PROJECT SCHEDULE CONTROL

      The first step in establishing a project is to estimate how long each activity will take, from the time it is started until the time it is finished. This duration estimate for each activity is the time for the work to be done plus associated waiting time.

     An activity duration estimate must be based on the quantity of resources expected to be used on the activity. Throughout the performance of the project some activities will take longer than their estimated duration, others will be done in less time than their estimated duration, and a few may conform to duration estimates exactly. Over the life of a project that involves many activities, such delays and accelerations will tend to cancel out one another.

PROJECT CONTROL:

     The key to effective project control is to measure actual progress and compare it to planned progress on a timely and regular basis and to take necessary corrective action immediately. The project schedule control process involves regularly gathering data on project performance, comparing with the planned performance. This process must occur regularly throughout the project.

     It starts with establishing a baseline plan that shows how the project scope will be accomplished on time and within the budget. Once this baseline plan is agreed with the customer the project starts. A regular reporting period should be established for comparing the actual progress with the planned progress. Reporting may be daily, weekly, or monthly depending on the complexity and the duration of the project. During each reporting period, two kinds of data or information need to be collected.

1.      Data on actual performance.

2.      Information on any changes to the project scope, schedule or budget.

     Once the updated schedule and budget have been calculated, they need to be compared with the baseline schedule and budget and analyzed for variances to determine whether the project is ahead or behind the time schedule. The project control process continues throughout the project.

APPROACHES TO SCHEDULE CONTROL:

Schedule control includes four steps

1. Analyzing the schedule to determine which areas need corrective action.
2. Deciding what specific corrective actions should be taken.
3. Revising the plan to incorporate the chosen corrective actions.
4. Recalculating the schedule to evaluate the efforts of the planned corrective actions.

     If the planned corrective actions do not result in an acceptable schedule these steps are repeated. It is necessary to analyze the newly calculated schedule to determine whether it needs further attention. The schedule analysis should include identifying critical path and any path of activities.

CONTROLLING THE PROJECT SCHEDULE:

     The managing and maintaining the schedule proactively is your best way to assure the project comes in on time. In order to be proactive about this process there are some inputs that one needs to understand.

Ø  The inputs are:

 

·         The Schedule Baseline - The schedule baseline is the current approved version of the project schedule which provides a basis for comparing and reporting on the project performance. The project schedule details the planned start and end dates for the activities.

·         Performance Reports – Performance reports are first and foremost a communication mechanism to list what work has been performed by whom. A good performance report should show the planned and actual dates and duration of work activities

·         Schedule Management Plan – The Schedule Management Plan details how changes to the schedule can be made and under which conditions such changes are allowed. Project Manager, Project Sponsors, and Functional Managers should adhere to the scheduling guidelines explained within the schedule management plan.

·         Approved Change Requests - Approved schedule change requests are an input because the schedule needs to be revised to reflect the approved changes to the project schedule.

     Once all of the inputs have been obtained, there are tools and techniques that can be used to review the schedule. If a situation occurs where project performance differs from the schedule, these tools and techniques can be used to correct the situation. Project managers will evaluate how much work has been completed compared with actual performance versus planned performance. If they uncover a schedule variance, the project manager should analyze the variance’s severity.

 

 

Ø The tools and techniques commonly employed in controlling the schedule are:

 

·         Progress reporting – Progress Reporting is when a report is created detailing the actual start and finish dates of activities and the remaining duration of unfinished activities. It is a good idea to include the percent complete of activities in the progress report.

·         Variance Analysis – Variance analysis compares planning data with actual performance in order to discover delays or variations in the project schedule. For example the planned start, duration, and anticipated completion date would be compared with the actual start date, duration, and completion date for that activity.

·         Performance Measurement - Performance measurement assesses the severity of delays and other deviations by measuring project performance compared against the project plan. This comparison helps the project manager determine if corrective or proactive actions are need for this project. Some common performance measurement tools are:

1.      Schedule comparison bar charts – Schedule comparison bar charts are a way to visualize the differences between the planned and actual performance. This is a good tool to graphically communicate project status.

2.      Project Management Software – PMIS is utilized to determine the affect of variance upon individual activities. The PMIS easily calculates the impact of any proposed change to the schedule.

3.      Schedule change control systems – Schedule change control systems are described in the project management plan with the integrated change control process. The schedule change control system is the bought into, agreed with, and realistic process to change the schedule. When project managers discover that actual performance is not meeting the schedule, it is a good idea to use the schedule change management process to propose changes to the schedule.

4.       Schedule variance and the Schedule Performance Index - Schedule variance and the Schedule Performance Index both measure the financial value of the work performed as of a given date.

SV = EV – PV

SPI = EV / PV

Schedule variance and the Schedule Performance Index yield information on the current conditions of the project and can be used to determine whether the project is on or off schedule.

 

Ø The process of controlling the schedule creates several different types of outputs as follows:

·         Performance measurements - The process of controlling the schedule produces measurements of performance to date on a project. The Schedule Variance and Schedule Performance Index are objective measures of project performance that can be used to report the status of the project to stakeholders.

·         Requested changes – Requested changes are the proposed changes to start dates, finish dates, activity durations, or project milestones.

·         Recommended corrective actions – Recommended corrective actions are changes to resolve a situation with the project schedule.

·         Schedule Baseline updates – Schedule Baseline updates are done when approved changes are applied to the existing baseline.

·         Activity List updates – Activity List updates occur when an approved change causes the project manager to add or remove activities from the Activity List.

·         Activity attribute updates – Activity attribute updates are updates or changes in the description or relationship of project activities. These changes may require additional actions by some stakeholders, so they have to be communicated.

·         Project Management Plan - Finally, the process of controlling the schedule may generate changes to the overall Project Management Plan. Corrective actions and approved schedule changes may call for changes in the methods, policies, and activities the project manager uses to control the schedule for the remainder of the project. These changes should be documented in the Schedule Management Plan segment of the Project Management Plan.

VARIANCE ANALYSIS:

The difference between the costs detailed in the plans and the actual costs is called variance. In order to calculate variance, up to date and accurate information is essential - providing a clear picture of the extent to which tasks are complete and the expense incurred to date. Clearly variance can be calculated for those tasks that have been completed, but for tasks that are partially completed the calculations are more complicated. A positive variance indicates that a project is under-spending whereas a negative variance indicates that a project is suffering from over-spend.

·         Applying Variance:

                 Variance can be used to quantify the difference between the planned costs and the                                                current planned costs, at whatever level is required - for example, for the project as a whole, for a sub-project, a group of related tasks or for individual tasks. Variance is usually expressed as a percentage, enabling the divergence to be quantified in proportional terms.

·         Limitations of Variance Analysis:

     This variance analysis can lead to the identification of certain types of task that frequently overrun their budget whilst other tasks may be seen to regularly come in under their budget. Occurrences such as these require further investigation in order to identify potential efficiency gains. The major problem with a variance analysis approach to project monitoring is the amount of time it takes to establish actual costs. On the majority of large projects, supported by a typical accounts department, there will be a time lag of around 6 weeks before spend information can be accurately reported.

EARNED VALUE ANALYSIS (EVA)

·         The Practical Benefits of EVA:

     The major problem with a simple variance analysis approach to project monitoring is the amount of time it takes to establish actual costs. Earned value analysis(EVA), represents a practical approach to measuring the progress of a project against the plans and this approach is based on variance analysis. Since EVA relies on the measurement of the actual amount of work that has been done at a given date and the multiplication of this by the associated cost rates, many of the delays associated with variance analysis can be eliminated.

     Tasks that have not been started or that have been completed are relatively easy to quantify in terms of earned value. However, for tasks which have started but are not yet complete the situation is less clear and the problem of quantifying the earned value is compounded if tasks of long duration are involved. Therefore EVA is made easier by having a larger number of shorter tasks in the plan.

·         The Earned Value Analysis Variables:

     The earned value approach to project control overcomes the problem of managers making decisions based on isolated information. The three basic variables relating to budgetary and actual costs are defined on this screen. These variables can be used to analyze the project, at any level, to establish a variety of useful parameters.

o   Budgeted Cost for Work Scheduled (BCWS) is the value of work that should have         been done at a given point in time. It indicates the budget and work targets at a given point.

o   Budgeted Cost for Work Performed (BCWP) is the value of work actually done at a given point in time. It takes the work that has been done and the budget for each task and indicates what portion of the budget should have been spent to achieve it. This variable is sometimes referred to as Earned Value.

o   Actual Cost for Work Performed (ACWP) is the actual cost of the work done and it may vary from that budgeted. ACWP is the amount reported as actually expended in completing the work accomplished within a given time period.

o   Earned Value(EV) = percentage complete multiplied by the budget, as defined by the Budgeted Cost for Work Scheduled (in either cost or man-hour terms).

o   Planned Value (PV) represents the amount of time which reaching the project’s current progress should have taken to achieve according to the project management’s schedule.

Example:  If, at a specific point of time, a project has a BCWP of Rs.25,000 and a BCWS of Rs.30,000 then it has a schedule variance (cost) of minus Rs.5,000 and a percentage variance of -16.6%. In other words it is behind schedule by 16.6%. The conversion to a percentage is done to avoid confusion, that is, the use of cost units to represent schedule variances.

FORMULAE:

1)  SCHEDULE VARIANCE (SV):

“Schedule variance is a measure of the deviation between the actual progress and the planned progress. This is usually measured in units of cost rather than time.” The schedule variance (cost) can be established at any point in time by referring to the difference between BCWS and BCWP. 

Schedule Variance can be calculated as using the following formula:

·         Schedule Variance (SV) = Earned Value (EV) - Planned Value (PV)

                                    OR

·         Schedule Variance (SV) = BCWP - BCWS

The formula mentioned  gives the variance in terms of cost which will indicate how much cost of the work is yet to be completed as per schedule or how much cost of work has been completed over and above the scheduled cost.

·         Positive Schedule Variance Indicates we are ahead of schedule

·         Negative Schedule Variance Indicates we are behind of schedule

It is unwise to accept any variance as the norm. To put this in perspective:

·         A contractor is reporting a SV of .89 actually means that for every £1.00 you pay him, you are receiving £0.89p in return. This must be questioned until a satisfactory answer and recovery plan are put in place.

·         The converse is also unacceptable. If a contractor continuously reports a SV of >1 then we could be looking at a relaxed schedule or a new way of working that will render the baseline plan irrelevant. This should not be discouraged but it is an opportunity to interrogate the plan and see how this might benefit both the contractor and the supplier.

2)  SCHEDULE VARIANCE % (SV):

Schedule Variance % indicates how much ahead or behind schedule the project is in terms of percentage.

Schedule Variance % can be calculated as using the following formula:

·         SV % = Schedule Variance (SV) / Earned Value (EV)

                         OR

·         SV % = SV / BCWP

The formula mentioned above gives the variance in terms of percentage which will indicate how much percentage of work is yet to be completed as per schedule or how much percentage of work has been completed over and above the scheduled cost

·         Positive Variance % indicates % ahead of schedule

·         Negative Variance % indicates % behind of schedule

3)  SCHEDULE PERFORMANCE INDICATOR (SPI):

Schedule Performance Indicator is an index showing the efficiency of the time utilized on the project. Schedule Performance Indicator can be calculated using the following formula:

·         SPI = Earned Value (EV) /Planned Value (PV)

                       OR

·         SPI = BCWP / BCWS

The formula mentioned above gives the efficiency of the project team in utilizing the time allocated for the project.

·         SPI value above 1 indicates project team is very efficient in utilizing the time allocated to the project

·         SPI value below 1 indicates project team is less efficient in utilizing the time allocated to the project

4)  TO COMPLETE SCHEDULE PERFORMANCE INDICATOR (TSPI):

To Complete Schedule Performance Indicator is an index showing the efficiency at which the remaining time on the project should be utilized. This can be claulated using the following formula:

·         TSPI = ( Total Budget - EV ) / ( Total Budget - PV )

                                   OR

·         TSPI = ( Total Budget - BCWP ) / ( Total Budget - BCWS )

The formula mentioned above gives the efficiency at which the project team should utilize the remaining time allocated for the project.

·         TSPI value above 1 indicates project team can be lenient in utilizing the remaining time allocated to the project.

·         TSPI value below 1 indicates project team needs to work harder in utilizing the remaining time allocated to the project.

GUIDELINES FOR DETERMINING VARIANCE THRESHOLDS:

     Variance thresholds vary from company to company and are based on risk strategies and the management reserves an organization uses, which are typically 10 to 15 percent. Thresholds can also vary from project to project depending on how critical the business objectives are.

     Less than 5 percent (low-risk tolerance):   Schedule variances less than 5 percent are an early warning for potential problems.

     Between 5 and 10 percent (moderate risk):   This range requires that we need to take action.

     Greater than 10 percent (high risk):   Anything greater than 10 percent requires immediate and substantial action.

     These guidelines are best for schedule variances on the critical path because they directly affect the finish date.  We can set higher thresholds (for instance, adding 5 percent to the values above) for schedule variances on noncritical path tasks. The higher thresholds mean that we don't have to take action as quickly, but we also don't want those tasks to be delayed so long that they affect those on the critical path.

EXAMPLE:

     To illustrate the concept of EVM and all the formulas, we assume a project that has exactly one task. The task was baseline at 8 hours, but 11 hours have been spent and the estimate to complete is 1 additional hour. The task was to have been completed already. Assume an Hourly Rate of Rs.100 per hour. Using this information:

Hourly Rate = Rs.100 

PV or BCWS = (Hourly Rate  X  Total Hours Planned or Scheduled)

PV = Rs.800                                                                      (Rs.100 X 8 hours)

AC or ACWP = (Hourly Rate  X  Total Hours Spent)

AC = Rs.1100                                                                    (Rs.100 X 11 hours)

EV or BCWP = (Baseline Cost  X  % Complete Actual)

EV = Rs.734                                                                       (baseline of Rs.800 X 91.7% complete) 

(NOTE % Complete Actual (below) to get the 91.7% )

SV = Earned Value (EV) - Planned Value (PV)

SV = -Rs.100                                                                       (Rs.700 – Rs.800)

SPI = Earned Value (EV) /Planned Value (PV)

SPI = 0.88                                                                            (Rs.700 / Rs800)