, but needs to be applied more often

Are most effective, if the required behavior is not yet shown in an effective way and skills and knowledge has to be built up.


Developing Project Execution Tracking & Reporting Competency

Type of Learning Suggested Learning ActivitiesOn-the- Job (70%)• On-the-job activities • Short-term assignments• Expanding/ modifying job• Outside own workplace

• Develop & deliver Lessons Learned for past 3 projects • Develop & document “Traffic Signal” presentations to mark

project progress & explain to Project Team• Develop follow-up routines to update progress on activities in

contract schedule; document process flow chart

Along- the- Job (20%)• Mentoring & support from others • Coaching• Assessment

• Develop 3 actions for personal learning from archived lessons learned on past 3 projects

• Conduct Peer Review sessions• Identify the areas where you need coaching or mentoring.

Off-the-Job (10%)• Self-directed learning• Training & other off-the-job events

• Study “Fast Forward MBA in Project Management” by Eric Verzuh

• Study “Critical Chain” by Eliyahu Goldratt• ABB APM6: Project Management Video by eLearning

(TrainingPartner)• Revisit ABB APM7: Project Planning & Scheduling by

eLearning (TrainingPartner)• ESI Project Planning Analysis & Control (PPAC) or ESI

Schedule & Cost Control (SCC) or equivalent• Microsoft Project or Primavera scheduling tool• ABB ProMIS for PS & PA Divisions.


Microsoft Project

Microsoft Project is a popular application for project scheduling and execution tracking.

Microsoft provides lot of free eLearning modules. Please visit:

http://office.microsoft.com

ABB US has developed an extensive guide to utilize this application. Please visit:

http://inside.abb.com/cawp/gad00636/2241c4d4b2976bcec1257818004e70a4.aspx

http://office.microsoft.com/

http://inside.abb.com/cawp/gad00636/2241c4d4b2976bcec1257818004e70a4.aspx

abb pm council project execution tracking & … execution tracking & reporting ......

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