Chapter 11
Project Control
1
Content
• Introduction
• The fundamental purposes of control
• The three types of Control Processes
• The design of a Control System
• Control of Change and Scope Creep
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Introduction
• In the previous chapter, we described the monitoring and information-
gathering process that would help the Project Manager (PM).
• Control is the last element in the implementation cycle of planning–
monitoring–controlling.
• Information is collected about system performance, compared with the
desired (or planned) level, and action is taken if actual and desired
performance differ enough that the controller (manager) wishes to
decrease the difference.
• In essence, control is the act of reducing the difference between plan
and reality.
• In general, control is focused on three elements of a project—scope,
cost, and time.
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Introduction
• The PM is constantly concerned with these three aspects of the project.
Is the project delivering what it promised to deliver, or more? Is it
making delivery at or below the promised cost? Is it making a delivery at
or before the promised time?
• In this chapter, we start by examining the general purposes of control.
Then we consider the basic structure of the process of control. we then
turn to the types of control that are most often applied to projects.
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The Fundamental Purposes of Control
• The two fundamental objectives of control are as follows:
1. The regulation of results through the alteration of activities.
2. The stewardship of organizational assets.
• The PM needs to be equally attentive to both regulation and
conservation
• Considering the conservationist role here. The PM must guard the
physical assets of the organization, its human resources, and its
financial resources.
• The processes for conserving these three different kinds of assets are
different.
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The stewardship of organizational assets
• Physical Asset Control
• Control over the use of physical assets. It Includes preventive and corrective maintenance.
Physical inventory, whether equipment or material, must also be controlled. It must be
received, inspected (or certified), and possibly stored prior to use. Records of all incoming
shipments must be carefully validated so that payment to suppliers can be authorized.
• Human Resource Control
• Controlling and maintaining the growth of people. This includes employee appraisals,
personnel performance indices, and screening methods for appointment, promotion,
retention, etc.
• Financial Resource Control
• Financial control includes current asset controls, and project budgets as well as capital
investment controls.
• Conformance to both organizational and client control standards in financial practice and
record keeping has to be emphasized
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The three types of Control Processes
• there are three basic types of control mechanisms
we can use: “cybernetic” control, go/no-go
control, and post control. FIGURE 11.1 A cybernetic control
system
• Cybernetic Control
• Cybernetic, or steering, control is by far the most
common type of control system. (Cyber is the
Greek word for “helmsman.”) The key feature of
cybernetic control is its automatic operation.
• Cybernetic are automatic control systems
that work over portions of the WBS that are
automatic in nature.
• Consider the diagrammatic model of a cybernetic
control system shown in Figure 11.1.
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The three types of Control Processes
• As Figure 11.1 shows, a system is operating FIGURE 11.1 A cybernetic control
with inputs being subjected to a process that system
transforms them into outputs. It is this
system that we wish to control. In order to
do so, we must monitor the system output
• Measurements taken by a sensor are
transmitted to the comparator, which
compares them with a set of predetermined
standards. The difference between the
actual and standard is sent to the decision
maker, which determines whether or not the
difference is of sufficient size to deserve
correction.
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The three types of Control Processes
• Go/No-Go Controls • Penalty clauses that are often included in
• Go/no-go controls take the form of testing the project contract.
to see if some specific precondition has • The project plan, budget, and schedule
been met. are all control documents, with
• Most of the control in project management, prespecified milestones as natural
if it exists at all, falls into this category. control checkpoints. Extra milestones
can also be inserted if necessary.
• For many facets of the project’s scope, cost,
and time, it is sufficient to know that the • Example: The parts of a new jet engine
predetermined specifications have been are individually checked for quality
met. conformance. and every part must pass
its own go/no-go test before being used
• In regard to time and cost, there may be in an engine. Similarly, computer
penalties associated with non-conformance programs are tested for bugs. The
with the approved plans. program passes its tests or it does not.
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The three types of Control Processes
• Phase-Gated Processes
• One form of go/no-go control that has gained • Phase gates are also commonly employed in
popularity is that of phase-gated processes (also known process improvement projects. For example, in the
as stage gates, toll gates, quality gates, and so on). Six Sigma DMAIC (Define-Measure-Analyze-
• The phase-gate process controls the project at various Improve-Control) methodology, each of the five
points throughout its life cycle to make sure it remains phases serves as a project milestone, which in
on course and of value to the organization. turn is frequently used as a tollgate to the next
phase.
• This process is most commonly used for new
product/service development projects where it is • The progress and outcomes associated with the
important to constantly evaluate the match between the process improvement project are evaluated at the
changing, dynamic market and the changing nature of end of each phase to assess the merits of
the new product/service under development. permitting the project to move on to the next
phase.
• At the launch of the new development project, a series
of “gates” are planned, whereby the project cannot
continue with funding until each gate has been
successfully passed.
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The three types of Control Processes
• Phase-Gated Processes
• There may be more or fewer gates FIGURE 11.3 A quality-gate application.
than milestones, but the purpose is
different—milestones are natural
“end-of-phase” points within a
project, whereas gates are meant to
catch problems early on.
• Figure 11.3 shows one PowerPoint
slide from a presentation to senior
management using a “quality gate”
system for reporting progress on the
firm’s projects.
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The three types of Control Processes
• Phase-Gated Processes
• The criteria for passing each gate are FIGURE 11.3 A quality-gate application.
developed in the project planning stage.
• There is a wide range of reasons for
terminating a project midstream; for
example, most of the benefits have already
been achieved and further expenditures
aren’t justified, or the market potential of the
project has changed substantially. Other
possible reasons easily come to mind: critical
personnel has left the organization, the
project life cycle costs have gotten out of
hand, a competitor has already come out with
a better product at a cheaper price, and so on.
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The three types of Control Processes
• Milestones, Gates, and Budgets This section of the
• Post Control
post-control document starts with a full report of
• Post controls (also known as post-performance project performance against the planned schedule
controls or reviews, or post-project controls or and budget.
reviews) are applied after the fact. • The Final Report on Project Results good and bad
• Cybernetic and go/no-go controls are directed toward results are reported here.
accomplishing the goals of an ongoing project. Post • Recommendations for Performance and Process
control is directed toward improving the chances for Improvement The culmination of the post-control
future projects to meet their goals. report is a set of recommendations covering the
• Post control is applied through a relatively formal ways that future projects can be improved
document that is usually constructed with four • Examples of recurring problems might be a
distinct sections chronically late supplier, a generally noncooperative
• The Project Objectives The post-control report will functional department, a habitually optimistic cost
contain a description of the objectives of the project. estimator, or a highly negative project team
member. Provision for such things can be factored
into future project plans, thereby adding to
predictability and control
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The Design of Control Systems
• There are some important questions to be • In addition to being sensible, a good control system
answered when designing any control should also possess some other characteristics:-
system: • The system should be flexible. Where possible, it
• Who sets the standards? should be able to react to and report unforeseen changes
in system performance.
• Will they achieve the project’s goals?
• The system should be cost-effective.
• What output, activities, behaviors should be • The control system must be truly useful and satisfy the
monitored? real needs of the project.
• How timely must the monitoring be? • The system must operate in an ethical manner.
• How great must a difference between standard • The system must operate in a timely manner.
and actual be before it becomes actionable? • Sensors and monitors should be sufficiently accurate
• What are the most appropriate actions for each and precise
situation? What rewards and • The control system should be easy to maintain.
• penalties can be used? Who should take what • Control systems should be fully documented
action?
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The Design of Control Systems
• To control Scope, the PM may need specific • The PM must be constantly on guard to
documentation such as engineering change identify such changes. We will have more to
notices, test results, quality checks, rework say about this shortly.
tickets, scrap rates, and maintenance • For cost control, the manager compares
activities. budgets to actual cash flows, purchase orders,
• Of particular importance here is carefully labor hour charges, amount of overtime
controlling any changes, usually increases, in worked, absenteeism, accounting variance
scope due to scope creep: the natural reports, accounting projections, income reports,
inclination of the funder to change the cost exception reports, and the like.
deliverables as they obtain better information • To control the schedule, the PM examines
about their needs over time. benchmark reports, periodic activity and status
• Scope creep is not always the fault of the reports, exception reports, AOA or AON
funder, however; sometimes the team networks, Gantt charts, the project schedule,
members themselves, in an effort to do their and EV graphs, and probably reviews the
best work, unwillingly increase the scope of WBS.
the project.
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Critical Ratio Control Charts
• On occasion, it may be worthwhile, particularly
on large projects, for the PM to calculate a set of
CRs for all project activities. The CR is
CR=(actual progress/scheduled
progress)×(budgeted cost/actual cost)
• The CR is made up of two parts—the ratio of
actual progress to scheduled progress and the
ratio of budgeted cost to actual cost
• Consider Table 11.1; We can see that the first
task is behind schedule but also has a
correspondingly lower cost, which is below
budget. Hence, even though the project is
running late, the CR shows no problems.
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Critical Ratio Control Charts
• The second task is on budget but its TABLE 11.1 (Actual Progress/Scheduled
physical progress is lagging. Progress) × (Budgeted Cost/Actual Cost)
• The third task is on schedule, but the
cost is running higher than budget,
creating another probable cost overrun.
• The fourth task is on budget but ahead
of schedule. A cost-saving may result.
• Finally, the fifth task is on schedule
and is running under budget, another
probable cost saving.
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Critical Ratio Control Charts
• Charts can be used to monitor and Figure 1-7:-Critical ratio control limits
control the project through the use
of these ratios;
• Figure 11.7 shows an example. Note
that the PM will ignore CRs in some
ranges and that the ranges are not
necessarily symmetric around 1.0.
Different types of tasks may have
different control limits.
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Control of Change and Scope Creep
• In earlier chapters, we discussed the fact • When either the process or output of a
that the original plans for projects are project is changed, there is almost
almost certain to be changed before the always a concomitant change in the
projects are completed. budget and/or schedule.
• Project changes result from three basic • Scope change is the major source of
causes: (1) uncertainty about the project delays or even failures.
technology on which the work of the • Prevention of change is not possible, the
project or its output is based; (2) an PM’s best hope seems to lie in
increase in the knowledge base or controlling the process by which change
sophistication of the client/user leading to is introduced and accomplished.
scope creep and (3) a modification of the
rules applying to the process of carrying • Control of scope creep is accomplished
out the project or to its output. with a formal change control system.
• Software projects are typical examples
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Control of Change and Scope Creep
• The purpose of the formal change control system is to:-
• review all requested changes to the project (both content and
procedures)
• identify all task impacts
• translate these impacts into project scope, cost, and schedule
• evaluate the benefits and costs of the requested changes
• identify alternative changes that might accomplish the same ends
• accept or reject the requested changes
• communicate the changes to all concerned parties
• ensure that the changes are implemented properly
• prepare monthly reports that summarize all changes to date and their
project impacts
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Control of Change and Scope Creep
• The following simple guidelines, applied with reasonable rigor, can be used to establish an
effective change control procedure:-
1. All project contracts or agreements must include a description of how requests for a
change in the project’s plan, budget, schedule, and/or deliverables will be introduced and
processed.
2. Once a project is approved, any change in the project will be in the form of a change
order that will include a description of the agreed-upon change together with any changes
in the plan, budget, schedule, and/or deliverables that result from the change.
3. The PM must be consulted on all desired changes prior to the preparation and approval of
the change order.
4. Changes must be approved, in writing, by the client’s agent as well as by an appropriate
representative of senior management of the firm responsible for carrying out the project.
5. Once the change order has been completed and approved, the project plan should be
amended to reflect the change, and the change order becomes a part of the project plan.
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Exercises
3. Given the following information
about a showroom renovation,
which activities are on time, which
are early, and which are behind
schedule? Page 423
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Exercises
4. Design and plot a CR for a computer
installation project that planned constant, linear
progress from 0 to an EV 200 over a 100-day
duration. In fact, progress for the first 20 days
has been: 2, 3, 4, 6, 7, 9, 12, 14, 15, 17, 20, 21,
21, 22, 24, 26, 27, 29, 31, 33. What can you
conclude about this project? Page 423
Solution
The slope of the planned progress curve is 200
points divided by 100 days or 2 points per day.
Since cost data are not provided, the CR is
simply the ratio of actual progress over planned
progress.
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Exercises
The project is running behind schedule,
more days are needed to meet the
schedule
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Q.4 page 424
• Industrial Building, Inc., has two project teams
installing virtually identical, four-story commercial
buildings for a funder in two separate cities. Both
projects have a planned daily cost of 100 and a
planned daily EV of 100. The first 6 days for each
team have progressed as follows:
• Compare the two projects in terms of general
progress and according to CRs.
• Use the planned daily earned value as an estimation
for the daily scheduled progress. Use the planned
daily cost as an estimation for the daily budgeted
cost
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Q.4 page 424 Solution:-
• The base data for the problem looks like Team A Team B
the table to the right:- Earned Value Cost Earned Value
Planned Actual Planned Actual Planned Actual Planned Actual
Cost
1 100 90 100 95 100 90 100 95
2 100 92 100 98 100 88 100 94
• Note that this data is incremental rather 3 100 94 100 101 100 95 100 102
than cumulative. The cumulative data with 4
5
100
100
98
104
100
100
106
116
100
100
101
89
100
100
109
99
CR calculations look like the table below: 6 100 112 100 126 100 105 100 118
Team A Team B
Earned Value Cost Earned Value Cost
Planned Actual Planned Actual CR Planned Actual Planned Actual CR
1 100 90 100 95 0.95 100 90 100 95 0.95
2 200 182 200 193 0.94 200 178 200 189 0.94
3 300 276 300 294 0.94 300 273 300 291 0.94
4 400 374 400 400 0.94 400 374 400 400 0.94
5 500 478 500 516 0.93 500 463 500 499 0.93
6 600 590 600 642 0.92 600 568 600 617 0.92
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Q.4 page 424 Solution:-
• It is interesting to note that while Team A Team B
Team A has incurred more costs it Earned
Value
Cost Earned
Value
Cost
has also achieved more progress. Plan Actu Plan Actu CR Plan Actu Plan Actu CR
Therefore, based on the Critical ned al ned al ned al ned al
1 100 90 100 95 0.95 100 90 100 95 0.95
Ratio, the teams are identical in 2 200 182 200 193 0.94 200 178 200 189 0.94
their achievements to date. 3 300 276 300 294 0.94 300 273 300 291 0.94
However, in both cases, their critical 4 400 374 400 400 0.94 400 374 400 400 0.94
5 500 478 500 516 0.93 500 463 500 499 0.93
ratios are deteriorating and should 6 600 590 600 642 0.92 600 568 600 617 0.92
be investigated for potential
corrective actions.
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Exercises
• 8. The following information (in
AOA format) concerns progress
at day 40 of an Internet
marketing project. Determine if
the project is in control based on
time and cost to date. If not,
what is the cost overage or
underage? Page 424
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Exercises
• 8. Solution
• At day 40 activities 3-5 should have been completed, but
according to the problem data, this task is only 70% completed.
• Actual progress=22 days +0.7*18 day=34.6 days
• Planned Progress=40 days
• Budgeted cost= all costs that are planned to finish by day 40
=300+400+350+405=1,455
• Actual cost=all costs incurred till day
40=250+450+380+400=1,480
• CR= Actual progress/scheduled progress*budgeted cost/actual
cost=34.6/40*1455/1480=0.85 <1 the project is not in control
• Cost overage=1,480-1,455=25
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