project monitoring and control. monitoring – collecting, recording, and reporting information...

Project Monitoring and Control

Project Monitoring and Control

Monitoring – collecting, recording, and reporting information concerning project performance that project manger and others wish to know

Controlling – uses data from monitor activity to bring actual performance to planned performance

Project Monitoring and Control

Why do we monitor? What do we monitor? When to we monitor? How do we monitor?

Why do we monitor?

Simply because we know that things don’t always go according to plan (no matter how much we prepare)

To detect and react appropriately to deviations and changes to plans

What do we monitor?

Time Money Resources Material Usage Tasks Quality/Technical

Performance

Progress

Costs

Job starts

Job completion

Engineering / Design changes

Variation order (VO)

When do we monitor? End of the project Continuously As soon as possible At task completion

How do we monitor Through meetings with clients, parties

involved in project (Contractor, supplier, etc.) For schedule – Update CPM, PERT Charts,

Update Gantt Charts Using Earned Value Analysis Calculate Critical Ratios Reports Tests and inspections PMIS (Project Management Info Sys) Updating

Project Control

Control – process and activities needed to correct deviations from plan

Control the triple constraints time (schedule) cost (budget, expenses, etc) performance

Project Control Cycle

Establish operational schedule

Measure and report progress

Compare actual with planned

Determine effect on completion

Plan/implement corrective action

Update operational schedule

Integrated Project ControlIntegration management is the key to overallproject success: Coordinate the people, the plan and work required to complete the project Focus on the big picture of the project Make strategic decisions during critical times Communicate key project information to senior management

Internal & External Project Control Both Internal & external control systems are

used to monitor & regulate project activities. Internal Control : refers to the contractor's

systems and procedures for monitoring work and taking corrective action.

External Control : refers to the additional procedures & standards imposed by the client, including taking over project coordination and administrative functions.

External Control Frequent reports on overall project

performance. Reports on schedules, cost and

technical performance. Inspections of work by client’s

programme managers Inspection of books & records of the

contractor. Strict terms on allowable project costs,

pricing policies, and so on.

Techniques for monitoring and control

Earned Value Analysis Critical Ratio

Earned Value Analysis

A way of measuring overall performance (not individual task) is using an aggregate performance measure - Earned Value

Earned value of work performed (value completed) for those tasks in progress found by multiplying the estimated present physical completion of work for each task by the planned cost for those tasks. The result is amount that should be spent on the task so far. This can be compared with actual amount spent.

Earned Value Analysis

Earned value concept – combines cost reporting & aggregate performance reporting into one comprehensive chart

Earned value chart – basis for evaluating cost and performance to date

Earned Value Analysis

Baseline cost to completion – referred to as budget at completion (BAC)

Actual cost to date – referred to as estimated cost at completion (EAC)

Identify several variances according to two guidelines

Earned Value Analysis - Variances Cost (spending) variance (CV) – difference between

budgeted cost of work performed (earned value) (BCWP) and actual cost of that work (ACWP)

CV = BCWP – ACWP (negative value - cost overrun) Schedule variance (SV) – difference between earned

value (BCWP) and cost of work we scheduled to perform

to date (BCWS) SV = BCWP – BCWS (negative value - behind

schedule) Time variance (TV) –difference between time

scheduled for work performed (STWP) and actual time to perform it (ATWP)

TV = STWP – ATWP (negative value - delay)

Earned Value Index ( Ratios) - Formula

Cost Performance Index (CPI) = BCWP/ACWPSchedule Performance Index (SPI) = BCWP/BCWSTime Performance Index (TPI) = STWP/ATWP

Interpretation of Indexes

TABLE 13.3

Earned Value Chart – basis for evaluating cost & performance to date

Critical ratio

Sometimes, especially large projects, it may be worthwhile calculating a set of critical ratios for all project activities

The critical ratio isactual progress x budgeted cost

scheduled progress actual cost If ratio is 1 everything is probably on target The further away form 1 the ratio is, the more

we may need to investigate

Critical ratio exampleCalculate the critical ratios for the following activities and indicate which are probably on target and need to be investigated.

Activity Actual progress

Scheduled Progress

Budgeted Cost

Actual cost

Critical ratio (CR)

A 4 days 4 days 60 40

B 3 days 2 days 50 50

C 2 days 3 days 30 20

D 1 day 1 day 20 30

E 2 days 4 days 25 25

TYPES OF PROJECT RISK

PeopleTime

Political Financial

Technical

TOOLS FOR RISK MANAGEMENT Expert opinion Simulation Historical Analysis Risk Analysis Contracting Strategy Insurance, bonding Management attention