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