Project Management Certificate Program control project performance

1. Project Management Certificate Program control project performance Module 13

3. Module Objectives By module end, you will be able to: • Understand how performance is managed on the project • Understand the purpose for monitoring and managing performance closely • Understand what tools will be used to manage project performance

4. Control Project Performance In Control Project Performance, the project manager will: • Continue to manage project work • Focus on controlling the project performance

5. Control Project Performance In Control Project Performance, 4 PMBOK processes are used: • Report Performance • Verify Scope • Perform Quality Control • Monitor & Control Project Work

6. Report Performance • Communications process of providing project stakeholders with performance information, through status reporting, progress reporting and forecasting • The level and detail of reporting should be appropriate to the intended audience. • Many times, performance reports rely heavily on earned value analysis, presented in the form of bar charts, S-curves, histograms and/or spreadsheets.

8. Report Performance Think about the practical application of this process: • Process Documents • Document Templates • Process Tasks • Think About It Exercise

9. Must Know Concepts

10. EARNED VALUE

11. Four Key Data Points • Planned Value • Earned Value • Actual Cost • Budget at Completion

12. Planned Value • Planned Value (PV = Budgeted Cost of Work Scheduled = BCWS) • The budget that has been authorized for work scheduled that is to be completed for a scheduled activity or WBS component.

13. Earned Value • Earned Value(EV = Budgeted Cost of Work Performed - BCWP) • The value received/recognized for the expense or use of approved funds/hours in order to complete scheduled work or WBS element(s).

14. Actual Cost • Actual Cost(AC = Actual Cost of Work Performed = ACWP) • Cost incurred for completed work (EV) during a given time period.

15. Schedule Variance • Schedule Variance Example: • In a 3 day period, we planned to complete 24 hours of work at $100/hr. The value of the work we planned to complete is $2,400 . • At the end of 3 days we have completed 18 hours of work at $100/hr. The means we have earned $1,800 hours worth of the work. The actual cost is $1,800.00. • SV = $1,800 - $2,400 = ($600)

16. Cost Variance • Cost Variance Example: • In a 3 day period, we planned to complete 24 hours of work at $100/hr. The value of the work we planned to complete is $2,400. • At the end of 3 days we have completed 18 hours of work at $100/hr. The means we have earned $1,800 worth of the work. The actual cost is $1,800.00. • CV = $1,800 - $1,800 = ($0)

17. Cost Performance Index is a measure of our cost efficiency. It is a ratio of Earned Value to Actual Cost. For every dollar we spend, how much work (in dollars) do we receive? CPI = EV/AC If the value is greater than 1, we have a favorable CPI. If the value is less than 1, we have an unfavorable CPI. Cost Performance Index

18. Using Earned Value – CPI involves taking a measurement of the project at a specific point in the project – like a stake in the ground…

19. Using Earned Value – CPI involves taking a measurement of the project at a specific point in the project – like a stake in the ground…

20. Schedule Performance Index • Schedule Performance Index measures our schedule efficiency. It is a ratio of Earned Value to Planned Value. • For every time unit we spend, how many time units of work do we receive? • SPI = EV/PV • If the value is greater than 1, we have a favorable SPI. • If the value is less than 1, we have an unfavorable SPI.

21. Using Earned Value – SPI involves taking a measurement of the project at a specific point in the project – like a stake in the ground…

22. Additional Calculations • Estimate to Complete (ETC) • Estimate at Complete (EAC) • Variance at Complete (VAC)

23. Estimate to Complete • Estimate to Complete = The expectation of what is needed to complete the work remaining on a scheduled activity/WBS element, etc. • More simply, how much still has to be done. • This is done when evaluating and making revisions on your estimates for project cost and/or time.

24. Estimate to Complete - 1 • ETC = BAC - EV • Example: • In our schedule, we planned to have $800 worth of work completed in 1 day. • Halfway through the day, we have completed only or $200 worth of work. • We have $600 of the work remaining to complete during the day. • ETC = $800 - $200 = $600

25. Estimate to Complete - 2 • Halfway through the day we have spent $400 to complete $200 worth of work. • CPI = EV/AC = $200/$400 = .5 (over budget) • ETC = (BAC-EV)/CPI • ETC = ($800 - $200)/.5 • ETC = $600/.5 = $1,200 • It will cost us $1,200 to complete the project.

26. Estimate at Completion • Estimate at Completion is the expected total cost for completing a project, scheduled activity, WBS item, etc. • It represents the actual cost to date plus the Estimate to Complete • EAC with new estimate • EAC = AC + ETC • EAC = $200 + $600 = $800

27. EAC with remaining budget EAC = AC + BAC - EV EAC = $400 + $800 - $200 EAC = $1,000 Estimate at Completion - 1

28. Halfway through the day we have spent $400 to complete $200 worth of work. CPI = EV/AC = $200/$400 = .5 (over budget) EAC = AC + ((BAC-EV)/CPI) EAC = $400 + (($800 - $200)/.5) = $400 + (600/.5) = $400 + $1200 = $1600 Estimate at Completion - 2

29. Variance at Completion forecasts what the final cost variance will be when the work is completed. If the VAC is >=0, then we are under budget. If the VAC is <=0, then we are over budget. VAC = BAC - EAC VAC = $800 - $1,600 = - $800 Variance at Completion

30. TCPI: To Complete Performance Index • TCPI (based on BAC): TCPI = (BAC – EV / (BAC – AC). TCPI based on BAC is the forecast of how efficient future project performance must be in order to conform to the planned BAC for the project. • BAC= $3,000 • EV= $2,000 • AC = $2,400 • TCPI = ($3,000 - $2,000) / ($3,000 - $2,400) or ($1,000) / ($600) = 1.666

31. TCPI: To Complete Performance Index • TCPI (based on EAC): TCPI = (BAC – EV / (EAC – AC). TCPI based on EAC is the forecast of how efficient future project performance must be in order to conform to the planned EAC (based on new outcome predictions) for the project. • BAC= $3,000 • EV= $2,000 • AC = $2,400 • EAC = $3,400 • TCPI = ($3,000 - $2,000) / ($3,400 - $2,400) or • ($1,000) / ($1,000) = 1.0

32. Must Know Concepts

33. Verify Scope • Obtaining formal acceptance of project deliverables • Project deliverable is not complete until it has been formally accepted • Formal acceptance must be documented

35. Verify Scope Think about the practical application of this process : • Process Documents • Document Templates • Process Tasks • Think About It Exercise

36. Must Know Concepts

37. Perform Quality Control • Process of monitoring specific project results to ensure they comply with the project’s quality standards • Also intended to identify ways to eliminate quality problems such as causes of weak processes or poor product quality

38. Perform Quality Control • Quality control monitors both product-related deliverables (work packages) and project management deliverables (cost/schedule/scope performance). • This process focuses on outputs and uses tools that measure these outputs.

40. RunChartExample

41. ScatterDiagramExample

42. Perform Quality Control Think about the practical application of this process : • Process Documents • Document Templates • Process Tasks • Think About It Exercise

43. Must Know Concepts

44. Monitor & Control Project Work • Monitor all other processes through initiation, planning, executing and closing • Take/make corrective/preventive actions • It is the project manager’s responsibility to continuously monitor project work

46. Monitor & Control Project Work Think about the practical application of this process : • Process Documents • Document Templates • Process Tasks • Think About It Exercise

47. Must Know Concepts

48. MODULE Review