Phase 3: Project Execution

Executing the Project

• Phase 3 of the project lifecycle
• This is the phase that is most associated with project management.
• Execution is all about building deliverables that satisfy the customer.
• Team leaders make this happen by allocating resources and keeping team members
focused on their assigned tasks.
• Execution relies heavily on the planning phase.
• The work and efforts of the team during the execution phase are derived from the
project plan
• At this point, the actual work on the project begins.
Executing the Project
Executing the Project
• All the requirements, resources and tools outlined in the project plan are
leveraged to meet the project goals.
• The tasks you are expected to complete at this stage are as follows:
 Assemble a team
 Assign resources
 Start executing the project management plan
 Proactive control and manage project execution
 Identify KPIs and set-up tracking systems.
 Distribute and assign tasks. This often feels like the meat of the
 Schedule status meetings project since a lot is happening during
 Update project schedule this time, like status reports and
 Modify project plans as needed. meetings, development updates, and
performance reports
Monitoring & Controlling the
Project

6
Project Manager must…

− Compare actual progress / work to original baseline

− Take steps to monitor and manage project
− Make well-informed decisions
− Take appropriate action where necessary e.g. risk analysis, quality mgt
− Make adjustments to project plan if needed
 Monitoring and Controlling the Project
• Project sponsors do not like surprises
• Unexpected situations will require adjustments to the project schedule and
budget.
 PM - not lose credibility because an unexpected event or situation arises.
 PM - will lose (or gain) credibility in terms of how they handle a particular situation.
• By addressing problem early, the chain reaction & impact on other project
activities can be minimised
• Early warning system is needed to keep project on track
1. allows PM to control & monitor the project’s progress,
2. identify early problems and
3. take appropriate corrective action
• Baseline plan = benchmark - gauge project performance against planned
expectations i.e. comparing actual to planned performance
Controlling & Monitoring the Project
• This phase runs throughout the project’s lifecycle.
• Controlling is about measuring ongoing activities and assessing project
performance against project plans.
• It is about identifying and taking corrective action to address deviations from
plans and to address issues and risks.
• To ensure that your project always remains on track, you will want to establish
key performance indicators (KPIs).
Project Lifecycle

Ideal: Reality:
The Process for Monitoring and Controlling the
Project
• Project Controls – ensures processes and
resources are in place to help PM monitor
project
 Provides capability to measure performance
 Alerts PM to problem situations
 Holds people accountable
 Ensure resources are utilized efficiently and
effectively
 Can be internal (project governance
committee) or external (industry standards)
• Should be communicated to all stakeholders
 Evaluating the Current Situation
• Information gathered through monitoring eg
 Timesheets
 Quality reviews
 Financial information
• Compared to baseline and calculate earned value
figures etc
• What are the risks?
• Bring it to sponsor’s attention
• One / two constraints may be dominant in a
particular situation & require more attention
e.g. one response to a time problem is to throw
resources (money, labour) at it
e.g. quality can often be improved by taking more time
over the work Trade-offs: The ‘Triple Constraint’
• Trade-off’s may be necessary depending on
project type
Investigate Prior to Making a Change…
 The total impact of the change on the development work – time, cost &
quality
 The effect of the change on the users – e.g. on their training & implementation
requirements
 Any implications of the change on the proposed size or configuration of
hardware or communications
 The consequences of not implementing change
 The risks resulting from implementing and from not implementing the change
Implementing Corrective Actions
1. Make sure that everyone Examples of Corrective Action:
knows about the changes you Do nothing Add more staff
are making & their impact on Add different skills Use overtime
the project Reassign tasks Increase supervision
 Revise project plans & work Decrease supervision Find improved methods
instructions Streamline procedures Change resource priorities
Re-plan the project Change the phasing of
2. Evaluate whether the changes deliverables
have had the desired effect Decrease inspections Increase inspections
3. Determine any potential risks Encourage the team Introduce incentives
Subcontract some work Negotiate changes to the
specification
Potential Project Control Points
Project initiation • should the project be undertaken at all
• agreement required.
End-stage assessment • progress reviewed & business case (MOV) re-examined
• if progress satisfactory proceed to next stage

Highlight reports • provided to project board by PM on regular basis

Exception assessment / • if project looks like it will go outside tolerances (metrics) PM seeks
report authorisation to vary tolerances / discuss next move

Project closure • based on formal report from PM

• project board declares if project is completed and closed.

Work packages • main control mechanism for PM

• consists of one or more products to be developed by team
• defined effort, timescale and cost estimates
• PM monitors progress by checking if these estimates have been met or
likely to be met
Exercising Evaluate
current
control Check that
situation

involves… the control

action has
Consider pros
of potential
had the
corrective
desired
measures
corrective
effect

Assess Impact of Change

Consider cons
Implement
of potential
the chosen
corrective
option
measures

Devise
Change Select one of
Control the options
Procedure
Project Metrics
Project Metric System
 Should support information requirements of stakeholders
 Focus on the following key areas:

Scope Schedule
Budget Resources
Quality Risk

 Example, team members submitting time sheets describing tasks completed,

time spent working on these tasks and any other resources used
 Project Metric
 Maybe a qualitative measurement of some  Data to support project’s metrics can
attribute of the project. be collected in a number of different
 Should be obtained from observable, ways:
quantifiable data.  Periodic reports
 Useful for developing a measurement  Time cards describing tasks working
program upon; time spent & resources used
 Used to gauge efficiency and effectiveness of  Report deliverables & milestones
work being done  User stories
 Used to create various reports defined in  Product features / functionality
The Communications Plan completed
A Good Project Metric Should be…
Understandable • intuitive
• easy to understand
Quantifiable • objective (no bias)
Cost Effective • easy and inexpensive to create
• meaningful
• accurate
Proven high validity
•
• must measure what one wants to manage
• must be effective
High Impact otherwise why bother?
•
Principles of Good Project Measurement System
• Allow the team to gauge its own progress (empower team to take
action)
• Be designed by the project team
• Adopt and use only a handful of measures (focuses team and
creates minimal interference)
• Track results and progress

Project Dashboard Metric

 Example: Burn-Down Chart
• Useful tool for reporting project’s progress
• Displays how much work is left and how much
time there is to do it in.
• Popular in Agile software development methods
eg Scrum/XP
• Shows how the scope, features or functionality,
or work is being completed over time
• Visually displays the amount of work that can be
delivered in a single iteration
• Helps to predict when project work will be
completed
 Example: Milestone Slip Chart

• Used to illustrate and measure

project progress
• Highly visual representation of
where project slippage has
occurred
• Illustrates what final effects
should be
y axis = actual progress
x axis = planned progress
Milestone 1 = on time
Milestone 2 = some slippage; predicting no further delays
Further delays at milestone 3
More delays before final milestone is achieved
Earned Value Analysis (EVA):
A Practical Example

(Use ‘Project Metrics’ handout on Moodle as an extension of these notes)

Earned Value Analysis - EVA
• Tool for monitoring project progress
• Measures not only how much has been spent but also how much has been
achieved
• Measures how much value has been earned
• Problem: terminology off-putting & cumbersome
• Provides valuable insights into the real project situation
• Helps uncover problem situations
• Also called EVM – Earned Value Method
Earned Value Example
(see handout)

• Suppose you just signed a contract

with a consulting firm called Dewey,
Cheatem, and Howe to develop an IS
for your organisation
• Project Budget, Schedule, Tasks:
Budget: $40,000
Schedule: 4 months

20 Tasks (evenly divided over 4 months)

 $2,000 per task
 5 tasks per month

The Planned Project Schedule and Budget

 Earned Value
Planned Value (PV) - The planned or budgeted
cost of work scheduled for an activity or
component of the WBS
• In our case, our planned value for each
task is $2,000
• The planned value for each month is
$10,000

Budgeted At Completion (BAC) - The total

budget for our project
• In our case, $40,000 is our BAC since this
is what we expect to pay for the
completed project

The BAC is the total cumulative planned value

At the end of Month 1, we
receive the following invoice…
We need to look at the rest of the invoice to be sure

• Only three of the five tasks scheduled to

be completed in Month 1 were
completed as planned.

• Two of the tasks cost more to complete

than originally estimated.

Maybe things are not as good as we

thought!
 Earned Value
Actual Cost (AC) - The actual cost incurred
for completing an activity or component of
the WBS
 For example, the actual cost for
completing task 2 is $3,000
 Or, we have to write a check for $8,000
for the three tasks that were completed
in Month 1

Planned Value versus Actual Cost

Earned Value
Earned Value (EV)
• A performance measurement that tells us how much of the budget we really
should have spent for the work that was completed
• Provides a method that incorporates scope, schedule and budget to analyse
project performance and progress

 We need to pay our consultants $8,000 in actual costs even though we

should be paying them only $6,000
 This $6,000 is called the earned value
Planned, Actual, & Earned Values for Month 1

Comparison of Planned Value, Actual Cost,

and Earned Value
Earned Value (EV) Analysis: Analysing Current Project
Performance
 Cost Metrics
Cost Variance (CV)
• The difference between a task or WBS
component’s estimated cost and its actual Cost Variance (CV) = EV – AC
cost: = $6,000 - $8,000
= ($2,000)
CV = EV - AC

Negative Value = over budget

Positive Value = under budget
Value = 0 means project is right on budget
 Cost Metrics
Cost Performance Index (CPI)
• Percentage of work completed per dollar spent
• Efficiency indicator
• Reflects the cost performance of a project
• Used as basis for predicting outcome.
CPI = EV  AC

ratio > 1 = ahead of budget

ratio < 1 = behind budget (cost overrun)
Ratio = 1 means project is right on budget
 Schedule Metrics
Schedule Variance (SV)
• Performance metric for the project’s schedule
• The difference between the current progress of
the project and its original or planned schedule Schedule Variance (SV) = EV – PV
= $6,000 - $10,000
• Can be used as an efficiency indicator to reflect
= ($4,000)
the schedule performance of a project
• Can be used as basis for predicting outcome
Negative
SV = EV – PV
value tells
the project
is behind
Negative Value = behind schedule
schedule
Positive Value = ahead of schedule
Value = 0 means project is right on schedule
 Schedule Metrics
Schedule Performance Index (SPI)
• Schedule efficiency metric Schedule Performance Index (SPE) =
• A ratio of the work performed to the work EV  PV
scheduled. = $6,000 
SPI = EV  PV $10,000
= 0.6
ratio > 1 = ahead of schedule We are less than 1
ratio < 1 = behind schedule - the project is
Ratio = 1 means our project is right on schedule behind schedule
Summary of Project Performance Metrics
Schedule
Planned Actual Earned Schedule Cost Performance
Cost Variance Performance
Task Value Cost Value Variance Index
Index
PV AC EV CV SV CPI SPI

1 $2,000 $2,000 $2,000 -0- -0- 1.00 1.00

1.00
2 $2,000 $3,000 $2,000 ($1,000) -0- 0.67

($1,000) 1.00
3 $2,000 $3,000 $2,000 -0- 0.67

($2,000)
4 $2,000 - 0.00

($2,000)
5 $2,000 - 0.00

Cumulative $10,000 $8,000 $6,000 ($2,000) ($4,000) 0.75 0.60

Earned Value (EV) Analysis: Forecasting Project Performance
Forecasting Project Performance
• We planned on spending $40,000
• Is this total cumulative planned value at completion (BAC) still realistic?

• Earned Value (EV) Analysis – can be used to predict / forecast the future
resource / budget needs of the project based upon the project’s current
performance.

BAC = Budget At Completion

 Estimate at Completion (EAC)
• Provides a revised estimate for the total cost of the project based on the actual costs
incurred so far plus the scheduled work that remains.

• Based on this data:

 We can either revise the whole budget and schedule and start over,…
or
 We can use the project’s current performance metrics to develop a more realistic
picture

• Depends on whether we believe these variances are

1. typical and expected to continue or
2. atypical – i.e., we don’t expect variances / problems
Estimate at Completion (EAC)
EAC (TYPICAL variances) OR EAC (TYPICAL variances)
= Cumulative AC + ((BAC - Cumulative = BAC/CPI
EV)/Cumulative CPI = $40,000 / .75
= $8,000 + ($40,000 - $6,000) / .75 = $53,333.33
= $53,333.33

If we believe the variances (i.e. problems) encountered

so far WILL continue for the remainder of our
project, then the total budget to complete this project is
estimated to be $53,333.33
Estimate at Completion (EAC)
• What If the variances encountered are influenced by issues/problems in the cost
performance index (CPI) and the schedule performance index (SPI)?
• A more conservative approach – multiply CPI and SPI to take into account how the
remaining work might be influenced
EAC (ATYPICAL variances)
= Cumulative AC + (BAC - Cumulative EV)/SPI*CPI
= $8,000 + ($40,000 - $6,000)/(.75*.60)
= $65,500.00 Under this scenario then the total budget
(final cost) to complete this project is
estimated to be between $53,333.33 and
$65,500.00
Other Earned Value Metrics
• Variance At Completion (VAC) and To Complete Performance Index
(TCPI) = 2 additional useful earned value metrics

• VAC = compares the original planned budget (BAC) with the EAC to
determine whether there is a budget surplus or deficit.

• TCPI = an efficiency metric that compares the remaining work to the

remaining funds available.
 Variance At Completion (VAC)
TYPICAL variances: VAC (CPI only) = BAC – EAC
= $40,000 - $53,333
= ($13,333)

Or, if considering the effect of both the CPI and SPI Both VAC for this project indicate that this
project is operating over budget
then use:
The BAC appears no longer realistic
ATYPICAL variances: VAC (CPI and SPI) = BAC – EAC EAC should become new budget
= $40,000 - $65,000
= ($25,000)

• Negative VAC = budget deficit

• Positive VAC = budget surplus
To Complete Performance Index (TCPI) – For the
original BAC
• TCPI >1 = project will be more difficult to complete based on the remaining
resources
• TCPI <1 = suggests less difficulty

TCPI = (BAC – EV)/(BAC-AC)

= ($40,000 - $6000)/($40,000 - $8,000)
= 1.06

This project may have a more

difficult time achieving its original
budget of $40,000
 To Complete Performance Index (TCPI) –
For the EAC
• Or, if considering the effect of both the
• TCPI >1 = project will be more difficult to CPI and SPI then use the calculation
complete based on the remaining resources below:
• TCPI <1 = suggests less difficulty TCPI (CPI and SPI) = (BAC – EV)/(EAC-AC)
= ($40,000 - $6000)/($65,000 - $8,000)
• For the EAC with typical & atypical variances: = .59
TCPI (CPI only) = (BAC – EV)/(EAC-AC)
= ($40,000 - $6000)/($53,333 - $8,000)
= .75 By achieving an EAC between
$53,333.33 and $65,500.00 it might make
it easier to complete the project
 Earned Value & % Complete

• Earned value can also be calculated in Task Planned % Complete Earned

Value (PV) Value (EV)
terms of complete of the planned value
• Multiply the planned value of an activity, A $1000 100% $1000
task, WBS component by it’s percentage B $1500 100% $1500
of completion C $2000 75% $1500
D $800 50% $400
• EV = PV * % Complete E $1200 50% $600
Cumulative $6500 $5000
Other Project Metrics
 Other Metrics: Change of Scope
• Keeps track of the size of the project.
• Every change request submitted requires a modification to the budget (time & money).
• Change of Scope helps you stay on top of this – helps avoid Scope Creep.
New size of project / Original size of project
• The more this ratio increases, the more you’ll need to re-budget.
 Example if a change requests increase the size of your project by 20%, you’ll have to set your
budgets accordingly.
• Individual change requests can be small, but can add up.
• Tracking all of them in one metric tells you if the amount you’re getting paid is
proportionate with the amount of work you’re expected to do.
 Example: If 15 different change requests increase the size of the project by 30%, you want to
make sure you’re not expected to complete the project in the same amount of time, or at the
same price!
Other Metrics: Resource Utilization
• Measures how much time individual workers are spending on a project.
• It’s a measure less of overall progress than of how efficiently your team is
working.
Percent of project done / Number of team hours spent on it.

• Or, if you’re looking at individual efficiency:

Percent of project done / Number of individual hours spent on it.

• Important to be able to measure utilization

• Need to have a time tracker system in place
• Helps PM know how many hours it’s taking people to get different jobs done!
Other Metrics: Resource Utilization
• Helpful for knowing how much time your team needs to accomplish various
tasks.
• Can help you schedule things in the future (will your team have enough hours
available to do those two other projects?)
• Can help isolate inefficiencies in your workflow.
 Example: If you’d budgeted 300 hours for the first 25% of the project, but it actually
took your team 500 hours to complete that portion, you know there’s a problem
with either your team’s efficiency or your budgeting procedure!
Further Resources:
• The 25 Most Important Project Management KPIs (& How To Track Them)
• https://www.clearpointstrategy.com/25-important-project-management-kpis/
• Improve Performance with 10 Project Management Metrics
• https://www.workfront.com/blog/10-project-management-metrics-to-propel-performance