Project Monitoring nd Control - Term Paper Example

Project monitoring nd control Introduction ll projects must be rigorously monitored t regulr intervls throughout their lifecycles to ensure tht required technicl performnce occurs on schedule nd within the pproved budget. To guge project's success, project mngers devise mesures tht help control qulity, schedule, nd cost. The results of the mesurements re ssembled into forml nd informl reports, which re used by both senior mngement nd the project tem to identify devitions from plnned performnce nd their cuses. The tem cn then tke corrective ctions to limit the impct of these devitions on the project's schedule, budget, or resources. The project control cycle Project control t the senior mngement level consists of evluting nd responding to forml Project Sttus Reports prepred by the project tem. These reports detil the overll progress of the project with specil ttention pid to production delys or budget overruns tht might jeoprdize contrctul greements. The reports ssist senior mngement in determining when expenditures on prticulr project re no longer profitble nd should be terminted. Depending on the level of mngement control, sttus reports my prompt senior mngers to provide dditionl funding, direction, or clrifiction to the project tem. In contrst, project control t the opertionl level is driven by need to determine how successful the tem hs been in chieving specific plnned objectives nd by need to ssist in the coordintion of complex nd interrelted ctions. The project tem monitors the progress of ech ctivity, tking corrective ction when ctivities re shown to be delyed or drifting (Spinner, 1992). Knutson nd Bitz (1991) list five stges of the opertionl project control process: (1) Updte pst sttus; (2) nlyze the impct of new chnges; (3) ct on the vrince between ctul nd plnned performnce; (4) Published schedule chnges; nd (5) Inform senior mngement. Obviously, ny dely in communicting mesurement results or feedbck to the project tem or senior mngement undercuts the control process. The Project Control Dimensions: Schedule, Cost, nd Performnce Time, cost, nd performnce form the bsis for the operting chrcteristics of project. These fctors help to determine the bsis for project control. Project control is the process of reducing the devition between ctul performnce nd plnned performnce. Mesurements re tken on ech of the three project constrints of time, performnce, nd cost. Cost Control. Tking the process one step further, cost control reports compre scheduled expenditures to ctul expenditures. The purpose of these reports, which re usully prepred by finncil plnners, is to identify or predict possible cost overruns. If cost overrun is likely, request for dditionl funds should be forwrded to senior mngement s soon s possible. If dditionl funding cn not be obtined quickly, nd the overrun is beyond the project's finncil tolernce, no further finncil commitments should be mde pending complete project cost nlysis. lthough this lck of finncil commitment my seem somewht hrsh, it is the best course of ction since it prevents the project from going bnkrupt, which would mke completion impossible (Spinner, 1992). There re certin techniques tht cn ssist mngers in controlling nd monitoring the project. To mny mngers, the costs ssocited with project my be considered more importnt thn the schedule; t minimum, senior mngement will require timely cost sttus reports. During the plnning stge, this will tke the form of developing project cost estimtes for inclusion in the initil project budget. Once the project hs begun, this informtion my be forwrded s prt of cost schedule or cost control reports. If the tem is considering ccelerting or "crshing" the project, the tem my develop cost minimizing reports (Spinner, 1992). Cost control hs received extensive coverge in the literture. Numerous ccounting nd reporting systems hve been developed over the yers for project cost monitoring nd control. Some of the strtegies suitble for controlling project cost include: Reducing lbor costs Using competitive bidding Modifiction of work process djusting work brekdown structure Improving coordintion of project functions Improving cost estimtion procedures Using less expensive rw mterils Controlling infltionry trends Cutting overhed costs When controlling the costs for the project it is important to evaluate the cost variance of the project, which is the difference between the budgeted and actual cost of the project. It is important that the value of the indicatior calculated was positive as it shows the efficiency of the project. However, it often happens that the indicator has a negative meaning. Negative cost variance idicates that the project is over budget or behind the schedule. Still project managers can benefit from this situation. When it comes to the negative meaning of the cost variance, project manager is in the situation when it is time to create and find the way of different ways of realizing the project. Unplanned costs bring new opportunities that a skilled project manager can successfully realize and win of the situation even more as it would be under the planned cost conditions. Performnce my be expressed in terms of qulity, productivity, or ny other mesure of interest. Cost my be expressed in terms of resource expenditure or budget requirements. Schedule is typiclly expressed in terms of the timing of ctivities nd the expected project durtion. It is impossible to chieve n optiml simultneous stisfction of ll three project constrints. Consequently, it becomes necessry to compromise one constrint in fvor of nother. Most project performnce problems will not surfce until fter the project is completed. This mkes performnce control very difficult. However, every effort should be mde to mesure ll the intermedite fctors ffecting the project. fter-the-fct mesurements generlly do not fcilitte good control. Some of the performnce problems my be indicted by time nd cost devitions. So, when schedule nd cost problems exist, n nlysis of how the problems my ffect performnce should be mde. Since project performnce requirements usully relte to the performnce of the end products, controlling performnce problems my necessitte the following: 1. Modifying policies nd procedures 2. Introducing improved technology 3. djusting project specifictions 4. Improving mngement control 5. Reviewing project priorities 6. Chnging qulity stndrds 7. llocting more resources 8. Improving work ethics Project performnce occurs on severl different levels, ll of which re importnt to the orgniztion. t its most bsic level, performnce refers to conformnce with technicl specifictions, i.e., ensuring tht project ctivities meet the technicl stndrds nd guidelines set forth in the project pln or contrctul greements. t this level performnce mesures re objective. The ctivity either does or does not meet the uthorized technicl stndrds. Inspections re usully ccomplished in ccordnce with qulity control pln, which is fully integrted into the overll project schedule (Burke, 1993). Plnned progress must be compred to ctul progress t every criticl juncture. This comprison my be extensive nd tedious, but it is necessry to ensure tht every devition from project specifictions is detected nd corrected s erly s possible. Better performnce cn be chieved if more time nd resources re vilble for project. If lower costs nd tighter schedules re desired, then performnce my hve to be compromised nd vice vers. From the point of view of the project mnger, the project should be t the highest point long the performnces xis. Of course, this represents n extreme cse of getting something for nothing. From the point of view of the project personnel, the project should be t the point indicting highest performnce, longest time, nd most resources. This, of course, my be n unrelistic expecttion since time nd resources re typiclly in short supply. Thus, fesible trde-off strtegy must be developed. Some of the cuses of control problems in project scheduling, performnce, nd cost re summrized below: Schedule Problems Performnce Problems Cost Problem Bd time estimtes Poor qulity High lbor cost Technicl problems Poor mobility Indequte budget Chnge of due dtes Lck of trining Poor cost reporting Precedence structure Poor functionlity Effects of infltion Unrelible time estimtes Mintennce problems High overhed cost Dely of criticl ctivities Lck of cler objectives Increse in scope of work Gntt chrts re prticulrly effective tool for mnging the project schedule. "First, even though they my contin gret del of informtion, they re esily understood. While they do require frequent updting (s does ny control device), they re esy to mintin s long s tsk requirements re not chnged or mjor ltertions of the schedule re not mde. Gntt chrts provide cler picture of the current stte of project" (Meredith & Mntel, 1995). nother pproch to controlling project's schedule is to use milestone reporting. Milestones re key events tht led to chieving project objective nd re usully shown in chronologicl order long with the plnned completion dte. ssembled properly, they provide chronologicl outline of criticl events in the life of the project. The Gntt chrts developed in the scheduling phse of project cn serve s the yrdstick for mesuring project progress. Project sttus should be monitored frequently. record should be mintined of the difference between the expected progress of n ctivity nd its ctul progress. This informtion should be conveyed to the pproprite personnel. The more milestones or control points there re in the project, the better the monitoring function. The lrger number llows for more frequent nd distinct venues for monitoring the schedule. Thus, problems cn be identified nd controlled before they ccumulte into bigger problem. Some corrective ctions tht my be tken for schedule problems include: - Crshing tsks - Redesigning tsks - Revising milestones - djusting time estimtes - Chnging the scope of work - Combining relted ctivities - Introduction of new technology - Eliminting unnecessry ctivities In estblishing control of qulity, the focus shifts to process control. Jurn nd Gryn (1993) stte tht work cn nd should be orgnized in such wy tht n individul hs the cpbility to control the chievement of plnned results. When person in the process hs control (clled "self-control" in this sitution), then he or she cn be held responsible for the results. Jurn nd Gryn further stte tht people must be provided with (1) knowledge of wht they re supposed to do; (2) knowledge of their performnce; nd (3) mens of regulting their performnce in cse they fil to meet the gols. Often mngement does not meet these criteri, nd the individul cnnot exercise self-control. When this occurs the qulity problem is "mngement controllble" nd the person cnnot be held ccountble. The mjor distinction between clssicl control nd self-control is one of timing. "Clssicl control tkes plce during execution of tsk; self-control provides useful criteri for evluting plns before tsk is executed" (Jurn & Gryn, 1993). Self-control is mens of regulting process with the primry emphsis before execution. In controlling process for qulity, the process cpbility must be considered. Process cpbility is the rnge over which the nturl vrition of process occurs. Nturl vrition is determined by common cuses. Process cpbility is, therefore, the bility of the combintion of mchines, tem members, mterils, nd mesurements to consistently meet specifictions. The three components of process cpbility re design specifictions, centering of nturl vrition, nd the rnge of vrition. Product specifictions nd process cpbility bring together design, mnufcturing, nd qulity. To understnd nd mesure the process cpbility of project, three different studies re used in the nlysis: pek performnce study reltes how process performs under idel conditions, process chrcteriztion study mesures the process under operting conditions, nd component vribility study mesures the contribution of vrious sources to totl vritions (Evns & Lindsy, 1996). Summry nd Conclusion The cost nd complexity of modern projects require control system cpble of effectively mesuring the orgniztion's progress. Choosing effective mesures requires input from both the project tem nd senior mngement nd should reflect the compny's strtegic gols. The results of these mesures re then ssembled into sttus reports detiling the cost, schedule, nd performnce of project ctivities. Specific cost nd scheduling techniques such s cost minimiztion nd milestone reporting ssist the tem in nlyzing possible delys or cost overruns. Becuse of outside influences or project chnges, trde-offs mong cost, schedule, nd performnce become inevitble. s project priorities nd gols chnge, so should the mesurement techniques of performnce. Mny of these techniques re now vilble in commercil softwre, mking this process fster nd more efficient. Informtion systems nd softwre hve enbled mngement to esily nd continully mesure ech of the prmeter chnges throughout the project's development. If used properly, project mngement informtion systems (PMIS) cn provide useful formt with which to monitor progress, sort informtion rpidly, identify milestones tht re on time or delyed, nd discover which milestones cn be dded or removed esily - without disconnecting mngement from the project or msking rel problems. Of course the use of coopertion, communiction, nd temwork must not be overlooked nd cnnot be replced with PMIS. On-time completion of projects hs lwys been ngging concern in project mngement. recent survey on project mngement conducted in June 1998 by lie Solutions indictes tht only 26% of projects re completed on time. Further reserch in project mngement must ddress the issue of on-time completion of projects. Bibliogrphy: 1. Burke, R. (1995). Project Mngement Plnning nd Control. Strtford Upon von: Mngement Press. 2. Dvenport, T.H. (1994, Mrch-pril). Sving IT's Soul: Humn-Center Informtion Mngement. Hrvrd Business Review. 3. Evns, J.R., & Lindsy, W.M. (1996). The Mngement nd Control of Qulity, (3rd ed.). St. Pul, MN: West Publishing Co. 4. Fleming, Q.W. (1992). Cost/Schedule Control Systems Criteri. Chicgo, IL.: Probus Pub. Co. 5. Goldstein, M.L. (1988, ugust 15). Tomorrow's Workforce Tody. Industry Week. 6. Jurn, J.M., & Gryn, F.M. (1993). Qulity Plnning nd nlysis. New York: McGrw-Hill. 7. Kpln, R.S., & Norton, D.P., (1993, September - October). Putting the Blnced Scorecrd to Work. Hrvrd Business Review. 8. Kloppenborg, T.J., & Mntel, S.J. (1990, Mrch). Trde-offs on Projects: They My Not Be Wht You Think. Project Mngement Journl. 9. Knutson, J., & Bitz, I. (1991). Project Mngement, How To Pln nd Mnge Successful Project. New York: mericn Mngement ssocition. 10. Might, R. (1984, ugust). n Evlution of the Effectiveness of Project Control Systems. IEEE Trnsctions on Engineering Mngement, Vol. EM-31 No. 3. 11. Meredith, J.R., & Mntel, S.J. (1995). Project Mngement pproch. New York: John Wiley & Sons. 12. Meyer, C. (1994, My-June). How The Right Mesures Help Tems Excel. Hrvrd Business Review. 13. Spinner, M.P. (1992). Elements of Project Mngement: Pln, Schedule nd Control. New York: Prentice-Hll. 14. Thmhin H.J. (1987, ugust). The New Project Mngement Softwre nd Its Impct on Mngement Style. Project Mngement Journl. 15. Thmhin, H.J., & Wilemon, D.L. (1986, June). Criteri for Controlling Projects ccording to Pln. Project Mngement Journl, 75-81. Read More