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14. 4KF3 Ch. 13 Progress and Performance Measurement and Evaluation.docx

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Steve Way

Chapter 13: Progress and Performance Measurement and Evaluation 4KF3 Lecture Notes Progress and Performance Measurement and Evaluation Project Monitoring Information Systems  What, How, When and Who for data collection  Analysis of data  Reporting of Progress  What data to collect is determined by metrics Project Control Process 1. Setting a baseline plan. 2. Measuring progress and performance. 3. Comparing plan against actual. 4. Taking action. Monitoring Time Performance • Tracking Gantt Chart • Control Chart Page 1 of 11 Chapter 13: Progress and Performance Measurement and Evaluation 4KF3 Steps for Integrating Cost/Schedule System New Terms • EV (aka BCWP): Budgeted Cost of the Work Performed – what we have earned so far • PV (aka BCWS): Budgeted Cost of the Work Scheduled – baseline • AC (aka ACWP): Actual Cost of the Work Performed • Cost Variance = EV – AC • Schedule Variance = EV – PV • BAC: Budgeted Cost At Completion • EAC: Actual Cost At Completion • ETC: Actual Cost To Complete the remaining work • VAC: Did we spend more or less? Cost/Schedule Graph Page 2 of 11 Chapter 13: Progress and Performance Measurement and Evaluation 4KF3 Earned Value Review Sample Project Rollup for Period Page 3 of 11 Chapter 13: Progress and Performance Measurement and Evaluation 4KF3 Performance Indices ***CSI tells you how close you are to completing the project on time and in budget. Other Earned Value Rules  0/100 Rule  50/50 Rule  Percent complete with weighted monitoring gates Forecasting Final Project Costs Page 4 of 11 Chapter 13: Progress and Performance Measurement and Evaluation 4KF3 Other Control Issues  Scope Creep  Baseline Changes (“rubber baseline”)  Costs and Problems of Data Acquisition Reading Notes Structure of a Project Monitoring Information System  A project monitoring system involves determining what data to collect; how, when, and who will collect the data; analysis of the data; and reporting current progress  What data are collected? o Determined by which metrics will be used for project control o Typical key data includes duration times, resource usage and rates, actual costs  Collecting data and analysis o Establish who, when and how the data will be assembled o Electronic means  Reports and Reporting o Who gets progress reports? o A common topic format for progress reports:  Progress since last report  Current status of project  Schedule  Cost  Scope  Cumulative trends  Problems and issues since last report  Actions and resolution of earlier problems  New variances and problems identified Page 5 of 11 Chapter 13: Progress and Performance Measurement and Evaluation 4KF3  Corrective plan established The Project Control Process  Control: the process of comparing actual performance against plan to identify deviations, evaluate possible alternatives courses of actions, and take appropriate corrective action o Step 1: Setting a baseline plan  Derived from WBS and time-sequence data o Step 2: Measuring progress and performance  Time and budgets and quantitative measures of performance that readily fit into the integrated information system  Qualitative measures such as meeting customer technical specifications and product function are most frequently determined by on-site inspection or actual use  Earned value (EV): defined as the budgeted cost of the work performed o Step 3: Comparing plan against actual  Status reports should take place every 1-4 weeks o Step 4: Taking action  If deviations from plans are significant, corrective action will be needed to bring the project back in line with the original or revised plan Monitoring Time Performance  A major goal so progress reporting is to catch any negative variances from plan as early as possible to determine if corrective action is necessary  Gantt charts are most favoured, used, and understandable tools o Easy-to-understand visual format  Tracking Gantt Chart o Although sometimes the Gantt chart does not show dependencies, when it is used in a network, the dependencies are easily identified if tracing is needed  Control Chart o Monitors past project schedule performance and current performance and to estimate future schedule trends o Used to plot the difference between the scheduled time on the critical path at the report date with the actual point on the critical path o Useful for giving warnings o Frequently used to monitor progress toward milestones, which mark events and as such have zero duration Development of an Earned Value Cost/Schedule System  Glossary of terms: EV  Earned vale for a task  The percent complete X the original budget Page 6 of 11 Chapter 13: Progress and Performance Measurement and Evaluation 4KF3 PV  The planned time-phased baseline of the value of the work scheduled  An approved cost estimate of the resources scheduled in a time-phased cumulative baseline AC  Actual cost of the work completed  The sum of the costs incurred in accomplishing work CV  Cost variance is the difference between the earned value and the actual costs for the work completed to date  CV = EV – AC SV  Schedule variance is the difference between the earned value and the baseline to date  SV = EV – PV BAC  Budgeted cost at completion  The total budgeted cost the baseline of project cost accounts EAC  Estimated cost at completion ETC  Estimated cost to complete remaining work VAC  Cost variance at completion  VAC indicated expected over- or underrun cost at completion  The EV system starts with the time-phased costs that provide the project budget baseline  Comparisons are made with actual and planned schedule and costs  Provides the missing links not found in conventional cost-budget systems  Five Steps: 1) Define the work using a WBS (at planning stage)  Developing documents that included the following information: i. Scope ii. Work packages iii. Deliverables iv. Organization units v. Resources vi. Budgets for each work package 2) Develop work and resource schedule (at planning stage) a. Schedule resources to activities b. Time-phase work packages into a network 3) Develop a time-phase budget using work packages included in an activity (at planning stage)  Cumulative values will become the baseline (PV)  The sum should equal the budgeted amounts for all the work packages in the cost accounts 4) At the work package level, collect the actual costs for the work performed (at execution stage)
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