UNIT-3.pptx

UNIT-III
PROJECT DURATION AND
CONTROL

Importance and Options to Accelerate Project Completion
Acceleration is the process of speeding up the work so that a
particular activity, or the project as a whole, can be completed
before the date.
Reasons for Project Acceleration (Importance):
 When delays arise out of surprises,
issues or performance problems

Methods for Project Acceleration
1.Add More Resources
2.Increase Working Hours
3.Reallocate Resources From Other Tasks
4.Overlap Activities By Consolidating
5.Look For Inefficiencies & Address The Largest Ones

1. Add More Resources To Accelerate The Project
The most common way project managers accelerate their project’s
schedule is by adding additional resources to the job.
This is particularly common in the construction industry, but is
applicable in many lines of work.
By adding resources to a project, it’ll almost certainly accelerate the
schedule
But after a certain point, the productivity per resource drops off
significantly.
That’s why it’s very important to monitor productivity per resource
when adding more.
As project managers, we must always make sure that the juice is worth
squeezing – production rates per added resource must stay constant.

Few types of situations when it makes sense to accelerate a schedule
by adding resources:
The cost of NOT hitting a deadline or milestone exceeds the additional cost
of adding resources.
There is a massive amount of work to be done that requires sheer volume of
production to get done.
The added resource is a specialist such as a consultant or expert that will
provide a lot of value for what you’re paying them.

2. Through Increasing Working Hours
• Multiple teams may rotate on a shift-basis, so work can continue for
many hours despite the crews being different.
• project’s timeline may be accelerated by extending the working hours
of the people.
• Limitations:
• people get tired- Staff that’s been working longer hours is more likely
to make mistakes, perform at a slower pace and even get sick from a
lowered immune system.
• having multiple rotating crews involved in the performance of work
leaves the project more susceptible to errors (changing hands too
much), and inconsistent quality.

Situations when extending working hours can accelerate the project
schedule:
The cost of NOT hitting a deadline or milestone exceeds the additional
cost of longer working hours.
There’s a seasonal deadline to hit that’s related to temperature, weather
or daylight hours.
The extended hours are only needed for a short while, where burnout
and productivity loss aren’t a risk

3. Reallocate Resources from Other Tasks
On any project, there are tasks that are extremely important to the project’s
outcome. These are known as items that fall on the critical path of the schedule.
Then there are tasks that can wait – they’re non-urgent tasks that happen
alongside the major ones.
They have plenty of float – time they can be put off while still getting
completed on time.
Add resources to the critical path-When entering a period of project
acceleration, resources from non-critical work tasks can be reallocated to
critical path items.
The advantage of reallocation is that you aren’t technically adding resources,
which means at the moment, your project isn’t taking on additional costs.

While all projects have their own unique circumstances,
reallocating resources to accelerate the schedule is a good idea in
the following scenarios:
Your project presently has resources working on tasks with a lot
of float.
The budget is tight and there’s no margin for more resources.
There’s an urgent tasks that MUST be done as quickly as possible

4. Overlap Activities by Consolidating
overlapping activities allows more successive tasks to get done in less
time.
Physical space is a factor, though – having too many people working on
top of one another is always problematic.
Generally speaking, it’s easier to consolidate unrelated tasks than it is to
consolidate tasks that are linked to one another.
If a task runs into trouble, all successor tasks will also have trouble.
If these tasks are overlapped too much and the predecessor task runs into
trouble, there will be a lot more to fix in the successor tasks, since more
was completed while the tasks were overlapped.

5. Look for Inefficiencies & Address The Largest Ones
As they say, the easiest way to save money is to not spend it. The
same can be said for a project’s budget and also for the project’s
timeline.
Project acceleration is a byproduct of remedying inefficiencies.
In terms of saving time, it’s key to understand productivity and
production rates on all of the work being performed.
Reduce the wastage of time if identified for any activity.
Remove activities that are no longer needed.

Time - Cost Trade off in Project Management
There is a relation between project completion time and its cost.
The relation may be direct or In-direct.
Because of these two types of costs, there is an optimal project pace with
minimum cost.
Types of costs:
Direct costs:
Directly associated with project activities.
Ex: salaries, travel, materials, equipment, etc.,
Direct costs are in-directly proportional to project duration.
Direct costs generally increase as more resources are to be allocated to accelerate
the project

Indirect costs:
Overhead costs that are not directly
associated with specific project
activities.
Ex: office space, taxes, etc.,
These costs are relatively steady /unit
of time for any project.
Total indirect cost decrease as the
duration of project decreases.

Variable costs :
 Variable Costs change with the amount of production or the amount of work.
 Variable costs change each month, such as the cost of labor, which usually
varies depending on the number of hours worked on the project.
Fixed costs:
 Any Cost which is fixed throughout the project life cycle and would not change
by quantity, time or any other project factors called for a fixed cost.
 Fixed costs include assets that are required for the project, with costs that don't
vary from month to month. These are not usually a part of a small project's
budget.
 the cost of assets that do not change over time, such as a building lease
The Total Project cost is the sum of all costs considered in the study.

PROJECT PERFORMANCE MEASURES
Cost Performance Index (CPI):
It is the measure of the cost efficiency of project.
It is expressed as a ratio of earned value to actual cost.
Schedule Performance Index (SPI):
Schedule Performance Index (SPI) is the measure of schedule
efficiency of the project.
It is expressed as the ratio of earned value to planned value.

Cost Performance Index (CPI):
The Cost Performance Index (CPI) is a method for calculating the cost
efficiency and financial effectiveness of a specific project through the
following formula:
CPI = earned value (EV) / actual cost (AC).
A CPI ratio with a value higher than 1 indicates that a project is
performing well budget-wise.
A CPI value of 1 indicates that a project is performing on budget.
A CPI value that is less than 1 indicates that a project is over budget.

Schedule Performance Index (SPI):
The schedule performance index (SPI) is a measure of the
conformance of actual progress (earned value) to the planned progress:
SPI = EV / PV.
It is an efficiency metric of how far ahead, behind or on time we are
on a project.
It measures how on-pace we are to meet a project timeline.
It’s calculated based on your project’s planned value (PV) and earned
value (EV) using the estimate determined at the project’s start.

Difference between Cost Performance Index (CPI) and
Schedule Performance Index (SPI)
Cost Performance Index Schedule Performance Index
It actually measures the performance
regarding the budget of the project.
It measures the performance regarding
the scheduled time of the project.
It describes the amount of
money spent on the project
It describes the amount of
time consumed on the project.
CPI also tells about the remaining
cost of the project.
SPI tells about how much more
CPI is the measurement of deviation
from the estimated cost of the project.
SPI is the deviation from the
scheduled time for project.
CPI = Earned Value / Actual Cost SPI = Earned Value / Planned Value

Planned value is how much work is projected to be done by a given point in time. It’s
also expressed using the monetary value of what it will cost to complete the project to
that point. To arrive at PV:
PV = % complete (planned) x Budget at Completion (BAC)
It is also known as Budgeted Cost of Work Performed (BCWP).
Earned value is how much work was actually done by a certain time. EV is
represented as a dollar value of what it has cost to complete this work. To determine
EV:
EV = % complete (actual) x Budget at Completion (BAC)
Actual Cost (AC):
It is also known as Actual Cost of Work Performed (ACWP). Actual Cost is the amount
that has been spent on the task.
“Actual Cost (AC) is the total cost actually incurred in accomplishing work performed
for an activity or WBS component.”

Planned value, Earned value, Actual Cost Comparison
Planned value Earned value Actual Cost
Ac is the total cost incurred
for the completed work to
the given time
PV is the approved value of
the work to be achieved in a
given time
EV is value of the
completed work to the
given time
PV is also known as
budgeted cost of work
scheduled
EV is also known as
budgeted cost of work
performed
AC is also known as Actual
cost of work performed
PV = Planned % Complete *
Budgeted Actual Cost
EV = % work Completed *
Budgeted Actual Cost
AC doesn’t have any
formula

Schedule Variance (SV):
Schedule variance is basically used to indicate whether a project is running ahead or
behind.
It is the difference of Budgeted Cost of Work Performed (BCWP) and Budgeted Cost
of Work Scheduled (BCWS).
Schedule variance is computed by calculating the difference between Earned Value
and Planned Value.
SV = EV - PV
Interpretation of Schedule Variance (SV):
If SV is negative, the project is behind schedule.
If SV is zero, the project is right on schedule.
If SV is positive, the project is ahead of schedule.

Cost Variance (CV):
is also known as budget variance as it deals with the budget of the software development.
Cost variance is the difference of the actual cost and the budgeted cost or in other words
it is difference between what was expected to be spent and what was actually spent.
The difference between the earned value and the actual cost is known as Cost Variance.
CV = EV - AC
Interpretation of Cost Variance (CV):
If CV is negative, the task is over budget.
If CV is zero, the task is on budget.
If CV is positive, the task is under budget.

Co-relation of SV and CV:
1.SV and CV are positive:
The project is ahead of schedule and it is under
budget.
2.SV is positive and CV is negative:
The project is ahead of schedule and it is over
budget. In other words we can say that the tasks
performed are over budget but most of them
have been performed before scheduled.
3.SV is negative and CV is positive:
The project is behind schedule and it is under
budget.
In other words we can say that the tasks performed
were efficient but more of them should have been
performed earlier.
4. SV and CV are negative:
The project is behind schedule and it is
over budget.

Example:
Assume we’re halfway through a year-long project that has a total budget of $100,000. The
amount budgeted through this six-month mark is $55,000. The actual cost through this six-
month mark is $45,000.
So, in summary:
 Planned Value (PV) = $55,000
 Actual Cost (AC) = $45,000
 Earned Value (EV) = ($100,000 * 0.5) = $50,000
 Schedule Variance (SV) = EV–PV = $50,000-$55,000 = -$5,000
 Schedule Performance Index (SPI) = EV/PV = $50,000/$55,000 = 0.91
 Cost Variance (CV) = EV–AC = $50,000-$45,000 = $5,000
 Cost Performance Index (CPI) = EV/AC = $50,000/$45,000 = 1.11

A project ABC is planned for 15 months with a budget (BAC) of USD 150,000. If
the scheduled percent of work completed after three months is 20% and the actual
work completion is 15%, Find the schedule variance.
PV= 150000 x 20% = 150000x(20/100) = $30,000
EV: 150000 x 15% = 150000 x (15/100) = $22,500
Therefore the SV= EV-PV = $22,500 - $30,000 = -$7,500
SV is negative; hence the project is behind schedule.

You are managing a project which is into six months of its execution. You are now reviewing the
project status and you have ascertained that project is behind schedule. The actual cost of
Activity A is ₹ 2,00,000 and that of Activity B is ₹ 1,00,000. The planned value of these
activities are ₹ 1,80,000 and ₹ 80,000 respectively. The Activity A is 100% complete. However,
Activity B is only 75% complete. Calculate the schedule performance index and cost
performance index of the project on the review date.
Tasks Planned Value (PV) Actual Cost (AC) % Completion
Activity A ₹ 1,80,000 ₹ 2,00,000 100%
Activity B ₹ 80,000 ₹ 1,00,000 75%
First tabulate the data provided in the problem

Since we have percentage completion data of each activity we can calculate the earned value. In
order to calculate earned value of each activity multiply % completion and the planned value.
Tasks
Planned Value
(PV)
Actual Cost (AC) % Completion
Earned Value
(EV)
Activity A ₹ 1,80,000 ₹ 2,00,000 100% ₹ 1,80,000
Activity B ₹ 80,000 ₹ 1,00,000 75% ₹ 60,000
Calculate the cumulative data for the period. Thereafter add planned value, actual costs and
earned value of both the activities.
Tasks
Planned Value
(PV)
Actual Cost (AC) % Completion
Earned Value
(EV)
Activity A ₹ 1,80,000 ₹ 2,00,000 100% ₹ 1,80,000
Activity B ₹ 80,000 ₹ 1,00,000 75% ₹ 60,000
Cumulative ₹ 2,60,000 ₹ 3,00,000 – ₹ 2,40,000

Schedule Performance Index (SPI) =0.92
Cost Performance Index (CPI) =0.8
Therefore, Schedule Performance Index (SPI) = EV/PV = 2,40,000/2,60,000 = 0.92
And, Cost Performance Index (CPI) = EV/AC = 2,40,000/3,00,000 = 0.8
Since both SPI and CPI are less than one, the project is behind schedule and is
experiencing cost overrun.

Project controls are a sub-function and focus on just two parameters:
cost
schedule.
The main objective of project controls is to minimize the variance in costs and schedule
from what was originally planned.
Controls acts as a safety harness to project management.
Project controls introduce a necessary reality check for project managers, giving a more
data-grounded view of how the project resources and objectives are trending over time.
At its core, project controls are part of a monitoring function that analyzes scenarios
and provides recommendations. A project controller reports on cost and schedule and
advises the project team of potential issues.
Project Control Process

Cost and Schedule Estimation Process
The cost and schedule estimation process helps in determining number of
resources to complete all project activities.
It generally involves approximation and development of costing alternatives
to plan, perform or work, deliver, or give project.
A good estimation is very much essential for keeping a project under
budget.
Two perspectives are generally required to derive project plans-
Forward-Looking
Backward-Looking

 Milestone scheduling also called
budget allocation with help of
top-down approach results in a
highly optimistic plan.
 Whereas, bottom-up approach
results in a highly pessimistic
plan.
 Iteration is very much needed
and important, using results of
one approach to validate and
even check results of other
approach.
 Both the approaches should be used together, in balance, throughout life-
cycle of project as shown.

S- Curve or S- Graph
An S-curve is a graph that
describes, visualizes and predicts
the business’ performance
progressively over time.
It's a logistic curve that plots the
progress of one variable and relates
it to another variable.
S-curve is a good communication
tool and helps project managers
communicate project progress to
project stakeholders.
 The ‘s’ shape isn’t imposed; it is simply the shape made by the graph from
the project initiation to the end.

S- Curve or S- Graph
 It displays cumulative data, such as project hours, cost, quantities or progress against
time
 Project managers analyze S-curves to quickly identify growth, deficiencies and
potential problems that may need immediate action.
 Professionals can use this curve to understand the pattern of a business's growth, a
product's development or a project's progress.
 Ensuring a project is on schedule and within budget limitations is vital to a company’s
success, and tracking that data is the main purpose of S-curve charts.
 As time progresses, growth begins to accelerate. This growth is represented by the
middle section of the ‘s’ in the graph, which shows this rapid rise.
 The inflection point is the point where the change occurs. These are crucial areas of the
curve since they show a change in growth.

Types of S-Curves
Baseline S-Curve
Target S-Curve
Costs Vs Time S-Curve

Man-Hours Vs Time S-Curve Actual S-Curve
Types of S-Curves

The 4 S-curve stages
1. Initial slow growth
 In the first stage, as a business experiences slow growth and gains little market share,
the slope of the S-curve is a slight increase.
 This stage is critical for building the foundations of a company’s operations.
 It also helps determine procedures and values that can help the company scale to a
much more rapid form of growth.
2. Rapid growth
 The second stage represents fast market growth.
 In this period, customers learn about the business's products, which helps a brand gain
market share and creates a sharp upward slope in the S-curve.
 Although companies scale to meet their staffing, manufacturing and real estate needs,
this growth period isn’t permanent, so it’s important to recognize early indicators of
change to maintain momentum.

3. Late-stage slow growth
 In this stage, the growth of the business slows, creating a more gradual slope in the
S-curve that internal and external factors influence.
 Watching for various influences can help a business understand when late-stage
slow growth is starting.
 When they notice this, they can invest in counteractive measures, such as products
or market shifts.
4. Stationary demand
 In this stage, the business's growth or product demand is either constant or
decreasing, so the slope of the S-curve is zero or negative.
 When the stationary demand phase begins, companies may choose to adapt by
innovating with new products or methods.
 This allows them to reshape their business structure or move to a new product.

S-curve inflection points
 The point of inflection is the portion of the S-curve that separates positive growth from negative
growth, meaning the business' growth slows, and it may eventually stop or decrease.
 Internal changes within a company, external factors, like economic events, or a combination of
internal and external factors can cause an inflection point.
 Inflection points can challenge a business, but they can also be great opportunities for change.
 Some common causes for inflection points include:
 New technology in the industry.
 Market saturation
 Regulatory changes
 Funding changes
 Natural disasters
 Scaling issues
 Changing values
 Customer relations
 Slower innovation

Uses of the S-Curve in Project Management
 Performance and Progress Evaluation  Growth Determination

 Determining Slippage
 Forecasting Cash Flows
 Cash flow refers to the flow of cash and
its timing.
 A cash flow curve allows you to assess
the requirement for money and the
precise time when payments are due.

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