Project Evaluation and Control Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Chapter 13 Learning Objectives After completing this chapter, students will be able to: Understand the nature of the control cycle and four key steps in a general project control model. Recognize the strengths and weaknesses of common project evaluation and control methods. Understand how Earned Value Management can assist project tracking and evaluation. Use Earned Value Management for project portfolio analysis. Understand behavioral concepts and other human issues in evaluation and control. Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion

The Project Control Cycle FIGURE 13.2 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13-03

Project S-Curves FIGURE 13.3 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13-04

Project Sierra’s S-Curve Showing Negative Variance FIGURE 13.4 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Milestone Analysis Milestones are events or stages of the project that represent a significant accomplishment. Milestones … show completion of important steps … signal the team and suppliers … can motivate the team … offer reevaluation points … help coordinate schedules … identify key review gates … delineate work packages 13-06

FIGURE 13.5 Gantt Chart with Milestones Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13-07

FIGURE 13.6 Assessing Project Blue’s Status Using Tracking Gantt Chart Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

FIGURE 13.7 Tracking Gantt with Project Activity Deviation Project status is updated by linking task completion to the schedule baseline 13-9 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Earned Value Management Schedule Cost Performance Tracking Control Charts Cost PerformanceSchedule Earned Value Project S-Curves Cost PerformanceSchedule 13-10

Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Earned Value Terms  Planned value (PV)  Earned value (EV)  Actual cost of work performed (AC)  Schedule performance index (SPI)  Cost performance index (CPI)  Budgeted cost at completion (BAC) 13-11

Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Steps in Earned Value Management 1. Clearly define each activity including its resource needs and budget 2. Create usage schedules for activities and resources 3. Develop a time-phased budget (PV) 4. Total the actual costs of doing each task (AC) 5. Calculate both the budget variance (CV) and schedule variance (SV) 13-12

FIGURE Project Baseline, Using Earned Value Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13-13

FIGURE Earned Value Milestones Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Earned Value Example ActivityJanFebMarAprilPlan%CValue Staffing Blueprint Prototype Design33331 Mon Plan ∑30 Cmltv Mon Act Cmltv Act Planned Value 38= Earned Value 30= Value 8=80%(10) Cumulative 40= Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13-15

Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Earned Value Example Schedule Variances Planned Value (PV) = 38 = Earned Value (EV) = 30 = Schedule Performance Index =.79 = 30/38 = EV/PV Estimated Time to Completion = (1/.79)x4=5 Cost Variances Actual Cost of Work Performed (AC) = 40 = Cost Performance Index =.75 = 30/40 = EV/AC Estimated Cost to Completion = 50.7 = (1/.75)x

FIGURE Earned Value Report for Project Atlas on March 7 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13-17

Earned Value Performance Metrics Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall FIGURE Source: Lipke (2003)

Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Completion Values in EVM Accurate and up-to-date information is critical in the use of EVM  0/100 Rule  50/50 Rule  Percentage Complete Rule 13-19

Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Human Factors in Project Evaluation & Control  Optimistic progress reports  Level of detail  Process evaluation  Non-technical performance measurement 13-20

Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Critical Success Factors in the Project Implementation Profile 1. Project mission 2. Top management support 3. Project plans & schedules 4. Client consultation 5. Personnel 6. Technical tasks 7. Client acceptance 8. Monitoring & feedback 9. Communication channels 10. Troubleshooting 13-21

Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Summary 1. Understand the nature of the control cycle and four key steps in a general project control model. 2. Recognize the strengths and weaknesses of common project evaluation and control methods. 3. Understand how Earned Value Management can assist project tracking and evaluation. 4. Use Earned Value Management for project portfolio analysis. 5. Understand behavioral concepts and other human issues in evaluation and control. 6. Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion

Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13-23