Controlling Time, Cost,

and Scope
PLANNING MONITORING AND CONTROL
Monitoring and controlling your project, like most other aspects of project
management, requires planning. Consider the following questions:

• How will you collect data about actual project status?

• What tools will you use to analyze those data?
• What format will you use to prepare project reports and updates? How will
you present that information?
• What is the threshold for problems that require you to inform project sponsors
and customers?
• How will you manage and allocate any contingency allowance of time or
money?
• If your risk plan includes contingent responses, how will you know when
they should be implemented?
MONITORING PROJECT STATUS
The three basic ways to gather information on project status are meetings, reports,
and inspections. You usually use all three techniques.
Status Reports
Members of your project team prepare status reports on their activities, and
you provide status reports on the overall project to appropriate stakeholders.
Which stakeholders and what information is decided when you prepare your
stakeholder management and communications management plans.

When the team is small and the project is not terribly complicated, it may not be
the best use of time to prepare a status report, but as team size and complexity
grows, it becomes harder for the project manager to keep all the information in his
or her mind.
The following sample status report template for team members to report status to
you. “Stoplight Status” is green if everything is on track, yellow if there is a minor
variance, and red if there is a serious problem.
Status Meetings

There are several schools of thought on how to run a good status meeting. One
approach is to keep it to an absolute minimum: have each team member summarize his
or her own status, and then take a break. (Some people even recommend that you
should not allow chairs as a way to keep the meeting short.)
Of course, often issues crop up in status meetings that require fuller attention, but not
everybody needs to be part of every discussion. Set separate meetings following the
status meeting involving just the people who need to be there, and let everybody else
get back to work.

Another approach takes into account that the team status meeting may be the only
structured opportunity to bring everyone into the same room. Use the meeting not
merely to get updated status info (a form may accomplish just as much) but as an
opportunity to build trust, air issues, and recognize achievements. Such team meetings
can build morale.
Status Meeting (Cont.)

Many project teams today are not co-located: team members may be in different
states, time zones, or countries. The travel costs to bring everybody together are
so high that it’s not feasible to have regular all-hands get-togethers. If possible, do
bring everyone together for the kickoff meeting and for the lessons learned
workshop, but that’s usually enough. Status meetings can be done through
teleconference or videoconference. That limits the role of team building, but you
still have the opportunity to acknowledge and praise good work.

No matter which approach is right for you, always practice good meeting rules:
distribute an agenda, make sure that you and team members are prepared with
the right information, control interruptions and sidebars, and be mindful that if a
meeting runs too long (over 40 minutes or so), people start to lose focus and
effectiveness drops. If you need more total meeting time to get through all the
issues, consider having more frequent, shorter, and more focused meetings
instead of a single marathon session.
Inspections and Reviews
Status reports normally focus on schedule, budget, and deliverables. Status
meetings tend to focus on issues and problems. Neither approach gets into the details
of the work itself. For that, you need to inspect and review the work product, whether
it’s work in progress or work completed. You can personally inspect the work, or you
can establish a peer review system in which people review each other’s work. In
some cases, you may want to bring in outside specialists to conduct a technical
review.

When you perform inspections and reviews, it’s important not to let it become an
inquisition. When people think the goal is to find an opportunity to criticize, they
become risk averse and may go so far as to hide bad news. Establish clear criteria up
front through the requirements process so that team members can measure their own
progress and be in control of results. Avoid surprise inspections. When deficiencies
are found, focus on ways to help the team member make necessary corrections rather
than spend excessive time figuring out what went wrong.
Inspections and Reviews (Cont.)
If the final product must undergo testing, it’s important to test components
at earlier stages of the project. If each component is right, it’s less likely
the final product will fail, and it’s easier to pinpoint problems if they should
be found in the testing process. Document all test and inspection results as
part of the overall project record.

Frequency of Reviews

It doesn’t make sense to have a status meeting or require a status report if

nothing much has happened since the last one. The frequency of reports has
to be based on the speed of change within the project. If you measure activity
duration in weeks, have a weekly meeting. If you measure it in months, have
a monthly meeting. If you measure it in hours, you may need to meet daily.
Frequency of Reviews (Cont.)
The tempo of a project often accelerates as it moves through the project life cycle. In
preliminary stages, activities could last a month or more, especially if the project
involves a long lead time (delivery time). As the project picks up speed, you may start
to measure activities in weeks. When you reach critical time, you might measure in
days. In a rocket launch, the last project activities are measured in seconds: 10-9-8-7-
6-5-4-3-2-1. For each of those final ten seconds, there are specific defined activities
taking place, and should those activities not produce green lights on the board, the
launch will be stopped.

The information needs of stakeholders often influence the status update timetable. If
the customer and project sponsor want a monthly report, you might schedule brief
updates weekly and have an all-hands staff meeting once a month, a few days before
the report is due.
Frequency of Reviews (Cont.)

Decide on your review cycle as part of planning, and make sure your team
members know what is expected of them in the process.

Don’t be constrained by a regular meeting schedule. If nothing much is

happening in a particular week, you might choose to skip the status meeting.
If, on the other hand, you’re dealing with major issues or changes, you may
want to put additional emergency meetings on the schedule.
REPORTING PROJECT STATUS
The basic way to report project status to stakeholders is through an overall project
status report. The following form shows a project status report template that you can
use to send information to key stakeholders.

For major project milestones on large projects, you might need to prepare a briefing,
complete with Power Point slides and handouts. You may even need a “dog and pony
show,” in which you bring key stakeholders to the project site to provide
demonstrations, briefings, a Question&Answer (Q&A) opportunity—and refreshments.

Finding out stakeholder needs and expectations is part of your stakeholder and
communications management plan. As with internal status reporting, make sure team
members know what to expect, when to expect it, and what they are required to
contribute to the process.
No matter what sort of schedule you set forth, you may need additional special
meetings if major project issues arise.
Project Status Report
Project Status Report
EARNED VALUE MANAGEMENT

Earned value management (EVM) is used to monitor and control large projects
in such fields as construction, engineering, and information technology. You
normally encounter EVM only in large organizations, and even then only on
the largest projects.

Today, EVM is one of the major tools used in acquisition reform, and its
effectiveness has been demonstrated by the early cancellation of several major
programs before they went out of control. As EVM’s track record has grown, its
use has been spreading into private industry outside the defense sector.
Planned Value, Earned Value, and Actual Cost
In the discussion of the cost baseline, it was pointed out that the cost baseline could
be used as a stand-in for scope and schedule as well. That’s the first key idea in how
(Earned Value Management) EVM works.

The graph given below shows that we have completed Week 8 of our 12-week
project.
The original cost baseline from the previous graph is shown as the planned value
(PV). As of the end of Week 8, the PV, or what we should have spent in order
to accomplish the work we were supposed to do is $16,250. Because it’s the plan, the
PV goes all the way to the final planned Project cost of $25,000, which is known as
the budget at completion (BAC).
AC $20,000
$18,000
EV
PV $16,250
The actual cost (AC) is how much money we’ve actually spent to date, regardless of
whether we’ve done more or less work than planned. At Week 8, the AC stands at
$20,000, meaning we’ve spent $3,750 more than planned.

Is that a problem? If that extra money is because we’re way ahead of schedule and
we’re doing stuff we wouldn’t otherwise have gotten done until Week 9 or 10, that
could arguably be good news. That’s why we have to compare the AC to the value of
the work we actually got done. The earned value (EV) is the planned cost for the
actual work—a hybrid measurement.
Cost Variance and Schedule Variance
Now let’s go back to the Earned Value figure. As of Week 8, our numbers
stand like this:
PV = $16,250
AC = $20,000
EV = $18,500
We planned to accomplish $16,250 worth of work (PV); we spent $20,000 to do it
(AC); and we got $18,500 worth of work done (EV). The cost variance (CV) is the
earned value (EV) minus the actual cost (AC), or:
CV = EV – AC = $18,500 – $20,000 = -$1,500
Negative numbers are bad news and positive ones are good news. We are over
budget by $1,500.
The schedule variance (SV) is the earned value (EV) minus the planned
value (PV), or:
SV = EV – PV = $18,500 – $16,250 = $2,250
We are ahead of schedule by $2,250!
Confusing? Imagine that the plan says we should have done three activities
by today, and each activity had a budget of $2,000. That means the PV is
$6,000. Unfortunately, we only got two activities done, so our EV is only
$4,000. We’re behind schedule by $2,000 worth of work.

Let’s imagine that we spent $5,000 on that work. The PV is still $6,000,
and the AC is $5,000. At first glance it looks like we’re under budget, but we
still have to do that third activity. Instead, we should compare the AC of
$5,000 to the EV of $4,000. We got $4,000 worth of work accomplished, but
we spent $5,000 to get it done. That means we’re really $1,000 over budget
from the perspective of the overall project.
What if instead, we got four activities done instead of the three that were
scheduled? Our PV is still $6,000, because it only measures what’s in
the schedule. Our EV, however, is now $8,000! That means we’re ahead
of Schedule by $2,000 worth of work.

Now let’s imagine that we spent $7,000 to get the work done. At first
glance, we appear to be over budget, with our AC of $7,000 comparing
to the PV of $6,000. But when we look at the EV of $8,000, it’s clear that
we’re really $1,000 under budget compared to the project as a whole.