Project Management:
A Managerial Approach 4/e
By Jack R. Meredith and Samuel J. Mantel, Jr.
Published by John Wiley & Sons, Inc.
Presentation prepared by RTBM WebGroup
Project Management
A 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
Chapter 10-1
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
Chapter 10-2
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
Chapter 10-3
Information Flow for the Planning
- Monitoring - Controlling Cycle
Chapter 10-4
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
Chapter 10-5
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
Chapter 10-6
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
Chapter 10-7
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
Chapter 10-8
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
Chapter 10-9
How to Collect Data
A count of “bugs” found during a series of
tests run on a new piece of software:
Chapter 10-10
How to Collect Data
Percent of specified performance met during
repeated trials
Chapter 10-11
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
Chapter 10-12
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
Chapter 10-13
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
Chapter 10-14
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
Chapter 10-15
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
Chapter 10-16
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
Chapter 10-17
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
Chapter 10-18
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
Chapter 10-19
Report Types
Exception 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
Chapter 10-20
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
Chapter 10-21
Meetings
Most often, reports are delivered in face-toface 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
Chapter 10-22
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
Chapter 10-23
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
Chapter 10-24
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
Chapter 10-25
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
Chapter 10-26
The Earned Value Chart
Graph to evaluate cost and performance to
date:
Chapter 10-27
The Earned Value Chart
Variances 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 performed
ACWP - actual cost of work performed
BCWS - budgeted cost of work scheduled
STWP - scheduled time for work performed
ATWP - actual time of work performed
Chapter 10-28
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.
Chapter 10-29
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
Chapter 10-30
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
Chapter 10-31
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
Chapter 10-32
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
Chapter 10-33
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
Chapter 10-34
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
Chapter 10-35
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
Chapter 10-36
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
Chapter 10-37
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
Chapter 10-38
Choosing Software
Characteristics of generally desirable
attributes in project management software:
– Friendliness
– Schedules
– Calendars
– Budgets
– Reports
– Graphics
– Charts
– Migration
Chapter 10-39
Typical Software Output
Software evaluation action plan
Chapter 10-40
Typical Software Output
Early and late start and finish dates and slack
Chapter 10-41
Typical Software Output
Gantt Chart
Chapter 10-42
Typical Software Output
AON Network
Chapter 10-43
Typical Software Output
Gantt Chart Tracking progress
Chapter 10-44
Summary
It is important that the planning-monitoringcontrolling 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
Chapter 10-45
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
Chapter 10-46
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
Chapter 10-47
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
Chapter 10-48
Monitoring and Information Systems
Questions?
Chapter 10-49
Monitoring and Information Systems
Picture Files
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Table Files
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