COMPARISON OF VARIOUS SCHEDULING & BUDGETING EVALUATION TOOLS by Shruti Singla

This paper is submitted in partial fulfillment of the requirements for the degree of MASTERS OF SCIENCE in PROJECT MANAGEMENT

ILLINOIS STATE UNIVERSITY 2010

The idea of good project management is to ensure that projects will be completed on time, on budget, and to meet clients satisfaction. Time management and Cost management are the two knowledge areas of project management which are concerned with resources, activities, scheduling, cost estimating and budgeting. Having project work packages executed on-time is a key responsibility of the project manager. The likely reason for this is because time is the one thing that there can be no more of. Extra resources can be leveraged, customer expectations can be massaged, but if the project will be delayed by an unacceptable period of time, the impact can be widespread. With poor Time management of a project, other projects can suffer the consequences by being delayed, robbed of resources or placed under increased pressure in relation to time to make up for the delays in the earlier project. Under time management, the goal is to build the project schedule subsequently to manage changes and updates to the schedule. There are many techniques to do the scheduling. These techniques are Critical Path Analysis, PERT, BAR /Gantt chart method, Linear Scheduling Methods. Some of these methods are more efficient than others, depending on the nature of the project to be scheduled. Below table suggests which scheduling tool is appropriate for each type of project. Type of Project Linear and continuous projects (pipelines, railroads, tunnels, highways) High rise buildings LOB, VPM Scheduling method LSM Characteristics Few activities Executed along a linear path/space Work continuity is crucial for effective performance Repetitive activities Large amount of activities Every floor considered a production unit Extremely large number of activities Complex design Crucial to keep project in critical path Indicates only time dimensions

Refineries and other very complex projects Simple projects(of any kind) Bar/Gantt Charts PERT/CPM

( when to start and end activity) Relatively few activities

LSM: Linear scheduling is a project management technique that creates a schedule in a coordinate system with a time axis and an axis that displays the amount of work that has been produced. Values on both axes are cumulative. The progression of several activities yields a collection of inclined lines in the graphical representation of the linear scheduling method (LSM). Their ratio of work per time is proportional to their productivity. This technique offers a practical way to model linear projects as well as an efficient framework to monitor their progress. It allows for positioning the activities in a time and space format, and the production rates for the activities are also included in the schedule in the form of the slope of the lines that represent the activities. The LSM performs optimally when scheduling linear continuous projects like highway construction, because it was conceived to represent and schedule this specific type of project and it is easy to keep an eye on the progression of work. However LSM can be very inefficient when scheduling complex discrete projects like bridges, building etc.

Critical Path Analysis (CPA) is an effective and powerful method that helps to identify and plan all tasks that must be completed on time for the whole project to be completed on time, and also identifies which tasks can be delayed for a while if resource needs to be reallocated to catch up on missed tasks.

PERT is a variation on Critical Path Analysis. It takes a slightly more skeptical view of time estimates made for each project stage. It consists of estimating the shortest possible time each activity will take, the most likely length of time, and the longest time that might be taken if the activity takes longer than expected in order to calculate the most accurate time estimate for each project stage. Formula for PERT: Shortest time + 4 x likely time + longest time ----------------------------------------------------------6 Gantt Chart: The Gantt chart was invented in the early 1900s by Henry L. Gantt, an American engineer and social scientist. The horizontal axis is (linear) time; each task is given its own horizontal band where the calendar duration of the task is indicated by a box, line, or other object with a variable horizontal dimension. Tasks are often grouped into categories, and each category can be treated as a summary task whose duration spans all the tasks within that category.

Figure 1: Example Gantt chart, generated using Microsoft Project The various advantages of the Gantt chart are: Time is explicit (and linear) All tasks visible in relationship to others Deadlines are shown Project status at intermediate times is shown can show progress by filling in task boxes

The unmodified Gantt chart has the following shortcomings: Tasks might not be associated with people Person-hours are not indicated, only calendar Dependencies are not explicit No summary of the load on a person Other resources not shown Critical paths are not explicit does not record difference between original plan and actual

Tools for Time management will help various companies like the insurance companies to analyze and describe each task of their IT project, identify the resources needed and define the milestones of the project (expected dates of deliverables).

This knowledge area includes cost estimating and budgeting. After the cost of the project has been estimated the project management must control the cost and makes changes to the budget as needed. The Project Cost Estimate is dependent on the accuracy of the cost estimate of each activity in the project. The accuracy changes as the project progresses. For instance, in the initiation of the project the estimate is more difficult to assess than later in the project when the scope and the schedule have been defined in detail.

Earned value analysis (EVA), a process of earned value management (EVM), is a fundamental method for project Management and It is an industry standard method to measure a projects progress, to forecast its completion date and final cost, and to provide project schedule and cost variances along the way. With the integration of three measurements, it provides consistent numeric indicators, which can be evaluated, for project performance. The three measurements that are calculated from the time period summation of planned and actual costs associated with each work package include the following. Budgeted cost of work scheduled (BCWS) or planned value; Budgeted cost of work performed (BCWP) or earned value; and Actual cost of work performed (ACWP) or actual cost of accomplished work.