TM 665 Project Planning

1
TM 665Project Planning Control Dr. Frank
Joseph Matejcik
5th Session 2/23/04 Chapter 10 Monitoring and
Information Systems

• South Dakota School of Mines and Technology,
  Rapid City

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Agenda New Assignment

• New Assignment Chap. 10 problems 2 8
• Calendar
• M M (Chapter 10 Monitoring and Information
  Systems)

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Tentative Schedule
Chapters Assigned Chapters 12-Jan 1 e-mail
22-Mar 4 contact, p24 questions 19-Jan Holiday
29-Mar 5, 6(start) 26-Jan 2 Problems 3-7 page
93 05-Apr 6, 7 02-Feb 8 problem 12, MS
Project 12-Apr Holiday 09-Feb 9 problems 3,
5 19-Apr 11 16-Feb Holiday 26-Apr 12,13 23-Fe
b 10 problems 2, 8 3-May Final 01-Mar Test 0
8-Mar Break 15-Mar 3
Attendance Policy Help me work with you.
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Updates to M M

• IIEs Solutions lists 44 short reviews of Project
  Management Programs
• Multiple offerings from vendors
• Some supplement MS Project other
• Prices as high as 1 million, as low as 49
• Web based Systems
• Advantage access anywhere
• Disadvantages Web speed general dot.com
  problems
• Couldnt find a free system like Software602s
  office suite

Not in Text
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Updates to M M

• OnProject http//www.onproject.com/
• most features of Microsoft Project share
  project information w/o setting up a server.
• 50/month for lt 21 users ( unlimited projects),
  30MB of free storage (each additional megabyte
  costs 6 cents) a download 30-day trial version
• Project 2000 costs 249.
• Appcity http//www.appcity.com/
• Is free entirely on line
• mainly for IT market
• Not a complete PM program

Not in Text
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Monitoring and Information Systems

• Project monitoring defined
• The plan-monitor-control cycle
• Designing the monitoring system
• Behavioral aspects of monitoring
• Earned value analysis
• Earned value examples

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Project Monitoring Defined

• Collecting, recording, and reporting information
  concerning any and all aspects of project
  performance that the project manager or others
  wish to know

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Effective Monitoring Precedes Control

• In Chapter 11, well look at Project Control
• Ensuring that actually mesh with the plan
• But effective control requires good information
• Such pertinent and timely information comes from
  an accurate monitoring system

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Monitoring Has Several Uses

• Project Monitoring has secondary uses
• Project auditing
• Lessons learned
• Reporting to client and senior management
• But the primary use is project control
• Ensuring that decision-makers have timely
  information enabling effective control over the
  project

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The Planning-Monitoring-Controlling Cycle

• Effective monitoring and control begins with good
  project planning
• What are the critical areas?
• How and when can progress be measured?
• Who gathers and reports info, to whom?
• The plan-monitor-control cycle continues through
  the entire project

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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

Section 10.1
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The Planning - Monitoring - Controlling Cycle

• The control process should be perceived as a
  closed loop system
• The planning-monitoring-controlling cycle is
  continuously in process until the project is
  complete
• In a closed loop system, revised plans and
  schedules should follow corrective actions

Section 10.1
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Project Control Information Flow, Figure 10-1
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Designing the Monitoring System

• 1. Start with the key factors to be controlled
• Pareto analysis a relatively few activities
  determine most of the projects success
• Use the project plan to identify items to be
  monitored
• Although other areas might be added also

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Designing the Monitoring System (contd)

• 2. Develop measurement systems
• Measure results, not activity outputs, rather
  than inputs
• Extract performance, time and cost goals from
  project plans
• Avoid tendency to focus on that which is easily
  measurable

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Designing the Monitoring System (contd)

• 3. Collecting Data Most data falls into one of
  five categories, as follows (with examples)
• Frequency counts tally of occurrences . . .
• Raw numbers dates, dollars, percents, specs .
  . .
• Subjective ratings numerical ranking,
  red-yellow-green assessments . . .
• Indicators surrogate measures of merit . . .
• Verbal measurement oral or written
  characterizations . . .

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Designing the Monitoring System (contd)

• 4. Reporting on Data Collected To turn data
  into information, it must be contextualized
• Reporting must be timely
• Data must be analyzed
• Trends Getting better or worse?
• Comparables Performance compared to specs, past
  performance, standard hours, etc.
• Statistical analysis
• Causation and correction

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Designing the Monitoring System

• The best source of items to be monitored is the
  Work Breakdown Structure
• 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

Section 10.1
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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

Section 10.1
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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

Section 10.1
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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

Section 10.1
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How to Collect Data

• A count of bugs found during a series of tests
  run on a new piece of software

Section 10.1
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How to Collect Data

• Percent of specified performance met during
  repeated trials

Section 10.1
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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

Section 10.1
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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

Section 10.1
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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

Section 10.1
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Reporting and Information Flows, Figure 10-5
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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

Section 10.2
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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

Section 10.2
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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

Section 10.2
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Information Needs and the Reporting Process
Section 10.2

• 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

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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

Section 10.2
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Report Types
Section 10.2

• 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 it is desirable to
  inform other managers as well as for
  documentation

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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

Section 10.2
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Meetings

• Most often, reports are delivered in face-to-face
  meetings, and in 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

Section 10.2
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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

Section 10.2
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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 firms information system
• Poor correspondence between the planning and the
  monitoring systems

Section 10.2
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Some Behavioral Aspects of Monitoring Systems

• Effective monitoring reduces surprises, and this
  can increase trust, morale
• Some reporting bias is inevitable, but dishonesty
  is unacceptable
• Shooting the messenger today just creates
  concealment tomorrow

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Earned Value Analysis (EVA)

• Needed An objective way to measure overall
  project performance
• The problem comparing actual expenditures to
  baseline plan is that it ignores the amount of
  work actually completed
• Thus, Earned Value Analysis
• A sort of cost accounting for projects

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Five Important Terms

1. BCWS The plan, integrating schedule and budget
2. BCWP What you planned to spend for work
   actually done
3. ACWP Actual dollars spent at a point in time,
   for the work actually done
4. STWP Time scheduled for work performed
5. ATWP Actual time for work performed

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The Earned Value Chart

• Graph to evaluate cost performance to date

Figure 10-7, Page 526 It defines the Terms.
Section 10.2
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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

Section 10.2
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More Terms

• BAC Budget at completion
• EAC Estimated cost at completion
• ETC Estimated cost to complete

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Five Relationships

• Cost Variance (CV) BCWP - ACWP
• Schedule Variance (SV) BCWP - BCWS
• Time Variance (TV) STWP - ATWP
• Estimated Cost to Complete (ETC) (BAC
  BCWP)/CPI
• Estimate Cost at Completion (EAC) ACWP ETC

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Indices Help Visualize Performance

• Projects on cost, on schedule will have indices
  1.0
• Indices below 1.0 are unfavorable
• Cost Performance Index (CPI) BCWP/ACWP
• Schedule Performance Index (SPI) BCWP/BCWS
• Cost-Schedule Index (CSI) CPI X SPI

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Possible Arrangements, Figure 10-8
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Example

1. Assume a work package expected to be finished
   today, at cost of 1500. But youre only 2/3
   complete, and youve spent 1350.
2. CPI BCWP/ACWP 1000/1350 .74
3. SPI BCWP/BCWS 1000/1500 .67
4. CSI CPI/SPI .74 X .67 .49

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Example (contd)

• Then you can calculate the estimated cost to
  complete the project (ETC) and the estimated cost
  at completion (EAC)
• ETC (BAC BCWP)/CPI (1500
  1000)/.74 676
• EAC ACWP ETC 1350 676
  2026

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Another Earned Value Example

• A 10-day project, today is day 7

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PERT AON Diagram, Figure 10-9
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Example Baseline Budget Using 50-50 Rule, Figure
10-10
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Example Status at Day 7, Figure 10-11
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Example Earned Value Chart Day 7, Figure 10-12
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MSP Budget Sheet, Figure10-13
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Case Earned Value at Texas Instruments
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Case Earned Value at Texas Instruments (contd)

• Graphic presentation clearly depicts projects
  history
• More crucial, though, is using EVA as a
  management tool. This requires
• Timely, accurate data collection
• Expeditious data analysis
• Appropriate and efficient corrective action

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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

Section 10.2
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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 projects
  master plan
• To do this, the set of action plans (the project
  master plan) must be kept up to date

Section 10.2
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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

Section 10.2
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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

Section 10.2
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Computerized PMIS

• New microcomputer-based project management
  information systems (PMISs) are considerably more
  sophisticated than earlier systems
• Uses the microcomputers 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

Section 10.3
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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

Section 10.3
63
Current Software
Section 10.3

• 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

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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

Section 10.3
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Choosing Software

• Characteristics of generally desirable attributes
  in project management software
• Friendliness
• Schedules
• Calendars
• Budgets
• Reports
• Graphics
• Charts
• Migration

Section 10.3
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Summary

• It is important that the planning-monitoring-contr
  olling 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

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Summary

1. The data collected are usually either frequency
   counts, numbers, subjective numeric ratings,
   indicators, or verbal measures
2. Project reports are of three types routine,
   exception, and special analysis
3. Project reports should include an amount of
   detail appropriate to the target level of
   management

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Summary

• Three common reporting problems are too much
  detail, poor correspondence to the parent firms
  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

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Summary

• There exist a great number of computerized PMISs
  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