Project Management

A Managerial Approach

Project Control
Project Control
 Control is the last element in the
implementation cycle of planning-
monitoring-controlling
 Control is focused on three elements of a
project
 Performance
 Cost
 Time
Chapter 11-1
Controlling Performance
 There are several things that can cause a
project’s performance to require control:
 Unexpected technical problems arise
 Insufficient resources are available when needed
 Insurmountable technical difficulties are present
 Quality or reliability problems occur
 Client requires changes in specifications
 Interfunctional complications arise
 Technological breakthroughs affect the project

Chapter 11-2
Controlling Cost

 There are several things that can cause a

project’s cost to require control:
 Technical difficulties require more resources
 The scope of the work increase
 Initial bids were too low
 Reporting was poor or untimely
 Budgeting was inadequate
 Corrective control was not exercised in time
 Input price changes occurred

Chapter 11-3
Controlling Time
 There are several things that can cause a project’s
schedule to require control:
 Technical difficulties took longer than planned to resolve
 Initial time estimates were optimistic
 Task sequencing was incorrect
 Required inputs of material, personnel, or equipment
were unavailable when needed
 Necessary preceding tasks were incomplete
 Customer generated change orders required rework
 Governmental regulations were altered
Chapter 11-4
Purposes of Control

 There are two fundamental objectives of control:

 1. The regulation of results through the alteration of
activities
 2. The stewardship of organizational assets
 The project manager needs to be equally attentive
to both regulation and conservation
 The project manager must guard the physical
assets of the organization, its human resources,
and its financial resources
Chapter 11-5
 Physical Asset Control
 Requires control of the use of physical assets
 Concerned with asset maintenance, whether preventive or
corrective
 Also the timing of maintenance or replacement as well as
the quality of maintenance
 Setting up maintenance schedules in such a way as to
keep the equipment in operating condition while
minimizing interference to ongoing work
 Physical inventory whether equipment or material must
also be controlled

Chapter 11-6
Human Resource Control
 Stewardship of human resources requires
controlling and maintaining the growth and
development of people
 Projects provide fertile ground for cultivating
people
 Because projects are unique, it is possible
for people working on projects to gain a
wide range of experience in a reasonably
short period of time

Chapter 11-7
Financial Resource Control

 The techniques of financial control, both

conservation and regulation, are well known:
 Current asset controls
 Project budgets
 Capital investment controls
 These controls are exercised through a series
of analyses and audits conducted by the
accounting/controller function

Chapter 11-8
Financial Resource Control
 Representation of the accounting/controlling
function on the project team is mandatory
 The parent organization is responsible for the
conservation and proper use of resources owned
by the client or charged to the client
 Due diligence requires that the organization
proposing a project conduct a reasonable
investigation, verification, and disclosure of all
material facts relevant to the firm’s ability to
conduct the project
Chapter 11-9
Three Types of Control
Processes

 Decisions must be made concerning:

 At what points in the project will control be
exerted
 What is to be controlled
 How it will be measured
 How much deviation will be tolerated
 How to spot and correct potential deviations
before they occur
Chapter 11-10
Three Types of Control
Processes

 No matter what the purpose in controlling a

project there are two basic types of control
mechanisms that can be used:
 Go/no-go control
 Post control
 Cybernetic control is a third, but less
common control mechanism that is rarely
directly applicable to projects.

Chapter 11-11
Go/No-go Controls
 Take the form of testing to see if some specific
precondition has been met
 Most of the control in project management falls
into this category
 This type of control can be used on almost every
aspect of a project
 Must exercise judgment in the use of go/no-go
controls
 Go/no-go controls operate only when and if the
controller uses them
Chapter 11-12
Information Requirements
for Go/no-go Controls

 The project proposal, plans specifications,

schedules and budgets contain all the information
needed to apply go/no-go controls to the project
 Milestones are the key events that serve as a focus
for ongoing control activity
 These milestones are the project’s deliverables in
the form of in-process output or final output

Chapter 11-13
Postcontrol
 Postcontrols are applied after the fact
 Directed toward improving the chances for future
projects to meet their goals
 It is applied through a relatively formal document
that contains four distinct sections:
 The project objectives
 Milestones, checkpoints, and budgets
 The final report on project
 Recommendations for performance and process
improvement
Chapter 11-14
Characteristics of a
Control System
 A good control system:
 Should be flexible
 Should be cost effective
 Must be truly useful
 Must satisfy the real needs of the project
 Must operate in a timely manner
 Sensors and monitors should be sufficiently accurate and
precise to control the project within the limits that are
functional for the client and parent organization

Chapter 11-15
Characteristics of a
Control System

 A good control system (cont.):

 Should be as simple as possible
 Should be easy to maintain
 Should be capable of being extended or otherwise
altered
 Should be fully documented when installed
 the documentation should include a complete training
program in system operation

Chapter 11-16
Control Systems
 All control systems use feedback as a control process
 The control of performance, cost, and time usually
require different input data:
 Performance - engineering change notices, test results,
quality checks, rework tickets, scrap rates
 Cost - budgets to actual cash flows, purchase orders,
absenteeism, income reports, labor hour charges,
accounting variance reports
 Schedule - benchmark reports, status reports, PERT/CPM
networks, earned value graphs, Gantt charts, WBS, and
action plans
Chapter 11-17
Control Tools
 Some of the most important tools available for the
project manager to use in controlling the project
are variance analysis and trend projection
 A budget plan or expected growth curve of time or
cost for a certain task is plotted
 Actual values are plotted as a dashed line as the
work is actually finished
 At each point in time a new projection from the
actual data is used to forecast what will occur in
the future
Chapter 11-18
Control Tools

 Trend projection

Chapter 11-19
Critical Ratio Control
Charts

 The critical ratio is made up of two parts:

 The ratio of actual progress to scheduled progress
 The ratio of budgeted cost to actual cost
 The critical ratio is a good measure of the general
health of the project
 By combining two ratios, it weighs them equally,
allowing a “bad” ratio to be offset by a “good”
ratio

Chapter 11-20
Critical Ratio
Task Actual Scheduled Budgeted Actual Critcal
Number Progress Progress Cost Cost Ratio

1 (2 / 3) X (6 / 4) = 1.0

2 (2 / 3) X (6 / 6) = .67

3 (3 / 3) X (4 / 6) = .67

4 (3 / 2) X (6 / 6) = 1.5

5 (3 / 3) X (6 / 4) = 1.5

Chapter 11-21
Critical Ratio

 Critical ratio control chart

Chapter 11-22
Benchmarking
 A recent addition to the arsenal of of project
control tools is benchmarking
 Benchmarking makes comparisons to “best in
class” practices across organizations
 Some successful organizations have been
benchmarked on their best practices and key
success factors for projects being conducted
in functional organizations
Chapter 11-23
Best Practices and Keys to
Success
 There were four major areas found to help
projects in functional organizations:
 Promoting the benefits of project management
 Personnel pay for project management skills
and high risk projects through bonuses, stock
options, and other incentives
 Methodology
 Results of project management

Chapter 11-24
Control as a Function of
Management
 The purpose of controlling is always the same: to
bring the actual schedule, budget, and
deliverables of the project into reasonably close
congruence with the planned schedule, budget,
and deliverables

 The job of the project manager is to set controls

that will encourage those behaviors that are
deemed desirable and discourage those that are
not
Chapter 11-25
Cybernetic Controls
 Human response to steering controls tends to
be positive
 Steering controls are usually viewed as helpful
rather than a source of unwelcome pressure
 Response to steering controls also depends on
the acceptance that the goals of the control
system are appropriate

Chapter 11-26
 Go/No-go Controls
 Response to go/no-go controls tends to be
neutral or negative
 “Barely good enough” results are just as
acceptable as “perfect” results
 The system makes it difficult for the worker to
take pride in high quality work because the
system does not recognize gradations of quality
 The fact that this kind of control emphasizes
“good enough” performance is no excuse for the
nonchalant application of careless standards
Chapter 11-27
 Postcontrols
 Postcontrols are seen as much the same as a
report card
 They may serve as the basis for reward or
punishment, but they are received too late to
change current performance
 Because postcontrols are placed on the process of
conducting a project, they may be applied to such
areas as: communication, cooperation, quality of
project management, and the nature of interaction
with the client
Chapter 11-28
Balance in a Control
System
 General features of a balanced control system:
 Built with cognizance of the fact that investment in
control is subject to sharply diminishing returns
 Recognizes that as control increases past some point,
innovative activity is more and more damped, and then
finally shut off completely
 Directed toward the correction of error rather than toward
punishment
 Exerts control only to the degree required to achieve its
objectives
 Utilizes the lowest degree of hassle consistent with
accomplishing its goals Chapter 11-29
Control of Creative
Activities
 The more creativity involved, the greater the degree of
uncertainty surrounding outcomes
 Too much control tends to inhibit creativity
 Control is not necessarily the enemy of creativity, nor does
creative activity imply complete uncertainty of
 There are three general approaches to control creative
projects:
 Progress review
 Personnel reassignment
 Control of input resources

Chapter 11-30
Progress Review
 The progress review focuses on the process of
reaching outcomes rather than on the outcomes
per se
 The process is controllable even if the precise
results are not
 Control should be instituted at each project
milestone
 The object of control is to ensure that the
research design is sound and is being carried out
as planned or amended
Chapter 11-31
Personnel Reassignment
 This type of control is straightforward -
individuals who are productive are kept
 Those who are not, are moved to other jobs or
to other organizations
 While it is not difficult to identify those who fall
in the top and bottom quartiles, it is usually
quite hard to make clear distinctions between
the people in the middle quartiles

Chapter 11-32
Control of Input Resources

 The focus is on efficiency

 The ability to manipulate input resources carries
with it considerable control over output
 Considerable resource expenditure may occur
with no visible results, but suddenly many
outcomes may be delivered
 The milestones for application of resource control
must be chosen with great care

Chapter 11-33
 Control of Change and
Scope Creep
 Coping with changes and changing priorities is
perceived as the most important single problem
facing the project manager
 The most common changes are due to the natural
tendency of the client and project team members to
try to improve the product or service
 The later these changes are made in the project, the
more difficult and costly they are to complete
 Without control, a continuing accumulation of little
changes can have a major negative impact on the
project’s schedule and cost Chapter 11-34
Control of Change and
Scope Creep
 The project manager’s best hope is to control the
process by which change is introduced and
accomplished
 This can be done with a formal change control system
that is able to:
 Review all requested changes and identify all task impacts
 Translate those impacts into project performance, cost, and
schedule
 Evaluate the benefits and costs of the requested changes
 Accept or reject the changes and communicate to all concerned
parties
 Ensure that changes are implemented properly
Chapter 11-35
Effective Change Control
Procedure

 The following guidelines, applied with reasonable

rigor, can be used to effectively control changes:
 1. All project contracts or agreements must include a
description of how requests for a change in the
project’s plan, budget, schedule, and/or
deliverables, will be introduced and processed
 2. Any change in a project will be in the form of a
change order that will include a description of the
agreed-upon change together with any changes in
the plan, budget, schedule, and/or deliverables that
result from the change
Chapter 11-36
Effective Change Control
Procedure
 3. Changes must be approved, in writing, by the
client’s agent as well as by an appropriate
representative of senior management of the firm
responsible for carrying out the project
 4. The project manager must be consulted on all
desired changes prior to the preparation and approval
of the change order. The project manager’s
approval, however, is not required
 5. Once the change order has been completed and
approved, the project master plan should be
amended to reflect the change, and the change
order becomes part of the master plan
Chapter 11-37
Summary

 Control is directed to performance, cost, and

time
 The two fundamental purposes of control are
to regulate results through altering activity
and to conserve the organization’s physical,
human, and financial assets
 The two main types of control processes are
go/no-go and postcontrol
Chapter 11-38
Summary
 The postcontrol report contains four
sections:
 Project objectives
 Milestones and budgets
 Final project results
 Recommendations for improvement+
 The trend projection curve, critical ratios,
and the control chart are useful control
tools Chapter 11-39
Summary

 Control systems have a close relationship to

motivation and should be well-balanced: that is
cost effective, appropriate to the desired end
results, and not overdone
 Three approaches to the control of creativity are
progress review, personnel reassignment, and
control of inputs
 The biggest single problem facing a project
manager is the control of change
Chapter 11-40
Project Control

Questions?

Chapter 11-41