Copyright 2009 John Wiley & Sons, Inc.

Chapter 10

Monitoring and Information Systems

Introduction

Monitoring - Collecting, recording, and reporting information concerning any and all aspects of project performance

Controlling - Uses the data supplied by monitoring to bring actual performance into compliance with the plan

Evaluation - Judgments regarding the quality and effectiveness of project performance

Planning–Monitoring–Controlling Cycle

Must decide what is important enough to monitor

We mainly want to monitor:– Project performance– Budget– Time

Must be operationalized – Some may be monitored continuously– Others may be checked only at milestones

Designing the Monitoring System

1. Identify key factors to be controlled– Performance– Cost– Time

2. Information to be collected must be identified

Designing the Monitoring System Continued

Want to avoid collecting necessary data because it is hard to get

Do not want to collect too much dataThe next step is to design a reporting

system that gets the data to the proper people in a timely and understandable manner

Data Collection

Once we know the data we want, we need to decide how to collect it

Should the data be collected after some event?

Should it be collected on a regular basis?

Are any special forms needed for data collection?

Much Data Involves

1. Frequency counts

2. Raw numbers

3. Subjective numeric ratings

4. Indicators

5. Verbal measures

Information Needs and Reporting

Project reports need to correspond to the schedule

As work packages are finished, reports on those packages are no longer needed

New work packages generate the need for new reports

Thus, the nature of project reports changes over time

Information Needs and Reporting Continued

Reports should address each levelNot at same depth for every level

– Lower levels need detailed information– Senior levels need overview reports

The Reporting Process

Reports must contain relevant dataMust be issued frequentlyShould be available in time for control

Report Types

1. Routine - Reports that are issued on a regular basis or each time the project reaches a milestone

2. Exception - Reports that are generated when an usual condition occur or as an informational vehicle when an unusual decision is made

3. Special Analysis - Reports that result from studies commissioned to look into unexpected problems

Meetings

Reports do not have to be writtenThey can be delivered verbally in meetingsProjects have too many meetingsThe trick is to keep them to as few as

possible

Meeting Rules

Avoid regular status report meetingsStart and end on timeHave an agenda and stick to itPublish the agenda earlyTake minutes

Common Reporting Problems

Too much detailPoor interface between the

data/procedures of the project and the information system of the parent company

Poor connections between the planning process and the monitoring process

Earned Value Analysis

Earned value is an estimate of the percentage of work completed thus far

This can be a difficult for a projectWhy is that the case?

The Earned Value Calculations

50-50 rule0-100 percent ruleCritical input use ruleThe proportionality rule

The Earned Value Chart

Figure 10-6

Chapter10 Project Monitoring & Control 18

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)

Schedule variance (SV) – difference between earned value (BCWP) and cost of work we scheduled to perform to date (BCWS)

Time variance (TV) –difference between time scheduled for work performed (STWP) and actual time to perform it (ATWP)

Chapter10 Project Monitoring & Control 19

Earned Value Variance - Formula

VariancesCV = BCWP – ACWP (negative value - cost overrun)

SV = BCWP – BCWS (negative value - behind schedule)

TV = STWP – ATWP (negative value - delay)

Index (Ratios)Cost Performance Index (CPI) = BCWP/ACWP

Schedule Performance Index (SPI) = BCWP/BCWS

Time Performance Index (TPI) = STWP/ATWP

Critical Ratio

It is possible for one of the indicators to be favorable while the other is unfavorable.

Cost-Schedule Index

CSI < 1, it is indicative of problem

Chapter10 Project Monitoring & Control 21

EXAMPLE

Assume that operations on a Work Package cost RM 1,500 to complete. They were originally scheduled to finish today. At this point, we actually spent RM1,350. And we estimate that we have completed two thirds (2/3) of the work. What are the cost and schedule variances?

CV = BCWP – ACWP = 1500 (2/3) – 1350 = - 350 SV = BCWP – BCWS = 1500 (2/3) – 1500 = - 500CPI = BCWP/ACWP = 1500(2/3)/1350 = 0.74SPI = BCWP/BCWS = 1500(2/3)/1500 = 0.67

Example

Solution

“To complete” and “At Completion”

Project manager reviewing what is complete and what remains

Final cost and final completion date are moving targets

The project manager compiles these into a ‘to complete’ forecast

Actual + forecast = final date and cost at completion EAC = ETC + ACWP ETC = (BAC – BCWP) / CPI

Milestone Reporting

Reports that are created when a project reaches a major milestone

They are designed to keep everyone up-to-date on project status

For executives and clients, these may be the only reports they receive