Project controls are where the project manager makes their money. It is relatively easy to assign someone work. But how do you ensure the quality of that work? That the deadlines are met? Or that the cost is reasonable? A project manager that can control these things is worth their wage in gold.
The triple constraints of time, cost, and quality can, and should, be monitored and controlled using standard project management practices that are proven to work. There is no substitute for this. If you know nothing else about project management, read and apply the information in this article and on this website on project controls, and you will become a good project manager.
Earned Value Analysis
The first technique to control projects is called Earned Value. It is used to control two of the most important aspects of the project:
- Schedule (time)
The end result is a number, called a schedule variance and cost variance, which gives you an indication of how far behind (or ahead) of schedule and budget the project is. Although these aren’t the only numbers project managers deal with, they are the most basic, fundamental ones.
Firstly, there must be a baseline to track against. The project must be broken down into tasks and each task requires the following pieces of data:
- Start and end dates
- A task budget.
Thankfully most projects already have these defined. If you don’t, you must unfortunately define them before you can measure against them.
For each task, the following definitions are required:
- Planned Value (PV): At any point in time, the amount of the task that is supposed to have been completed, in dollar terms. A linear interpolation works as good as any. Also known as Budgeted Cost of Work Scheduled (BCWS).
- Earned Value (EV): At any point in time, the amount of the task that is actually completed, in dollar terms. Also known as Budgeted Cost of Work Performed (BCWP).
- Actual Cost (AC): The actual cost to the organization of the work that has been performed. Also called Actual Cost of Work Performed (ACWP).
To calculate Earned Value manually, you would perform the following tasks:
- Estimate the expected percent complete of each task. For example if the start and end dates of the task are Dec. 1 and Dec. 10, respectively, and it’s Dec. 3 today, the expected percent complete is 30%.
- Convert this to a monetary value by multiplying by the task budget. This is called the Planned Value (PV), also known as the Budgeted Cost of Work Scheduled (BCWS).
- Estimate the actual percent complete of each task, based on the number of hours of work left to complete it, or some other relevant metric.
- Convert this to a monetary value by multiplying by the task budget. This is called the Earned Value (EV), also known as the Budgeted Cost of Work Performed (BCWP).
- Calculate EV – PV (or BCWP – BCWS). This is the schedule variance.
- Calculate EV – AC (or BCWP – ACWP). This is the cost variance.
- Graph the results.
If the schedule variance is negative, you are behind schedule. If the cost variance is negative, you are over budget. The actual amount of variance can be compared to employee charge out rates or similar data to ascertain how difficult it might be to recover. This is a snapshot which, if your percent complete data is instantaneous, will give you an instantaneous view of the status of your project.
A major assumption of this method is that the task gets completed at a constant rate. Sometimes tasks have the bulk of their work at a certain concentrated time, or are otherwise very non-linear. If this is the case, you could make the necessary adjustments (in #1 above).
One of the biggest causes of project issues is called scope creep. This happens when tasks are slowly added to a project, eventually driving it over budget or behind schedule. It is very easy, even human nature, to allow a small additional task to be performed within a large project that can seem to easily absorb it. But collectively this is a recipe for project disaster.
To maintain an adequate control on the project scope, the project manager must do two things:
- Examine the project scope, which is written out in the project management plan, to ensure it has not changed and is still relevant.
- Ensure that project team members are not working on additional tasks that have not been approved by the project manager.
These two tasks should be carried out regularly, I suggest weekly, by the project manager.
Communications and Stakeholder Control
Since there are plenty of examples of project managers thinking they are doing a much better job than their clients think they are doing, it is important to manage stakeholders and provide the right communication. The communication plan, a part of the project management plan, is intended to convey the regular communication needs of each stakeholder.
Controlling this aspect of a project should involve some form of regular review of stakeholder communications. The project manager doesn’t always see every client communication. Sometimes a team member can communicate a technical item that makes a stakeholder unsure of whether the project is meeting their goals. The project manager should ensure the communication lines are open to all stakeholders to flesh out these issues, and regular communication is often the answer.
For small projects carried out by a technical expert, a written risk management plan might not be necessary. But I believe, and the PMBOK guide concurs, that the most important risks should always be known, prioritized and actively managed.
In my experience every project has one or two major risks that everyone is aware of. For example, a plumbing project can contain a leak, or a new building construction project can have unexpected soil conditions. These are the high priority risks – those which have a high consequence to the company or probability of occurrence. Nobody has to warn the stakeholders of those risks. But it’s the lesser risks that prove the expertise of the project manager. Actively identifying and prioritizing risk can work wonders to the project success.
The project risks should be itemized and prioritized within the project management plan. During the controlling phase, each risk is re-evaluated on a regular basis, struck off the list if it didn’t occur, or re-prioritized if circumstances change. Most importantly, the response plans of outstanding risks are re-affirmed and committed to the memory of the project team.