OPMA 5364
Project Management
Part 6
Project Control
Topic Outline: Project Control
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Project control steps
Measuring and monitoring system
Resource allocation and resource conflicts
Project accelerating/crashing
Resource loading and leveling
Project control exercise
Project tracking tools
Earned value analysis
Microsoft Project example
Scope creep and change control system
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Project Control
• Project control  taking corrective actions
to keep the project on target toward meeting
its performance goals (time, cost,
deliverables)
• The project manager has final responsibility
for project control
• There are many ways to exert control; the PM
must decide which is most appropriate
– Resource allocations, funding decisions,
personnel assignments, change in priorities
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Project Control – 3 Steps
1. Measuring & Monitoring
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Identifying/tracking key performance metrics
2. Evaluating
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Analyzing causes of problems and potential
corrective actions
3. Correcting
•
Taking corrective actions to bring project
performance back in line with goals
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Measuring & Monitoring System
Many issues must be decided for a good
measuring and monitoring system
• What should be measured and monitored?
• How should it be measured?
• Who should monitor it?
• How should it be monitored?
• When should it be monitored?
• Where should info be stored?
• Who should have access to info?
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Project Reports as a Control Tool
• Reports are one way to give many different
people a chance to look for potential problems
• They also can keep everyone updated about the
current project status
• Everyone concerned with the project should
receive reports containing info. relevant to
issues under their control
• What types of info. should an engineer working
on a project receive, vs. senior management?
• When should these reports be provided?
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Resource Allocation
• Resource allocation can be used as a control
mechanism
• Allocating more, less, or different physical
resources can affect the progress of activities,
and can affect their cost and/or the quality of
outputs/deliverables as well
• Assigning more, less, or different employees
also can affect project performance
• Allocating more or less funds to an activity is
yet another way to affect project performance
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Resource Conflicts
• Sometimes a limited resource is needed (at
the same time) by several activities in one
project or by different activities in multiple
projects (so some of the activities must wait)
• Setting priority rules for which activity get the
constrained resource first can be a means of
project control
• In the case of multiple projects, the goals and
importance of all the projects should be
considered
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Resource Conflict Rules
Example: Suppose two tasks from different
projects need to use the radiation testing lab
chamber at the same time. Which gets it first?
• task with the least slack time
• task that needs the least time in the lab
• task that needs the most time in the lab
• task with the most following activities
• task from the more important or profitable project
• arbitrary—flip a coin
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Project Accelerating/Crashing
• Project crashing (or accelerating a project) is
another way to exert project control
• “Crashing” a project means shortening its
duration, or speeding it up (doing it quicker)
• Unfortunately, this almost always costs more
• Sometimes crashing is done because earlier
activities were delayed; other times it is done
because the customer is willing to trade a
higher cost for a shorter project time frame
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Project Crashing
Rules:
• only crash critical activities
• crash the cheapest critical activity first
• assume each task can be crashed one day at a
time (simplifying assumption, but not necessary)
• all critical paths must decrease by one day, in
order for the project duration to decrease by one
day
Crashing example
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Resource Loading
• For each resource during each time period,
determine the total amount of resource time
required by all activities combined
• Compare this total time with the capacity of
the resource during each time period
• Identify resources that are over-utilized (or
overloaded) during any time period
• What should be done about it?
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Resource Leveling
• Re-scheduling some activities to eliminate
resource overloading in certain time periods
• Try to delay activities that have extra slack
time first—this will not delay the project
• If that doesn’t work, then activities must be
delayed which will delay the project due date
• Popular project management software will
identify resource overloading and will perform
resource leveling automatically if requested
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Microsoft Project Example
Activity
Predecessor
Duration
a
b
c
d
--b
a,b
5
3
5
4
Tim
Joe
Gus
Amy
e
f
g
a
e
c,d
2
6
2
Amy, Joe
Sue
Tim
Done
f,g
0
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Resources
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Microsoft Project Example
a.) Enter all data
b.) Resource Loading: Look at Resource Sheet, Resource
Usage, and Resource Graphs (Amy is the only
overloaded resource)
c.) Perform resource leveling (Tools..Resource
Leveling..Level Now)
What changed? Why?
d.) Suppose activity c needed Sue instead of Gus.
Do resource leveling again.
What changed? Why?
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Project Control Exercise
Envirosafe Project case
(30 minutes)
• Divide into small groups
• Read case
• Discuss why the project was late and over
budget; root causes
• Recommend control procedures and other
changes that should prevent future problems
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Project Tracking Tools
• Popular project management software allows you
to easily track cost and schedule performance as
the project progresses
• This provides a useful tool for project control
• The current cost and schedule status must be
entered routinely (daily or weekly)
• For each activity, you must estimate: actual cost
so far, and percent complete
• Earned Value Analysis is a common tracking tool
that provides performance metrics
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Earned Value Analysis
• Earned Value Analysis compares the current
project status with the original (baseline) plan
• It computes several performance metrics for
individual activities and for the entire project
• It focuses on cost and schedule performance
• It’s a useful tool for project control
• Popular project management software
computes these metrics
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Earned Value
• Earned Value for a task = (budgeted cost of
task)*(% completion of task)
• It’s often difficult to estimate % completion of
a task; 4 approaches once task is started:
–
–
–
–
assume 50% completion until task is finished
assume 0% until task is finished
use % of budgeted cost or time used so far
best guess of knowledgeable person (best)
• Earned Value for the entire project is the
summation of earned values for all tasks
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Earned Value Metrics
• BCWS—Budgeted Cost of Work Scheduled (PV)
– baseline cost of scheduled work
• ACWP—Actual Cost of Work Performed (AC)
– actual cost of work actually performed so far
• BCWP—Budgeted Cost of Work Performed (EV)
– budgeted cost of work actually performed so far
• Cost variance (CV) = BCWP – ACWP
• Schedule variance (SV) = BCWP – BCWS
• BAC—Budgeted cost At Completion
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Earned Value Chart
• 3 lines on chart:
– Baseline—planned cost over time (BCWS)
– Actual Cost line (ACWP)
– Earned Value line (BCWP)
• Schedule variance (negative is bad)
• Cost variance (negative is bad)
• Example chart on next slide
– describe project performance in this example
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Dollars
Earned Value Chart 1
Cost schedule plan
(baseline)
Performance
Cost
Sched.
ACWP
Actual cost
BCWS
BCWP
Schedule
variance
Cost
variance
Value completed (Earned Value)
Now
Time
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Dollars
Earned Value Chart 2
Performance
Cost
Sched.
ACWP
BCWS
baseline
BCWP
=EV
Now
Time
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Dollars
Earned Value Chart 3
BCWP = EV
Performance
Cost
Sched.
BCWS
baseline
ACWP
Now
Time
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Earned Value Chart 4
Dollars
Performance
Cost
Sched.
BCWS
baseline
ACWP
BCWP = EV
Now
Time
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Earned Value Chart 5
Dollars
Performance
Cost
Sched.
BCWS
baseline
BCWP = EV
ACWP
Now
Time
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Earned Value Chart 6
Dollars
Performance
Cost
Sched.
BCWS
baseline
BCWP
=EV
ACWP
Now
Time
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Earned Value Metrics
• BCWS—Budgeted Cost of Work Scheduled (PV)
– baseline cost of scheduled work
• ACWP—Actual Cost of Work Performed (AC)
– actual cost of work actually performed so far
• BCWP—Budgeted Cost of Work Performed (EV)
– budgeted cost of work actually performed so far
• Cost variance (CV) = BCWP – ACWP
• Schedule variance (SV) = BCWP – BCWS
• BAC—Budgeted cost At Completion
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CPI and SPI
CPI and SPI give the same information as cost
variance and schedule variance, except as a
ratio instead of as a $ difference
• Cost Performance Index (CPI)
– CPI = BCWP / ACWP (or EV / AC)
• Schedule Performance Index (SPI)
– SPI = BCWP / BCWS (or EV / PV)
• Values less than 1.0 are undesirable
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Example
Example: Budgeted cost for finished task = $850;
Actual cost to date = $550; Task is 70% complete,
but was scheduled to be 80% complete by now
BCWS = 0.8*($850) = $680
PV (baseline)
BCWP = 0.7*($850) = $595
EV
ACWP = $550
AC
Cost variance = BCWP – ACWP = +$45 (good)
Schedule variance = BCWP – BCWS = -$85 (bad)
CPI = BCWP / ACWP = 1.082 (good)
SPI = BCWP / BCWS = 0.875 (bad)
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ETC and EAC
Two more cost metrics are ETC and EAC
• Estimated (remaining cost) To Completion
– ETC = (BAC – BCWP) / CPI
• (note: Microsoft Project does not divide by CPI)
– BAC = budgeted cost at completion = $850
– ETC = (850 – 595) / 1.082 = $235.67
• Estimated (total cost) At Completion
– EAC = ETC + ACWP
– EAC = 235.67 + 550 = $785.67
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Microsoft Project Example
Prede- Duration
Activity cessors (weeks)
Budget
($)
Actual
%
Cost ($) Complete
a
b
---
2
3
300
200
400
180
100
100
c
d
a
a
2
5
250
600
300
400
100
20
e
b,c
4
400
200
20
It is currently the end of week 6, so activity d should be
80% complete and activity e should be 50% complete
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Microsoft Project Example
a.) Input activities, durations, and predecessors
b.) Set the project start date at 1/5/04 (Project..Project Information)
c.) Enter the budgeted cost of each activity as the Fixed Cost on
the cost view of MS Project (View..Table: Cost)
d.) Save the baseline information (Tools..Tracking..Save Baseline)
e.) Update the project to show work completed through 2/15/04
(Tools..Tracking..Update Project)
f.) Update each task to show % completion (View..Table: Tracking)
g.) Enter the actual cost for each activity as of 2/15/04 in the Cost
view of MS Project. To do this you will need to uncheck the
option button that reads ‘Actual costs are always calculated by
Microsoft Project’ (Tools..Options..Calculation)
i.) Print the Earned Value report (View..Reports..Costs..Earn.Val.)
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Scope Creep
• PM must be cautious of scope creep. Why?
• Most common cause is due to the client or project
team wanting to enhance the project’s deliverables
• The later that changes are made, the more difficult
and costly they become
• Scope creep is welcome if it lowers costs or
enhances the firm’s competitiveness
• A change control system allows the PM to assess
the impacts and desirability of potential changes
before deciding to implement them
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Change Control System
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Review suggested changes
Assess all impacts to project goals
Evaluate advantages and disadvantages
Consider alternative changes that are better
Allow responsible parties to make decision in
light of all information
• Communicate changes to everyone involved
• Implement changes
• Summarize all changes and impacts in report
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