4H - Control & Monitoring of Cost and Schedule

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Monitoring and Controlling the Budget
• Do not rely on accounting reports alone for financial status of the project
– Accounting reports show IDC labor effort and invoices that have been paid
– Cost to date is published every week from the accounting department
– Estimated cost to complete takes skill and knowledge of project status
• Evaluation of Project Scope
– Defines the original budgets – Defines cost control strategy – Defines project schedule – Defines Project Reporting Requirements • Client requirements, IDC management requirements, project team members requirements, and day-to-day management information – Defines “Work Breakdown Structure” and Cost Coding
– Clients are satisfied that they are getting value for their investment
– There are no “surprises” at the end of the project – IDC gets repeat business from a satisfied client – IDC makes money
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Control
• Control is the process for ensuring that the project’s actual performance meets expectations and goals
– Adjustments are made based on information gathered while monitoring the project against the plan
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What Monitoring Should Accomplish
• Notify you that corrective action taken to resolve a problem is having the desired effect
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Planning
• The project execution plan is your primary tool for maintaining control of the project
– Articulates the IDC scope of work
Example “S” Curve
Project: FAB 24 Client: Intel $1,400K Project No. 6410US & 6410IR
Architectural Labor Cost
Project Mgr. John Palmer
$1,200K
$1,000K
$800K
– Introduction – Planning – What to monitor – What monitoring should accomplish – Control – Monitoring and controlling the budget – Managing change – Scheduling – Estimating
– Warning signs • Escalating project cost
• Steadily Deteriorating Contingencies
• Schedule Milestones are not being met • Poor Productivity and Performance Rates • An unhappy client • Claim threats from contractors or subconsultants
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Planning (Continued)
– Subcontracting and Buyout Strategy – Staffing Requirements
– Estimate preparation and strategy
– Organization Charts – Defines Post Project Requirements
– Include scheduling, progress reporting, financial reporting, and change management processes in subcontract language – Subcontractors are more likely to cooperate if their payment contingent upon supplying information timely and in the correct format
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What Monitoring Should Accomplish
• Communicate project status and changes to other project team members • Inform the client and IDC upper management about the status of the project • Provide justification for making project adjustments
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• The cohesiveness and cooperation of team members
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What You Should Monitor
• Status information needs to be collected from all project team members, including subconsultants and subcontractors
• Material and Equipment Pricing
• Craft Labor Performance Analysis and Pricing
• Staff Performance and Pricing • Office Cost • Subcontractor status
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• Document current project plans compared to the original project plan
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What Monitoring Should Accomplish
• Alert you to developing problems early enough to take corrective action
– Accounting reports do not show commitments made in the form of contracts and purchase orders
• A project manager needs to forecast the project cost on a routine basis for comparison the the current project budget
– Standard IDC Project Control Tools
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Introduction
• Control is a good thing
– Schedule milestones are completed on time
– Project team members are kept aware of project cost and schedule status throughout the project
• The cost expenditures compared to the plan (Budget)
• The attitudes of people working on or involved with the project, including clients and management
– Current budget = original budget + changes
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Monitoring and Controlling the Budget
• Cost to date + cost estimated to complete = forecast
• Evaluation of project schedule status
• Contract pricing and commitments • Escalation
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Monitoring and Controlling the Budget
PM WORKSHOP
Control and Monitorinபைடு நூலகம் of Project Cost and Schedule
Session Objectives
• Discuss basic techniques for monitoring and controlling project cost and project schedule
$600K Status as of Dec 1, 2000 Budget Actual Forecast $400K Earned
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What You Should Monitor
• The status of work compared to the plan (Schedule)
• The volume of work being completed
• The quality of work being performed
• The project execution plan establishes the basis for measurement of schedule performance and financial performance • The project execution plan will probably change as the project evolves