CHAPTER 05 –

Project Tracking, Monitoring and Control

Learning Outcomes
 Understanding what is tracking, monitoring and control
and its benefits
 Understanding Project Control Process
 Understanding Earned Value Technique (EVM) and
solving EVM problems based on specific short cases
 Project Change Management and Control Processes
Project Tracking, Monitoring and Control:
• Project Tracking-fact finding processes
• Project monitoring-analysis of these facts
• Project control-progress against the plan
• Murphy Law
• Benefits of PMC: Meeting its planned objectives (timeframe, budget, performance), reveal problems
early, accountability and communication, motivate staff, draw lessons
• Project tracking and monitoring information: written status reports, schedule performance, resource
analysis, Financial analysis, project performance review presentations
• Project Control Processes: identify potential problems early, compare the data, make recommendations
• Achieving self-control: clear definition of role, personal plan, skills and resources, feedback, clear
definition of authority
• EVM technique: integrates scope, time and cost data and for a snapshot in time. Early warning system
Setting a baseline/ entering actual information
• Bringing performance under control: take care of CPM- resources, activities, adjusting resources, no out
of scope work, new risks, issues
• Bringing costs under control: less expensive resource, adjust time frame, plan optimised for resources
• Change-controlled and communicated
• Change control process: change request in change control form, size of change, impact analysis,
review/approval by change control board, Accept/Reject/Put-on-hold change
Definitions
• Project Tracking is defined as the fact-finding processes and ,
• Project Monitoring is defined as the analysis of these facts collected
– Both are needed for effective management of a project.
• Project Control compares progress against the plan so that corrective
action can be taken when a deviation
– Control processes also predict what may happen in the future if the present
conditions continue.

• Laws of Project Management

– Projects progress quickly until they become 90% complete, then they remain
at 90% complete forever.
– The Murphy’s Law as applied to Project management:
• When things are going well, something will go wrong.
• When things just cannot get any worse, they will.
• When things appear to be getting better, you have overlooked something.
– If project scope is allowed to change freely, the rate of change will exceed
the rate of progress.
– Project managers should be organized and disciplined.
 Benefits of Project Monitoring and Control
• Ensure the project meet its planned objectives, within planned
or acceptable time frame, budget and performance quality
• Reveal problems early so that actions can be taken to deal with
them. This may even include decisions to change project scope.
• Support the accountability to, and communication with, all
stake holders, and thus enhancing their commitment and
support.
• Motivate staff and re-affirm commitment to project objectives.
• Draw lessons for other phases or projects (current / future)
Project Tracking and Monitoring
• The project information data come from the project team and
from the processes used to keep the plan current.
• Project tracking and monitoring information include:
– Written status reports - Review the completed activities, Identify
milestones reached, Identify problems or issues including CR’s.
– Schedule Performance, showing actual progress compared to the
plan.
– Resource analysis comparing the actual resources against the plan.
– Financial analysis comparing actual costs versus planned costs.
– Issues/Action Item log documenting issues, decisions and action items
that may impact project performance, with due dates and status of
each.
– Change Control log with due dates and status information.
– Project Performance Review presentations to Executive /
Management
Project Tracking and Monitoring Guidelines
Tracking Activity Recommended Frequency Remarks
Project Master Monthly and for key milestones or phase Gantt Chart Preferred
Schedule completion reviews Baseline, actual and forecast
Detailed work Weekly or Bi-Weekly for status reports Task leaders are the source
schedules
Estimate at Completion Monthly or whenever costs and schedule Schedule
(EAC) variance are significant Costs
Financial Status and Monthly and whenever Management Spent Vs Budgeted
Planned Vs Actual Review or Steering committee review
spending happens
Staff Loading and Staff Monthly and whenever Management Are there unacceptable peaks and valleys
Availability Review or Steering committee review Validate need for resources
happens
Risk Identification and Quarterly or as per Risk Management Plan Update Risk Matrix
Analysis Is Risk Mitigation Required?.
Has risk materialized ?.
Tracking WBS As required when scope changes are When requirements change
approved or addln tasks are identified As plans evolve and more clarity emerges
Project Requirements When change requests are approved Contract Modification
Change Control log for details
Quality Status Quarterly and for key milestones and phase Reviews completed, quality issues
completion reviews identified and problem resolution
addressed
Issues and Action Weekly for status review meetings Tracked until resolved
Items list
 Project Control Processes
• The purpose of the project control
process is to identify potential problems
early and prevent them from
happening, or to minimize their impact.
– Preventing problems is far easier and less
costly than solving them.
– The minimum tracking and monitoring
components for a project are:
• Schedule, Cost & Scope
• Resource utilization and availability
• Quality performance
h Compare the data gathered with the
project plan, performance standards .
– Update project schedule and progress.
– Update budget and calculate variances.
– Forecast project outcomes;
h Make recommendations for corrective
actions or adjustment if a control system does not use
deviation data to initiate corrective
– These include: adding resources or
action, it is not really a control
changing the sequence of activities, and
system but simply a monitoring
which does not change the overall
system
project scope, schedule or cost.
Achieving Team Self Control
The only way to control a project is for every member of the
project team to be in control of his own work. To achieve
self-control, team members need:
 A clear definition of what they are supposed to be doing, with the
purpose stated.
 A personal plan for how to do the required work.
 Skills and resources adequate to the task.
 Feedback on progress that comes directly from the work itself.
 A clear definition of their authority to take corrective action when
there is a deviation from plan (and it cannot be zero!).
Earned Value Management (EVM) Technique
• EVM is a Project Performance Measurement technique that integrates
scope, time, and cost data and evaluates performance for a snapshot in
time.
• More and more organizations around the world are using EVM to help
control project costs. It provides an early warning system to detect deficient
or endangered project performance.
• To use EVM, involves two important steps:
– Setting a baseline (original plan plus approved changes) determines how well the
project is meeting its goals
– One must enter actual information periodically to use EVM
• EVM compares what you got to what you have spent.
We analyze past performance………to help us control the future
PAST PRESENT FUTURE
Are we on schedule?
Are we on budget? When will we finish?
What are the significant variances? What will it cost at the end?
Why do we have variances? How can we control the trend?
What is the trend to date?
EVM Illustration
I plan to build 5 widgets this month. Each widget should take 100hrs. I will
measure Earned Value based on # widgets completed (three) at a given
snapshot in time

Oh boy! I better figure out what

3 is going on. I've got 200hrs worth of
At Month End... 2 work to catch up on, and I've
1 already overspent by 100 hrs.

Budget Plan Earned Value Actual

500hrs 300hrs 400hrs
Schedule Cost
Variance Variance
(200) (100)
• Earned Value differs from the usual budget verses actual costs incurred model, in
that it requires the cost of work in progress to be quantified. This allows the
project manager to compare how much work has been completed against how
much he expected to be completed at a given point.
• The primary function of this technique is to determine and document the
variance, the impact from the variance and to determine corrective actions
Five Basic Performance Questions & Answers
Question Answer / EVM Terms Acronym
How much work did we plan to do? Budgeted Cost for Work Scheduled BCWS = PV
How much work got done? Budgeted Cost for Work Performed BCWP = EV
How much did the completed work cost? Actual Cost of Work Performed ACWP =AC
What was the total job supposed to cost? Budget at Completion BAC
What do we now expect the total job to cost? Estimate At Completion EAC

At what rate are we progressing?* Rate of Progress / performance RP

* The most common way to measure progress is to simply estimate percentage complete for each task
Illustration: Earned Value Chart for Project after Five Months

If the EV line is below the AC or PV line, there are problems in those areas/project.
Activity Rules
• There are multiple methods for determining Earned Value. The rules for
determining Earned Value should be documented in the Planning Phase.
– The rules are all based on the percent complete of an activity and include:
• 0/100 rule: this rule allows the project to earn 100% of the value of each
activity only when it has been completed.
– It is considered the most conservative of the Earned Value rules. Even if the activity is
90% complete, only 0% is earned until the activity is 100% complete.
• 50/50 rule: this rule allows the project to earn 50% of the value of an activity
as soon as the activity starts.
– The last 50% can only be earned after the activity has completed.
• Proportional rule: this rule uses the actual effort or duration spent so far
on an activity to determine the portion of the activity that is complete.
– This rule is the most common rule used and is supported by most software applications
such as Microsoft® Project.
– For example, if the activity was estimated to take 10 days and 5 days have already been
spent working on the activity, then the proportional percent complete is 50%.
– Alternatively, If the activity is estimated to take 20 effort hours and 10 hours have
already been expended to date, then the activity is 50% complete and the project can
earn 50% of the value of the activity.
Issues with Percent Complete for EVM Calculations

• Once the percent complete is known, then the total Planned Value (or
budgeted value) for that activity is multiplied by the percent complete to
determine the Earned Value.
– For example, if the activity was budgeted (planned) to cost $100, and the
percent complete of that activity at a point in time is 50%, then the Earned
Value for the activity is $50 (50% x 100 = 50).
– There is some risk with this rule if activities are underestimated, since the
project could be reporting 50% of the activity as earned, however more than
50% of the work or duration is still remaining to finish the activity. For this
reason, some Project Managers require team members to not only report the
effort hours expended to date, but they also require team members to
estimate the remaining effort hours of work. In this way, they can adjust for
the proper Earned Value percent.
– Additionally, if the project has held themselves to the estimating rule of no
activity being more than 10 days in duration, then this risk is also mitigated.

9-14/15
Interpreting EVM Results
• Negative numbers for cost and schedule variance indicate problems in
those areas
• CPI and SPI less than 100% indicate problems
– Problems mean the project is costing more than planned (over budget) or taking longer
than planned (behind schedule)
• Zero variances (very rare);
• Problem indicators variance >10% or $ variance >$50,000 at the control
account level
• Monthly trends turning negative or downward
• Schedule variances usually indicate cost variances will follow
• When Actuals > Baseline or Latest Revised Estimates (LRE) means a new
Baseline / LRE needs to be developed to see what program cost will be
• When BCWP increases with no increase in ACWP (Should not be adding
budget if actuals are not indicating it is needed)
Tools PM have to bring SPI under Control

• Examples of types of actions that PM could

consider if schedule performance (SPI) is
showing a decline are:
– Reassign resources to activities to ensure critical path
activities are finishing on time.
– Adjusting activity predecessor/successor relationships to
ensure the critical path deliverables are on time.
– Adjust resource levels or resources to ensure the proper
skills are being utilized.
– Evaluate scope of work to ensure no "out of scope" work
has found its way into the project (i.e. Scope Creep).
– Evaluate new risks and determine response strategies.
– Ensure issues are promptly reviewed and closed.
9-16/15
Tools PM have to bring CPI under Control

• Examples of types of actions that PM could consider

if cost performance (CPI) is showing a decline are:
– Adjust resource levels or resources to ensure the proper skills are
being utilized.
– Evaluate scope of work to ensure no "out of scope" work has found its
way into the project (i.e. Scope Creep).
– Evaluate new risks and determine response strategies.
– Ensure issues are promptly reviewed and closed.
– Using less expensive resources than planned in order to recover some
budget decline.
– Adjusting the time frame to complete the work so that it is completed
at a time that could use less expensive resources (note that this may
impact the schedule performance).
– Ensuring your plan is optimized for resources, and no new resources
are regularly joining the team and dragging down productivity.

9-17/15
Change Control - Overview
• Change must be controlled and communicated.
• A change control process is used to manage changes to the baseline plan
for scope, cost, or schedule.
– Changes in scope would include such things as: added features or functions to the
product, any new deliverables, any new requirements, any added or removed activities
that affect the content/requirements of the project deliverables.
– Changes in cost would include such things as: additions or subtractions to the budget to
complete the project when performance metrics are outside the variance limits.
– Changes in schedule would include such things as: needing additional time to complete
the project deliverables, or change to original commitment to deliver the project
Milestones.
• To reiterate, the changes we are discussing here are changes that would
breach a measurement variance as defined in the Quality Plan.
– For example, if we determined a cost variance of plus or minus 5% was an acceptable
variance for budget, then we can make budget adjustments within that variance without
requiring a Change Order.
– If however, the budget change breaches the variance limit, then we will need to
document a Change Order. Similarly this scenario holds true for the assessment of
variance to scope and schedule.

9-18/15
Project Change Management
• The Change control Form and Change Log are the primary artifacts.

• Change Thresholds - If the change is considered minor and the project

plan can absorb the change with minimal impact, make the necessary
adjustments and move on .
– If, however, a severity threshold (typically any change that has an effort impact
of > 3 Person Weeks) has been exceeded, this should trigger action by you and
your team to implement the change control process.
– Schedule thresholds require more analysis based upon critical path
implications (or not) and the duration to complete the task.
Change Control Process
Five Step Process for Change Control
1. Enter the change request in a
formal change control form (see the
picture)
2. Assess the size of change (as per
defined thresholds)
3. Conduct Impact Analysis – Impact
on Project Scope, Schedule and
Cost
4. Record the same on the change
control form and place it for
review/approval by the Change
Control Board (CCB)
– CCB typically comprises of Client
manager, Business manager, project
manager and other relevant stakeholders
5. Accept or Reject or Put on HOLD
the change as per decision from the
CCB
Class Activity or Assignment

• Open the EVM Problem Solving Document

• Understand the flavour of the EVM problems
and understand how they are solved
• Take up any EVM problems from previous
question papers and work out the EVM
Calculation and also respond to the questions as
part of the EVM Problem case

9-21/15
Variance Analysis using Spending Curves

This means you

have not applied This usually means
enough resources. that extra resources
The problem is that have been applied to
it usually results in the project but at the
an overspend when labor rates originally
you try to catch up. anticipated.

Acceptable Variances
If you are doing a well-defined construction job, the
variances (cost & schedule) can be in the range of
+3–5 percent. If the job is research and This generally
development, acceptable variances increase happens because the
generally to around +10–15 percent. original estimate was
too conservative
It is not enough to recognize a variance. Its
cause must be determined so that
corrective action can be taken.