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Project Management: A Managerial Approach 4/e By Jack R. Meredith and Samuel J. Mantel, Jr. Published by John Wiley & Sons, Inc. Presentation prepared.

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Presentation on theme: "Project Management: A Managerial Approach 4/e By Jack R. Meredith and Samuel J. Mantel, Jr. Published by John Wiley & Sons, Inc. Presentation prepared."— Presentation transcript:

1 Project Management: A Managerial Approach 4/e By Jack R. Meredith and Samuel J. Mantel, Jr. Published by John Wiley & Sons, Inc. Presentation prepared by RTBM WebGroup

2 Project Management A Managerial Approach Chapter 11 Project Control

3 zControl is the last element in the implementation cycle of planning- monitoring-controlling zControl is focused on three elements of a project yPerformance yCost yTime Chapter 11-1

4 Controlling Performance zThere are several things that can cause a project’s performance to require control : yUnexpected technical problems arise yInsufficient resources are available when needed yInsurmountable technical difficulties are present yQuality or reliability problems occur yClient requires changes in specifications yInterfunctional complications arise yTechnological breakthroughs affect the project Chapter 11-2

5 Controlling Cost zThere are several things that can cause a project’s cost to require control: yTechnical difficulties require more resources yThe scope of the work increase yInitial bids were too low yReporting was poor or untimely yBudgeting was inadequate yCorrective control was not exercised in time yInput price changes occurred Chapter 11-3

6 Controlling Time zThere are several things that can cause a project’s schedule to require control: yTechnical difficulties took longer than planned to resolve yInitial time estimates were optimistic yTask sequencing was incorrect yRequired inputs of material, personnel, or equipment were unavailable when needed yNecessary preceding tasks were incomplete yCustomer generated change orders required rework yGovernmental regulations were altered Chapter 11-4

7 Purposes of Control zThere are two fundamental objectives of control: y1. The regulation of results through the alteration of activities y2. The stewardship of organizational assets zThe project manager needs to be equally attentive to both regulation and conservation zThe project manager must guard the physical assets of the organization, its human resources, and its financial resources Chapter 11-5

8 Physical Asset Control zRequires control of the use of physical assets yConcerned with asset maintenance, whether preventive or corrective yAlso the timing of maintenance or replacement as well as the quality of maintenance ySetting up maintenance schedules in such a way as to keep the equipment in operating condition while minimizing interference to ongoing work yPhysical inventory whether equipment or material must also be controlled Chapter 11-6

9 Human Resource Control zStewardship of human resources requires controlling and maintaining the growth and development of people zProjects provide fertile ground for cultivating people zBecause projects are unique, it is possible for people working on projects to gain a wide range of experience in a reasonably short period of time Chapter 11-7

10 Financial Resource Control zThe techniques of financial control, both conservation and regulation, are well known: yCurrent asset controls yProject budgets yCapital investment controls zThese controls are exercised through a series of analyses and audits conducted by the accounting/controller function Chapter 11-8

11 Financial Resource Control zRepresentation of the accounting/controlling function on the project team is mandatory zThe parent organization is responsible for the conservation and proper use of resources owned by the client or charged to the client zDue diligence requires that the organization proposing a project conduct a reasonable investigation, verification, and disclosure of all material facts relevant to the firm’s ability to conduct the project Chapter 11-9

12 Three Types of Control Processes zDecisions must be made concerning: yAt what points in the project will control be exerted yWhat is to be controlled yHow it will be measured yHow much deviation will be tolerated yHow to spot and correct potential deviations before they occur Chapter 11-10

13 Three Types of Control Processes zNo matter what the purpose in controlling a project there are two basic types of control mechanisms that can be used: yGo/no-go control yPost control zCybernetic control is a third, but less common control mechanism that is rarely directly applicable to projects. Chapter 11-11

14 Go/No-go Controls zTake the form of testing to see if some specific precondition has been met zMost of the control in project management falls into this category zThis type of control can be used on almost every aspect of a project zMust exercise judgment in the use of go/no-go controls zGo/no-go controls operate only when and if the controller uses them Chapter 11-12

15 Information Requirements for Go/no-go Controls zThe project proposal, plans specifications, schedules and budgets contain all the information needed to apply go/no-go controls to the project zMilestones are the key events that serve as a focus for ongoing control activity zThese milestones are the project’s deliverables in the form of in-process output or final output Chapter 11-13

16 Postcontrol zPostcontrols are applied after the fact zDirected toward improving the chances for future projects to meet their goals zIt is applied through a relatively formal document that contains four distinct sections: yThe project objectives yMilestones, checkpoints, and budgets yThe final report on project yRecommendations for performance and process improvement Chapter 11-14

17 Characteristics of a Control System zA good control system: yShould be flexible yShould be cost effective yMust be truly useful yMust satisfy the real needs of the project yMust operate in a timely manner ySensors and monitors should be sufficiently accurate and precise to control the project within the limits that are functional for the client and parent organization Chapter 11-15

18 Characteristics of a Control System zA good control system (cont.): yShould be as simple as possible yShould be easy to maintain yShould be capable of being extended or otherwise altered yShould be fully documented when installed xthe documentation should include a complete training program in system operation Chapter 11-16

19 Control Systems zAll control systems use feedback as a control process zThe control of performance, cost, and time usually require different input data: yPerformance - engineering change notices, test results, quality checks, rework tickets, scrap rates yCost - budgets to actual cash flows, purchase orders, absenteeism, income reports, labor hour charges, accounting variance reports ySchedule - benchmark reports, status reports, PERT/CPM networks, earned value graphs, Gantt charts, WBS, and action plans Chapter 11-17

20 Control Tools zSome of the most important tools available for the project manager to use in controlling the project are variance analysis and trend projection zA budget plan or expected growth curve of time or cost for a certain task is plotted zActual values are plotted as a dashed line as the work is actually finished zAt each point in time a new projection from the actual data is used to forecast what will occur in the future Chapter 11-18

21 Control Tools zTrend projection Chapter 11-19

22 Critical Ratio Control Charts zThe critical ratio is made up of two parts: yThe ratio of actual progress to scheduled progress yThe ratio of budgeted cost to actual cost zThe critical ratio is a good measure of the general health of the project zBy combining two ratios, it weighs them equally, allowing a “bad” ratio to be offset by a “good” ratio Chapter 11-20

23 Critical Ratio Chapter 11-21 Task Number Critcal Ratio Actual Cost Budgeted Cost Scheduled Progress Actual Progress 1(2 / 3) X(6 / 4) = 1.0 2(2 / 3) X(6 / 6) =.67 3(3 / 3) X(4 / 6) =.67 4(3 / 2) X(6 / 6) = 1.5 5(3 / 3) X(6 / 4) = 1.5

24 Critical Ratio zCritical ratio control chart Chapter 11-22

25 Benchmarking zA recent addition to the arsenal of of project control tools is benchmarking zBenchmarking makes comparisons to “best in class” practices across organizations zSome successful organizations have been benchmarked on their best practices and key success factors for projects being conducted in functional organizations Chapter 11-23

26 Best Practices and Keys to Success zThere were four major areas found to help projects in functional organizations: yPromoting the benefits of project management yPersonnel pay for project management skills and high risk projects through bonuses, stock options, and other incentives yMethodology yResults of project management Chapter 11-24

27 Control as a Function of Management zThe purpose of controlling is always the same: to bring the actual schedule, budget, and deliverables of the project into reasonably close congruence with the planned schedule, budget, and deliverables zThe job of the project manager is to set controls that will encourage those behaviors that are deemed desirable and discourage those that are not Chapter 11-25

28 Cybernetic Controls zHuman response to steering controls tends to be positive zSteering controls are usually viewed as helpful rather than a source of unwelcome pressure zResponse to steering controls also depends on the acceptance that the goals of the control system are appropriate Chapter 11-26

29 Go/No-go Controls zResponse to go/no-go controls tends to be neutral or negative z“Barely good enough” results are just as acceptable as “perfect” results zThe system makes it difficult for the worker to take pride in high quality work because the system does not recognize gradations of quality zThe fact that this kind of control emphasizes “good enough” performance is no excuse for the nonchalant application of careless standards Chapter 11-27

30 Postcontrols zPostcontrols are seen as much the same as a report card zThey may serve as the basis for reward or punishment, but they are received too late to change current performance zBecause postcontrols are placed on the process of conducting a project, they may be applied to such areas as: communication, cooperation, quality of project management, and the nature of interaction with the client Chapter 11-28

31 Balance in a Control System zGeneral features of a balanced control system: yBuilt with cognizance of the fact that investment in control is subject to sharply diminishing returns yRecognizes that as control increases past some point, innovative activity is more and more damped, and then finally shut off completely yDirected toward the correction of error rather than toward punishment yExerts control only to the degree required to achieve its objectives yUtilizes the lowest degree of hassle consistent with accomplishing its goals Chapter 11-29

32 Control of Creative Activities zThe more creativity involved, the greater the degree of uncertainty surrounding outcomes zToo much control tends to inhibit creativity zControl is not necessarily the enemy of creativity, nor does creative activity imply complete uncertainty of zThere are three general approaches to control creative projects: yProgress review yPersonnel reassignment yControl of input resources Chapter 11-30

33 Progress Review zThe progress review focuses on the process of reaching outcomes rather than on the outcomes per se zThe process is controllable even if the precise results are not zControl should be instituted at each project milestone zThe object of control is to ensure that the research design is sound and is being carried out as planned or amended Chapter 11-31

34 Personnel Reassignment zThis type of control is straightforward - individuals who are productive are kept zThose who are not, are moved to other jobs or to other organizations zWhile it is not difficult to identify those who fall in the top and bottom quartiles, it is usually quite hard to make clear distinctions between the people in the middle quartiles Chapter 11-32

35 Control of Input Resources zThe focus is on efficiency zThe ability to manipulate input resources carries with it considerable control over output zConsiderable resource expenditure may occur with no visible results, but suddenly many outcomes may be delivered zThe milestones for application of resource control must be chosen with great care Chapter 11-33

36 Control of Change and Scope Creep zCoping with changes and changing priorities is perceived as the most important single problem facing the project manager zThe most common changes are due to the natural tendency of the client and project team members to try to improve the product or service zThe later these changes are made in the project, the more difficult and costly they are to complete zWithout control, a continuing accumulation of little changes can have a major negative impact on the project’s schedule and cost Chapter 11-34

37 Control of Change and Scope Creep zThe project manager’s best hope is to control the process by which change is introduced and accomplished zThis can be done with a formal change control system that is able to: yReview all requested changes and identify all task impacts yTranslate those impacts into project performance, cost, and schedule yEvaluate the benefits and costs of the requested changes yAccept or reject the changes and communicate to all concerned parties yEnsure that changes are implemented properly Chapter 11-35

38 Effective Change Control Procedure zThe following guidelines, applied with reasonable rigor, can be used to effectively control changes: y1. All project contracts or agreements must include a description of how requests for a change in the project’s plan, budget, schedule, and/or deliverables, will be introduced and processed y2. Any change in a project will be in the form of a change order that will include a description of the agreed-upon change together with any changes in the plan, budget, schedule, and/or deliverables that result from the change Chapter 11-36

39 Effective Change Control Procedure y3. Changes must be approved, in writing, by the client’s agent as well as by an appropriate representative of senior management of the firm responsible for carrying out the project y4. The project manager must be consulted on all desired changes prior to the preparation and approval of the change order. The project manager’s approval, however, is not required y5. Once the change order has been completed and approved, the project master plan should be amended to reflect the change, and the change order becomes part of the master plan Chapter 11-37

40 Summary zControl is directed to performance, cost, and time zThe two fundamental purposes of control are to regulate results through altering activity and to conserve the organization’s physical, human, and financial assets zThe two main types of control processes are go/no-go and postcontrol Chapter 11-38

41 Summary zThe postcontrol report contains four sections: yProject objectives yMilestones and budgets yFinal project results yRecommendations for improvement+ zThe trend projection curve, critical ratios, and the control chart are useful control tools Chapter 11-39

42 Summary zControl systems have a close relationship to motivation and should be well-balanced: that is cost effective, appropriate to the desired end results, and not overdone zThree approaches to the control of creativity are progress review, personnel reassignment, and control of inputs zThe biggest single problem facing a project manager is the control of change Chapter 11-40

43 Project Control Questions? Chapter 11-41

44 Project Control Picture Files

45 Project Control Figure 11-1

46 Project Control Figure 11-2

47 Project Control Figure 11-3

48 Project Control Figure 11-4

49 Project Control Figure 11-5

50 Project Control Figure 11-6

51 Project Control Figure 11-7

52 Project Control Figure 11-8

53 Project Control Figure 11-9

54 Project Control Table Files

55 Project Control

56

57

58

59 Copyright © 2000 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.


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