Where Module 04 : Knowing Where the Project Is 1

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Monitoring and Control Project Approval Formal “Go” decision Project Charter Project Manager assigned Project Plan Clear and approved project or phase definition Stakeholders Scope (Deliverables) Schedule Cost Project Execution Complete deliverables per the project management plans Determine and communicate project status Knowing Where the Project Is What Knowing What the Project Is Deliverables completed, Status Report, Issues and Action Item Log, Meeting Minutes Change Request Approval / Rejection Continual Team Development & Conflict Management 4

To provide goal-centered feedback to detect and correct the course Guide Course correction Forewarn Issue Detection Inform Collective meaning Act If you don’t act, don’t measure  What data is relevant?  Where is it best collected?  Who should analyze and act on it?  When should it be done? 5

Backward Looking Project status-to-date: schedule, cost, scope/quality Significant milestones completed Forward Looking Projected project status Milestones for the next reporting cycle Significant issues and planned corrective actions / recommendations Project environment changes / review Traffic Light ReportingEarned Value ReportingTraffic Light Reporting 6

7 MetricStatusTrend ScheduleGreen CostYellowRed Scope / QualityGreen OthersGreenYellow Overall HealthGreenRed

Scope Green No scope change. Yellow Change within 10% of original scope Red Change over 10% of original scope. Need re- baseline. Schedule Green On track for scheduled completion Yellow Within 10% of scheduled completion Red Over 10% scheduled completion. Need re- baseline. Cost Green Completion within budget Yellow Completion within 10% of budget Red Completion over 10% of budget. Need re- baseline. 8

9 Parameter RedYellowGreenComments Scope Some “must have” deliverables cannot be delivered Some “must have” deliverables are at risk All “must have” deliverables on track to be delivered Indicator reflecting approved functionality to be delivered by the project Schedule Variance > 4 weeks Variance > 1 week Variance < 4 weeks Project on track Measured as variance of current Critical Path completion date to approved date CostVariance >10% Variance > 5% Variance < 10% Variance < 5% Measured as variance of (actuals + forecast to complete) to approved budget

10ColorDefinitionGreen Less than 20% probability that a project risk that impacts a parameter target (scope, time, cost) will occur Yellow 20% to 50% probability that a project risk that impacts a parameter target (scope, time, cost) will occur. Red Greater than 50% probability that a project risk that impacts a parameter target (scope, time, cost) will occur

ProjectMetricStatusTrend Problem Statement Corrective Action Scope Schedule Cost Overall Health Executive Summary Results Next Steps Working Challenges Significant results for the reporting period. Significant work to be started for the next reporting period. Significant work in progress for the reporting period. Major issues, constraints, etc. 11

12 ProjectStatusTrendSignificant Results for the Period Significant Work To Be Started or In-Progress for the Period Challenges and Corrective Actions

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14 Trigger point for Schedule ‘color’ can be tighter Trigger point for Cost color can be looser

Where Earned Value Management * Knowing Where the Project Is: Earned Value Management PP lanned Value (PV) – the physical work scheduled to be performed, including the estimated value of this work. (a.k.a. Budgeted Cost of Work Scheduled - BCWS) EEarned Value (EV) – the physical work actually accomplished, including the estimated value of this work. (a.k.a. Budgeted Cost of Work Performed - BCWP) AActual Cost (AC) - the actual cost incurred to accomplish the earned value. (Actual Cost of Worked Performed - ACWP) 15

A work on a project task is expected to cost $1500 to complete and the workers were scheduled to finish today. As of today however, the workers have actually expended $1350 and the best estimate is the task is 2/3 complete. Determine the Planned Value, Actual Cost and Earned Value at this point in time. Task Budget = $1500 Money Spent = $1350 % Complete = 2/3 Today PV = 1500 AC = 1350 EV = (2/3)(1500) =

17 Cost VarianceCV = EV - AC Cost Variance in %CVP = (CV/EV) 100% Cost Performance IndexCPI = EV / AC Schedule VarianceSV = EV - PV Schedule Variance in %SVP = (SV/PV) 100% Schedule Performance IndexSPI = EV / PV

EAC = AC EV X The estimate at completion is the best estimate of the total cost at the completion of the project. The EAC is a periodic evaluation of the status of the project - usually on a monthly basis or until a significant change has been identified. (BAC) Other Formulae 1.Actual plus new Estimate To Complete EAC = AC + ETC Actual plus budget (PV) for remaining deliverables EAC = AC + (BAC – EV) Actual plus budget for remaining deliverables modified by the performance index EAC = AC + (BAC – EV)/CPI 18

SV CV PV EV AC Time of measurement CUMMULATIVE COST, $ TIME 19

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Project: Software enhancement for a drug company Baseline: Entire effort priced at $200K and scheduled for completion June 10 th As of June 10: Project cost to date is $195K. One activity is left in the project estimated to cost S25K. Find cost and schedule variance amounts, cost and schedule variance percentages, cost and schedule performance indexes, and estimate at completion amount. 21

Given: BAC = $200K, PV = $200K, AC = $195K Last Activity Cost = $25K Solution: EV = 200K – 25K = $175K CV = EV – AC = 175K- 195K = -$20K SV = EV – PV = 175K – 200K = -$25K CV% = (CV / EV) 100% = (-20/175) 100% = -11% SV % = (SV / PV) 100% = (-25/200) 100% = -12.5% CPI = EV / AC = 175 / 195 =.897 SPI = EV / PV = 175 / 200 =

EAC 1 = (AC/EV) x BAC = (195/175)200K = $223K EAC 2 = AC + (BAC – EV) = 195K + 200K – 175K = 220K EAC 3 = AC + (BAC – EV)/CPI = 195K + (200K-175K)/.897 = $223K ETC= EAC – AC = 223 – 195 = 28K 23

Project: Construction of a new house Baseline: Entire effort priced at $1.2M and scheduled for completion January next year. As of July 1: First project activity is a site survey with a budget of $80K. By July 1 st, half of the site survey is expected to be completed. Cost to date is $60K and work is already 80% complete. Find cost and schedule variance amounts, cost and schedule variance percentages, cost and schedule performance indexes, and estimate at completion amount. 24

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26 A C E B D F Week 1 Using Earned Value IV

27 Using Earned Value IV

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29A C E B D F Week 1 Week 2 29

30 Objective Manage changes to project via an approved change control process Deliverable Approved / rejected change request document Updated project and product process deliverables

31 * Enhancement of stakeholders’ ability to contribute as individual and team’s ability to function as a team * Team building activities * Reward and recognition * Training Projects are managed through its people! Deliverables Project Manager Resources

32 * Formalized review process with participation from management on issue resolution – Gate review – Status review * Check-in, stay in-touch * Maintain an open environment * Tracking intensity proportionate to project importance / priority