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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