W.3_Lilly Wasitova_ The Performance Measurement


Problem Statement

Entering the third week AACE Certification Program, a lot of effort to deliver the project scope has been done while learning the whole process at once. The problem occurs when time comes to measure the actual work already performed and to see where we are heading since the Face to Face Session until end of Week 2. To measure the performance properly is very important to the stakeholders, customers, sponsors or any party concerns, especially when intelligent decisions has to me made concerning performance improvement, time, cost or quality of the deliverables.

In this case, the performance of Project #6 is to be measured form beginning until end of Week 2.

Alternative Solutions

The commonly used Performance Measurement Tools/Techniques, such as:

  1. The Balance Score Card [1]
  • This Technique is used by integrating four (4) sets of measurement: Financial, Internal Business Process, Learning Growth and Customer.



Figure 1: Adapted from Robert S. Kaplan and David P. Norton, “Using the Balanced Scorecard as a Strategic Management System,” Harvard Business Review (January-February 1996): 76.

 

  • Malcolm Baldrige National Quality Award Criteria/TQM (Total Quality Management) [2]
    • This criteria is based on a 1000-point scale and focus on three business factors:
      • Approach – The processes used to run an organization.
      • Deployment – The execution of an approach.
      • Results – The outcome of the approach and the deployment.

     

  • The Earned Value [3]
    • This Technique is to determine the true performance through cost/resources and schedule control.

 

 
   

Figure 2: Planning and Control Cycle [4]

 

Selection Criteria

The method 1 and 2 require more parameters and not practical to be used for simple project performance measurement, whereas the use of Method 3 will help us answering the following questions more accurate and faster as the project progressed:

 

1. How much work has been completed?

2. How much should have been spent?

3. How much was the project supposed to cost?

4. How much will the project actually cost?

 

Analysis and Comparison of Alternatives

As selection already made to use Method 3 and Taking the Gold Card [5] and the data obtained until end of Week 2, the result of the performance measured for the team as below:

Team Performance Indices per Week

Description

Abbr.

W1

W2

Actual Cost of Work Performed

ACWP

2,200

3,000

Budgeted Cost of Work Performed

BCWP

600

1,000

Budgeted Cost of Work Scheduled

BCWS

900

1,800

Schedule Variance

SV

(300)

(800)

Cost Variance

CV

(1,600)

(2,000)

Schedule Performance Index

SPI

0.67

0.56

Cost Performance Index

CPI

0.27

0.33

Estimate At Completion

EAC

125,400

120,960

To Complete Performance Index

TCPI

0.185

0.190

Table 1: Team Performance Calculation Result

 

Selection of the preferred alternatives

The selection made is practically because the following question will be answered as:

Description

Abbr.

Meaning

Actual Cost of Work Performed

ACWP

Cost of work accomplished

Budgeted Cost of Work Performed

BCWP

Value of work accomplished

Budgeted Cost of Work Scheduled

BCWS

Value of work planned to be accomplished

Schedule Variance

SV

If > 0 it means under budget, favorable

Cost Variance

CV

If > 0 it means under budget, favorable

Schedule Performance Index

SPI

If > 1 it means ahead of schedule

If = 1 it means right on schedule

If < 1 it means behind schedule

Cost Performance Index

CPI

If > 1 it means under budget

If = 1 it means right on plan

If < 1 it means over budget

Estimate At Completion

EAC

How much will the project actually cost

To Complete Performance Index

TCPI

Efficiency needed from ‘time now’ to achieve a Budget At Completion, Estimate At Completion

Table 2: Meaning of the Descriptions

 

Performance Monitoring & Post Evaluation of Results


Figure 3: Team Performance Graph

 

In conclusion to the Team Performance Measurement is that:

  1. The team is behind schedule and over budget.
  1. The quality required from customer of SPI/CPI 0.9-1.1 is still not achieved.
  2. Large room for improvement, through active participation of team members.

 

References:

  1. What Is Balanced Scorecard. Retrieved from http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx
  2. Performance Based Management Handbook Volume 2 P.35 & p.47. Retrieved from http://www.orau.gov/pbm/pbmhandbook/volume%202.pdf
  3. Project Management Using Earned Value, Humpreys and Associates, 2002, Chapter 29
  4. Planning and Control Cycle. Retrieved from http://www.p3planningengineer.com/progress%20measure.htm
  5. The Earned Value Management Gold Car, Defense Acquisition University, September 2010
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About Lilly Wasitova

Goal oriented professional who like to have fun
Aside | This entry was posted in Lilly Wasitova, Week #3. Bookmark the permalink.

3 Responses to W.3_Lilly Wasitova_ The Performance Measurement

  1. DrPDG says:

    Not bad, Bu Lilly……

    I am not certain I would buy into your alternatives- I have never used Balanced Scorecard or TQM (or Six Sigma) to actually measure project performance, but I won’t challenge that point right now. There is a “new” method called “Last Planner” which is being used on large, complex mega projects. It was introduced in the mid 1990’s as part of the “lean” project management movement, but I haven’t actually used it.

    Anyway, the rest of your analysis was a great start on your weekly reports but I would like to see it in the traditional S Curve format. So for the time being I will accept that as sufficient for W1 and W2, but by W3 I will be looking for something more along what your Nigerian colleagues are producing.

    Bottom line- you are DEFINITELY heading in the right direction, but we need to get those people who are not engaged yet on the bus and Teguh in particular really knows how to put these dashboards together……

    Keep up the good work, Bu Lilly!!

    BR,
    Dr. PDG, Jakarta

    • Lilly Wasitova says:

      Thank you so much Pak,

      I am working on getting Figure 3 in place, seems to me that the graph from excel can not directly be used in blog posting, since this happened to me last week too.

      Thanks again for your support pak

  2. Pingback: Google Alert – "earned value" or "earned value management"- PTMC/APMX Building Project Management Competency

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