CHAPTER (7)

MONITORING AND
CONTROLLING THE PROJECT

7-1
 Monitoring and Control
• Monitoring is the collection, recording, and
reporting of project information
• Control uses the monitored data to bring actual
performance into agreement with the plan
• Monitoring and control are the opposite sides of
project selection and planning
– Project selection dictates what to monitor
– Project planning identifies the elements to be controlled

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 Plan-Monitor-Control Cycle
• The plan–monitor-control cycle constitutes a
“closed loop” process
– Continues until the project is completed
• With complex projects, there is a temptation to
minimize the planning–monitoring–controlling
effort so that “real work” can be done
– It is these projects that need the planning–monitoring–
controlling process the most

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 Project Authorization and Expenditure
Control System Information Flow

Figure 7-1
7-4
 Designing the Monitoring
System
• Identify special characteristics of scope,
cost, and time that need to be controlled
– Specific performance characteristics should be
set for each level of detail in the project
• Real-time data must be identified to
measure achievement against the plan
• It is important to avoid the tendency to
focus on easily collected data

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 Data Collection and Reporting
• Once data to monitor has been decided,
mechanisms to collect this data must be designed
• Analysis is used to transform data into information
• A number of questions come up:
– Should we use special forms?
– Should data be collected before/after milestones?
– Should time and cost data be collected at the same
time?

7-6
 Data Collecting
Data to be collected exist in one of following five formats:
1) Frequency counts: Talley of occurrence (eg., accident free days)
2) Raw numbers: Actual amounts are used, to compare with planned
amount (eg., dollars spent, hours required)
3) Subjective numeric ratings: subjective estimates of some quality
offered by specialists (eg, ranksings of performance)
4) Indicators and surrogates: Use when no direct measure (eg, to
measure customer service level, use no. of salesperson / years of
experience)
5) Verbal characterizations: Use when no other variables to measure
(eg., to measure team spirit, use verbal characterizations)

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 Data Analysis
• Data analysis techniques
– Simple aggregation
• Averaging, for example
– Fitting statistical distribution functions to the
data
– Curve fitting
• Significant differences from the plan should
be flagged
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 Data Analysis Examples

Figures 7-2, 7-3, 7-4

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 Reporting and Report Types
• Routine performance reports
– Project status reports
– Time/Cost reports
– Variance reports
• Avoid periodic or routine reports
• Not all stakeholders need to receive same information
• Electronic media makes it possible to customize
information for difference audiences
• Reports should be timed to allow control to be exercised
before completion of the task in question

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 Report Types
1. Routine
– Status, progress, and forecast reports
2. Exception
– A report used for special decisions or unexpected
situations where affected team members need to be
made aware, and the change itself documented
3. Special analysis
– The results of a special study which documents a
particular opportunity or problem within the project
itself

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 Additional Report Benefits
• They provide the mutual understanding between
stakeholders in a project
• They help communicate the need for coordination
among those working on project
• They establish and maintain a communication
network for global projects
• Reports can communicate information about
changes to a project
• They help maintain the visibility of the project
• They improve motivation

7-12
 Meetings
• Many reports are delivered at meetings
• Meetings range from regular, highly
formalized and structured sessions to
informal, off-the-cuff get-togethers
– Presentations
– Question and answer sessions
• Meetings must be well run to be effective

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 Meeting Guidelines
• Meetings should be used primarily for group decision
making, not for mere progress reports
• Distribute written agenda in advance of meeting to ensure
that all attendees are properly prepared for the meeting
• For a crisis meeting, restrict discussion to that issue
• Meeting should take minutes
– Avoid attributing remarks to individuals in the minutes
• Avoid excessive formality
• If meeting is held to address specific crisis, restrict
meeting to this issue alone

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 Virtual Reports, Meetings, and
Project Management
• The Internet can be used to communicate and
report about the project’s status
– Irrespective of the location of the project team
members
• Software programs allow the project manager to
utilize the organization’ local area network or
intranet
• Virtual project teams have members spread
worldwide
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 Earned Value
• The earned value (EV) of a task or project is the
budgeted cost of the work actually done
– It is calculated by multiplying the budgeted cost of the
task by the percentage completion of the task
– Process is more difficult than it sounds
• Budgeted cost of a task is clear
• Percentage of completion is not
• The percent of a task’s budget actually spent is not
good indicator of percent completion

7-16
 Conventions Used to Estimate
Progress on Tasks
• 50-50
– Task is listed as 50% complete when initiated and the remaining
50% added when task is completed
• 100%
– The task is 100% complete when finished … and zero percent
before that
– projects will always appear to be “behind schedule”
• Ratio of cost (or time) expended to cost (or time) budgeted
– Neither is an accurate estimator of percentage completion
• These conventions are meant for application only to
individual tasks on a project, not to the project as a whole

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 Earned Value Chart

Figure 7-5
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 Two Simple Rules for Variances
1. A negative variance is bad and a positive
variance is good
2. The spending and schedule variances are
calculated as the earned value minus some
other measure

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 Variances
• Cost/Spending variance
– Earned value (EV) – actual cost (AC)
• Schedule variance
– Earned value (EV) – planned cost (PV)
• CPI (cost performance index)
– Earned value (EV)/actual cost (AC)
• SPI (schedule performance index)
– Earned value (EV)/planned cost (PV)

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 Example
• Work on a project was expected to cost
$1,500
• Workers were originally scheduled to finish
today
• However, as of today…
– Actually spent $1,350
– About 2/3 finsished

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 Various Variances Visually

a: Positive schedule variance, negative spending variance

b: Negative schedule variance, negative spending variance

Figure 7-6 c: Negative schedule variance, positive spending variance

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Calculations for Example

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 Additional Items of Interest
• Estimated remaining cost to completion
– ETC = (BAC – EV) / CPI
• ETC: estimated cost to completion
• BAC: budget at completion
• EV: earned value
• CPI: cost performance index
• Estimated total cost at completion
– EAC = ETC + AC
• EAC: estimated at completion
• ETC: estimated cost to completion
• AC: actual cost

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Additional Calculations for Example
• BAC = 1500
• EV = 1500 (2/3) = 1000
• CPI = .74 (calculated earlier)
• AC = 1350
• ETC = (BAC – EV) / CPI
= (1500 – 1000) / .74
= 676
• EAC = ETC + AC
= 676 + 1350 = 2026

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 Microsoft Project Status Report for
DVD Project

Table 7-1
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 Project Control
• Control, the act of reducing differences between
the plan and actuality
• It is the final element in the planning-monitoring-
controlling cycle
• It is to no avail if actions are not taken when
reality deviates significantly from what was
planned
• Control is a difficult task
– It involves human behavior
– Problems are rarely clear cut so the need for change
and redirection is also fuzzy

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 Purposes of Control
1. Stewardship of organizational assets
– Physical asset control
– Human resources management
– Financial control through the use of accounting tools
2. Regulation of results through the alteration of
activities
– This step involves taking action when reality deviates
from plan
– It includes both mechanistic and human elements

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 Purposes of a Control System
• Primary purpose is to correct errors
– Not to identify and punish the guilty
– Managers must realize that the past cannot be changed
• Control the investment, subject to diminishing
returns
• Consider impact on creativity and innovation
• The control system should employ the lowest
degree of hassle consistent with accomplishing its
goals

7-29
 Primary Mechanisms by which
Project Manager Exerts Control
1. Process reviews
• An analysis of the process of reaching the project
objectives
2. Personnel assignment
• Control can also be exercised through personnel
assignments based on past productivity
3. Resource allocation
• Resources are usually allocated to the more
productive or important tasks and this can
significantly influence the attainment of project
results

7-30
 Common Mistakes
• Emphasizing short-run results at the expense of
long-run objectives
• Excessive control directed to specific objectives
can result in sacrificing other project objectives
• Across-the-board cuts in resource allocations tend
to reward those who have already overspent or
over hired while penalizing the frugal and efficient
• Focusing on certain items for control can distract
the attention of team members from other, equally
important items

7-31
 Control System Components
• Sensor
– Its purpose is to measure any aspect that one wishes to control
• Standard
– The control system must have a standard of items to measure
against
• Comparator
– Compares the output of the sensor with the standard
• Decision maker
– To decide if the difference between what is measured and the
standard is large enough to warrant attention.
• Effector
– If some action is required to reduced the difference, the effector
must then take action

7-32
 Types of Control Systems
• Cybernetic control systems
– A control system that uses all five components of a
control system
– Also known as steering controls
• Go/no-go controls
– A predetermined standard must be met for permission
to be granted to continue
• Post-control (post-performance reviews)
– Applied after the project has been completed
– Purpose is to allow future projects to learn from past
project experience

7-33
 Tools for Control
• Some already covered
– Variance analysis
– Trend projections
– Earned value
• Critical ratio
– Indicates when a task is becoming unacceptable
• When the ratio drops below one
– CR = (actual progress/scheduled progress)  (budgeted cost/actual cost)

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 Critical Ratio Calculations

Table 7-3
7-35
 More Tools for Control
• Control chart
– Any measure can be plotted and tracked on a
control chart
– Control limits set by project manager
• Benchmarking
– Make comparisons to “best in class” practices
across organizations, or divisions, or even
departments within an organization

7-36
 Two Sample Control Charts

Figures 7-9 and 7-10

7-37
Scope Creep and Change Control
• Midcourse changes to a project must be
controlled
– Called scope creep
• The later changes are made to a project, the
more difficult and costly they become
• All projects face change
• The best approach is a well-controlled,
formal process for change

7-38
 Purpose of Change Control System
• Review all requested changes
• Identify all impacts
• Translate impacts into performance, schedule, and
cost
• Evaluate the benefits and disadvantages
• Have appropriate person accept or reject
• Communicate accepted changes
• Ensure changes are implemented properly
• Prepare report

7-39
 Rules for Controlling
Scope Creep
• Include a change control system in every project
contract
• Require all changes be introduced by a change
order
• Require approval in writing by the client’s agent
and senior management
• Consult with project manager prior to preparation
of change order
• Amend master plan to reflect changes

7-40
THANK YOU

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