Part 3

Project

Control and Evaluation

17-Jun-19 1

*Project Control

• Every step taken up to now has been for one

purpose: to achieve control of the project, this is

what is expected from a project manager, to

control (manage) the project.

• Project Control is to compare project progress

status against project plan, when deviations

(variances) occur, corrective action must be taken

to bring progress back on target.

• If a control system does not use deviation data

to initiate corrective action, it is not really a

control system but simply a monitoring system.

17-Jun-19 2

• The response to deviations (variances)

must be timely, if corrective action occurs

too late, it will be ineffective.

• Also information (data) about project

progress status should be accurate, if data is

not accurate, corrective action might be

wrong.

• Every member of the project team should

encouraged to provide accurate feedback

data, as will as practicing self-control.

17-Jun-19 3

*Project Evaluation

• Project evaluation is to analyze progress

deviations, to determine their cause and

effect.

• That evaluation provides the basis for

management decisions on how to proceed

with the project.

• The primary tool for project evaluation is the

project process review, which is usually

conducted periodically at major time intervals

(milestones) throughout the life of the project.

17-Jun-19 4

• Reasons for conducting periodic project

process reviews is to discover progress

problems early, so that action can be taken.

• periodic project process reviews provide

periodic feedback to the project team about

their performance.

• Without feedback you cannot learn,

whether you are doing is right or wrong.

17-Jun-19 5

• A formal process review should be conducting by

external reviewer and followed by a report, that

should contain:

– Current and Future project Status, using “Earned Value

Analysis”, as presented in the following section.

– Status of critical tasks

– Limitations of the process review, any factors that affect

the validity of review such as : missing or contaminated

data, uncooperative in providing data, ..etc.

• Report information should be organized so that

planned versus actual results can be easily

compared, and significant deviations should be

highlighted and explained.

17-Jun-19 6

Project Control Using

Earned Value Analysis

17-Jun-19 7

• One of the hardest things to do in managing

projects is to actually measure progress.

• Well-defined work, such as construction

projects, can be accurately measured,

and controlled to tight tolerances (± ).

• Poorly-defined work, such as knowledge

work, has to allow larger tolerances.

• Managers must recognize and accept the

fact that: we cannot have control unless

we measure progress.

17-Jun-19 8

Earned value analysis

• Earned value analysis, was developed in the 1960s to

allow the government to decide whether a

contractor should receive a progress payment for

work done.

• The method is also called simply variance analysis

and it is considered the correct way to monitor and

control almost any project.

• Two variances (deviations) are considered:

– Cost variance: Compares earned and actual cost of work.

– Schedule variance: Compares earned and scheduled

(planned) cost of work.

17-Jun-19 9

Definitions

• BCWS: (Budgeted Cost of Work Scheduled): The cost of work scheduled to be done in a given time period.

• BCWP: (Budgeted Cost of Work Performed): The cost of work performed in a given time period.

Note: BCWP is usually called (Earned Value), and given by:

(BCWP = BCWS x percentage% of work performed)

• ACWP: (Actual Cost of Work Performed): The actual cost spent for work done in a given time period.

Note:

percentage% of work performed, and actual spending values are reported from the field of work.

17-Jun-19 10

Considered variances

Cost Variance (Earned – Actual)

CV = BCWP − ACWP

deviation of earned cost from actual cost

Schedule Variance (Earned – scheduled)

SV = BCWP − BCWS

deviation of earned cost from scheduled cost

17-Jun-19 11

Spending Curves

• Variances are often plotted using spending curves, a

curve of scheduled cost (BCWS curve) that shows

the cumulative spending planned for a project, is

presented below:

12

BCWS Curve

• The pervious BCWS Curve of Planned (Scheduled)

cost was drawn using the cumulative $/Wk data from

the following Bar Chart :

13

Progress Tracking Using Spending Curves

• Consider the following curve:

14

Project behind schedule & overspent

cv = - 20 k$

sv = -10 k$

ACWP

BCWP

• Until the date of review (analysis), the previous

figure indicates that:

o The Scheduled cost of work (BCWS) is $50,000 (50K).

o The Performed (earned) cost of work (BCWP) is $40,000

o The Actual cost of work performed (ACWP) is $60,000

o CV = BCWP − ACWP = 40 – 60 = -20 K

o SV = BCWP − BCWS = 40 – 50 = -10K

• Cost Variance (CV) and Schedule Variance (SV) are

both negative indicating that the project would be

behind schedule and overspent.

17-Jun-19 15

• The following spending curves indicating different

status:

17-Jun-19 16

Project ahead schedule & spending correctly

cv = 0 k$

sv = 10 k$

17-Jun-19 17

Project behind schedule & spending correctly

cv = 0 k$

sv = -10 k$

17-Jun-19 18

Project ahead schedule & underspent

cv = 20 k$

sv = 10 k$

Responding to Variances

• It is not enough to simply detect a variance, you

should understand what it means and what

caused it, then you have to decide what to do to

correct for the deviation.

• Following are some general guidelines:

– When both ACWP and BCWP are equal, and

above BCWS, it means that more work done

than expected, at the correct cost, thus you are

ahead schedule and spending correctly.

19

– When both ACWP and BCWP are equal, and below

BCWS, it means that less work done than

expected, at the correct cost, thus you are behind

schedule and spending correctly, (being behind

might get the project to overspent later on).

– When BCWP above BCWS, and ACWP below

BCWS, it means that more work and less cost,

(being lucky because the schedule expected that

the work would be harder and expensive than it

was)

20

Using Percentage Complete to Measure Progress

• The most common way to measure progress is to

compare the project total Budget At Completion

(BAC), to BCWS, BCWP, and ACWP at review time,

this gives the following results of percentage of

completion at review time :

% BCWS = (BCWS / BAC) x 100

% BCWP = (BCWP / BAC) x 100

% ACWP = (ACWP / BAC) x 100

17-Jun-19 21

17-Jun-19 22

Example 1:

Given the following scheduled and field data, calculate

the followings at day7:

CV, and SV

Percentage Complete of BCWS, BCWP, and ACWP

State the status of the project progress

23

Task ID Pre. Du. (day) Cost/Day

A - 2 300

B A 3 400

C B 3 400

D B 2 200

E D 3 100

Field report at end of day 7

Task ID % Performed Actual Cost

A 100 % 600

B 100 % 1400

C 33 % 500

D 50 % 200

E 0 % 0

Scheduled

Data

Field

Data

24

Report Date

Bar Chart

Solution:

Draw the Bar Chart to indicate the given scheduled data

Use the field data to mark the percentage% of work performed for each task

For the period from start to end of day7:

Use the Bar Chart to calculate: BCWS: total cost for work scheduled in the given time interval

BCWP : total cost for work performed in the given time interval

Then calculate SV: (SV = BCWP - BCWS)

From the field data calculate: ACWP : total cost for work actually spent in the given time interval

Then calculate CV: (CV = BCWP - ACWP )

From the scheduled data calculate: BAC: total cost for work scheduled in the whole time of the project

Then calculate %completion of ACWP, BCWP, and BCWS

%ACWP = (ACWP / BAC) x 100

%BCWP = (BCWP / BAC) x 100

% BCWS = (BCWS / BAC) x 100

as calculated in the next slide:

Task ID BCWS BCWP ACWP SV CV

BAC

%

BCWS

%

BCWP

%

ACWP

A 600 600 600

B 1200 1200 1400

C 800 400 500

D 400 200 200

E 0 0 0

Total 3000 2400 2700 -600 -300 3700 81% 64% 72%

Calculated Results

• From the previous table, the status of the project progress

at day 7 is :

– Behind schedule : the cost of performed work is less than the

cost of scheduled work by 600 $

– Over spent : the spending cost is more than the cost of

performed work by 300 $

• From the scheduled data, the budget at completion (BAC) is

3700 $, and the percentage of completion at day 7 are:

- %BCWS = (3000 / 3700) x 100 = 81%

- %BCWP = (2400 / 3700) x 100 = 64%

- %ACWP = (2700 / 3700) x 100 = 72%

-17-Jun-19 27

Task

ID

Immediate

Predecessors

Duration

(week)

Cost ($/week)

A - 1 100

B - 2 400

C A, B 2 500

D C 3 300

E C 1 300

F D 2 200

17-Jun-19 28

### Example 2: Given the following scheduled data, and field data at end of

week 6:

Calculate the followings at end of week 6:

- Cost Variance CV, and Schedule Variance SV

- Percentage complete of BCWS, BCWP, and ACWP

- State the Status of the project progress

Task ID % Performed Actual Cost

A 100 % 100

B 100 % 1000

C 50 % 400

D 33 % 200

E 0 % 0

F 0 % 0

Scheduled Data Field Data

17-Jun-19 29

Bar Chart Report Date

Task

ID

BCWS BCWP ACWP SV CV

BAC

%

BCWS

%

BCWP

%

ACWP

A 100 100 100

B 800 800 1000

C 1000 500 400

D 600 300 200

E 300 0 0

F 0 0 0

Total 2800 1700 1700 -1100 0 3500 80% 48% 48%

17-Jun-19 30

Project progress status : Behind schedule & correct Spending

Assignment• Given the following scheduled data, and field data at end of week 5:

Calculate the followings at end of week 5:

– Cost variance CV, and schedule variance SV

– Percentage complete of BCWS, BCWP, and ACWP

– State the status of the project progress

17-Jun-19 31

Scheduled Data Field Data

Good Luck

17-Jun-19 32