SUPREME MANAGEMENT CONSULTANTS

CHARLES COTTER

11-12 OCTOBER 2013

RANDBURG TOWERS

PROJECT PERFORMANCE TRACKING, ANALYSIS AND

REPORTING

TRAINING PROGRAMME OVERVIEW

The Project Performance Framework Key Performance Indicators and Monitoring of Outcomes:

Guide to Identification and Selection Developing and Analyzing Project Performance Objectives:

Outputs and Outcomes Project Performance Benchmarking Measuring and Monitoring Project Performance Reporting & Documenting Project Performance Research Methods in Project Performance Management Establishing Baselines and Gathering Data Project Information Management Systems in Project

Performance Management

THE FUNDAMENTAL CONCEPTS

Defining Project/Project Management

Defining Performance Management

The Project Management Triple Constraint

The Project Management Life-cycle

The Performance Management process/cycle

DEFINING PROJECT/PROJECT MANAGEMENT

According to Gray & Larson (2008) a project is defined as a complex, non-routine, one-time effort limited by time, budget, resources and performance specifications designed to meet specific needs.

PMBOK (2000) define project management as the application of knowledge, skills, tools and techniques to project activities to meet project requirements.

DEFINING PERFORMANCE MANAGEMENT

Performance management can be seen as a comprehensive management system aimed at constantly improving and monitoring the performance of others.

It therefore concerns itself with improving productivity, delivering a better quality service/product and is aimed at achieving the goals of both the institution and the employee.

PROJECT MANAGEMENT TRIPLE CONSTRAINT

PROJECT MANAGEMENT LIFE- CYCLE

THE PERFORMANCE MANAGEMENT CYCLE

MODEL OF VALUE

MEASURES TO DETERMINE THE VALUE OF A PROJECT – BALANCED SCORECARD

PERSPECTIVE

PHASES OF PROJECT PERFORMANCE MONITORING AND TRACKING

• Preventative - Prior to Initiation

Project Selection Risk Management

• Concurrent – Project Implementation

Project Monitoring Information System Project Control Process Earned Value Management Control Charts

• Reactive – Post Project Evaluation

Post project metrics

PROJECT SELECTION TOOLS – NUMERIC MODELS

Financial Models:

Payback period

Return on Investment (ROI)

Net Present Value (NPV)

Internal Rate of Return (IRR)

PROJECT SELECTION TOOLS – NUMERIC MODELS

Scoring Models:

Factor model

Decision Matrix

Cost Breakeven Analysis

RISK MANAGEMENT PROCESS

Risk Identification

Risk Analysis

Risk Control

Risk Evaluation

LEARNING ACTIVITY

Syndicate Group Discussion

Complete the activity

Provide feedback

PROJECT MONITORING INFORMATION SYSTEM

Creating a Data Collection structure and process

Analysis of the data

Reporting current process

DATA COLLECTION

Data collection determined by which metrics will be used for project control

What data to collect?

How will data be collected?

Who will collect the data?

When will data be collected?

DATA ANALYSIS

Methods – electronic and/or manual

Process

Collation

Analysis

Interpretation

Verification

DATA REPORTING

Form – written or oral

Format:

Progress since last reportCurrent status of project – schedule, cost and scopeCumulative trendsProblems and issues – new variances and

resolutionsCorrective action planned

PROJECT CONTROL PROCESS

LEARNING ACTIVITY

Syndicate Group Discussion

Complete the activity

Provide feedback

DEFINING EARNED VALUE MANAGEMENT (EVM)

Earned Value Management (EVM) is a project management technique for measuring project performance and progress.

It integrates scope, cost and schedule measures to assess the performance of a project.

Based on the three measures a baseline cost and schedule is developed and actual performance is measured with regards to the baseline values. 

EARNED VALUE MANAGEMENT

Mastering the terminology:

Planned Value (PV)Earned Value (EV)Actual Cost (AC)Schedule Variance (SV)Cost Variance (CV)Schedule Performance Index (SPI)Cost Performance Index (CPI)Critical Ratio (CR)

EARNED VALUE MANAGEMENT - CONCEPTS

Budget at Completion (BAC): The original cost estimate, budget or quotation.

Planned Value (PV): This is the authorized budget allocated to the work to be accomplished for an activity. It is also known as budgeted cost of work scheduled (BCWS)

Earned Value (EV): This is the value of work performed expressed in terms of the approved budget assigned to work for an activity. It is also known as budgeted cost of work performed (BCWP). BCWP = % complete X BAC

Actual Cost (AC): This is the actual cost incurred in accomplishing the work performed for an activity. It is also known as Actual Cost of Work Performed (ACWP).

WORKED EXAMPLE

EARNED VALUE MANAGEMENT - CONCEPTS

Schedule Variance (SV): Schedule variance is calculated as SV = EV –PV

Cost Variance (CV): Cost variance is calculated as CV = EV-AC

Schedule Performance Index (SPI): This represents efficiency of the time utilized on the project. It is calculated as measure of progress achieved compared to progress planned for a project.  SPI = EV/PV

Cost Performance Index (CPI): This represents the efficiency of the resource (cost) utilized on the project. It is calculated as measure of value of work completed compared to the actual cost or progress made on the project. CPI = EV/AC

Estimate at completion (EAC) is the expected total cost of a task or project, based on performance as of the status date. EAC is also called forecast at completion, and is calculated like this: EAC = ACWP + (BAC - BCWP) / CPI.

Critical Ratio (CR): This indicator combines both the cost performance index (CPI) and schedule performance index (SPI) to represent the project status. This indicator takes care of cost and schedule trade-offs.

THE SIGNIFICANCE OF THE CRITICAL RATIO

Indicates whether project performance is stable or not over project duration.

Predicts future performance from a stable project performance.

Indicates whether project has experienced special cause variation during the project duration.

Indicates any special trend or pattern observed in project performance.

TUTORIAL VIDEO CLIPS

http://www.youtube.com/watch?v=7WsfuvHegxE

http://www.youtube.com/watch?v=UggTFk2EiUg

http://www.youtube.com/watch?v=jJi1FxC2e64

http://www.youtube.com/watch?v=-MJEYc48Cjs

WORKED EXAMPLE

WORKED EXAMPLE

LEARNING ACTIVITY

Syndicate Group Discussion

Complete the activity

Provide feedback

LIMITATIONS OF EVM

EVM indexes are point estimates; they represent the performance of the project at a particular reporting instance. They do not provide information about project performance over a period of a time.

They do not capture the trend of project performance.

CONTROL CHARTS

Control Charts are a quality tool which displays process data over time against the process control limits. Control limits define the area three standard deviations (by default) on either side of the centerline, or mean, of data plotted on a control chart where expected variation is observed.

A control chart is used to determine whether a given process is stable (contains only common cause variation) or it is subjected to special cause variation.

BASIC COMPONENTS OF A CONTROL CHART

Centerline representing the mean value of the data points

Horizontal border lines, Upper Control Limit (UCL) and Lower Control Limit (LCL) that define the limits of common cause variations

Data points plotted over time

TYPES OF VARIATION

Common Cause Variation (or Controlled Variation): These variations are present in the process due to its inherent nature. These are predictable and expected variations.

Special Cause Variation (or Uncontrolled Variation): These variations are introduced in the process by non–random events /factors external to process. If special cause variation is present in the process then process is said to be in unstable state.

LEARNING ACTIVITY

Syndicate Group Discussion

Complete the activity

Provide feedback

POST-PROJECT EVALUATION

Perform a Post Implementation Review of the project

Close-out report

Assessment of the project against actual performance, quality of management (focusing on quality and risk management)

The lessons learnt that can be applied to future projects

CONCLUSION

Summary

Questions

Contact details:

Charles Cotter +27 84 562 9446 charlescot@polka.co.za Linked In Twitter: @Charles_Cotter