Description
It includes how to begin a project, network analysis, network diagram, project auditing, project evaluation.
Management Control Of Projects
FLOW
NATURE
ENVIRONMENT
PROCESS OF CONTROL
Operating Organisations
ORGANISATIONS
Project Organisations
NATURE OF PROJECTS
Set of Activities
Interest to management
Project
Specified End result
Sufficient Importance
Beginning A Project
Approve General Nature
Authorize Approximate Resources
Project End
Objective Accomplished
Cancellation
• Completion can lead to ongoing operations • Transition from project organizations to operating organizations
Project Extremes
Similar work done previously
New Work
1 or few people Few days or weeks
Many People Several Years
Our Discussion
• Formal Control Organisation • Consumes enough Resources • Management Control System
Contrast with ongoing operations
Single Objective Organization Structure Focus on Project
Need for trade-offs
Less reliable standards
Frequent Plan Changes Environmental Influence
Different Rhythm
Exceptions
CONTROL ENVIRONMENT
• PROJECT ENVIRONMENT STRUCTURE
– Temporary organisation – Special Team assembly
• Matrix Organisations
– Members of project team (if from sponsoring org. have 2 bosses)- project manager and functional dept. manager – Conflict of interest – Creates tension
Evolution of organisation Structure
• Different Stages –Different personnel and methods
– Planning: Architects,engineers,schedulers,analysts – Execution: production managers – Final: marketing departments,quality department
Contractual Relationships
Fixed Price
• Specified work-Specified DateSpecified Price • Penlaties if Specifications not met • Scope of project may changechange order issued
Cost Reimbursement
• Reasonable costs +profit • “ Not to exceed upper limit” • Scope, schedule , cost cannot be estimated
Contractual Relationships
Contrasts
• Contractor gives fixed price • Allowance for contingencies based on uncertainties • Fixed price appropriate when scope closely specified
Variations
• Incentive Contract- for moderately reliable costs and estimates • Different contract types for different activities on a project
Information Structure
• Work Packages
– Information structured by elements
• Smallest- work package • Way of aggregation- work breakdown structure
– Work package-measurable increament of workmilestone
• Indirect cost accounts
– For administrative and support purposes – Costs estimated per unit time
Project Planning
• Planning Team- Starting point takes estimates -used as decision to undertake project • Refines- detailed specifications of product detailed schedules and cost budget • Development of control system • Organisation chart • Planning process is a sub project of overall project
Nature of Project Plan
Scope
• Specifications of work package • Nebulous specification- brief and general
Schedule
Cost
• Estimated time for each work package • Relation between work packages- network
• Control budget • Monetary costs-aggregate of several work packages
Network analysis
• Several tools may be used
– PERT – CPM
• Each technique has 3 basic steps
– Time estimation for each work package – Interdependencies among packages – Critical path calculation
Network diagram
• Number of Nodes: Subgoals for completion to complete project • Lines joining nodes to one another: Represent activities , create network diagram, a chronological sequence to complete project.
Critical Path and Slack
Critical Path
Shortest total time to complete project
Slack
Extra time between activities
Special Attention Required. Aim at reduction of critical path
Should not slip away. Do not incur cost to reduce slack
Probabilistic PERT
• Estimated time on probabilistic basis • 3 estimates made :
– Most likely – Pessimistic – Optimistic
• Serious practical difficulties
Estimating Costs
• Made at level of aggregation • Includes several work packages • Individual work packages- controlled in terms of physical quantities • Two types of estimated costs:
– Known unknown – Unknown Unknowns
Preparing control budgets
• Prepared close to inception of work – Ensures current information • Enough time for approval by decision makers • Lenghty projects- first phase (detailed); later stages (rough estimates) • Link between planning and control of performance
Other Planning Acitivities
• • • • Material ordered Permits obtained Interviews Selection of personnel All activities need to be controlled and intergrated into overall effort
Project Execution
• At various milestones : Actual time,cost,scope compared to planned time,cost and scope. • Concerned Questions
– Scheduled completion date met? – Completion within estimated costs? – Work meets expected specifications? If not WHY? And what's the corrective action?
Nature of Reports
Trouble Reports
Progress Reports
Financial Reports
Quantity of reports Summarising progress
Percent complete
Punch list
Use of Reports
• Trouble reports
– Decision of which problem to give highest priority – Which problems to give personal attention and which to delegate?
• Progress Reports
– Required to spot not too apparent problems – Gives reflection of what lies ahead – Manage by exception
Use of Reports cont.
• Cost to complete:
– Comparisons of actual costs to date to bedgeted costs till date – Actual cost of entire project to budgeted costs of entire project
• Current estimate of total cost –atleast actual cost till date+original estimates for work remaining • Usage of lower amounts- can hide over runs by being over optimistic about future costs
Informal sources of information
• • • • • Talking to people on the floor Members of staff Regularly scheduled or ad-hoc meetings Informal memoranda Personal inspection of work status
Revisions
• Accept and proceed as planned • Cut back scope Cost Overrun • Replace project manager if cost unwarranted
• Track future progress against revised plan or original plan? • Revised plan –may have unwarranted cost increase and hides inefficiencies of past Plan revision • Original Plan –may be known to be obsolete
Solution
• Compare with both • Original budget- revisions authorised till date+reasons • Revised budget –variance causing factors
Project Auditing
• Auditing as work progresses
– Prefferable – Uncovers potential errors – Caution on time essential
• Operational Auditing
– Useful technique :Attention to management actions – Auditors are not managers
Project Evaluation
•Shortly after Evaluation of project completion performance •Several years after Evaluation of completion Results
Evaluation of performance
• Assist in decisions Project regarding project management managers
Process of • Discover better managing the ways of conducting future projects project
Cost overruns
• Actual cost exceeds budgeted costs • Interpretation of cost reports is complicated • Budgeted costs are rarely a reflection of what is actually encountered
Evaluation of Results
• Success of project
– Evaluated after enough time lapse – Actual benefits and costs considered
• Complicated if expected benefits not stated in objective,measureable terms and actual benefits not measurable • Situation on government project or NGOs
Criteria for post completion audit
• Important enough to warrant expenditure post completion • Quantifiable Results • Effect of unanticipated variables should be known approximately and not swamp assumptions /basis of approval of project • Leads to action (Better ways to propose /decide future projects)
doc_410970542.pptx
It includes how to begin a project, network analysis, network diagram, project auditing, project evaluation.
Management Control Of Projects
FLOW
NATURE
ENVIRONMENT
PROCESS OF CONTROL
Operating Organisations
ORGANISATIONS
Project Organisations
NATURE OF PROJECTS
Set of Activities
Interest to management
Project
Specified End result
Sufficient Importance
Beginning A Project
Approve General Nature
Authorize Approximate Resources
Project End
Objective Accomplished
Cancellation
• Completion can lead to ongoing operations • Transition from project organizations to operating organizations
Project Extremes
Similar work done previously
New Work
1 or few people Few days or weeks
Many People Several Years
Our Discussion
• Formal Control Organisation • Consumes enough Resources • Management Control System
Contrast with ongoing operations
Single Objective Organization Structure Focus on Project
Need for trade-offs
Less reliable standards
Frequent Plan Changes Environmental Influence
Different Rhythm
Exceptions
CONTROL ENVIRONMENT
• PROJECT ENVIRONMENT STRUCTURE
– Temporary organisation – Special Team assembly
• Matrix Organisations
– Members of project team (if from sponsoring org. have 2 bosses)- project manager and functional dept. manager – Conflict of interest – Creates tension
Evolution of organisation Structure
• Different Stages –Different personnel and methods
– Planning: Architects,engineers,schedulers,analysts – Execution: production managers – Final: marketing departments,quality department
Contractual Relationships
Fixed Price
• Specified work-Specified DateSpecified Price • Penlaties if Specifications not met • Scope of project may changechange order issued
Cost Reimbursement
• Reasonable costs +profit • “ Not to exceed upper limit” • Scope, schedule , cost cannot be estimated
Contractual Relationships
Contrasts
• Contractor gives fixed price • Allowance for contingencies based on uncertainties • Fixed price appropriate when scope closely specified
Variations
• Incentive Contract- for moderately reliable costs and estimates • Different contract types for different activities on a project
Information Structure
• Work Packages
– Information structured by elements
• Smallest- work package • Way of aggregation- work breakdown structure
– Work package-measurable increament of workmilestone
• Indirect cost accounts
– For administrative and support purposes – Costs estimated per unit time
Project Planning
• Planning Team- Starting point takes estimates -used as decision to undertake project • Refines- detailed specifications of product detailed schedules and cost budget • Development of control system • Organisation chart • Planning process is a sub project of overall project
Nature of Project Plan
Scope
• Specifications of work package • Nebulous specification- brief and general
Schedule
Cost
• Estimated time for each work package • Relation between work packages- network
• Control budget • Monetary costs-aggregate of several work packages
Network analysis
• Several tools may be used
– PERT – CPM
• Each technique has 3 basic steps
– Time estimation for each work package – Interdependencies among packages – Critical path calculation
Network diagram
• Number of Nodes: Subgoals for completion to complete project • Lines joining nodes to one another: Represent activities , create network diagram, a chronological sequence to complete project.
Critical Path and Slack
Critical Path
Shortest total time to complete project
Slack
Extra time between activities
Special Attention Required. Aim at reduction of critical path
Should not slip away. Do not incur cost to reduce slack
Probabilistic PERT
• Estimated time on probabilistic basis • 3 estimates made :
– Most likely – Pessimistic – Optimistic
• Serious practical difficulties
Estimating Costs
• Made at level of aggregation • Includes several work packages • Individual work packages- controlled in terms of physical quantities • Two types of estimated costs:
– Known unknown – Unknown Unknowns
Preparing control budgets
• Prepared close to inception of work – Ensures current information • Enough time for approval by decision makers • Lenghty projects- first phase (detailed); later stages (rough estimates) • Link between planning and control of performance
Other Planning Acitivities
• • • • Material ordered Permits obtained Interviews Selection of personnel All activities need to be controlled and intergrated into overall effort
Project Execution
• At various milestones : Actual time,cost,scope compared to planned time,cost and scope. • Concerned Questions
– Scheduled completion date met? – Completion within estimated costs? – Work meets expected specifications? If not WHY? And what's the corrective action?
Nature of Reports
Trouble Reports
Progress Reports
Financial Reports
Quantity of reports Summarising progress
Percent complete
Punch list
Use of Reports
• Trouble reports
– Decision of which problem to give highest priority – Which problems to give personal attention and which to delegate?
• Progress Reports
– Required to spot not too apparent problems – Gives reflection of what lies ahead – Manage by exception
Use of Reports cont.
• Cost to complete:
– Comparisons of actual costs to date to bedgeted costs till date – Actual cost of entire project to budgeted costs of entire project
• Current estimate of total cost –atleast actual cost till date+original estimates for work remaining • Usage of lower amounts- can hide over runs by being over optimistic about future costs
Informal sources of information
• • • • • Talking to people on the floor Members of staff Regularly scheduled or ad-hoc meetings Informal memoranda Personal inspection of work status
Revisions
• Accept and proceed as planned • Cut back scope Cost Overrun • Replace project manager if cost unwarranted
• Track future progress against revised plan or original plan? • Revised plan –may have unwarranted cost increase and hides inefficiencies of past Plan revision • Original Plan –may be known to be obsolete
Solution
• Compare with both • Original budget- revisions authorised till date+reasons • Revised budget –variance causing factors
Project Auditing
• Auditing as work progresses
– Prefferable – Uncovers potential errors – Caution on time essential
• Operational Auditing
– Useful technique :Attention to management actions – Auditors are not managers
Project Evaluation
•Shortly after Evaluation of project completion performance •Several years after Evaluation of completion Results
Evaluation of performance
• Assist in decisions Project regarding project management managers
Process of • Discover better managing the ways of conducting future projects project
Cost overruns
• Actual cost exceeds budgeted costs • Interpretation of cost reports is complicated • Budgeted costs are rarely a reflection of what is actually encountered
Evaluation of Results
• Success of project
– Evaluated after enough time lapse – Actual benefits and costs considered
• Complicated if expected benefits not stated in objective,measureable terms and actual benefits not measurable • Situation on government project or NGOs
Criteria for post completion audit
• Important enough to warrant expenditure post completion • Quantifiable Results • Effect of unanticipated variables should be known approximately and not swamp assumptions /basis of approval of project • Leads to action (Better ways to propose /decide future projects)
doc_410970542.pptx