Project Management Methodology

Project Management Methodology Project monitoring and control

What to control? • Scope • Resources • Time • Cost • People • Risks occurrence • Communication plan implementation • Quality

How to control? • Apply specific technique of the project control for each subject • Integrate project management processes with other IT processes • Use Project Management tools

Scope monitoring and control • At the planning stage the project scope was identified with the help of: • Scope definition (in and out) • Requirements • Deliverables • WBS

Scope Control • Scope control involves controlling changes to the project scope • Goals of scope control are to: • Influence the factors that cause scope changes • Assure changes are processed according to procedures developed as part of integrated change control • Manage changes when they occur • Varianceis the difference between planned and actual performance. Control variances

The factors of scope change • Time is shorter than planned • Human resources not available • Material resources shortage • Requirements changed

Progress tracking • Tracking is the process of comparing actual with plan • Help to understand the project issues and justify requests for changes • With actual in hands you will operate with facts • Planned characteristics are recorded with the help of baseline

Baselines • MS Project allow storing the project baseline • Baseline should be stored first when the planning stage is completed • It can be updated during the project implementation to reflect changes • Baseline is a snapshot of: • TasksResources • Assignments

Tasks baseline • For each task it will show planned characteristics of • Duration • Start and finish date • Resources assigned • Cost • Dependencies

Use of baseline • Planned data are used to calculate • Critical Path • Free and float slack • Early and late start and finish date • They also are used to monitor the project performance in terms of timeline and cost

Baseline options • For entire project • For selected tasks • For a part of the project that starts from selected task

How to track • Specify the work completed in % • Use the Tracking Gantt table to record actual information • Use other tables to see the project state from different perspectives

Using tables • View – Table – Variance • Show variances in task timing between baseline and actual • View – Table – Work • Show differences between baseline and actual work efforts • View – Table – Cost • Show differences in cost between baseline and actual

Cost control • Project budget defined at the planning stage and recorded into the project plan creates the baseline • To have the cost baseline established make sure that • All tasks from WBS have assigned resources • Work efforts are identified • Rate or fixed cost data are provided • Material resources and third-party services are counted

Cost control tools • Earned value management • This is a project performance measurement technique that integrates scope, time , and cost data. • First thing is to track the WBS items in terms of how much work has been completed by the time of measurement, when the work started and ended, and how much it actually cost to do the work. Use tracking table to record actuals

Cost control tools • You control project performance during some period of time. In other words you have a date as your checkpoint • Normally this is the date of your reporting to the project monitoring committee • For a given date, you calculate the values required to evaluate the cost performance • You can set the date for MS Project thru the Project Information Window. Use The Status Date for this

Cost control tools • You calculate the following values • Planned value (PV). That is the budgeted cost for the work scheduled, also known as BCWS • Earned Value (EV). That is the budgeted cost of work performed, also known as BCWP • Actual cost (AC). That is about how much is spent during a monitoring period, in other words actual cost of work performed, aka ACWP

Cost control tools • To calculate Earned Value you do the following: • Calculate Rate of Performance (RP). RP is calculated as the ratio of actual work completed to the percentage of work planned to be completed. • Calculate Earned Value (EV). To calculate the earned value we use the formula: • The EV = PV to date * RP

Earned Value • Earned value is a powerful metric used to evaluate the project cost performance • Earned value is a measurement that indicates how much of the budget should have been spent in comparison to the cost of the work performed thus far • Earned value is used for financial analysis known as Earned Value analysis

Earned Value analysis • Your need other calculations involved into the cost control • Cost Variance (CV) = EV – AC (earned value minus actual cost) • CV shows your actual cost in comparison to the cost planned for the work performed • If CV is negative it means that the cost is higher than planned. If CV is positive it means that the cost is lower than planned

Earned Value analysis • Your need other calculations involved into the cost control • Schedule variance (SV) = EV – PV (earned value minus planned value) • SV shows the difference in the actual work efforts in comparison to planned efforts • If SV is negative it means the work took longer than planned. If SV is positive it means that the work took shorter time than planned

Cost control tools • Cost performance index (CPI) is the ratio of EV to AC. • Used to estimated the projected cost of completing the project. If CPI = 1, the cost is as budgeted. If CPI < 1, the cost is over budgeted. If CPI > 1, the cost is under budgeted. • Schedule performance index (SPI) is the ratio of earned value to planned value. • If SPI = 1 the project is on schedule. If SPI < 1 the project is behind the schedule. If SPI is > 1 the project is ahead of schedule

Cost control tools • Estimate at completion (EAC) • Used to estimate of what it will cost to complete the project based on performance today • To calculate, use Budget at Completion (BAC) which is equal to planned budget • EAC = BAC/CPI

Exercise • Assume the following numbers: • Status date is somewhat in the middle • Planned works to be completed is 45% • Actual work completed is 30% • Planned cost is 55K • Actual cost is 60K • Project budget is 100K

Exercise • Calculate the following: • Rate of performance • Earned value • Cost variance • Schedule variance • Cost performance index • Schedule performance index • Estimate at completion

Project Management Methodology