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13 Monitoring and Corrective Action
Chris Clinton/Digital Vision/Thinkstock
Learning Objectives
By the end of this chapter, you will be able to:
• Explain the purpose of project monitoring.
• Participate in the project monitoring process.
• Perform the four types of corrective actions.
• Describe the project monitoring model.
• Provide project reports for stakeholders, top management, and the project team.
• Prepare for a phase-gate review.
• Discuss current trends in project monitoring.
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Introduction
Pretest
1. The PMBOK guidelines assume that following guidelines and correctly monitoring a project will lead to the project staying on track. a. True b. False
2. Costing less than estimated is a clear indicator of a project’s success. a. True b. False
3. A project manager will sometimes choose not to make any adjustments to schedules or cost estimates, even when variance from that schedule or estimate has occurred. a. True b. False
4. If customer requirements are being met, it is safe to assume the customer is satisfied. a. True b. False
5. Project managers can never provide too many status reports for stakeholders. a. True b. False
6. Projects are reviewed after each phase so that bad projects can be stopped before they use up too many resources. a. True b. False
7. Today task leaders have become less likely to gather data and make routine reports. a. True b. False
Answers can be found at the end of the chapter.
Introduction Whether or not something goes wrong in a project, project managers need to keep the team and various stakeholders aware of project progress. In addition, the project manager must make changes and adjustments in the project when things are not going as planned. The only way the project manager is going to know how things are going is to design and conduct a monitoring process that tracks key indicators in the project—and takes corrective action if necessary. Monitoring is not easy if you have not first planned to collect information on important aspects of the project, such as schedule, cost, and quality. Some stakeholders may have special interests that require tracking other measures such as product test results or contractor performance. If project managers and teams are not keeping track of how the proj- ect is performing, then it is difficult to know what to do when things go wrong or vary sub- stantially from the plan. The purpose of a monitoring and corrective process is to make sure you know how a project is performing and that you have thought through actions you can take to solve problems as they become clear through the monitoring process.
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Section 13.1 Project Monitoring
This chapter covers the monitoring process, including how to set up a monitoring process and measures to track what kinds of corrective actions are typical, how to report on monitoring data, and how to conduct a phase-gate review after each project phase is completed. Monitor- ing feeds the project decision process because it is a systematic source of facts and data on the project.
13.1 Project Monitoring We will first address how a project is tracked, called the monitoring process. Preparing the monitoring system is important because project managers need to collect the right informa- tion to see how the project is performing.
Project Monitoring Versus Evaluation
This chapter will address project monitoring, and Chapter 14 will cover evaluation. Moni- toring and evaluation are closely related, but there is a basic difference. Monitoring is the process of tracking progress and identifying necessary adjustments during the course of the project. Its results feed decision making and, later, evaluation. It is conducted in close contact with the project execution process to determine if the project is on track and what unantici- pated changes have occurred.
Evaluation involves stepping back from a project after its completion and assessing which outputs and outcomes were produced—and how efficiently and effectively they were pro- duced. It involves more analysis and a broad perspective on project objectives, outcomes, benefits, and impacts. Evaluation addresses the anticipated outcomes and unexpected, unin- tended consequences.
Table 13.1 outlines the differences between project monitoring and project evaluation.
Table 13.1: Monitoring and evaluation: A comparison
Project monitoring Project evaluation
Tracks key indicators during the execution phase Conducted at end of project to assess achievement of project goals, impacts, and outcomes
Focused on variances from schedule, budget, and other plans
Focused on whole project and achievement of project goals, objectives, impacts, and sustained outcomes
Emphasis on inputs, milestones, problem solving, trends, risks
Emphasis on customer satisfaction, benefits and costs, overall contribution to enterprise growth and profitability
Links project activities to outputs, efficiency Links project deliverables to achievement of goals, impacts, outcomes, and integration with other proj- ects in the enterprise portfolio
continued
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Section 13.1 Project Monitoring
Project monitoring Project evaluation
Starts with baseline plans, schedules, budget, and risk management plan
Starts with review of impacts, outcomes, and linkage to project activities regardless of original baseline
Tracks functional support issues such as procure- ment, finance, configuration management, and production
Tracks functional support indicators to see how they contributed to overall project success
Conducted by project manager and team Conducted by outside interests such as stakeholders and academic evaluators
Links to program control and process Links to enterprise strategy, policy, and long-term plans
Produces lessons learned for project management process and managing the project right
Produces lessons learned for choosing the right projects
Now that we have explored the differences between monitoring and evaluation, we can now dive into the monitoring process, the central theme of this chapter.
The PMBOK Guidelines on Project Monitoring
The PMBOK includes a section called “Monitor and Control Project Work” in its project inte- gration process. This involves setting up a project to monitor key measures of progress. Monitoring is presented as a combination of expert judgment, analytic techniques, project information, and meetings. It produces change requests, work performance reports, a plan, and document updates as its outputs.
The PMBOK indicates that monitoring focuses on:
1. comparing actual project performance against the project management plan; 2. assessing performance to determine whether any corrective or preventive actions
are indicated, and then recommending those actions as necessary; 3. identifying new risks and analyzing, tracking, and monitoring existing project risks
to make sure the risks are identified, their status reported, and the appropriate response plans are executed;
4. maintaining an accurate, timely information base concerning the products and their associated documentation through project completion;
5. providing information to support status reporting, progress measurement, and forecasting;
6. providing forecasts to update current cost and schedule information; 7. monitoring implementation of approved changes as they occur; and 8. providing appropriate reporting on project progress and status to program man-
agement when the project is part of an overall program (Project Management Institute, 2013).
Table 13.1: Monitoring and evaluation: A comparison (continued)
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Section 13.2 Project Monitoring Process
The PMBOK guidelines do not address project evaluation per se or equate it with monitoring and review, because the writers of the guidelines see any major, postmortem evaluation to be beyond the control and responsibility of the project manager and team. The PMBOK assumes that if a project is monitored correctly and guidelines are followed in initiation and planning, accurate reading of monitoring and performance indicators will lead to actions that realign the project with the baseline, or close to it. If change and monitoring trends suggest major restructuring and change order action, and if the project manager acts appropriately to find root causes and fix them, then the completed project will align with the revised baseline plan.
The PMBOK also sees the major purpose of a project as production of outputs and deliver- ables that satisfy customers according to the project goals, requirements, and scope of work. Any long-term impacts and outcomes beyond the immediate closeout and final project review are left to other parties and interests beyond the project itself.
13.2 Project Monitoring Process Project monitoring is the continuous process of watching the project to see where it is headed and set the stage for corrective action if necessary. Corrective action is the process of taking steps that are designed to adjust a project that is off course and put it back on course. The monitoring process parallels the execution process. Monitoring involves the following steps:
1. Establishing priorities in terms of project goals. This means asking questions to determine what the main priorities are. For example, it is important to establish if the main priority is to deliver the product on time and within budget or to build a long-term relationship with the customer even if it means overrunning the budget and absorbing the loss of profit margin.
2. Setting up the project plan, objectives, and performance indicators, as well as a supporting information system so that the right data can be gathered and analyzed. This is sometimes called data analytics. Indicators are measures of a key aspect of the project; a key indicator of overspending could be the existence of high volumes of unused supplies and materials. Data is quantified information, usually presented in terms of numbers and figures; the data performance on a given task is presented in percent complete.
3. Looking back to the project plans and documents to determine which aspects of the project were not anticipated in the planning phase, called change management or variance analysis.
4. Determining what needs to be corrected or adjusted, which is known as corrective action or project adjustment.
5. Identifying what risk events are occurring that need to be mitigated, which is called risk management and contingencies.
6. Looking forward to the remaining work and cost to complete, which is called for- ward mapping.
7. Keeping in touch with stakeholders and customers and collecting their feedback, also known as customer or stakeholder relationship management.
Monitoring data is shared with stakeholders through electronic tools such as e-mails, tele- conferences, and text messaging. If there are major implications generated by tracking data,
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Section 13.2 Project Monitoring Process
a phone call to key top managers, project sponsors, and stakeholders may be in order. The data is stored in project software and may also be stored in a cloud system by a contractor if appropriate.
Preparing for Monitoring in the Planning Process
To illustrate how monitoring is integrated into a project, we will show how the project man- ager handles the process using the example of a new town hall project. The project has been planned using the PMBOK process, including a project management plan with schedule and budget in a project management software program, risk management plan, and other associ- ated plans for communication, stakeholder management, and project integration. To set up the project for monitoring, the project manager has established a project baseline, starting task plan, schedule, and budget that will serve as the base for project execution and monitor- ing. Everything will be measured against the baseline.
The project manager has briefed all team members on their responsibility to enter actual durations for their tasks at given points so that variance can be calculated. The team is also trained in the use of electronic time sheets that have been integrated into the project manage- ment software program so that actual task durations and costs will be entered by each team member at designated points to support monitoring. In addition, project cost capture codes have been set up to document all acquisitions and related costs incurred by functional depart- ments supporting the project and to integrate them into the project management program’s cost templates by task.
A defined process for monitoring has also been established. Progress will be reviewed infor- mally every 2 weeks, with formal project data pulls and reviews every 4 weeks. A project management information system network has been set up to enable all team members to have full transparency and access to project data.
In the early stages of the project planning process, a small project task force including team members and IT staff was created to establish the data gathering and analysis process to support monitoring. The group recommended that the key project objective was to complete a new town hall (the deliverable) for turnover to the city in 12 months, on time and within budget. The customer signed off on the baseline to confirm the project’s starting point.
Key indicators of progress and associated data needs were established based on the proj- ect manager’s previous experience with town hall projects. Three key indicators were deter- mined to be drivers of project success. A driver indicator is a determining factor of project success based on previous, similar projects. Monitoring these key indicators can help the project manager see early indications that the project is on track. The assumption is that if these indicators are going well, the project will succeed. If they are not on time and within budget, the project will be late.
In this project it was decided that in addition to the regular monitoring of schedule, budget, and quality, three key indicators would be closely tracked: (a) construction blueprints, (b) building wiring completion, and (c) customer acceptance. If these tasks are successfully finished on time
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Task Name FinishStartDuration
15 days
40 days
50 days
14 days
221 days
30 days
30 days
Milestone (0 days)
10 days
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1.2 Initial concept design
1.0 Prepare Facility Concept
2.0 Plans
2.2 Final blueprint
3.0 Construction Plans and Installation
3.2 Supply delivery
3.4 Complete HVAC duct work
3.6 Complete wiring system installation
1.3 Final concept design
1.1 Requirements
2.1 Draft blueprint
2.3 Blueprint complete
3.1 Supply acquisition
3.3 Complete foundations
3.5 Complete wiring diagram
3.7 IT systems installation 3.8 Final building installations 3.9 Customer acceptance
Predecessors
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iDriver Project MilestoneID FinishStart
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Customer Acceptance
Complete Blueprint Complete Wiring System
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Section 13.2 Project Monitoring Process
and within budget, the assumption is that the project will likely succeed. This does not mean other indicators are not monitored, but the project manager will give special attention to data on these measures.
Figure 13.1 shows the basics of the town hall project schedule from a high level.
The project schedule shows these three driver milestones in Figure 13.2.
Figure 13.1: Town hall construction project: High-level project schedule
This Gantt chart shows the basics of the town hall project schedule.
Adapted from Smartsheet.com.
Task Name FinishStartDuration
15 days
40 days
50 days
14 days
221 days
30 days
30 days
Milestone (0 days)
10 days
15 days
16 days
20 days
10 days
1 day
15 days
60 days
60 days 15 days
1.1
2.1
1.2
1.3
2.2
2.3
3.8
3.1
3.3
3.5
3.2
3.4
3.6 3.7
1.2 Initial concept design
1.0 Prepare Facility Concept
2.0 Plans
2.2 Final blueprint
3.0 Construction Plans and Installation
3.2 Supply delivery
3.4 Complete HVAC duct work
3.6 Complete wiring system installation
1.3 Final concept design
1.1 Requirements
2.1 Draft blueprint
2.3 Blueprint complete
3.1 Supply acquisition
3.3 Complete foundations
3.5 Complete wiring diagram
3.7 IT systems installation 3.8 Final building installations 3.9 Customer acceptance
Predecessors
08/15/18
08/30/18
09/10/18
10/01/18
11/06/18
11/17/18
01/02/19
02/19/19
09/01/18
07/30/18
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10/15/18
11/06/18
12/31/18
02/03/19
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04/21/19 06/22/19
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07/07/18
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Figure 13.2: Key milestones in town hall construction project
Key milestones in the town hall construction project include completing the blueprint, completing the wiring system, and achieving customer acceptance.
Adapted from Smartsheet.com.
iDriver Project MilestoneID FinishStart
3
1 2
Customer Acceptance
Complete Blueprint Complete Wiring System
06/22/19
10/15/18 02/19/19
07/07/19
11/05/18 02/19/19
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Section 13.2 Project Monitoring Process
Monitoring During Execution
During execution, the project manager collects monitoring data on project progress, such as schedule and cost information, then interprets the data, prepares reports, and discusses issues with the appropriate people. The process is ongoing, and the project manager will regularly refer to monitoring data on key measures before acting.
The project manager uses monitoring results to take corrective action if necessary. If results show schedule or cost variance, the project manager drills down to understand what is really happening. If the results are positive, such as if positive cost variance indicates that the proj- ect is saving money and will contribute to the margin, the project manager does not immedi- ately assume that this is good news, because the positive variance could be the result of bad workmanship or bad cost estimates. The project manager must ensure that the cost savings is not an indication of lower quality, but rather the result of real efficiency in accomplishing the task.
The project manager is constantly asking, “What is going on in this project, what things are happening that we did not anticipate, and how do we see the changes before they hurt us or before we miss opportunities to exploit them?” and “What can be learned from the moni- toring process for this project and future ones?” If the project manager has the benefit of past experiences with similar projects and can conclude from the earlier project profiles and
State Department of Health and Human Services Public Sector Case Study
As we return to HHS, the secretary, Robert Mikawa, meets with the assistant secretary for programs, Rebecca Dawson, and project manager, Shannon Adams, to discuss a monitor- ing program for their health records project.
Mikawa asks Dawson and Adams who will oversee the project and monitor performance at a department level. He wants to ensure that they know what is happening in the project and are not surprised by any issues that arise.
Adams informs him that they plan to institute a macro-monitoring system that looks at high-level indicators from more detailed projects. They will require all partner teams in the project to monitor performance against a common set of indicators in addition to their own measures, and they will use the high-level indicators to track how the overall project is going. She plans to monitor overall schedule or cost variations from the plan by 25%, problems that have not been resolved and need a broader view, problems that involve network partners, and successful decisions (best practices).
Dawson thinks this is a good plan but asks Adams how she can ensure the quality of the assessment at this portfolio level of projects. She reminds Adams of the errors and varia- tions in data that could occur before getting the results.
Question for Discussion
1. How do you think Adams should track quality?
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Section 13.2 Project Monitoring Process
lessons learned that there were key indicators, or drivers, of project success in all of these projects, the emphasis in monitoring is targeted on those indicators.
There must be a balance between quantitative and qualitative measures in project monitor- ing. Quantitative measures reduce the subjectivity of the review and base conclusions on numbers and facts. The more facts and quality data are integrated into the monitoring pro- cess, the more the project manager can rely on them.
Qualitative measures are also important and may not be captured in data gathering. Quali- tative measures are physical or social indicators of project progress, such as customer sat- isfaction or team morale, that are important but difficult to quantify. Qualitative measures sometimes suggest problems that quantitative indicators do not, such as the extent to which a customer may have lost interest in a project or lacks confidence that it will be successful.
For instance, if a task leader is not communicating about task performance and does not appear to be engaging the task members in project reports and activities, the project manager will need to act on this soft but real indicator of a problem. And if a project manager receives a report on task performance for an earned value analysis that suggests 100% completion of a task before it is due, the project manager must be aware of the possibility that the task is not actually finished. This is a sensitive piece of project manager responsibility since question- ing the quality or integrity of a task leader report on progress can be debilitating to the task leader and team if it turns out to be unwarranted.
Data Collection
Sometimes, monitoring involves the analysis of hard data that targets specific indicators and quantifies performance. Other times, the monitoring process requires an intuitive sense that helps management anticipate project problems and the need for preventive change. The focus of project monitoring is determined by the particular interest and interpretation of success. Whereas one stakeholder may be more interested in scheduling, another may be more inter- ested in profit margin and avoiding overruns. A third party may be more interested in the quality of the product deliverable and is not worried about time or cost. The traditional proj- ect manager is focused on delivering a quality product on time and within budget, but other factors can determine project success.
In the process of selecting indicators, the project manager will look to two kinds of indica- tors: time driven and event driven. A time-driven indicator is a measure such as a mile- stone that is triggered at a given point in the project and generates monitoring information on that milestone. A measure is the actual data point for an indicator. For instance, whereas a project manager may be looking for an indicator of project quality, the technical measure that is gathered in monitoring to support that indicator might be actual product test results. A time-driven indicator is scheduled and conducted to take a snapshot of the project on that date, regardless of other indicators.
An event-driven indicator is a measure that is driven by an event or unanticipated and dis- ruptive change, such as if a risk event occurs, a supply deliverable is not delivered, or a team member leaves the team. Time-driven indicators must be addressed when planning the moni- toring system, but the project manager must be ready to deal with unanticipated event-driven
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Section 13.2 Project Monitoring Process
indicators when they occur. A formal change order process is a useful tool to give the project manager a process to respond to event-driven indicators.
The project manager must also be sensitive to the cost of data collection and relate costs to benefits. Obtaining finely tuned and accurate data quality may satisfy the need to “know everything,” but it may cost more than it is worth to collect. Thus, trade-offs are made in the decision to collect indicators. For instance, if the test technician indicates that the product is not likely to meet requirements after data is gathered from a preliminary test, fine-tuning the data so that it can be presented in more detail is not necessary to generate corrective action.
Data Points Data points are times in the project when monitoring data are gathered for analysis. Data points are usually associated with the dates on which key milestones are completed or in preparation for project reviews. Data can be in the form of quantitative measures of quality or process, dates and transactions, or technical details on an intermediate or final deliverable. Here are some of the key data points for the town hall project.
1. Blueprints complete; data to be pulled (gathered) for monitoring on November 5, 2018, include: a. Planned start and finish dates in baseline schedule b. Actual start date for blueprint task c. Actual finish date for blueprint task d. Quality control and technical acceptance for blueprint graphics and document e. Narrative comments from blueprint task leader and drafter f. Source: blueprint task leader and quality control staff in PMO
2. Wiring complete; data to be pulled on February 19, 2019: a. Planned start and finish dates in baseline schedule b. Actual start date for wiring task c. Actual finish date for wiring task d. Quality control and city code approval and signature for wiring e. Narrative comments from wiring contractor f. Source: wiring contractor and quality control staff in PMO
3. Customer acceptance; data to be pulled on July 7, 2019: a. Planned start and finish dates in baseline b. Actual start date for customer acceptance c. Actual finish date for customer acceptance d. Customer sign-off confirming acceptance e. Narrative from customer on project outcome f. Source: project manager
4. Pull actual labor and resource costs from Microsoft Project® and the financial accounting system to calculate cost variance by comparing BCWP to ACWP. (Remem- ber that BCWP − ACWP = cost variance, and if negative it indicates a cost overrun.)
5. Calculate schedule variance by determining the percent complete from task leaders on work performed to date and comparing the BCWP, based on percent complete, to BCWS. (Remember that BCWP − BCWS = schedule variance, and if negative it indi- cates a schedule delay.)
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Section 13.2 Project Monitoring Process
This case reminds us that variance analysis, or discovering whether the project is on schedule and within budget, tends to focus backward on the original plan and schedule. This tendency can mask the real issue, particularly how the remaining work should be scheduled and bud- geted to complete the project on time and within budget. If there have been major changes and shifts in the project that make the baseline schedule unworkable, then simply trying to bring the project into alignment with a bad baseline will not be effective.
The project manager has to understand this problem and create a new plan, with a revised schedule and budget, and perhaps an updated task structure, to look ahead to completion. This proactive move will also help shift the team’s focus from how to stay with the original plan to how to complete the remaining work, given the changes that have occurred.
This case has been made simpler than a project might be in the real world, but the point remains that project managers must set up a project for effective monitoring during the plan- ning process. If the project is not set up correctly by focusing on what is to be measured and how, when it comes time to monitor those measures, the data will be difficult, if not impos- sible, to gather.
For special, in-depth reviews, the monitoring process supports a full-effort data analysis to prepare for review. To accomplish a special analysis such as a phase-gate review, the process of data gathering, analysis, reporting, and agenda setting may be handled by the PMO working with the team.
Earned Value Earned value is a traditional project performance measure that has been emphasized by the PMBOK for years. Earned value is the process by which a project stays on schedule and within budget. If the project varies from the schedule or budget, this is termed schedule and cost variance—two measures of earned value. Earned value is frequently used because it sepa- rates performance on schedule from cost (Fleming & Koppelman, 2010).
Projects may be performing well on one measure but not on another. It is normal for a project to be ahead of schedule but have negative cost variance because the expenses are much more than anticipated (Fleming & Koppelman, 2010). On the other hand, it is also common for a project to be behind schedule but have positive cost variance because the spending rate is consistent with the planned costs for slower progress at that point in the project.
Earned value helps the project manager and team look at both measures before determin- ing the overall performance of the project. The downside of earned value is that it assumes that the original schedule and cost estimate were correct, and it looks backward to align with them rather than learning from the factors that changed the performance of the proj- ect from the original plan and looking forward by rescheduling the remaining work. In addi- tion, a limitation of earned value is that the project manager must ask the task leader for the percent complete for the task to calculate earned value and relate percent progress to a budget number for that exact percent complete.
It is important to understand that an accurate assessment of earned value is difficult, given the problem of identifying the actual budgeted cost of the project at the review point and the
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Section 13.2 Project Monitoring Process
additional problem of determining the percent of work completion at that point. But earned value is important, because it helps the project manager and the team look at the two mea- sures separately.
Regardless of the limitations of earned value as an indicator, it is important for tracking the project because substantial variance from the baseline schedule and budget is an important trend. Variation can indicate that the original baseline was wrong in predicting the durations and sequences of tasks, or it can indicate that the work is not progressing as planned because of other root causes. In either case earned value is an important mindset for those doing the job. Team members should be aware that a task is not shaping up as planned and that this development should be flagged early. It is not easy for a task manager to admit that the task is taking longer than planned, simply because it may reflect on that manager’s commitment or competence.
To mitigate this issue, the project manager should promote the concept that finishing on time and within budget is not the key objective in any project and that milestones are just guide- lines. The problem is compounded when the budget allocated to a project does not provide enough resources to do the job. Sometimes this happens when top management or the cus- tomer is convinced that budgets and schedules are padded and that taking a percentage off the top of a project cost estimate is a natural offset to that practice.
Correcting a major variation in earned value revealed in monitoring data is not always advis- able, especially in the early phases of a project. Overreaction with the wrong corrective action in response to such indicators is worse than no action at all. This is why the project manager must see earned value as a learning tool, not an intervention tool. Intervention in a project process should occur only if there is sustained information over time that substantiates the need for correction, and even then the project manager should be aware of the tendency to overreact or to address corrective actions to a symptom rather than to a true root cause.
Informal Feedback Project managers should heed informal indicators of project progress as well as quantitative measures and data (Fleming & Koppelman, 2010). Sometimes team members and stakehold- ers will express feelings and personal views about a project that may not be made public but that deserve attention. This is the process of reading the project’s status from personal views that can signal developing trends and issues that are not visible in monitoring data.
For instance, a stakeholder may express concern that the project team is experiencing conflict and tension that may not be visible to the project manager but is evident in communications with stakeholders. Some team members may indicate that the project is not going well sim- ply to vent their dissatisfaction with their roles or their compensation but are unwilling to express their views inside the team.
Project managers need to have a good relationship with stakeholders so that these kinds of messages can be informally delivered without major consequences. When this kind of devel- opment occurs, project managers may find that they do not have the confidence of the team they thought they had, and that team members fear retribution if they express negative views within the team and enterprise.
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Section 13.2 Project Monitoring Process
Using the Logical Framework
The approach to monitoring a project should reflect an overall strategy to track inputs and outputs, activities, impacts, and outcomes. This progression is sometimes called the logical framework, which shows a causal linkage from project activities all the way through to out- comes, called result chains or value chains. This process begins by tracking project perfor- mance against plans and deliverables, but the actual evaluation of the project (covered in Chapter 14) will focus on outputs, impacts, and outcomes. This way of thinking through the actual value of the project in terms of outcomes is called the logical framework, or logframe, because it traces the logic from initial activity to result.
Table 13.2 shows an example of a logical framework for the town hall project. Note that each activity results in a planned result and outcome, an indication of a logical relationship between an activity and a project result. The logical framework is a way of ensuring that each project activity can be tracked to a project result and outcome.
Table 13.2: Logical framework for town hall project
Activity or output of project enterprise Measure Result Outcome
Blueprint Customer sign-off Customer approves move to design and construction
No additional costs to change basic construc- tion blueprint
Completed wiring Quality control approval and city code sign-off
Assures quality of wiring system to meet requirements and that building will meet code requirements if constructed according to the wiring plan
No additional costs to mitigate construction code violations
Final customer acceptance
Customer sign-off Customer satisfaction Customer financial support
Overall project Customer acceptance of final deliverable
Customer promptly pays for project in full
Owner (the city) profits from project, project enterprise profits from tight project cost control, community benefits from jobs and economic development
Follow-on contract Successful new project work with customer
New project approved Owner (the city) profits from new project, proj- ect enterprise profits from tight project cost control, community benefits from jobs and economic development
The logical framework helps the project manager see the big picture: in this case, that the disciplined management and control of schedule and costs, as well as the key indicators of
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Section 13.3 Corrective Action
project success, will lead to customer satisfaction, financial profitability of the project enter- prise, and overall beneficial outcomes to society, such as jobs and economic development. Whereas the project manager cannot control outcomes, the logical framework suggests that the chance of realizing planned project outcomes is enhanced, but not guaranteed, when basic controls are in place so that schedule, cost, and quality are assured.
13.3 Corrective Action When the project manager sees change or variation in the performance of a project, the next step is to interpret the indicator or measure and determine the extent of the change and the need for corrective action. In some cases the change or variation has been anticipated, such as in the risk matrix. If the variation appears to be the result of an anticipated risk event, there should be documentation available on intensity, impact, and contingency actions. If the varia- tion is due to an unanticipated factor, the root causes must be uncovered to understand the extent of the disruption.
Corrective action is the process of adjusting the project based on monitoring results that sug- gest variation in performance. Sometimes this is called contingency planning, because the corrective action to be taken is contingent on the indicator and root cause of the variation. Actions to adjust the project can take four basic shapes: (a) minor tweaks (small changes) to the project schedule, budget, or resources; (b) actions to prevent risk events or other disrupt- ing influences from happening; (c) mitigation actions or change orders to control the risk event or variation and its impacts in order to bring the project back under control; and (d) major restructuring of the project based on major impacts.
Minor Tweaks
Minor tweaks include changes in schedule based on performance, such as changing task dura- tions, start and finish dates, and predecessors. For example, project monitoring might show that the requirements subtask for a construction project was completed in 10 days rather than the estimated 15 days. If this subtask is on the critical path, this could mean submitting the deliverable 5 days early. If an early delivery is attractive to the customer, the schedule is adjusted to reflect the new subtask duration and its impact on the whole schedule, and a new baseline schedule would be distributed.
The project manager must also determine that the change in the time necessary to complete the requirements document in this project is worth making an adjustment for, given that a new schedule would have a ripple effect and impact many team members’ current calendars and due dates. The optional approach would be to do nothing and keep the requirements sub- task on the baseline schedule despite the potential savings in cycle time of 5 days.
Major Preventive Actions
Major preventive actions are considered when there are fundamental shifts occurring in the project that could alter the quality and timing of the project deliverable. These shifts may be the result of identified risks that would have major impacts on project variables.
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Section 13.3 Corrective Action
For instance, say a schedule variation is picked up in the routine monitoring process, suggest- ing that the requirements subtask for our town hall project is not only late, but has not started. Queries to the subtask leader uncover a major uncertainty in project requirements coming from the customer, a risk that was highlighted in the risk management plan. The project man- ager thus has some documentation on the risk that suggests preventive action to avoid major project schedule delays and budget overruns attributable to unclear requirements.
In this case the action planned was to stop the project and meet with the customer to brain- storm a new requirements document and make the necessary changes in the project through the change order system. The customer requirements shifted due to a change in local building codes for Wi-Fi wiring systems, and the blueprints could be altered relatively easily.
It is likely that the problem would be resolved with no major impacts since the project is just starting. But had the project manager not seen the delay as it was occurring through a moni- toring intervention, the project could have faltered simply because of the natural tendency of projects to continue despite being off track (Fleming & Koppelman, 2010). Had the customer made a major change in requirements that would fundamentally change the shape and func- tion of the building deliverable, the project manager would terminate project activity, renego- tiate the schedule and budget, and issue a new baseline and kickoff point.
Major Mitigation or Control Actions
If the change or variation uncovered in monitoring has already happened and triggered a high negative impact on the project schedule, budget, or other performance factor, the project manager must take mitigation actions to control the project.
For instance, in our town hall project, monitoring data in a project review meeting on the wiring system installa- tion uncovered a problem of coordina- tion between wiring installation and heating, ventilation, and air-conditioning (HVAC) ductwork. According to the schedule, contractors were supposed to install the ductwork after the wiring sys- tem was installed, but instead, the duc- twork was completed before the wiring system, possibly due to a lack of commu- nication between two task leaders and their contractors. This problem requires a complete removal of the ductwork to enable wiring to be completed as origi- nally planned and ductwork reinstalled, with major impacts on project schedule, cost, and perhaps even quality.
This issue suggests problems in the project team, especially a lack of communication and coordination between interdependent task leaders and their contractors. The problem could
Jeff_Hu/iStock/Thinkstock
Poor communication may result in issues that require major mitigation by the project manager, such as the HVAC ductwork issue in the town hall construction project.
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Section 13.4 Project Monitoring Model
cost the enterprise both profit margin and market share, especially if the change alters the customer’s schedule and performance requirements. The project manager must then step in to correct the issue and work with the two task leaders to ensure that this kind of problem is not repeated in the future. In addition, the project manager will note this experience and make sure it is documented in the lessons-learned process in project closeout.
Major Project Restructuring
Sometimes high-impact risk events and unanticipated changes in the project environment cannot be prevented nor controlled. For instance, in our town hall example, the underlying assumptions in the project plan about the local economy and associated property values can change unexpectedly. Downturns in the economy, lack of consumer demand, property value collapses, and lack of inexpensive financing can fundamentally change a construction project midstream. If a project faces termination or major restructuring, the project manager must go through the following steps:
1. Review key indicators and seek out expertise to confirm that negative economic and related trends and changes are likely to be sustained.
2. Meet with top management, sponsors, customer, and stakeholders to review exter- nal data and economic information in the project environment.
3. Generate and evaluate options, given the current status of the project, such as down- sizing the scale of the project and its property footprint or downsizing the project staff and functional support.
4. Seek additional financing and ownership to support restructuring. 5. Start from scratch with new project goals, objectives, scope, charter, work break-
down, schedule, budget, risk management plan, and deliverable. 6. Create a new baseline and begin the project as a new effort.
Corrective actions can take on different shapes and forms, depending on the extent of the problem. Project managers can make minor adjustments if the data suggests minor variation from the plan, such as a 2% overrun of the budget on a given task. Or if there is a 25% over- run of the budget, a project manager may have to take a major corrective action such as ask- ing for more funding or cutting back on another task. Project managers can work to prevent problems and the need for corrective action altogether. Sometimes, monitoring suggests that project activities are not linked to intended outcomes. If the monitoring data suggests major breakdowns in schedule, cost, team performance, or product quality, the project manager may have to do major surgery on the project to restructure tasks.
Now that we have explored the monitoring process and what it includes, we will discuss a model that presents the typical focus of the monitoring process.
13.4 Project Monitoring Model A model for project monitoring is available that provides a detailed look at what we have discussed so far. Table 13.3 shows this model, which includes each activity in the planning
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Section 13.4 Project Monitoring Model
process, the measures or metrics used to track or monitor that activity, and which corrective actions might be necessary in follow-up.
Table 13.3: Project monitoring model
Project activity
Metrics, indicators, sources of data on indicators, frequency of collection, audience
Preventive and corrective actions
1. Strategic objectives The project manager monitors whether assumptions that relate to the project in the strategic plan are actually playing out.
If project performance is not aligned with strategic plan assumptions and initiatives, the project manager can request a review of the strategic plan to close the gap and/or a review of the project to realign it.
2. Project The overall project is viewed from arm’s length to ensure the whole project is progress- ing, with no lagging parts or processes.
The project manager can termi- nate or fundamentally change a project direction based on monitoring data.
3. Project business case The project manager watches project spending and potential revenue ratios to ensure that planned profitability and market share measures in the business case are likely to be met.
Project finances can be changed to control costs or to increase the potential revenues from project deliverables by changing specifications or more proactive marketing.
4. Project business case Goals such as maintaining con- stant customer satisfaction and minimizing change orders are monitored.
Corrective actions include rede- sign of project products, change orders, and redefining project goals to reflect more realistic project outcomes.
5. Project requirements Performance of product and/ or services is measured against customer requirements.
A project can be stopped to renegotiate requirements or to review requirements with the customer before moving to the next phase.
6. Project specifications The project manager ensures specifications of product com- ponents that are documented in the configuration management system are being produced.
Certain specifications can be modified through change order and rescheduling.
7. Project process The project manager watches the project process and cycle to ensure key processes such as design and testing are being implemented.
The project manager can rede- fine processes, including pro- curement and technical testing.
8. Inputs Inputs are monitored, including resources, facilities, people, busi- ness processes, and financing.
If basic resources are not avail- able, they are acquired or made available.
continued
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Section 13.4 Project Monitoring Model
Project activity
Metrics, indicators, sources of data on indicators, frequency of collection, audience
Preventive and corrective actions
9. Project resources The project manager ensures that resources are available on time and being consumed or used as planned.
Contingency action on scarce resources could mean renego- tiating supply and equipment contracts.
10. Project objectives Measurable objectives such as product deliverable pass every test and are monitored.
If a project objective is not going to be met, the project manager identifies the problem and takes action such as a change order, redefinition of the objective, or a fundamental shift in project priorities.
11. Scope The project manager ensures that the scope of work is being performed and no more.
The project manager reviews work to ensure that the scope of work is being implemented and that work beyond the scope is avoided.
12. Project plan As the project progresses, the project manager monitors actual performance against the plan, assessing the accuracy of the plan in predicting performance.
The project is tracked to see that scope, schedule, and budget do not vary.
13. Milestones The project manager monitors the project at key milestones for schedule and cost variance and other performance indicators.
Key milestones are end dates for major tasks or phases that serve as useful points for monitoring project progress.
14. Schedule variance (from baseline plan)
The project manager measures whether the work is on schedule by taking the BCWP at a given point and comparing it to the BCWS for that same point:
BCWP − BCWS = schedule variance
The project manager assumes that the calculation of percent complete is accurate and that the budgeted cost at that point is accurate as well.
15. Cost variance (from baseline plan)
The project manager measures whether the project is within budget by taking the BCWP at a given point and comparing it to the ACWP for that same point:
BCWP − ACWP = cost variance
The project manager ensures that the project cost trend, or burn rate, is aligned with the work being performed.
16. Earned value Earned value gives the project manager a view of whether the project is on schedule and within budget.
The project manager looks at both schedule and cost indica- tors to assess performance against both.
Table 13.3: Project monitoring model (continued)
continued
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Section 13.4 Project Monitoring Model
Project activity
Metrics, indicators, sources of data on indicators, frequency of collection, audience
Preventive and corrective actions
17. Budget If the budget is different from the cost estimate, the project manager tracks costs against budgeted amounts.
The budget is the amount allocated to the project; if the budget does not equal the cost estimate, the spending rate must be tracked to ensure the project is not underfunded.
18. Project deliverables Project deliverables, both inter- mediate (prototype test product) and final product, meet customer and/or user specifications and requirements.
If project deliverables do not meet requirements, root causes must be identified and options presented to the customer to get the project back on track.
19. Stakeholder satisfaction The project manager tracks feedback from key stakeholders to ensure that they are satisfied with project progress.
Some stakeholders need finan- cial performance information, some scheduling, and some quality and output assessments; reports are tailored to stake- holder interests.
20. Customer satisfaction Customer satisfaction is tracked through constant communication and information exchange, not assumed simply because require- ments are being met.
If the customer is not satisfied, successful performance of the project against schedule and cost objectives are not relevant; the root causes of customer dissat- isfaction must be identified and addressed in contingency actions.
21. Contract performance Contractors are monitored for earned value on their particular contract provisions.
Contractors are typically required to deliver their outputs on due dates and inform the project manager if contract schedules, budgets, or quality deliverables are not aligned with project plans.
22. Team performance Team performance is monitored to ensure smooth work flows and successful problem solving when necessary.
The project manager tracks team performance and looks for indicators of technical, morale, interpersonal, or motivational problems and addresses them quickly.
23. Project quality Process and product quality is monitored by tracking product defects and waste in business processes and procedures.
Quality standards for the project process and products should be addressed in the requirements document; if project quality is in question, work is temporarily stopped to address root causes and options.
Table 13.3: Project monitoring model (continued)
continued
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Section 13.4 Project Monitoring Model
Project activity
Metrics, indicators, sources of data on indicators, frequency of collection, audience
Preventive and corrective actions
24. Project outcomes Early indicators of outcomes, both anticipated and unan- ticipated, will serve to alert top management and support project evaluation at closeout.
Measures of outcomes are tracked to see early indications of longer term trends in ben- efits, impacts, and unintended consequences.
25. Support functions Support functions such as technology, quality control, procurement and acquisition, finance and accounting, and human resources are assessed for responsiveness.
Team members are surveyed for assessment of functional sup- port, timeliness, responsiveness, and compatibility.
26. Technology, compatibility Information technology com- patibility—such as integration problems between project man- agement software and configura- tion software in tracking product components and suppliers, performance of technical equip- ment, facilities, and systems—is monitored.
The project manager tracks compatibility of project manage- ment software and data sources with other enterprise systems to identify issues that disrupt or delay project performance.
27. Project phase-gate reviews At the end of each phase, the project manager selects key mea- sures such as phase deliverables, cost and schedule, and customer satisfaction to assist in deciding whether to go forward to the next phase or not.
Phase-gate reviews are conducted at the end of each key phase to determine whether the project should be advanced to the next phase; the project manager handles the preparation, agenda, and information supports.
28. Project activities The project manager performs general tracking of project activi- ties such as team performance, meetings, reports, facilities, per- formance, and functional support.
The project manager tracks how the project activities are going in general, given all indicators, and determines whether to escalate issues to top management in a phase-gate review. This requires assessing the tolerance level for variance and avoiding escalating issues without taking responsi- bility to resolve them first.
Table 13.3: Project monitoring model (continued)
The Links Corporation Private Sector Case Study
As we return to Links, the CEO, Phillip Johnson, meets with the vice president of project management, Desiree Aubert, and the project manager, Miles Parker, to discuss how they will monitor their printer project.
(continued)
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Section 13.5 Project Reporting
Johnson begins the meeting by stating that they need to monitor the project closely to ensure that it is going well. He feels the issue is whether manufacturing accepts the project and owns it. He wants the manufacturing department to accept the effort before focusing too much about being behind schedule or over budget.
Parker disagrees. He would like to track quantitative measures of schedule and budget vari- ance, along with product quality. He feels that if they show manufacturing how important quality and analysis is to the team, the department will be more accepting of the project.
Aubert agrees with both Johnson and Parker. She would like to see them do both, by showing discipline and influencing manufacturing’s ownership of the project, and by responding to any of their views that the project is not theirs.
Question for Discussion
1. How do you feel about the issue being discussed: whether to pay attention to qualitative or quantitative measures, or both? Explain your reasoning.
The Links Corporation Private Sector Case Study (continued)
Monitoring involves identifying the kinds of things you want to track in the project based on management needs as well as the different needs of the project sponsor, the customer, and project stakeholders. There is also value in looking ahead when you are designing the moni- toring system to anticipate and define the kinds of corrective actions you will need to take, given certain variations from the project plan. Further, it may also be useful to include cer- tain corrective actions in the project schedule as contingencies if the probability of variations occurring is relatively high.
Now that we have explored project monitoring activities, we will discuss how to report moni- toring data.
13.5 Project Reporting Reporting is the process of keeping stakeholders up-to-date on project progress and devel- opments. The project manager faces a difficult challenge in reporting because too much reporting can be as ineffective as too little reporting. A reporting system that produces too much information on a project will likely be ignored, whereas a system that produces too little information will not deliver the required messages to the right people and stakeholders (Barkley & Wagner, 2010).
There is a relationship between top management support and project monitoring. Project monitoring is enhanced when top management and sponsorship demonstrate interest in how the project is progressing and request relevant data on the project. A project manager who takes the time to gather and report performance data expects his or her audience to read it and respond. If top management and key stakeholders show interest in the project, then
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Section 13.5 Project Reporting
project monitoring takes on a new dimension of urgency. If no one reads the project reports, projected monitoring deteriorates rapidly (Barkley & Wagner, 2010).
Types of Project Reports
To design an effective reporting system, the project manager considers five kinds of reports: activity reports, performance reports, progress reports, special reports, and financial reports.
Activity Reports to a Wide Audience Project activity reports include performance information on project progress, including the status of key deliverables, schedules, and other aspects of the project. These reports are intended to keep stakeholders informed on the project and to assure them that the project is on track. For instance, a monthly activity report may include work completed to date, remain- ing work to project completion, the status of intermediate products and outputs, and upcom- ing events or activities that may be of interest.
Performance Reports to the Project Team Performance reports to the team are prepared by the project manager and include detailed and technical feed- back on their project. For instance, a performance report on a new product might include:
• plans for project reviews and analyses;
• testing results on a product prototype;
• technical data on a system design to meet product requirements;
• administrative information on changes in meeting schedules or tracking activities; and
• schedule and budget updates to alert team members to possible issues.
Progress Reports to Top Management Progress reports to top management are short and to the point, more like executive sum- maries than full reports. But the challenge is to use top management reports to alert policy makers in the enterprise to both good and bad news. Good news covers project highlights and successes. Bad news helps avoid surprises by including potential project risks and issues that
Robert Nicholas/OJO Images/Getty Images
Project reporting helps keep key stakeholders abreast of the project’s status.
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Section 13.5 Project Reporting
could happen. The trick is to avoid executives’ overreactions while informing them of issues and actions they might need to change in the future.
Special Reports to Selected Stakeholders Special reports are targeted to selected stakeholders and their unique interests. For instance, if a partner in a project has a particular need to know about technology issues because that stakeholder has provided a key piece of testing equipment, then that report focuses on the performance of the testing equipment. If another stakeholder is more interested in the proj- ect team’s performance because he or she assisted in staffing the team, then that report addresses how the team is coordinating and collaborating to accomplish tasks. If a stake- holder is more interested in on-time delivery because he or she is working on a product that will complement the project deliverable, then that report addresses schedule variance and performance against milestones.
Financial Reports Financial stakeholders such as banks, investors, and government funding agencies will seek out information on the financial performance of the project. This kind of report will highlight cost control measures, cost variances, and corrective actions; provide information on poten- tial revenues from project deliverables and breakeven points; and present value analysis and other financial outcomes.
Project Transparency
The concept of project reporting envisions that the project manager is in control of the report- ing process, its content, and its target audiences. But modern communication technologies have begun to change the concept from proactive reporting to ensuring project transparency in order to enable wide access to information.
Project transparency is the process of making relevant performance data available to a wide variety of stakeholders in real time, without reports. Rather than designing reports to target audiences, a project information system would automatically give access to a wide variety of interests. The issue today in data analytics is that too much data is available, not too little (Foreman, 2013). This means that making the right data available is more important than presenting all of the data available.
Project transparency has more relevance in government and nonprofit projects than in pri- vate sector projects. In private sector projects there is no incentive or legal requirement to make project information or evaluation data available to the public. Companies can control the results of project assessments and limit access to company officials and staff. And unless there is a major governmental intervention in the company’s business that requires project data to be available, outside organizations are not privy to such data.
For instance, say a company contracts with a local airport operator to improve an airport terminal and there is a dispute on finances. In that case the operator or owner can use legal
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Section 13.6 Preparing for a Phase-Gate Review
means, subpoenas, court action, and so forth, to make financial or project-relevant data pub- licly available in a litigation or enforcement action.
But because of the increasing concern for the integrity of government programs and projects, there has been a major increase in the demand to make more information available to the public on agency performance (Gordon, 2014). Project performance data is now being made available to the general public—some of which could be potentially damaging to the project, such as financial overruns, waste, and late completions and deliveries (Gordon, 2014). This develop- ment portends a new approach to public sector project monitoring and performance reporting.
With more public involvement and information sharing—especially citizen involvement gen- erated by the media and the ubiquitous use of mobile communication and social network systems—comes more potential for conflict and project delays.
For instance, if a state government community-development grant program finances a local nonprofit agency in a social services project, both those who oppose such services and those who support them can access relevant data on the grant and the potential impacts of the proj- ect on the community. And since many governmental programs are becoming increasingly controversial as more real data is revealed to a wide variety of special interests, the move- ment toward full transparency—as admirable as this policy is for citizen involvement—could have a major impact on the programs and projects that government agencies are willing to undertake (Gordon, 2014).
13.6 Preparing for a Phase-Gate Review In a real sense, the monitoring process provides the basis for project reviews. Without the benefit of data and trends on schedule, costs, risks, quality, and change, there would be little basis for informing review decisions. This is particularly true for phase-gate reviews, since their focus is typically the future, not the past. Top management tends to be less interested in variance from a baseline (that may be out-of-date, given fast-moving changes) than in how the remaining work will be handled to ensure success. Table 13.4 shows a typical agenda for a phase-gate project review, along with the kinds of data produced in the monitoring process to support status reporting and decision making.
Note that the agenda items are consistent with the elements of the project management plan and that a status report on each will be of some interest in the meeting. But the overriding issue in this review is, “What have we learned from this phase that would suggest terminating the project, and if the project is satisfactory so far, let’s proceed.” So the agenda starts out with a discussion of overall project performance and customer satisfaction. Then the discussion moves to issues and decisions and could end there unless there are major problems that sug- gest a full review of the project and whether it should proceed.
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Section 13.7 Trends in Project Monitoring
Table: 13.4: Phase-gate review agenda
Agenda item Status report Data support
Overall project perfor- mance in the phase
Customer satisfied with progress to date
Overall assessment of project “health” from project manager
Issues and decisions Defines any major problems or issues, e.g., project behind schedule and over budget, customer unhappy
Schedule and cost variance analysis, customer survey
Project objectives Provides midstream assessment of probability that project objectives will be met
Assessment of early indicators of progress toward project objectives
Project schedule More than 10% variation from baseline schedule suggests correc- tive action
Schedule variance analysis, feedback on remaining work
Project budget More than 10% variation in actual costs compared to baseline budget suggests corrective action
Cost variance analysis, assessment of current trends in costs on poten- tial for final project cost overrun
Project risks List of anticipated risks in risk matrix and current probabilities of risk events
Tracking of risk events and contin- gency actions, risk management plans, relative intensities of risk events
Quality process Product testing trends, issues in product or service development that portend quality problems in deliverables
Testing results data, design issues, preliminary product prototype per- formance data
Change Major changes in key indicators, e.g., cost; schedule; customer “voice”; economic, social, or technology indi- cators; status of competition; factors in business case
Broad perspective on the extent of change in key project success factors that require top management review and decisions
You can see the importance of the phase-gate review in the monitoring process because it is a critical gate to the next phase. This review takes advantage of earlier monitoring data and pres- ents in summary form to top management to support the “go” or “no go” decision. For instance, all of the monitoring data for the phase under review would be summarized and presented only for a few key milestones in the phase, such as final schedule variance or cost overrun.
13.7 Trends in Project Monitoring New developments in understanding the speed of change suggest more agile project manage- ment, or the capacity to respond quickly and effectively to change. In addition, projects are moving to more concurrent task performance, collapsing what used to be linear, sequenced tasks into more compact, parallel work.
For instance, software development projects are moving toward iterative models, in which teams sprint to end points faster to check prototypes and customer reactions. A new project
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Summary and Resources
management concept, the scrum, suggests that teams are mobilizing quickly to speed up their responses to change. A project that is stuck in routine, sequenced tasks and a totally inside view of the project schedule can be caught in today’s global economy unprepared to deal with fast-paced change coming from outside, market-based factors.
This development poses new challenges for project monitoring systems. Rather than report- ing on the traditional schedule and the effectiveness of handoffs from one task to another in the classic project sequence, task managers are even more likely to neglect gathering data and making routine reports. Task managers typically want to do the work rather than report on it; project managers want reports to make sure the work is being done. But if project work is increasingly complex and iterative, team members have a harder time reporting on their work in progress. This will lead to less-frequent monitoring and more empowerment of task managers to decide how and when project work should be reported. This development would give more emphasis to reporting by exception, rather than the routine gathering of perfor- mance data.
With new developments in mobile technology, project data can be distributed to customers and stakeholders anytime. Thus, monitoring data can be almost immediately made avail- able to enable quick responses, especially if the data is interpreted for those customers and stakeholders. These data can include quantitative data, such as detailed measures of cost or product testing results, or qualitative data, such as symptoms of communications issues with the customer that deserve attention. This means that there is no excuse for failing to adjust quickly to tracking information on a project.
Summary and Resources
Chapter Summary • Designing a project monitoring system requires an understanding of what indicators
of project progress must be tracked. • Designing a corrective action system requires thinking through what preventive and
corrective actions should be taken and what kinds of monitoring information to use. • Monitoring is different from evaluation. Monitoring is the process of tracking prog-
ress during the project, and evaluation is the process of determining whether project goals, outputs, and outcomes have been achieved after the project is completed.
• Effective monitoring requires a way of thinking about the project that enables the project manager to keep one eye on the task at hand and the other on the overall progress of the project.
• There are four basic types of corrective actions: minor tweaks, major preventive actions, major mitigation or control actions, and major project restructuring.
• Project reporting is a process of keeping stakeholders, management, and team members up-to-date on key project information using formats and network systems tailored to the needs of the audience.
• There are five types of reports: activity reports, performance reports, progress reports, special reports, and financial reports.
• Fast turnarounds in presenting monitoring information are required to keep up with changes in today’s changing, global environment; thus, project managers are always looking for quick updates on key project indicators, sometimes weekly or daily.
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Summary and Resources
Posttest 1. Which of the following is true about project evaluation? a. It focuses on variance from the budget and schedule. b. It is conducted by the project team and project manager. c. It emphasizes milestones, inputs, risks, and trends. d. It is linked to enterprise policy and strategy.
2. Why do the PMBOK guidelines not focus on the evaluation stage of the project life cycle?
a. Evaluation is not technically part of the project manager or team’s responsibilities.
b. The guidelines focus more on ideal scenarios than what happens in the real world.
c. The PMBOK is more interested in identifying problems than correcting them. d. When the guidelines were drafted, evaluation was not a routine practice.
3. Which of the following is a benefit of using earned value as a project performance indicator?
a. It is easy to obtain an accurate measure of earned value. b. It allows the project manager and team to look at cost and schedule separately. c. It requires the project manager to obtain information about task percent com-
plete from task leaders. d. It allows the project manager to look ahead to remaining work rather than look-
ing back to the original baseline.
4. What can be measured by evaluating each activity of a project in terms of the value it adds to the deliverable?
a. event-driven indicators b. earned value c. project variance d. the logical framework
5. After monitoring reveals change or variation in a project, a project manager’s next step is to __________.
a. decide whether a minor tweak, major preventive action, or mitigation action is required
b. carry out a contingency, as planned for in the risk matrix c. determine the extent of the change and need for corrective action d. report the issue to top management and relevant stakeholders
6. When project monitoring uncovers a variation that has already occurred and has had a negative impact on the project budget, the project manager will __________.
a. make a minor tweak to the cost estimate b. initiate a major preventive action c. undertake a major mitigation or control action d. perform major project restructuring
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Summary and Resources
7. The corrective action of stopping work on a project to address root causes of prob- lems is most likely to occur when __________.
a. monitoring detects problems in process or product quality b. indicators of team morale or interpersonal conflicts are found c. the project’s budget is found to differ from the cost estimate d. a project objective is not going to be met
8. Which activity of project monitoring particularly requires project managers to exer- cise judgment over when to escalate issues to top management?
a. monitoring whether project deliverables meet customer requirements and user specifications
b. general tracking of activities like team performance, meetings, and functional support
c. ensuring that resources are consumed or used as planned and are available “just in time”
d. watching the project process to make sure key processes are being implemented
9. Which of the following tends to enhance project monitoring and reporting by main- taining a sense of urgency?
a. a wide audience for the status reports b. a project that faces many obstacles c. top management showing an interest in the project d. project transparency
10. Which of the following audiences typically receives a report that is brief but covers both good and bad news?
a. top management b. the project team c. a wide audience of stakeholders d. financial stakeholders
11. During phase-gate reviews, top management tends to be most interested in __________. a. any variance from the project baseline b. how the remaining work will lead to success c. whether the project should be restructured d. whether the customer is satisfied with progress to date
12. A project manager might use prototype performance data or testing results to sup- port which agenda item in a phase-gate review?
a. project risks b. project budget c. quality process d. issues and directions
13. Which of the following is a current trend in project management? a. providing more frequent and specific reports to all stakeholders b. promoting a completely inside view of the project schedule c. emphasizing less complex projects that can be completed in faster sprints d. performing tasks concurrently rather than in a linear manner
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14. Project managers tend to see transparency as __________. a. a positive development, because it showcases the skills of their team and their
own accomplishments b. threatening, because some of their control over the process and team is lost c. mixed, because of the downside that monitoring results can be distributed too
widely d. neutral, because good project managers will perform to the same high standard
no matter how much scrutiny they may receive
Review Questions 1. What is project monitoring? What are its similarities to project evaluation? Its
differences? 2. What kinds of performance indicators are useful in monitoring a project? 3. As a project manager, when do you take corrective action on a problem uncovered in
monitoring and when do you leave it alone? 4. When is it advisable to start from scratch on a project with a new baseline? 5. How do you ensure that key stakeholders own the project monitoring system and
associated performance measures? 6. What developments in monitoring and sharing monitoring data and analyses are
changing the turnaround time for corrective action?
Think About It! Reflective Exercises to Enhance Your Learning 1. In order to see how difficult it is to develop meaningful indicators, look at yourself in a
professional or personal mode and develop five key indicators of your own success. 2. Interview a practicing project manager about how he or she monitors projects and
the difficulties in assessing project success. 3. Review a recent project audit report and identify the indicators that auditors use to
evaluate and audit a project. 4. Look at the PMBOK preparation guide for any of the PMI certifications and see what
kinds of questions are posed on monitoring and evaluation.
Additional Resources Gouda, P. (2011). A guide to project monitoring and evaluation. Bloomington, IN: Author House.
Kerzner, H. (2013). Project management case studies. Hoboken, NJ: Wiley.
Newton, R. (2010). Checklists for project managers (2nd ed.). New York: Prentice Hall Business.
Search the PMI site for “Strategic PMOs Play a Vital Role in Driving Business Outcomes” to read more about how project management offices can help orient projects to focus on long-term outcomes: http://www.pmi.org
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Answers and Rejoinders to Chapter Pretest 1. True. The assumption in these guidelines is that if a project manager accurately
monitors a project, corrective actions will lead to the project being realigned with the baseline plan, or at least close to it.
2. False. Efficiency is one possible cause for positive cost variance in a project. How- ever, cost savings can also occur due to poor workmanship that is cheaper but results in lower quality, or simply because the initial estimate was bad. Project man- agers should investigate positive cost variances rather than assuming they are good news.
3. True. In the case of changes that would require only minor tweaks, such as a task that is completed a few days early, the manager might choose to keep task schedules as they are. The intention behind this is to avoid ripple effects that would impact other team members’ due dates.
4. False. It cannot be assumed that a customer is satisfied just because requirements are being met. Customer satisfaction should be monitored throughout the project, through constant communication and exchange.
5. False. Project managers must strike a challenging balance when it comes to report- ing to stakeholders, because too little reporting and too much reporting can both be ineffective. Providing too much information about a project makes it likely that the information will be ignored.
6. True. The main purpose of the phase-gate review that occurs after each phase of the project life cycle is to make sure only “good” projects proceed and “bad” ones are terminated.
7. True. As projects become more complex and teams speed up their response to change, task managers find it more difficult to report on work in progress. They are generally more interested in doing the work rather than reporting on the work.
Answers and Rejoinders to Chapter Posttest 1. d. Unlike project monitoring, which links to program control and process, project
evaluation links more broadly to enterprise long-term plans, policy, and strategy. Each of the other answer choices describes project monitoring, not evaluation.
2. a. The writers of the PMBOK guidelines do not specifically address project evalua- tion, because they see a project’s main goal as producing deliverables that satisfy the customer. Apart from closeout and project review, evaluation is beyond the control of the project manager and team and is performed by outside parties.
3. b. Earned value has many benefits for project managers, including its usefulness for separating performance on schedule from cost. Its limitations include the fact that it can be difficult to obtain an accurate measure and that it looks backward by assuming the original schedule and cost estimate were correct. In addition, the fact that earned value requires the project manager to ask task leaders for per- cent complete data for each task is a downside.
4. d. The logical framework is a way of thinking about a project in terms of outcomes. It involves tracing the linked sequence of activities from initiation to final result, showing how one leads to the next. It can be measured by evaluating every activ- ity in the project and ensuring that each adds value to the final deliverable.
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5. c. Before undertaking any corrective action, the project manager first needs to find out more information about the issue and whether or not any action is in fact needed.
6. c. If monitoring shows that a major problem has already taken place and is affecting the project schedule, budget, or quality, the action required falls into the category of major mitigating action. The project manager steps in to correct the issue and later makes sure it is documented in the lessons-learned process during project closeout.
7. a. According to the project monitoring model, a corrective action that may be taken if project quality is in question is to temporarily stop work and address root causes and options.
8. b. When tracking all indicators to monitor how project activities are going in gen- eral, project managers should avoid escalating issues to top management without first taking responsibility to try to resolve them. However, escalating problems is sometimes a necessary corrective action.
9. c. When top management and the project sponsor show interest in a project and request information and data about it, project monitoring continues to be a priority. When it is clear that no one is reading project reports, the reports tend to deteriorate.
10. a. Top managers receive progress reports that are closer to executive summaries than to full reports. However, these reports must alert enterprise leaders about both good and bad news, ideally in such a way that they will not overreact to the negative information.
11. b. Phase-gate reviews focus on the future, not the past. Data on variance from a baseline can quickly go out of date in a fast-moving project, and top management is more interested in finding out how the remaining work will be handled to ensure success.
12. c. To report on quality-process issues, including product testing trends or potential quality problems with deliverables, project managers often rely on testing results data, preliminary prototype performance data, and design issue information.
13. d. In the fast-paced modern world of complex projects, more are moving toward concurrent task performance. Tasks that were once performed in a linear sequence are now often collapsed and performed in parallel.
14. c. Because of social media in particular, project monitoring results can end up being distributed to groups and individuals who do not necessarily have the project’s best interests at heart. The fact that data about poor performance can be used by the wrong people and for the wrong reasons leads many project managers to feel skeptical of transparency.
Key Terms
corrective action An adjustment in a proj- ect variable such as schedule, scope of work, or cost to prevent or control the impact of a risk event.
data Quantitative figures that are gathered in a monitoring system.
data point A point in the project when col- lecting monitoring data makes sense, such as a key milestone.
evaluation An assessment of whether a project has met its objectives and its antici- pated and unanticipated impacts.
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indicator A status measure that suggests trends in a key factor in project success.
logical framework A way of showing how project activities lead to or are linked to project results and outcomes.
measure A time-driven indicator such as a milestone that is triggered at a given point in a project and generates monitoring informa- tion on that milestone.
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