Project Evaluation and Control Project Termination and Closeout

Project Evaluation and Control Project Termination and Closeout Chapter 13 -14 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 13 -1

The Project Control Cycle 1. Setting a Goal 4. Taking Action and Recycling the Process 2. Measuring Progress 3. Comparing Actual with Planned Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 13 -2

Tools of monitoring project performance • Project S-Curve • Milestone Analysis • Tracking (Gantt) Charts • Earned Value Management (Earned Value Analysis) Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 13 -3

Cumulative Cost ($ in thousands) The Project S-Curve 60 $10, 000 Negative Var 40 Cumulative Budgeted Cost 20 Cumulative Actual Cost 5 10 15 20 25 30 35 40 45 50 Elapsed Time (in weeks) Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 13 -4

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 © 2010 Pearson Education, Inc. Publishing as Prentice Hall 13 -5

Tracking Gantt Chart Project status is updated by linking task completion to the schedule baseline Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 13 -6

Earned Value Management Cost Project S -Curves Performance Cost Schedule Cost Earned Value Performance Schedule Tracking Control Charts Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 13 -7

Earned Value Terms v Planned value (PV) – cost estimation across project life cycle v Earned value (EV) – real budgeted cost v Actual cost of work performed (AC) v Schedule performance index (SPI) v Cost performance index (CPI) v Budgeted cost at completion (BAC) Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 13 -8

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) Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 13 -9

Earned Value Milestones ACWP Actual Overspend Cost PV EV Budget Slip Schedule Performed Schedule Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 13 -10

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 Earned Value 30=15+8+6+1 Planned Value Actual Cost 38=15+10+10+3 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 40=8+11+8+13 13 -11

Earned Value Example Schedule Variances Planned Value (PV) = 38 = 15+10+10+3 Earned Value (EV) = 30 = 15+8+6+1 Schedule Performance Index (SPI) = EV/PV = 30/38 =. 79 Estimated Time to Completion (ETC) = (1/. 79)x 4 = 5 Cost Variances Actual Cost of Work Performed (AC) = 40 = 8+11+8+13 Cost Performance Index (CPI) = EV/AC = 30/40 =. 75 Estimated Cost to Completion (ECC) = (1/. 75)x 38 = 50. 7 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 13 -12

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 © 2010 Pearson Education, Inc. Publishing as Prentice Hall 13 -13

Termination & Closeout Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 13 -14

Project Termination All activities consistent with closing out the project v Extinction: no real afterlife v Addition: institutionalization v Integration to the functional organization v Starvation: loosing the resources Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 14 -15

Elements of Project Closeout Management (natural termination) Harvesting Gaining Finishing Handing Acceptance the Benefits Over the The Work Product for the Reviewing Product How It All Went Putting it All to Bed Disbanding the Team Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 14 -16

Reviewing how it all went Lessons learned analysis Common Errors Ø Misidentifying systematic errors Ø Misinterpreting lessons based on events Ø Failure to pass along conclusions Meeting Guidelines ü Establish clear rules of behavior ü Describe objectively what occurred ü Fix the problem, not the blame Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 14 -17

Putting it all to bed: Closeout Paperwork • Documentation • Legal • Cost • Personnel Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 14 -18

Why are Closeouts Difficult? ü Project sign off can be a de-motivator ü Constraints cause shortcuts on back-end ü Low priority activities ü Lessons learned analysis seen as bookkeeping ü Unique view of projects Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 14 -19

Final Report Elements q Project performance q Administrative performance q Organizational structure q Team performance q Project management techniques q Benefits to the organization and customer Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 14 -20