Software Project Management

Project Control

Resources:
Earned value analysis
[Link]

Cost Performance Index (CPI) and Cost Varience (CV) explained

[Link]

Schedule Performance Index (SPI) and Schedule Variance (SV) explained

[Link]

Earned value analysis worked example

[Link]

How to interpret an earned value graph

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 Project Control
• Ongoing effort to keep your project on track
• 4 primary activities:
– 1. Planning performance
• A SDP, schedule, and a control process
– 2. Measuring status of work performed
• Actuals
– 3. Comparing to baseline
• Variances
– 4. Taking corrective action as needed
• Response
• Prerequisite to good control is a good plan
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 Project Control
• “Control”
• Power, authority, domination. No.
• Guiding a course of action to meet an objective. Yes.
• Principles
• Work is controlled, not workers
– Control helps workers be more effective & efficient
• Control based on work completed
– Use concrete deliverables
• Balance
– Appropriate level between too much and too little
– Includes:
» Micro-managing vs. neglect
» Too much tracking detail vs. too little

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 Progress Monitoring
• The 3 key Progress Monitoring Questions
– What is the actual status?
– If there’s a variance, what is cause?
– What to do about it?
• Possible responses
• 1. Ignore
• 2. Take corrective action
• 3. Review the plan

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 Progress Monitoring
• Monitoring rates
– Daily, weekly, monthly
– If problems occur – then adjust
• You may have to monitor problem areas more closely
• For some period of time
• Almost always there’s one or more areas under closer scrutiny
• Status Reporting
– Part of the communications management plan
– Which is usually just a section of SDP

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 Status Reports
• From team to PM, from PM to stakeholders
• Typical format for latter
– Summary
– Accomplishments for this period (done)
• Tasks, milestones, metrics
– Plans for next period (to-do)
– Risk analysis and review
– Issues & Actions
• Shoot for weekly updates
– Email notes, then hold brief meeting
– More frequently during crises

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 Programming Status Reporting
• A programmer reports that he’s 90% done.
– What does this mean?
• A programmer reports completing 4,000 LOC on
estimated 5,000 LOC effort.
• Is this 80% complete?
• Quality?
• Ratio, estimated to completed?
– Your estimates could have been wrong
• If you can’t measure scope or quality you don’t know “reality”
• You really only know cost (hours spent)
• How can you improve this?

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 Binary Reporting
• Work packages (tasks) can only be in one of 2
states: complete or incomplete
– No partial credit
• Preferred to anything subjective!
• “90% Complete Syndrome”
– Software is 90% complete 90% of the time
• Use lower-level task decomposition
• Tangible exit criteria
• Plan for 4-80 staff hours of effort per task

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 Earned Value Analysis (EVA)
• a.k.a. Earned Value Management (EVM)
• a.k.a. Variance Analysis
• Metric of project tracking
• “What you got for what you paid”
– Physical progress
• Pre-EVA ‘traditional’ approach
• 1. Planned time and costs
• 2. Actual time and costs
• Progress: compare planned vs. actual
• EVA adds third dimension: value
• Planned, actual, earned
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 Earned Value Analysis
• Forecasting
– Old models include cost & expenditure
– EVA adds schedule estimation
• Measured in dollars or hours
– Often time used in software projects
• Performance Measurement Baseline (PMB)
• Time-phased budget plan against which contract performance
is measured
• Cost & schedule variances go against this
• Best via a bottom-up plan

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 Earned Value Analysis
• Different methods are available
– Binary Reporting
– Others include
• Based on % complete
• Weights applied to milestones
• EVA can signal errors as early as 15% into
project
• Alphabet Soup

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 Earned Value Analysis
– 3 major components
• BCWS: Budgeted Cost of Work Scheduled
– Now called “Planned Value” (PV)
– “Yearned”
– How much work should be done?
• BCWP: Budgeted Cost of Work Performed
– Now called “earned value” (EV)
– “Earned”
– How much work is done?
– BCWS * % complete
• ACWP: Actual Cost of Work Performed
– Now called “Actual Cost” (AC)
– “Burned”
– How much did the work done cost?

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 Derived EVA Variances
• SV: Schedule Variance
– BCWP – BCWS
– Planned work vs. work completed
• CV: Cost Variance
– BCWP – ACWP
– Budgeted costs vs. actual costs
• Negatives are termed ‘unfavorable’
• Can be plotted on ‘spending curves’
– Cumulative cost (Y axis) vs. Time (X axis)
– Typically in an ‘S’ shape
• “What is the project status”?
– You can use variances to answer this

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Earned Value Analysis

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 Derived EVA Ratios
– SPI: Schedule Performance Index
– BCWP / BCWS
– CPI: Cost Performance Index
– BCWP / ACWP
– Problems in project if either of these less than 1
(or 100%)

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 Earned Value Analysis
• Other Derived Values
• BAC: Budget At Completion
– Sum of all budges (BCWS). Your original budget.
• EAC: Estimate At Completion
– Forecast total cost at completion
– EAC = ((BAC – BCWP)/CPI) + ACWP
– Unfinished work divided by CPI added to sunk cost
– If CPI < 1, EAC will be > BAC
• CR: Critical Ratio
– SPI x CPI
– 1: everything on track
– > .9 and < 1.2 ok
– Can be charted

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 EVA Example

As of 1-July where are we?

BCWS

BCWP

ACWP
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 EVA Example

CV

SV

CPI

SPI

CR

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 EVA Example
A $10,000 software project is scheduled for 4 weeks.
At the end of the third week, the project is 50%
complete and the actual costs to date is $9,000

Planned Value (PV) = $7,500

Earned Value (EV) = $5,000
Actual Cost (AC) = $9,000

0 1 9000$ 2 3 4
5000$ | | 10000 $
 What is the project health?
Schedule Variance
= EV – PV = $5,000 – $7,500 = - $2,500
Schedule Performance Index (SPI)
= EV/PV = $5,000 / $7,500 = .66
Cost Variance
= EV – AC = $5,000 - $9,000 = - $4,000
Cost Performance Index (CPI)
= EV/AC = $5,000 / $9,000 = .55

Objective metrics indicate the project is behind schedule

and over budget.
On-target projects have an SPI and CPI of 1 or greater
 Forecasting Costs
• If the project continues at the current
performance, what is the true cost of the
project?
• Estimate At Complete
= Budget At Complete (BAC) / CPI
= $10,000 / .55 = $18,181
At the end of the project, the total project costs
will be $18,181
 Establish Ranges to Guide Traffic
Light Status
• Traffic Light status is useful in conveying
overall project with one color
• Establish objective SPI and CPI ranges to
determine the true project color.
Green [1.0 - .95]
Yellow [.94-.85]
Red [.84, 0]
 Earned Value Analysis
• BCWS
– Use ‘loaded labor’ rates if possible
• Direct pay + overhead
• Remember it’s an aggregate figure
– May hide where the problem lies
– Beware of counterbalancing issues
• Over in one area vs. under in another

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 Earned Value Analysis
• Benefits
– Consistent unit of measure for total progress
– Consistent methodology
• Across cost and completed activity
• Apples and apples comparisons
– Ability to forecast cost & schedule
– Can provide warnings early
• Success factors
– A full WBS is required (all scope)
– Beware of GIGO: Garbage-in, garbage-out

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 The MS-Project Process
• Move WBS into a Project outline (in Task Sheet)
• Add resources (team members or roles)
• Add costs for resources
• Assign resources to tasks
• Establish dependencies
• Refine and optimize
• Create baseline
• Track progress (enter actuals, etc.)

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 Earned Value: Example
Today

18

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On Day X:
• PLANNED VALUE (Budgeted cost of the work scheduled, BCWS) =
18 + 10 + 16 + 6 = 50
• EARNED VALUE (Budgeted cost of the work performed, BCWP) =
18 + 8 + 14 + 0 = 40
• ACTUAL COST (of the work performed , ACWP) =
45 (from your project tracking - not evident in above chart)

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 Variance
• Any schedule or cost deviation from a specific
plan.
• Used within an organization to verify the
budget and schedule for a project
• Frequently used as a key component of plan
reviews and performance measurement

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 Variance
• Must compare scheduling and budget variance at
the same time
– Schedule variance: deviations from work planned –
not a measure of changes in cost
– Cost variance: deviations from the
budget – not a measure of work scheduled vs. work
completed
• Example: applying more $$/people to a task may maintain
the schedule, but it adds to cost… schedule on track… over
budget on expenses (cost)
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 Performance Indices
• Cost Performance Index
– CPI = BCWP/ACWP
• Schedule Performance Index
– SPI = BCWP/BCWS
• Analysis
– CPI > 1.0  exceptional performance
– CPI < 1.0  poor performance
– Similar for SPI

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 Earned Value & Variance:
Example
18

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On Day X:
• PLANNED VALUE (BCWS) = 18 + 10 + 16 + 6 = 50
• EARNED VALUE (BCWP) = 18 + 8 + 14 + 0 = 40
• ACTUAL COST (ACWP) = 45 (from your project tracking)
Therefore:
• Schedule Variance = BCWP – BCWS = 40 - 50 = -10 (behind schedule)
• Schedule Performance Index = 40 / 50 = 0.8, or 80% of plan (a B-, at best)
• Cost Variance = BCWP - ACWP = 40 - 45 = -5
• Cost Performance Index = 40/45 = .89, or you’re getting an 89¢ return on every $1.00 (or,
person-hour) spent on this project
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 Primary Measurement Methods
• Measurable efforts
– Discrete increments of work with definable
schedule and tangible results (i.e., real tasks
with a deliverable)
• Level of effort
– Work that is not discernable in discrete,
measurable tasks (e.g., project management,
training)

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 Determining % Complete –
When?
• Allocate based on time spent – but what if you spend
more time than allocated?
• Allocate 50% at start of task, 50% at end
– But only for small, discrete tasks
• Allocate 100% at start of task
• Allocate 100% at end of task
– Best solution if you keep tasks very small Our appro
• Allocate value at Critical Milestones
– Good solution when using with contract work
• Others?

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 Another Example Project
• Suppose BCWP is $300K
– How is this determined?
• What conclusions now?
– SV = BCWP – BCWS
– SV = $300k - $400K = -$100K
• Behind schedule, but what does the $100K in
variance really mean?
– CV = BCWP – ACWP = $300K - $325K
• Over budget by $25K
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 Project Overview
• This is a ‘quickie’ overview
• We will return to all of these steps
individually over the next few weeks
• Sample project from McConnell

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 Project UI
• Views
– Default is Gant Chart View
• 2 panes
• Task Sheet on left (a table)
• Gantt Chart on right
– View Bar on far left

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 Project UI
(Un)Link Buttons Toolbars

Outline
Buttons

Indicators

Enter Tasks Timescale

Here

Gantt Chart
View Bar

Task Bars
Task Sheet

Milestone

Split Bar

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 Create Your Project
• File/New
• Setup start date
• Setup calendar
– Menu: Project/Project Information
– Often left with default settings
– Hours, holidays

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 Enter WBS
• Outlining
• Sub-tasks and summary tasks
• Do not enter start/end dates for each
• Just start with Task Name and Duration for each
• Use Indent/Outdent buttons to define summary
tasks and subtasks
• You can enter specific Start/End dates but don’t
most of the time

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 Establish Durations
• Know the abbreviations
– h/d/w/m
– D is default
• Can use partial
– .5d is a half-day task
• Elapsed durations
• Estimated durations
– Put a ‘?’ after duration

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 Add Resources
• Work Resources
– People
• Material Resources
– Things
– Can be used to track costs
• Ex: amount of equipment purshased
– Not used as often in typical software project

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 Resource Sheet
• Can add new resources here
– Or directly in the task entry sheet
• Beware of mis-spellings (Project will create near-duplicates)
• Setup costs
– Such as annual salary (put ‘yr’ after ‘Std. Rate’)

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 Effort-Driven Scheduling
• MS-Project default
• Duration * Units = Work
• Duration = Work / Units (D = W/U)
• Work = Duration * Units (W = D*U)
• Units = Work / Duration (U = W/D)
• Adding more resources to a task shortens duration
• Can be changed on a per-task basis
• In the advanced tab of Task Information dialog box
• Task Type setting
• Beware the Mythical Man-month
• Good for laying bricks, not always so for software
development
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 Link Tasks
• On toolbar: Link & Unlink buttons
– Good for many at once
• Or via Gantt chart
– Drag from one task to another

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 Milestones
• Zero duration tasks
• Insert task ‘normally’ but put 0 in duration

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 Make Assignments
• Approach 1. Using Task Sheet
– Using Resource Names column
– You can create new ones by just typing-in here
• 2. Using Assign Resources dialog box
– Good for multiple resources
– Highlight task, Tools/Resources or toolbar button
• 3. Using Task Information dialog
– Resources tab
• 4. Task Entry view
– View/More Views/Task Entry
– Or Task Entry view on Resource Mgmt. toolbar

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 Save Baseline
• Saves all current information about your project
– Dates, resource assignments, durations, costs

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 Fine Tune
• Then is used later as basis for comparing against
“actuals”
• Menu: Tools/Tracking/Save Baseline

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 Project 2002
• 3 Editions: Standard, Professional, Server
• MS Project Server 2002
• Upgrade of old “Project Central”
• Includes “Project Web Access”, web-based UI (partial)
• Workgroup and resource notification features
• Requires SQL-Server and IIS
• “Portfolio Analyzer”
– Drill-down into projects via pivot tables & charts
• “Portfolio Modeler”
– Create models and “what-if” scenarios
• SharePoint Team Services integration

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 Project 2002
• MS-Project Professional
– “Build Team” feature
• Skills-based resource matching
– Resource Pools: with skill set tracking
– Resource Substitution Wizard
• “Project Guide” feature
– Customizable “process component”

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 MS-Project Q&A
• Your WBS in Project
• How did it go?
• Any questions?

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 Homework
• Schwalbe: 7 “Project Quality Management”
• URLs
– “Introduction to Software Testing”
• [Link]
– “Introduction to Software Testing Principles”
• [Link]
• Project plan:
– Develop and submit an initial copy of the project plan
(limited to tasks & milestones) for your individual
project
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Questions?

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