PROJECT CONTROL TECHNIQUES AND VARIANCE CONTROL Monitor and Control Project Work is the process of Tracking, Reviewing

and Regulating the progress to meet the performance objectives defined in the Project Management Plan. (PMBOK 2008) Perform Integrated Change Control is the process of Reviewing, Approving and Managing changes, and is conducted from project inception to completion. All changes, and related corrective and preventive actions, are done via the Integrated Change Control Process. 1.0 KEY TECHNIQUES EMPLOYED TO MONITOR/CONTROL THE

PROJECT: Verify/Control Scope o Monitor the status of Project Scope and manage changes to scope baseline. Control Schedule o Monitor project status to update progress and manage changes to schedule baseline. Control Costs o Monitor status of project budget, manage changes to cost baseline. Perform Quality Control o Monitor/record results of executing quality activities, to assess performance and recommend necessary changes. Report Performance o Collection/distribution of performance information including status reports, progress measurements, and forecasts. Monitor/Control Risks o Implement risk response plan, track identified risks, monitor residual risks, identify new risks, evaluate risk process effectiveness. Variance Analysis/Control Process

PROJECT CONTROL TECHNIQUES AND VARIANCE CONTROL o Assess magnitude of variation from original scope baseline and decide whether corrective or preventive action is required.

2.0 KEY CONTROL METHODS: Measuring/controlling Project Progress and Performance against the Project Plan. Anticipating, escalating, and managing/resolving all Problems, Issues and Risks. Reviewing and adjusting/updating the Plan on an ongoing basis.

3.0 THE PROJECT CONTROL PROCESS The control steps employed for measuring and evaluating progress and performance are: A) Setting a baseline plan B) Measuring progress and performance C) Comparing plan against actual D) Taking action (Larson & Gray 2011) A) Setting Baseline Plan Set the Baseline Plan, Schedule and Budget based on information drawn from the that progress and B) Work Breakdown Schedule. It is against the Baseline Plan performance are assessed.

Measuring Progress and Performance Measure, compare and analyse schedule performance including start/finish dates, percent complete, remaining duration. Path: is it early, on schedule or late? The technique employed for time performance is analysis of the Critical

PROJECT CONTROL TECHNIQUES AND VARIANCE CONTROL A different measure is employed for measuring performance against Budget. This is Earned Value (EV) where EV = budgeted cost of work performed. Using EV, cost and schedule has a common (monetary) denominator; even Schedule Variance (SV) is calculated monetarily. Definition of Earned Value (EV) The value of work performed (expressed in terms of the approved budget assigned to that work) for a schedule activity or work breakdown structure component. (PMBOK 2008) Measuring progress using this method provides the Project Manager with: Cost Variance (CV): the difference between budgeted and actual cost, and Schedule Variance (SV): the difference between the work scheduled for completion at that point and the work actually completed at that point. C) Earned Value Management (EVM) Also known as Variance Analysis, EVM is one of the best project control techniques for early detection of variances. By integrating the scope, schedule and cost, EVM makes it possible to assess Cost Performance and Schedule Performance together. The EVM technique is used to track the Progress and Status of a Project and Forecast the likely future performance of the Project. (Tutorials Point, 2011) Comparing Plan Against Actual - Assessing Current Status: Metrics used to compare the Baseline Plan against actual include: PV EV AC Planned Value Earned Value Actual Costs Budgeted Cost of work scheduled Budgeted Cost of work

performed* Actual Costs of work performed

PROJECT CONTROL TECHNIQUES AND VARIANCE CONTROL CV Cost Variance Earned Value - Actual Costs (CV Earned Value - Planned Value Calculated % Complete /

= EV-AC) SV** Schedule Variance (EV-PV) SVI CPI (AC)

Numerical performance representation of Project cost

Schedule Variance Index

Expected % Complete Cost Performance Index CPI = Earned Value (EV) / Actual Costs

SPI Value (PV)

Schedule Performance Index

SPI = Earned Value (EV) / Planed

Numerical representation of Project schedule performance

BAC Budget at Completion EAC ETC Estimate to Complete

Total Baseline Project Budget ETC = EAC - AC

Estimate at Completion EAC = BAC / CPI

(Horine 2009) Note: *Cost of work performed is the total cost of personnel/non-personnel resources. **Calculation cost of Schedule Variance (SV) is measured in , not time. D) Take Action Take corrective actions if deviation significant enough to negatively impact critical 4.0 path activity, or if outside agreed threshold level.

MEETINGS, REPORTING METHODS & TOOLS AT DIFFERENT

PROJECT PHASES Systems for Management, Analysis and Reporting of the project: 4.1 Project Kickoff

PROJECT CONTROL TECHNIQUES AND VARIANCE CONTROL Setup Project Administration including electronic filing system (Portal/Intranet): Project Plans commencing with Baseline Plan Progress/Status Reports: o Time (Schedule), Critical Path, Slack Change Control o Establish, implement and enforce Change Control Procedure to plan for change throughout project including assessment of impact on scope, schedule, budget and quality. o Manage Change Requests o Create Change Control Log Quality Control (QC) o Establish implement and enforce QC procedures to meet customer Quality/Performance specifications o Cost Benefit Analysis (CBA): Cost of Quality (COQ) Cost of Poor Quality (COPQ) o Metrics: OTD On Time Delivery OTIF On Time In Full (and error free) including documentation and billing TAT Turn Around Time Variance Control: o This process is employed to assess magnitude of variation from original scope baseline. Cost performance measurements (CV, CPI, SV, SVI) are used to determine the magnitude of variation, and to determine necessity and extent of any corrective or preventive action.

PROJECT CONTROL TECHNIQUES AND VARIANCE CONTROL o The percentage range of acceptable variances declines as the project progresses. (Ian S. Hayes, 2011) o Action is normally only initiated if Variance Control thresholds are exceeded (thresholds levels are agreed as a percentage deviation from baseline plan). Issue Management o Establish, implement and enforce Issue Escalation/Management Procedure o Create Issues Log o Review open Issues Risk Management - Risk Identification, Detection, Mitigation o Develop Risk Management Plan/Risk Register to include: o Risk Identification - Qualitative/Quantitative Risk Analysis o Risk Characterisation and Impact Ranking o Response Planning/Contingencies o Risk Monitoring and Controlling: Detecting/Preventing potential risks Tracking identified risks, monitoring residual risks Identifying potential new risks

o Procedure for ongoing evaluation during project 4.2 MsProject Reporting Tools: Tracking Gantt Chart: Baseline duration, Slack, Actual complete, remaining Duration. Control Chart: Plot difference between scheduled time on Critical Path with actual point on Critical Path, monitor progress towards Milestones. 4.3 Project Team Meetings: Kickoff, Weekly Status and/or End of Stage

PROJECT CONTROL TECHNIQUES AND VARIANCE CONTROL Define Roles, Responsibilities, Reporting structure Ensure allocation of appropriate / adequate BIP resources to team Include Client representative Establish Control Procedures, review on ongoing basis

4.4 Weekly Status Reports: Scope changes and/or other changes Review authorised/unauthorised changes Is POS still valid Schedule, Milestones, Constraints QC Issue escalation/resolution Risk Management/Risk Register

4.5 Project Closure meeting/review

PROJECT CONTROL TECHNIQUES AND VARIANCE CONTROL BIBLIOGRAPHY PMI Project Management Institute 2008. A guide to the Project Management Body of Knowledge (PMBOK Guide) Fourth Edition. Chapter 4 Project integration Management Pennsylvania: PMI Larson & Gray 2011. Project Management The Managerial Process 2011 5th Edition International Edition. Chapter 13 Progress and Performance Measurement and Evaluation The Project Control Process New York: McGraw Hill PMI Project Management Institute 2008. A guide to the Project Management Body of Knowledge (PMBOK Guide) Fourth Edition. Chapter 7 Earned Value Page 182 (7.3.2) Control Costs: Tools and Techniques Earned Value Pennsylvania: PMI Tutorials Point, 2011. Earned Value Management (EVM) [Online]. Available from: http://www.tutorialspoint.com/earn_value_management/evm_overview.htm [Accessed 2 December 2012]. Horine 2009. Absolute Beginner's Guide to Project Management. Chapter 10, Controlling A Project, Figure 10.1 Earned Value Management Elements Que Publishing

PROJECT CONTROL TECHNIQUES AND VARIANCE CONTROL Ian S. Hayes 2011. Metrics for IT Outsourcing Service Level Agreements[Online]. Available from http://www.clarity-consulting.com/metrics_article.htm [Accessed 5 December 2011].