Chapter 10: Monitoring

“As soon as the boss decides he wants his workers to do something, he has two problems:
making them does it and monitoring what they do? Monitoring is the systematic, regular
collection and occasional analysis of information to identify and possibly measure changes over
a period of time. Evaluation is the analysis of the effectiveness and direction of an activity and
involves making a judgment about progress and impact. The main differences between
monitoring and evaluation are the timing and frequency of observations and the types of
questions asked. However, when monitoring and evaluation are integrated as a project
management tool, the line between the two becomes rather blurred. Participatory monitoring and
evaluation (PM&E) is the joint effort or partnership of two or more stakeholders (such as
researchers, farmers, government officials, extension workers) to monitor and evaluate,
systematically, one or more research or development activities.

10.1 Why to Monitor and Evaluate? In general, the purpose of monitoring & evaluation can
be: To assess project results: to find out if and how objectives are being met and are resulting in
desired changes. To improve project management and process planning: to better adapt to
contextual and risk factors such as social and power dynamics that affect the research process.
To promote learning: to identify lessons of general applicability, to learn how different
approaches to participation affect outcomes, impact, and reach, to learn what works and what
does not, and to identify what contextual factors enable or constrain the participatory research.
To understand different stakeholders' perspectives: to allow, through direct participation in the
monitoring and evaluation process, the various people involved in a research project to better
understand each other’s views and values and to design ways to resolve competing or conflicting
views and interests. To ensure accountability: to assess whether the project is effectively,
appropriately, and efficiently executed to be accountable to the key agencies supporting the work
(including, but not exclusively, the donors) .

10.2 Project Monitoring Methods and Techniques of monitoring projects / Programs Projects
even with a good planning, adequate organizational machinery and sufficient flow of resources
cannot automatically achieve the desired result. There must be some warning mechanism, which
can alert the organization about its possible success and failures, off and on. Constant watching
not only saves wastage of scarce resources but also ensure speedy execution of the project. Thus
monitoring enables a continuing critique of the project implementation. Definition Monitoring
means keeping a track of implementation process. Monitoring involves watching the progress of
a project against time, resources and performance schedules during the execution of the project
and identifying lagging areas requiring timely attention and action. Monitoring is defined as a
management function to guide in the intended direction and to check performance against pre –
determined plans. Monitoring means periodic checking of progress of works against the targets
laid down in order to ensure timely completion of the project.

Efficiency, Effectiveness and Relevance Underlying reasons for monitoring and evaluating are
frequently framed in terms of: Efficiency refers to the amount of time and resources put into the
project relative to the outputs and outcomes. A project evaluation may be designed to find out if
there was a less expensive, more appropriate, less time-consuming approach for reaching the
same objectives. (getting more output from minimum input – do less & accomplish more)
Effectiveness describes whether or not the research process was useful in reaching project goals
and objectives, or resulted in positive outcomes. Relevance or appropriateness describes the
usefulness, ethics, and flexibility of a project within the particular context Combined, these
criteria enable judgment about whether the outputs and outcomes of the project are worth the
costs of the inputs. Effectiveness, efficiency and appropriateness can be considered for the
different methods, tools and approaches rather than questioning the value of the research
approach as a whole.

10.3 Purpose of Monitoring: Project monitoring helps to provide constructive suggestions like.
Rescheduling the project (if the project runs behind the schedule) Re budgeting the project
(appropriating funds from one head to another; avoiding expenses under unnecessary heading).
Re – assigning the staff (shifting the staff from one area to other; recruiting temporary staff to
meet the time schedule)

What to Monitor and Evaluate? Understanding the condition of the community /target group
before the project was initiated is useful in order to provide a point of comparison for monitor
and evaluating changes that occur during the project. Baseline survey conducted at the beginning
of the project can provide a point of reference for comparison and for understanding change in
the community /target group . It is useful to distinguish between the different kinds of results
generated from the project: outputs, processes, outcomes, impact and reach. These can be briefly
defined as follows: Outputs describe the concrete and tangible products of the research as well as
the occurrence of the research activities themselves Processes describe the methods and
approaches used for the project. Outcomes describe the changes that occur within the community
or with the project managers that can be attributed, at least in part, to the project process and
outputs. Impact describes overall changes that occur in the community to which the project is
one of many contributing factors. One such impact often expected from project is positive
transformation of the community /target group. Reach describes who is influenced by the project
and who acts because of this influence.

10.4 Steps in Monitoring: Identifying the different units involved in planning & implementation
Identifying items on which feedback is required. Developing proforma for reporting.
Determining the periodicity of reporting. Fixing the responsibility of reporting at different levels.
Processing and analyzing the reports. Identifying the critical / unreliable areas in implementation.
Providing feedback to corrective measures.

10.5 Indicators for Monitoring: Projects are usually monitored against Whether the projects -
Running on schedule -Running within the planned costs -Receiving adequate costs. Methods /
Techniques of monitoring. Project reporting, project appraisal, project monitoring project
evaluation are inter – related terminologies with minor differences in their meaning. In project
evaluation monitoring is referred as interim or concurrent evaluation. So many of the methods
used for evaluation can also relevant for monitoring the project. First hand information. Formal
reports Project status report Project schedule chart Project financial status Report Informal
Reports. Graphic presentations. Evaluation Meaning Objectives Scope Principles Functions &
Methods of Project Evaluation. Types (internal / external) of Evaluation. A guideline for
evaluating Projects.
10.6 Difference between Monitoring and Evaluation

Evaluation is a learning management tool but differs materially from monitoring. Project
monitoring is undertaken at the implementation stage while evaluation is generally preferred
when a project is complete. The monitoring reports provide the data base for the "evaluation" but
evaluation cannot contribute directly to monitoring. The evaluation studies are more
comprehensive in nature, covering all aspects of the projects, whereas monitoring provides
information mainly to assess and help maintain or accelerate the progress of implementation.
However, key differences between M and E functions are summarized below:

Monitoring (M) Evaluation(E)

Keeps track of daily activities a continuous
function
Accepts objectives, targets and norms
stipulated in the project document
Checks progress towards output targets
Takes long range view through indepth study -
a onetime function
Questions Pertinence and validity of project
objectives / targets
Measures performance in terms of objectives

Stresses conversion of inputs to outputs Emphasizes achievement of overall objectives

Reports on current progress at short intervals Provides an indepth assessment of performance

for immediate corrective actions for future feedback

10.7 Create a Task and Cost schedule

When you think of scheduling the work for projects you need to realize that the cost schedule
and task schedule of the project are considered together. Not only do you need to complete the
project on time, you also need to complete it within budget. It's generally considered bad form if
you consume the entire budget before the project is finished. In this topic we'll consider both the
task and cost schedule.

Tasks always have a schedule component. Task schedules are affected by resource availability
and by task relationships and dependencies. In most projects there are dependencies between
tasks that affect the schedules. For example, when building a house, framing is dependent upon
the foundation being completed. Roofing is dependent on framing. Electrical and plumbing are
both dependent on framing, but often can take place in parallel.

Tasks always have a cost component based on assigned resources. Resource costs can be fixed,
variable or recurring. The sum of these is the cost of the task, and the sum of the task costs is the
cost of the project. Conversely, funding can also have an affect on scheduling, especially when it
delays resource availability or the purchase of a needed asset. Sometimes the funds for a
particular project are not all available at the beginning of the project. Tasks cannot be worked if
the required resources are not available.
Don't confuse costs with pricing. If you or your company manage products for customers, it is
likely that you are billing the customer at a rate higher than the actual resource costs. The
difference between what you charge the customer and what you pay for the resources is the
project's profitability. However, in meetings with customer's the term cost is often used to
describe the billing because it is the customer's cost.

Scheduling and costs go hand in hand. If a project is slated to last six months and cost $60,000,
you are expected to complete the project on time and within the $60,000 Budget. If you use more
than $60,000 you will overrun the budget and possibly reduce the profitability of the project.
One view is that the project is using $10,000 per month, though in actual practice, project costs
are rarely distributed evenly. More often the bulk of the cost is spent at the beginning, middle or
end of the project depending on the task relationships and requirements for things like purchased
equipment or materials. Your cost schedule should reflect when money will be made available
and when it will be spent.

Build a preliminary project schedule. You'll need to know when tasks will start and finish when
you begin to allocate resources to the tasks. You'll need to adjust the start and finish dates to take
into account the resource availability. If you have the resource costs you should record those as
well then you'll be ready to build the first schedule.

A commonly used tool for presenting schedule information is the Gantt chart. The Gantt chart is
made up of horizontal bars displayed on a grid with tasks down the left hand side and dates
across the top. The left end of the bar indicates the start date, the length indicates the duration,
and the right end indicates the end date. Some Gantt charts also indicate task dependencies and
relationships using arrowed lines to indicate the relationship between any two tasks.

Project management software like Microsoft Project can do much of the work for you, but Gantt
charts can be created manually or with other types of software like spreadsheets or diagramming
tools. If you used something other than project management software, you'll need to transcribe
your project into the tool you're going to be using.

The illustration below shows a Gantt chart created with Microsoft Project.
10.8 Task Schedule

Budget consumption can be shown on the Gantt chart as well. Various costs can be rolled up
from individual tasks to summary tasks above. For example, using Microsoft project, rolling up
actual costs against the value of costs, baseline cost or EAC, and rolling the task bars up to the
summary bar does a fair job of presenting the budget consumption, as illustrated below.

When your plan is completed, you should present it to the stakeholders and get their agreement.
They may be contributing resources or may even be resources themselves. Get their input and
incorporate it into your final schedule.

Record the plan so you can use it as a baseline. While the project is underway, you'll want to
compare how things are going to the original plan. The original plan is called the baseline. Some
project management tools have the ability to capture the baseline separately for comparison. If
not then you'll want to make a copy of the original plan so that you can make changes to the
working plan as things move forward without compromising the original baseline. As you work
the project, and after it is completed, you'll be able to compare to the original baseline and report
variances. This will help you track the project against your original task and cost schedule and it
will help you learn from situations that happened while it was in progress.

10.9 Implement Project Status Tracking

It's important to get timely information. Just because you're managing a small project, doesn't
mean you can go without a good project status tracking plan. You'll always need to be collecting
timely status reports. When you have a number of things going on at the same time, you need to
be collecting, evaluating, and making corrections on a daily basis if you're going to make sure
the project is finished on time and within budget. Errors and slippage on a project have a way of
compounding rapidly, so you can't wait too long to take action or your project could wind up
hopelessly behind schedule or impossibly over budget.
Make it easy for the team members instead of yourself. If you hope to get your team members to
provide timely information, you'll need to make it easy for them to submit updates and status
reports. For example, if you are using a project management tool, you may find it easy to let
them enter status directly into the software. On the other hand, if they are not familiar with the
tool, it may be easier for them to email status reports in a standard format, so that you can enter
the update into the software yourself. Your team members are more likely to provide accurate
and timely information, if you've taken the trouble to streamline your project status tracking
process, to document it, and to make it as easy for them as possible.

Allow for alternate means of reporting. Let your team members use whatever means is familiar
to them even if they don't all use the same method. It may be that a simple fill-in the blanks
form is good for two or three team members. A couple may prefer e-mail or voice mail. Others
may prefer instant messaging or text messaging. Try keep your project status tracking as flexible
as possible. Remember the goal is to get the information and get it as accurately and promptly as
possible.

Get enough information to recognize a problem. I've actually heard a project manager say to his
team members, "Listen up, people! I don't want to hear any bad news. Just get the job done the
way it's supposed to be done, so we can all go home!" Wrong approach. It's nice if the news is
always good, but you absolutely want to hear the bad news. There are several things you should
be tracking and insisting on getting from your team:
 Tasks that are taking too long
 Tasks that are costing too much
 Tasks that should have started but haven't
 Tasks that are not sufficiently completed for the time spent
 Tasks that should be finished that aren't
 Tasks being worked that aren't on the schedule

10.10 Completed Tasks and Deliverables that don't meet requirements

Avoid negative reactions to bad news. Your team is less likely to be honest about bad news if
you react badly when presented with it. Insure that you response to bad news is non-judgmental.
You want to be appreciative of the fact that the team member has updated you and present an
attitude of optimism and confidence. Phrases like, "It's not what I was hoping to hear, but I
appreciate the update." You can also ask for recommendations. Some times the solution to a
problem will be obvious to the team member if not to you, simply because they are closer to the
problem. Don't be afraid to ask. Remember, you are a central component of your project status
tracking system and your team members need to be comfortable with your approach.

Arm your team with information on what is expected. You can prevent a lot of problems if
you supply your team with a copy of the requirements, the budgeted cost and schedule
information on the tasks to which they are assigned. If team members know what is expected
they will consciously and unconsciously attempt to meet the expectations. It is surprising how
many project managers keep their team in the dark, in the hopes that they will accidentally
exceed the schedule requirements.

Promptly assess the impact on the project. As soon as you have the team's updates from your
project status tracking system, you'll want to apply those to the overall working plan in order to
assess the impact and take corrective action. You'll also want to compare the project progress to
the original baseline plan so that you can identify variances and missteps that might affect the
conclusion of the project.

10.11 Implement Issue and Problem Tracking

You can help customers and stakeholders feel more comfortable about the project by providing
them with a working issue and problem tracking process. In any project there are problems and
issues that come up and things that are produced or delivered that don't live up to the customer's
expectations. In most cases these are things that can be resolved easily, but often they are left
unresolved and allowed to cause the customer a lot of frustration and dissatisfaction.

You can help customers feel comfortable by giving them a complaint process that lets them feel
confident their problems will be addressed. Next to having no way to report problems, the
second most frustrating issue for customers is the feeling that their problems will be forgotten
once they are reported.

It's important to make the process easy for your customers. They'll feel even more frustrated if
they think that you may have deliberately made the process unnecessarily complex or otherwise
placed an obstacle in the way of getting problems fixed. Below are some considerations for
putting issue and problem tracking into place.

Have a single point of contact. Whether it's you, a member of your team, or some other
designee, you should be sure that there is a single point of contact for all customer or stakeholder
concerns. Others in your group should be instructed not to take complaints but to redirect to the
point of contact where problems can be recorded, assigned, and tracked.

Avoid having the customer fill out a form. Even if it's an electronic form, it should be filled
out by the point of contact who will use an interview process to get the information. Your
customer is likely to see the form as an impersonal obstacle with little feedback. On the other
hand, an interactive interview process seems friendlier, more personal, and has the advantage of
insuring the customer that a living person is aware of the problem.

Make sure all information needed for resolving the problem is recorded. Your problem
tracking process should have the ability to record everything you need to solve the problem and
report back to the customer. At a minimum, your tracking system should gather the following
from the initial reporting:
 An identification number that can be used to refer the issue later
 Name and contact information for the person reporting the problem
 Date and time problem was reported
  Name of person recording the information
 Short description, or problem summary
 Detailed description, including how to reproduce (especially important in technology
projects)

Provide the ability to track resolution efforts. Your issue and problem tracking process should
give you a way to assign the report to a team member and permit recording activity and events
related to resolving the problem. At a minimum your ability to track the activity involved should
include:
 The person assigned to the effort
 Date and time the issue was assigned
 Current status of the issue (waiting to be assigned, in progress, completed, closed, etc.)
Multiple activity entries containing:
 Date of activity
 type of activity
 Free form notes
 Results of activity
 Summary of final resolution

Provide Regular Status Reporting. The customer should not be kept in the dark on issues and
complaints. Regular communication of the status of issues should be built into your
communication plan. Additionally if you are able to put your problem tracking process online,
you may want to give the customer the ability to review progress on issues to satisfy them that
the problems are being handled.

Your system doesn't have to be complicated -- it just needs to workable and the people who use
it and who deal with the issues need to be sincere in their efforts to resolve the issues and make
customers feel satisfied with the problem tracking process.

Take Corrective Action Promptly

Take corrective action promptly to head off adverse impact. If your status reports indicate
schedule slippage, cost overrun, quality problems or scope creep, you'll want to take prompt
action to curb the problems and get things back on track. There are a number of things you can
do, when managing small projects, to correct various types of issues. Naturally, the action you
take will depend on the type of issue you want to correct.

Compensate for tasks that are taking too long. You can speed up a task by adding a resource,
by working additional overtime hours, or by replacing a resource with one that performs faster.
There is often a cost tradeoff when you add a resource. Additional resources or overtime will
cost more, and a more skilled or higher-powered resource may come at an increased rate. If the
task is not on the critical path or if it has no dependencies, it may not be necessary to take
corrective action, especially if it looks like the task will eventually complete satisfactorily. But if
the task has dependencies or will cause the project to slip, you will need to take action quickly.
Compensate for tasks costing too much. If a purchased or fixed fee item has been impacted by
a price increase, often the best thing to do is to adjust the overall cost plan for the project, rather
than trying to compensate. Otherwise, you can look for cost tradeoffs elsewhere, like using
cheaper purchased items, lower cost resources and so on. Sometimes there are conflicts between
trying to compensate for cost and schedule impacts. That's where your decision-making skills
come in. You'll have to make a tradeoff and rely on your knowledge of the management climate
and the goals and requirements of the project.

Check on resources and precursors of tasks that should have started. If a task should have
started but has not, it is generally an indication of a problem in resource availability or tasks
upon which this one is dependent. You may need to address the problems in precursor tasks or
substitute an unavailable resource with one that is available. It may be too late too deal with
precursor tasks, in which case the correct approach may be to simply recalculate the schedule
based on the new information.

Check on skills and obstacles in tasks not completing or finishing fast enough. When all the
hours allocated to a task are gone, but the task is not yet finished, it indicates a problem. But a
better time to catch the problem might be when 25% of the hours are used, but the task is not
25% completed. That's when you still have an opportunity to take corrective action. Prompt
reporting can help, but you'll need to pay close attention to tasks that are shorter than your
reporting cycle. If you have a daily or weekly reporting cycle, it's possible for a two-day task to
double and go unreported until it's too late.

Correct issues where unscheduled tasks are being worked. You can avoid this, for the most
part, by advising your team to notify you when out-of-scope requests are received. This type of
activity always occurs at the request of someone, most often a stakeholder. You can head off
these issues by having a change request and approval process, and advising the requester and
approvers of the impact on the project's cost and schedule. If the change is approved, you simply
recalculate the project to accommodate it and keep track of it.

Correct Inadequate Tasks and Deliverables. The most difficult problem to deal with is the
one where the task is completed and materials are ready for delivery, but they just don't meet
requirements. This shouldn't happen in a well-documented project, but it does -- often because
resources just don't read the project documentation. The only solution is rework. Rework is
costly and can be prevented by incorporating inspection points during the development of a
deliverable. Incorporating a quality control process into the project itself should prevent this type
of problem especially if you inspect the deliverable as it is being produced instead of waiting
until it is being delivered. Closely monitoring the status of tasks and the quality of deliverables
can often eliminate the need for taking corrective action.

Report Project Status

In the same way that you expect your team members to be accurate and timely in reporting task
status to you, you must report project status in a timely way to your sponsor, customers, and
stake holders. In doing so, you have an opportunity to take credit for the things you and your
teams have done well and get direction on situations where help is needed.
Communicate accurately and often. Your sponsor, customer and stakeholder will take bad news
more easily if it's presented to them in time to provide direction or make suggestions to correct
them. If you report project status in time to take action, you make your stakeholders partners in
decision-making for the project, even if the decision is to pull the plug. The worse thing you
could do would be to wait until most of the budget has been spent before letting them know that
the project is hopelessly behind schedule and consuming funds twice as fast as expected. Give
them the opportunity to help and offer suggestions.

Focus on schedule, cost, achievement, and changes. When you report project status to the
decision-makers you'll want to emphasize progress against the schedule for the entire project,
and for tasks with exceptional variances. You'll want to report on expenditures for the whole
project, and for tasks with exceptional cost variances. Run down the list of deliverables,
indicating those that were delivered on time, delivered late, or behind schedule. Finally, identify
any changes that have been made to the project like additional tasks and deliverables, or
resources pulled for use elsewhere. Indicate where the changes affected the project. The best way
to accomplish the reporting is to use baseline and actual comparisons.

Highlight budget revisions by comparing current budget to the original baseline. Show changes
that have been made to the project, by comparing your revised budget or baseline to the original
baseline you saved when the scope was approved. Compare Costs and tasks against the schedule
timeline and identify any tasks that were changed due to requirements or resource changes. This
comparison should only be showing changes that have been approved.

Report project status by comparing actual to the current budget. By comparing actual progress to
the most recent budget revision you show how things stand that have occurred since the revisions
were approved and since the last reporting session. Here's where you will want to talk about
tasks that are going according to plan, as well as those that are falling behind or consuming
budget too quickly.

Use variances to forecast future performance. You'll want to give them an idea of the project
outcomes based on events and progress so far, and on projections of current trends in cost and
schedule variances. Where possible, indicate schedule trends like tasks appear to be averaging
20% longer than anticipated. Obviously, only one delayed task out of 50 wouldn't indicate a
trend. You can show trends in costs either on a task by task basis or as an overall project
spending rate, also known as the burn rate. For example, we're spending about $150 more per
week than planned.

Present an action plan to correct or improve progress. You should never make the sponsor,
customer and stakeholders come up with a plan. They will resent having to do it and you will
rarely be satisfied with what they suggest. Instead, develop your own plan and present it to them.
Then give them the opportunity to accept it, change it, or suggest alternatives.

Sometimes negotiation is your only option. When you have problems that are uncorrectable,
often your only choice is to adjust the project's cost, schedule, or requirements to compensate or
accommodate the changes. When you need to do that, you'll need the approval of the sponsor,
the customer, and perhaps the stakeholders. To get that approval you may need to negotiate the
changes. Be prepared to communicate progress and talk about solutions. In some cases it may be
advisable to have two or three possible solutions or scenarios up your sleeve.

Remember to report project status often and whenever significant events occur. It's easier to
make course corrections if you do it right away. Wait too long, and you could be too far off
course to recover.

10.12 Minimum Cost Scheduling

The basic assumption in minimum cost scheduling is a relationship between activity completion
time and the cost of a project. On one hand, it costs money to speed up the activity; on the other,
it costs money to sustain the project. The costs are associated with the activities which are
termed to direct costs, and add to the project direct cost. It is relevant to the worker’s overtime
and hiring more workers from other jobs; others are resource related, such as buying additional
or more efficient equipment and drawing depending upon the additional facilities.

The costs are associated with sustaining the project are termed with the project indirect costs;
overhead, facilities, and resource opportunity costs, and, under certain contractual situations,
penalty costs or lost incentive payments. The direct cost and project indirect costs are opposing
costs which depend on time, the scheduling problem is essential for finding the project duration
that minimizes their sum or finding the optimum point in a time-cost.

Procedure of minimum cost scheduling:

The procedure for finding minimum cost scheduling consists of five steps. The first step is to
prepare a CPM-type network diagram which calculates the normal cost and normal time. The
normal cost is the lowest expected activity costs. The normal time associated with the normal
cost. The second one is determining the cost as per unit of time to expedite the each activity. This
assumption is common in practice and helps us to derive the cost per day to expedite the value
may be found directly by taking the slope of the line using slope formula. The third one is
computing the critical path. The fourth is to shorten the critical path at the least cost.

Finally, the cost of applying critical path methods to a project is sometimes used as a basis for
criticism. However, the cost of applying critical path techniques rarely exceeds the percent of
total project cost. The added features of a work breakdown structure and various reports are
more expensive but rarely exceed the percentage of total project costs. Thus, added cost is
generally outweighed by the savings from improved scheduling and reduced project time.

Additional Considerations:

There are other considerations which besides project cost. For example, when the project is a
part of development of a new product, it may be extremely important and beneficial to accelerate
the project to a point where the cost is greater than the minimum cost scheduling. There are
incentive payments which is associated with early and late completion time by simulating as
indirect costs.
10.13 Project Planning Templates

These Project Planning Templates provide you with all of the project management planning
documents you need, to plan projects. Every project planning template has been pre-formatted
and already includes the sections, tables and practical examples you need.

Project Plan
A Project Plan sets out the phases, activities and tasks needed to deliver a project. The
timeframes required delivering the project, along with the resources and milestones are also
shown in the Project Plan. Using this Project Plan Template, you can quickly and easily create a
comprehensive Project Management Plan for your project, as it already lists the commonly used
tasks needed to complete projects from start to finish. A Project Plan Template is filled in every
time you wish to embark on a new project. A summarized Project Plan is usually created early in
the life cycle, with a detailed Project Plan being created later the planning phase. The Project
Plan is referred to constantly throughout the project. Every day, the Project Manager will review
actual progress against that stated in the Project Plan, to ensure they are still on track. The
Project Plan is therefore the most critical tool a Manager can have to successfully deliver
projects.

If you want to create a Project Plan for your project within a few easy steps, then this project
plan template will tell you how to do it.

Each project planning step is described in detail and is accompanied by a suite of practical tips
and hints.

By using this Project Plan template, you can:

 Identify all of the phases, activities and tasks
 Sum up the effort needed to complete those tasks
 Document all of the project inter-dependencies
 List the planning assumptions and constraints
 Create a detailed project planning schedule
 This Project Plan Template will also help you to:
 Define the project scope & milestones
 Identify the Work Breakdown Structure
 Set and agree the target delivery dates
 Monitor and control the allocation of resource
 Report on the progress of the project, to the sponsor

The Project Plan is the most important document in the project, as it provides the Project
Manager with a roadmap ahead, and it tells them during the journey whether they are on-track.
Using this Project Plan template, you can create a comprehensive project management plan for
your project today.

Resource Plan
A Resource Plan summarizes the level of resources needed to complete a project. A properly
documented Resource Plan will specify the exact quantities of labor, equipment and materials
needed to complete your project. This Resource Planning template also helps you gain approval
from your Sponsor, ensuring their buy-in. A Resource Plan is created during the Resource
Planning phase of the project. Anyone responsible for Project Resource Management will need
to create a comprehensive Resource Plan, to ensure that all of the resources needed to complete
the project are identified. By implementing proper Resource Planning practices, it also helps you
with budgeting and forecasting project expenditure.

This Resource Planning template will help you identify the:

 Types of labor required for the project
 Roles and key responsibilities for each labor type
 Number of people required to fill each role
 Items of equipment to be used and their purposes
 Types and quantities of equipment needed
 Total amount of materials needed
 This Resource Plan template will also help you to:
 Plan the dates for using or consuming these resources
 Identify the amount of resource required per project activity
 Create a detailed resource utilization schedule

By purchasing this resource planning template, you can schedule the resources needed to
complete your project successfully.

Financial Plan
A Financial Plan identifies the Project Finance (i.e. money) needed to meet specific objectives.
The Financial Plan defines all of the various types of expenses that a project will incur (labor,
equipment, materials and administration costs) along with an estimation of the value of each
expense. The Financial Plan also summarizes the total expense to be incurred across the project
and this total expense becomes the project budget. As part of the Financial Planning exercise, a
schedule is provided which states the amount of money needed during each stage of the project.
Whenever you need to ask for money, you need a sound Financial Plan showing how it will be
consumed. For a Project Manager, getting Project Finance is one of the most critical tasks in the
project. Therefore, sound Financial Planning principles must be followed to ensure a positive
outcome. Using this Financial Plan template, you can create a detailed Financial Plan for your
project. It will help you get the Project Finance needed to successfully deliver your project on
time.

This Financial Plan template will help you to identify the:

 Types of labour costs to be incurred during the project
 Items of equipment needed to deliver the project
 Various materials needed by the project
 Unit costs for labor, equipment and materials
 Other costs types such as administration
 Amount of contingency needed
 You can then use the Financial Plan template to create a budget by:
 Calculating the total cost involved in completing the project
  Identifying the total cost of each project activity
 Creating a schedule of expenses

Creating a project budget is an extremely important part in any project, as it gives you a goal
post to aim for. This Financial Plan will help you meet that goal post, by giving you a clear
process and template for creating a budget for your project.

Acceptance Plan
An Acceptance Plan (also known as an "Acceptance Test Plan") is a schedule of tasks that are
required to gain the customers acceptance that what you have produced is satisfactory. It is more
than just a task list though. An Acceptance Plan is in fact an agreement between you and the
customer, stating the acceptance tasks that will be undertaken at the end of the project to get their
final approval. The Acceptance Plan includes a list of the deliverables, the acceptance test
activities, the criteria and standards to be met, and the plan for their completion.

You should create an Acceptance Plan every time you need to produce a set of deliverables that
require the customer's approval before completion. If the customer needs to approve anything,
then you should agree upfront what actions will be taken to get their approval when the
deliverables are complete. By creating an Acceptance Plan at the start of a project, it will save
you time and hassle at the end, as the acceptance test actions will already have been pre-
completed by the customer.

This Acceptance Plan template will help you gain acceptance, by:
 Creating a full list of all project deliverables
 Listing the criteria for gaining customer acceptance
 Putting in place, acceptance standards to be met
 You can then use this template to create an Acceptance Plan, by:
 Identifying the acceptance test methods
 Allocating acceptance test resources
 Scheduling acceptance reviews with your customer
 Gaining your final acceptance of your deliverables

By creating an Acceptance Plan for your projects, you'll boost your chances of success - as you
will constantly produce deliverables which meet your customer’s requirements. The Acceptance
Plan template helps you to schedule customer acceptance tests to ensure that your deliverables
meet your customer’s needs, every time.

Risk Plan
A Risk Plan helps you to foresee risks, identify actions to prevent them from occurring and
reduce their impact should they eventuate. The Risk Management Plan is created as part of the
Risk Planning process. It lists of all foreseeable risks, their ranking and priority, the preventative
and contingent actions, along with a process for tracking them. This Risk Plan template will help
you perform these steps quickly and easily.

A Risk Plan should be used anytime that risks need to be carefully managed. For instance, during
the start up of a project a Risk Plan is created to identify and manage the risk involved with the
project delivery. The Risk Plan is referred to frequently throughout the project, to ensure that all
risks are mitigated as quickly as possible. The Risk Plan template helps you identify and manage
your risks, boosting your chances of success.

This Risk Planning template will help you to:

 Identify risks within your project
 Categorize and prioritize each risk
 Determine the likelihood of the risks occurring
 Identify the impact on the project if risk does occur
 You can then use this Risk Plan template to:
 Identify preventative actions to prevent the risk from occuring
 List contingent actions to reduce the impact, should the risk occur
 Schedule these actions within an acceptable timeframe
 Monitor the status of each risk throughout the project

Creating a Risk Management Plan is a critical step in any project, as it helps you to reduce the
likelihood of risk from occurring. Regardless of the type of risk, you will be able to use this
template to put in place processes and procedures for reducing the likelihood of risk occurring,
thereby helping you to deliver your project successfully.

Quality Plan
A Quality Plan helps you schedule all of the tasks needed to make sure that your project meets
the needs of your customer. It comprises two parts; the Quality Assurance Plan lists the
independent reviews needed and the Quality Control Plan lists the internal reviews needed to
meet your quality targets. By using Quality Assurance and Quality Control techniques, you can
create a comprehensive Quality Management Plan for your project.

Creating a Quality Plan is essential if you want to provide the customer with confidence that you
will produce a solution that meets their needs. The Quality Plan states everything you're going to
do, to ensure the quality of your solution. The first section defines the Quality targets. The
second section sets out a Quality Assurance Plan. And the third section defines a Quality Control
Plan. By using this template, you can create a Quality Management Plan that gives your
customer a high degree of confidence that you will succeed.

You can use this Quality Plan to set quality targets by:
 Identifying the customer’s requirements
 Listing the project deliverables to be produced
 Setting quality criteria for these deliverables
 Defining quality standards for the deliverables
 Gaining your customers agreement with the targets set
 You can then use this Quality Plan to monitor and control quality by:
 Identifying the quality control tasks needed to control quality
 Creating a Quality Control Plan, by scheduling the control activities
 Listing the quality assurance activities required to assure quality
 Building a Quality Assurance Plan, by creating an activity schedule
Quality Planning is a critical part of any project. It enables you to agree a set of quality targets
with your customer. It then helps you to monitor and control the level of quality produced by the
project, to ensure that you meet the quality targets set. By using this quality plan template, you
can set quality targets and ensure that your project produces deliverables which meet your
customer’s needs, thereby ensuring your success.

Communication Plan
A Communication Plan (or Communications Plan) describes how you intend to communicate the
right messages to the right people at the right time. Within a Communication Plan, the
communication goals, stakeholders and strategies, activities and timeframes are described. A
Communication Plan helps you keep everyone informed so that you can communicate a
consistent message to your target audience.

Whenever you have a variety of staff, external suppliers, customers and stakeholders to
communicate with, then you should record your communications formally in a Communication
Plan. A clear Communications Plan is vital to the success of an organization. It is also critical to
the success of projects, as it ensures that all of the staff and stakeholders are kept properly
informed of the progress of a project. The best time to perform Communication Planning is
during the start up phase of a project. This will ensure your Communication Plan includes the
tasks needed to communicate effectively throughout the entire project life cycle.

The template helps you to build Communication Plans by:

 Listing your communications stakeholders
 Defining each stakeholders communication needs
 Identifying the required communications events
 Determining the method and frequency of each event
 Allocating resource to communications events
 Building a communication event schedule
 You can then use this Communication Plan template for :
 Monitoring the communications events completed
 Gaining feedback on communications events
 Improving communications processes

Communication Planning is an important part of any business. Using this template you can
create a comprehensive Communications Plan for your project or team, helping keep your
stakeholders properly informed at all times.

Procurement Plan
A Procurement Plan defines the products and services that you will obtain from external
suppliers. A good Procurement Plan will go one step further by describing the process you will
go through to appoint those suppliers contractually. Whether you are embarking on a project
procurement or organizational procurement planning exercise, the steps will be the same. First,
define the items you need to procure. Next, define the process for acquiring those items. And
finally, schedule the timeframes for delivery.
It is advisable to create a Procurement Plan whenever you want to purchase items from suppliers.
Using the Procurement Plan template, you can define the procurement requirements, identify
potential suppliers, contract those suppliers and manage them to ensure delivery. Project
Procurement Planning is critical to the success of any project. This Procurement Plan template
helps you to perform these steps quickly and easily.

This Procurement Plan helps you:

 Define your procurement requirements
 Identify all of the items you need to procure
 Create a sound financial justification for procuring them
It also helps you to:
 List all of the tasks involved in procuring your products
 Schedule those tasks by allocating timeframes and resources
 Create a robust project procurement process for your business

Procurement Planning is critical if you want to get the most out of your supplier relationships.
By using this Procurement Plan template, you can quickly and easily define your procurement
requirements, the method of procurement and the timeframes for delivery.

Tender Process
A Tender Process (or "Invitation to Tender" process) is a method by which suppliers are selected
for the provision of products and services to an organization. The process involves creating a
suite of Tender Documents to manage the supplier selection process. The Tender Documents
help the organization to select the best possible supplier available, and include documents such
as the "Statement of Work", "Request for Information" and "Request for Proposal".

If you want to appoint an external supplier, then you need to document a formal Invitation to
Tender Process. By using a formal tender process, you can show that the preferred supplier was
selected fairly. This Tender Process includes all of the steps needed to select and contract
external suppliers, quickly and efficiently.

This Tender Process helps you with:

 Creating a Statement of Work
 Issuing a Request for Information
 Completing a Request for Proposal
 Selecting one or more preferred suppliers
The Tender Process will also help you to:
 Define the roles of staff involved in the Invitation to Tender
 Evaluate and prioritize the supplier's proposals
 Monitor and control supplier relationships

By using this Invitation to Tender process, you can ensure that you choose the best available
supplier, at the best price.
Statement of Work
A Statement of Work or SOW, defines 'what it is that you need' from an external supplier. It is a
statement of the work to be completed by a supplier. The Statement of Work also describes the
materials and equipment to be provided, within a defined timeframe. This Statement of Work
Template saves you time, because all of the sections have been pre-completed for you.

Every time you need to request work from an external supplier, you need to issue a Statement of
Work. It helps you clarify what it is that you want from your supplier and the timeframes in
which to complete it. Writing a Statement of Work is easy, by using this comprehensive
template.

This Statement of Work template helps you by:

 Defining the type of supplier that you wish to appoint
 Describing the materials and equipment you need
 Specifying the deliverables to be provided by the supplier
 Stating your terms and conditions for payment
This Statement of Work template also includes:
 Instructions to help you create it quickly
 Practical examples, to show you how to do it
 re-completed tables, to save you time
 Real-life examples

Everything you need to create a Statement of Work is included within this comprehensive
template.

Request for Information

A Request for Information (or "RFI") is a document which is issued to potential suppliers to
allow them to take part in an "Invitation to Tender" process. It is a request for information from
the supplier, to help you decide whether or not to appoint them. By using this Request for
Information template, you can complete the RFI process quickly and easily.

You need to issue a Request for Information whenever you want to contract an external supplier
to your business. The document will explain to your supplier, the information you need, to help
you with your supplier selection. This Request for Information template includes all of the
sections, content and examples you need to document a Request for Information today.
This Request for Information template helps you with:
 Defining your supplier needs
 Informing supplier of your procurement process
 Specifying the rules and timeframes for engaging with suppliers
 Selecting suppliers for your business
 This Request for Information template includes:
 Helpful completion instructions
 Pre-formatted sections and sample content
 Practical, real-life examples
By using this Request for Information template, you will save time and effort as you won't need
to start from scratch. You can simply fill it in, to create a Request for Information for your
business today.

Request for Proposal

A Request for Proposal (RFP) is a document that is issued to suppliers to help them provide the
information needed to make a preferred supplier decision. By using this RFP Template, you can
quickly create a Request for Proposal for your business. It includes all of the relevant content
you need to create a Request for Proposal.

You need to create a Request for Proposal whenever you want to request a proposal from
external suppliers. The Request for Proposal describes the nature of the proposal you're seeking
from them and the timeframes for delivering it. The Request for Proposal also includes key terms
and conditions you intend to include in a supplier agreement. This RFP Template will save you
time creating your Request for Proposal now.

This Request for Proposal template will help you to:

 Tell suppliers about your purchasing needs
 Inform suppliers of the information that you need from them
 Make your preferred supplier decision
This Request for Proposal template also includes:
 Instructions on what to do
 Pre-formatted sections to save you time
 Lots of real-life examples, tips and hints

This template will help you to create a Request for Proposal faster than before. Simply fill-in-the
gaps to create a Request for Proposal for your business today.

Supplier Contract
A Supplier Contract or "Supply Contract" is an agreement between a business and an external
supplier for the delivery of a defined set of products and services. A Supplier Contract is a legal
agreement and is used as the basis upon which to measure the suppliers performance. In addition
to listing the items to be supplied, the Supply Contract states the timeframes, responsibilities,
pricing and payment clauses needed to administer the relationship. By putting a Supply Contract
in place, it helps you to get the most out of the supplier relationship.

A Supplier Contract should be used whenever you need to purchase products or services from an
external supplier. By documenting a supply contract, your external suppliers will treat the
relationship more seriously. The Supply Contract defines the delivery milestones and therefore
the criteria for making payments. So by using a Supply Contract, it will make it easier to manage
your suppliers today.

This template help you document a supply contract that specifies the:
 Deliverables to be provided by the supplier
 Training, documentation and support to be provided
 Responsibilities of both parties
  Performance criteria and review process
 Pricing schedule and invoicing process
 Contractual terms and conditions
This template is unique, as it:
 Includes all of the critical sections of a Supplier Contract
 Tells you how to complete each section, step-by-step
 Has lots of practical real-life examples
 Provides pre-completed tables and content to save you time

Using this supplier contract template, you can quickly create a comprehensive supply contract
that covers all of the critical terms and conditions needed. It will also give you a sound basis for
reviewing the supplier’s performance during the contract, as you will have a clear set of
performance criteria and delivery milestones to measure against.

Tender Form
A Tender Form is issued to a supplier during the "Invitation to Tender" process. Each Tender
Form helps the team to collect information about potential suppliers so that they can appoint one
or more preferred suppliers to the business. As each Tender Form is released to the suppliers, the
progress is tracked in the Tender Register. To save time creating each Tender Form, a Tender
Template is used.

Every time you appoint a new supplier, you need to create one or more Tender Forms. They help
you keep the process open and visible within your business so that you can prove that your
Tender Process has been run fairly. The typical types of Tender Forms include the "Statement of
Work", "Request for Information" and "Request for Proposal". The Tender Register helps you
manage them all in one place.

The Tender Register tracks the current status of each Tender Form within your project or
organization. For example, it records the:
 Types of Tender Forms released
 Release date and release details
 Status such as; Approved, Released, Distributed
 Outcome of the release of the Tender Forms
By using this Tender Register, you can:
 Monitor and control your tender processes
 Ensure that your tender process is followed
 Identify and resolve any issues with you tender early
 Keep track of the overall status of your tender
 Ensure that your tender is completed on time

When purchasing products and services from suppliers through an Invitation to Tender process,
this tender register will be invaluable, as it helps you to identify the current status of the tender at
any point in time. You can therefore monitor and control the progress of any Invitation to tender,
effectively.
10.14 Earned Value

Earned value management, which is used to track earned value, is an integrated system of project
management and control that enables a Contractor and their customer to monitor the progress of
a project in terms of integrated cost, schedule, and technical performance measures. The
Contractor/developer owns the process but the Acquirer/customer has full and timely visibility of
the information contained within it. Traditional project management practice tends to compare
actual costs with planned expenditures, and confuses actual costs with actual progress. EVM
provides a third reference point that is an objective view of the status of the effort, i.e., the value
to the end goal of the work completed to date.

Successful implementation of Earned Value Management principles can result in:

 Better Visibility into Program Performance

 Reduced Cycle Time to Deliver a Product
 Increased Accountability
 Reduced Risk

Earned value project management involves planning work to a manageable level of detail such
that it is feasible to allocate a portion of the budget to each planned work unit (work package),
and then tracking progress by the accumulated “value” of completed work units. As work is
performed, it is “earned” on the same basis as it was planned, in dollars or other quantifiable
units. As the work units are completed, the project earns the budgeted value associated with
those work units. This method associates a dollar value with work completed so that it can be
compared with the actual spending (to determine cost variance – potential cost overruns), and the
planned spending (to determine schedule variance – potential schedule slippage). In this manner,
planned and actual spending are integrated with actual work performed. The integration
provides greater visibility into the real project status for all stakeholders and thus creates a
scenario for better management of risks, for early determination of whether a project is in
trouble, and for estimating what will be needed to complete it.
Although tracking earned value occurs during project execution, it cannot be accomplished if
appropriate project planning and budget allocation has not occurred up front. The figure below
depicts, at a high level, the activities that are necessary in order to effectively implement the
principles of earned value management.

Earned value (EV) management is an integrated system of project management and control that
enables a Contractor and their customer to monitor the progress of a project in terms of
integrated cost, schedule, and technical performance measures. The Contractor/developer owns
the process but the Acquirer/customer has full and timely visibility of the information contained
within it. This represents a recent migration in focus from acquirers using EV for inspection and
oversight to developers using EV for project management. Traditional project management
practice tends to compare actual costs with planned expenditures, and confuses actual costs with
actual progress. EVM provides a third reference point that is an objective view of the status of
the effort, i.e., the value to the end goal of the work completed to date.

Although tracking earned value occurs during project execution, it cannot be accomplished if
appropriate project planning and budget allocation has not occurred up front. The figure below
depicts, at a high level, the activities that are necessary in order to effectively implement the
principles of earned value management.

DEFINE THE WORK: The Project Manager must decompose the project into distinct discrete
manageable tasks or groups of tasks (work packages) with decisive outputs and specific
measurable entry and exit criteria. Each work package has a short duration, or can be divided
into a series of milestones whose status can be objectively measured. Each work package can be
assigned a start and finish date, a budget value, and can be integrated with higher-level
schedules. This activity is often referred to as developing the Work Breakdown Structure
(WBS). It is important to balance the level of detail in the WBS with the needs of the project,
with the ultimate goal being the ability to realistically estimate the cost of accomplishing each
task (earned value). Providing too much detail creates an overload of data, creating a tracking
nightmare, and stifling the creativity of developers; lack of detail may mask vital information.
Guidelines on EVM from the UK Ministry of Defense suggest that 3-4 levels in the WBS are
sufficient for most projects, but complex projects (such as building a ship) may require five or
six levels.

SCHEDULE AND BUDGET: Once the effort is identified through the WBS, the project
manager must prepare a budget and schedule for accomplishing the work. This is in contrast to
“backing into a schedule” based on an arbitrary fixed dollar amount. Details of budgeting and
scheduling are beyond the scope of this document, but essentially involve identifying what
resources are needed and how much effort will be required in what time frame to complete each
of the tasks in the WBS. What is critical to being able to track earned value is that a portion of
the budget is allocated for each work package that comprises the WBS and that the WBS
adequately defines all work necessary to meet the agreed-upon requirements for the project.

MEASURE PERFORMANCE: This activity focuses on performance, not just planned vs.
actual spending. It involves tracking a number of measures starting very early in the project, and
analyzing the data to determine real project status. Important measures are:

Primary Measures

Budget Cost of Work Scheduled (BCWS) – the spending plan; the dollars (or hours) planned
for the effort. The cumulative planned expenditures would equal the total dollars budgeted for
the effort for the specified time period. With EVM, the spending plan serves as a performance
baseline for making predictions about cost and schedule variance and estimates of completion.
Actual Cost of Work Performed (ACWP) – actual spending; the cumulative actual
expenditures on the effort viewed at regular intervals within the project duration.
Budgeted Cost of Work Performed (BCWP) – earned value, the measure of technical
accomplishment; the cumulative budgeted value (dollars or hours) of work actually completed.
It may be calculated as the sum of the values budgeted for the work packages actually
completed, or calculated as the percent work complete multiplied by the planned cost of the
project.

Derived/Calculated Measures

From the three primary measures it is possible to derive measures that can be used to accurately
assess the status of the project and predict its future state.

 Cost Variance (CV) – The numerical difference between the earned value (BCWP) and
the actual cost (ACWP). CV = BCWP – ACWP. (Another way of thinking of this is the
difference between the planned and actual costs of work completed.)
 Schedule Variance (SV) - An indicator of how much a program is ahead of or behind
schedule. SV = BCWP – BCWS. (Another way of thinking of this: earned value –
planned budget, or the difference between the value of work accomplished for a given
period and the value of the work planned). Schedule variance is presented well in chart
format.
  Cost Performance Index (CPI) – The cost efficiency factor representing the relationship
between the actual cost expended and the earned value. CPI = BCWP/ACWP. A CPI ≥
1 suggests a relatively efficient cost factor, while a CPI <1 may be cause for concern.
 Schedule Performance Index (SPI) – The planned schedule efficiency factor representing
the relationship between the earned value and the initial planned schedule. SPI =
BCWP/BCWS. A SPI ≥ 1 is good. SPI < 1 suggests actual work is falling behind the
planned schedule.
 Budget at Completion (BAC) – sum total of the time-phased budget. Synonymous with
“Performance Measurement Baseline”.
 Estimate to Complete (ETC) – A calculated value, in dollars or hours, that represents the
cost of work required to complete remaining project tasks. ETC = BAC – BCWP.
 Estimate at Complete (EAC) – A calculated value, in dollars or hours, that represents the
projected total final costs of work when completed. EAC = ACWP + ETC.

In looking at the list of important measures earned value (BCWP) is one of the three basic
measures from which the other measures are derived. Without it, the other measures are not
possible.

Earned value credit should be binary, with 0 percent being given before task completion and 100
percent given when completion of each work unit is validated. Establishing specific measurable
exit criteria for each task makes it easier to track task completion, and thus credit the earned
value of the task to the project so that the earned value of the project at any given point in time is
obtained by “simple math” rather than by subjective assessment.

COMMUNICATE PERFORMANCE STATUS: Tracking earned value is of little value if the

estimating and analysis capability that it provides is not used to manage the project. Although
originally required for reporting project status to the acquirer, in recent years there has been a
migration of focus. EVM is now viewed as a project management technique, as well. Its
usefulness is broader than simply reporting project status up the management chain. There are
some important reasons to communicate the project status (represented in terms of earned value)
to all stakeholders.
Promote Accountability - When developers understand how their individual work (or lack
thereof) influences the project, they tend to be more focused on their specific work goals. They
also better understand the significance of estimating the amount of work needed to complete
specific tasks. There exists a mindset among some project managers that they should “protect”
their developers from the distraction of project metrics. In reality, communicating project status
to the development staff tends to establish a sense of accountability for their assigned pieces of
the project and often results in more realistic estimates for completion of future tasks.
Reporting real project status, including earned value, at regular intervals provides an
opportunity to address potential problems early in the project when it is still possible to resolve
problems and avoid cost overruns and schedule slippage. The project team takes a proactive
approach to prevent problems from occurring. Management uses the information to resolve
issues that are beyond the control of the project team. The time interval should be at least
monthly, regardless of the size and duration of a project, and more frequent for some projects.
Many practitioners experienced with earned value management indicate that the project team
should review project earned value weekly, because it can alert the team to specific problem
areas before they develop into major problems.

Illustrative Example:

Assuming a project budget of $300K (with $100K allocated for the first four months), planned to
be implemented over 12 reporting periods (1st 4 periods shown here), a sufficiently detailed
WBS, and an accurate method of crediting earned value, Table 1 provides the primary project
level data that would be captured under principles of EVM to communicate project status. Data
typically captured (and measures reported) under a traditional approach are shaded blue in both
tables. Rows shaded gold represent additional data collected and measures reported using an
EVM approach.

(K$) 1 2 3 4 Total Allocation

Work Planned 25 25 25 25 100
Actual Costs 22 20 25 25 92
Earned Value (Value of completed work) 20 20 20 20 80
Under the traditional project-reporting paradigm (Planned vs. Actual spending), at the end of 4
periods this data shows that the project is under run by $8K. However, when “tracking earned
value” is added as an additional reference point, the data shows that the project is overrun by
$12K (see Cost Variance in Table 2). This is the effect of integrating EV into the project
monitoring process. It focuses on reporting progress from the perspective of work completed,
and that focus brings a whole new dimension to the status of a project. In this case, the
difference in project status ($20K), as reported by the two approaches, amounts to 20% of the
funding ($100K). Table 2 illustrates other metrics derived from earned value data that can be
used, not only to better assess the current status of the project, but also to make more realistic
predictions about where the project is headed.
Cum (Planned – Actual)

Spending $3K $8K $8K $8K $8K

Cost Variance (CV)

Cum EV- Cum Actual Cost -$2K -$2K -$7K -$12K -$12K

Schedule Variance (SV)

Cum EV – Cum Planned -$5K -$10K -$15K -$20K -$20K

Cost Performance Index (CPI)

Cum EV/Cum Actual 20/22 ≈ 0.91 40/42 ≈0.95 60/67 ≈ 0.90 80/92 ≈0.87 0.87

Schedule Performance Index (SPI)

Cum EV/Cum Planned 20/25 ≈0.80 40/50 ≈0.80 60/75 ≈0.80 80/100 ≈0.80 0.80

Estimate to Complete (ETC) 300 – 20 = 300 – 40 = 300 – 60 = 300 – 80 = $20K

Total Budget (BAC) – Cum EV $280K $260K $240K $220K

Estimate at Complete (EAC) 22 + 280 = 42 + 260 = 67 + 240 = 92 + 20 = $312K

Cum Actual + ETC $302K $302K $307K $312K
Communicating earned value does not make problems go away automatically, but it can provide
objective consistent measures that are useful in focusing attention on the “real” status of the
project, as follows:

a. Cost and schedule efficiency factors <1 are cause for concern
b. Downward trend in CPI is consistent with government findings in monitoring
projects since the 1970s (see below)
c. Even with fluctuation, data reported early in the project is a good predictor of
what will happen later
d. Frequent reporting of EV data supports trend analysis that can better
communicate the direction of the project

The DoD has been able to make several determinations about projects in general by using
data collected from projects where tracking earned value was required (over 400 projects
since 1977).

a. Without exception, the cumulative CPI does not significantly improve between
the period of 15% and 85% of contract performance period. In fact, it tends to
decline. For example, a CPI of 0.75, derived from data at the 15% mark suggests
that if the budget and schedule remain constant, only 75% of the work will be
completed at project end. This clearly indicates early in the project a need to
adjust budget, schedule, and/or the scope of work.
b. Studies show that EACs based on both the CPI and the SPI tend to be
significantly higher and are generally more accurate (Christensen, 1996)

By adding the 3rd primary measure, earned value, to project reporting we provide the
opportunity to uncover, address, and resolve problems early. The Figure below (EVM
Workshop) presents a typical project status report used with EV. In graphical form, it quickly
communicates cost variance and schedule status in addition to the technical completion status of
the project relative to the baseline.
CHARACTERISTICS OF IMPLEMENTATION:

Successful implementation of the Earned Value Management principles can result in:

Better Visibility into Program Performance

The combination of advance planning, baseline maintenance, and earned value analysis yields
earlier and better visibility into program performance than is provided by non-integrated methods
of planning and control.
Reduced Cycle Time to Deliver a Product
Earned value management is premised on careful detailed planning – task decomposition,
scheduling, and budgeting. This planning often addresses/prevents problems from surfacing
later in the effort that result in rework. Thus, as rework is prevented cycle time may, in fact, be
reduced.
Fosters Accountability
When the developer, at the personal level, understands how their pieces fit into the overall
project effort they tend to focus on delivery of a quality product. Additionally, over time they
are better able to estimate the work required to complete a task, thereby improving the overall
accuracy of the budget/estimating process for future efforts.
Reduced Risk

Because earned value measures enable realistic estimates of completion (for both cost and
schedule) to be derived early in the project, it is possible to make adjustments and take corrective
action to mitigate the risk of cost overruns and schedule slippage.

DETAILED CHARACTERISTICS
Key Characteristics of the Track Earned Value Gold Practice

Characteristic Comments
Required Practice on Large DoD Software Required on DoD projects >$40M. See DoD
Intensive Systems Instruction 5000.2-R.
Requires a Disciplined Approach to Project Formalized planning and reporting processes
Planning must be established as part of the project
management infrastructure.
Integrates Cost, Schedule and Performance Work completed is represented as a dollar
Metrics value portion of the budget, and compared with
planned and actual expenditures to measure
progress and communicate project status.
Removes the myth that actual costs equate to
actual technical progress.
Decompose Project Tasks to “Inch-Pebbles” A work breakdown structure is a necessary part
of project planning. Task decomposition must
be performed with granularity sufficient to
enable accurate estimation of cost and
resources for task completion.
Allocate Budget at the Detailed Task Level A portion of the spending plan (budget) is
allocated to each specific task
Report Project Status at Frequent Regular
Intervals
Involve Development Team in Developing
Task Estimates
Track Task Completion at the Detail Level
Credit Earned Value Only on Full Completion
of Task
Communicate Project Status to Developers as
Well as Customers
Not a “Silver Bullet” for Already Failing
Projects
Applicable to Most Projects with a Duration of
Longer Than a Few Months
Necessitates Educating Project Team on
EVMS
Based on Mutual Integrity and Trust
At least monthly – more frequently on short
projects
Realistic estimates are critical to making EV a
useful, meaningful practice
· Developers improve their estimating ability
over time
· Other factors in the organizational culture
can impact the credibility of developer
estimates. Teams built on trust and mutual
respect are more successful at estimating
Use binary status – done or not done – on
detailed tasks and activities within the project
to aid in determining work unit completion
Binary quality gates – done or not done – no
partial credit
Apply earned value credits at the detailed task
level (inch-pebbles)
EV principles are used to manage projects, not
just report project status
Individual developers take on ownership for
their efforts when the focus of the project is
outcome-based
If a project is more than 50% expended and in
trouble, implementing EVM at that point does
not guarantee success, although it may provide
sufficient insight about the project status to
enable discussions about the best course of
action
EVM is a prevention-based approach to project
management
In general, the larger/longer the project, the
greater the need for implementing EVM, and
the greater its value for project management
Developers need to understand how it works,
what it is used for, and how it contributes to a
successful project
Managers need to “practice what they preach”
regarding use of EV data
Establishing arbitrary budgets will degrade the
integrity of earned value data
Developers must be trained to estimate, and
then trusted. If their estimates are not used,
they will stop providing true estimates
RELATIONSHIPS TO OTHER PRACTICES:

The Figure below represents a high-level process architecture for the subject practice, depicting
relationships among this practice and the nature of the influences on the practice (describing how
other practices might relate to this practice). These relationship statements are based on
definitions of specific “best practices” found in the literature and the notion that the successful
implementation of practices may “influence” (or are influenced by) the ability to successfully
implement other practices. A brief description of these influences is included in the table below.

Process Architecture for the "Track Earned Value" Gold Practice

Summary of Relationship Factors for the Track Earned Value Practice

INPUTS TO THE PRACTICE

Facilitate Establishing and Tracking Earned The significance of “earned value tracking” is
Value Metrics based on the notion that the Project Manager is
able to accurately estimate the resources (and
therefore cost) necessary to complete each task
in order to allocate a portion of the budget to it
(earned value). The following practices may
help the project manager (and the team) to do
the planning that is necessary to provide
accurate earned value estimates that are
ultimately used to track progress on the
project:
 · Establish Clear Goals and Decision Points

· Performance-Based Specifications

· Goal-Question-Metric Approach

· Binary Quality Gates at the Inch Pebble

Level
Support/Encourage Use of Earned Value The DoD acquisition process has undergone a
Metrics paradigm shift with regard to tracking earned
value, from a reactive project monitoring role
(as evidenced by the requirements to use
CSSR, or Cost Schedule Status Report) to a
proactive project management role that
supercedes CSSR with a requirement for
contractors to comply with the industry
standard earned value management system.
This allows contractors to use their own
systems and provides more flexibility for
internal management than the previously rigid
requirements of the CSSR. Earned value is
now perceived as a management tool as well as
a reporting tool.
Management Involvement and Support Is Tracking earned value cannot work unless
Critical managers have the planning skills, the
appropriate work ethic, and the tools to
facilitate maintaining project data.
Management must be accountable for their
planning and for providing the estimates that
are used to establish earned value. They must
have the proper training, and they must
establish and maintain good working
relationships with the team – an environment
in which truth and trust prevail. They must
implement a disciplined process for estimating
work and tracking it through completion.
Implementing configuration management of
the project data is essential for managing and
communicating the metrics relating to earned
value as the project progresses.
Provide Objective Data for Determining A task’s earned value cannot be credited until
Earned Value Credits the task is complete. The Project Manager
must determine up front (during planning)
what constitutes completion of a task. There
may be several criteria that must be met. No
partial credit is given. Formal inspections and
demonstration-based reviews provide an
 objective basis for determining task
completion, thus facilitating crediting earned
value. This is in contrast to completion status
based on subjective assessment of the
developer, for example saying, “I just have a
little bit more to do on it – so it’s essentially
done” – but it really isn’t done.
OUTPUTS FROM THE PRACTICE
Alert PMs to Potential Schedule and Cost Measures derived from tracking earned value
Risks Early can be used to establish thresholds that
automatically trigger alerts to situations that
are then addressed through formal risk
management. This is viable in the early stages
of the project (near 15% completion). This is
probably the most significant benefit of
tracking earned value.
Provide a Documented Project Performance Since tracking earned value integrates planning
Trail for Use (budgeting), actual spending, and actual
technical accomplishment, project data that
encompasses earned value tracking provides a
comprehensive historical performance trail that
can be used internally for planning future
projects, for improving the task estimating
process (and therefore the acquisition process),
and for determining which contractors have the
best record for delivery of quality products, on
time, and within budget thus providing data to
support best value awards.
Provide Quantitative Data for Decision Making Tracking earned value quantifies project
completion status by providing a means for
viewing actual accomplishment in terms of
planned value (dollars or hours) and integrating
it with other quantitative measures such as
budget, and actual costs, thereby facilitating
more meaningful analysis of schedule, effort,
and costs. The subjectivity exists only during
the initial estimation required to establish the
earned value for a task. Thereafter, the
measures are quantitative, including the binary
completion status of each task. The resulting
project data can be used to improve the task
estimation process for future efforts as well.
Communicate Project Status Integrating earned value within the typical
project progress charts that compare actual
spending to planned spending provides another
important dimension for better communicating
 project status. It enables accurate predictions
of the real cost to complete a project (and the
real schedule) to be made early in the project
so that adjustments can be made before a crisis
situation develops.

Using earned value to communicate progress

provides the overall picture and should be part
of any scheduled project reviews. There is a
tendency for project reviews to include
demonstrations of accomplishments in lieu of
dialog about them. The practice of tracking
earned value is not just for reporting to the
customer. It should be included in regular
internal project team reviews, as well
providing all stakeholders with visibility of
progress vs. plan.

Change Control
Change control is method for implementing only changes that are worth pursuing, and for
preventing unnecessary or overly costly changes from derailing the project. Change control is
essentially an agreement between the project team and the managers that are responsible for
decision-making on the project to evaluate the impact of a change before implementing it. Many
changes that initially sound like good ideas will get thrown out once the true cost of the change is
known. The potential benefit of the change is written down, and the project manager works with
the team to estimate the potential impact that the change will have on the project. This gives the
organization all of the information necessary to do a real cost-benefit analysis. If the benefit of
the change is worth the cost, the project manager updates the plan to reflect the new estimates.
Otherwise, the change is thrown out and the team continues with the original plan.

Establish a Change Control Board

The most important part of change control is a change control board (CCB). There are certain
people in the organization who have the power to change the scope of the project. Usually there
is a senior manager or decision-maker who has the authority to make sweeping changes at will;
sometimes there are several people in this position. For change control to be effective, these
people must be part of the CCB.

In addition, the CCB should contain people from the project team:

 The project manager

 An important stakeholder or user (or someone who understands and advocates their
perspective)
  Someone who understands the effort involved in making the change (usually, this is a
representative from the programming team)

 Someone who understands the engineering decisions that the team makes over the course
of the project (a design team member, requirements analyst or, if neither is available, a
programmer who participated in the design of the software)

 Someone who is familiar with the expected functionality of the software and with the
behavior being discussed for each individual change (typically a tester)

This last person fulfills a very important role in the change control process. Typically, she is
involved in the tracking of changes and defects in the product. When a bug is reported, part of
her job is to figure out whether it is a defect (meaning that the software does not behave the way
its specification requires it to behave) or a change (meaning that the software behaves as
designed, but that this behavior is not what the users or stakeholders need).

Change Control Process

The following script describes an effective change control process:

Name Change Control Process Script

Purpose To control changes by evaluating their impact before agreeing to
implement them.
Summary The change control process ensures that the impact of each change
is evaluated before the decision is made to implement that change.
A change is proposed by anyone evaluating the software. A change
control board (CCB), made up of the decision-makers, project
manager, stakeholder or user representatives, and selected team
members, evaluates the change. The CCB either accepts or rejects
the change.
Work Products Input
Issue report in the defect tracking system that describes the change
Output
Modified issue report that reflects the impact of the change and the
decision on whether or not to move forward with it
Entry Criteria A change has been discovered, and an issue report that describes it
has been entered into the defect tracking system.
Basic Course of Events A CCB member (typically a tester) who is familiar with the
expected functionality of the software reads and understands the
issue report which describes the requested change.
The CCB member familiar with the change meets with the project
manager to explain its scope and significance. Together, they
identify all project team members who will be impacted by the
change, and work with them to evaluate its impact. The project
 manager updates the issue report to reflect the result of that
evaluation.
At the next CCB meeting, the project manager presents the scope
and significance of the change, along with its expected impact. The
CCB discusses the change, and performs a cost-benefit analysis to
determine if its benefits are worth the cost. The CCB approves the
change.
The project manager updates the issue report to indicate that the
change has been approved, and then updates the project plan to
reflect the change. The team members begin implementing the
change.
Alternative Paths In step 1, if the CCB member does not understand the change, it
can be returned to the submitter for further explanation. The
submitter may choose to either update the issue report to clarify the
change (in which case the script returns to step 1) or drop it
entirely (in which case the change control process ends).
In step 3, if the CCB determines that the benefits of the change are
not worth the cost, they can reject it. The change control process
ends, and no changes are made to the project. The project manager
updates the issue report to reflect the fact that it was rejected.
Exit Criteria The project plan has been updated to reflect the impact of the
change, and work to implement the change has begun.