Project management a managerial approach chapter 10

Project Management: A Managerial Approach Chapter 10 – Monitoring and Information Systems â 2006 John Wiley Overview • • Closed-loop System Monitor System Design Data Collection Project Reports Earned Value Charts © 2006 John Wiley 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 © 2006 John Wiley 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 © 2006 John Wiley 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 © 2006 John Wiley Chapter 10-3 Project Control Closed-Loop MANAGEMENT FEEDBACK LOOPS “Customer” IDs Need “Ballpark” Resource Estimates “Project Plan And Schedule” Develop Functional Specs Verify Specs w/ “Customer Design Specs to Engineering Specs Functional Specs to Design Specs Implement, Monitor, & Control Stakeholder Feedback PM TEAM FEEDBACK LOOPS © 2006 John Wiley REPORT/MONITOR FEEDBACK LOOPS PLANNING/SCHEDULING FEEDBACK LOOPS Information Flow for the Planning Monitoring - Controlling Cycle © 2006 John Wiley 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 © 2006 John Wiley 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 © 2006 John Wiley 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 © 2006 John Wiley Chapter 10-7 The Earned Value Chart • Graph to evaluate cost and performance to date: © 2006 John Wiley The Earned Value Chart • Variances on the earned value chart follow two primary guidelines: – A negative is means there is a deviation from plan—not good – The cost variances are calculated as the earned value minus some other measure • • • • • EV - Earned Value: budgeted cost of work performed AC - actual cost of work performed PV - Planned Value: budgeted cost of work scheduled ST - scheduled time for work performed AT - actual time of work performed © 2006 John Wiley Chapter 10-28 The Earned Value Chart • EV - AC = cost variance (CV, overrun is negative) • EV - PV = schedule variance (SV, late is negative) • ST - AT = 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 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 © 2006 John Wiley Chapter 10-29 The Earned Value Chart • Variances are also formulated as ratios rather than differences – Cost Performance Index (CPI) = EV/AC – Schedule Performance Index (SPI) = EV/PV – Time Performance Index (TPI) = ST/AT • Use of ratios is particularly helpful when comparing the performance of several projects © 2006 John Wiley Chapter 10-30 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 © 2006 John Wiley 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 © 2006 John Wiley 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 © 2006 John Wiley 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 © 2006 John Wiley 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 © 2006 John Wiley Chapter 10-38 Choosing Software • Characteristics of generally desirable attributes in project management software: » Friendliness » Schedules » Calendars » Budgets » Reports » Graphics » Charts » Migration © 2006 John Wiley Chapter 10-39 Typical Software Output © 2006 John Wiley Chapter 10-40 Typical Software Output • Early and late start and finish dates and slack © 2006 John Wiley Chapter 10-41 Typical Software Output • Project Cost Tracking © 2006 John Wiley Chapter 10-42 Typical Software Output • AON Network © 2006 John Wiley Chapter 10-43 Copyright 2006 John Wiley & Sons, Inc All rights reserved Reproduction or translation of this work beyond that permitted in section 117 of the 1976 United States Copyright Act without express permission of the copyright owner is unlawful Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc The Publisher assumes no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information herein © 2006 John Wiley ... 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 –... 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... measured • Information to be collected may consist of accounting data, operating data, engineering test data, customer reactions, specification changes and the like © 2006 John Wiley Chapter 10- 7