Chapter 9

Monitoring and control

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 Why?? … Monitoring and
control
Once work schedules have been published and the project is

started, attention must be focused on progress.

This requires monitoring of what is happening, comparison of

actual achievement against the schedule and revision of plans and

schedules to bring the project as far as possible back on target.

Data collection – we gather information at regular intervals about how the project

is progressing. These raw details could be quite numerous and complex on a large

project

Data processing – we process the progress data and convert it into ‘information’

which makes it easier for the project managers and others to understand the

overall condition of the project

Making decisions/plans – in the light of the comparison of actual project progress

with that planned, the plans are modified. This may require the modelling of the

outcomes of different possible courses of action

…and so the cycle goes on.

Define objectives – at the beginning of the project we
decide on what we want to achieve

Making decisions/plans – we decide how we are going to

achieve the objectives i.e. we create a plan

Modelling – as part of the process of creating a plan we

will consider different approaches and attempt to assess
the consequences of each of these approaches in terms of
how much it will cost and how long it will take, and so on.

Implementation – the plan is now carried out

Project Control
Cycle

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Overall responsibility
Responsibilities
for ensuring
satisfactory progress

Day-to-day progress
responsibility

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 Categories of Reporting

• Oral or written • Oral formal regular

– Weekly or monthly progress meetings
• Formal or informal
• Regular or ad hoc • Oral formal ad-hoc
– End-of-stage review meeting

• Written formal regular

– Progress report, written form

• Written formal ad-hoc

– change reports

• Oral informal ad-hoc

– general discussion
 Assessing progress
Checkpoints – predetermined times when progress is
checked

– Event driven: check takes place when a particular

event has been achieved

– Time driven: date of the check is pre-determined

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 Taking snapshots

• Frequency of progress report depends on

– Size

– Degree of risk

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 9.3 Collecting the data
Need to collect data about:

• Achievements

• Costs

A big problem: how to deal with partial completions

• Projects have to be delivered on time and within budget, hence the
concern with monitoring achievements and costs.

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 Partial completion reporting

– A record of time spent on an activity

– How much more time is required to complete

activity

– Schedule of activity

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 Red/amber/green (RAG) reporting
• Avoid asking for estimated completion dates instead ask of
the likelihood of meting the planned target date.
• of partial completion: traffic-light method
• Identify key tasks
• Break down into sub-tasks
• Assess subtasks as:
Green – ‘on target’
Amber – ‘not on target but recoverable’
Red – ‘not on target and recoverable only with difficulty’
• Status of ‘critical’ tasks is particularly important 14
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SPM (5e) resource

allocation© The McGraw-Hill
Companies, 2009
9.4 Visualizing progress

• Gantt charts
• The Slip Chart
• The Timeline

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Gantt charts

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The Slip Chart

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The Timeline

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 9.5 Cost monitoring
• A project could be late because the staff originally committed
have not been deployed

• In this case the project will be behind time but under budget

• A project could be on time but only because additional

resources have been added
– over budget

• Need to monitor both achievements and costs

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Project is delayed 21
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 9.6 Earned value analysis
• Planned value (PV) or Budgeted cost of work
scheduled (BCWS) – original estimate of the
effort/cost to complete a task

• Earned value (EV) or Budgeted cost of work

performed (BCWP) – total value credited to a project
at any point

• Monitoring earned value: Actual cost of work

performed(ACWP) – Actual cost of each task
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 Accounting conventions
• Work completed allocated on the basis
– 50/50 half allocated at start, the other half on
completion. These proportions can vary e.g.
0/100, 75/25 etc

– Milestone current value depends on the

milestones achieved

– Percentage Completed:
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 Monitoring earned values
• Schedule variance(SV)
– SV= EV-PV
– Negative SV means project is behind the schedule

– E. g. work with a PV of 40k should have been completed by

now, but some of work has not been done so, EV=35k only.

SV=35k-40k= (-5k)

Hence project is behind the schedule

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• Time variance
difference between when the achievement of the current
earned value was planned to occur and the time now.

• Cost variance
= EV – AC

– Difference between budgeted cost and actual cost of

completed work

– Accuracy of original cost estimated

Positive CV means project within budget

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 Performance ratios
• Schedule performance index (SPI)
= EV/PV
• Cost performance index (CPI)
= EV/AC

SPI <1.00, project behind schedule

CPI > 1.00 means project within budget

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 Earned value – an example
• Tasks

– Specify module 5 days

– Code module 8 days

– Test module 6 days

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 Earned value – an example
• Tasks

– Specify module 5 days

– Code module 8 days

– Test module 6 days

• At the beginning of day 20, PV = 19 days

• If everything is completed but not testing EV = 13 days

• Schedule variance = EV-PV i.e. 13-19 = -6

• Schedule performance indicator (SPI) = 13/19 = 0.68

• SV negative or SPI <1.00, project behind29schedule

 Earned value analysis – actual cost
• Actual cost (AC) is also known as Actual cost of work performed (ACWP)

• In previous example, if

– ‘Specify module’ actually took 3 days

– ‘Code module’ actually took 4 days

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 Earned value analysis – actual cost

• Actual cost (AC) is also known as Actual cost of work

performed (ACWP)

• In previous example, if

– ‘Specify module’ actually took 3 days

– ‘Code module’ actually took 4 days

• Actual cost = 7 days

• Cost variance (CV) = EV-AC i.e. 13-7 = 6 days

• Cost performance indicator(CPI) = 13/7 = 1.86

• Positive CV or CPI > 1.00 means project31within budget

 Earned value analysis – actual costs

• CPI can be used to produce new cost estimate

• Budget at completion (BAC) – current budget allocated to

total costs of project

• Estimate at completion (EAC) – updated estimate = BAC/CPI

– e.g. say budget at completion is 19,000 and CPI is 1.86

– EAC = BAC/CPI = 10,215 (projected costs reduced because

work being completed in less time)

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 Time variance

• Time variance (TV) – difference between time

when specified EV should have been reached .

• For example say an EV of 19000 was supposed

to have been reached on 1st April and it was
actually reached on 1st July then TV = - 3
months
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 Example
Suppose you are managing a software
development project. The project is expected
to be completed in 8 months at a cost of
$10,000 per month. After 2 months, you
realize that the project is 30 percent
completed at a cost of $40,000. You need to
determine whether the project is on-time and
on-budget after 2 months.

SPM (5e) resource allocation

SPM (5e) resource allocation
SPM (5e) resource allocation
Step 1: Calculate the Planned Value (PV) and
Earned Value (EV)
From the scenario,
Budget at Completion (BAC) = $10,000 * 8 =
$80,000
Actual Cost (AC) = $40,000
Planned Completion = 2/8 = 25%
Actual Completion = 30%
SPM (5e) resource allocation
Therefore,
Planned Value = Planned Completion (%) * BAC = 25% *
$ 80,000 = $ 20,000
Earned Value = Actual Completion (%) * BAC = 30% * $
80,000 = $ 24,000
Step 2: Compute the Cost Performance Index (CPI) and
Schedule Performance Index (SPI)
Cost Performance Index (CPI) = EV / AC = $24,000 /
$40,000 = 0.6
Schedule Performance Index (SPI) = EV / PV = $24,000
/ $20,000 = 1.2

SPM (5e) resource allocation

Since Cost Performance Index (CPI) is less than
one, this means the project is over budget

Since Schedule Performance Index (SPI) is more

than one, the project is ahead of schedule

SPM (5e) resource allocation

 Example
Suppose you have a budgeted cost of a
project at $900,000. The project is to be
completed in 9 months. After a month, you
have completed 10 percent of the project at a
total expense of $100,000. The planned
completion should have been 15 percent.

SPM (5e) resource allocation

SPM (5e) resource allocation
SPM (5e) resource allocation
From the scenario, you can extract the
following:
BAC = $900,000
AC = $100,000
The Planned Value (PV) and Earned Value (EV)
can then be computed as follows:
Planned Value = Planned Completion (%) * BAC
= 15% * $ 900,000 = $ 135,000
Earned Value = Actual Completion (%) * BAC =
10% * $ 900,000 = $ 90,000
SPM (5e) resource allocation
Compute the earned value variances:
Cost Performance Index (CPI) = EV / AC =
$90,000 / $100,000 = 0.90.

Schedule Performance Index (SPI) = EV / PV =

$90,000 / $135,000 = 0.67.

SPM (5e) resource allocation

Since both Cost Performance Index (CPI index)
and Schedule Performance Index (SPI index)
are less than 1, it means that the project is
over budget and behind schedule

This example project is in major trouble and

corrective action needs to be taken

SPM (5e) resource allocation

 Example
Numerical 3: For the following project calculate
SV,CV, SPI and CPI at the end of second
month.

SPM (5e) resource allocation

SPM (5e) resource allocation
SPM (5e) resource allocation
 Example
You are managing a project which is into six months of its
execution. You are now reviewing the project status and you
have ascertained that project is behind schedule. The actual
cost of Activity A is ₹ 2,00,000 and that of Activity B is ₹
1,00,000. The planned value of these activities are ₹ 1,80,000
and ₹ 80,000 respectively. The Activity A is 100% complete.
However, Activity B is only 75% complete. Calculate the
schedule performance index and cost performance index of
the project on the review date.

SPM (5e) resource allocation

SPM (5e) resource allocation
SPM (5e) resource allocation
 9.9 Change control

• Identifying items that need to be subject to

change control – it is unlikely, for example,
that a feasibility report would be subject to
change control once agreement has been
obtained to start the project

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 Typical change control process
1. One or more users might perceive the need for a change

2. User management decide that the change is valid and

worthwhile and pass it to development management

3. A developer is assigned to assess the practicality and cost of

making the change

4. Development management report back to user

management on the cost of the change; user management
decide whether to go ahead
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 Typical change control process
5. One or more developers are authorized to make
copies of components to be modified

6. Copies modified. After initial testing, a test version

might be released to users for acceptance testing

7. When users are satisfied then operational release

authorized – master configuration items updated

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The role of configuration librarian:

• Identifying items that need to be subject to

change control

• Management of a central repository of the

master copies of software and documentation

• Administering change procedures

• Maintenance of access records

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