Integrated Cost and Schedule Control in Project Management

234 Pages·2011·6.373 MB·English

by  Ursula Kuehn

8230 Leesburg Pike, Suite 800
Vienna, VA 22182
[phone]
Fax: [phone]
www.managementconcepts.com
Copyright © 2011 by Management Concepts, Inc.
All rights reserved. No part of this book may be reproduced or utilized in any form or by any means, electronic or
mechanical, including photocopying, recording, or by an information storage and retrieval system, without permission in
writing from the publisher, except for brief quotations in review articles.
Printed in the United States of America
Library of Congress Cataloging-in-Publication Data
Kuehn, Ursula, 1949–
Integrated cost and schedule control in project management /
Ursula Kuehn. — 2nd ed.
p. cm.
ISBN 978-1-56726-296-4
1. Engineering economy. 2. Project management. 3. Cost control.
4. Production scheduling. I. Title.
TA177.4.K864 2010
658.4’04—dc22
2010030621
ABOUT THE AUTHOR
Ursula Kuehn, PMP, EVP, is president of UQN and Associates, Inc. She has been a certi(cid:633)ed Project
Management Professional since 1995 and a certi(cid:633)ed Earned Value Professional (EVP) since 2006. She currently
serves as a consultant/trainer to government agencies and commercial corporations in various aspects of project
management. She has a strong background in operations research and mathematics, and she specializes in
integrated cost and schedule control and earned value management system procedures. She has an MS in
operations research from the George Washington University (GWU), a Master’s Certi(cid:633)cate in project management
from GWU, and a BS in mathematics from Bowling Green University. She is a member of American Mensa. When
she is not working, she and Fred can be found sailing their 41’ ketch, the S/V Julie Marie, or setting marks for a
sailboat race course on her 21’ walkaround, Earned Value. Ursula can be contacted via email at
[email protected].
CONTENTS
Preface
Acknowledgments
Part 1—Project Management and the Integrated Process
Chapter 1—Basic Concepts
Success
The Project
Project Management
Stakeholders
The Project Team
The Project Manager
Project Documentation
Chapter 2—The Integrated Process
The Integrated Cost and Schedule Control Processes
Balancing the Triple Constraint
The Work Breakdown Structure
The Guidance System
Integrated Cost and Schedule Control in the Federal Government
Part 2—The Initiation Process
Chapter 3—Defining the Scope
Customer-Focused Scope Decisions
Customer Expectations of What They Can Get for Their Money
Building and Using a Deliverable-Oriented WBS
Chapter 4—Estimating the Cost and Duration of Work Packages
Determining Work Packages
Estimating Work Package Effort
Including Risk Identification in Work Package Estimates
Translating Effort to the Cost of a Work Package
How Individual Productivity Impacts the Cost Estimate
The Control Account
The Planning Package
Translating Effort to Duration of a Work Package Using Availability
Chapter 5—Balancing the Scope to the Budget
Determining Other Stakeholder Needs/Wants
Baselining the Scope
The Initiating Process in the Federal Government
The Control Account Manager and Organizational Breakdown Structure
Part 3—The Planning Process
Chapter 6—Understanding Workflow and How Work Packages Relate
Finish-to-Start
Start-to-Start
Finish-to-Finish
Start-to-Finish
Lag and Lead
Constraints
Chapter 7—Building a Network Schedule
Network Scheduling Using the Arrow Diagramming Method
Network Scheduling Using the Precedence Diagramming Method
Compressing Our Example Schedule
Planning Our Example Resources
Compressing Our Example Even More
Chapter 8—Analyzing and Adjusting the Schedule
Forward Pass
Backward Pass
Calculating Float
Identifying the Critical Path
Calculating Free Float
Forward and Backward Pass with Start-to-Start Relationship
Forward and Backward Pass with Finish-to-Finish Relationship
Compressing the Network Schedule
Resolving Resource Conflict
Task and Resource Information
Chapter 9—Analyzing Schedule Risk
Analyzing the Critical Path Using PERT
Merge Bias
Merge Bias
Monte Carlo Simulation
Chapter 10—Readdressing the Scope to Balance the Triple Constraint
De-Scoping the Project
Displaying the Integrated Cost and Schedule Plan
Project Planning in the Federal Government
Control Account Plan
Integrated Master Plan and Integrated Master Schedule
Responsibility Assignment Matrix
Work Authorization Document
Part 4—The Execution and Controlling Process
Chapter 11—Establishing a Performance Measurement Baseline
Budget at Completion
Displaying the Baseline on the Network Schedule
Changing the Baseline
Chapter 12—The Federal Integrated Baseline Review…
IBR Process
IBR Preparation and PMB Assessment
IBR Execution
IBR Results Review and Management Processes
Chapter 13—Collecting Cost and Schedule Performance Metrics
Planned Value
Actual Cost
Earned Value
Calculating Earned Value for Level of Effort
Determining Project Status Data Using Only Effort Hours
Earned Schedule
Chapter 14—Performing Earned Value Analysis
Using Earned Value Analysis to Analyze Cost and Schedule Performance
Variance Analysis
Performance Index Analysis
Project Percentage Analysis
Using Earned Value Analysis to Forecast Future Cost Issues
How Much Could the Entire Project Cost?
How Much Will Be Needed to Complete the Project?
Are We Over or Under the Budget at Completion?
What Performance Do We Need to Get Back on Track?
Understanding ANSI/EIA-748
Organization
Planning, Scheduling, and Budgeting
Accounting Considerations
Analysis and Management Reports
Revisions and Data Maintenance
Chapter 15—Steering Future Performance Back Toward the Baseline
Chapter 16—Contract Performance Reports Required by the Federal
Government
Header Information, Formats 1–4
Government Contractor
Contract
Project
Report Period
Format 1—Work Breakdown Structure
Quantity
Negotiated Cost
Estimated Cost of Authorized Unpriced Work
Target Profit/Fee
Target Price
Estimated Price
Contract Ceiling
Estimated Contract Ceiling
Over-Target Baseline/Over-Target Schedule
Estimated Cost at Completion
Management Estimate at Completion
Estimate at Completion—Based on a Simple Formula of BAC/CPI
Estimate at Completion—Based on the Formula EAC = AC + (BAC-EV)/SPI*CPI
Contract Budget Base
Variance
Authorized Representative
Performance Data
Column (1) Work Breakdown Structure Number
Column (2) Work Breakdown Structure Elements
Cost of Money
General and Administrative
Undistributed Budget
Subtotal (Performance Measurement Baseline)
Management Reserve
Total
Columns (2) through (22)
Columns (1), (3), (4), and (5)
Columns (6) and (13)—Planned Value (Budgeted Cost of Work Scheduled)
Columns (7) and (14)—Earned Value (Budgeted Cost of Work Performed)
Columns (8) and (15)—Actual Cost (Actual Cost of Work Performed)
Columns (9) and (16)—Schedule Variance
Columns (10) and (17)—Cost Variance
Columns (11) and (18)—Schedule Performance Index
Columns (12) and (19)—Cost Performance Index
Column (20)—Planned Value in Time
Column (21)—Earned Value in Time
Column (22)—Schedule Variance in Time
Column (23)—Schedule Performance Index in Time
Column (24)—Budget at Completion
Column (25)—Estimate at Completion
Column (26)—Variance at Completion
Column (27)—To-Complete Performance Index
Format 2—Organizational Breakdown Structure
Column (1) Organizational Category
Cost of Money
General and Administrative
Undistributed Budget
Subtotal (Performance Measurement Baseline)
Management Reserve
Total
Columns (2) through (18)
Format 3—Baseline
Baseline Data
Original Negotiated Cost
Negotiated Changes
Current Negotiated Cost
Estimated Cost of Authorized Unpriced Work
Project Budget Base
Total Allocated Budget
Difference
Contract Start Date
Contract Definitization Date
Planned Completion Date
Performance Measurement Schedule Inconsistent with Contractual Schedule
Over-Target Schedule Agreement
Indicators of a Performance Measurement Schedule Inconsistent with the
Contractual Schedule
Contract Completion Date
Estimated Completion Date
Performance Data
Column (1)—Performance Measurement Baseline (Beginning of Period)
Baseline Changes
Performance Measurement Baseline (End of Period)
Management Reserve
Total
Column (2)—Planned Value—Cumulative to Date….