1IME 6140 Dr. Larry MallakFigure 7-6(b) Negative Schedule Variance, Negative Spending VarianceIME 6140 Dr. Larry MallakFigure 7-6(c) Negative Schedule Variance, Positive Spending VarianceIME 6140 Dr. Larry MallakAdditional Items of Interest• Estimated (Remaining Cost) to CompletionETC = (BAC - BCWP)/CPI• (Total Cost) Estimated at CompletionEAC = ETC + ACWPIME 6140 Dr. Larry MallakSCOPE CREEP AND CHANGE CONTROLIME 6140 Dr. Larry MallakScope Creep• “Would it be possible…?”• “It’s just a small change…”• “If you do this, it will be perfect.”• “I forgot to add this into the specs.”•Etc.•A PM’s nightmare!IME 6140 Dr. Larry MallakScope Creep• Coping with changes frequently cited by PMs as the single most important problem• Common Reasons for Change Requests–Client– Availability of new technologies and materials2IME 6140 Dr. Larry MallakPurpose of Change Control System• Review all requested changes• Identify impact of change• Evaluate advantages and disadvantages of requested change• Install process so that individual with authority may accept or reject changesIME 6140 Dr. Larry MallakPurpose of Change Control System continued• Communicate change to concerned parties• Ensure changes implemented properly• Prepare reports that summarize changes made to date and their impactIME 6140 Dr. Larry MallakRules for Controlling Scope Creep• Include in contract change control system• Require all changes be introduced by a change order• Require approval in writing by the client’s agent and senior management• Consult with PM prior to preparation of change order• Amend master plan to reflect changesIME 6140 Dr. Larry MallakProject AuditingProject TerminationIME 6140 Dr. Larry MallakBackground•A project evaluationappraises the progress and performance relative to the project’s initial or revised plan.• Also appraises project against goals and objectives set for it during selection process.• Projects should be evaluated at a number of crucial points.• Purpose is to improve process of carrying out project.IME 6140 Dr. Larry MallakEvaluation Criteria• Original criteria for selecting and funding project• Success to date• Business/Direct Success• Future Potential• Contribution to Organization’s Goals•Contribution to Team Member Objectives3IME 6140 Dr. Larry MallakMeasurement• Measuring performance against planned budgets and schedules straightforward• Earned value analysis more complicatedIME 6140 Dr. Larry MallakPurpose of Audits• To conduct an in-depth examination of project work to determine its true status for the benefit of the parent organization.IME 6140 Dr. Larry MallakTwo Types of Audits• Post-project audit– Benefits future projects– Can be a witch hunt• In-process audit–With change of P.M.– Poor performance– Matter of routineIME 6140 Dr. Larry MallakThe Audit Process• Timing depends on purpose•Three Levels– general audit– detailed audit– technical auditIME 6140 Dr. Larry MallakLevels of Audits• General audit– cover the six areas• Detailed audit– usually conducted as a follow-up to general audit• Technical audit– usually the most detailed– proprietary issuesIME 6140 Dr. Larry MallakSteps in Project Audit• Familiarize audit team with requirements of project• Audit project on-site• Write up audit report• Distribute report4IME 6140 Dr. Larry MallakBehavior Aspects• Audit team must have free access to anyone with knowledge of the project• Project team members rarely trust auditors• Audit team must understand politics of project team• Information must be confirmed• Project team should be made aware of in-process audit• No judgmental commentsIME 6140 Dr. Larry MallakThe Audit Report•Introduction– description of project and its goals• Current Status– comparison of work completed and planned• Future Project Status– conclusions regarding project progress– recommendations for changesIME 6140 Dr. Larry MallakThe Audit Report continued•Critical Management Issues– issues senior management should monitor• Risk Analysis and Risk Management– potential for project failure and monetary loss• Final Comments– caveats, assumptions, limitationsIME 6140 Dr. Larry MallakHow to Conduct an Audit• Name the auditor• Gather information• Evaluate information compared to project plans•Draw conclusions•ReportExample: ABET IE visitIME 6140 Dr. Larry MallakProject Goals•Primary• Ancillary•An audit provides feedback on how well the project addressed/achieved its goals.IME 6140 Dr. Larry MallakChasing AncillaryGoals is Difficult.• Can’t measure against an unknown• Unwilling to admit personal goal• Lack of trust in “outsider” auditor• Multipurpose projects and different views of project goals among members5IME 6140 Dr. Larry MallakAudit Variables•Depth– data availability•Timing– various points in project life cycle•Cost– benefits of audit should exceed costsIME 6140 Dr. Larry MallakSections of Audit Report:Current Status• Costs: compare actual to budget• Schedule: milestones, actual vs. planned Gantt• Progress: compare work completed with resources expended [earned value charts]• Performance: report on key success measures of project• Critics: their concerns and how addressed so farIME 6140 Dr. Larry MallakSections of Audit Report:Future Project Status• Conclusions on progress w/ recommendations for changes in technical approach, schedule, budget in remaining tasks• Only completed work consideredIME 6140 Dr. Larry MallakSections of Audit Report:Critical Management Issues• Identify issues requiring close monitoring.• Link issues to project pyramid.IME 6140 Dr. Larry MallakSections of Audit Report:Risk Analysis• Review major risks and impact on pyramid.• Note alternatives to those risks.• Don’t second guess the proposal.IME 6140 Dr. Larry MallakSections of Audit Report:CLA•Caveats• Limitations• Assumptions•concerning the audit report itself6IME 6140 Dr. Larry MallakProject TerminationIME 6140 Dr. Larry MallakWhen to Terminate a Project• Sunk Cost Approach– whether organization is willing to invest the time and cost required to complete the project• Two Other Criteria– the degree to which the project has met its goals– the degree to which the project qualifies against a set of factors associated with success or failureIME 6140 Dr. Larry MallakTypes of Project