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Project ManagementA Managerial Approach
Chapter 10
Monitoring and Information Systems
Monitoring and Information Systems
Evaluation and control of projects are the opposite sides of project selection and planning
Logic of selection dictates the components to be evaluated
The details of the planning expose the elements to be controlled
Monitoring is the collecting, recording, and reporting information concerning any and all aspects of project performance
The Planning - Monitoring - Controlling Cycle
The key things to be planned, monitored, and controlled are time (schedule), cost (budget), and specifications
The planning methods require a significantly greater investment of time and energy early in the life cycle of the project
These methods significantly reduce the extent and cost of poor performance and time/cost overruns
The Planning - Monitoring - Controlling Cycle
The control process should be perceived as a closed loop system
In a closed loop system, revised plans and schedules should follow corrective actions
The planning-monitoring-controlling cycle is continuously in process until the project is complete
Information Flow for the Planning - Monitoring - Controlling Cycle
Designing the Monitoring System
The first step in setting up any monitoring system is to identify the key factors to be controlled
The project manager must define precisely which specific characteristics of performance, cost, and time should be controlled
Exact boundaries must then be established, within which control should be maintained
Designing the Monitoring System
The best source of items to be monitored is the project action plan
The monitoring system is a direct connection between planning and control
It is common to focus monitoring activities on data that are easily gathered - rather than important
Monitoring should concentrate primarily on measuring various facets of output rather than intensity of activity
Designing the Monitoring System
The measurement of project performance usually poses the most difficult data gathering problem
Performance criteria, standards, and data collection procedures must be established for each of the factors to be measured
Information to be collected may consist of accounting data, operating data, engineering test data, customer reactions, specification changes and the like
How to Collect Data
It is necessary to define precisely what pieces of information should be gathered and when
A large proportion of all data collected take one of the following forms: Frequency counts Raw numbers Subjective numeric ratings Indicators Verbal measures
How to Collect Data
After data collection has been completed, reports on progress should be generated
These reports include project status reports, time/cost reports, and variance reports
Causes and effects should be identified and trends noted
Plans, charts and tables should be updated on a timely basis
How to Collect DataA count of “bugs” found during a series
of tests run on a new piece of software:
How to Collect DataPercent of specified performance met
during repeated trials
How to Collect Data
Monitoring can serve to maintain high morale on the project team
Monitoring can also alert team members to problems that will have to be solved
The purpose of the monitoring system is to gather and report data
The purpose of the control system is to act on the data
How to Collect Data
Significant differences from plan should be highlighted or “flagged” so that they cannot be overlooked by the controller
Some care should be given to the issues of honesty and bias
An internal audit serves the purpose of ensuring all information gathered is honest
No audit can prevent bias - all data are biased by those who report them
How to Collect Data
The project manager is often dependent on team members to call attention to problems
The project manager must make sure that the bearer of bad news is not punished; nor the admitter-to-error executed
The hider-of-mistakes may be shot with impunity - and then sent to corporate Siberia
Information Needs and the Reporting Process
The monitoring system ought to be constructed so that it addresses every level of management
Reports do not need to be of the same depth or at the same frequency for each level
The relationship of project reports to the project action plan or WBS is the key to the determination of both report content and frequency
Information Needs and the Reporting Process
Reports must contain data relevant to the control of specific tasks that are being carried out according to a specific schedule
The frequency of reporting should be great enough to allow control to be exerted during or before the period in which the task is scheduled for completion
The timing of reports should generally correspond to the timing of project milestones
Information Needs and the Reporting Process
The nature of the monitoring system should be consistent with the logic of the planning, budgeting, and scheduling systems
The primary objective is to ensure achievement of the project plan through control
The scheduling and resource usage columns of the project action plan will serve as the key to the design of project reports
Information Needs and the Reporting Process
Benefits of detailed, timely reports delivered to the proper people: Mutual understanding of the goals of the project Awareness of the progress of parallel activities More realistic planning for the needs of all groups Understanding the relationships of individual tasks to
one another and the overall project Early warning signals of potential problems and delays Faster management action in response to
unacceptable or inappropriate work Higher visibility to top management
Report Types
For the purposes of project management, we can consider three distinct types of reports: Routine Exception Special analysis
Routine reports are those issued on a regular basis
Report TypesException reports are useful in two
cases: First, they are directly oriented to project
management decision making and should be distributed to the team members who will have a prime responsibility for decisions
Second, they may be used when a decision is made on an exception basis and it is desirable to inform other managers as well as to document the decision
Report Types
Special analysis reports are used to disseminate the results of special studies conducted as a part of the project These reports may also be used in
response to special problems that arise during the project
Usually they cover matters that may be of interest to other project managers, or make use of analytic methods that might be helpful on other projects
MeetingsMost often, reports are delivered in
face-to-face meetings, and in telephone conference calls
Some simple rules can lead to more productive meetings: Use meetings for making group decisions Have preset starting and stopping times Make sure that homework is done prior to
the meeting
Meetings
Some simple rules for more productive meetings (cont.): Avoid attributing remarks or viewpoints to
individuals in the meeting minutes Avoid overly formal rules of procedure If a serious problem or crisis arises, call a
meeting for the purpose of dealing with that issue only
Common Reporting Problems
There are three common difficulties in the design of project reports:
There is usually too much detail, both in the reports themselves and the input being solicited from workers
Poor interface between the project information system and the parent firm’s information system
Poor correspondence between the planning and the monitoring systems
The Earned Value Chart
One way of measuring overall performance is by using an aggregate performance measure called earned value
A serious difficulty with comparing actual expenditures against budgeted or baseline is that the comparison fails to take into account the amount of work accomplished relative to the cost incurred
The Earned Value Chart
The earned value of work performed (value completed) for those tasks in progress is found by multiplying the estimated percent completion for each task by the planned cost for that task
The result is the amount that should have been spent on the task so far
The concept of earned value combines cost reporting and aggregate performance reporting into one comprehensive chart
The Earned Value ChartGraph to evaluate cost and performance
to date:
The Earned Value ChartVariances on the earned value chart follow
two primary guidelines: 1. A negative is “bad” 2. The cost variances are calculated as the
earned value minus some other measure
BCWP - budgeted cost of work performedACWP - actual cost of work performedBCWS - budgeted cost of work scheduledSTWP - scheduled time for work performedATWP - actual time of work performed
The Earned Value Chart
BCWP - ACWP = cost variance (CV, overrun is negative)
BCWP - BCWS = schedule variance (SV, late is negative)
STWP - ATWP = time variance (TV, delay is negative)
If the earned value chart shows a cost overrun or performance underrun, the project manager must figure out what to do to get the system back on target
Options may include borrowing resources, or holding a meeting of project team members to suggest solutions, or notifying the client that the project may be late or over budget
One note, Microsoft Project 98 does not calculate cost variance as defined by the PMI. They do it in reverse.
The Earned Value Chart
Variances are also formulated as ratios rather than differences Cost Performance Index (CPI) = BCWP/ACWP Schedule Performance Index (SPI) =
BCWP/BCWS Time Performance Index (TPI) = STWP/ATWP
Use of ratios is particularly helpful when comparing the performance of several projects
Cost/Schedule Control System Criteria (C/SCSC)
C/SCSC was developed by the U.S. Department of Defense in the late 1960s and was required for defense projects
It was an extension of the earned value analysis It spelled out a number of standards of
organization, accounting, budgeting, etc. that firms must meet if they are to be considered acceptable for government contracts
It is usually not required on government projects, but still is required by some businesses
Cost/Schedule Control System Criteria (C/SCSC)
For purposes of control, it is just as important to emphasize the need to relate the realities of time, cost, and performance with the project’s master plan
To do this, the set of action plans (the project master plan) must be kept up to date
Cost/Schedule Control System Criteria (C/SCSC)
Differences between work scheduled and work planned can develop from several different causes: Official change orders in the work elements Informal alterations in the methods used Official or unofficial changes in the tasks to be
accomplished
If the plan is not altered to reflect such changes, comparisons between plan and actual are not meaningful
Milestone Reporting
Milestone reports serve to keep all
parties up to date on what has been
accomplished
If accomplishments are inadequate or
late, these reports serve as starting
points for remedial planning
Computerized PMIS
New microcomputer-based project management information systems (PMISs) are considerably more sophisticated than earlier systems
Uses the microcomputer’s graphics, color, and other features more extensively
Many systems can handle almost any size project, being limited only by the memory available in the computer
Computerized PMIS
The PMIS trend of the 1990s has been to integrate the project management software with spreadsheets, databases, word processors, communication, graphics, and the other capabilities of Windows-based software packages
The current trend is to facilitate the global sharing of project information, including complete status reporting, through local networks as well as the Internet
Current Software
The explosive growth of project management software during the early 1990s saw the creation of more than 500 packages
Systems can be easily misused or inappropriately applied - as can any tools
The most common error is managing the PMIS rather than the project itself
Current Software
In addition to managing the PMIS instead of the project, other problems include: Computer paralysis PMIS verification Information overload Project isolation Computer dependence PMIS misdirection
Choosing SoftwareCharacteristics of generally desirable
attributes in project management software:
– Friendliness– Schedules– Calendars– Budgets– Reports– Graphics– Charts– Migration
Typical Software Output
Software evaluation action plan
Typical Software Output
Early and late start and finish dates and slack
Typical Software Output
Gantt Chart
Typical Software Output
AON Network
Typical Software Output
Gantt Chart Tracking progress
Summary
It is important that the planning-monitoring-controlling cycle be a closed loop cycle based on the same structure as the parent system
The first task in designing the monitoring system is to identify key factors in the project action plan to be monitored and to devise standards for them
The factors should concern results, rather than activities
Summary
The data collected are usually either frequency counts, numbers, subjective numeric ratings, indicators, or verbal measures
Project reports are of three types: routine, exception, and special analysis
Project reports should include an amount of detail appropriate to the target level of management
Summary
Three common reporting problems are too much detail, poor correspondence to the parent firm’s reporting system, and a poor correspondence between the planning and monitoring systems
The earned value chart depicts scheduled progress, actual cost, and actual progress (earned value) to allow the determination of spending, schedule, and time variances
Summary
There exist a great number of computerized PMIS’s that are available for project managers, with software evaluations occurring regularly in various magazines
Project managers’ preferred PMIS features are friendliness, schedules, calendars, budgets, reports, graphics, networks, charts, migration, and consolidation
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Questions?
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Picture Files
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