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Project Management A Managerial Approach Chapter 10 Monitoring and Information Systems.

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1 Project Management A Managerial Approach Chapter 10 Monitoring and Information Systems

2 zEvaluation and control of projects are the opposite sides of project selection and planning zLogic of selection dictates the components to be evaluated zThe details of the planning expose the elements to be controlled zMonitoring is the collecting, recording, and reporting information concerning any and all aspects of project performance

3 The Planning - Monitoring - Controlling Cycle zThe key things to be planned, monitored, and controlled are time (schedule), cost (budget), and specifications zThe planning methods require a significantly greater investment of time and energy early in the life cycle of the project zThese methods significantly reduce the extent and cost of poor performance and time/cost overruns

4 The Planning - Monitoring - Controlling Cycle zThe control process should be perceived as a closed loop system zIn a closed loop system, revised plans and schedules should follow corrective actions zThe planning-monitoring-controlling cycle is continuously in process until the project is complete

5 Information Flow for the Planning - Monitoring - Controlling Cycle

6 Designing the Monitoring System zThe first step in setting up any monitoring system is to identify the key factors to be controlled zThe project manager must define precisely which specific characteristics of performance, cost, and time should be controlled zExact boundaries must then be established, within which control should be maintained

7 Designing the Monitoring System zThe best source of items to be monitored is the project action plan zThe monitoring system is a direct connection between planning and control zIt is common to focus monitoring activities on data that are easily gathered - rather than important zMonitoring should concentrate primarily on measuring various facets of output rather than intensity of activity

8 Designing the Monitoring System zThe measurement of project performance usually poses the most difficult data gathering problem zPerformance criteria, standards, and data collection procedures must be established for each of the factors to be measured zInformation to be collected may consist of accounting data, operating data, engineering test data, customer reactions, specification changes and the like

9 How to Collect Data zIt is necessary to define precisely what pieces of information should be gathered and when zA large proportion of all data collected take one of the following forms: yFrequency counts yRaw numbers ySubjective numeric ratings yIndicators yVerbal measures

10 How to Collect Data zAfter data collection has been completed, reports on progress should be generated zThese reports include project status reports, time/cost reports, and variance reports zCauses and effects should be identified and trends noted zPlans, charts and tables should be updated on a timely basis

11 How to Collect Data zA count of “bugs” found during a series of tests run on a new piece of software:

12 How to Collect Data zPercent of specified performance met during repeated trials

13 How to Collect Data zMonitoring can serve to maintain high morale on the project team zMonitoring can also alert team members to problems that will have to be solved zThe purpose of the monitoring system is to gather and report data zThe purpose of the control system is to act on the data

14 How to Collect Data zSignificant differences from plan should be highlighted or “flagged” so that they cannot be overlooked by the controller zSome care should be given to the issues of honesty and bias zAn internal audit serves the purpose of ensuring all information gathered is honest zNo audit can prevent bias - all data are biased by those who report them

15 How to Collect Data zThe project manager is often dependent on team members to call attention to problems zThe project manager must make sure that the bearer of bad news is not punished; nor the admitter-to-error executed zThe hider-of-mistakes may be shot with impunity - and then sent to corporate Siberia

16 Information Needs and the Reporting Process zThe monitoring system ought to be constructed so that it addresses every level of management zReports do not need to be of the same depth or at the same frequency for each level zThe relationship of project reports to the project action plan or WBS is the key to the determination of both report content and frequency

17 Information Needs and the Reporting Process zReports must contain data relevant to the control of specific tasks that are being carried out according to a specific schedule zThe 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 zThe timing of reports should generally correspond to the timing of project milestones

18 Information Needs and the Reporting Process zThe nature of the monitoring system should be consistent with the logic of the planning, budgeting, and scheduling systems zThe primary objective is to ensure achievement of the project plan through control zThe scheduling and resource usage columns of the project action plan will serve as the key to the design of project reports

19 Information Needs and the Reporting Process zBenefits of detailed, timely reports delivered to the proper people: yMutual understanding of the goals of the project yAwareness of the progress of parallel activities yMore realistic planning for the needs of all groups yUnderstanding the relationships of individual tasks to one another and the overall project yEarly warning signals of potential problems and delays yFaster management action in response to unacceptable or inappropriate work yHigher visibility to top management

20 Report Types zFor the purposes of project management, we can consider three distinct types of reports: yRoutine yException ySpecial analysis zRoutine reports are those issued on a regular basis

21 Report Types zException reports are useful in two cases: yFirst, 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 ySecond, they may be used when a decision is made on an exception basis and it is desirable to inform other managers as well as to document the decision

22 Report Types zSpecial analysis reports are used to disseminate the results of special studies conducted as a part of the project yThese reports may also be used in response to special problems that arise during the project yUsually 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

23 Meetings zMost often, reports are delivered in face-to- face meetings, and in telephone conference calls zSome simple rules can lead to more productive meetings: yUse meetings for making group decisions yHave preset starting and stopping times yMake sure that homework is done prior to the meeting

24 Meetings zSome simple rules for more productive meetings (cont.): yAvoid attributing remarks or viewpoints to individuals in the meeting minutes yAvoid overly formal rules of procedure yIf a serious problem or crisis arises, call a meeting for the purpose of dealing with that issue only

25 Common Reporting Problems zThere are three common difficulties in the design of project reports: yThere is usually too much detail, both in the reports themselves and the input being solicited from workers yPoor interface between the project information system and the parent firm’s information system yPoor correspondence between the planning and the monitoring systems

26 The Earned Value Chart zOne way of measuring overall performance is by using an aggregate performance measure called earned value zA serious difficulty with comparing actual expenditures against budgeted or baseline is that the comparison fails to take into account the amount of work accomplished relative to the cost incurred

27 The Earned Value Chart zThe earned value of work performed (value completed) for those tasks in progress is found by multiplying the estimated percent completion for each task by the planned cost for that task zThe result is the amount that should have been spent on the task so far zThe concept of earned value combines cost reporting and aggregate performance reporting into one comprehensive chart

28 The Earned Value Chart zGraph to evaluate cost and performance to date:

29 The Earned Value Chart zVariances on the earned value chart follow two primary guidelines: y1. A negative is “bad” y2. The cost variances are calculated as the earned value minus some other measure zBCWP - budgeted cost of work performed zACWP - actual cost of work performed zBCWS - budgeted cost of work scheduled zSTWP - scheduled time for work performed zATWP - actual time of work performed

30 The Earned Value Chart zBCWP - ACWP = cost variance (CV, overrun is negative) zBCWP - BCWS = schedule variance (SV, late is negative) zSTWP - ATWP = time variance (TV, delay is negative) zIf the earned value chart shows a cost overrun or performance underrun, the project manager must figure out what to do to get the system back on target zOptions may include borrowing resources, or holding a meeting of project team members to suggest solutions, or notifying the client that the project may be late or over budget yOne note, Microsoft Project 98 does not calculate cost variance as defined by the PMI. They do it in reverse.

31 The Earned Value Chart zVariances are also formulated as ratios rather than differences yCost Performance Index (CPI) = BCWP/ACWP ySchedule Performance Index (SPI) = BCWP/BCWS yTime Performance Index (TPI) = STWP/ATWP zUse of ratios is particularly helpful when comparing the performance of several projects

32 Cost/Schedule Control System Criteria (C/SCSC) zC/SCSC was developed by the U.S. Department of Defense in the late 1960s and was required for defense projects zIt was an extension of the earned value analysis zIt 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 zIt is usually not required on government projects, but still is required by some businesses

33 Cost/Schedule Control System Criteria (C/SCSC) zFor purposes of control, it is just as important to emphasize the need to relate the realities of time, cost, and performance with the project’s master plan zTo do this, the set of action plans (the project master plan) must be kept up to date

34 Cost/Schedule Control System Criteria (C/SCSC) zDifferences between work scheduled and work planned can develop from several different causes: yOfficial change orders in the work elements yInformal alterations in the methods used yOfficial or unofficial changes in the tasks to be accomplished zIf the plan is not altered to reflect such changes, comparisons between plan and actual are not meaningful

35 Milestone Reporting zMilestone reports serve to keep all parties up to date on what has been accomplished zIf accomplishments are inadequate or late, these reports serve as starting points for remedial planning

36 Computerized PMIS zNew microcomputer-based project management information systems (PMISs) are considerably more sophisticated than earlier systems zUses the microcomputer’s graphics, color, and other features more extensively zMany systems can handle almost any size project, being limited only by the memory available in the computer

37 Computerized PMIS zThe 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 zThe current trend is to facilitate the global sharing of project information, including complete status reporting, through local networks as well as the Internet

38 Current Software zThe explosive growth of project management software during the early 1990s saw the creation of more than 500 packages zSystems can be easily misused or inappropriately applied - as can any tools zThe most common error is managing the PMIS rather than the project itself

39 Current Software zIn addition to managing the PMIS instead of the project, other problems include: yComputer paralysis yPMIS verification yInformation overload yProject isolation yComputer dependence yPMIS misdirection

40 Choosing Software zCharacteristics of generally desirable attributes in project management software: –Friendliness –Schedules –Calendars –Budgets –Reports –Graphics –Charts –Migration

41 Typical Software Output zSoftware evaluation action plan

42 Typical Software Output zEarly and late start and finish dates and slack

43 Typical Software Output zGantt Chart

44 Typical Software Output zAON Network

45 Typical Software Output zGantt Chart Tracking progress

46 Summary zIt is important that the planning-monitoring- controlling cycle be a closed loop cycle based on the same structure as the parent system zThe 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 zThe factors should concern results, rather than activities

47 Summary zThe data collected are usually either frequency counts, numbers, subjective numeric ratings, indicators, or verbal measures zProject reports are of three types: routine, exception, and special analysis zProject reports should include an amount of detail appropriate to the target level of management

48 Summary zThree common reporting problems are too much detail, poor correspondence to the parent firm’s reporting system, and a poor correspondence between the planning and monitoring systems zThe earned value chart depicts scheduled progress, actual cost, and actual progress (earned value) to allow the determination of spending, schedule, and time variances

49 Summary zThere exist a great number of computerized PMIS’s that are available for project managers, with software evaluations occurring regularly in various magazines zProject managers’ preferred PMIS features are friendliness, schedules, calendars, budgets, reports, graphics, networks, charts, migration, and consolidation

50 Monitoring and Information Systems Questions?

51 Monitoring and Information Systems Picture Files

52 Monitoring and Information Systems Figure 10-1

53 Monitoring and Information Systems Figure 10-2

54 Monitoring and Information Systems Figure 10-3

55 Monitoring and Information Systems Figure 10-4

56 Monitoring and Information Systems Figure 10-5

57 Monitoring and Information Systems Figure 10-6

58 Monitoring and Information Systems Figure 10-7

59 Monitoring and Information Systems Figure 10-8A

60 Monitoring and Information Systems Figure 10-8B

61 Monitoring and Information Systems Figure 10-10

62 Monitoring and Information Systems Figure 10-11

63 Monitoring and Information Systems Figure 10-13

64 Monitoring and Information Systems Figure 10-14

65 Monitoring and Information Systems Figure 10-15

66 Monitoring and Information Systems Figure 10-16

67 Monitoring and Information Systems Figure 10-17

68 Monitoring and Information Systems Table Files

69 Monitoring and Information Systems

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