Monitoring, Controlling

and Evaluation of
Project

1
Copyright 2018 John Wiley & Sons, Inc.
Terms

• Monitoring - Collecting, recording, and reporting

information concerning any and all aspects of project
performance
• Controlling - Uses the data supplied by monitoring to
bring actual performance into compliance with the plan
• Evaluation - Judgments regarding the quality and
effectiveness of project performance

10-2
 The Planning–Monitoring–
Controlling Cycle
• We mainly want to monitor:
• Time (schedule)
• Cost (budget)
• Scope (project performance)
• Becoming more important as projects are increasingly complex
• Closed-loop system
• Revised plans and schedules following corrective actions

10-3
Designing the Monitoring System (Slide 1 of
2)

• Identify key factors to be controlled

• Scope
• Cost
• Time
• Information to be collected must be identified

10-4
Designing the Monitoring System (Slide 1 of
2)

• Do not want to avoid collecting necessary data

because it is hard to get
• Do not want to collect too much data
• The next step is to design a reporting system that
gets the data to the proper people in a timely and
understandable manner

10-5
 Creating a project monitoring
information system
• Creating a project monitoring system involves
determining:
• what data to collect
• how, when and who will collect the data
• how to analyse the data
• how to report current progress to management
Data collection

• What data are collected?

– Current status of project (schedule and cost)
– Remaining cost to compete project
– Date that project will be complete
– Potential problems to be addressed now
– Out-of-control activities requiring intervention
– Cost and/or schedule overruns and the reasons for them
– Forecast of overruns at time of project completion
Reporting
• Common formats
– Progress since last report
– Current status of project (schedule, cost, scope)
– Cumulative trends
– Problems and issues since last report (actions and resolutions)
– Corrective action planned
• Decisions on reporting circulation
– Who will receive the reports?
– How will the reports be transmitted?
– When will the reports be distributed?
Benefits of Detailed and Timely
Reports
• Mutual understanding of the goals
• Awareness of the progress of parallel activities
• Understanding the relationship of tasks
• Early warning signals of problems
• Minimizing the confusion
• Higher visibility to top management
• Keeping client up to date

10-9
Report Types

• Routine - Reports that are issued on a regular basis

or each time the project reaches a milestone
• Exception - Reports that are generated when an
usual condition occurs or as an informational
vehicle when an unusual decision is made
• Special Analysis - Reports that result from studies
commissioned to look into unexpected problems

10-10
Meetings

• Reports do not have to be written

• They can be delivered verbally in meetings
• Projects have too many meetings
• The trick is to keep them to as few as possible

10-11
Meeting Rules

• Use meetings to make group decisions

• Start and end on time and have an agenda
• Do your homework before the meeting
• Take minutes
• Avoid attributing remarks to individuals in minutes
• Avoid overly formal rules of procedure
• Call meeting for serious problems

10-12
Common Reporting Problems

• Too much detail

• Poor interface between the data/procedures of the
project and the information system of the parent
company
• Poor correspondence between the planning process
and the monitoring process

10-13
“To complete” and “At Completion”

• Project manager reviewing what is complete and

what remains
• Final cost and final completion date are moving
targets
• The project manager compiles these into a to
complete forecast
• Actual + forecast = final date and cost at completion

10-14
Milestone Reporting

• Reports that are created when a project reaches a

major milestone
• They are designed to keep everyone up-to-date on
project status
• For executives and clients, these may be the only
reports they receive

10-15
The project control process
• Control
• The process of comparing actual performance against plan to
identify deviations, evaluate courses of action and take
appropriate corrective action
• Project control steps
1. Setting a baseline plan
2. Measuring progress and performance
3. Comparing plan against actual
4. Taking action
• Tools
• Tracking and baseline Gantt charts
• Control charts
The Project Control Cycle
Figure 13.3 Project S-Curves
 19

Using the following information, develop a simple S-curve

representation of the expected budget expenditures for
this project (figures are in thousands).

10 20 Duration
30 (in40
days) 50 60 70 80
Activities 4 8 12 20 10 8 6
2
S-curve

20
S-Curve Showing Negative Variance
Baseline and tracking Gantt charts
Earned Value Management

Earned Value Management (EVM) recognizes that it is

necessary to jointly consider the impact of time, cost,
and project performance on any analysis of current
project status.
Earned Value (EV) directly links all three primary
project success metrics (cost, schedule, and
performance).
One way is by using an aggregate performance
measure called earned value
Earned Value Terms

• Planned value (PV)

• Earned value (EV)
• Actual cost of work performed (AC)
• Schedule variance (SV) and schedule performance index (SPI)
• Cost variance (CV) and cost performance index (CPI)
 Indexes to monitor progress
• Performance indexes
• Cost performance index (CPI)
• Measures the cost efficiency of work accomplished
to date
• CPI = EV/AC
• Scheduling performance index (SPI)
• Measures scheduling efficiency
• SPI = EV/PV
Variances

• Variances can help analyze a project

1. A negative variance is bad
2. Cost and schedule variances are calculated as the
earned value minus some other measure
• Will look at some of the more common ones

10-26
Cost Variance (CV)

• CV = EV – AC

• Negative variance indicates a cost overrun

• Magnitude depends on the costs

10-27
Schedule Variance (SV)

• SV = EV – PV

• Negative variance indicates you are behind schedule

• Measured using costs

10-28
Steps in Earned Value Management

1. Clearly define each activity including its resource needs and

budget.
2. Create usage schedules for activities and resources.
3. Develop a time-phased budget (PV).
4. Total the actual costs of doing each task (AC).
5. Calculate both the budget variance (CV) and schedule variance
(SV).
The Earned Value Chart and
Calculations
• Actual against baseline ignores the amount of work
accomplished
• Earned value incorporates work accomplished
• Multiply the estimated percent work complete for
each task by the planned cost
• Only need percent complete estimate for tasks
currently in progress

10-30
Using the data in the table below, complete the table by calculating the cumulative
planned and cumulative actual monthly budgets through the end of June. Complete the
earned value column on the right. Assume the project is planned for a 12-month
duration and a $250,000 budget.

10-31
10-32
• Schedule Variances
Planned Value (PV) 98
Earned Value (EV) 54
Schedule Performance Index (SPI) EV/PV = 54/98 = .55
Estimated Time to Completion (1/.55) × 12 mos. = 21.75 mos.
 
• Cost Variances
Actual Cost of Work Performed (AC) 94
Earned Value (EV) 54
Cost Performance Index (CPI) EV/AC = 54/94 = .58
Estimated Cost to Completion (1/.58) × $250,000 = $434,622

10-33
Project Baseline, Using Earned Value
Assume you have collected the following data for your project. Its
budget is $75,000 and it is expected to last four months. After two
months, you have calculated the following information about the
project:

PV = $45,000
EV = $38,500
AC = $37,000

Calculate the SPI and CPI. Based on these values, estimate the time
and budget necessary to complete the project. How would you
evaluate these findings? Are they good news or bad news?

35
SPI = EV/PV = $38,500/45,000 = .86
CPI = EV/AC = $38,500/37,000 = 1.04
Estimated Time to Completion = (1/.86) × 4 months = 4.68 months
Estimated Cost to Completion = (1/1.04) × $75,000 = $72,078

The findings are a bit of good news and a bit of bad. The good
news is that your estimated cost to completion is lower than the
original budget; however, the bad news is that the project is behind
schedule and is likely to take 4.65 months to complete, rather than
the originally planned 4 months.
 

36
Earned Value Example
Schedule Variances
Planned Value (PV) = 103
Earned Value (EV) = 44
44 EV
Schedule Performance Index  43  
103 PV
 1 
Estimated Time to Completion    7  163 months
 .43 
Cost Variances
Cumulative Actual Cost of Work Performed (AC) = 78
44 EV
Cost Performance Index  56  
78 AC
 1 
Estimated Cost to Completion   $210,714     $118,000
 .56 
Additional earned value rules
• Rules applied to short-duration activities and/or small-cost activities
• 0/100 per cent rule
• Assumes 100 per cent of budget credit is earned at once and
only when the work is completed
• 50/50 rule
• Allows for 50 per cent of the value of the work package
budget to be earned when it is started and 50 per cent to be
earned when the package is completed
• Per cent complete with weighted monitoring gates
• Uses subjective estimated per cent complete in combination
with hard, tangible monitoring points
Human Factors in Project Evaluation
and Control
• Project coordination and relations among stakeholders
• Adequacy of project structure and control
• Project uniqueness, importance, and public exposure
• Success criteria salience and consensus
• Lack of budgetary pressure
• Avoidance of initial overoptimism and conceptual
difficulties
Critical Success Factors in the Project
Implementation Profile
1. Project mission
2. Top management support
3. Project plans and schedules
4. Client consultation
5. Personnel
6. Technical tasks
7. Client acceptance
8. Monitoring and feedback
9. Communication channels
10. Troubleshooting
 “Dear Mr. President—Please Cancel our Project!”: The
Honolulu Elevated Rail Project
This case is a great current example of a very expensive project that was kicked off because of an
assumed need—to relieve congestion in downtown Honolulu through an elevated urban rail
system. Critics argue that in addition to having a ballooning cost, the actual planning was poorly
conceived, leaving Honolulu with an intrusive and ugly rail system through the downtown area,
ruining panoramic views, and impeding traffic. Additionally, advocates underestimated the
power needs for the rail system, requiring the transport authority to renegotiate electricity fees for
the system. Finally, the original costs that were assumed for the project were calculated during an
economic downturn and with the economy booming again, the costs of the project have gone up
dramatically. All of these elements points to a state Governor who is anxious to be rid of the
project and hoping that President Trump will deny additional federal funding, in which case the
project will likely be cancelled.
Questions
1.Why are public works projects like the Honolulu Rail project nearly impossible to stop once
they have been approved, even if later cost estimates skyrocket?
2.Project Management researchers have charged that many large infrastructure projects, like this
one, suffer from “delusion” and “deception” on the parts of their advocates. Explain how
“delusion” might be a cause of ballooning budgets in this project. How does “deception” affect
the final project budget overruns?

41