Project Performance Monitoring
Project performance monitoring can reveal potential problems before a project is impacted. Its usefulness when budgets are tight is plain. However, Revay has found shortcomings in the typical monitoring process:
- Cost monitoring is performed against preset cost codes which do not correspond to the project activities or project work breakdown structure ("WBS");
- Costs are too often only reported at a summarized level and the "current" cost data is usually too old to facilitate advance warning;
- Quality monitoring is limited to the quality assessment of too few key "products" or deliverables produced by the work;
- Change monitoring is limited to the running total amount of approved and pending changes to the work.
Fundamental to an effective performance monitoring system is a properly defined WBS that allows the performance of individual work activities to be integrated upwards to yield the overall performance. The health of a project or contract can be effectively assessed for each component of the work, using the WBS as a basis, by consistently measuring the following:
- Earned value measures including cost and schedule variances as well as projected final cost and duration, which require an accurate determination of the percent complete for each element of work;
- Labor productivity index;
- Change variance with respect to the work performed;
- Budget contingency variances;
- Unanticipated change variance with respect to the approved contingency amounts;
- The variance between the projected man-hours required to those available.
The above assessments can be made only on the basis of available data. By using the WBS and gathering the data at all levels of the work, the ability to focus on a specific area causing a problem is greatly facilitated, thereby giving management the information to take timely remedial action to correct a problem before it has a negative impact on the overall work performance.