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FA - Chapter 13

BUSI 2550

11/12/2018

Progress and Performance Measurement and Evaluation

Structure of Project Monitoring Information System
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Involves determining what data to collect, how, when and who will collect, analysis and
reporting of data
Step 1: determine what data is collected
o Data collected are determined by which metrics used for project control
o Typical key data collected: actual activity duration times, resource usage/rates, actual
costs vs
...
?
o Reporting period 1 hr, 1 day, 1 week?
o Central repository for data and who is responsible for dissemination?
Step 3: Reports and Reporting
o Design report for appropriate audience
...
planned performance to identify deviations, evaluate alternatives
and take corrective action
Project control steps for measuring and evaluating performance:
o 1 – Setting Baseline Plan
 Provides elements for measuring performance
 Derived from WBS and network/resource scheduling decisions
o 2 – Measuring Progress and Performance
 Quantitative measures: time and budget
 Qualitative measures: meeting customer tech
...
expected plans
 More frequent status reports allow for early detection of causes of variations
4 – Taking Action
 Scope can sometimes change leading to baseline plan changing as well

Monitoring Time Performance
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11/12/2018

Goal of progress reporting is to catch negative variances from
plan early
Gantt charts, control charts and milestone schedules are used as
project schedule status’s
Tracking Gantt Chart – Compares planned vs
...
2012–January 15, 2013

1% For Art Selection:

November 2012–May 31, 2013

Bid and Permit:

January–March 31, 2013

Construction:

April 2013–August 31, 2014

Furnishing Selections:

September–November 30, 2013

Occupancy:

September 7, 2014

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FA - Chapter 13

BUSI 2550

11/12/2018

Development of Earned Value Cost/Schedule System
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Planned budgeted value (PV) – project budget baseline
Earned Value provides missing links not found in cost-budget systems (can be used to create
status reports)

EV

Earned value for a task is percent complete times original budget
...
An approved cost
estimate of the resources scheduled in a time-phased cumulative baseline

AC

Actual cost of the work completed
...
CV = EV − AC
...

SV = EV − PV
...
The total budgeted cost of the baseline or project cost
accounts
...


ETC

Estimated cost to complete remaining work
...
VAC indicates expected actual over- or underrun cost at
completion
...
Develop following documents:
 Scope
 Work packages
 Deliverables
 Organization Units
 Resources
 Budgets for work packages
o 2 - Develop work/resource schedule
 Schedule resources to activities
 Time-phase work packages into a network
o 3 - Develop time-phase budgets using work packages
 Cumulative value of budgeted value for work packages becomes baseline/PV
o 4 - Collect actual costs for work performed (at work package level)
 Called AC (actual cost) of work completed
 Collect percent complete and multiply it with original budget to get earned
value
o 5 – Compute Schedule Variance and Cost Variance
 Schedule variance = EV-PV
 Cost Variance = EV-AC
 Prepare status reports for each level of management

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FA - Chapter 13

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BUSI 2550

11/12/2018

 Actual time performance compared to project network schedule
Baseline is created to monitor/report progress and estimate cash flow
Percent Complete Rule – rule of any earned value system
o Best method is to establish frequent checkpoints over duration of work packages and
assign completion percentages in $’s
Baseline (PV) is sum of cost accounts
o Each cost account is sum of work packages in cost
account
o 3 direct costs that PM’s can control included:
labor, equipment and materials
2 key computation for measuring accomplishments
o 1 – Compare EV with expected schedule value
o 2 – Compare EV with AC
3 data elements to assess status using EV (used to
compute SV and CV)
o 1 – PV – planned cost of work scheduled
o 2 – EV – budgeted cost of work completed
o 3 – AC – Actual cost of work completed
Cost Variance – identifies if work accomplished costs
more/less than was planned
o negative SV/CV = problem or changes that have
taken place
o Schedule Variance – measures progress in dollars
rather than time units
 Does NOT contain CP info
...
Baseline Development
a
...
Baseline Gantt Chart

c
...
Development of Status Report
a
...
Work packages are in one of these conditions: not started, finished, in-process
Status Report: Ending Period 1
Task

%Complete

EV

AC

PV

CV

SV

50%

10

10

10

0

0

10

10

10

0

0

%Complete

EV

AC

PV

CV

SV

Finished

20

30

20

−10

0

20

30

20

−10

0

%Complete

EV

AC

PV

CV

SV

A

Finished

20

30

20

−10

0

B

33%

5

10

5

−5

0

C

20%

20

30

20

−10

0

D

60%

21

20

15

+1

+6

66

90

60

−24

+6

EV

AC

PV

CV

SV

A
Cumulative Totals
Status Report: Ending Period 2
Task
A
Cumulative Totals
Status Report: Ending Period 3
Task

Cumulative Totals
Status Report: Ending Period 4
Task

%Complete

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FA - Chapter 13

BUSI 2550

11/12/2018

A

Finished

20

30

20

−10

0

B

Finished

15

20

15

−5

0

C

50%

50

70

50

−20

0

D

80%

28

30

25

−2

+3

113

150

110

−37

+3

%Complete

EV

AC

PV

CV

SV

A

Finished

20

30

20

−10

0

B

Finished

15

20

15

−5

0

C

60%

60

100

80

−40

−20

D

80%

28

50

35

−22

−7

123

200

150

−77

−27

%Complete

EV

AC

PV

CV

SV

A

Finished

20

30

20

−10

0

B

Finished

15

20

15

−5

0

C

80%

80

110

100

−30

−20

D

Finished

35

60

35

−25

0

150

220

170

−70

−20

%Complete

EV

AC

PV

CV

SV

A

Finished

20

30

20

−10

0

B

Finished

15

20

15

−5

0

C

90%

90

120

100

−30

−10

D

Finished

35

60

35

−25

0

E

0%

0

0

30

0

−30

F

0%

0

0

0

0

0

160

230

200

−70

−40

Comulative Totals
Status Report: Ending Period 5
Task

Cumulative Totals
Status Report: Ending Period 6
Task

Cumulative Totals
Status Report: Ending Period 7
Task

Cumulative Totals

b
...
Gantt Chart showing status

d
...
00 = progress is as planned

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11/12/2018

FA - Chapter 13
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BUSI 2550

11/12/2018

Index of 1
...
00 Under cost Ahead of schedule
o Cost Efficiency
 CPI = EV/AC
=1
...
7 (for every $0
...
00 Over cost
Behind schedule
work planned is completed for every $1
actually spend)
o Scheduling Efficiency
 SPI = EV/PV
 SPI = 160/200 = 0
...
8 of work has been completed for
every $1 worth of scheduled work)
Two indexes for Project Percent Complete
o Compare the current progress to end of project
o Percent Complete Index Budgeted costs
 PCI) = EV / BAC
 PCIB = 160/320 = 0
...
40 = 40%
 Managers favor this index as it contains actual/revised estimates
o Third index used in construction industry: Management Reserve Index
 MRI = CV / MR
0/100 rule – assumes credit is fully earned for work completed
...

50/50 rule – 50 percent of value of work package to be earned once started and 50 percent to
be earned when completed
Percent complete with weighted monitoring gates – uses subjective estimated percent complete
in combination with hard, tangible monitoring points
...

o Frequently used to authorize progress payments to contractors

Forecasting Final Project Cost
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2 Methods to revise estimates of future project costs:
o Revised Estimated Cost at Completion (EACre)
 EACre = AC + ETCre
 Revised estimated cost at completion = cumulative actual cost of work
completed + revised estimated cost to complete remaining work
o Forecasting model (EACf)
 EACf = ETC + AC
 ETC = Work Remaining / CPI = (BAC – EV) / (EV / AC)
 Forecasted total cost of completion (EACf) = Estimated total cost to complete
remaining work (ETC) + Cumulative actual cost of work completed (AC)

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FA - Chapter 13
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BUSI 2550

To Complete Performance Index (TCPI) – measures amount of value each remaining dollar in
budget must earn to stay on budget
o TCPI = (BAC – EV) / (BAC – AC)

Other Control Issues
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11/12/2018

Issues in maintaining control of projects
o Technical performance measurement
o Scope creep
o Baseline changes
o Data acquisition costs and problems

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