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SPM-UNIT IIIRISK MANAGEMENT
MONITORING & CONTROL
Prof. Kanchana Devi
Prof. Kanchana Devi
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Introduction After scheduling , project will start and
then attention must be focused on progress.
Progress needs monitoring What is happening Comparison of actual achievement against the
schedule Revision of plans and schedules (wherever
necessary)
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Creating Framework Exercising control over a project and
ensuring that targets are met is a matter of regular monitoring.
Finding out what is happening and comparing it with targets
Re-planning also sometimes required
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Project control cycle
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Responsibility The overall responsibility
Ensuring satisfactory progress on a project It is the role of “Steering Committee”,
project management board or Project Board.
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Project Reporting Structure
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Reporting
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Reporting may be Oral/Written Formal/Informal Regular/Ad-hoc
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Assessing Progress Information should be collected routinely Information should be objective and
tangible Whether or not a particular report has been
delivered Sometimes the assessment depends on
estimates of proportion of current activity that has been completed
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Setting Checkpoints Necessary to set a series of check points
in the initial activity plan. Checkpoints may be:
Regular(Monthly) Tied to specific events (production of report)
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Collecting the Data Rule: Manager will breakdown the long
activities into more controllable tasks of one or two weeks.
It is necessary to gather information about partially completed activities, forecasts of how much work is left to be completed.
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Example of partial completion reporting
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Risk Reporting One way to overcome the objections of
partial completion report is to avoid asking for completion dates. (instead ask for likelihood of meeting the target)
Called “Traffic Light Method”.
Prof. Kanchana Devi
Consists of following steps13
Identify the key elements for assessment in a piece of work
Break these key elements into constituent element Assess each of the second level element on the
scale Green for target, Amber for ‘not on target but recoverable’Red for ‘not on target and recoverable
only with difficulty’ Review second level assessment to arrive at first
level Review first level assessment to produce an
overall assessment
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Example
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Visualizing Progress Gantt Chart Slip Chart Ball Chart Timeline Chart
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Cost Monitoring
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Expenditure monitoring is an important component of project control
A project might be on time but only because more money has been spent on activities than originally budgeted
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Tracking cumulative expenditure
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Cumulative Expenditure Chart
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Earned Value Analysis is based on assigning a ‘value’ to
each task or work package based on expenditure forecasts.
The assigned value is the original budgeted cost for the item and is known as the ‘baseline budget’ or ‘budgeted cost of work scheduled’(BCWS)
The total value credited to a project at any point is known as the ‘earned value’ or ‘budgeted cost of the work performed’(BCWP)
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Actual Cost By recording the “Earned Value”, the
actual cost of each task can be collected as “Actual Cost” or ACWP-Actual Cost of Work Performed.
There are three types of Variance: Schedule Variance(SV) Time Variance(TV) Cost Variance(CV)
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Schedule Variance(SV) The Schedule Variance is measured
in cost terms as EV-PV It indicates the degree to which the
value of the completed work differs from the planned work.
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Example: A work with a PV of $40,000 should have
been completed by now. In fact, some of that work has not been done so that the EV is only $35,000. Calculate SV. SV=EV-PV 35000-40000= - 5000 A negative SV means the project is behind
schedule
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Time Variance (TV) Difference between the time when the
achievement of the current earned value was planned to occur and the time now.
Eg: The current EV should have been achieved
in the early part of month 9 and as the time now is end of month 11, the TV is about -1.75 months from graph.
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Cost Variance (CV) This is calculated as EV-AC. It indicates the difference between the
earned value or budgeted cost and the actual cost of the completed work.
Let Actual Cost for previous example is $ 55,000
CV=35000-55000 = -20000 A negative CV means that the project is over
cost
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Prioritizing Monitoring List of priorities
Critical Path Activities Activities with no free float Activities with less than a specified float High Risk Activities Activities using critical resources