Project

Management
Project
Execution
Daniel Blouin, PMP
Define Plan
Execute Close
Execute
12
FIGURE 1.1
----------------- Continuous improvement -----------------
Executing
1. Status reports
2. Changes
3. Quality
4. Forecasts
Project Management - Execution
One of the most important aspect of
Project Management during the
Execution phase is Monitoring
Progress.
The Project Manager must be able to
Control if things are moving according
to the planned schedule and budget.
3
Monitoring Progress
4
Activity Duration
Days
18 19 20 21 22 23
A 3
B 1
C 1
D 1
Regularly control if the actual work is
moving according to the plan
Monitoring Progress
5
Activity Duration
Days
18 19 20 21 22 23
A 3
B 1
C 1
D 1
Always identify the date that the state
of the progress is reported on :
Monitoring Progress
6
Activity Duration
Days
18 19 20 21 22 23
A 3
B 1
C 1
D 1
Identify the activities that have been
started : (task in progress)
Monitoring Progress
7
Activity Duration
Days
18 19 20 21 22 23
A 3
B 1
C 1
D 1
Identify the activities that have been
completed : (task completed)
Monitoring Progress
8
Activity Duration
Days
18 19 20 21 22 23
A 3
B 1
C 1
D 1
Identify the activities that have been
completed : (task completed)
Monitoring Progress
9
Activity Duration
Days
18 19 20 21 22 23
A 3
B 1
C 1
D 1
Identify the revised
completion dates :
estimated
completion
Monitoring Progress
10
Example:
You have been asked to do a
Research on internet about the Parks
in your city. You plan to work on it for
3 days.
Activity Duration
Days
18 19 20 21 22 23
A 3
Monitoring Progress
11
Example:
You begin to work
After 2 days you evaluate what you
have accomplished.
Activity Duration
Days
18 19 20 21 22 23
A 3
Monitoring Progress
12
Example:
In 2 days you have only gathered
information about 5 parks.
You realize that you will need to be
more efficient.
You also realize that 1 day will not be
enough to complete your research.
Activity Duration
Days
18 19 20 21 22 23
A 3
Monitoring Progress
13
Example:
You estimate that even if you change
your approach to be more efficient,
you will still need another 3 days to
finish the internet research.
Activity Duration
Days
18 19 20 21 22 23
A 3
Estimate to
complete
Monitoring Progress
14
Task Status :
Task started as planned
Task is in progress
Task is not expected to finish as planned
New estimated completion date is : 22

Activity Duration
Days
18 19 20 21 22 23
A 3
Monitoring Progress
15
Example:
Planned duration = 3 days
Activity Duration
Days
18 19 20 21 22 23
A 3
Actual work done to date = 2 days
Estimate to complete : 3 days
Monitoring Progress
16
Example:
Task Duration
Days
Actual
Days
Worked
Estimate
to
complete
18 19 20 21 22 23
A 3 2 3
Monitoring Progress
17

Task Duration
Days
Actual
Days
Worked
Estimate
to
complete
18 19 20 21 22 23
A 3 2,5 0
B 1 1,0 0
C 1 1,3 1,6
D 1 0 1
Planned
Actual
Estimate to complete
Status
of tasks


Completed

Completed

In Progress

Not Started
Monitoring Progress
18

Task Duration
Days
Actual
Days
Worked
Estimate
to
complete
18 19 20 21 22 23
A 3 2,5 0
B 1 1,0 0
C 1 1,3 1,6
D 1 0 1
Planned Actual Estimate to complete
Project Status :
In progress.
Tasks A, B are
completed
Tasks B and C
started late
Task C is estimated
to take much longer
than planned
The Project
completion date is
now estimated to be
the 23.
Gantt Chart
Project Status
Preparation is completed
Purchase of Material is
In progress but is expected to
finish late on September 29
Estimated project completion
date is October 7
20
Build a Storage shed Time Phased Budget
Monitoring Progress Cost Control
21
Milestone Report
Project : Build a Storage Shed
Milestone Progress Report 2012-09-25
22
Milestone
Planned
Start
Date
Actual
Start
Date
Planned
Finish
Data
Actual
Finish
Date
Planned
Budget
Cumulative
Actual
Expense
Preparation
09/17 09/17 09/23 09/25


1 070 000

1 070 000
1 470 000

1 470 000
Purchase
Material
09/21 09/22 09/26 7 450 000

8 520 000
Construction
09/23 10/02 2 880 000

11 400 000
Milestone Report
Project : Build a Storage Shed
Milestone Progress Report 2012-09-25
23
Milestone
Planned
Budget
Cumulative
Actual
Expense
Difference
%
Preparation
1 070 000

1 070 000
1 470 000

1 470 000
400 000

400 000
+ 37%

+ 37%
Purchase
Material
7 450 000

8 520 000
Construction
2 880 000

11 400 000


+ 4%
Monitoring Progress
24
Cost Control :
Planned Value (PV) is
The Total cost of the work scheduled
for given tasks at a given reporting date

PV = Hourly Rate X
Total Hours Planned or Scheduled
Monitoring Progress
25
Cost Control Example:
The Task A planned work hours = 24
The Direct cost per hour = 25 VND
The total Planned Value (PV) of this
activity is 24 X 25 = 600 VND

Task
Duration
Days
Actual
Days
Worked
Estimate
to
complete
Panned
Work
hours
18 19 20 21
A 3 2 3 24
Monitoring Progress
26
Cost Control Example:
The Task A planned work hours = 24
The Direct cost per hour = 25 VND
The Planned Value (PV) on the 18
for this task is 8 X 25 = 200 VND

Task
Duration
Days
Actual
Days
Worked
Estimate
to
complete
Panned
Work
hours
18 19 20 21
A 3 2 3 24
Monitoring Progress
27
Cost Control Example:
The Earned Value (EV)
is the Planned Value (PV)
multiplied by the % of completion.
EV : 200 VND X 50% = 100 VND

Task
Duration
Days
Actual
Days
Worked
Estimate
to
complete
Panned
Work
hours
18 19 20 21
A 3 2 3 24
Monitoring Progress
28
Cost Control Example:
As of the Status date, the Actual
work hours used for Task A is 4
The Actual cost per hour is 30 VND
The Actual Cost (AC) of this activity
is 4 X 30 = 120 VND
Task
Duration
Days
Actual
Days
Worked
Estimate
to
complete
Panned
Work
hours
18 19 20 21
A 3 2 3 24
Monitoring Progress
29
Cost Variance (CV) is a very
important factor to measure project
performance.
Cost Variance (CV) indicates how much
over or under budget the project is.
Cost Variance can be calculated using the
following formula
Cost Variance (CV) =
Earned Value (EV) - Actual Cost (AC)

Monitoring Progress
30
Cost Control Example:
Cost Variance (CV) =
Earned Value (EV) 100
- Actual cost (AC) 120 -
20


Task
Duration
Days
Actual
Days
Worked
Estimate
to
complete
Panned
Work
hours
18 19 20 21
A 3 2 3 24
A Positive Cost Variance
Indicates that the project is under budget
A Negative Cost Variance
Indicates that the project is over budget
Monitoring Progress
31
Cost Variance % indicates how much
over or under budget the project is in
terms of percentage.
Cost Variance % can be calculated using
the following formula
CV % =
Cost Variance (CV) / Earned Value (EV)

Positive Variance % indicates % under Budget.
Negative Variance % indicates % over Budget.




Monitoring Progress
32
Cost Control Example:
Cost Variance % (CV%) =
Cost Variance (CV) / Earned Value (EV)
- 20 / 100 = - 20 %
20 % over budget
Task
Duration
Days
Actual
Days
Worked
Estimate
to
complete
Panned
Work
hours
18 19 20 21
A 3 2 3 24
Monitoring Progress
33
Cost Performance Indicator (CPI)
Cost Performance Indicator is an index
showing the efficiency of the utilization of
the resources on the project.
CPI can be calculated using the following formula:
CPI = Earned Value (EV)
/ Actual Cost (AC)

CPI value above 1 indicates efficiency in utilizing the
resources allocated to the project is good.
CPI value below 1 indicates efficiency in utilizing the
resources allocated to the project is not good.

Monitoring Progress
34
Cost Control Example:
Cost Performance Indicator (CPI) =
Earned Value (EV) / Actual cost (AC)
100 / 120 = 0,833


Task
Duration
Days
Actual
Days
Worked
Estimate
to
complete
Panned
Work
hours
18 19 20 21
A 3 2 3 24
CPI value above 1 indicates good efficiency in
utilizing the resources allocated to the project
CPI value below 1 indicates poor efficiency in
utilizing the resources allocated to the project.
Monitoring Progress
35
Schedule Variance (SV) indicates
how much ahead or behind schedule
the project is.
Schedule Variance can be calculated as using
the following formula
Schedule Variance (SV) =
Earned Value (EV) - Planned Value (PV)
Positive Schedule Variance Indicates we are
ahead of schedule
Negative Schedule Variance Indicates we are
behind of schedule
Monitoring Progress
36
Cost Control Example:
Schedule Variance (SV) =
Earned Value (EV) 100 -
- Planned Value (PV) 200
100


Task
Duration
Days
Actual
Days
Worked
Estimate
to
complete
Panned
Work
hours
18 19 20 21
A 3 2 3 24
Positive Schedule Variance
Indicates we are ahead of schedule
Negative Schedule Variance
Indicates we are behind of schedule
Monitoring Progress
37
Schedule Variance % (SV%)
indicates how much ahead or behind
schedule the project is in terms of
percentage.
Schedule Variance % can be calculated
as using the following formula
SV % =
Schedule Variance (SV) / Planned Value (PV)
Positive Variance % indicates % ahead of schedule.
Negative Variance % indicates % behind of schedule.
Monitoring Progress
38
Cost Control Example:
Schedule Variance % (SV%) =
Schedule Variance (SV) - 100
/ Planned Value (PV) / 200
- 50%


Task
Duration
Days
Actual
Days
Worked
Estimate
to
complete
Panned
Work
hours
18 19 20 21
A 3 2 3 24
Positive Variance % indicates % ahead of
schedule.
Negative Variance % indicates % behind of
schedule.
Monitoring Progress
39
Schedule Performance Indicator (SPI)
is an index showing the efficiency of the
time utilized on the project.
Schedule Performance Indicator can be
calculated using the following formula:
SPI = Earned Value (EV) /Planned Value (PV)
SPI value above 1 indicates project team is very efficient in
utilizing the time allocated to the project.
SPI value below 1 indicates project team is less efficient in
utilizing the time allocated to the project.
Monitoring Progress
40
Cost Control Example:
Schedule Variance (SV) =
Earned Value (EV) 100 /
/ Planned Value (PV) 200
0,5


Task
Duration
Days
Actual
Days
Worked
Estimate
to
complete
Panned
Work
hours
18 19 20 21
A 3 2 3 24
SPI value above 1 indicates project team is very efficient
in utilizing the time allocated to the project.
SPI value below 1 indicates project team is less efficient
in utilizing the time allocated to the project.
1341
Structure of a Project Monitoring
Information System
Establishing the project monitoring
system involves determining:
What data to collect
How, when, and who will collect the data
How to analyze the data
How to report current progress to
management
1342
Project Monitoring Information System
What data are collected?
Current status of project (schedule, cost)
Remaining cost to compete project
Date that project will be complete
Potential problems to be addressed now
Out-of-control activities requiring intervention
Cost and/or schedule overruns and the
reasons for them
Forecast of overruns at time of project
completion
1343
Project Monitoring System (contd)
Collecting data and analysis
Who will collect project data?
How will data be collected?
When will the data be collected?
Who will compile and analyze the data?
Reports and reporting
Who will receive the reports?
How will the reports be transmitted?
When will the reports be distributed?
1344
The Project Control Process
Control : The Process of comparing actual
performance against plan to identify
deviations, evaluate courses of action, and
take appropriate corrective action.
Project Control Steps
1. Setting a baseline plan.
2. Measuring progress and performance.
3. Comparing plan against actual.
4. Taking action.
Tools : Tracking and baseline Gantt charts
Budget control charts
Developing an Integrated Cost/Schedule System
1.Define the work using a WBS.
a. Scope
b. Work packages
c. Deliverables
d. Organization units
e. Resources
f. Budgets
2.Develop work and resource schedules.
a. Schedule resources to activities
b. Time-phase work packages into a network

1346
Developing an Integrated Cost/Schedule System
3. Develop a time-phased budget using
work packages included in an activity.
Accumulate budgets (PV).
4. At the work package level, collect the
actual costs for the work performed
(AC). Multiply percent complete times
by original budget (EV).
5. Compute the schedule variance (EV-
PV) and the cost variance (EV-AC).

1347
Development of Project Baselines
Purposes of a Baseline (PV)
An anchor point for measuring performance
Planned cost and expected schedule against
which actual cost and schedule are measured.
Basis for cash flows and Progress payments.
A summation of time-phased budgets along a
project timeline.
Cost accounts representing summed work packages
What Costs Are Included in Baselines?
Labor, equipment, materials, project direct
overhead costs (DOC)

48
Development of Project Baselines (contd)
Rules for Placing Costs in Baselines
Costs are placed exactly as they are
expected to be earned in order to track
them to their point of origin.
Percent Complete Rule
Costs are periodically assigned
to a baseline as units of work
are completed over
the duration of a
work package.
1349
Methods of Variance Analysis
Comparing Earned Value
With the expected schedule value.
With the actual costs.
1350
Methods of Variance Analysis
Assessing Status of a Project
Required data elements
Budgeted cost of the work scheduled (PV)
Budgeted cost of the work completed (EV)
Actual cost of the work completed (AC)
Calculate schedule and cost variances
A positive variance indicates a desirable
condition, while a negative variance
suggests problems or changes that have
taken place.
1351
Developing A Status Report:
A Hypothetical Example
Assumptions
Each cost account has only one work package,
and each cost account will be represented as
an activity on the network.
The project network early start times will serve
as the basis for assigning the baseline values.
From the moment work an activity begins,
some actual costs will be incurred each period
until the activity is completed.
1352
Indexes to Monitor Progress
Performance Indexes
Cost Performance Index (CPI)
Measures the cost efficiency of work accomplished to
date.
CPI = EV/AC
Scheduling Performance Index (SPI)
Measures scheduling efficiency
SPI = EV/PV
Percent Complete Indexes
Indicates how much of the work accomplished
represents of the total budgeted (BAC) and actual
(AC) dollars to date.
PCIB = EV/BAC
PCIC = AC/EAC
1353
Additional Earned Value Rules
Rules applied to short-duration activities
and/or small-cost activities
0/100 percent rule
Assumes 100 % of budget credit is earned at once and
only when the work is completed.
50/50 rule
Allows for 50% of the value of the work package
budget to be earned when it is started and 50% to be
earned when the package is completed.
Percent complete with weighted monitoring gates
Uses subjective estimated percent complete in
combination with hard, tangible monitoring points.
1354
Forecasting Final Project Cost
Methods used to revise estimates of future
project costs:
EAC
re
Allows experts in the field to change original
baseline durations and costs because new
information tells them the original estimates
are not accurate.
EAC
f
Uses actual costs-to-date plus an efficiency
index to project final costs in large projects
where the original budget is unreliable.

455
Project Scope: Terms and Definitions
Scope Creep
The tendency for the
project scope to expand
over time due to
changing requirements,
specifications, and
priorities.

456
Project Management - Execution
Change Control
Identifying, documenting,
approving or rejecting,
and controlling Changes
to the project baselines
(schedule and budget)
Not to be confused with Change Management
which covers aspects like organizational change
planning and acceptance, communication of
changes and formal training.

57
Milestone
Activity
Task
Deliverable
Work
Package
Responsibility
Department
Person
Preparation
Obtain local authority
approval

Authorization
Me
Local Authority
Select or make a
construction plan
Construction plan Me
Purchase Material
Purchase Required
Material

List of Material to buy
Me
Hardware store

Construction
Build the Shed
Shed
Foundation
Walls
Roof, Finish
Me
Help
Specialists
in scope out of
scope
Requirements
Project
Charter
Work
Breakdown
Structure
Objectives
Constraints
Who, what, why,
where, when, how
Schedule
Budget
Baseline

58
Milestone
Activity
Task
Deliverable
Work
Package
Responsibility
Department
Person
Preparation
Obtain local authority
approval

Authorization
Me
Local Authority
Select or make a
construction plan
Construction plan Me
Purchase Material
Purchase Required
Material

List of Material to buy
Me
Hardware store

Construction
Build the Shed
Shed
Foundation
Walls
Roof, Finish
Me
Help
Specialists
Scope
out of
scope
Requirements
Project
Charter
Work
Breakdown
Structure
Objectives
Constraints
Who, what, why,
where, when, how
Schedule
Budget
Baseline

59
Milestone
Activity
Task
Deliverable
Work
Package
Responsibility
Department
Person
Preparation
Obtain local authority
approval

Authorization
Me
Local Authority
Select or make a
construction plan
Construction plan Me
Purchase Material
Purchase Required
Material

List of Material to buy
Me
Hardware store

Construction
Build the Shed
Shed
Foundation
Walls
Roof, Finish
Me
Help
Specialists
Scope
out of
scope
Requirements
Project
Charter
Work
Breakdown
Structure
Schedule
Budget
Baseline
Objectives
Constraints
Who, what, why,
where, when, how

60
Milestone
Activity
Task
Deliverable
Work
Package
Responsibility
Department
Person
Preparation
Obtain local authority
approval

Authorization
Me
Local Authority
Select or make a
construction plan
Construction plan Me
Purchase Material
Purchase Required
Material

List of Material to buy
Me
Hardware store

Construction
Build the Shed
Shed
Foundation
Walls
Roof, Finish
Me
Help
Specialists
Scope
out of
scope
Requirements
Project
Charter
Work
Breakdown
Structure
Schedule
Objectives
Constraints
Who, what, why,
where, when, how
Budget
Baseline
761
Change Control System Process
1. Identify proposed changes.
2. List expected effects of proposed changes
on schedule and budget.
3. Review, evaluate, and approve or disapprove
of changes formally.
4. Negotiate and resolve conflicts of change,
condition, and cost.
5. Communicate changes to parties affected.
6. Assign responsibility for implementing change.
7. Adjust master schedule and budget.
8. Track all changes that are to be implemented
762
Benefits of a Change Control System
1. Inconsequential changes are discouraged
by the formal process.
2. Costs of changes are maintained in a log.
3. Integrity of the WBS and performance measures
is maintained.
4. Allocation and use of budget and management
reserve funds are tracked.
5. Responsibility for implementation is clarified.
6. Effect of changes is visible to all parties involved.
7. Implementation of change is monitored.
8. Scope changes will be quickly reflected in
baseline and performance measures.
1363
Key Terms
Baseline budget
Progress Monitoring
Tracking Gantt Chart
Started
In Progress
Estimate to complete
Completed
Cost Control Chart
Actual Cost
Difference and %
Scope creep
Change control
1364
Key Terms
Control parameters
Planned Value (PV)
Cost variance (CV)
Earned value (EV)
Schedule variance (SV)
Cost performance index (CPI)
Schedule performance inder (SPI)
Schedule performance index (SPI)
Estimated Cost at Completion
Forecasted (EAC
f
)
Revised Estimates (EAC
re
)
Variance at Completion (VAC)


65
Project Definition