Project Monitoring and Control - Research Paper Example

Project Controls Introduction This section will provide an overview of the monitoring and controlling mechanisms put in place to manage the K1 Gap Analysis Closure Project. The techniques described as part of this section will ensure a strict control over the schedule and budget associated with the project. Requirements Control One of the basic requirements of a project of this magnitude is to manage the measuring, reporting and controlling of all project resources and parameters in an effective manner in order to fulfill all requirements. For achieving this, it is necessary to have adequate mechanisms in place to cater to changes in the scope of the various phases besides maintain overall quality in the work undertaken. The managers entrusted with the project have developed several approaches to track and control changes to the schedule and cost besides managing all identified risks through standard procedures. For effective management, a team of two project managers (known as the high-level and low-level project managers respectively) have been nominated from the company’s management team who will oversee the entire process of ugradation to the new EU regulatory directives. The PD will delegate the activities of requirements and change management to a requirements team (RT) comprising several well-qualified professionals. For further information on the project team, please refer to the chapter titled ‘Stakeholders and Stakeholder management’. All requirements are developed through a formal process and stored in one of the company’s network drives in MS Access format, allowing a proper definition all required components and resources besides using it as a reference point for all purposes of management, monitoring and control. The primary purpose of storing all requirements in a database is to retrieve them when required and develop traceability matrices through them. The traceability matrix is an easy way of checking whether each of the requirements identified are met and to help create various documents such as a request for proposal, deliverable documents as well as plan individual project tasks. The use of a web based solution has facilitated an automated creation of all these components whenever required. It must be mentioned at this particular juncture that the requirements analysis (RA) processes are performed constantly through a series of regular stakeholder interviews. A list of stakeholders has been provided below. Besides identifying all the required changes to implement the directives (and also the non-compulsory directives in the company’s interest), obtaining feedback from the stakeholders is important to drill down to the actual and feasible ways in which the required changes could be undertaken. Further, the information sourced through these interviews facilitated the formation of a realistic opinion on the changes that have to be made to the requirements to accommodate them against realistic possibilities on the floor of the production facilities. In many instances, stakeholders also contributed by providing information on better or cheaper alternatives to many of the resources that had been envisioned earlier in the project. The Stakeholders is provided in the chapter titled ‘Stakeholders and Stakeholder management’. Schedule Control Schedule control in general consists of the following parameters:  Determining the current status of the project schedule.  Influencing the factors that create schedule changes.  Determining that the project schedule has changed.  Managing the actual changes as they occur. The entire process can be shown according to the schematic below. Part of the production facility requires upgrade work in order to comply with the K1 European directive. The work can be undertaken only when the plant is fully shut down and planned shut downs occur on two occasions of the year during the Christmas holidays for 2 weeks in December and 2 weeks in July. Besides initiating works to modernize the facilities according to the EU directives, the management has also considered the incorporation of other non-compliance driven works into the project for other business advantages. As a result, design and development of the entire work package is ongoing and the scope still remains to be finalized. Feedback from the Project manager suggests that it may be difficult to complete the project during the slot this December. A number of constraints such as budget, quality and time are attached to the upgrade wherein the primary emphasis is on completing the work on schedule due to the less time available for these tasks. During the course of the project, it was the responsibility of the project management team to determine whether the schedule and progress derived previously needed to be modified so as to accommodate any changes as envisioned in the change control process. In some cases, existing phases could be tweaked in order to accommodate such schedule events. In most cases, changes to a schedule event are necessary whenever it is progressing behind schedule or due to a need to change the timing of a succeeding event. To prevent making changes in an unorganized and a haphazard manner, certain tabs will be maintained to assure proper control by the people in charge including those from the project management team. This process of maintaining control on the K1 Gap Closure project will be achieved through effective schedule control elaborated below. Schedule Tracking A Gantt chart will be prepared to track the project schedule whereby individual tasks will be charted on a monthly basis. Likewise, a review of the progress will be conducted at the beginning of every month and charted against every task on the chart as the percentage of work completed. The Gantt chart is prepared using Microsoft Project, which provides generation of easy customized reports on current and future performance. Further, deviations between current and expected performance levels are analyzed constantly to generate information on tasks that needed special attention. Schedule Performance Reports As mentioned above, status information on actual and expected performance is calculated from the charts to make changes to future milestones besides catering to task that are needed to be given additional focus to complete them on time. Deviations between current and future milestones against the allocated dates will be flagged. Further, various reports through comparison of the Actual Cost of Work Performed (ACWP), Budgeted Cost of Work Scheduled (BCWS) and Budgeted Cost of Work Performed (BCWP) are calculated and elaborated in the next section. Schedule Reviews The performance reports generated monthly are presented to the project managers who will identify all issues and problems associated with individual tasks. A particular advantage of using the Gantt approach is the easy visualization of the connectivity and relationships among various tasks along with related dependencies. Managers are more at ease in identifying problematic areas, which are overcome through changes in resource allocation and changes to task schedules without compromising the overall project schedule and dependencies. Another advantage is the provision of risk identification through this process and categorizing them according to severity. Managers can then confer with relevant personnel responsible for a specific task to ascertain reasons for the problems and delays and find out ways to overcome them through mutual discussions and corrective actions. All actions taken thereafter are also documented and followed upon during subsequent reviews to ensure if they had been completed to expectations. The reviews will further benefit through the use of an ‘Actual S Curve’, which compares the actual progress of the project on a monthly basis and is shown below. Budget Control The PMBOK guide states that cost control includes:  Influencing the factors that create changes to the cost baseline.  Ensuring requested changes are agreed upon.  Managing the actual changes when and as they occur.  Assuring that potential cost overruns do not exceed the authorized finding periodically and in total for the project.  Monitoring cost performance to detect and understand variances from the cost baseline.  Recording all appropriate changes accurately against the cost baseline.  Preventing incorrect, inappropriate, or unapproved changes from bring included in the reported cost or resource usage.  Informing appropriate stakeholders of approved changes.  Acting to bring expected cost overruns within acceptable limits. The schematic for the entire process is depicted below. The total budget allocated for the project was £2.7 million of which £200,000 was assigned for the design and development phase of the project. I included this sentence to explain why the project is unlikely to be undertaken during the Christmas break this December. Can you please A project of such a huge budget has to include effective budgetary controls in order to maintain strict control of any potential cost overruns and to ascertain that the funds are being used for the required and deserving tasks in the correct amounts. Further, cost control will enable corrective action to be taken whenever actual costs do not tally with the budgeted costs. The budget and cost overview is calculated on a monthly basis along with the schedule performance and presented to the management. Through the methods of Earned Value Analysis and Critical ratios, the periodic review provides enhanced control over important project milestones during the entire course of the project. Each of these methods is elaborated below. Cost Management As is common practice, one of the core responsibilities of the project management team is to provide a constant tracking of the budget while the project manager holds the authority to approve any sanction of fresh funds towards a specific task. The team uses Microsoft Project to devise the ‘Work Breakdown Structure’ of the project to keep track of the costs, although this does not serve the immediate purpose of calculating the required statistics to derive suitable inferences. The calculations form the core of what is commonly referred to as the ‘Earned Value Analysis’. For every task identified within the project, a baseline cost is assigned upon consultations with stakeholders, project members, suppliers and contractors. Further, schedules for completing these tasks are available from the Gantt chart described in the preceding section. The baseline cost serves as the nodal point from which all deviations based on cost are calculated. Cost Control The project team is adopting the guidelines stipulated by the ‘Project Management Book of Knowledge’ (PMBOK) to track the budget and update the management team on the progress. Using inputs on the percentage of work completed and the costs incurred per task, the project manager will determine the BCWP for each task and compile them against the Baseline costs (BC) identified at the beginning of the project. A comparison of BCWS against BC gives a direct measure of adherence, redirecting focus on tasks that need greater attention of the manager to speed up the progress or derive alternatives to cut expenses. Contractor Cost Control The different works that need to be completed as part of the project (the individual tasks) are largely contracted to professional service providers and suppliers wherever their expertise is essential. The contribution of every contractor involved is monitored and measured for performance to track the schedule and budget besides mitigating all possible risks. Further, this facilitates a constant dialogue with the contract on periodic progress of their responsibilities and verification that the specifics of the agreement are not compromised. The K1 Gap Analysis Closure Project uses a review and reporting system that requires contractor evaluation and is consistent with contracting requirements. A monthly contractor’s status report including any variances in cost, schedule, or technical performance are included in the monthly program reviews. The same problem identification and resolution procedures used by the Project Management team are extended to any subcontractors present; to ensure management visibility and to guarantee that proper and prompt attention is given to risk management and reduction on a program-wide basis. Cost Variance Measurement Corrective actions on budget are a core part of this project and are identified through the measurement of cost variances. A tolerance value is assigned to the variances and those that are found to be beyond these limits are referred to the project manager for consideration. These limits are assigned individually to the tasks by the PM during the commencement of the project and included into the web driven database to provide automatic alerts whenever a particular threshold is exceeded. Cost Variance Corrective Action The variances and costs incurred at a given instant are recorded and graphed to understand variances that exceed the pre-determined thresholds. This also facilitates comprehensive analysis of the corrective actions by the project team and the general direction in which the project is progressing. This way, all potentially significant overruns are prevented from getting out of reach. Since it is possible that some cost problems cannot be rectified from within the Pharmaceutical Company’s K1 Gap Closure Project resources, the PM may also elect to draw upon the significant resources of other Pharmaceutical Company or sponsor organizations. The project manager focuses on cost variance (CV) and schedule variance (SV) to maintain control on related parameters. Earned Value Analysis In continuance of the preceding discussions, as many as three different variances are necessary for cost control and monitoring in terms of schedule and budget. These individual values each reflect either the planned or actual costs associated with each task and form the core of Earned Value Analysis. Budgeted Cost for Work Scheduled (BCWS) The BCWS represents the budget allocated for all activities that are planned under a particular task, which are derived from the Work Breakdown Structure. The budget allotted ach such task along with its respective date is included into a table known as the ‘Master Schedule’. Actual Cost of Work Performed (ACWP) As the name suggests, ACWS records the actual value of the cost incurred against a work that has been completed. Most of these estimates are sourced from invoices and time sheets used to keep track of the schedule. The process of collecting information in this regard can be quite straightforward if regular practices are put in place so that all project members report the necessary information as and when they receive it. Budgeted Cost of Work Performed (BCWP) BCWP can be regarded as the core of earned value analysis as it is commonly referred to as the ‘Earned Value’. In contrast to BCWS and ACWP, the BCWP provided an instantaneous value of the work done by combining the portion of work completed with its budgeted cost. BCWP provides the flexibility to implement it for work in any state like completed, in progress and planned. Cost Variance (CV) The BCWS, ACWP and BCWP do not offer much information on their own. Given the tight schedule of the project, it is essential to derive useful interpretations from these calculations. The cost variance is the difference of the BCWP and ACWP and offers an insight into the variation between planned and actual usage of resources (time and cost) for a particular task. This is one of the best estimated to identify any savings or cost overruns in a project. Cost Variance (CV) = Earned Value (BCWP) - Actual Cost (ACWP) Schedule Variance (SV) Like the variation between planned and incurred costs, the difference between budgeted cost, known as the schedule variance, and earned value signifies the extent to which a project is progressing as per schedule. A negative value implies that the task is behind schedule. Schedule Variance (SV) = Earned Value (BCWP) – Budget (BCWS) A plot of the three cost based estimates BCWS, ACWP and BCWP is shown below. Quad Plot IV diagram Apart from the estimates discussed above, the PM team also proposes to use two more calculations known as the Schedule performance Index (SPI) and the Cost Performance Index (CPI). The SPI is most important from the perspective of the project as it will help the managers to compare and ascertain whether the ongoing schedule is matching the initial plan. Likewise, the CPI allows managers to estimate if the current expenditure is progressing within the budgetary estimates. The formula for these estimates is provided below. SPI = BCWP / BCWS CPI = BCWP / ACWP The managers will use these ratios and estimate their extent deviation from 1. A value of 1 indicates strict adherence of the schedule or project to the planned estimates. A value of 1 means the actual value of cost incurred or schedule is more than the estimate, calling the attention of the managers to take necessary actions to minimize this ratio. A case of less than 1 for these values signifies that the work was completed well below the limits stipulated and is a favourable metric. The project managers propose to calculate the SPI and CPI on a monthly basis and will have an table of these values from the second review onwards. Using this data, they will compare the SPI against the CPI as a two dimensional plot, known as the Quad plot IV Diagram. The direction of the arrows indicates the general performance of the task during subsequent reviews. An approach towards the centre of the plot or towards the right of the origin (towards the ‘ahead’ side of budget and schedule) will mean that the project is progressing beyond expectations. In other cases, the managers will need to make relevant change to attain more control and shift the performance to a favourable region of the plot. Critical Ratio A combinational measure of the overall task performance can be obtained my multiplying the SPI and CPI. By this estimate, the project managers will be able to tell how much they are progressing in terms of their investments (both money and time). Critical Ratio (CR) = CPI * SPI Like the CPI and CPI, the CR has to be in and around 1. A perfect score of ‘1’ indicates that the project is progressing according to plan for both the time and money invested. It is also possible that the CR is 1 for a little overspending (CPI < 1) and better progress (SPI > 1). A plot, similar to that Quadploy IV of the Critical ratios against time will allow the project managers to track the overall task progress over a period of time. Control ratios will also help managers establish control limits, which are threshold values to see whether the task is overshooting beyond desired limits. The plot is demonstrated below. 1.4 Project Reporting and Communication Communication and reporting were the backbone for effective management of the project and helped in the smooth flow of information amongst all participants. A proper control on the schedule and cost will not be possible without an effective reporting mechanism in place. Further, it is also important to convey the performance to all major stakeholders and inform them of any changes in the tasks. A number of methods will be used to communicate and report in a formal manner. Meetings The K1 Gap Analysis Closure Project meetings are typically held onsite through presentations and reviews of the reports developed by the Gantt charts and the cost management methods described in the preceding section. All important outcomes and decisions during these meetings are also stored in the regular formats (the Microsoft Project file and the website) for further use. Information Repository The K1 Gap Analysis Closure Project Information Repository (IR) is an Access database stored in one of the company’s network drive and will serve as a single secure location for reference documents, test reports, a reuse library, and related documentation. It is the single source of information for all performance reports and budgetary calculations. Internal Reviews The Project team will hold In-Progress Reviews (IPRs) at least every third month for the purpose of monitoring internal progress towards milestones, reviewing problems encountered, presenting proposed resolutions, presenting near-term plans, reviewing risks and mitigation plans, and presenting a financial review using Earned Value data. Status Reporting The team provides monthly progress reports to the Program Manager summarizing work completed, a financial report, issues, meetings and conferences attended, and upcoming calendar events. Electronic Media The use of a website means that all important alerts on major performance parameters will be automatically triggered and sent as emails to the concerned manager. Likewise, all documents and reports are available in electronic formats so as to provide a round-the-clock access to important information. Secure communication and log maintenance will ensure safety of the data and mitigation of the possibility to manipulate financially sensitive data without proper credentials. Conclusion The section on project monitoring and control has demonstrated the numerous methods through which the project managers will be maintain a strict overview over the project and its inherent tasks during the entire lifetime of the project. The managers emphasize on the need to concentrate more on completing the project within the schedule as the window for shutting down plant operations for some of the upgradation tasks is highly limited. As such, managers will need to really focus on avoiding any delays and ensuring that all planned work is completed during these periods. The project team will employ earned value analysis as well as methods under critical ration analysis as shown in the discussion to control the inputs, outputs and deliverables besides ensuring that all stakeholders are efficiently managed and informed to provide a smooth platform for completing all required tasks within the schedule and budget. Likewise, there will also be monthly reviews of performance to identify existing bottlenecks and overruns so as to identify the issues and problems leading to these shortcomings and taking the necessary actions to eliminate all deficiencies. With standard industry practices and formal project monitoring techniques in place, it is hoped that the team will be in a good position to control the resources efficiently. Recommendations A couple of recommendations will be useful in this context when utilizing the Earned value analysis method and the quadploy IV diagram. Earned value analysis provides a very methodical approach to track the planned and actual values of activities both in terms of schedule and cost. Given the primary constraint of time in this context, the project managers will benefit most importantly from the schedule variance (SV). As described previously, SV is the difference between the earned value and the budget or planned value. The earned value will allow managers to estimate the proportion of work (output) that has been completed until that instant and find out the extent to which a given task is lagging behind the planned standpoint. The extent of variance will be a clear and direct measure to identify the additional speed with which the task would need to be completed in the available time. The Qudply IV diagram relies on the product of the CPI and SPI, which are again derived from the Earned Value Analysis. In the current case, the managers will be focusing on shifting the plot towards the region beyond the right of the origin (perfect score of 1 implying the project is on track for both schedule and budget). The periodic plot combined with the use of the direction will provide a clear picture to managers on the results of their efforts. In simpler words, the diagram will facilitate the regulation of inputs for a given task without compromising on the quality of the output or deliverables so as to complete them within the constraints specified (schedule is the primary constraint in this case although cost is also important to be kept within desired limits). Managers will be able to ascertain the impact of their actions and decisions on a regular basis and be able to make changes to turn the graph towards the favourable region of the graph. The Quadploy IV diagram is thus a very effective tool that provides instantaneous visualization of the pace and progress of the project Read More