<<

. 4
( 5)



>>

audience is the project team, you will be concerned about the fundamental nitty-gritty areas. You and the team
want to know about what has been done, what slipped, what impact the slippage had, what you will do about
it, and what is coming up in the near future. With these issues in perspective, you have the basis for a renewed
commitment to completion.
• Prepare a well-thought-out agenda. Allocate your agenda time wisely. Cover the most important
topics early when people are alert and will address them with vigor. On your copy of the agenda, insert
the scheduled time for each topic in the margin. Allow some buffer time should the topic take longer
than expected. Preview the agenda with the appropriate people to ensure that you have not omitted
anything, included anything that is extraneous, or neglected to clarify the objective of each topic.
• Invite the essential people. It serves no purpose to have all concerned parties attend each meeting.
There is a core team that should be present, but beyond that, the balance of the team members should be
encouraged to attend only when they have something to contribute or have a need to be kept informed.
A project review meeting on the first Monday of every month could become tedious should the agenda
have no relevance to the current activities of the attendees.
• Dry run your speakers. You as project manager should not always make the entire presentation. For
example, an engineer may report on a technical design, a marketing representative on a sales strategy,
or a computer programmer on a new automated system. Before the presentation, request your speakers
to walk through (talk through) their presentation, for both their benefit and yours. It is too late to make
modifications when they are in front of the audience and presenting erroneous or inappropriate data.
• Organize the project review meeting to your best advantage. As the first speaker, you need to present
briefly and concisely an overview of the meeting, the objective of it, and a quick preview of the agenda.
With this effective form of introduction, you set the tone and alert the participants to your major
concerns.


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How to Conduct a Review Meeting
Title

• Follow the agenda. Once the agenda is set, follow it. Do not stray from the format. If an attendee
attempts to circumvent your game plan, use the agenda to bring the subject back into focus. Typically
your agenda should cover the following subjects:
-----------
Typical Agenda for a Project Review Meeting
• Major accomplishments since the last review.
• Schedule status (actual versus plan).
• Financial status (actual versus plan, including a clear explanation of variances from plan).
• Major issues (problems) and action plans. Indicate specific assistance required from management or
the customer, as well as from any of the functional areas within the matrix (action plans should
include a deliverable(s) and deadlines).
• Plans for the next period.
• Special topics (those with a sense of urgency).
• Review of action items generated from this meeting and a time and place for the next meeting.

A number of questions will help you gain the information you need:
Suggested Questions for a Project Review Meeting
• Do you foresee any future problems?
• Is your personnel supply in jeopardy? Are people being pulled off projects?
• Is there dissatisfaction among your staff? What™s bothering them?
• How are you dealing with recurrent problems?
• What are you lacking to do your job?
• Have you prepared for long lead deliveries?
• Are you accepting substantive changes that should be addressed in a change control (change of
scope) process?
• Don™t overrun your agenda. Most attendees™ schedules are tight; therefore, they will probably
allocate just so much time to your review meeting. There is a prevailing feeling that too much time is
spent in meetings, so make the briefing concise and stay on target. Record time allotment on the margin
of your working agenda. Maintain your pace, and move on when you need to. When appropriate, carry
over the discussion to the next meeting. Assign team members the responsibility for investigating
subjects and reviewing the results in advance of the next meeting. Remember the rule of thumb: People
can be productive in a meeting environment for approximately one to one and a half hours. After that,
it™s all downhill.
Remember that a well-run review meeting is the forum in which to accomplish many of your key objectives
as project manager: to improve communication, motivate the project team, maintain control, evaluate status,
isolate problems, and institute action plans. Use this opportunity well.

Senior Management Reviews
Project management reports are generated for senior management on a recurring basis, usually at the end of
each cyclical reporting period. These reports, in conjunction with review meetings, afford you a wonderful
opportunity to interact with senior management. In order to maximize this opportunity, make sure that your
project reports for senior management review meetings take less than thirty minutes. The review of the project
status should be structured according to five topics:
1. Project introduction: Summarize the project objectives and the composition of the project team.
2. Problems: Present each problem being faced by the team and include the worst-case scenario, the
action required to fix the problem, and the approvals required to implement the solution.
3. Subjective appraisal: Give your assessment of the state of the project and the degree of client
satisfaction with the effort.
4. Outstanding decisions: Enumerate the decision that senior management and the client must make, as
well as the consequences of a delay in receiving the decisions.
5. Status: Present summary project-management-system displays of the schedule, cost, resource, and
accomplishment states of the project.


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Title
Chapter 9
A Model for Earned Value:
Achievement-Accomplishment Monitoring
-----------

In this chapter, we explore how to assess the state of the project based on milestone completions”what is
often called earned value or achievement-accomplishment monitoring. Achievement monitors the completion
of milestones. Accomplishment assesses earned value. Earned value shows how much work has been
accomplished and can be used to determine performance standards and to forecast mathematically time and/or
dollars needed to complete the project. It can provide much more information than just whether the project is
ahead of or behind schedule, over or under budget, and/or being efficient or inefficient with the organization™s
money.
Achievement and accomplishment serve the same purpose. They allow you to draw conclusions concerning
the accuracy of the estimates-to-complete furnished by the members of the project team. But the quality of the
information is not the same. Achievement monitoring is an intuitive, judgmental process in which you and the
team members infer the project status from the unique trends and dynamics produced over the project™s life
cycle. Accomplishment planning and control allows a quantified comparison with person-hour and dollar
expenditures, as well as schedule status.
Both approaches are based on milestones, which are identified during the development of the project plan, and
each works best if there are a significant number of milestones, with at least a few scheduled to be completed
during each progress-monitoring period.

The Role of Milestones
A milestone is a marker for a major event”a significant point in development. In the world of information
systems, a milestone might be the delivery of an internal design or systems test. In construction, a milestone
might be the delivery of materials. And in research and development, funding or completion of a prototype
test might be considered a milestone.
Before that milestone can ever be met, a series of smaller markers must be passed. Waiting to check progress
until a major milestone is reached is an invitation to disaster. It is these small deliverables that you will be
managing. What is due today? If it isn™t ready, when will it be? What is needed to get back on track?
In achievement monitoring, milestones are not weighted on the basis of complexity or difficulty. They are
identified and incorporated into the project schedule. A milestone schedule is developed so that you know
when each milestone is scheduled to be achieved. During the course of informal project control or
management by wandering around, you must verify the timely completion of the milestones and indicate their
completion on the project status report. Finally, you must use the achievement data to assess whether the cost
and schedule estimates are consistent with the achievement to date. Consistent data should raise your level of
confidence; inconsistent data will raise doubts about the estimates-to-complete furnished by task leaders.
In performing an assessment of achievement to date, it is not possible to determine the worth of the completed
milestones as a percentage of the total worth of the project milestones. An invalid conclusion would be to
infer that 33 percent of a project has been achieved because twenty-five of seventy-five milestones are
completed. It may be interesting to know that twenty-five of seventy-five milestones have been completed,
but the project might be only 5 percent complete”or 95 percent complete”based on the relative worth of
those milestones.
Accomplishment monitoring contains several added steps. The first step is the same: Identify the milestones
and incorporate them into the project schedule. The second step, developing a milestone schedule, is also the
same regardless of whether achievement or accomplishment is being used. But the third step is complex. Each
milestone must be given a difficulty weight, which forms the basis of the earned value calculations and the
mathematical assessment of the yield of efforts to date (a subject discussed later in this chapter). During the
course of informal project control or management by wandering around, verify the timely completion of the
milestones and indicate their completion on the project status report. Finally, make the earned value
calculations and use them to check the consistency of the earned value data with the cost and schedule
estimates. Consistency can raise your level of confidence; inconsistency can raise doubts about the
estimates-to-complete furnished by the task leaders.
The critical issue in accomplishment monitoring is to determine how milestones are weighted. The
Department of Defense (and other government agencies that use milestone reporting) prefers to use the
milestone budget as an indicator of the worth of the milestone. Thus, the percentage of completion of the
project is calculated by dividing the budget of the completed milestones by the total direct cost budget of the
project. If $5,650 worth of milestones have been completed out of a total budget of $25,000, the project is
said to be 22.6 percent complete. The major problem in using budget as the weight for the milestones is the
purchased item distortion. Purchased items that are not difficult to obtain but are high-cost items receive a
disproportionately high value in the calculation of percentage complete.
Other organizations use person-hours, labor budgets, or expert assigned points. In the person-hour approach,
the percentage of completion of the project is calculated by dividing the planned person-hours of the
completed milestones by the total person-hours of the project. While this eliminates the purchased item
distortion, it creates its own distortion in which tasks requiring a large number of hours of unskilled labor are
valued more highly than tasks requiring slightly fewer hours of the most skilled professionals in the
organization.
In the labor budget approach, the percentage of completion of the project is calculated by dividing the labor
budget of the completed milestones by the total labor budget of the project. This reduces the distortion created
by tasks requiring large amounts of unskilled labor, but it is based on an assumption that may not prove true:
that people are compensated on the basis of the value of their contribution to the effort.
Using a group of experts to assign point values to each of the project milestones yields the most accurate
results. In this approach, the percentage of completion of the project is calculated by dividing the point values
of the completed milestones by the total point values of all project milestones. This approach is the least
frequently used, however, since the added cost of assigning points to the milestones, and revising the point
values if the project scope changes, can be great.
Any of these weighting techniques can be used at the end of a period in order to derive a planned percentage
of completion for the project and an actual percentage of completion for comparison purposes. The data can
be further analyzed as checks on the status being reported by the members of the project team.
Because many project control techniques do not focus on the physical completion of work or do not place
sufficient emphasis on this factor, either achievement or accomplishment monitoring needs to be part of every
organization™s approach to project management. Many organizations ought to consider developing a
procedure for each approach so they can apply the achievement approach to smaller, less significant projects
and the accomplishment approach to larger, more visible, and more critical projects.


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by Joan Knudson and Ira Bitz
AMACOM Books
ISBN: 0814450431 Pub Date: 01/01/91

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Achievement Monitoring
Title

Achievement monitoring works best when there are many milestones in the plan. The example in Figure 9-1
uses a milestone plan for a ten-month project. Each box with a number inside represents a milestone. The
number equals the budget dollars for each milestone. Zeros have been eliminated.
-----------
Let™s examine the potential achievement status of the project at the end of the fifth month. If we monitor cost
and schedule performance, then we will expect the project to be 50 percent complete (five months of a
ten-month project completed). If completion of milestones is the measuring criterion, then at the end of five
months, we could expect the project to be 48 percent complete (ten of twenty-one milestones completed). We
can also expect that 70 budget dollars (sum of milestone budgets for the first five months) out of a total of 126
budget dollars (sum for all milestones) will have been completed, or 55 percent complete (70/126). Thus we
have a range of expectations from 48 percent complete to 55 percent complete, with the 55 percent
completion clearly being accurate because it is based on earned value.
Figure 9-2 presents the actual milestone completions at the end of the fifth month. Note that Milestone 8 has
been completed ahead of schedule, while Milestone 13 should have been completed over a month ago. The
value of the completed milestones is 65 (the sum of the completed milestones budgets). Using earned value,
the project is actually 51.5 percent complete (65/126). The project is 3.5 percent behind where it ought to be
(55 percent “ 51.5 percent).
Now let us assume that the cost accounting system tells us that we spent $73 to complete the current
milestones (this is an arbitrary number we have chosen for the sake of the example). This information will
enable us to anticipate the information to be generated by the members of the project team and will thereby
demonstrate the power of earned value. We can expect the members of the project team to report that they are
behind schedule by approximately 7.1 percent. The difference between the budgets of the planned milestones
(70) and the completed milestones (65), divided by the budget of the planned milestones [(70 “ 65)/70] gives
this result. However, we can expect the members of the project team to report that they are under budget by
approximately 12.3 percent. The difference between the budgets of the completed milestones (65) and the cost
incurred to complete them (73), divided by the budget of the completed milestones [(65 “ 73)/65] gives this
result.
Analysis of Accomplishment Data
The effort that goes into calculating the weighted value of completed milestones can yield information useful
to you over and above the ability to report accurately a percentage of completion at the close of a reporting
period. The analyses we will use here can be performed with any rational weighting scheme for
milestones”budget, labor budget, person-hours, or expert assigned points. For this discussion, we will
assume that milestones have been weighted on the basis of their budgets.




Figure 9-1 Milestone plan for a ten-month project. Each numbered box is a milestone; the number in each
box shows the budget dollars for it.

Comparison of Budgeted Cost of Milestones Scheduled and Budgeted Cost of
Milestones Performed
A comparison of the budgeted cost of milestones scheduled (BCMS) and the budgeted cost of milestones
performed (BCMP) yields an assessment of schedule performance on the project:
Three Typical Interpretations for Schedule Performance
1. If BCMS is greater than BCMP, the project is behind schedule.
2. If these two values are equal, the project is on schedule.
3. If the BCMP is greater than BCMS, the project is ahead of schedule.

These values are calculated from your verification of milestone completions rather than by reports from the
task leaders. If task leaders report milestone completions, these analyses will not function as a check and
balance on cost and schedule progress reporting. When you compare BCMS and BCMP, the results should be
consistent with the schedule status as reported by the task leaders through the schedule of
estimates-to-complete. If the results are consistent, it is likely that the task leaders™ assessment of schedule
performance is accurate. If the results are inconsistent, it is likely that there is a problem with the schedule
estimates-to-complete rendered by the task leaders.

Comparison of Budgeted Cost of Milestones Performed and Actual Cost of
Milestones Performed
A comparison of the budgeted cost of milestones performed (BCMP) and actual cost of milestones performed
(ACMP) yields three assessments of cost performance on the project:
Assessments of Cost Performance
1. If BCMP is greater than ACMP, the project is under budget.
2. If these two values are equal, the project is on budget.
3. If the ACMP is greater than BCMP, the project is over budget.




Figure 9-2 Actual milestone completions at the end of the project™s fifth month.
When you compare BCMP and ACMP, the results should be consistent with the cost status reported by the
task leaders through the cost estimates-to-complete. If the results are consistent, it is likely that the task
leaders™ assessment of cost performance is accurate. If they are inconsistent, it is likely that there is a problem
with the cost estimates-to-complete rendered by the task leaders.
The problem with cost estimates could stem from an erroneous assessment of cost to complete, it could be
unwarranted optimism on the part of the task leaders, or it could be an error in the processing of the data. In
any case, you need to determine why there is an inconsistency between cost performance to date and the cost
estimates-to-complete.

Schedule Performance Index and Cost Performance Index
The final element of the analysis is the calculation of two important trends: the schedule performance index
(SPI) and the cost performance index (CPI):
Key Accomplishment Trends
1. The schedule performance index is equal to the budgeted cost of milestones performed divided by
the budgeted cost of milestones scheduled.
2. The cost performance index is equal to the budgeted cost of milestones performed divided by the
actual cost of milestones performed.

Calculate the performance index SPI and CPI at the end of each reporting period. Ideally, each index should
be equal to 1, which indicates that actual performance and planned performance are the same. An index value
less than 1 indicates you are behind schedule or over budget, and an index value greater than 1 indicates you
are ahead of schedule or under budget. Index values calculated at the end of a period of performance add little
to the value of the information already available to you. They become meaningful and useful when they are
available for a number of periods and can be used to indicate a trend in schedule and/ or cost performance.
Plotting these values on a single graph where the x-axis is the end period and the y-axis is the index value will
show a clear picture of both the schedule and cost performance trends on the project. You can then see if the
index values are changing in an alarming manner or if the change indicates that the project is under control.


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by Joan Knudson and Ira Bitz
AMACOM Books
ISBN: 0814450431 Pub Date: 01/01/91

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Calculations Using Accomplishment Data
Title

The calculations employed in the analysis of accomplishment data use these acronyms:
BAC = budget at completion
BCMS = budgeted cost of milestones scheduled (or the planned
-----------
earned value)
BCMP = budgeted cost of milestones performed (or actual earned value)
ACMP = actual cost of milestones performed (or actual dollars spent)

Example 1
Activity ABC is to produce 100 units and is scheduled to take 5 weeks. Each unit is planned to cost $75.*
Below are the basic data needed to work through this example.
1. Planned status at the end of the third week. If 100 units are scheduled to be produced in 5 weeks, 20
units are scheduled to be generated per week if we assume linear production. Therefore, at the end of
the third week, 60 units are planned to be produced. If the standard cost of each unit is $75, the BCMS
is $4,500.
2. Actual status at the end of the third week. Fifty units have been produced, earning the value of
$3,750. In other words, 50 units — $75 (standard cost) = $3,750. Therefore, the BCMP is $3,750.
3. Monies actually spent: The financial reports indicate that $3,000 has been spent; therefore, the
ACMP is $3,000.
To summarize:
• BAC of the project is planned to be $7,500.
• At the end of the third week, BCMS is $4,500, BCMP is $3,750, and ACMP is $3,000.

Questions:
Here are seven questions that can be answered with the data provided. Work through the calculations; then
look up the answers and explanations that follow.
*For purposes of this example, it does not matter whether the units are widgets or miles of pipe or drawings.
It is important, however, that a quantifiable measurement of the number of units can be attached to the output
from this activity.
1. Project™s cost variance = BCMP “ ACMP.
Answer: $_____
Are we over budget or under budget?_____
2. Schedule variance in cost terms = BCMP “ BCMS.
Answer: $_____
Are we ahead of or behind schedule?_____
3. Cost performance index (CPI) = BCMP/ACMP.
Answer:_____
Are we performing better or worse than planned?_____
4. Schedule performance index (SPI) = BCMP/BCMS.
Answer:_____
Are we performing better or worse than planned?_____
5. Budgeted cost for the remaining milestones (BCRM) = BAC “BCMP
Answer: $_____
6. Estimate to complete the project (ETC) = (BAC “ BCMP)/CPI
Answer: $_____
7. Total estimate at completion (EAC) = ACMP + ETC
Answer: $_____

Answers
1. Project™s cost variance = BCMP “ ACMP. $3,750 “ $3,000 = $750 (compares what was planned to
be spent against what was actually spent).
If the answer is a positive figure, less money is being spent than was planned; the project is under
budget.
2. Schedule variance in cost terms = BCMP “ BCMS. $3,750 “ $4,500 = “ $750 (compares what was
spent in terms of accomplishment as compared to what was planned to be spent).
If the answer is a negative figure, less work is being accomplished than planned, and the project is
behind schedule.
3. Cost performance index (CPI) = BCMP/ACMP. $3,750/$3,000 = 125 percent (compares the ratio of
what was accomplished in dollar terms to that which was actually spent).
If the answer is more than 100 percent, the project performance relative to cost performance is good.
4. Schedule performance index (SPI) = BCMP/BCMS. $3,750/ $4,500 = 83.3 percent (compares the
ratio of what was accomplished in dollar terms to what was planned to be accomplished).
If the answer is less than 100 percent the project relative to schedule performance is poor.
There is good news and bad news so far. This activity is behind schedule, but the project™s money is being
spent effectively. In other words, the cost performance is good; more units of work are being accomplished
for fewer dollars than planned. The schedule performance is not measuring up to plan, however.
5. Budgeted cost for the remaining milestones (BCRM) = BAC “ BCMP. $7,500 “ $3,750 = $3,750
(subtracts the accomplishment in dollar terms from the original planned budget at completion).
This answer indicates how much money is left in the budget.
6. Estimate to complete the project (ETC) = (BAC “ BCMP)/CPI. ($7,500 “ $3,750)/1.25 = $3,000
(uses the BCRM calculated in Step 5 and takes into account the cost performance index).
This answer shows the additional money needed to complete the job.
7. Total estimate at completion (EAC) = ACMP + ETC. $3,000 + $3,000 = $6,000 (adds what has
already been spent to what yet needs to be spent in order to finish the job).
This answer anticipates the total budget at the end of the project.
This is only the beginning of the calculations that can be used in accomplishment analysis. The example
assumes that Task ABC is accomplished in a linear fashion and that each of the deliverables will be produced
at equal intervals and for equal dollars. This may not be true. In fact, much work is accomplished in a
nonlinear way.
Often progress is measured over time on the basis of an assumed linear relationship, perhaps because linear
extrapolations are easier to calculate than nonlinear ones. But we think that the problem is more complex. In
essence, there seems to be a natural tendency to think in terms of linear relationships. When this is coupled
with the fact that we live in a nonlinear world, it leads to false assessments of progress and, in turn, diversion
of management attention from real problems to apparent problems. This result can be a disaster, even
crippling an organization.
As an example, assume that a technician faced with the task of upgrading sixty personal computers can
complete the job in sixty hours (this is the technician™s estimate). Furthermore, assume that four machines can
be completed at the end of the first day. When we examine the first day™s progress, we are distressed to
discover that only two machines have been completed. Should we panic? Probably not.


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The technician might have started the task by inspecting all sixty upgrade kits to ensure that each contained
Title
all of the correct supplies. In this case, the effort required on the remaining fifty-eight machines may be less
than two hours per machine. In addition, it is possible that the machines are of different ages and
configurations, and the technician may have decided to take the most difficult machines first, knowing that
they would take more time per machine. There may be other machines in the queue that will take substantially
----------- less than two hours per machine. And it is possible that the technician spent seven hours on the first machine,
figuring how to install and test the upgrade most efficiently. Having done so, the second machine may have
only taken one hour, and the other fifty-eight machines may take less than one hour each because of the
learning curve. There are a number of circumstances in which our linear extrapolation is misleading and
distressful.
It is not a linear world, and therefore linear plans fail the project manager. More often than not, there is a
nonlinear plan in the minds of those performing the work. If this is the case, you cannot afford to accept a
linear plan from the members of the project team. In developing the project plan, communicate the desire for a
nonlinear plan and facilitate the gathering of nonlinear plan data. The software used must be capable of
accepting nonlinear data and using them as the basis for comparisons with actual performance.
The example we worked through for Activity ABC had an inherent assumption in it: the schedule called for
the production of twenty units per week. It is often the case that there is a nonlinear baseline for the
production of deliverables within a project or an activity. Let™s make a different assumption and work through
the activity again. There should be some dramatically different results.

Example 2
Assume that the 100 units mentioned, at a cost of $75 each, are going to be produced according to the
following schedule:
Week Units
1 10
2 15
3 20
4 25
5 30
This activity is scheduled to take 5 weeks, during which time 100 units are to be produced, each unit costing
the firm $75. The status of this activity at the end of the third week is the same as in Example 1: 50 units have
been produced earning the value (BCMP) of $3,750 (50 units — $75 per unit = $3,750) and $5,000 has been
spent (ACMP).

Questions
Answer the questions that follow concerning the status of this project and its forecast of projections.
1. What should have been accomplished at the end of the third week: in other words, what is the plan?
_____ units should have been produced.
$_____ should have been spent (BCMS).
2. The project™s cost variance = BCMP “ ACMP = _____
Are we over or under budget? _____
3. Schedule variance in cost terms = BCMP “ BCMS = _____
Are we ahead of or behind schedule? _____
4. Cost performance index (CPI) = BCMP/ACMP = _____
Are we performing better or worse than planned? _____
5. Schedule performance index (SPI) (in $) = BCMP/BCMS = _____
Are we performing better or worse than planned? _____
6. Budgeted cost for remaining work = BAC “ BCMP (where BAC = budget at completion) = _____
7. Estimate to complete the project (ETC) = (BAC “ BCMP)/CPI = _____
8. Total estimate at completion (forecasted cost) (EAC) = ACMP + ETC = _____

Answers
1. The plan is to produce 45 units and to spend $3,375 (BCMS).
2. The project™s cost variance = BCMP “ ACMP (determines whether the completed work has cost
more or less than was budgeted for that work) = $3,750 “ $5,000 “ $1,250.
We are over budget.
3. Schedule variance in dollars = BCMP “ BCMS (compares work completed to work scheduled) =
$3,750 “ $3,375 = $375, or 5 units at $75 per unit.
We are ahead of schedule.
4. Cost performance index (CPI) BCMP/ACMP = $3,750/$5,000 = 75 percent.
Less than 100.0 indicates poor performance. We are performing worse than planned.
5. Schedule performance index (SPI) = BCMP/BCMS = $3,750/ $3,375 = 111 percent.
Less than 100.0 indicates poor performance. We are performing better than planned.
6. Budgeted cost for remaining work = BAC “ BCMP (where BAC = budget at completion) = $7,500 “
$3,750 = $3,750.
7. Estimate to complete the project (ETC) in dollars = (BAC “ BCMP)/CPI = ($7,500 “ $3,750)/.75 =
$5,000.
8. Total estimate at completion of project or the forecasted final cost (EAC) = ACMP + ETC = $5,000
+ $5,000 = $10,000.


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Project Management
by Joan Knudson and Ira Bitz
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ISBN: 0814450431 Pub Date: 01/01/91

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Let™s compare the answers we obtained from assuming the linear and nonlinear plans for the units to be
Title
produced.
Item Linear Plan Nonlinear Plan
Planned output 60 45
Actual output 50 50
-----------
Cost variance +$750 “$1,250
Cost status under over
Schedule variance “$750 +$375
Schedule status behind ahead
CPI 125 percent 75 percent
Cost performance good poor
SPI 83.3 percent 111 percent
Schedule performance poor good
Budget for remaining work $3,750 $3,750
Estimate to complete $3,000 $5,000
Estimate at completion $6,000 $10,000

Earned value is often analyzed graphically. Figure 9-3 shows the earned value plan using the nonlinear data
from Example 2. The y-axis coordinates are the number of units (left side) and percentage complete (right
side). Dollars could also be used as a y-axis. You might be concerned at the increasing pace of unit production
which has been planned by the project team. Figure 9-4 is an example of the earned value plan (BCMS) and
earned value actual (BCMP) for this activity at the end of the third week using the nonlinear data. It is quite
clear that the effort is ahead of schedule. Figure 9-5 shows the earned value plan and earned value actual with
actual cost data for the activity using the nonlinear data from Figures 9-3 and 9-4. The earned value actual
(BCMP) is over the earned value plan (BCMS); therefore, the effort is ahead of schedule. However, the actual
cost (ACMP) is well over the earned value plan (BCMS); therefore, the effort is substantially over budget.
Having these types of data makes it easier for you to check the information given to you by project team
members or by their functional bosses. Measurements for earned value or work accomplishment have more
substance and integrity than just schedule and cost variances and are a better base from which to extrapolate
future costs and schedules. Incidentally, it is also true that the nonlinear relationships tend to prevail when
looking at person-hours versus time, and therefore the nonlinear planning requirements apply to the
measurement of actuals as well.




Figure 9-3 Earned value plan using nonlinear data.




Figure 9-4 Earned value plan (BCMS) and earned value actual (BCMP) at end of third week.




Figure 9-5 Earned value plan and earned value actual, with actual cost data.


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ISBN: 0814450431 Pub Date: 01/01/91

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Title
Chapter 10
Supporting Project Management: Software, Training,
and Administration
-----------

In this chapter, we explore three of the many support issues relative to project management:
• Software support: Employing automated tools to manipulate project management data in order to
plan, control, and investigate what-if simulations, and to generate meaningful reports.
• Training support: Teaching interested parties about the organization™s project management
methodology, their project management process and associated tool kit, and the chosen software tool (if
one exists).
• Administrative support: Providing qualified help to the project manager and functional managers of
the project team with the purpose of collecting, processing, and disseminating project management
information.
Many companies appear to believe that once they purchase a piece of project management software, all of
their project managers will become competent overnight. Buying a project management scheduling package
does not ensure success, however. First, one must understand the basics of project management in order to
prepare the data for system entry, comprehend the logic the software uses to calculate the output, and be able
to interpret the data and request meaningful reports.
Training is required to provide a grounding in the fundamental tools and techniques of project management.
In addition, the project manager and team members must be given the time to plan, monitor, and track the
project”an effort that cannot be accomplished in one™s spare time. If the project manager is not given the
time to do the project management job correctly, administrative support must be found to take away some of
the burden.

Software Support
Choosing the right project management software package used to be as easy as going to a local computer store
and seeing what was available, but accelerating changes in project management software have mandated a
different approach. More emphasis on sophisticated features and ease of use require an in-depth evaluation of
the major alternatives. The payoff is a more effective implementation of project management.
In 1955, the project management software count was zero. By 1981, it had increased to approximately 220.
The number of products introduced to perform project management functions on the computer, mainframe or
mini, was impressive. In the early 1980s project management software packages were introduced for the
microcomputer. The functionality was very limited, yet this was the most significant step in the evolution of
project management software in at least a decade.
Today over 1,300 new products are available to perform project management functions. Four hundred of these
are microcomputer-based, MS-DOS machine-based products. How many will there be tomorrow? Clearly the
answer is fewer. Certainly project management is an expanding market, and more and more organizations are
realizing that a portion of their workload lends itself to being managed with project management, but the
market is not broad enough to support that many products. There has to be a shakeout in the project
management software business. Some companies and some products”including good ones”will not survive.
This represents a risk to the organization acquiring a project management software product. Will the company
be there to provide technical support? Will there be new releases, fixing bugs and/or offering new features
desired by the customer base? If new, incompatible hardware product lines are introduced, will there be new
releases of the software that will run on the hardware? All of these questions can be a major concern to the
potential buyer. None of the answers is easy. The companies offering the products range in size from
one-person operations to giants of industry. Neither may survive in the face of intense competition. Financial
resources do not, in and of themselves, guarantee survival. The risk may not be capable of being managed, but
certainly it must be recognized when the software decision is presented to management for approval.
Before you begin your search for the perfect package, do your homework. Conduct a thorough analysis of
your current project management methodology to determine your specific requirements for a software
package. Devise a comprehensive checklist of all the requirements necessary for you to manage your projects
using a software tool. Describe the way you utilize resources, handle job costs and budgets, handle task
assignments and task relationships, want to see reports, and so forth. On your checklist, note which items are
mandatory, which are highly desirable, and which are window dressing. Once you have your checklist you™re
ready to evaluate products. But first, let™s take a look at what project management software can and cannot do:
What Project Management Software Can Do
• Perform calculations such as early start, early finish, late start, late finish, float, critical path,
resource loading, and labor budget extrapolations, to name but a few.
• Allow you to try various scenarios to determine the impact of changes.
• Sort and extract data to produce a variety of reports.
• Perform some of the calculations to level your overloaded resources or to meet a mandated target
date.
• Portray the actuals compared to the plan from data you have entered.

What Project Management Software Cannot Do
• Define the project objectives.
• Develop the work breakdown structure.
• Determine the logical dependencies of tasks one to another.
• Choose who should be working on which tasks.
• Estimate the duration of tasks.
• Fix all the problems of resource overloading or attempt to meet a mandated target date by
compressing the critical path.
• Design the correct reports for different people on your distribution list.

The bottom line is that project management software cannot do your thinking. What it can do is take the
laborious work out of calculating and recalculating the data and out of preparing handwritten reports.

Defining Key Software Features
The following features are of significance in evaluating the suitability of individual project management
programs to your specific application.
Pricing
There is only a slight correlation between price and performance. Some $500 products outperform products
costing six to ten times as much. The fullest-featured products are not on the shelves of your local software
store. With but a few exceptions, the products that have more functionality are marketed directly by the
source to the end user. These products tend to be somewhat less well known and are more difficult to locate to
include in a comparative evaluation. The products in the store may be sufficient to meet your needs, but if
they are not, look further. Sales volume is not an indicator of quality or functionality. Many products have
sold on the basis of their name or reputation, without having any significant feature advantage over less
well-known products sitting unused on bookshelves. Features are being added at a frantic pace. Most vendors
are working feverishly to add capabilities to their products, and the rate at which updates are being released is
increasing.


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Project Management
by Joan Knudson and Ira Bitz
AMACOM Books
ISBN: 0814450431 Pub Date: 01/01/91

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Number of Activities
Title
What is the total number of activities (tasks) that may be assigned to any project”to both the main project
and each subproject? We are witnessing a gradual evolution away from a strict numerical restriction toward
the terms limited by the system or unlimited. You will need to investigate whether the number of activities is
limited by the amount of available main memory in your computer or by disk capacity. Check the limiting
-----------
factors and whether the capacities meet your minimum functional requirements.
Total Resources
What are the total numbers of resources”individuals, skill categories, equipment categories, materials, and
others”available for assignment at any given time? Some packages limit the number of resources per task;
others limit the number per project. Determine what software factors limit resources and what your minimum
constraints are before you purchase.
Direct Costs
How does the software package handle direct costs (material, equipment, supplies) that may be assigned to
each activity? If you want a detailed accounting, confirm that the categories may be both listed and
accumulated by specific item rather than by a generic title such as “Fixed Costs” or “Other Costs.” Consider
how the costs are allocated: up front, amortized across the duration, in fixed payments, at specific
performance milestones, or at the end of an activity”or whether you have a choice. The program™s capability
for allocating and reporting the respective direct costs by time periods is a significant feature.
Resource Availability and Allocation
It is not realistic to expect that any one resource will be made available 100 percent of its time to a specific
project. Resource availability and allocation features allow the planner to designate the number of hours a
resource is available to the project and/or the percentage of the resource™s time that is committed to the
project. In more sophisticated packages, the resource allocation feature can provide overtime costing, lag
starts of individual resources, multiple shift allocation, and individual resource calendars for scheduling
vacations, holidays, and conferences.
Resource-Constrained Scheduling
Where resources are overscheduled, resource leveling is employed. Tasks on noncritical paths are moved
within their float and/or elongated into their float. This reduces the amount of resources required during any
one unit of time. If the movement of tasks does not resolve the problem”in other words, some resources are
still overscheduled”the critical path activities are delayed until no resource is scheduled more than the
number of hours that it has available to the project. When the effect on the completion date is recalculated, the
project may take longer than originally scheduled. Selective changes may then be made to task priorities,
dependencies, resource assignments, and other alternatives to reach a balance between the original and
extended completion dates. These changes may be repeated in an iterative fashion until a compromise
acceptable to the project team and management is achieved. It is particularly important to allocate resources
intelligently during the planning stages. Although the same results could be obtained by manually adjusting
assignments and durations, it is more efficient and effective to have a computer system perform the
calculations.
On-Screen Network Diagram
An on-screen network representation of the activities and milestones in a project is an integral tool for
successful project management. Systems that provide on-screen networks may permit activities to be moved
on the screen to achieve an optimum presentation for report purposes. Other programs, in comparison, provide
a fixed network diagram, which generally is the result of entries made in the task and/or Gantt screens.
On-Screen Schedule/Gantt Chart
Planners require graphic schedule information, and most packages use the Gantt or bar chart format, which
shows the activities on a time-scale orientation. Gantt charts display start, end, and durations of tasks within
the project. This format is widely used as a planning, monitoring, and tracking device. Some products show
the interfaces of predecessor(s) to successor(s); some do not.
On-Screen Resource Utilization
On-screen presentation of how and when resources are utilized throughout the duration of the project is
helpful to project managers. Presentation in some cases is displayed not only in tabular form but also in a
graphic form, such as histograms. There may also be a capability to compare resource utilization with the
activities to which the resource is assigned, sometimes on the same screen. Absence of this feature makes
resolution of resource conflict much more difficult than it needs to be.
Resource Leveling Within Float
When one or more resources is overloaded or overutilized, some effort must be made to relieve the situation.
This is called leveling. Through an automatic option or manual intervention, this feature allows two options:
(1) movement of noncritical tasks within float to resolve overloading or (2) the addition of qualified personnel
or other resources. Consequently, this kind of leveling does not affect the scheduled completion date. Most
current packages have a resource leveling option; however, they level by delaying tasks within float (option 1)
only. They will not locate and utilize alternate resources of comparable skill that are underutilized and make a
substitution. However, the product allows the project manager to accomplish this through menu-driven
entries.
Work Breakdown Levels
This is the number of levels to which project work can be broken down and reflected by the project
management package. Generally detailed planning for task and resource assignment is done at the lowest level
of detail and then rolled up to selected intermediate or top levels. For example, the highest levels may be
feasibility phase, preliminary design phase, detailed design phase, development phase, and implementation
phase. Feasibility can then be broken down into market analysis, needs analysis, and current system study,
and market analysis may then be broken into telephone survey of Fortune 500 firms and competition survey.
How many levels of detail and how well the system consolidates those levels is important to the planner. This
person plans and manages at the lowest level but often reports at the higher levels.
Tracking Schedule Progress
Recording the actual start time and duration for each activity, as well as the finish date, permits the planner to
track the project. An additional feature is the ability to forecast the revised completion date based on the
slippage during the earlier activities of the project.
Tracking Budget Expenditures
The ability to record the actual costs (which often deviate from the plan) incurred during the progress of the
project is an important feature of tracking. A project manager must be able to add current actual costs to
update existing actual costs and produce reports documenting the planned and actual expenditures.
Simulations
The capacity to perform a series of what-ifs (simulations of alternative options) iteratively is an effective
option if the various alternative scenarios may be examined individually, saved to disk, and then compared
with the original baseline plan. Effective project managers recognize the need for varied contingency plans, as
well as the need to replan frequently according to circumstances.


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Project Management
by Joan Knudson and Ira Bitz
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ISBN: 0814450431 Pub Date: 01/01/91

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Calendar Flexibility
Title
Software users may need to plan in intervals ranging from hours to months. Small projects may be planned in
hours or days, whereas larger projects may be planned in weeks and months. Decide what units of time you
need, from lowest to highest. Also decide if you need a combination of intervals in one project or when
comparing multiple projects.
-----------
Resource Calendars
You may need the ability to create unique calendars for each resource with varying workweeks, shifts,
holidays, and/or shutdowns. Each of the individual resource calendars can be adjusted independently to
accommodate a particular individual™s availability. Some programs allow a calendar for each resource,
especially helpful if personnel have different amounts of time available or you must schedule computer time,
equipment time, or a subcontractor™s time.
Number of Subprojects
This capability allows you to create two or more subprojects linked to tasks in the main project. The details of
the subprojects may be rolled up and summarized in the main project. Any change in network scheduling
affecting the parent task will be reflected in the subproject, and vice versa.
Multiproject Resource Allocation
This feature is critical in an environment where individual and group resources are assigned to several
concurrent projects. Projects sharing common resources need to be reviewed as a group in order to examine
the aggregate resource utilization and costs over particular time periods. Multiproject composite resource
allocation tables are useful to point out both overloading and underutilization of resources and to facilitate
their reassignment, change task relationships, or other actions to accomplish resource leveling.
Cost and Budget Documentation
A comprehensive project management software package must be able to create or accept baseline budget data
and actual costs and create comparative reports. The reports should be available in tabular and graph format
identifying variances for specific resources, activities, or categories of costs. Although planners may not place
a lot of weight on this feature, most managers will.
Report Generator
A good software package will provide you with the capability to prepare standard and special reports. Many
standard report formats do not meet specific needs. The addition of a report generator to customize output
allows timely creation of meaningful output and greatly expands the utility of a program.
Graphics/Plotter
Newer programs support an increasing number of attractively priced plotters. Some programs, however,
require the purchase of a supplemental piece of software to accomplish this end. The addition of a plotter or
plotter-quality printer allows you to create presentation-quality output, as well as large-size document for
project displays.
Data Export
A common means of performing detailed analysis on project data not available within a project management
package is to export data to other programs. A project management software program should accomplish all
of the primary and essential planning activities. Some allow export of project data to other types of programs
that perform auxiliary tasks. Spread sheets, database, and graphic display packages are more appropriate for
certain jobs, and the easy transfer of data makes this interface particularly attractive.
Windows
Windows permit the simultaneous presentation of two or more program displays on screen, such as Gantt
charts and resource histograms. Such dual displays allow you to compare cause and effect without continually
switching from one display to another.
Micro/Mainframe Connection
The availability of software to accommodate transfer of data between the micro-based software and the
mainframe environments can be invaluable. This option offers the ability to transfer data from the personal
computer(s) to the mainframe (and vice versa) and permits the accumulation, manipulation, and reporting of
companywide information on a compatible mainframe project management package. This migration of data to
the mainframe also allows multiuser access to project management data. There may be a further interface of
these data into accounting, inventory, or purchasing systems.
Vendor Support
The vendor or publisher should provide some or all of the following: training, installation, maintenance and
updates, and hot-line support. Updates are supplied free of charge within a certain period from purchase or at
a per-copy fee. It is important to explore the vendor™s customer support services before you purchase a
system. Verify that there is a telephone number and responsive staff to answer questions.
User Manual
This document must provide a well-organized, broad coverage of the program™s features, with a complete
index. A well-written manual facilitates the learning process, explains clearly the full features of the program,
and provides quick access to sections relating to specific problems. The quality of a user manual can be
judged by the speed with which needed information can be quickly located and understood.
Choosing the right software program can be an expensive and time-consuming process. For those of you who
have had to live with a less-than-perfect choice and for those of you who wish to avoid one, the time and
money is well spent. If you are in the process of choosing software, consider using the following seven-step
process.
1. Work with the people who will be using the product and decide on the features you require and
those that you would like.
2. Obtain some literature on project management. The Project Management Institute in Drexel Hill,
Pennsylvania, has a directory, and PC magazines often publish articles comparing products. Another
alternative is to ask around.
3. Pick several products that will satisfy your specifications.
4. Acquire demonstration versions of the products you have decided will fit your needs.
5. Conduct benchmark tests against each product™s demonstration package. Set up a small project that
typifies the data in your organization. Run the data through each of the products to determine if the
product meets your criteria. In general, evaluate the products for ease of data entry, what-if simulations,
entering actual data and extracting reports and management roll-ups of data, quality of screen and
report presentation, multiple project analysis (if this is one of your criteria), and processing volumes of
data. Reproduce your benchmark test data to equal the maximum transactions you will want to process.
Run this mass of data through several functions of the product and see if the processing speed slows
down.
6. Now that you have made your choice, send out a public relations memo explaining your
expectations with this new software. Then provide training on the basics of project management (if
necessary) and on the product, and offer some assistance to those trying to get up to speed. You may
want to be their in-house hot-line.
7. Demonstrate to the project team and to management that you intend to maintain the discipline
required to use this product. The minute you relax the requirements for plans or status reports from the
project management scheduling, almost everyone will drop the software like a hot potato. If you keep
the energy and urgency high, you can expect support.


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by Joan Knudson and Ira Bitz
AMACOM Books
ISBN: 0814450431 Pub Date: 01/01/91

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Current Trends
Title

Speed
New releases are being reworked to increase the speed of processing. In some cases, only certain features of
the product have speed increases; in others, all of the system™s processing is being accelerated. The speed
-----------
increases range from barely discernible to dramatic; certain products tout increases of close to 1,000 percent
on many functions. Some products are now pushing the speed limitations of the hardware, yet there is room
for further improvements in speed through hardware upgrades. As chip-based machines proliferate in the
businss community, dramatic speed increases in all microcomputer-based project management products will
be experienced.
Work Breakdown Structure Support
More software vendors are coming to realize the critical role of the work breakdown structure in project
management and are including support for WBS in their products. Some are including the ability to print or
plot the WBS diagram among the features of their new releases.
Increased Capacity
Many vendors are increasing the capacity of their products, typically in tasks per project, resources per
database, resources per task, predecessors per task, and direct costs per task. Even memory-based products
(the project must be resident in memory while being worked upon) are increasing their capacity by taking
advantage of memory above the 640K limitation on MS-DOS microcomputers. Because of increased
capacity, field sizes are being increased, allowing more flexibility, especially for adding narrative comments.
More Resource Functions
This may be the area in which the most significant improvements are being made. The new features that are
surfacing in some products include the ability to make nonlinear resource assignments within a task, so that
an individual can work on a ten-day task for four hours per day the first week and eight hours per day the
second week. More products are including resource-constrained scheduling capabilities, so that the demand
for resources can be reduced to the capacity of the organization, at the expense of the end date of the project.
The algorithms used for resource-constrained scheduling are improving. They take the critical path into
account and minimize the delay in the project while leveling the demand for resources. Many products are
adding resource leveling (within float) capabilities to the system. Unlike resource-constrained scheduling,
resource leveling does not allow the project end date to change and often yields imperfect leveling results.
The algorithms for resource leveling are also improving; many can now factor a user-determined task priority
into the calculations. Some systems now allow the assignment of resources in hours, days, weeks, or months,
all within the same project. Many products are addressing the need to alter the cost of resources on a
time-scaled basis. It is now possible to vary the hourly rate of a resource either annually or by establishing
“from” and “to” dates for the rates. The number of resources allowed per task and per database has been
increasing. The use of different calendars for each resource is becoming more popular. The major advantage
to the resource calendar approach is that it allows the organization to track and to factor into project schedules
planned training, vacations, and other administrative time. Finally, ability to use PERT (Program Evaluation
Review Technique) and earned value calculations is becoming available.
Scheduling Flexibility
Many systems have limited the user to input of durations in one standard unit per project. Thus, prior to data
entry, the user had to decide to enter all durations in hours, days, weeks, or months. Once the decision was
made, it could not be changed. An increasing number of systems now allow the time units to be determined at
the task level rather than at the project level. Thus, Task A can be entered with a duration of forty hours, and
Task B can be entered with a duration of three weeks. In some older systems, only durations entered in days
were allowed if holidays were to be factored into the schedule calculations. Holidays were ignored if
durations were entered in weeks or months. Increasingly that is no longer the case. Holidays are now
recognized regardless of the units used for entry of durations.
Better Reporting
In systems that lack report writers, a more impressive menu of standard reports is becoming available.
Although there is still a lack of flexibility in this feature, the end user is more likely to find what is desired in
the expanded menu of reports. The report writers are also becoming more flexible, allowing users a wider
range of choices in structuring personalized reports. One annoying characteristic of the older report writers is
gradually disappearing. In many older systems, the personalized report had to be recreated each time it was
run; there was no provision to save the report so that it could be rerun periodically. More systems are now
allowing the user to save the personalized report and to recall and rerun it as required. A few menu-driven
systems even allow the user to place the personalized report name in the menu of reports.
Ease of Data Entry
Many systems are adding features that can reduce the amount of time and effort required to get the project
data into the system. Screens on which multiple tasks can be entered are one result of this improvement.
Copy, paste, and combine functions are another. The user can now create a group of repeating tasks and copy
them as many times as required in building the plan. If there are ten tasks to the design of a circuit board, for
example, and nine circuit boards to be designed, ten entries (rather than ninety) are required. The combine
function allows models to be built and then used in many projects.
Output Device Support
The range of printers and plotters supported by the software is increasing dramatically. Larger and faster
printers and plotters are now being supported, even by microcomputer-based products. This gives an
acceptable output speed to the product, even when very large projects are being reported upon.
System Linkages
There is an increasing trend for smaller, easier-to-use products to provide uploading facilities to more capable
systems. This allows the plan to be built in an interactive mode on a small, very user-friendly system and the
status reports to be generated on a larger, more complex, and full-featured project management system.
Project management software vendors are becoming more responsive to the user community. When the first
microcomputer-based products were introduced, people bought them because there was little choice, and
some functionality was better than none. Today, with a broad range of choices for the end user, a more
responsive approach is required. The future will continue to bring greater functionality and increased speed.


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by Joan Knudson and Ira Bitz
AMACOM Books
ISBN: 0814450431 Pub Date: 01/01/91

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Training Support
Title

With or withour project management software, training support positions a project organization for success.
Training is not a one-time effort. It should be planned on an annual basis. There is new information to learn
relative to the tools of the trade and relative to how to work in project organizations. Moreover, new staff who
-----------
join the project team need to be brought up to speed.
This section looks at two relatively new modes of training, both reliant on computer support: a self-paced,
independent study training approach called computer-based training or (CBT) and a classroom training
technique called computer simulation training. We also discuss an older approach, on-the-job training, a
technique that is not being used as frequently as it might.
Computer-Based Training
Computer-based training (CBT) is an automated version of programmed instruction. This type of training
consists of text that presents a problem to which the student provides an answer. Then the student refers to the
solution to determine whether he or she has the correct answer. The problem may be in the form of multiple
choice questions, fill-in-the-blanks, mathematical problems, or charts or graphs to be drawn.
CBT presents these problems on a computer screen. The student responds via the keyboard. The software not
only validates the answer with approval or disapproval, but the response is specific relative to the student™s
answer, provides guidance and rationale as to why the answer was wrong, and describes what constitutes a
correct answer.
The most effective project management CBT products are those that are accompanied by an interactive
workbook. The software enables students to survey the subject, identify the key points, and do a minimal
amount of practice. The interactive workbook encourages students to practice the new skill using paper and
pencil until they become facile with the technique. The workbook presents a case study from beginning to end
to enable students to visualize and develop a perspective of how the tools integrate with one another.
Furthermore, the workbook can allow students to explore subjects in greater depth than is covered in the
software.
The combined power of the CBT software and the workbook provides diversity in training modes, variation
of pace in training activities, and changes in perspective, all designed to keep the student stimulated.
CBT is not intended to replace classroom training. The classroom provides a forum for exploration of ideas,
for presenting questions and problems, and for communicating with others of similar backgrounds; CBT is
designed as a primer before going into a classroom setting, as a reinforcement after a seminar is completed, or
as a stop-gap training for a new project team member until the next seminar is scheduled.
CBT was not created with the goal of being completed at a single session; users set their own pace. A novice
user may want to work systematically through each part of the package in sequence, whereas more advanced
users may want to review selected sections. This flexibility in the training tool allows students to access
specific functions within project management to support individual needs and growth.

Computer-Based Simulation Training
This mode of training simulates risks in the environment as a means to stimulate creative solutions and
produce high-quality results. Simulation-type training has been used for centuries in a classroom with teams
such as the military, to teach tactics and strategies to use in combat. Alternative scenarios were presented to
the students; the students responded, and their choices were classified as successful or unsuccessful. The
students benefited by learning from their failures and being reinforced by their successes.
Flight simulators facilitate trainee pilots™ learning the controls and the proper responses during varied flight
conditions without risking their lives or the lives of others. After World War II, Monopoly was used to teach
returning veterans how to operate in the real estate industry without risking any of their capital.
Simulation training is employing a case study approach. Traditionally, a case is presented to the student in a
classroom, the student responds, and the response is classified as successful or unsuccessful. There are two
drawbacks with this type of case study training: the evaluations of success or failure are often subjective and
dependent on the instructor or fellow team members, and no matter what the student™s response is, the case
study itself is not dynamic, and change is not in response to the choices of the student.
Computer-based simulation training introduces an element of reality to the case study. Since the computer is
driven by dynamic software, its response is dependent on the input. That response is fast paced and
encourages the student to move quickly from scenario to scenario and from learning experience to learning
experience. There is no delay while the instructor reconfigures the case or the team members critique the
action taken.
In computer-based project management simulation training, the participant develops an initial plan and enters
the schedule, resource assignments, and budget into the system. The software is not a project management
scheduling system; it is not a programmed-instruction computer-based training; it is not a game. The software
presents alternative scenarios to the participant, the participant responds, and his or her actions are graded as
either successful or unsuccessful by the successive actions of the simulation and its output status reports. The
participants are reinforced by their successes and learn from their failures.
The case thus transforms schedule, resources (both internal and external), and costs into conflict situations.
All the classic project management charts and graphs are utilized. The participant is confronted with all the
decision situations found in a project management environment. For example, during the simulation, project
team members may quit, the equipment may malfunction, and contractors may not be productive. We say may
because each team goes through its own unique labyrinth of situations when actual versus plan data are
presented. Many months of project evolution are consolidated into a three- or four-day classroom experience,
and each team follows a very different scenario.
Simulation training creates a classroom environment in which the members of the teams are closely united.
Their one goal is to win. They win not by beating out the other teams (although competition can be felt within
the room) but by meeting their original commitments: schedule, budget, morale of their team members, and
quality. They are competing with themselves to do the best that they can. In order to accomplish this, the team
must be able to reach consensus, be efficient in the assignment of roles within the group, and, most important,
be proactive rather than reactive.
There are few project management computer-based simulation products on the market. One that we are
familiar with offers two versions of project management simulations. The first addresses a single
environment; the second, a multiproject scenario within a matrixed environment. The multiproject simulation
assigns to each of the team members the role of one of three project managers or one of two functional
managers. Single-project and multiproject management are very different and need to be positioned from
different perspectives.
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Project Management
by Joan Knudson and Ira Bitz
AMACOM Books
ISBN: 0814450431 Pub Date: 01/01/91

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Computer-based simulations provide an exciting environment: lecture, team practice, dynamic feedback,
Title
baseline analysis, and, most important, real-world application embedded in the learning process. Project
management simulation training is designed for those who say, “I™ve seen it all. I™ve been to project
management seminars before. If there is something new, something beyond the basics, I™d be willing to go to
another program. But until then, I™d be bored.” Our experience indicates that those attending a simulation
----------- course are highly stimulated. Attendees have requested that the classroom be opened earlier than scheduled
each morning and on the last day have negotiated with the instructor to keep the machines active “for just
another half-hour.”

On-the-Job Training
What is on-the-job training in project management? Why is it needed, how does it work, and what are its
benefits? Classroom training in project management has been the standard since the 1960s. It is a fine vehicle
for presenting the concepts of project management, dealing with organizational issues, and establishing the
mind-set necessary to plan and control work effort. Computer-based training has taken a place in the
development of skills in scheduling, resource-cost planning, and control data processing. But neither
classroom training nor computer-based training equips the new or potential project manager with the
experience necessary to deal with projects and their problems on a daily basis. Even simulation-based
training, which comes close to replicating the real world, does not have the pressure, sense of urgency, and
sense of criticality that is present in real-world project management. None of the formal training vehicles
fosters the long-term development of a project management style on the part of personnel being trained. Short
of trial by fire, there is only one other alternative: on-the-job training.
On-the-job training in project management involves pairing an experienced project manager with a prospect
to expose the new manager to behavioral patterns, style, and methods that yield effective planning and control
of the work. It also can pair a new project manager with a project management consultant for the same
purposes.
If the project manager in training is paired with a more senior project manager, there are two modes in which
the training experience can be structured: (1) the more experienced project manager as the project manager of
record or (2) the candidate as the project manager of record. We believe that the manager in training should be
the manager of record. This yields a more meaningful training experience and allows for termination of the
training when management has concluded that the objectives of the learning experience have been attained.
When the project manager in training is paired with a consultant, it is essential that the trainee be the project
manager of record. In principle, we are opposed to the concept of an individual who is not an employee of the
organization managing the project and giving direction to project team members who are employees of the
organization. In addition, this is a costly method, and it will be of relatively short duration. Upon termination
of the training experience, the project manager in training will continue to manage the project.
The most significant disadvantage of on-the-job training is cost. In absolute terms, it is expensive. Two
salaries rather than one are applied to the management of the effort. Even if the training period is much
shorter than the duration of the project, the costs will be significant. On the other hand, the costs pale in
comparison to the potential cost to the organization of the trial-by-fire approach. The risk associated with trial
by fire may serve to make the relatively modest cost of on-the-job training palatable to management.
A second disadvantage of on-the-job training is the possible transfer of bad habits and behaviors along with a
transfer of desired habits and behaviors. This potential disadvantage can be overcome by extremely careful
selection of the mentors, whether staff members or consultants, and by frequent monitoring and assessment of
the transfer of knowledge.
Another drawback, which is related to the issue of cost, is the scarcity of project managers in the organization.
The workload beckons, and anyone with the potential of performing the project management function may be
conscripted to staff the backlog. Therefore, on-the-job training is best accomplished during periods of
relatively slack demand, when the sense of urgency in staffing the workload is less pressing.
Advantages of on-the-job training are primarily contextual. It is the only means short of trial by fire of
exposing the trainee to the actual project management environment, with all the variables that affect the
project management processes and decision making in that environment. The project manager who has been
through on-the-job training is potentially better equipped to undertake larger, more complex project
assignments than the organization would trust to a new project manager who has not been through the
process.
On-the-job training requires more than a management decision to undertake the effort and the selection of a
mentor. It requires a plan, learning objectives, and periodic reviews of lessons learned, with a facilitator other
than the new project manager™s mentor.
In planning this experience, considerable attention should be given to the selection of the project. It should not
be contrived, overly simple, or overly complex. In selecting the mentor, consideration should be given to the
technical knowledge of both the mentor and the trainee. On-the-job training works best when both mentor and
trainee have similar fields of technical experience. This creates a stronger bond between two people who will
be spending a great number of hours together over a short period of time.
Finally, planning of the experience should include a schedule plan, with a target date for completion of the
learning experience substantially in advance of the completion of the project. An initial decision should be
made as to whether the mentor or the trainee will assume exclusive responsibility for the project at the end of
the training period.
There should also be periodic reviews between the trainee and a third-party facilitator of any learning progress
made. This facilitator could be the head of project management or another experienced project manager.
On-the-job training is costly, effective, time-consuming, and difficult with regard to a commitment of
resources, but its potential benefit to the organization makes it worth considering as part of the total
development plan for project managers.

Administrative Support
Administrative support within an organization that uses project management optimizes the use of time by the
project manager and the project team. The administrative support unit can be the custodian of the
organization™s project management standards. It can issue copies of the standards to all personnel requiring
them; edit, produce, and distribute updates to the standards; and coordinate the process of modifying the
standards, as required. This function clearly needs to be performed and does not require the attention of
project managers.
The administrative support unit can be the point of contact between the organization and its project
management software vendor. The unit manages the availability of the software for the staff. When new
releases of the software become available, this unit coordinates the evaluation of the upgrade, installs new
releases, provides training for the staff in the use of the software, and receives questions about the software.
When significant amounts of plan data have to be entered into the project management system, project
managers should be able to request data entry support from this group. The group either has data entry
resources or manages work flow to the data entry unit. In addition, this unit can manage the interface between
the organization™s project management software and its cost accounting and time reporting systems by
periodically transferring cost and person-hour data into the project management system for status reporting
purposes. Error checking, resolution of data problems, and reconciliation of incorrect project charges can all
be handled by this unit.


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Project Management
by Joan Knudson and Ira Bitz
AMACOM Books
ISBN: 0814450431 Pub Date: 01/01/91

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While project managers and teams tend to produce their own reports from the project management system, the
Title
administrative support unit is responsible for the production of periodic multiproject reports. Monthly senior
management summary status reports are requested, printed, and distributed by the unit. Multiproject resource
reports, directed to functional (skill group) managers, are also produced by this unit. These responsibilities
require the unit to ensure that all projects have been updated prior to generating the multiproject reports.
-----------
Finally, the administrative support unit can function as the project management archivist for the organization.
Information concerning completed or current projects can often be utilized again by the organization. When
such information is required, the unit can make the information available to the project manager and team.
Among the items that can be archived are work breakdown structure models for projects, phases, or groups of
tasks commonly performed in many projects; network models; historical estimates; and actual costs for
standard tasks.
An administrative support function allows project managers more time to devote to their projects. The clerical
work will be performed by clerical workers rather than managers. Specialists will devote their time to the
organization™s system interfaces rather than having each project manager attempt to deal with these complex
interfaces. The bottom line is that each project manager, having been freed from the administrative burdens,
can manage an additional portion of the workload. Thus, fewer project managers can control the workload of
the organization.
One final word of caution is required: If an administrative support function is relied upon by senior
management for an early warning reporting of project problems, the entire perception of the group in the
organization changes. Project and function managers will no longer consider the group to be their service. The
group will be regarded as an audit function, and its services will be utilized only with great reluctance. Project
problems should be brought to the attention of senior management by the managers of the projects which are
experiencing them, not by a support unit.

Political Aspects of Support
The three mechanisms that can support project management”software support, training support, and
administrative support”have technical and political aspects too.
The technical aspect of software support consists of the tangible software and the procedures that accompany
it. There are political issues here as well. Should one software product be chosen for all people within the
organization, or should each person (or group) be allowed to choose individually? There are arguments for
both sides. Those who suggest individual software choices argue that different groups need different types of
software support, and therefore each group should be allowed to pick a product fitting its own needs. On the
other hand, if everyone picks software, how will the data ever be consolidated in a manner that will allow the
management of the whole rather than fragmented pieces, and how will management ever be able to see a
composite picture of the status, staffing, and expenditures of all the projects in the organization? We believe
that most project management software products are competitive. If a product fits the basic requirements, then
all groups should be willing to use it for the good of the overall organization.
Training also has technical and political aspects. Technically, the course material must be designed, training
manuals developed, and qualified trainers brought up to speed. Politically, training is not always seen with a
tangible return on investment. Whether the course is developed inside the organization or an outside training
consultant is brought in, there is expense. And taking employees off their job to attend a training class is
another expense. Therefore, management and the participants must be convinced that there is a meaningful
reward in improved productivity and better efficiency for this expenditure of time and dollars.
Administrative support is less controversial but equally affected by both technical and political issues.
Technically, a job position must be created for an administrative support person, a salary justified, and a job
description developed. Politically, it may be difficult to convince management that an administrative support
person is necessary. What is the project leader doing if most of his or her work is being done by the
administrator? Are we paying two salaries to get one job done? The answer is “no.” The administrator can
offload some of the more detailed work from the project manager, who then has more time to work on
managing the project. The other political issue is who is the right person to take this job. It is more than a
clerical job. It requires some business knowledge and a strong logical bent, especially for checking the data
for reasonability. It is also not the project manager™s job, and the administrator will have to subvert his or her
ambition to be the boss, at least while on this job. You as project manager may promise the administrator that
this is an interim step in his or her career and there will be a promotion in a year or two. Even a year or two
with a good administrator is worth the investment, and you will see how much this person lightens your load
and allows you to concentrate on planning, problem isolation, and resolution.


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Project Management
by Joan Knudson and Ira Bitz
AMACOM Books
ISBN: 0814450431 Pub Date: 01/01/91

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Title
Index
[Italic page numbers refer to figures.]
accomplishment data
-----------
analysis of, 157-161
calculations using, 162-171
accomplishment monitoring, 154
critical issue in, 155-156
milestones in, 155
accomplishment trends, 161
achievement monitoring, 154, 157
milestones in, 155
actual cost of milestones performed (ACMP), 159-161, 162
administrative support, 172, 189-191
Advanced Project Management (Harrison), 33-35
alternative solutions, 122-124
authority, 7
formal, 27
informal, 26-27
in organization, 17-18
BAC (budget at completion), 162
backup plans, 95
balancing resources of the plan, 45-47
B-A-N-C criteria, 6-7
baseline change
client-driven, 101-103
externally driven, 105
guidelines for establishing, 107-108
internally driven, 105-106
procedures for management of, 106-107
regulatory-driven, 104-105
sources of, 101, 106
tracking of, 107
BCMP (budgeted cost of milestones performed), 159, 161, 162
BCMS (budgeted cost of milestones scheduled), 159, 162
bottom-up planning, 48-51
Brooks, Frederick (The Mythical Man-Month), 33
budget, 4, 7, 38
allocation of, on cost spread sheet, 89, 90-91
computer documentation of, 179
plotting of, 89
preparation of, 45
purpose of, 88-89
risk factors in, 94
in status report, 133
tracking expenditures of, 178
budget at completion (BAC), 162
budgeted cost of milestones performed (BCMP), 159, 161, 162
budgeted cost of milestones scheduled (BCMS), 159, 162
calendar flexibility, 178
change
baseline, 101-108
effective management of, 5
effects of, 96
investigation team for, 100
key objectives for control of, 97-98
management of, 96-108
in requirements, 96
scope, 96-101
change controller, 98
client, 4, 7-8
absence of, 8-9
determining objectives of, 14
focused interviews with, 14
recognition of, 7-8
rules for selection of, 9
sources for, 9
client-driven change, 101-103
coercion, using, to control team, 30-31
community relations, 13-14
compensation time, 86
completion criteria, 15

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