Performance Reporting
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==Application== | ==Application== | ||
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| + | Once the metrics are defined is necessary to define: | ||
| + | *Who should be responsible to gather and elaborate the data. It could be a project team, contractors, cost engineers or data could come from the company's ERP<ref>https://www.defactosoftware.com/erp-software/data-analysis-and-reporting</ref> | ||
| + | *When the data will be assembled and communicated and which is going to be the reporting period (day, week, months, quarter...) | ||
===Setting a Baseline Plan=== | ===Setting a Baseline Plan=== | ||
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===Work Performance Information=== | ===Work Performance Information=== | ||
Work performance information is the performance data collected from various controlling processes. These information arise from different project areas. The data itself cannot and be used in the decision making process until they are not correlated and contextualized in the different functions. Once data are turned into information each company reports it to the project management. | Work performance information is the performance data collected from various controlling processes. These information arise from different project areas. The data itself cannot and be used in the decision making process until they are not correlated and contextualized in the different functions. Once data are turned into information each company reports it to the project management. | ||
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===Comparing Plan against Actual=== | ===Comparing Plan against Actual=== | ||
Revision as of 14:26, 29 September 2017
Project Control is the process of tracking, reviewing, and reporting the progress to meet the performance objectives defined in the project management plan. When a project exceed a certain scale is necessary to establish some form of formal control. By controlling the status of a project, a manager can keep people accountable for process execution and prevent minor problems to scale up. The main outcome of a functional reporting system is providing information about the state of a project. These information should be available in a time range that allows the project manager to eventually take effective corrective actions [1]. Project control report are delivered the project manager and to stakeholders involved in the project. Consequently, the report metrics has to represent and estimate accurately the intended performance. Typically, key measures in progress reporting assume time or financial value. However, the introduction of KPIs aimed to measure other kind of performances (for example people motivation or project reputation) is not excluded. Additionally, managers has to identify in the organization different professional in charge of the report maintenance. These are appointed of gathering data, implementing the report and of distribute it to all the involved stakeholders. While the project is in execution, the actual data are compared with the estimated data, defined by the baseline. This comparison can eventually exhibit a variance, that can be considered as signal of ineffective process execution. In a longer time prospective, the purpose of project reporting is to prove how different decision making process and practices led to failure or success. This insight should then be used as guideline for improvement by replicating good practices and avoiding mistakes[2].
Contents |
Scope of Project Control
The main input for project control is the project management plan. Many different knowledge areas contribute in writing the plane. These areas also play a role in monitoring the project work. Many documents they issue help to asses the status of the project[3]. The following table illustrates the knowledge areas or function that usually contribute in generating the reports, their role in the reporting process and the document they use to generate the reports:
| Area | Role | Reporting documents |
|---|---|---|
| Scope (or Configuration) Management | The scope of work defines what the project is producing or delivering. Reports will take track of scope variation during the implementation. |
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| Technical Support | Technical experts keeps track of their results to interpret clients need and addressing it respecting regulation and adopting good practices. |
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| Time Management | Outlines the sequence and timing of the scope of work through control documents as Progress report |
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| Procurement Management | The procurement function classifies all the purchased items. These are procured to specification, time schedule and budget |
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| Resource Management | Resource management is in charge to integrate the resource estimate with time management to produce resource forecast. Used resourced are closely linked to manpower requirements. |
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| Cost Management | Cost Management allocates budgets and cash-flows to the work packages |
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| Change Control | Set of documents that tracks and revise the progress of the scope of work. |
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| Quality Management | State how the company plans to meet the requirements |
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| Communication Management | The communication functions share information and instruction to the responsible parties. |
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| Human Resource Management | The HR function sets frameworks for the persons employed in the project. |
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| Environmental Management | Takes in account all the external issues that may effect the project. |
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Application
Maintenance
Once the metrics are defined is necessary to define:
- Who should be responsible to gather and elaborate the data. It could be a project team, contractors, cost engineers or data could come from the company's ERP[4]
- When the data will be assembled and communicated and which is going to be the reporting period (day, week, months, quarter...)
Setting a Baseline Plan
The first action to implement progress and performance reporting is setting a baseline. The development of a project baseline is properly a part of planning process. However, since it constitutes the main input for the comparison with actual data, it constitutes the foundation for any reporting activity. The baseline is an written document that represents commitment to the achievement of some cost, schedule or other performance. The reference value are acquired from the work breakdown structure. The WBS provides discrete work packages tied to deliverables and organization unit. Furthermore, each work package defines the work, duration and budget. The project network schedule time-phase all work, resources and budget into a baseline plan. The costs included in the baseline are usually labor, equipment and materials. Also direct overhead costs are associated to different work packages. One of the most common methods to assign costs to the baseline is to divide in percentage the completion of the project. This is possible by identify a relevant measure unit that properly express the progression of the project. Units could be workdays, drawing completed, line or code or others.
Measuring Progress and Performance
Data acquisition (or capture) is the activity of selecting and collecting data that builds up the information in a report. This activity is performed adopting a time frequency that allows to appreciate the variations of the process .For instance sales number could be reported daily while financing cost could be displayed in a monthly report. At the same time the data contained in the report as to be enough recent to allow the project management to take corrective actions on the reported activities. The purpose of the metrics is to provide the management with the current situation overview and estimated future scenarios.
Project status metrics
The measured indicators can be qualitative or quantitative. Qualitative indicators can be performed by on-site-inspection or other kind of personal assetment. Quantitative measures regards mainly time and budget performance. Relevant measurement are made on the early or late actualization of the critical path. The slack of of near-critical path can be measured in relation with the arise of new critical activities. Economical measurement keeps track on the expenditure performance to compare it with the budget values. However, in order to realistically estimate the performance agains time phased budget, we have to consider earned value (budgeted cost of the work performed.) as well. The data are collected based on the performance that the manager or interested stakeholder want to keep track of. Typically the information that are expressed by the data are related to[5]:
- Activity duration and completion status
- Resource usage rate
- Actual cost of resources and activities
Those measures are then compared with the expected duration, usage and costs defined before the activity execution. When projected and actual data are available is then possible to make a comparison and identify possible deviations.
However, the control process should not just take in account time and cost variable. Also inconsistent issues and behaviors can be identified during the execution of project activities in different knowledge areas, such as Project Value, Quality, or Reputation[6]. Sometimes it is not possible to measure the intended metrics as they do not manifest in quantitative values. For this reason are introduced other metrics, used as proxy for measurement purpose. If some deviation manifests (in the schedule, resource, expenditure or other metrics) it should be possible to locate the problem in the organization. The report should be capable to explicate causes and responsibilities for overrun. Additionally the report should indicate the forecast for cost overrun in case of midway overrun.
Work Performance Information
Work performance information is the performance data collected from various controlling processes. These information arise from different project areas. The data itself cannot and be used in the decision making process until they are not correlated and contextualized in the different functions. Once data are turned into information each company reports it to the project management.
Comparing Plan against Actual
As the plans rarely manifest exactly as estimated, it is a priority to detect deviations in useful time. The management must be able take corrective actions as soon the deviation manifests. For this reason is imperative to measure periodically the status of the project to compare the actual toward the expected plans. Consequently, the timing of the status must have a frequency that allows early detection and correction of deviations. A good indication is to generate a status report every one to four weeks to be useful and allow to take proactive actions.
Time performance
The project network schedule derived from the WBS/OBS is used as baseline to monitor the current project status. The two graphical tools used for communicating the project schedule status are tracking Gantt chart and control charts. Tracking Gantt chart associates the baseline duration of each past activity to its actual completion. At the same time it displays the remaining duration for ongoing and future activities. Control chart is beneficial when is necessary to underline current and past schedule performance. This graph plots the reporting period on the x-axis and the positive or negative deviation respect the schedule on the y-axis. The result is an outline over time of the difference of the scheduled date in the critical path in the report date with the actual point on the critical path.
Cost Analysis
The traditional cost analysis measurement usually focus on the comparison of earned value with:
- Expected schedule value, cumulative value of the resource cost estimation in a time phased baseline.
- Actual costs (of the work completed), the sum of the the cost incurred in accomplishing work.
In the analysis based on earned value and expected schedule value we need to assess planned cost of work scheduled, budgeted cost of work completed and actual cost of work completed. These values are used on periodical basis to calculate schedule variance and cost variance. Cost variance indicates if the work performed costed more or less than expected at any point in the project lifetime. This value can be calculated as difference between actual cost and earned value. Schedule Variance quantifies the progress of work packages in monetary terms. Schedule Variance is calculated by subtracting planned value from earned value[7].
Taking Action
When significant variances occurs, managers has to take action to bring back the project in line with the original or revised plan. When the scope changes throughout the project, a new baseline must be set, so to include the new informations. The project manager should train and communicate the importance of maintaining reporting system to the project members.
Risks and limitations
Staff involvement
One of the biggest challenges for a manager is to communicate to the staff the importance of reporting. Many times professional tend to consider reporting as a second category activity, compared to their other task. For example, a procurement manager requires from his/her buyers to fill into a monthly report the actual purchase value.However the manager does not communicate to the buyers how the result of the report will be used. The buyer will feel in that case really little motivated and will give a low priority to the task.
Metrics and behaviors
The choice of the most suitable KPIs for the achievement of goals and performances is one of the biggest challenge of reporting design. The target of indicators should be to monitor a performance necessary for the achievement of a goal. However, not always the chosen KPIs promote the intended behavior. Indicators measures quantifiable outputs. If reward system is based only on the achievement of that value, employee will do everything in their power to maximize the indicator. This can lead to bigger amount of service, neglecting the quality. For this reason KPI must be monitored and fixed when they generates anomalies[8].
Notes
- ↑ Project Management: Planning and Control Techniques, Third Edition, Wiley, Chichester, 1999, p. 191
- ↑ https://www.nap.edu/read/11344/chapter/4, 22/09/2017
- ↑ Project Management: Planning and Control Techniques, Third Edition, Wiley, Chichester, 1999, p. 193
- ↑ https://www.defactosoftware.com/erp-software/data-analysis-and-reporting
- ↑ Project Management: The Managerial Process, Third Edition, Clifford Gray and Eric Larson, Mc Graw Hill, 2006, p. 193
- ↑ Definition of a Project Performance Indicators Model: Contribution of Collaborative Engineering Practices, Marcelo Silva Pereira and Rui M. Lima, 2017
- ↑ https://pmstudycircle.com/2012/05/schedule-variance-sv-cost-variance-cv-in-project-cost-management/
- ↑ https://www.linkedin.com/pulse/do-your-kpis-performance-targets-cause-crazy-behaviour-bernard-marr/
