Chapter 13 Project Evaluation and Control Copyright 2013

Chapter 13 Project Evaluation and Control Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -01

Chapter 13 Learning Objectives After completing this chapter, students will be able to: �Understand the nature of the control cycle and four key steps in a general project control model. �Recognize the strengths and weaknesses of common project evaluation and control methods. �Understand how Earned Value Management can assist project tracking and evaluation. �Use Earned Value Management for project portfolio analysis. �Understand behavioral concepts and other human issues in evaluation and control. �Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -02

The Project Control Cycle FIGURE 13. 2 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -03

Project S-Curves FIGURE 13. 3 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -04

Project Sierra’s S-Curve Showing FIGURE 13. 4 Negative Variance Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -05

Milestone Analysis Milestones are events or stages of the project that represent a significant accomplishment. Milestones …show completion of important steps …signal the team and suppliers …can motivate the team …offer reevaluation points …help coordinate schedules …identify key review gates …delineate work packages Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -06

Gantt Chart with Milestones FIGURE 13. 5 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -07

Assessing Project Blue’s Status Using Tracking Gantt Chart FIGURE 13. 6 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -08

Tracking Gantt with Project Activity Deviation Project status is updated by linking task completion to the schedule baseline FIGURE 13. 7 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -9

Earned Value Management Cost Project S -Curves Cost Schedule Performance Cost Earned Value Performance Schedule Tracking Control Charts Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -10

Earned Value Terms v. Planned value (PV) v. Earned value (EV) v. Actual cost of work performed (AC) v. Schedule performance index (SPI) v. Cost performance index (CPI) v. Budgeted cost at completion (BAC) Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -11

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 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -12

Project Baseline, Using Earned Value FIGURE 13. 11 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -13

Earned Value Milestones FIGURE 13. 12 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -14

Value 8=80%(10) Earned Value Example Activity Staffing Jan Feb Mar April Plan %C Value 8 7 15 100 15 Blueprint 4 6 10 80 8 Prototype 2 8 10 60 6 3 3 33 1 38 ∑ 30 Design Mon Plan 8 7 6 17 Cmltv 8 15 21 38 Mon Act 8 11 8 13 Cmltv Act 8 19 27 40 Cumulative 40=8+11+8+13 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Earned Value 30=15+8+6+1 Planned Value 38=15+10+10+3 13 -15

Earned Value Example Schedule Variances Planned Value (PV) = 38 = 15+10+10+3 Earned Value (EV) = 30 = 15+8+6+1 Schedule Performance Index =. 79 = 30/38 = EV/PV Estimated Time to Completion = (1/. 79)x 4=5 Cost Variances Actual Cost of Work Performed (AC) = 40 = 8+11+8+13 Cost Performance Index =. 75 = 30/40 = EV/AC Estimated Cost to Completion = 50. 7 = (1/. 75)x 38 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -16

Earned Value Report for Project Atlas on March 7 FIGURE 13. 16 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -17

Earned Value Performance Metrics FIGURE 13. 18 Source: Lipke (2003) Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -18

Completion Values in EVM Accurate and up-to-date information is critical in the use of EVM Ø 0/100 Rule Ø 50/50 Rule Ø Percentage Complete Rule Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -19

Human Factors in Project Evaluation & Control v. Optimistic progress reports v. Level of detail v. Process evaluation v. Non-technical performance measurement Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -20

Critical Success Factors in the Project Implementation Profile 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Project mission Top management support Project plans & schedules Client consultation Personnel Technical tasks Client acceptance Monitoring & feedback Communication channels Troubleshooting Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -21

Summary 1. 2. 3. 4. 5. 6. Understand the nature of the control cycle and four key steps in a general project control model. Recognize the strengths and weaknesses of common project evaluation and control methods. Understand how Earned Value Management can assist project tracking and evaluation. Use Earned Value Management for project portfolio analysis. Understand behavioral concepts and other human issues in evaluation and control. Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -22

Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 -23