ENGINEERING KIX2004

PROJECT
MANAGEMENT
KIX2004 BY ALL OF US
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CONTENT
8 PROJECT MONITORING AND CONTROL
8.1 Project monitoring and control
8.2 Project monitoring information system
(PMIS)
8.3 Project control
8.4 Earned value (EV) Management

Ch
8
8.1. Project Monitoring and control

• Monitoring– collecting, recording, and reporting information concerning project

performance that project manger and others wish to know
• Controlling– uses data from monitor activity to bring actual performance to
planned performance.

• Techniques for project monitoring and control

1. Project monitoring information system (PMIS)
2. Earned value (EV)
8.2. Project management information system (PMIS)

• Structure of a Project Monitoring Information System (PMIS)

Creating a project monitoring system involves determining:
• What data to collect
• How, when, and who will collect the data
• How to analyze the data
• How to report current progress to management
1. Why do we monitor?
2. What do we monitor?
3. When to we monitor?
4. How do we monitor?
8.2.1.1 Why do we monitor?

1. Simply because we know that things don’t always go according to plan (no matter
how much we prepare)

2. To detect and react appropriately to deviations and changes to plans

8.2.1.2 What do we monitor?

• Men (human resources)

• Machines
• Materials
• Money
• Space
• Time
• Tasks
• Quality/Technical Performance
8.2.1.3 What do we monitor?

Inputs
1. Time
2. Money
3. Resources
4. Material Usage
5. Tasks
6. Quality/Technical Performance

Outputs
1. Progress
2. Costs
3. Job starts
4. Job completion
5. Engineering / Design changes
6. Variation order (VO)
8.2.1.4 When do we monitor?

• End of the project

• Continuously
• Regularly
• Logically
• While there is still time to react
• As soon as possible
• At task completion
• At pre-planned decision points (milestones)
8.2.1.5 Where do we monitor?

• At head office?
• At the site office?
• On the spot?
• Depends on situation and the ‘whats’.
8.2.1.6 How do we monitor?

• Through meetings with clients, parties involved in project (Contractor, supplier etc)
• For schedule –Update CPA, PERT Charts, Update Gantt Charts
• Using Earned Value Analysis
• Calculate Critical Ratios
• Milestones
• Reports
• Tests and inspections
• Delivery or staggered delivery
• PMIS (Project Management Information System) Updating
8.3. Project control

• Progress since last report

• Current status of project
1. Schedule
2. Cost
3. Scope
• Cumulative trends
• Problems and issues since last report
1. Actions and resolution of earlier problems
2. New variances and problems identified
• Corrective action planned
8.3.1 Project control cycle

Control the triple constraints

1. Time (schedule)
2. Cost (budget, expenses, etc)
3. Performance (specifications, testing results, etc.)
8.4. Earned value (EV) analysis

• Earned value (EV) refers to the determination of how much work has been
performed on the basis of what was budgeted for the work that has actually been
completed.
• The earned value concept (sometimes also called Achieved value) compares
several measures to obtain an overall picture of project status
• EV management is a project performance measurement technique that integrates
scope, time, and cost data
• Given a baseline (original plan plus approved changes), you can determine how
well the project is meeting its goals
8.4. Earned value (EV) analysis

Primary data
1) BCWS: Budgeted Cost of Work Scheduled
This is also known as planned value (PV) and its measure is developed at the outset
of the project as it involves assigning to activities the amount budgeted (estimated)
for the activity. Knowing the project schedule, it is possible to determine the amount
of money budgeted relative to time. This is essentially the same as developing the
cumulative cost curve discussed earlier.
8.4. Earned value (EV) analysis

Primary data
2) BCWP: Budgeted Cost of Work Performed
This is the earned value (EV) as it indicates what the budgeted costs are for the work
that has actually been performed to date. It requires making an assessment of the
amount of work completed (time schedule) to date and then applying the appropriate
budgeted amounts for this work.
8.4. Earned value (EV) analysis

Primary data
3) ACWP: Actual Cost of Work Performed:
This is the measure that brings together the monitoring of both time schedule (work
performed) and cost records (actual cost). It gives the actual costs (AC)
to date. (Note that ACWS, Actual Cost of Work Scheduled, is not a component of the
system, because if the work scheduled has not yet been performed, it is impossible to
determine its actual cost)
8.4. Earned value (EV) analysis

Primary data
4) SV: Schedule Variance (BCWP –BCWS)
This can be obtained by subtracting the budgeted cost of work scheduled from the
budgeted cost for work performed and it provides an indication of schedule deviance
in terms of dollars of work. The cost side of the system remains constant (using
budgeted cost figures) so the difference between the two amounts must be due to
schedule deviations alone. A negative value indicates that the project is behind
schedule as the "value" of work performed is less than that scheduled.
8.4. Earned value (EV) analysis

Primary data
5) CV: Cost Variance: (BCWP –ACWP)
The difference between the budgeted and actual costs of work performed clearly
indicates the status of the project in terms of cost. The work performed provides the
common unit of comparison. A negative CV indicates the project is over budget as the
actual costs exceed the budgeted
8.4. Earned value (EV) analysis
Performance Indexes
1) Cost Performance Index (CPI)
Measures the cost efficiency of work accomplished to date.
CPI = EV/AC
2) Scheduling Performance Index (SPI)
Measures scheduling efficiency
SPI = EV/PV
3) Percent Complete Indexes
Indicate how much of the work accomplished represents of the total budgeted (BAC)
and actual (AC) dollars to date.
PCIB = EV/BAC , PCIC = AC/EAC
8.4. Earned value (EV) analysis

Index Cost (CPI) Schedule (SPI)

Ahead of
>1.00 Under cost schedule
=1.00 On cost On schedule
<1.00 Over cost Behind schedule
8.4. Earned value (EV) analysis

Forecasting Model

The equation for this forecasting model:

8.4. Earned value (EV) analysis
8.4. Earned value (EV) analysis

Example
8.4. Earned value (EV) analysis

Variances

Schedule Variance = SPI:

BCWP-BCWS BCWP/BCWS
$49,000-55,000 49,000/55,000 = 0.891 (Behind schedule)
SV = -$ 6,000

Cost Variance = CPI:

BCWP-ACWP BCWP/ACWP
$49,00056,000 49,000/56000 = 0.875 (Over cost)
CV = -$7,000
8.4. Earned value (EV) analysis
 End of Chapter 8
Thanks
KIX2004