Module 5: Executing

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Projects
DEPARTMENT OF COMPUTER SCIENCE AND DESIGN
FACULTY OF ENGINEERING AND TECHNOLOGY
DMIHER (DEEMED UNIVERSITY)
SAWANGI (M) WARDHA
 Introduction
• The first phase of project is PROJECT INITIATION then comes
PROJECT PLANNING and then is PROJECT EXECUTION

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• According to PMBOK
“The executing process group consists of those processes performed to
complete the work defined in the project management plan to satisfy the
project specifications”
• During the execution phase , the PM integrates the different project
resources to achieve the objective of the entire project.
• He/she guides them at each step of execution to produce the pre-
defined deliverables.
• The PM ensure the availability of required resources
• The stakeholders need a variety of information, this need to collected

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and communicated.
• The stakeholders must be engaged in the project work
• During planning, risk register was created , if some risk materializes
during the execution, the planned risk response must be implemented.
• The project must deliver the quality work.
 Planning, Monitoring and Controlling
cycle
• Project planning is never a one-time activity
• While executing the project, the PM still needs to plan and most often

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keep re-planning
• This is necessary because as the work goes on, the PM monitors the
work and if any deviations are found, corrective actions need to be
taken.
• Monitoring is collecting, recording and reporting information
concerning any and all aspects of project performance that the PM or
others in the organization wish to know
• Controlling uses the data supplied by monitoring to bring actual
performance into approximate congruence with planned performance.
 Planning, Monitoring And Controlling Cycle
• The key things to be planned, monitored and controlled are
Time(Schedule)

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Cost(Budget)
Scope(Performance)
• Planning-Monitoring-Controlling cycle is continuously in process
until the project is completed.
• The information flow is shown
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 Designing a Monitoring System
• The first step in setting up any monitoring system is to identify the key
factors to be controlled.

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• Clearly, the PM wants to monitor performance, cost, and time but must
define precisely which specific characteristics of performance, cost,
and time should be controlled and then establish exact boundaries
within which control should be maintained.
• But the best sources of items to be monitored are the project Work
Breakdown Structure (WBS) and the risk management plan.
• WBS describes what is being done, when and the planned level of
resource usage for each task, work package and work element.
• Monitoring the risks found in the risk management plan keeps the PM
and the project team alert to specific risks and thus lower the

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probability of surprise.
• The monitoring system is a direct connection between planning and
control.
• Monitoring system focus mainly on time and cost as measure of
performance and not scope.
• Monitoring can serve to maintain high morale on the project team as
well as to alert team members to problems that will have to be solved.
• The purpose of the monitoring system is to gather and report data .
• The purpose of the control system is to act on the data.

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• Once we know what to monitor we need to know what piece of
information should be gathered and when.
• There are various ways to collect data….
• After data collection has been completed , reports on project progress
should be generated.
• This include project status report, time/cost reports and variance reports.
• Cause and effects should be identified and noted.
 Information Needs and Reporting
• The monitoring system developed must suit the needs of all the
management levels by providing reports about the project’s progress.

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• At the senior level, overview reports are required, that provide
information and view about the aggregate performance of tasks instead
of individual task performance details.
• Such reports are generated at higher frequency.
• At lower levels, the detailed information about individual tasks and the
factors that impacted them is required.
• These reports are issued at a lesser frequency.
• The report structure should reflect WBS, allowing the senior
management to have enough control at the relevant levels.

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• The information flow must be facilitated between the different
managerial levels and organizations
• One critical aspects of information is that it has to be accurate and
timely
• With advent of technology, the collection and dissemination of
information have become faster, due to the availability of project-
specific information systems.
 Report
• The advantage of reports are:-

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• For the purpose of project management, we can consider three distinct
types of reports

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Routine
Exception
Special Analysis
There are three common difficulties in the design of project reports
Too much detail
poor interface between systems
poor corresponding between planning and monitoring
 Meetings
• The reports written are not disseminated by hard-copy, email or internet rather all
three types of reports are delivered in face-to-face meetings or telephone
conference calls.
• Rules to remove pain from meetings

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Use meetings for making group decisions or getting input for important problems
Have preset starting and stopping times as well as a written agenda
Make sure that you do your homework prior to the meeting
If you chair the meeting, take your own minutes
Avoid attributing remarks or viewpoints to individuals in the minutes
Avoid overly formal rules of procedure
If a serious problem or crisis arises, call a meeting for the purpose of dealing with
that issue only.
 Engaging Stakeholders
• Stakeholders are an important part of any project as they are interested in
the project’s outcome.

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• Their engagement is necessary for the successful project delivery
• Stakeholder engagement involves the interaction and influence of project
stakeholders to deliver the desirable outcome.
• To achieve stakeholder engagement, the PM needs to create a stakeholder
engagement plan
• According to PMBOK the stakeholder engagement plan is “a component of
the project management plan that identifies the strategies and actions
required to promote productive involvement of stakeholders in project or
program decision making and execution ”
 Engaging Stakeholders
• To create plan following steps must be followed:
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 Earned Value Management Techniques
• With WBS we can monitor individual tasks but overall project
performance is the crux of the matter and must not be overlooked.

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• One way of measuring overall performance is by using an aggregate
performance measure called Earned Value.
• Earned Value Management (EVM) technique is used for understanding
the overall performance of the project.
• In this method, the planned work and its budgeted costs are compared
with the actual work and cost borne during the entire project.
• To understand performance levels in the project, cost and schedule
variance are used.

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• Cost and schedule variances measure the difference between actual
and planned costs and schedules
• Earned value analysis is performed for the following
• To report the status
• To understand the variance
• To assess the performance levels
All EVM calculations are, as on certain date, termed as Status
Date/Status Reporting Date/Reporting Date.
Some terms related to EVM
1. Budget at Completion (BAC)

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The baseline cost to completion is referred as BAC. It is addition
of all the cost of each activity of the project
2. Estimated cost at Completion (EAC)
It is the actual cost to date to completion is referred as EAC
3. Planned Value (PV)
It is the value of work planned to be completed as on status
reporting date.
4. Earned Value (EV)
EV is the value of work actually completed as on the status reporting
date.
5. Actual Cost (AC)
It is the cost actually incurred for completing the work as on the

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status reporting date.
6. Time Variance (TV)
It is the difference in the time scheduled for the work that has been
performed (ST) and the actual time used to perform it (AT)
TV = ST-AT
7. Estimated cost to complete (ETC)
To forecast the future of the work under the condition when no
measures are taken to correct matters is ETC
ETC = (BAC+EV)/CPI
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8. Cost Variance (CV)
• It is the difference between the amount of money we
budgeted for the work that has been performed to date i.e. EV and
the actual cost of the work i.e. AC

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• CV = EV-AC
• Cost variance is interpreted as
If cost variance is positive, the project is under budget
If cost variance is negative, the project is over budget
If cost variance is zero, the project is on budget
9. Schedule Variance (SV)
It is the difference between the EV and the cost of the work we
schedules to be performed to date i.e. PV

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SV=EV-PV
Schedule Variance can be interpreted as
If schedule variance is positive, project is ahead of schedule
If schedule variance is negative, project is behind schedule
If schedule variance is zero, project is on schedule
It is quite possible for one of the indicator to be favorable while the other
is unfavorable.
We might be ahead of schedule and behind the cost or vice-versa
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• Performance Index
1. Cost Performance Index (CPI)
It is the ratio of the value achieved and the cost incurred to

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achieve the value as on the status reporting date.

2. Schedule Performance Index (SPI)

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 Problem
• There is a project that has three deliveries-----A, B and C. The amount
required to complete the work on each deliverable is shown in fig.
along with timeliness. Here on day 5, the status of the project is that
deliverable A is 20% complete and total amount of Rs.1000 has been

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spent. You need to perform the Earned Value Analysis for the project.

Series1

0 5 10 15 20 25
Days A(3200) B(1600) C(3200)
 Series1

0 5 10 15 20 25

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Days A(3200) B(1600) C(3200)
Solution
Calculate BAC
Calculate PV
Calculate EV
Calculate CV
Calculate SV
Calculate CPI
Calculate SPI
 HW Problem
• A project has to be completed in a year, and the budget of the project
is Rs 1,00,000. After 6 months, Rs 60,000 has been spent on the

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project, but only 40% of the work has been completed so far.
Calculate the cost variance.
 Using Milestones For Measurement
• Important goal of project management is staying on schedule
• Project schedule must be planned in such a way that all the activities

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and tasks are completed in order of dependencies
• Any delay in one activity or task may lead to delay in the subsequent
activities, which will delay the project completion
• One of the tools which can be used to track the schedule of the project
is a milestone chart
• The milestone chart shows the time when a milestone is scheduled to
be achieved.
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• The milestone may represent a group of activities or an activity, which
forms an important part of the project, or is an important event in the
project.

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• Some examples of milestones are project kicked-off, site mobilized,
raw material acquisition completed and design finalized.
• In the milestone chart, each horizontal line shows activity, and the
time of achieving the milestone is usually shown bu placing a triangle
on the line.
• The status of the milestone at a time can be depicted by the color of
the triangle.
• Milestone chart differs from a Gantt chart, as only completion time is
shown using the triangle corresponding to each milestone chart

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• Figure depicted key milestones, deliverables and other checkpoints of
the project on a timeline.
• The triangle shows the scheduled time of completion and the different
colors of the triangle show other features of the milestone.
• The advantages and disadvantages of the milestone chart are as
follows
Advantages of Milestone Chart
• By dividing the project activities into sub-activities, it facilitates greater
control over projects

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• Each of the activities and sub activities can easily be recognized during the
progress of the project
• It provides the schedule of the project in a clear and concise manner
Disadvantages of Milestone Chart
• It fails to depict interdependencies between the milestones
• The chart may become complicated for the project having a large number of
milestones
• It does not reflect uncertainty
 Change Requests And Scope Creep
• During the life cycle of the project, various change requests may be
generated.

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• These requests are basically formal proposals to make amendments in
the project’s deliverable, such as adding or changing a feature of the
deliverable, or some other part of the plan such as cost or schedule
• These change requests may be for reduction in the likelihood of
occurrence of a risk event and mitigation of its harmful effect on the
project
• If the change requests occur without following the formal of change management
processes, it can lead to a scope creep, which may affect the completion of the project.
Definition

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The uncontrolled expansion to product or project scope without adjustments to
time, cost, and resources is referred to as scope creep.

• Scope creep refers to a phenomenon in which the scope of the project changes in an
uncontrollable manner.
• It may happen because the project scope was not well defined or not communicated
clearly in the initial phases
• For example, the project sponsor may request addition of various fancy features to the
initial project scope
• However, the project scope is not always brought by project sponsors
only.
• It can occur due to the new ideas brought about by the project team

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members.
• The tram’s enthusiasm for addition of new ideas can result in the
development of new features, which have not been asked for by the
project sponsors.
• Therefore it is necessary to identify and control scope creep
throughout the project as it can bring delays in project completion,
thereby resulting in cost overruns
 Reasons For Scope Creep
• Change control processes not defined:-
Changes are always going to be a part of the project work. Clarity about

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work itself emerges as the project moves from various phases of
development. As clarity emerges, the stakeholders may demand or
suggest changes to the project requirements. A well defined change
control system is required to be set up to deal with such changes in a
structured a]manner, to avoid scope creep
• Scope not understood well:- At times, the requirements may be clear,
but the scope of work to be done to meet the requirements may not be
clear or may change. This can also lead to scope creep

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• Lack of communication:- Scope could creep due to lack of
communication between project stakeholders, where the requirements
or scope is misinterpreted. Proper communication and discussion
among various stakeholders, including project team can control scope
creep.
 Project Audit
• Project audit is the process of examining the entire project process,
methodologies used, budgets and the completion.

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• It deals with the entire or some part of the project
• It is similar to a financial audit and represents a detailed investigation of
the main subject of the audit
• However it is different from the financial audit
• The financial audit has a limited scope and focuses mainly on the use
and preservation of the organization’s audits.
• On the other hand, the scope of project audit is broad and is used ti
perform the following
• Discover strengths and weakness of the organization in terms of project
management maturity, and decision making techniques and systems, as well as
the project team
• Enable access to project policy decision making by external stakeholders

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• Determine and enhance the risk management processes related to project in
the organization
• Enhance the project contribution towards the professional growth of project
team members
• Discover high potential project personnel, who could lead teams.
• Develop a friendly environment to enable the project team members to work
collectively and creatively.
• Project audits are conducted y a audit department, an external auditor,
steering committee or Project Management Office (PMO).
• While conducting the project audit, the designated authority must

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follow a sequence of steps
1. Planning of the Audit
2. Execution of the Audit
3. Summarization of the Audit
4. Presentation of Results
5. Identification of Action Plan
6. Scheduling of Follow-up
1. Planning of the Audit
• At first, the project auditor must clearly plan and involve everyone
associated with the project.

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• The auditor must communicate the purpose of the audit to the project
team and explain that it will not impact their performance.
2. Execution of the Audit
• The auditor must conduct the audit as planned and collect all the relevant
data and proof.
• The execution of audit includes interviewing manger, sponsor and project
team through face-to-face interaction , group meeting or questionnaires
3. Summarization of the Audit
• Once the auditor has data, the findings, improvements and faults must be
documented in the execution summary, to provide a detailed overview.

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• The summary should also have praises for the good processes and worthy
performers.
4.Presentation of Results
• After the summary is created, the next step is to present the results to both the
team and stakeholders.
• The project auditor reports must be present the identifies opportunities that
have been exploited and all the problems that have been resolved or yet to be
resolved.
5.Identification of action Plan
• In this step, a plan of action must be developed to bring the
improvement in efficiencies.

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• The project auditor should include new assignments and their
corresponding due dates, and submit the plan to the senior
management
6. Scheduling of Follow-up
• After the action plan is implemented, it should be checked regularly to
ensure its progress
• The entire audit process must be reputed at different stages of the
project . Project audits increase the efficiencies in the project, and

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therefore , just be conducted at regular intervals.
 Project Procurement Management
What Is Project Procurement Management?
• Procurement, in terms of project management, is when you need to

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purchase, rent or contract with some external resource to meet your
project goal. These relationships, like any process in the project, need
management.
• Managing these relationships means getting the best quality from the
outside vendors employed by the company to assist in its doing business.
There are constraints in a relationship with vendors that revolve around
cost and time. Procurement management is a way to more efficiently and
productively handle the process of sourcing, requisitioning, ordering,
expediting, inspecting and reconciliation of procurement.
• Once you’re ready to procure goods from a vendor, project procurement
management is broken down into four processes.

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1. Plan Procurement Management

• Procurements are first identified during the planning phase of the project. For every external
contractor, there needs to be a Statement Of Work(SOW) to serve as a document outlining the
work being contracted.
• Prior to the contract, however, is a request for proposal in which multiple contractors get to
bid on the job, and the project manager can determine from their bids who will get the

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contract.
• These requests are well-thought out as they work as guiding documents through the project.
The more specific they are, the better. This avoids confusion later and helps develop more
accurate plans.
• This process is collected in the procurement management plan, which includes requirement
documents , risk register, activity resource requirements, project schedule, activity cost
estimates and more.
• To guide these decisions there are tools and techniques, such as make-or-buy analysis, which
helps to determine if the activity needs an external supplier or can be done in-house. Seeking
help from experts, doing market research and meeting with stakeholders also helps guide this
decision.
2. Conduct Procurements
• After finishing the paperwork of the first phase, the conduct procurement phase is when
you study the bids that come back and determine which one to accept. Before deciding,
however, there should be a criterion in place to decide which bid is best for the project and
fits your logistics management. The agreements are then signed, and the project
management plan is updated.
• Decide the winner by conferencing with the bidders, having techniques for evaluating the
proposals and having independent estimates to make sure the bids are within the range of

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normal. It doesn’t hurt to seek the advice of experts in the areas your contracting to get
their perspective.
• There are also analytical techniques you can apply. Advertising is a good way to make
sure you’re casting the widest net possible, so you can decide based on all potential
bidders. Then there are procurement negotiations that will be needed to tweak the final
contracts to meet your needs and the contractor’s.
3. Control Procurements
• Once the contracts are signed, the management of those contractors must be folded into
the overall management responsibilities. Contractors can have negative impact on budgets
and schedules, which can lead to a project going off-track or worse.
• Therefore, regular status updates are necessary to review contractor agreements, get
progress updates and review work performance to make sure that the contractors are
meeting the requirements outlined in their contracts. Though you hire contractors because
they’re experts in what they do, you still need to monitor and track their work to make

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sure it’s proceeding as planned.
• It’s best to contract a change control system and have regular procurement performance
reviews, including inspections and audits to make sure the work is going right.
Performance reporting helps keep managers informed, too. A payment system needs to be
in place as well as a claims administration and a records management system.
4. Close Procurements
• Just as there is a process to start the procurement, there needs one in place to finalize it.
What constitutes completed work should be detailed in the initial agreement with the
contractor, so there is no confusion of either’s part as to when the work is done.
• Insurance and bonding also will usually require a formal release of liability. This makes
sure that there are no outstanding changes related to the value and completion date of the
contract.

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• Procurement audits help with this process, as well as having structured procurement
negotiations. A records management system will also be needed to manage all the
paperwork that will be involved with this stage of the procurement process.
 Project Contracting
• A contract is an agreement between an external party and an
organization about the exchange of products and services

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• It is formed during the project procurement management to acquire
products and services required for the completion of the project.
• In the project, there can be three types of contracts: Fixed price
contract, Cost plus contract and Time & Material(T&M) contracts.
• Each of these contracts can be used depending upon the stability of
requirements and scope.
• The risk of uncertainty is borne by either the supplier or the buyer in
the different types of contract.
 Fixed Price Contract
• Also known as lump sum contract, fixed price contract include a pre-
defined price for the product/service to be used in the project.

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• In this type of contract, the cost risk is borne by the seller instead of the
buyer.
Following are the three main types of fixed price contract
Firm Fixed Price(FFP)
• In this contract, the buyer has to pay the agreed amount, irrespective of
the cost incurred by the contractor for completing the work.
• The contract is mainly used for the projects which have well-defined
scope.
• If the seller has to do any extra work, he/she will be paid only if the scope of
work has been formally changed, and the changes have been accepted by the
buyer.
Fixed Price Incentive Fee(FPIF)
• In this contract, the burden of risk is borne by the sellers.
• On the achievement of the agreed metrics, financial incentives may be given to

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sellers.
• These incentives are associated with the cost, schedule or technical performance
of the seller.
• At the beginning of the project, performance targets are set, and the final
contract price is established after the project is completed.
• The final contract price is based on the performance of the sellers.
• If the cost is reduced below the original estimation, both the seller and the buyer
split the cost saving on agreed share ratio.
• However, if the cost is greater than the price ceiling, the seller receives no profit.
Fixed Price with Economic Price Adjustments(FP-EPA)
• In this type of contract, the price increases if the contract is developed and
maintained for several years
• In FP-EPA, pre-defined final adjustments can be made to the project contract
price owing to change in conditions like increase or decrease in cost and the
latest developments in the economic environment.

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• The aim of FP-EPA is to provide protection to buyer and seller from
uncontrollable conditions
Cost-Plus Contract
• In this type of contract, reimbursement are made to contractors for machinery,
labor and other services provided b them for the project completion
• These reimbursements are made in addition to the agreed fee payments to be
made to the contract/services providers.
• These payments can be made on a monthly or quarterly basis.
Following are the three type of cost-plus contracts
1. Cost Plus Fixed Fee(CPFF) or Cost Plus Percentage of Costs (CPPC)
• In this contract, the buyer pays the seller for the costs involved in the
completion of project work and an additional specific amount.
• In case the fixed amount is estimated as a percentage of the initial estimated

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project costs, it is called CPPC type of contract.
• The change in the fee amount takes place only when there is a change in the
project scope
2. Costs Plus Incentive Fee(CPIF)
• In this contract, costs of the project are reimbursed and a pre-defined fee, e.g.
bonus, is paid if the seller is able to meet the performance goals or any
performance target specified in the contract
3. Costs Plus Award Fee (CPAF)
• In this type of contract, the buyer pays the fee depending on the evaluation of
the seller’s performance by the buyers.
T& M Contract
• In this type of contract, the contractor is paid for the duration for which their

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services have been utilized and their material has been used.
• Such contracts are used majorly for software development where the scope is
not clear.
• They are also used for hiring equipment, such as earthmoving machinery, crane
etc.
• In such contracts, the cost of uncertainty is borne by the buyer, as they have to
pay even if the resource are idling or unutlized.
 Project Outsourcing
• In the present days, various companies outsource the project
management to the external firms

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• Through outsourcing, the company attempts to use the expertize of the
external firm and save money.
• Some examples of project outsourcing may be as follows:-
• Outsourcing of project management functions by a client to an
external vendor or service provider:- For example, a cement
manufacturing company may outsource the entire project to a cement
machinery manufacturer.
• The government may outsource the construction of roads to a road
construction company.
• Such projects are often termed as Turnkey Projects

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• Outsourcing of project management functions by a service provider to
another vendor or service provider:- For example, a software company
may outsource the hardware part of the project to a third party.
• Outsourcing of project management functions that are regarded as
separate within an organization:- For example , the it department of an
organization may implement an IT software solution for the operations
department
Through project outsourcing, the organization can obtain the following
benefits
• Increase focus on core competencies
• Fast time to market
• Provision of modern trends in specific section

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• Preparation of similar future projects
Project outsourcing also has some limitations. These are as follows:
• Extra focus needs to be laid on the maintenance of relationship with
vendors to achieve the outsourcing benefits
• Vendors can terminate the relationship due to the absence of ownership
of resource with the client
• Data security can be comprised based on the nature of the project
• Costs can increase if the relationship does not become a success.