PROJECT MONITORING

EARNED VALUE
MANAGEMENT(EVM)
Earned Value Management (EVM)

- well-known technique used in Project Management

to control the cost and time performance of a
project

- used to predict the final project cost and duration

 HISTORY
The US federal government introduced
Earned Value management (EVM) in 1967 as
a part of the cost/schedule control systems
criteria (C/SCSC) to understand the financial
aspects of programs and to be used in
acquisition programs of large degree in an
attempt to generate a consistent method
based on best practices.
Earned Value management is a systematic
process that is used to measure the
performance of a project at different times
throughout the life cycle of a project.
EVM is useful to help project managers of
people in general that are responsible for
a project to determine whether a project is
on schedule, or if the project is over or
under budget.
Earned Value management can also be used
to compare the actual work that has been
performed to the work that was estimated
and planned for the project at a certain
time during the project. EVM can also be
used to forecast projected performance.
EVM is a technique that can be applied, to at
least some degree, to the management of
projects in any industry and using any
contracting approach.
Earned Value management measures
project progress and performance by the
integrated management of three
fundamental elements of project
management, cost, schedule and scope
which make up the Project Management
Triangle
 Project Management Triangle

Project management triangle source: http://www.ambysoft.com/essays/brokenTriangle.html

To sum up the objectives of Earned Value
Management

- To relate time phased budgets to exact contract

task or/and statement of work.

- To provide the necessary basis to capture the

work progress assessment against the pre-
planed baseline plan

- To relate schedule technical and cost

performance
- To provide the necessary timely, valid and
auditable information so it can be used for
the proactive project management analysis
and the corresponding action

- To provide the managers with a practical

level of summarization to enable effective
decision making
Basic Terminology
Budget at Completion (BAC) The final planned at completion of
the project.
Planned Value (PV) The Approved budget for the work
scheduled to be completed by a specified date. Also known as
budgeted cost of work scheduled (BCWS)
Earned Value (EV) The approved budget for the work actually
completed by the specified date, also referred to as the
budgeted cost of work performed (BCWP)
Actual Cost (AC) The cost actually incurred for the work
completed by the specified date, also referred to as the actual
cost of work performed (ACWP)
Establishing a budget-loaded schedule

The purpose of budget loading the schedule is to

establish cost target for individual elements of the
work. The performance measurement baseline
(PMB) is established by allocating budget to the
plan at activity level. Usually this is in terms of
money and man-days/hours
Establishing a budget-loaded schedule
It is important to allocate budget at an appropriate level of
detail to facilitate accurate calculations for planned and
earned values: this would normally mean activities of
duration between 4 to 6 weeks, though there will be
exceptions in both directions. Care should be taken with
activities of longer duration than 6 weeks, and if these are
used, they should be easy to assess with an appropriate,
objective measure.
Establishing a budget-loaded schedule

On the other hand, the greater the granularity achieved in

the schedule the more subjective the assessment can be,
without compromising the essential integrity of the EVA
system. (Greater granularity implies that smaller “pieces of
work” are measured, and the subjective nature of the
assessment is thus reduced to an acceptable level of detail)
Calculating earned value
Software packages such as Microsoft Project can perform earned
value calculations automatically, and they’re simple calculations that
can quickly be performed manually as needed. Earned value
calculations require the following:
• Planned Value (PV) = the budgeted amount through the current
reporting period
• Actual Cost (AC) = actual costs to date
• Earned Value (EV) = total project budget multiplied by the % of
project completion
Calculating earned value
Software packages such as Microsoft Project can perform earned
value calculations automatically, and they’re simple calculations that
can quickly be performed manually as needed. Earned value
calculations require the following:
• Planned Value (PV) = the budgeted amount through the current
reporting period
• Actual Cost (AC) = actual costs to date
• Earned Value (EV) = total project budget multiplied by the % of
project completion
PROJECT MONITORING

MONITORING AND INFO

SYSTEM
What Is Project Monitoring and Control?
• Project monitoring and control helps you measure project
performance. Use the process to look at the project plan,
review project status, identify potential problems, and
implement changes when necessary. This phase coincides with
the execution phase of the project lifecycle.
• You can use this phase to keep a project on schedule and within
budget while also managing risk and avoiding scope creep. At
the end of the monitoring and control phase, the customer
accepts the completed project deliverables.

https://www.smartsheet.com/content/project-monitoring-control
What Is the Main Purpose of the Project Monitoring
and Control Phase in Project Management?

The primary purpose of monitoring and

control in project management is to
identify problems before they occur and
make adjustments. These changes may
require reevaluating and updating the
project plan.

https://www.smartsheet.com/content/project-monitoring-control
Importance of Project Monitoring and Control
• Project monitoring and control are essential to completing a
project on time, on budget, and within scope. Monitoring and
control processes identify deviations from the project plan.
Project monitoring and control ensure that performance is
seamless, efficient, and on track.
• Alan Zucker describes the importance of project monitoring and
control for delivering a successful project: "Project managers
know that no project proceeds perfectly according to plan. We
must be diligent in tracking performance to see if it meets our
expectations for success. If not, we must determine what is
needed to keep the project on track."

https://www.smartsheet.com/content/project-monitoring-control
Project Monitoring and Control Process
• The monitoring and control process tracks performance metrics to keep a
project on schedule, on budget, and within scope. The process helps project
teams discover problems before they occur.
• Monitor Key Performance Indicators (KPIs): Monitoring KPIs keeps project
deliverables on track and performance up to date. Project managers use
data on timelines, budgets, and quality to enable better decisions, make
changes to avoid problems, and capitalize on opportunities.
• Monitor Change Requests: Measuring project performance data helps
reveal whether the project is on track or if changes are necessary. If the
project is off course, then a change request will be submitted and
implemented to make a course correction.

https://www.smartsheet.com/content/project-monitoring-control
Project Monitoring and Control Process
• Monitor Project Scope: This step helps ensure that any changes to the
project scope are verified and documented. You’ll need to update any
relevant documents, such as a project scope statement and work
breakdown structure. You’ll also want to determine any timeline and cost
adjustments that are relative to a scope increase that can cause a shift in
strategy.
• Identify Risks: Ideally, risk identification should occur throughout a project;
when risks arise, you have the relevant information available to make the
right decision.
• Communicate with Team Members, Stakeholders, and Clients: Maintaining
regular communication keeps projects on track and helps avoid
misunderstandings that cost time and money. It’s vital that stakeholders and
team members receive all relevant information in a timely manner.

https://www.smartsheet.com/content/project-monitoring-control
How to Create a Project Monitoring and Control Plan
• A project monitoring and control plan integrates factors such
as success, scope, schedule, resources, risk, and costs. The
plan is developed during the project lifecycle’s planning
phase.
1.Outline the project.
Establish scope, schedule, and budget baselines for
benchmarking according to the project plan. The plan
defines project goals, resources, and milestones.

https://www.smartsheet.com/content/project-monitoring-control
 How to Create a Project Monitoring and Control Plan
2. Break down the project into subtasks or units of work.
A work breakdown structure is a useful tool that project managers
can use to create subtasks and manage work. This visualization
helps project managers track and simplify performance and
deliverables.
3. Execute the project plan, and report and analyze to identify
variances.
Determine if variances are acceptable and continue to monitor
them. Find the cause of unacceptable variances and make
adjustments.

https://www.smartsheet.com/content/project-monitoring-control
 How to Implement Project Monitoring Control

Project managers use three to five key performance indicators

to report monitoring data and define objectives to keep the
project on track. KPIs must be specific, measurable, attainable,
relevant, and timely.
• Monitor Project Parameters: The project plan will include the
scope of the project and measurements for success. Project
managers use KPIs to track schedule, effort, and cost and to
ensure they align with the project plan.

https://www.smartsheet.com/content/project-monitoring-control
 How to Implement Project Monitoring Control

• Monitor Stakeholder Involvement: By positioning and

communicating with the project team, management, and
clients, you keep everyone engaged and on task.
• Monitor Risk: When you complete risk
assessments throughout the life of the project, you avoid issues
and enable mitigating negative impacts on the project timeline
and budget.

https://www.smartsheet.com/content/project-monitoring-control
 How to Implement Project Monitoring Control

• Monitor Project Performance: Project managers use KPI

dashboards to identify problems and measure work progress.
• Take Corrective Action to Control Progress: Project managers
use the project plan as a baseline to control progress and track
changes until resolution or the project enters the closure
phase.
• Monitor and Manage Data Documentation: Documenting
performance and changes in the project keeps stakeholders
involved, mitigates issues, and informs future projects.

https://www.smartsheet.com/content/project-monitoring-control
 Project Monitoring and Control Best Practices

• Project monitoring and control best practices require constant

attention to detail. These best practices can empower project
managers and teams to balance time, cost, and budget.
• Define Project Management Team Roles: Make sure that team
members know the expectations and the timelines to meet.
• Identify a Point of Contact: When problems arise, there should
be a dedicated person who is responsible for tracking,
documenting, and monitoring any issues.

https://www.smartsheet.com/content/project-monitoring-control
Project Monitoring and Control Best Practices
• Determine the Frequency of KPI Reporting: When developing the project
plan, decide how often you’ll conduct KPI reporting and stick to that
schedule. This data is essential for monitoring and control performance.
• Define Variance Thresholds for Schedule, Budget, and Cost: Decide what
percentage of change is acceptable and the variance threshold figure that
requires change.
• For schedule variance (SV), subtract planned value (PV) from earned
value (EV).
• For budget variance (BV), subtract the money spent from the planned
budget for each line item and divide it by the original budget to
calculate the percentage.
• For cost variance (CV), subtract actual cost (AC) from earned value
(EV).
https://www.smartsheet.com/content/project-monitoring-control
Project Monitoring and Control Best Practices

• Determine if Variance Cause Is Common or Unique: Work

continues without change under expected and acceptable
variance. If the variance is caused by the unexpected, identify
and implement the proper change.
• Scrutinize Change Orders: Review documented change
requests with the project team to approve or reject them.

https://www.smartsheet.com/content/project-monitoring-control
Project Monitoring and Control Best Practices

• Monitor and Control Scope Creep: Mitigate scope creep to

maintain project parameters and recognize that project change
may impact outcomes.
• Conduct a Rigorous Approval Process at Completion: Make
sure to document and file all approvals appropriately.

https://www.smartsheet.com/content/project-monitoring-control
Project Monitoring and Control Techniques
• Project managers depend on monitoring and control to track, review, and
report on project performance. They rely on this phase to make informed
decisions, avoid crises, and maximize performance and opportunities.
• Project monitoring and control techniques address three areas in project
management:
• Project Plan Monitoring: Use the critical path method (CPM) to identify
essential project milestones and keep deliverables on schedule.
• Project Budget Monitoring: Use earned value management to assign
project tasks according to their cost.
• Project Status Monitoring: Use project status reports to standardize the
reporting process and identify completed tasks, key takeaways, risks, and
real-time progress.
https://www.smartsheet.com/content/project-monitoring-control
Project Monitoring and Controlling Strategy
Successful projects require diligence and precision in monitoring and
control, so having the right strategy can make all of the difference. A good
monitoring and control approach looks at quality, risk, and stakeholder
engagement levels and communicates all project outcomes.
• These tips can help you adhere to a project monitoring and control
strategy:
• Establish a cadence and well-defined process for managing change
requests.
• Tailor performance reporting to project needs.
• Do not overburden the project team with information requests.

https://www.smartsheet.com/content/project-monitoring-control
Project Monitoring and Controlling Strategy
• Position stakeholders where they are needed most according to
their expertise.
• Prioritize performance data that is actionable and requires a
decision.
• Take into account how decisions impact the schedule, budget,
and scope.
• Establish a transparent decision-making process and
communicate and document outcomes.

https://www.smartsheet.com/content/project-monitoring-control
PROJECT MONITORING

QUALITY ASSURANCE
 Quality Guru’s

=
Continual Improvement
Management Methods
Total Quality
Quality Circles
Product Design
 Deming’s 14 Points Prescription
of Quality

1 - Create constancy of purpose

2 - Adopt philosophy of prevention
3 - Cease mass inspection
4 - Select a few suppliers based on quality
5 - Constantly improve system and workers
6 - Institute worker training
 Deming’s 14 Points Prescription
of Quality

7 - Instill leadership among supervisors

8 - Eliminate fear among employees
9 - Eliminate barriers between departments
10 - Eliminate slogans
11 - Remove numerical quotas
12 - Enhance worker pride
13 - Institute vigorous training & education programs
14 - Implement these 13 points
 PCDA Cycle
Deming Wheel Plan

Act

Do

Check
The Quality Cycle Quality
Control

Create Test
site site

input

Quality output

Refine Test
site results
Quality
Assurance
Comparison between Quality
Control & Quality Assurance
Quality Management
Philosophy