Chapter 9

Project Monitoring and Control

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Project Management Process
Groups
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
 Outputs include performance reports,
requested changes, and updates to various
plans
Chapter 9 Project Monitoring & Control 3
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

Chapter 9 Project Monitoring & Control 4

Project Control
 Ongoing effort to keep your project on track
 4 primary activities:
 1. Planning performance

schedule, and a control process
 2. Measuring status of work performed

Actuals
 3. Comparing to baseline
 Variances
 4. Taking corrective action as needed

Response
 Prerequisite to good control is a good plan
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Project Control
 “Control”
 Power, authority, domination. No.

Guiding a course of action to meet an objective. Yes.
 Principles
 Work is controlled, not workers
 Control helps workers be more effective & efficient

Control based on work completed
 Balance
 Appropriate level between too much and too little
 Includes:
 Micro-managing vs. neglect

 Too much tracking detail vs. too little

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Progress Monitoring
 The 3 key Progress Monitoring
Questions
 What is the actual status?
 If there’s a variance, what is cause?
 What to do about it?
 Possible responses
 1. Ignore

2. Take corrective action

3. Review the plan
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Progress Monitoring
 Monitoring rates
 Daily, weekly, monthly
 If problems occur – then adjust
 You may have to monitor problem areas more closely
 For some period of time
 Almost always there’s one or more areas under closer
scrutiny
 Status Reporting
 Part of the communications management plan

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Status Reports
 From team to PM, from PM to stakeholders
 Typical format for letter
 Summary
 Accomplishments for this period (done)
 Tasks, milestones,
 Plans for next period (to-do)
 Risk analysis and review
 Issues & Actions
 Shoot for weekly updates
 Email notes, then hold brief meeting
 More frequently during crises
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Traffic Light Assessment
 Identify the key element
 Break these key element in constitute element
 Access each second level element
 Green (on target)
 Amber (not on target but recoverable)
 Red (not on target but recoverable with difficulties)
 Review all the second level assessment to arrive at
first level assessment

Chapter 9 Project Monitoring & Control 10

Project Control Cycle

PLAN
Specifications
ACTION Project Schedule
Correct Project budget
deviations Resource plan
MONITOR
from plan Vendor contracts
Record status
RE-PLAN as Report progress
Report cost
necessary
COMPARE
Actual status
against plan
-Schedule
-Cost

Chapter 9 Project Monitoring & Control 11

Project Control
 Control – process and activities needed to
correct deviations from plan
 Control the triple constraints
 time (schedule)
 cost (budget, expenses, etc)
 performance (specifications, testing results, etc.)

Chapter 9 Project Monitoring & Control 12

Techniques for monitoring and
control
 Earned Value Analysis
 Critical Ratio

Chapter 9 Project Monitoring & Control 13

Earned Value Analysis (EVA)
 Earned Value analysis is a method of performance
measurement
 EVA is also called Variance Analysis
 Metric of project tracking
 “What you got for what you paid”
 Physical progress
 Pre-EVA ‘traditional’ approach
 1. Planned time and costs
 2. Actual time and costs
 Progress: compare planned vs. actual
 EVA adds third dimension: value
 Planned, actual, earned

Chapter 9 Project Monitoring & Control 14

Earned Value Analysis
 If total value of the work accomplished is in balance
with the planned (baseline) cost, and actual cost then
top mgmt has no particular need for a detailed
analysis of individual tasks
 Old models include cost & expenditure
 EVA adds schedule estimation
 Measured in dollars or hours

Chapter 9 Project Monitoring & Control 15

Earned Value Analysis
 3 major components

BCWS: Budgeted Cost of Work Scheduled
 Now called “Planned Value” (PV)
 “Yearned”
 How much work should be done?

BCWP: Budgeted Cost of Work Performed
 Now called “earned value” (EV)
 “Earned”
 How much work is done?
 BCWS * % complete
 ACWP: Actual Cost of Work Performed
 Now called “Actual Cost” (AC)
 “Burned”
 How much did the work done cost?

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Derived EVA Variances

SV: Schedule Variance
 BCWP – BCWS
 Planned work vs. work completed

CV: Cost Variance
 BCWP – ACWP
 Budgeted costs vs. actual costs
 Negatives are termed ‘unfavorable’

“What is the project status”?
 You can use variances to answer this

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Derived EVA Ratios
 SPI: Schedule Performance Index
 BCWP / BCWS
 CPI: Cost Performance Index
 BCWP / ACWP
 Interpretation of Indexes

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Earned Value Analysis
 Other Derived Values

BAC: Budget At Completion
 Sum of all budges (BCWS). Your original budget.
 Planned Value (PV) at the end of the project

EAC: Estimate At Completion
 Forecast total cost at completion
 EAC = ((BAC – BCWP)/CPI) + ACWP
 Unfinished work divided by CPI added to sunk cost
 If CPI < 1, EAC will be > BAC
 CR: Critical Ratio
 SPI x CPI
 1: everything on track
 > .9 and < 1.2 ok
 Can be charted
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EVA Example-1
 You have a project to be completed in 12 months and total cost of
project is $100,000. Six months have been passed (and schedule says
that 50% of work should be completed).
 Six months have been passed and $60,000 is spent but on closer look
you find that only 40% of work is completed so far.
 Planned Value (BCWS)
 Project duration – 12 months
 Project Cost (BAC) = $100,000
 Percent complete – 50% (as per the schedule)
 Planned Value = 50% of value of total work
 = 50% of BAC
 = 50% of $100,000
 = (50/100)X $100,000
 = $50,000

 Chapter 9 Project Monitoring & Control 20

EVA Example-1
 Earned Value (BCWP)
 Hence, Earned Value is = 40% of value of total work
 = 40 % of BAC
 = 40% of $100,000
 = 0.4X$100,000
 = $40,000
 Therefore, Earned Value (EV) is $40,000
 Actual Cost (ACWP)
And in our question, you have spent $60,000 on the project so far.
 Hence, Actual Cost is $60,000
 Calculate SPI and CPI?

Chapter 9 Project Monitoring & Control 21

Earned Value Analysis
 Benefits
 Consistent unit of measure for total progress
 Consistent methodology

Across cost and completed activity

Apples and apples comparisons
 Ability to forecast cost & schedule
 Can provide warnings early
 Success factors
 A full WBS is required (all scope)

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