W26_Austin_Best Practice Earned Value Technique for Objective Performance Measurement

1.    Problem recognition, definition and evaluation

Earned value techniques (EVT) are selected consistent with the way planned work is to be performed. EVM provides PMs with early warning of inadequate performance that allows them to take necessary corrective action before the project spins out of control and is not recoverable. Hence, selecting the appropriate earned value technique is crucial to the effectiveness of earned value data for proactive program control, making program decisions and timely reporting.

2.    Development of the feasible alternatives

There are numerous recognized Earned Value Techniques/Methods available to measure tasks/activities performance/progress:

1.    The physical Percent Complete Technique – requires that Control Accounts (CAM) measures or estimates the percent of actual physical progress that has been achieved on the WP, relative to the total value (BAC) of the WP. The percent complete is applied to the BAC to determine cumulative BCWP (EV).

2.    The Weighted Milestone Technique – requires that the Work Package be defined in terms of interim milestones, at least one per accounting period. When each milestone is completed, 100 percent of the respective budget value is earned.

3.    The Milestone with Percent Complete Technique – It requires that the Work Package be defined in terms of sequential milestones, it is especially effective when Work Packages have short duration (say less than six weeks).

4.    The Equivalent or Actual Units Complete Technique - The Actual Units Complete EVM method is used for repetitive tasks using Line of Balance (LoB) scheduling, i.e. tasks involving the same work; e.g. the installation of 10” gate valves in a linear meter run of pipeline. One unit installed is actual value earned.

5.      The Level of Effort (LOE) Method – This method sets incremental earned value equal to the planned (budgeted) amount and precludes (prevents) any schedule variance, i.e. BCWP = BCWS.

6.    The Fixed Formula Technique provides easy handling of short-term activities, i.e. activities that span one to two accounting periods. The 0/100 and 50/50 splits are common forms of this method; 0/100 is applicable to an activity confined to a single accounting period , 50/50 is used where the activity may start in one month and end in the next accounting month. Procurement activities can be measured more accurately using this method.

7.    Apportioned Effort Method - is also referred to as factored effort or factored method. It is used to calculate earned value for tasks that are related in direct proportion to a parent work package.

3.    Development of the outcomes and cash flows for each alternative

4.    Selection of the acceptable criteria

Earned value techniques are selected consistent with the way planned work is to be performed. The EVMS must be reviewed with the customer during the IBR, based on acceptable criteria such as; Objective measurable milestones, partial credit against milestones, standards earned methodology, mirror established cost estimating relationship. Monthly budget value is earned with the passage of time and is equal to the monthly scheduled amount (BCWP = BCWS).

5.  Analysis and Comparison of the alternatives

Detailed supporting documentation is typically required during the IBR to demonstrate a clear measurement approach and strategy. Applying the physical percent complete technique is based on objective measurable milestones, which the customer prefers, and allows for partial credit against milestones. While use of subjective EVM methods such as Level of Effort (LOE), Expert Judgment and Apportioned Effort not measured objectively is always subject to challenge.

6.    Selection of the preferred alternative

The Physical Percent Complete Technique requires objective measurable milestones, which the customer prefers, and allows for partial credit against milestones. This EVT can reduce excessive schedule details by representing numerous activities as internal milestones within a single work package.

7.    Performance Monitoring and Post Evaluation of Results

EVM provides PMs with early warning of inadequate performance that allows them to take necessary corrective action before the project spins out of control and is not recoverable. Warning of problems is usually available to management before 15 percent of the program is complete, in time to take corrective measures to alter an unfavorable outcome.

8.    References/Bibliography

1. Earned Value Management Best Practices. Guidance on three commonly asked questions. Presented by. Michael R. Nosbisch, CCC, PSP:

https://acc.dau.mil/adl/en-US/399151/attachment/53768/MR%20and%20Rebaselining.pdf

2. Kimberly, Meyer EVP, and Kimberly, Hunter EVP, AACE Cost Engineering Journal March/April 2013 Edition:

http://www.nxtbook.com/ygsreprints/AACE/32699_aace_costengineering_marapr2013/#/6

3. AACE International Recommended Practice Updated No. 11R-88

http://www.aacei.org/resources/rp/

 

W25_Austin_ Best Practice Network Technique for Planning, Scheduling and Budgeting

1.    Problem recognition, definition and evaluation

Project managers are usually faced with decision environments in which there are a number of considerations and conflicting objectives such as minimizing the total project costs, meeting certain contract and delivery dates, conflicting expenses on a fixed budget, and ensuring that certain activities achieve certain quality levels. Hence, the use of Best Practice Network Technique is required for the entire Project Management phases (Planning, Monitoring, Controlling and Reporting).

2.    Development of the feasible alternatives

Currently, there are several Network Techniques available in Project Management practice:

1.    CPM – Critical path method is based on mathematical calculations and it is used for scheduling project activities. This method was first introduced in 1950s as a joint venture between Remington Rand Corporation and DuPont Corporation. CPM method as a computer-based technique enhances the use of appropriate software solution in project management.

2.    PERT - Project Evaluation and Review Technique is primarily developed to calculate the time duration that will be taken to complete the project. The technique helps in calculating the minimum and maximum duration that is required to complete the project.

3.    Gantt Chart - A Gantt chart is a type of bar chart, developed by Henry Gantt in the 1910s, that illustrates a project schedule. Gantt charts illustrate the start and finish dates of the terminal elements and summary elements of a project.

4.    PDM - The precedence diagram method is a tool for scheduling activities in a project plan. It is a method of constructing a project schedule network diagram that uses boxes, referred to as nodes, to represent activities and connects them with arrows that show the dependencies.

5.    ADM - Arrow diagramming method (ADM) is a network diagramming technique in which activities are represented by arrows. ADM is also known as the activity-on-arrow (AOA) method. Use of ADM as a common project management practice has declined with the adoption of computer-based scheduling techniques.

3.    Development of the outcomes and cash flows for each alternative

4.    Selection of the acceptable criteria

An important component of the project baseline is the completion of a network schedule. Best Practice schedule technique easily defines critical path, visible dependencies, effective decision making, enhances use of appropriate software solution and shows if the project is progressing according to plan.

5.  Analysis and Comparison of the alternatives

The CPM method enables comparison of the current schedule with the baseline schedule to see if the project is proceeding according to plan. Variances from the baseline schedule can also be addressed with corrective actions and work around plans. The large amount of project data can be organized & presented in diagram for use in decisions making.

6.    Selection of the preferred alternative

From the preference ranking above, the use of CPM is the acceptable Best Practice, in order to determine the critical path of a network, considering not only time but also cost, quality, and safety criteria.

7.    Performance Monitoring and Post Evaluation of Results

Since project schedules change on a regular basis, CPM allows continuous monitoring of the schedule, allows the project manager to track the critical activities, and alerts the project manager to the possibility that non-critical activities may be delayed beyond their total float, thus creating a new critical path and delaying project completion. In addition, the method can easily incorporate the concepts of stochastic predictions, using the Program Evaluation and Review Technique (PERT) and event chain methodology.

8.    References/Bibliography

1. CPM vs. PERT CPM or "Critical Path Method": tool to analyze project and determine duration, based on identification of "critical path" through an activity network: http://home.snc.edu/eliotelfner/333/stones/page3.html

2.    AACE International Recommended Practice Updated No. 11R-88

http://www.aacei.org/resources/rp/

3.    Dr. Paul D. Giammalvo, AACE Cost Engineering Journal March/April 2013 Edition:

http://www.nxtbook.com/ygsreprints/AACE/32699_aace_costengineering_marapr2013/#/34

W24_Austin_Conflict Resolution in Project Management

1.    Problem recognition, definition and evaluation

Conflict in a program or project management is inevitable. Often, committed group members attempt to resolve group conflicts by actively communicating information about their conflicting motives or ideologies to the rest of the group. Hence, problem statement is to determine best method of addressing a conflict situation among group members within a project organization.

2.    Development of the feasible alternatives

Ultimately, a wide range of methods and procedures for addressing conflict exist;

1.    Collaborating - also known as problem solving, integrating, or win-win solution.

2.    Compromising - also described as a "give and take" or satisfaction style.

3.    Accommodating - also referred to as smoothing or obliging style.

4.    Forcing - also known as competing, controlling, dominating, or win-lose solution. 

5.    Avoiding - also described as withdrawal style.

3.    Development of the outcomes and cash flows for each alternative

4.    Selection of the acceptable criteria

Conflict in project management is not necessarily unfavorable when properly managed. Several advantages have been identified such as increasing personal growth and morale, enhancing communication, and producing better project outcomes, dependent on acceptable criteria of need to win, building trust, building commitment, common interest, foster accountability, resolving conflicts and focusing on results.

5.  Analysis and Comparison of the alternatives

The challenge for organizational leaders and project managers is to try to maintain the right balance and intensity of conflict in project management, through negotiation, mediation, diplomacy and peace building approaches.  However, conflict can be the decline of an organization if it is not effectively managed.

6.    Selection of the preferred alternative

With reference to above survey results, analysis and comparison of the alternative conflict resolution methods, it is therefore established that best method of conflict resolution among group members in a project organization is the collaborative, problem solving, win-win solution. Practically results in long term solutions to conflict.    

7.    Performance Monitoring and Post Evaluation of Results

By utilizing project management principles, understanding the dynamics of conflict, and learning approaches to conflict resolution, managers will be able to establish an environment in which creativity and innovation is encouraged and project goals are accomplished.

8.    References/Bibliography

1.    Dr. Paul D. Giammalvo, AACE Certification Prep Course:

Day-3 P.94-106 Conflict Resolution Matrix (With ref to: Thomas-Kilman Conflict Mode Instrument): http://www.kilmanndiagnostics.com/catalog/thomas-kilmann-conflict-mode-instrument

2.    Ford J. Workplace conflict: facts and figures: http://mediate.com/workplace/ford1.cfm

3.    Teamwork using team conflicts:

http://www.vta.spcomm.uiuc.edu/TCT/tctl1-ov.html

W23_Austin_Project Management Efficiency using Computer Applications

Dear Dr Paul,

Please review case study and advice better approach carrying out this comparison and analysis. Excerpts from AACE forums/discussions website: http://www.aacei.org/cgi-bin/forums/discus.cgi

1.    Problem recognition, definition and evaluation

Good Project Management involves successful completion of the project in time within budget and without compromising on quality. In recent years, technological innovation, use of computer applications with the internet in construction projects has significantly enhanced fulfilling aforementioned project objective. Hence this week’s case study is to quantify the project management efficiency (PME) using computer applications as compared to traditional project management system.

2.    Development of the feasible alternatives

There are two main types of project management systems:

1.    Traditional Project management system - The traditional project management system uses orthodox methods and techniques, linear and incremental management processes. These methods and techniques have been evolved for decades and are applicable for most of the domains. But for some domains, such as software development, traditional project management is not a 100% fit.

2.    Modern Project management system - Therefore, there have been a few modern project management practices, interactive and adaptive, introduced to address the shortcomings of the traditional method. Below are five such modern project management applications:

1.    Microsoft Project - Microsoft Project is one of the more popular packages and it now offers a web interface and deep Office, Outlook and SharePoint integration.

2.    Matchware MindView - MindView has an easy-to-use spreadsheet-like layout, and its mind map option lets you see your project in visuals, reminiscent of brainstorming bubbles.

3.    Project Kickstart - Project KickStart is an easy-to-use project management package that integrates with other applications like PowerPoint, Outlook, Excel, Word, Microsoft Project, and ACT!.

4.    RationalPlan Multi Project - RationalPlan Multi Project has features to manage resources and budgets as well as multiple projects. It has an interactive Gantt chart, normally available only in higher-end suites.

5.    Basecamp - Basecamp is a low-cost web-based project management and collaboration package which is gaining momentum.

3.    Development of the outcomes and cash flows for each alternative

4.    Selection of the acceptable criteria

In today's world, project management methods need to be flexible enough to enable handling and management of multiple changes simultaneously, using modern computer applications based on selected criteria such as efficiency, compatibility, speed, accuracy, accessibility and flexibility for switching between applications.

5.  Analysis and Comparison of the alternatives

Contemporary project management, interactive and adaptive process stresses more on the EXECUTION (EV), rather than the PLANNING (PV) aspect of a project. This does not mean that planning is not important, but the key stress and the main focus should be on the EXECUTION (EV) aspect of the project once the project has exited envisioning and planning phases.

6.    Selection of the preferred alternative

The evaluation of PME with the use of modern computer applications, tools and techniques can serve for project managers and project organizations as indicator for measuring level of achievements of project management objectives and project teams performance evaluation.

7.    Performance Monitoring and Post Evaluation of Results

We are now transitioning to a new arena where project management skills have increasingly being called out as 'essential' in an organization due to the increased complexities in today's projects and the multiple problems around and thereby replacing predictive planning with adaptive planning methodologies, using modern computer applications, tools and techniques.

8.    References/Bibliography

1.    AACE forums/discussions website:

http://www.aacei.org/cgi-bin/forums/discus.cgi

2.    Effective Project Management: Traditional, Agile, Extreme: http://www.amazon.com/Effective-Project-Management-Traditional-Extreme/dp/0470423676

3.    Recommended Practices - AACE International:

www.aacei.org › Professional Resources

http://www.aacei.org/resources/rp/

W18_Reginald Nwachukwu_Implementing Earned Value Using MS Project 2007

1. Problem Definition or Opportunity Statement:

To implement and use Earned Value technique on the construction of 27m length precast box culvert.

To convey final approval for commence of works, it is required to develop a Performance Measurement Baseline (PMB) to integrate project scope of work, schedule and cost. The intent is to use the PMB to monitor, measure and report work progress, performance and variances. This is to help the project team watch trends, make forecast and calculate completion dates.

2. Development of Feasible Alternatives:

The various alternatives that can be readily be developed is to list and prioritize the various commercial software tools that are available for use. To do this, below is a list of commercial software that can be used to implement Earned Value technique:

List of Commercial Software that be use to implement Earned Value

(i) MS Project 2007

(ii) MS Excel 2007

(ii) Primevera P6

3. Development of Outcome for Each Alternative:

Each alternative tool can easily be deployed and use to implement earned value. The focus here is to reduce the overall time/cost required to construct and implement EVMS system that can be use on the project. Excel would require much time as much as P6 Primevera software tools. MS Project is familar to most schedulers and can easily be used to deploy earned value on a single or multiple project.

Table 1. Activity List and Resources Avaliable

Table 2  Standard Wage Rate for Labor from Historic Data

Table 3 Earned Value on Resources - Labor (Work Hour)

Table 4 Status

Table 5 Basic Earned Value Dashboard

4. Selection of Acceptable Criteria:

Recognizing the fact that Earned Value Management System can be implemented fully using any of the alternatives; the basis for selecting any of the alternatives include:

(i) Availability of Software tool
(ii) Installation Cost 
(iii) Familiarity to Schedulers/Planners

5. Analysis and Comparison of Each Alternative:

With particular reference to the Table 1 - 5 above; MS Project 2007 was used to implement earned value technique for the construction of Precast Box Culvert. The results are those basic metrics that can be use by project team to measure and report work progress, performance, variances, trending and forecasting of completion dates. The ease of implementation of Earned Value technique using MS Project 2007 is one that makes its a valuable tool in the hands of most scheduler.

6. Selection of Preferred Alternative:

MS Project 2007 is the preferred alternative, since it readily avalaible, cost of installation is relatively cheap and is most familiar to Project planners and schedulers.

7. Evaluation of Results and Performance Reporting:

Evaluation of results obtained from implementation of EV using MS  Project 2007 can be checked by comparing the output with manual /hand calculation of earned value for each work package. With this hand calculations the performance of the Earned Value system using MS Project 2007 can be reported.

References:

1. AACE International (2012) Skills and Knowledge of Cost Engineering (5th Edition Revised) pp. 14.1 -14.6 AACE International Morgantown W.V. 

2. Brassard, M. & Ritter, D.(2010). The Memory Jogger 2: Tools for Continuous Improvement and Effective Planning, pp.92-95

3. Humphreys G.C. (2002) Project Management Using Earned Value (2nd Edition) pp.545-558 Orange CA Humphreys & Associates

W17_Reginald Nwachukwu_Developing Methods of Measurement for Precast Box Culvert

1. Problem Definition or Opportunity Statement:

To determine how project tasks are to be measured and reported using Earned Value technique:

The lead scheduler has happily inform the Planning & Scheduling project team that stakeholders have accepted/approved the Baseline Plan, Schedule and Scope of Work earlier submitted for approval. Given this development, he further informed the team that EVMS system was stated in the contractual requirements as the basis for reporting progress, performance and variance analysis for the project. He therefore requested that we develop methods for measuring performance and reporting work progress/variances objectively using Earned Value.

2. Development of Feasible Alternatives:

The alternatives developed for measurement of work progress and reporting performance/variances of workers productivity are those of Earned Value Management System (EVM) and each technique is applied specifically to each work item/activity to reflect how work progress can be measured using that technique. The three basic work progress measurement methods include:

(a)  Discreet Effort

(b) Apportioned Effort

(c)  Level of Effort (LOE)

For the purpose of this analysis, evaluation of the various workpages, only the Discreet Effort technique is considered. The Discreet Effort technique has several other techniques used to measure and report progress of work. These methods includes :

(i) Unit Complete
(ii) % Complete

(iii) Start/Finish Method

(iv) Incremental Method

(v) Expert Opinion

(vi) Cost Ratio or LOE Method

(vii) Weighted or Equivalent Method

3. Development of Outcome for Each Alternative:

Development of the Outcome ( or rather Cost objectives) for each method adopted by Discreet Effort technique will define clearly how progress of individual work activity/package will be measured, calculated, recorded and reported using Earned Value technique. Table 1 below shows how each progress measurement method will be measured and reported using EVM.

Table 1 Methods of measurement using Earned Value for Precast Box

4. Selection of Acceptable Criteria:

The criteria used for selection of alternatives will be based on the accuracy of each method to measure "status" or progress and performance OBJECTIVELY considering workers productivity. The various  methods measuring progress should give further insight  into cost variances and schedule variances analysis and trending so as to objective. The CV and SV of each method is compared and analysed to determine accuracy.

5. Analysis and Comparison of Each Alternative:

Based on the outcome for considerations of each work package and the various methods of measurement defined by Earned Value, the Weighted Milestone, Unit Complete, % Complete, LOE were selected for reporting performance and controling of overall work progress.

6. Selection of Preferred Alternative:

Based on the analysis and evaluation of work packages using methods of progress measurement by Discreet Effort technique, it can be recommended that the Equivalent/Weighted Unit Method should be used to more often to determine the performance, progress and productivity of workers effort. Considering the fact that other methods can be easily be applied where task to be performed is known, tangible and easily quantified.

7. Performanance Monitoring and Evaluation of Results:

Since accuracy, reliability and validity of data obtained from EVMS is of uttermost concern; the results obtained from the system will equally depend on the quality of data record and methods used to measure them objectively. Therefore, to improve performance and evaluations of results, data collected to used for EV must be measured, quantified and reported objectively.

References:

1. AACE International (2012) Skills and Knowledge of Cost Engineering (5th Edition Revised) pp. 28.3-28.7  AACE International Morgantown W.V. 

2. Brassard, M. & Ritter, D.(2010). The Memory Jogger 2: Tools for Continuous Improvement and Effective Planning, pp.92-95

3. AACE International (2008) Planning and Scheduling Professional certification Guide (First Edition Revised) pp. 143-145  AACE International Morgantown W.V.