Unit No. V Project Monitoring and Control TE(Mech.

)-II

UNIT NO. V : Project Monitoring and Control

Introduction & Purpose:
• The purpose of Project Execution and Control is to develop the product or service that the
project was commissioned to deliver.
• The purpose of the Execution & Control phase of the project is to manage every aspect of
project delivery to assure the project is successful.
• Typically, this is the longest phase of the project management lifecycle, where most
resources are applied.
• Project Execution and Control utilizes all the plans, schedules, procedures and templates that
were prepared and anticipated during prior phases.
• Unanticipated events and situations will inevitably be encountered, and the Project Manager
and Project Team will be taxed to capacity to deal with them while minimizing impact on the
project’s CSSQ (Cost, Scope, Schedule, and Quality).
• Project execution (or implementation) is the phase in which the plan designed in the prior
phases are put into action.
• The purpose of project execution is to deliver the project expected results (deliverable and
other direct outputs).
• The conclusion of the phase arrives when the product of the project is fully developed, tested,
accepted, implemented and transitioned to the Performing Organization.
• The term "control" is included here because execution is not a blind implementation of what
was written in advance but a watchful process where doing things goes along with
understanding what is being done, and re-do it or do it differently when the action does not
fully responds to what was meant for.
• This "control" is an integral part of project management and is a necessary task of the project
manager.
• It usually takes the most time and resources to perform project execution since the products
of the project are produced here
• The most important output of execution is work results (deliverables)
• Project managers must use their leadership skills to handle the many challenges that occur
during project execution

 Control
The process of comparing actual performance against plan to identify deviations, evaluate
courses of action, and take appropriate corrective action.
Unit No. V Project Monitoring and Control TE(Mech.)-II
Project Control Process:
• The project control process compares actual performance versus the planned performance of
the project.
• A project manager uses a formula to determine if the work that has actually been completed
matches what was originally planned for completion at any given time.
• For example, a project planned to have 50% of the work completed and budgeted to spend
Rs.10,00,000 by the 6-month mark. A project manager can calculate the actual amount of
work completed and budget spent versus what was planned. If the two figures are not equal,
corrective action may be required.
• The project control process will also identify and track new risks and issues. Tracking risks
and issues is important because either one, if not controlled, can quickly cause the project to
overspend or fall behind schedule.
• Project status reports are another method used to determine if a project is under control.
• A project manager can use Status reports to identify when the project may be experiencing
issues that require corrective action.
• A project manager will meet with the project team regularly to gather status report
information from each work group involved in the project.

 Tools: Following tools are used in project control process

1. Tracking and baseline Gantt charts
2. Control charts

Project Control Process:

The process of comparing actual performance against plan to identify deviations, evaluate courses
of action, and take appropriate corrective action
Following are the project control steps:
1. Setting a baseline plan.
2. Measuring progress and performance.
3. Comparing plan against actual.
4. Taking action.
Unit No. V Project Monitoring and Control TE(Mech.)-II

Step 1: Setting a Baseline Plan:

 The baseline plan provides with the elements for measuring performance.
 The baseline is derived from the cost estimates; information relating to duration is derived
from the work breakdown structure (WBS) database; and time-sequence data are derived
from the network and resource scheduling decisions.
 The WBS defines the work in discrete work packages that are tied to deliverables and
organization units. In addition, each work package defines the work, duration, and budget.
From the WBS, the project network schedule is used to phase all work, resources, and
budgets into a baseline plan

Development of Project Baselines:

• The baseline (PV) serves as an anchor point for measuring performance. The baseline is a
concrete document and commitment; it is the planned cost and expected schedule
performance against which actual cost and schedule are measured.
• It can also serve as a basis for developing cash flows and awarding progress payments.
Development of the project baseline is part of the planning process.
• The baseline is the major input to the cost/schedule system to be described.
• Costs to be included in Baselines The baseline planned value(PV) is the sum of the cost
accounts, and each cost account is the sum of the work packages on the cost account. Three
costs are typically included in baselines, viz., labour, equipment, and materials. Sometimes
project direct overhead costs are also included.

Step 2: Measuring the Actual Performance:

• Time and budgets are quantitative measures of performance that readily fit into the integrated
information system.
• Qualitative measures such as meeting customer technical specifications and product function
are most frequently determined by on-site inspection or actual use.
Unit No. V Project Monitoring and Control TE(Mech.)-II
• Measurement of time performance is relatively easy and obvious. Examples: the critical path,
early on schedule or late; is the slack of near critical-paths decreasing to cause new critical
activities, etc.
• For measuring performance, earned value is necessary to provide a realistic estimate of
performance against a time-phased budget. Earned value (EV) will be defined as the
budgeted cost of the work performed.

The earned value of a project:

* Earned value (EV) is a way to measure and monitor the level of work completed on
a project against the plan. Simply put, it's a quick way to tell if you're behind schedule or
over budget on your project. You can calculate the EV of a project by multiplying the
percentage complete by the total project budget.
* In a nutshell, Earned Value is an approach where you monitor the project plan, actual work,
and work completed value to see if a project is on track. Earned Value shows how much of
the budget and time should have been spent, considering the amount of work done so far.
* Earned Value is more useful because it shows you how much value you have earned from the
money you have spent to date.
* The formula to calculate Earned Value : Take the actual percentage of the completed work
and multiply it by the project budget.
Earned Value = % of completed work X BAC (Budget at Completion).

Step 3: Comparing Actual with Baseline Plan:

• All the baseline plans seldom materialize as expected and hence, it becomes imperative to
measure deviations from plan to determine if action is necessary.
• Periodic monitoring and measuring the status of the project allow for comparisons of actual
versus expected plans.
• It is crucial that the timing of status report be frequent enough to allow for early detection of
variations from plan and early detection of causes. Usually, status reports should take place
every one to four weeks to be useful and allow for proactive correction.

Step 4: Taking Corrective Action:

• If deviations from plans are significant, corrective actions will be needed to bring the project
back in line with original or revised plan.
• In some cases, conditions or scope can change, which, in turn, will require a change in the
baseline plan to recognize new information.
Unit No. V Project Monitoring and Control TE(Mech.)-II

Project Management Information System (PMIS):

Introduction :
• A Project Information Management System (PIMS) is the systematic process of creating,
identifying, collecting, organizing, sharing, adapting, and using project information.
Information management is a process for identifying all the information the project
stakeholders need to make informed decisions.
• Development project managers need to improve the way they manage their information, by
bringing the right information to the right people at the right time. It is through information
management that they can improve their decision-making process, learn, and create new
knowledge.
• Project operates in a dynamic environment. The project manager needs timely and accurate
information to respond to environmental changes.
• Project Management Information System (PMIS) is a database for project.
• It collects, analyses, stores, retrieves and disseminated project information for making project
decisions.
• It consists of people, equipment and procedures.
• A Project Management Information System (PIMS) is not necessarily the information
technology, but rather the common practices that a project should follow to properly manage
its information.
• A PIMS is also beneficial during the different project-management phases.
• During the planning phase, a project manager uses a PIMS to organize the project work,
define the scope baseline, estimate the budget, and create a schedule.
• During the implementation phase, the project team collects progress information that is used
to compare with the baseline and evaluates the accomplishment of each activity. It is also
used to manage deliverables, collect financial data, and keep a record for reporting purposes.
• During the monitoring phase of the project, the PIMS is used to review the goals to check if
the outcomes were accomplished or not.
• A PIMS is about how effectively the project manages the data, how it transforms data into
information, and how that information eventually becomes knowledge.
• The goal of a good PIMS is to make the right information available to the right people at the
right time.
• A PMIS enables an organized and controlled flow of information, so nothing is siphoned off
or misplaced.
Unit No. V Project Monitoring and Control TE(Mech.)-II
• An abundance of information is created, transferred and stored over the life cycle of a project.
It seems people are always communicating and making constant updates. It’s easy for
something to get lost in the mix.
• Without a way of organizing all information a project is doomed to fail.
• PMIS helps that in organizing the data so generated and delivered to the right party and person.
• PMIS captures all project data and stores it in an organized way, it must also be retrievable,
searchable, categorizable, shareable and analyzable.
A typical PMIS software system consists of :
1. WBS creation tools
2. Calendaring features
3. Scheduling abilities
4. Work authorisation tools
5. Earned Value Management (EVM) controls
6. Quality control charts, PERT charts, Gantt charts, and other charting features
7. Calculations for the critical path, Earned Value Management (EVM), target dates based
on the project schedule, and more
8. Resource tracking and leveling
9. Reporting functionality

Design of PMIS:
Following elements should be kept in view in the design, development and operation of a
PMIS:
• The PMIS should support the full range of life cycle including project analysis and post
project review.
• Enterprise guidance and project background information must be a part of PMIS.
• PMIS include all information coming from a various sources, including formal reports,
informal sources, observations, project review meetings and questioning.
• The PMIS must interface with larger organisational information system to permit smooth,
well- organised interchange of information in support of organisational and project goals.
• Only relevant information should be a part of PMIS.

Design of PMIS consists of following four sub- systems:

• Capture data: This involves capturing data from primary as well as secondary sources
• Processing data into information
• Storing data/information/reports
• Distribute/communicate information
 Unit No. V Project Monitoring and Control TE(Mech.)-II

Each sub-system consists of the following components:

• Hardware: A computer and its peripheral: Input, output, and storage device. It also includes
communication equipment that facilitates fast transmission and reception of text, pictures,
sound, and animation in the form of electronic data.
• Software: Sets of instructions that tell the computer how to take data in, how to process it,
how to display information, and how to store data and information.
• People: It includes IT professionals and users, who analyse information needs, design, and
construct information system, write computer program, and operate and maintain the system.
• Procedure: Procedures include priorities in running different applications and the security
measures to achieve optimal and secure operations of the system.

Planning of PMIS:
• Information management is term that covers array of the systems and processes within an
organization to create and use of corporate information.
• Objectives of information system planning are desired future positions and destinations the
organizations intend to reach in order to fulfil its mission. Its policies are a general guideline
that directs and constraints, decision making within an organization.
• In present scenario, information system planning is key issue faced by senior executives of
company. Information management planning mainly involves in identification of the stage of
IS in the organization, identification of the applications of organizational information
systems, evaluation of each of these applications, based on established evaluation criteria,
establishing a priority ranking for these application and determining the optimum architecture
of IS for serving the top priority applications.
• Plan for integration of existing tools with the organisation with PMIS.

Stage model of Information System planning:

 Strategic planning:
 Derivation from the organizational plan.
 Strategic fit with organizational culture.
 Strategy set transformation.
 Information requirement analysis:
 Define underlying organizational requirements.
 Develop sub system matrix.
 Define and evaluate information requirements for organizational sub-systems.
Unit No. V Project Monitoring and Control TE(Mech.)-II
 Resource allocation:
 Return on investment
 Portfolio approach
 Steering committees.
 Project planning
 milestones
 Critical path method
 Gantt chart

Project Performance Measurement and Evaluation:

Performance management:
Once you have selected a project
And planned it
And hired the team
And started the work
How do you stay on track?
How do you even know if you are progressing to plan?
Unit No. V Project Monitoring and Control TE(Mech.)-II

Model for controlling project performance

What is a Project Monitoring System:

It involves determining what data to collect, how, when an who will collect the data; analysis
of the data; and reporting progress. You need to know what information is needed to satisfy
you and your stakeholders.
Unit No. V Project Monitoring and Control TE(Mech.)-II

Collecting data and analysis:

who will collect project data?
how will data be collected?
when will the data be collected?
who will compile and analyze the data?
who will receive the reports?
how will the reports be transmitted?
when will the reports be distributed?

Progress Reports: Typical progress report contains

 Progress since last report
 Current status of project
 Schedule
 Cost
Unit No. V Project Monitoring and Control TE(Mech.)-II
 Scope
 Problems and issues since last report
 Actions and resolution of earlier problems
 New variances and problems identified
 Corrective action planned
Sample Project Progress Report Template:

How do I Monitor Time Performance

Tools used to catch negative variances from plan and communicate project schedule status:
Tracking and baseline Gantt charts
show expected, actual, and trend data for event duration
performance Control charts
plot the difference in scheduled time on the critical path with the actual point on the critical
path
Unit No. V Project Monitoring and Control TE(Mech.)-II
Unit No. V Project Monitoring and Control TE(Mech.)-II

Earned Value Management (EVM) Or Earned Value Analysis

(EVA):
A project performance measurement technique that integrates scope, time, and cost data.
Given a baseline (original plan plus approved changes), you can determine how well the
project is meeting its goals.
You must enter actual information periodically to use EVM.
The basic principle of Earned Value (EV) is based on the fact that everyone understands the
language of money.
EVM Terminology:
Unit No. V Project Monitoring and Control TE(Mech.)-II

Planned Value:
Also called the budget. This is that portion of the approved total cost estimate planned to be
spent on an activity during a given period
Actual Cost:
The total of direct and indirect costs incurred in finishing work on an activity during a given
period
Earned Value:
An estimate of the value of the physical work actually completed
Cost Variance:
Earned value minus the actual cost. Shows the difference between the estimated cost of an
activity and the actual cost of that activity
Schedule Variance:
Earned value minus the planned value. Shows the difference between the schedule
completion of an activity and the actual completion of that activity.
If SV is positive, you are ahead of schedule.
If SV is negative, you are behind schedule
Cost Performance Indicator:
The ratio of earned value to actual cost and can be used to estimate the projected cost of
completing the project.
If the CPI is equal to 1 or 100% then the planned and actual costs are equal, or the costs are
as budgeted.
If the CPI is less than 1 or less than 100%, the project is over budget.
Unit No. V Project Monitoring and Control TE(Mech.)-II
If the CPI is greater than 1 or more than 100%, the project is under budget
Schedule Performance Indicator:
The ratio of earned value to planned value and can be used to estimate the projected time to
complete the project.
Similar to the CPI, an SPI of 1 or 100% means the project is on
schedule. If the SPI is greater than 1 or 100% then the project is ahead of
schedule. If the SPI is less than 1 or 100%, the project is behind schedule
Budget at Completion:
Budget at completion (BAC) is the original total budget estimate created at the beginning of a
project.
Estimated time to complete: Estimated time to complete is a value that is expressed
in hours of work required to complete a task or project.
Original Time Estimate or Time Estimate:
The assessment of the number of hours needed to complete a task or a series of tasks.
Assess how many hours, days or weeks each of the project activities may take and sum up
individual estimates to get the grand total of time necessary to complete the project

Earned Value Analysis Example:

Project Plan
The project team needs to build 80 wooden tables in 5 days. It is estimated that each table
will cost 1000 units of money.
The following figure provides initial plan for the project. It also provides equivalence
between Project Scope, Schedule, and Cost.
Unit No. V Project Monitoring and Control TE(Mech.)-II

Project Tracking
Let us assume that, the project was started 3 days ago and we are evaluating the performance
at the end of Day 3.
The following figure provides status at the end of Day 3.

You would have noticed that only 35 tables were built at the end of the day 3.
Cumulative Work Scheduled at the end of Day 3 = 40 Tables worth 40000 units of money
Cumulative Actual Cost at the end of Day 3 = 36000 units of money
Cumulative Work Performed at the end of Day 3 = 35 tables worth 35000 units of money at
the Budgeted Cost
Let us re-write these terms again
Budgeted Cost of Work Scheduled (BCWS)/PV = 40000
Budgeted Cost of Work Performed (BCWP)/EV = 35000
Actual Cost of Work Performed (ACWP)/AC = 36000
Unit No. V Project Monitoring and Control TE(Mech.)-II
These are the 3 basic terms/values of EVA. The modern names for these terms are Planned
Value (PV), Earned Value (EV) and Actual Cost (AC) respectively.

We can interpret few things by analyzing the above data:

1. The project is behind schedule.
•The Project Team had planned to build 40 tables at the end of Day 3.
•They could only build 35 tables.
•In EVA parlance we can say that Project Team planned to complete the work that was
worth 40000 units of money.
• They completed the work that was worth 35000 units of money.
2. The project is Over Budget.
•The Project Team build 35 tables at the end of Day 3.
•In EVA parlance we can say that they completed the work that was worth 35000 units of
money.
•The Project Team spent 36000 units of money to build 35 tables.
•In EVA parlance we can say that 36000 units of money was spent for doing the work that
was worth 35000 units of money.
Formulas:
Variance Formulas
Schedule Variance (SV) = EV – PV
Cost Variance (CV) = EV – AC
Efficiency Formulas
Schedule Performance Index (SPI) = EV/PV
Cost Performance Index (CPI) = EV/AC
Calculations
SV = 35000 – 40000 = -5000
CV = 35000 – 36000 = -1000
SPI = 35000 / 40000 = 0.875
CPI = 35000 / 36000 = 0.97
Final Interpretation
• EV is the first term in all the formulas.
• Negative variance means Project is behind/problem.
• Positive variance means Project is ahead.
• Efficiency less than 1 means Project is behind/problem.
• Efficiency of greater than 1 means Project is ahead.
Unit No. V Project Monitoring and Control TE(Mech.)-II

Earned Value Chart for Project after 5-Months

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