QLDA - Chapter 13-Progress and Performance Measurement and Evaluation

13/1/2022
CHAPTER 13: PROGRESS AND PERFORMANCE

UNIVERSITY OF FINANCE - MARKETING
FACULTY OF BUSINESS ADMINISTRATION
MEASUREMENT AND EVALUATION
CHAPTER 13:
PROGRESS AND PERFORMANCE
MEASUREMENT AND EVALUATION
Course ID number: 1931101013902

QUẢN TRỊ DỰ ÁN
How does a project get one year late?

Lecturer: Dr. PHAM HAI CHIEN
. . . One day at a time.
January, 2021
Faculty of Business Administration —Frederick P. Brooks—
CHAPTER 13: PROGRESS AND PERFORMANCE MEASUREMENT AND EVALUATION 2
LEARNING OBJECTIVES CHAPTER OUTLINE
1. Identify the four steps for controlling a project. 1. Structure of a Project Monitoring Information System
2. Utilize a tracking Gantt to monitor time performance. 2. The Project Control Process
3. Understand and appreciate the significance of earned 3. Monitoring Time Performance

value. 4. Development of an Earned Value Cost/Schedule
4. Calculate and interpret cost and schedule variance. System
5. Developing a Status Report: A Hypothetical Example
5. Calculate and interpret performance and percent
indexes. 6. Indexes to Monitor Progress
6. Forecast final project cost. 7. Forecasting Final Project Cost
7. Identify and manage scope creep. 8. Other Control Issues

9. Summary
CHAPTER 13: PROGRESS AND PERFORMANCE MEASUREMENT AND EVALUATION 3 CHAPTER 13: PROGRESS AND PERFORMANCE MEASUREMENT AND EVALUATION 4
1
13/1/2022
1. STRUCTURE OF A PROJECT MONITORING

2. THE PROJECT CONTROL PROCESS
INFORMATION SYSTEM
1. What Data Are Collected?
Control is the process of comparing actual performance
 What is the current status of the project in terms of schedule
and cost? against plan to identify deviations, evaluate possible
 How much will it cost to complete the project? alternative courses of actions, and take appropriate
 When will the project be completed?
 Are there potential problems that need to be addressed now? corrective action.
 What, who, and where are the causes for cost or schedule
overruns? 1. Step 1: Setting a Baseline Plan
 If there is a cost overrun midway in the project, can we forecast
the overrun at completion? 2. Step 2: Measuring Progress and Performance
2. Collecting Data and Analysis 3. Step 3: Comparing Plan against Actual
3. Reports and Reporting
 Progress since last report 4. Step 4: Taking Action
 Current status of project: schedule, cost, scope
 Cumulative trends
 Problems and issues since last report
 Corrective action planned
3. MONITORING TIME PERFORMANCE 3. MONITORING TIME PERFORMANCE
1. Tracking Gantt Chart 2. Control Chart
2
13/1/2022
4. DEVELOPMENT OF AN
3. MONITORING TIME PERFORMANCE
EARNED VALUE COST/SCHEDULE SYSTEM
3. Milestone Schedules Glossary of Terms:

 EV: Earned Value is the percent of the original budget that has
 Programming: June–August 31, 2014 been earned by actual work completed. [BCWP—budgeted cost
 Schematic Design: September–January 15, 2012 of the work performed]
 PV: The BCWS—budgeted cost of the work scheduled].
 Design Development: January–August 31, 2012
 AC: Actual Cost of the work completed. [ACWP—actual cost of
 Historic Review: June–October 31, 2012 the work performed].
 Construction Documents: Sept. 2012–January 15, 2013  CV (Cost Variance): the difference between earned value and
actual costs for work completed to date where CV = EV − AC.
 1% For Art Selection: November 2012–May 31, 2013  SV (Scheplanned time-phased baseline of the value of the work
 Bid and Permit: January–March 31, 2013 scheduled. [dule Variance): the difference between the earned
value and the baseline line to date where SV = EV − PV.
 Construction: April 2013–August 31, 2014
 BAC: Budgeted Cost at completion.
 Furnishing Selections: September–November 30, 2013  EAC: Estimated Actual Cost at completion
 Occupancy: September 7, 2014  ETC: Estimated cost To Complete remaining work.
 VAC: Cost variance at completion (BAC − EAC)
4. DEVELOPMENT OF AN 4. DEVELOPMENT OF AN
EARNED VALUE COST/SCHEDULE SYSTEM EARNED VALUE COST/SCHEDULE SYSTEM
Key steps ensures that the cost/schedule system: Project Management Information System Overview
1. Define the work using a WBS (see Chapters 4 and 5):
 Scope, Work packages, Deliverables, Organization units,
Resources, Budgets for each work package.
2. Develop work and resource schedule
 Schedule resources to activities (see Chapter 8).
 Time-phase work packages into a network.
3. Develop a time-phase budget using work packages
included in an activity. The cumulative values of these
budgets will become the baseline for the planned
budgeted cost of the work scheduled (PV).
4. At the work package level, collect the Actual Costs (AC)
for the work performed.
5. Compute the Schedule Variance (SV = EV − PV) and
Cost Variance (CV = EV − AC)
3
13/1/2022
4. DEVELOPMENT OF AN 4. DEVELOPMENT OF AN
EARNED VALUE COST/SCHEDULE SYSTEM EARNED VALUE COST/SCHEDULE SYSTEM
Methods of Variance Analysis Cost/Schedule Graph

1. Comparing EV with the expected schedule value (PV)
2. Comparing EV with the Actual Costs (AC)
5. DEVELOPING A STATUS REPORT: 5. DEVELOPING A STATUS REPORT:

A HYPOTHETICAL EXAMPLE A HYPOTHETICAL EXAMPLE
1. Assumptions 2. Baseline Development

 Assume each cost account has only one work package, Work Breakdown Structure with Cost Accounts
 Assume each cost account will be represented as an activity

on the network.
 The project network early start times will serve as the basis for
assigning the baseline values.
 From the moment work on an activity task begins, some actual

costs will be incurred each period until the activity is completed.
4
13/1/2022

3. Development of the Status Report

Digital Camera
 Not yet started
Prototype Project
Baseline Gantt  Finished
Chart  In-process or partially complete
Digital Camera
Prototype Project
Baseline Budget
($320)

3. Development of the Status Report 3. Development of the Status Report
5
13/1/2022


6
13/1/2022

Digital Camera Prototype Summary Graph ($320)

Digital Camera Project-Tracking Gantt Chart Project Rollup End Period 7 ($320)
Showing Status—Through Period 7
7
13/1/2022
6. INDEXES TO MONITOR PROGRESS 6. INDEXES TO MONITOR PROGRESS
 Indexes can be considered efficiency ratios

 Indexes are typically used at the cost account level Indexes
(SPI) = EV/PV
and above Periods 1–7 = 160/200 = .80
 Performance Indexes (CPI) = EV/AC

= 160/230 = .70
 Cost Performance Index (CPI) = EV/AC
 Scheduling Performance Index (SPI) = EV/PV PCIB = EV/BAC

= 160/320 = .50 (50%)
 Percent complete index budgeted costs (PCIB) = EV/BAC
6. INDEXES TO MONITOR PROGRESS 7. FORECASTING FINAL PROJECT COST
1. Project Percent Complete Indexes 1. First method using EACre to represent revisions made
 Percent Complete Index Budgeted costs: PCIB = EV/BAC
by experts and practitioners associated with the project.
 Percent Complete Index actual Costs: PCIC = AC/EAC
2. Management Reserve index MRI: MRI = CV/MR EACre = AC + ETCre
3. Software for Project Cost/Schedule Systems
 Schedule variance (EV − PV) by cost account and WBS and OBS
where
 Cost variance (EV − AC) by cost account and WBS and OBS
EACre = revised estimated cost at completion
 Indexes—total percent complete and performance index
 Cumulative actual total cost to date (AC) AC = cumulative actual cost of work completed to date
 Expected costs at completion (EAC)
 Paid and unpaid commitments ETCre = revised estimated cost to complete remaining work
4. Additional Earned Value Rules
 0/100 rule
 50/50 rule
 Percent complete with weighted monitoring gates
8
13/1/2022
7. FORECASTING FINAL PROJECT COST 7. FORECASTING FINAL PROJECT COST
3. Another popular index is the To Complete

Performance Index (TCPI), which is useful as a
supplement to the estimate at complete (EACf)
computation.
This ratio measures the amount of value each remaining
dollar in the budget must earn to stay within the budget.
BAC  EV
TCPI 
BAC  AC
7. FORECASTING FINAL PROJECT COST 8. OTHER CONTROL ISSUES
The following information is available from our earlier

1. Technical
example; the estimate cost at completion (EACf) is
Performance
computed as follows:
Measurement
2. Scope Creep
3. Baseline Changes
4. The Costs and
Problems of Data
Acquisition
9
13/1/2022
9. CHAPTER SUMMARY
1. The integrated cost/schedule model provides the project

manager and other stakeholders with a snapshot of the
current and future status of the project.
2. The benefits of the cost/schedule model are as follows:
 Measures accomplishments against plan and deliverables.
 Provides a method for tracking directly to a problem work package and
organization unit responsible.
 Alerts all stakeholders to early identification of problems, and allows for
quick, proactive corrective action.
 Improves communication because all stakeholders are using the same
database.
 Keeps customer informed of progress, and encourages customer
confidence that the money spent is resulting in the expected progress.
 Provides for accountability over individual portions of the overall budget
for each organizational unit.
CHAPTER 13: PROGRESS AND PERFORMANCE MEASUREMENT AND EVALUATION 37
10

QLDA - Chapter 13-Progress and Performance Measurement and Evaluation

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

QLDA - Chapter 13-Progress and Performance Measurement and Evaluation

Uploaded by

Copyright:

Available Formats

13/1/2022

CHAPTER 13: PROGRESS AND PERFORMANCE

Course ID number: 1931101013902

How does a project get one year late?

LEARNING OBJECTIVES CHAPTER OUTLINE

3. Understand and appreciate the significance of earned 3. Monitoring Time Performance

6. Forecast final project cost. 7. Forecasting Final Project Cost

7. Identify and manage scope creep. 8. Other Control Issues

1. STRUCTURE OF A PROJECT MONITORING

3. MONITORING TIME PERFORMANCE 3. MONITORING TIME PERFORMANCE

1. Tracking Gantt Chart 2. Control Chart

3. Milestone Schedules Glossary of Terms:

Methods of Variance Analysis Cost/Schedule Graph

5. DEVELOPING A STATUS REPORT: 5. DEVELOPING A STATUS REPORT:

1. Assumptions 2. Baseline Development

 Assume each cost account will be represented as an activity

 From the moment work on an activity task begins, some actual

5. DEVELOPING A STATUS REPORT: 5. DEVELOPING A STATUS REPORT:

3. Development of the Status Report

5. DEVELOPING A STATUS REPORT: 5. DEVELOPING A STATUS REPORT:

3. Development of the Status Report 3. Development of the Status Report

5. DEVELOPING A STATUS REPORT: 5. DEVELOPING A STATUS REPORT:

5. DEVELOPING A STATUS REPORT: 5. DEVELOPING A STATUS REPORT:

5. DEVELOPING A STATUS REPORT: 5. DEVELOPING A STATUS REPORT:

Digital Camera Prototype Summary Graph ($320)

5. DEVELOPING A STATUS REPORT: 5. DEVELOPING A STATUS REPORT:

6. INDEXES TO MONITOR PROGRESS 6. INDEXES TO MONITOR PROGRESS

 Indexes can be considered efficiency ratios

 Performance Indexes (CPI) = EV/AC

 Scheduling Performance Index (SPI) = EV/PV PCIB = EV/BAC

6. INDEXES TO MONITOR PROGRESS 7. FORECASTING FINAL PROJECT COST

7. FORECASTING FINAL PROJECT COST 7. FORECASTING FINAL PROJECT COST

3. Another popular index is the To Complete

7. FORECASTING FINAL PROJECT COST 8. OTHER CONTROL ISSUES

The following information is available from our earlier

1. The integrated cost/schedule model provides the project

You might also like