Monitoring and Information Systems

1
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

2
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

3
Effective Monitoring Precedes Control

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

4
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

5
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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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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Reporting and Information Flows, Figure 10-5
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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

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

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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

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

Activity Predecessor Duration(Days) Budget() Actual Cost(s) Complete
a - 3 600 680 100
b a 2 300 270 100
c a 5 800 80
d b 4 400 25
e c 2 400 0
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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