CPETECET 470 Technology Project Management

1
CPET/ECET 470Technology Project Management

• Class 5 Variances Estimate to Complete

2
Decoding Variance

• Negative Variances Are Always Unfavorable
• Behind Schedule
• Overrun
• Positive Variances Are Better
• Ahead of Schedule
• Underrun
• NO VARIANCE IS BEST!
• All Variances Which Exceed Threshold Must Be
  Explained, Whether Favorable or Unfavorable

3
Variance Analysis Questions

• Behind Schedule
• How Critical Is Schedule?
• Can I Afford to Work Overtime to Recover?
• Can I Do Tasks Concurrently?
• Are There Technical Innovations Which Could Speed
  up the Process?
• Am I Driving to Over Spec?
• Over Cost
• Can I Reschedule Tasks? (Timephasing)
• Is There a Less Costly Facility I Can Use?
• Are There Tasks Which Can Be Deleted?

4
Variance Analysis Check List

• CAUSE Answer the question WHY?
• Did I discuss CV and SV separately?
• Did I clearly identify the reason?
• Did I isolate significant labor rate variances?
• Did I place emphasis on the Quantitative?
• Did I place emphasis on the Specific?
• IMPACT Answer the question WHAT?
• Did I describe impact on the cost account, other
  cost accounts, and/or the project?
• Did I address intermediate schedules?
• Did I address Predecessors Successors?
• Did I assess the need to revise the EAC?
• Did I place emphasis on the Specific?

5
Variance Analysis Check List

• CORRECTIVE ACTION Answer the question HOW?
• Did I describe the specific actions taken or
  being taken?
• Did I include the individual or organization
  responsible for the action?
• Did I include schedules and get well dates?
• Did I include results of previous corrective
  action plans?
• If no corrective action is possible, did I
  explain why

6
When To Do an ETC

• Full Bottom-Up ETC is Generated for the Program
  Semi-Annually
• Basic rule-of-thumb Generate an ETC for a Cost
  Account When Either of the Following Conditions
  Are Met
• BCWP 50 of BAC
• ACWP 90 of EAC

7
CAM Responsibilities
Cost Account Managers Dont Just Monitor
Status, They Manage the Work !!!
8
CAM Notebook

• Should Contain at a Minimum
• Work Authorization Document (WAD)
• Original Baseline Schedule (Gantt or PERT)
• Original Baseline Task Usage Report
• Original Baseline Resource Usage Report
• Original Budget Baseline Report
• Latest Cumulative Earned Value Report
• Latest Actuals Report
• Most Recent Variance Analysis Report
• All Completed Budget Change Requests
• Latest Budget Baseline Report

9
CAM Notebook

• Suggest the Following Be Included
• Labor Transfer Sheets
• Last Few Months of Data
• BCRs in Process
• Special Shop Orders
• Any Special Reports the CAM Generates for His/Her
  Own Use In
• Determining BCWP
• Supporting Budget Data
• Explaining Variances
• Subcontract Status Reports
• CSSR CFSR
• Tracking to MPM system

Maintain the Notebook as a TOOL
10
WAD Purpose

• A WAD is a contract between the CAM and the
  Program Office for the scope of work, including
  budget, completion dates and technical
  performance
• For efforts outside of the scope of work, the CAM
  must request additional authorization PRIOR to
  executing work
• A WAD should include the following at a minimum
• Definition of work to be performed
• Assumptions for performing work
• Deliverable products resulting from effort
• Exit Criteria for completion of effort
• A WAD may include the following additional
  information
• Associated work that is EXCLUDED from this SOW
• Representative functional efforts contained
  within this effort (I.e. design, supervision, QA,
  touch labor, test, equipment, etc.)

11
Earned Value Methods

• Discrete Effort - Specific End Product or Result
• Milestone method
• Start/Finish method 0/100, 25/75, 50/50, 75/25,
  etc.
• Percent complete method
• Apportioned Effort
• Factored effort directly related to discrete
  tasks (ie-inspection)
• Dependent on other work ( of BCWP of another
  task)
• Level of Effort
• No final product or result (ie - program
  management)
• Measure performance with the passage of time
• Each month BCWP is set to equal BCWS

12
EV Method - Level of Effort

• Activities Which Are Time-Based Rather Than
  Task-Based
• Program Management
• Scheduling / Cost Management
• Security
• Contract Administration
• Project Engineering
• Generally Continue for the Life of the Project,
  But Have No Measurable Outputs
• Work Performed Is Assumed to Always Equal to Work
  Scheduled
• Therefore There Is Never a Schedule Variance

13
Discrete EV Method Selection

• Milestone Method
• Used for CAs where there is limited visibility
  into the specific tasks being performed, but
  discrete items that will be completed as the work
  is performed
• Good for
• CDRLs
• PWB layouts
• etc.
• Percent Complete Method
• Least objective of the three choices
• Define an equation that you will use to remove
  subjectiveness
• Least preferred most time consuming method

14
Discrete EV Method Selection

• Start/Finish Method
• Most common method - works for all tasks that
  have clear completion criteria
• What percentages are best?
• Depends on the task resource loading and
  management preference
• Each method has some error for an in-process task
• Example Task - Software Coding
• Preferred method 50/50
• Why? Software coding is most likely a level
  resource task with clear exit criteria (software
  module is ready for test)

15
WAD Task Description Content

• Most Important Element in a WAD
• Provides
• Entry (Start) Criteria - Predecessor Activities
• Completion (Exit) Criteria
• Scope of Work
• Basis of Estimate
• Major Risk Identification
• Earned Value Method for All Tasks in the Cost
  Account

16
How to Write a Task Description

• As the CAM - Know the Task
• If you arent the expert on the task, then get
  input
• Dont just gloss over detail because you dont
  know it - Learn it
• Ask Yourself
• When Can the task start?
• What is the task?
• How is the task to be accomplished?
• How do we know when the task is accomplished?
• Why do we think the task will require the defined
  resources?
• Manpower?
• Schedule?
• Material?
• What are the risks?
• If These Are Answered, The Task Description is
  Complete

17
EVM Summary
18
Elements of EVM
Now
Contract Value
Contract Complete
Contract Start
19
EVM Formulas

• Variance
• SV BCWP - BCWS
• CV BCWP - ACWP
• VAC BAC - EAC
• Estimates At Completion
• EAC ACWP ETC
• LRE ACWP ETC
• EAC LRE
• Other
• MR Contract Value - BAC

• Performance Indices
• CPI BCWP / ACWP
• SPI BCWP / BCWS
• TCPI (BAC - BCWP) / (EAC - ACWP)
• (EAC BAC at program start)

20
EV Advantages

• Objective Project Status Information
• Capability to Trace the Source of Problems
• Progress Measured Against an Agreed Upon Baseline
• Integrated Cost and Schedule Approach
• Early Identification of Potential Problems

21
Rules of Thumb

• You Dont need ACTUALS to take Earned Value (EV)
• You Dont need ACTUALS to complete an ETC
• You Cant earn more than 100!
• Cost Variance (CV) and Schedule Variance (SV)
  ALWAYS measured against Budget (BCWS) not ETC
• Cost Account tasks (detail schedules) must be
  planned to support overall program milestones

22
Final Word on Project Control
If you cant measure it, You cant manage it !
- Daniel S. Goldin Former Administrator, NASA