It also means that project stakeholders want to be updated on the status regularly, to ascertain whether the project is on track to complete on time.
A project status report contains whatever information the stakeholders require, but the comprehensive list is as follows:
- Schedule status
- Budget status
- Schedule and budget projections
- Scope control
- Stakeholder communication
- Quality control
In project management, the schedule status is reported using a technique called earned value management.
In this method, each task within the project is measured in terms of percent complete. This is applied to the task budget, for example, if a task is 50% complete and the budget is $10,000, the earned value EV = $5,000. Likewise, the planned value (PV) is the expected completion based on the schedule, for example if the same task starts on Mar. 1 and ends on March 30, and it’s March 10 today, PV = 0.33 x $10,000 = $3,333.
From this, two earned value metrics are determined which tell the project manager the current schedule status:
- Schedule Variance (SV)
The amount that the project is ahead or behind schedule, reported in terms of the project budget. For example, SV = $2,000 means the project is ahead of schedule.
- Schedule Performance Index (SPI)
The schedule efficiency, that is, the amount that the project is ahead or behind schedule relative to the overall project budget. For example, SPI = 1.1 means the project is behind schedule by 10%.
Each of these variables takes into account the schedule status right up to the point of analysis, including partial task completions. If you are able to specify task percent complete values up to that very day, then that is your schedule status that very day.
The SV and SPI are simple numbers which, when included in a project status report, can instantly communicate how far ahead or behind schedule the project is.
Similar to the schedule status, the budget status is reported using the two earned value metrics. One more thing needs to be determined from the project tasks: The Actual Cost (AC).
Most organizations track project costs very well, however if you need to track time, materials, and other expenses by the task, it is not as onerous as it sounds. The resulting variable is the AC for each task.
The two variables which communicate the project’s budget status are:
- Cost Variance
The amount that the project is over or under budget. For example, CV = $5,000 means the project is under budget by that amount.
- Cost Performance Index
The cost efficiency, that is, the amount that the project is over or under budget relative to the overall project budget. For example, CPI = 1.25 means the project is under budget by 25%.
Once again, these variables take into account multiple partial task completions and are current right up to the point of analysis.
When included in a project status report, the CV and CPI instantly communicate to stakeholders whether the project is over or under budget (and how far).
Schedule and Budget Forecasts
But the wonders of the earned value management system do not end there. The current status of the budget and schedule are great information, but forecasting them out to the end of the project is even greater. It allows you to extrapolate the schedule and budget performance to determine the potential final project budget and schedule. This comes in the form of the following four variables:
- Variance at Completion (VAC): The projected Cost Variance (CV) at the end of the project under the current cost performance
- Estimate to Complete (ETC): The projected amount of money needed to complete the project. It can be calculated either assuming the same performance until the end of the project, or reverting back to the planned performance.
- Estimate at Completion (EAC): One of the most used earned value metrics, the EAC is the final projected budget. It can be calculated using one of two assumptions, either the past performance will continue or the project will revert back to the initial planned performance.
- To Complete Performance Index (TCPI): The required efficiency, that is, CPI, to complete the project, either at the original or the new (EAC) budget.
I have not included the formulas for these values for brevity, as most of them have several options for performing the extrapolation. Our handy Guide to Earned Value Management contains everything you need to know about this method.
Also, small projects would not typically report these as it can be subject to large error when only a few people’s time are involved. The SV/SPI and CV/CPI are still quite useful, however.
Scope issues are one of the biggest causes of project stress. Maybe that is because the tendency is to estimate aggressively (to obtain the work, etc.) and then to spend extra time to perform higher quality work than the estimator imagined (gold plating, etc.). Or it could be because it’s human nature to assume the project can absorb a little bit of this and that, causing the scope to creep upwards.
Whatever the reason, project scope control is essential to managing successful projects. Scope control involves:
- Validating the deliverables
After a product has been delivered to the project sponsor, client, or customer, the deliverable must be validated (project management lingo) to ensure it is acceptable. If not, there are inevitably many people from different departments and organizations who think it should be changed slightly (or greatly) to suit their preferences. Most of the time that occurs long after the project is done.
- Controlling the scope
The project scope statement is revisited to ensure it is still meeting the needs of the project. If any changes are required, it is once again approved by the project sponsor, client, etc.
Commenting on the scope within the project status report is optional if the project scope has not changed. However, because the project scope statement is essentially the project’s DNA, any changes to the scope are critical items and should be communicated within the project status report.
As part of the overall project management plan, the stakeholder communications plan, often called the stakeholder engagement plan, is used to guide stakeholder consultations. During project control activities, the project manager performs three actions:
- Determine if the stakeholder communications within the plan have occurred.
- Determine if the stakeholder communications plan is still meeting the needs of the project.
If a stakeholder’s status must change throughout the project, that is, if they must move from being opposed to neutral or supportive of the project, this is a situation that demands a significant amount of project management resources. These stakeholders should be tracked, and their communications assessed during regular project status intervals to ensure they are progressing along the road.
The project status report comments on the stakeholder engagement activities during the period and whether each stakeholder is supportive of the project.
Every project produces deliverables. These deliverables can be products or services. Regardless of their format, size, shape or color, they should be inspected after production in a process called quality control. Quality control measurements determine whether the products conform to their specification, and should be recorded and stored in the project documents.
The project status report should comment on any quality control issues or deviations and what actions were undertaken to address out-of-specification conditions.
- if they are still available
- if their efficiency is still adequate
- any other issue that might impact their use on the project
Some tasks have one resource that is critical to the task, for example, a specialty piece of construction equipment, or an expert reviewer for a design report. Others have resources that are easily replaced or substituted. In either case, the project status report comments on the availability of resources to give stakeholders an important piece of data.
In project management, project success is defined by a list of success factors, and a risk register is used to track events that could occur that would undermine those success factors.
A comment on changes in the project risk profile is not always a mandatory part of the project status report, but can be if the risk profile has changed significantly.
Most projects purchase external materials, supplies and equipment, or outsource contractors and suppliers. These activities usually come with contracts, tenders, and proposals. For larger organizations, a procurement division is devoted to the purchasing and management of external resources.
Because they are integral to the success of the project, the project status report should include a comment on procurement status. Tenders that have been received, contracts that have been executed, and any other milestones should be specified. Any other important items related to procurement should be commented on.
All projects require status reports, even if they are irregular, verbal updates or project presentations. Let these 9 items ensure that your status reports are top notch.