How do you track the performance of your project? Here are 5 ways that you can do it.
1. Fixed Formula
This is pretty easy. Assign a fixed percentage when the work starts. Then make it up to 100% by allocating the rest when the task finishes.
The Pareto principle is a good one to use if you don’t know how to split your task percentages. Assign 20% complete to the job when it starts, and the remaining 80% when your team member reports the work complete (because at that point it’s 100% complete).
It’s simple to work out but it’s not terribly accurate. It’s only good for small pieces of work and short tasks where it would be too difficult or not worth it to work out percent complete across a couple of days. It can also be used where the task is no longer than a week long. If you are updating your project plan once a week, and the task is no longer than a week long, the task is either started or finished so the 20/80 split (or 50/50 or whatever you think is appropriate) works out pretty well.
2. Weighted Milestones
When you’ve got plenty of milestones along the way, you can work out project performance by tracking how many you’ve hit.
In other words, you can pre-assign progress (percent complete) to certain milestones or parts of tasks. When you hit Milestone 1 you can say the project is 15% complete, at Milestone 2 it goes up to 20%, at Milestone 3 you’re 65% complete and so on. Until your final milestone at project completion where your project (or task) gets updated to be 100% complete.
This is also a way to split payments to vendors – many contracts have a schedule of payments linked to the achievement of key milestones. Your budget could be weighted in the same way as how you track performance.
3. Percentage Complete
We’ve talked about % complete already, but this version of it is just based on the project manager’s
This isn’t hugely accurate either – although it depends on the project manager. It takes experience to be able to pick a percentage out of the air and have it reflect reality. Generally, project management tools can help with this by playing back to you the % complete of your project schedule, so at least in that case you should have something underpinning the number you give.
4. Percentage Complete with Gates
This is similar to weighted milestones but instead of waiting to hit the ‘gate’ point, you can report any percentage complete up to the approved limit for that milestone.
For example, when you hit Milestone 1 you can say the project is 15% complete, as we saw above. With weighted milestones, until that point the project would be 0% complete. With gates, you can set a % complete every day if you like, working up to 15% at the point of hitting the gate (the target milestone date or achievement).
It’s like a blend of using your professional judgement but being constrained to not say you are too far ahead because you can only ever hit a certain percent complete through the nature of where you are on the project.
It sounds complicated to explain but this is my favourite approach for measuring project performance.
5. Level of Effort
Finally, you can track effort against the elapsed time. Alternatively, you can track against some other task or work package on the plan. For example, ‘Complete Testing Documentation’ might be linked to ‘Complete Testing’ and the two activities progress in parallel.
You’d track performance for ‘Complete Testing’ and then, as you know that testing documents are being updated as you go, apply the same % complete to ‘Complete Testing Documentation.’
Which one(s) of these do you use? And which do you avoid? Do you use these as standalone techniques or do they link to your Earned Value Management activities? Let us know in the comments below!
In his book, Business Leadership for IT Projects, Gary Lloyd goes into Earned Value in some depth – enough for business leaders to understand what it is and how it can be used to provide a reality check on project performance.
He warns against ‘earned value complacency’, which is where the exercise of pulling together the EV statistics and producing the graph lull you into the sense of security that you know all you need to know about the project’s performance and expenditure.
If you’ve used EV, you’ll know that the numbers only tell part of the story, so Lloyd recommends that you use it as a tool to enable further discussion about performance. So much of what EV tells you is down to how it is applied. If you’re a supplier organisation using EV on your client projects, you could be using it in a different way to how the sponsor is used to seeing it.
Not radically different, of course – the formulae are the formulae – but just different in terms of base assumptions or presentation. Even small changes in how the data is calculated or what’s included might change how someone interprets performance.
Lloyd recommends that these are the questions that project leaders should be asking of the people putting together their EV charts for projects, whether they are internal or external. As a supplier project manager, a canny customer could end up putting you on the spot if you don’t understand the exact calculations behind the data. Even if it is produced by your company’s Project Management Office, you still need enough of an understanding to be able to answer questions from your client with credibility and accuracy. It’s reasonable of them to be asking you and a good client should want to challenge and understand the numbers. Besides, that process of challenge is good for everyone so don’t take it as a personal affront. Leaders don’t take numbers at face value; it’s not what makes them good leaders.
9 Questions Project Leaders Should Ask About Earned Value
As a project sponsor, if you’re going to choose something in the EV reports to dig into, try to pick something that you have a reasonably good understanding of where the data points are significantly large so as to help the calculations be transparent. Trying to work out whether a particular task is half a day ahead of schedule or not isn’t going to help you understand the model.
Here are the questions to help you delve into what is really going on.
Could you answer these questions about your EV reports? If not, who are you going to get to explain them to you so that you can adequately explain them to someone else?
4 Key Terms for Earned Value
Categories: earned value
Whole books have been written about Earned Value, so I won’t be able to go into much detail here. However, it’s worth having a little refresher on the key terminology, and if you haven’t come across Earned Value before, hopefully this is a gentle introduction to some of the language you’ll hear often.
To recap, Earned Value is a way of assessing project progress and lets you compare performance across projects. It can help spot trends in performance. It combines scope, schedule and cost and looks at project progress holistically with all of those elements included.
Earned Value (EV) is the value of the work performed. It’s the word ‘value’ here that caught me out for a long time. However, once you understand the terminology, the rest of EV becomes much easier. Project Management for Dummies (yes, that’s on my shelf and I refer to it often!) defines EV like this:
The earned value of a piece of work is defined to be equal to the amount you planned to spend to perform it.
In other words, it’s the original budget for a task. I think the terminology avoids using the word ‘budget’ because this means something very specific in EV and ‘the amount you planned to spend’ could also include resource time that is not costed in the same way as buying a cement mixer or other resource.
Planned Value (PV) is the amount of budget that you’ve planned to use up at a particular point in the project.
The Dictionary of Project Management Terms (another of my go to reference books) explains it like this:
Sum of approved cost estimates (including any overhead allocation) for activities or portions of activities scheduled to be performed during a given period. Also called: budgeted cost of work scheduled.
Ah, ‘budgeted cost of work scheduled’. That makes a lot more sense, doesn’t it?
Actual Cost (AC) is one of the easiest to get your head around: it’s the actual cost, expressed in terms of money, for the project to the specified date.
You might also see Actual Cost of Work Performed (ACWP) which relates to the total cost for doing a task or set of tasks during the time period you’re referring to. It includes direct and indirect costs, so it should be a complete and comprehensive cost for the activities.
Budget at Completion
Budget at Completion (BAC) is also quite straightforward to understand. It’s the amount you are forecasting to spend for the project at the point that the project will be finished: in other words, the total planned expenditure.
Think of it as what has been approved: it’s what your project sponsor says you can spend to get you to the end of the project, hopefully based on your realistic and practical estimates.
With these bits of information, and a few others, you will be set to start crunching the numbers and running the formulas to start producing your Earned Value information.
It’s the time of year when project managers (and everyone else) are looking to make resolutions. You know, the kind of promises you make to yourself in the dark days of winter and then have completely forgotten by Easter.
On the off chance that you’ll be making resolutions this year, here are some you could consider. They all have a money-related theme, so if you want to brush up your budgeting or polish your financial management skills in 2013, these could be great resolutions for you to adopt. So here we go: 5 promises for better money management over the next 12 months.
1. I will look at historical data for forecasts
When you are managing projects that are repetitive in nature and that the team has a lot of experience of, it’s very tempting to simply let them estimate the length of tasks and assume that they know what they are doing. Most of the time, they probably will. But it is worth validating their estimates against historical data from timesheets and previous project schedules. Use your online project management software to pull up reports of how long things took the last time you did them.
This could be at the level of an individual task, like completing a particular piece of coding, or a project phase, like testing. Or both. The purpose of checking is to make sure that your estimates really are sound and that the people who are estimating are not making the same mistakes about task duration on every project.
2. I will do my timesheets in a timely fashion
This is a personal resolution for you, although you could extend it to all your project team members. The risk of not doing your timesheets on time is that you forget exactly what it was that you were doing. As a result, you block out 8 hours per day for a task called ‘project management’ which doesn’t give you any breakdown of how you actually spent the time. Worse, you could be booking time to one project when in reality you got pulled off that project to spend half a day on some other project. These things happen in real life, to you and your team members.
By aiming to complete your timesheets at least weekly you’ll not have long enough to forget what you were working on!
3. I will understand Earned Value Analysis (or teach someone else how to do it)
If you don’t understand EVA, make 2013 the year when you get your books out and study how it works. If you do understand EVA, make a resolution to share your knowledge with someone else this year. Even if you don’t use EVA on your projects, it is a very useful skill to have.
4. I will do my expenses on time
Most project managers will incur expenses in the course of their job, such as travel to meetings. Not doing your expenses on time means that you are out of pocket. Many companies only pay expenses once a month in the monthly pay run, so don’t let your expense bill mount up – that’s effectively a loan to your company.
Get your personal paperwork in order by keeping receipts together, noting down your mileage after every trip and understanding the schedule for submitting expenses so that you don’t miss the deadlines.
If your expenses are being cross-charged to your project it is even more important to get your expenses in on time. If you don’t, your project budget will reflect that you have more ‘in the bank’ than you actually do.
5. I will review my budget quarterly
You do this already, don’t you? If not, make 2013 the year when you review your project budget forecasts regularly. If your project runs over two quarters you’ll probably be asked to do this by your finance team anyway, but even if you are not, it is still good practice to get out your spreadsheets and just check that you are still on track to stick within your budget tolerance limits.
Have you chosen any of these as your resolutions for 2013? If not, what are you having as your resolutions instead?