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Project Management
by Joan Knudson and Ira Bitz
AMACOM Books
ISBN: 0814450431 Pub Date: 01/01/91

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Step 5: Inform Management
Title

During the controlling process, management needs to be informed of problems being experienced on the
project so that it can respond to inquiries concerning the project. Management may be asked to provide
information or insights necessary to take corrective or preventive action in response to a problem. In addition,
----------- management must be given an overall picture of the condition of the project, the problems that have been
encountered, and the actions that have been taken in response to the problems.
Management is kept informed through:
• Informal discussions about problems being experienced in the execution of the work and requests for
input to the development of solutions.
• Formal presentations (on an infrequent basis) that provide a subjective assessment of the condition of
the project.
• Written single-project status reports, prepared each month, that convey a detailed picture of the
project.
• Tabular multiproject status reports, giving a very brief summary of the condition of a group of
projects.
When deciding whether to distribute status reports to management to keep them informed, remember that
people retain only 10 percent of what they read, 20 percent of what they hear, 30 percent of what they see, and
45 percent of what they see and hear (see Figure 7-2). This indicates that a management briefing in which you
give a presentation using good graphical representations of the project status, issues, and resolutions is the
most effective. Below are some basic guidelines to keep in mind when communicating with management:
• Objectives: Continually readdress the project objectives to keep the goal clear in everyone™s mind.
• Simplicity: Keep communications simple, clear, and concise.
• Approvals: Be sure you have obtained appropriate approvals for any changes.
• Authority levels: Permit project plans to be changed by authorized people only.
• Accuracy: Be sure that everything you display or publish is accurate. This means that all numbers
add and cross reference; it also means that reality is portrayed with integrity and honesty.
• Problem isolation: Identify project problems primarily through people, not paper. Use upward and
downward communication techniques.




Figure 7-2. Project control: steps to ensure that actual performance conforms to plan.
• Management by exception: Establish key indicators. Everything does not have to be communicated;
management is interested in just the exceptions.
• Thresholds: Establish clear thresholds under which management does not need to be informed and
thresholds over which management is to be told about the problem, preferably with recommended
solutions.
• Relevant reports: Produce only reports useful to management.
• Review meetings: Do not use project review meetings as the vehicle for presenting problems to top
management for the first time. Inform them beforehand of the issues.
The bottom line is that systems are not a substitute for leadership and effective day-to-day management.

Project Team Members™ Role in the Controlling Process
Consider status information. With respect to completed tasks, the data required include actual task start date,
actual task duration, actual person-hours, and actual costs incurred. The first three of these four items should
be available from the organization™s time reporting system, and the fourth should be available from the cost
accounting system. Therefore, it should not be necessary to ask team members for this information, diverting
attention from the work at hand.
With respect to tasks that have not yet commenced, the data required include revised duration, revised
person-hours required, and revised cost. If the organization has an adequate change management procedure,
this information should be available from the current approved plan, which consists of the original project
plan plus the approved changes to date. The project team members participated in the development of the
estimates for the changes and do not need to be asked about the impact of the change. Furthermore, if a new
change to the plan is required, the change management procedure has the team member elevate the need to the
attention of the project manager. Therefore, the project manager does not need to ask if there are any revisions
to the estimates of future tasks. Once again, the team member may be left to work undisturbed on the project.
The most complex data requirements are those with respect to tasks that are underway at the end of the
control period. Data required with respect to these tasks include actual start date, actual days worked, actual
person-hours, actual cost, estimated days to complete, estimated person-hours to complete, and estimated cost
to complete. Again, there are sources for some of these data other than project team members. Actual start
date, actual days worked, and actual person-hours should be available from the time reporting system. Actual
cost to date should be available from the cost accounting system. The estimates to complete, however, must
come from the project team members; there is simply no other source of these data.
A well-thought-out data collection effort in an organization with adequate time reporting and cost accounting
systems can reduce the number of data that have to be gathered from the members of the project team,
allowing them more time to work on the project and furthering the objectives of the organization. If the
organization™s systems are inadequate, the project team members become the primary source of all data. This
results in lower productivity and higher estimates for performing the work. Relying on the project team
members as the source of data, rather than fixing the time reporting and cost accounting systems, is a poor
long-term strategy for the organization.


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Project Management
by Joan Knudson and Ira Bitz
AMACOM Books
ISBN: 0814450431 Pub Date: 01/01/91

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Title
Chapter 8
Project Control Techniques: Status Reports and
Reviews
-----------

Designing and Producing Status Report Documents
Do you work in a department or division where everyone who writes a status report uses the same general
format? Our guess is that you probably do not. In several informal surveys we have taken, less than 10 percent
of project managers within the same organization have a standardized reporting format. How do you as a
status reporter know what to report if there are no guidelines? Who teaches you how to construct an
informative, concise report with which to keep management abreast of project performance? Typically a
status report contains five sections:
Format for a Status Report
Section 1. Where are we today?
Section 2. Where will we be at the next report?
Section 3. What is our budget position?
Section 4. What items jeopardize project completion?
Section 5. Who deserves recognition?

Section 1: Where are we today? This first section gives a brief synopsis of the project™s progress since the last
status report. You can do this with a list of bulleted items no more than one or two sentences each. Each item
describes recent achievements, milestones completed, and other events that have had significant impact on the
project (vendor issues, personnel items). Then provide a milestone chart giving a historical perspective of
thirty to sixty days. A chart provides a quick context, or background, for the reader to compare planned versus
actual performance. This section also provides a high-level project perspective for the purposes of
management review. In other words, it keeps the detail level low, provides concise data, pinpoints situations
that merit attention, and allows readers the opportunity to request further information as needed. Keep in mind
that your audience is inundated with written reports, memos, and other documentation. Your goal is to
provide an adequate description of the project, in a short format, that is readable”and will more than likely
be read.
Section 2: Where will we be at the next report? Once you have brought the reader up to date, describe the
project™s near-term direction”the events that will take place during the next reporting interval. Again, use
one-to-two-sentence bulleted items describing pending events, and prepare a milestone chart with a thirty-to
sixty-day forward view. This chart can be combined into a single graphic with the milestone chart from
Section 1. Most PC-based project management software packages can easily create this type of chart.
This section gives upper managers a view of the project™s immediate direction. In this way, they have the
opportunity to suggest course corrections early enough to make an impact on project progress.
Section 3: What is our budget position? It is very important that this section be a clear visual image. Detailed
charts with mounds of data and dozens of line items get ignored unless a project is in serious trouble. Prepare
a simple line graph or a bar chart that displays plan versus actual data. If there is significant variance in actual
versus plan, provide a brief explanation of the cause of the variance. This simple chart gives managers enough
basic data to assess overall project budgetary status. If they want more detail, they will request it.
Section 4: What items jeopardize project completion? HELP! That™s really what this section is about. Let
management know where there is a problem and what should be done about it. There are two criteria for an
item to be included in this section: It must place the completion of the project at risk, and it must be beyond
your capability to resolve. If both these conditions are met, ask for help in clear tones. (If not, resolve the
issue yourself and go on). Be sure you indicate clearly what action you would like management to take. This
is not an opportunity to take a monkey off your back and put it onto your boss™s. It™s your chance to call in the
cavalry. But you need to be explicit in describing the help you need.
A political side note is required here: Inform your manager of any items you intend to include in this section
before you print the report. Managers do not like to be caught unaware, and it is a politically adroit project
manager who gives a manager a chance to resolve problems before they reach print.
Section 5: Who deserves recognition? This last section is very important and often overlooked. Team
members, not just project managers, make or break a project. Their involvement, commitment, and dedication
to quality make the difference between success and failure. Yet we often overlook basic opportunities to
recognize team members who demonstrate excellence on the job, put in long days and weekends, forsake
vacations and holidays, and walk that extra mile to make a project successful. This section allows you to
acknowledge excellence and dedication. As a morale boost, it demonstrates to the project team that you are
aware of the work being done and are appreciative. It also provides visibility for the productive workers to
upper management.
Adapt these five sections to your own situation in order to improve communication with management.
Encourage your peers to adopt a format they will all employ. You will find that a short, concise status report
is a management tool, not drudgery. Managers will learn what to expect in a status report and where to find it.
The key to a status report is how effectively it communicates the state of the project to management, but it has
to be read first. Make it concise.

Charts and Graphs
There are a variety of graphic presentations that can effectively compare planned versus actual performance.
Remember that status reports give us the questions. You not only need to address these questions but also find
solutions and implement action plans.
The typical Gantt chart shown in Figure 8-1 indicates that Activities 3, 5, and 6 have started later than
planned. Some of the questions you need to be asking are the following: Are these slippages on the critical
path? If they are, is there a way to make up the lost time? If these slippages are on noncritical activities, has
the slippage eaten up all the available float? What caused the slippage?
The Gantt chart in Figure 8-2 shows a dramatic slippage on all activities. Among the questions you need to
ask are these: Why did the project start late? Why did Activity A take twice as long to complete? Critical path
Activity E has started one and a half months late. Is there any chance of completing this activity on time?
(Probably not.) Most important, why are we living with this unrealistic schedule? Where is the revised plan?
Now let™s look at Figure 8-3. This Gantt chart shows an early completion of critical path Activity E. However,
noncritical path Activity C has slipped one month. As you can see, the noncritical path Activity F has one and
a half months of float, which can accommodate the slippage in C. With the early completion of E, however,
the C,F path has now become the critical path.
Here are some questions that you should ask: What is taking so long in Activity C? If it completes within the
next half-month, we have a chance of completing the project early. If not, the initially noncritical path
Activity C could cause the project to be completed late. Could we transfer people from Activity E, which
completed early, onto Activity C? Do those people who worked on Activity E have the correct skill mix to
work on Activity C? If not, this is not a viable solution.




Figure 8-1 Typical Gantt chart.




Figure 8-2 Gantt chart with slippage.




Figure 8-3 Gantt chart with slippage on noncritical path.


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Project Management
by Joan Knudson and Ira Bitz
AMACOM Books
ISBN: 0814450431 Pub Date: 01/01/91

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In the resource loading chart in Figure 8-4, the original plan is the histogram outlined by a heavy line; the
Title
actual is shown by the shading. It is obvious that more resources are being used than were planned. Perhaps
priorities have changed, and resources are being poured into the project to get it completed earlier. Or
additional changes of scope, which require additional resources, have been requested. A third reason might be
that the original work effort ws underestimated, and more resources are needed to get the job done. The
----------- schedule could be slipping and resources are being expected to catch up, or less qualified resources were
scheduled to the project than planned, and therefore it is taking more time to finish the work. Without the
schedule status, it is impossible to come to a conclusion.
Cost line graphs can be analyzed easily. Figure 8-5 shows that the actual monies spent are consistently behind
the plan. This may mean that the project is progressing slower than planned. However, the trend seems to be
catching up with the plan. If we could see the schedule, it is a safe guess that money is being pumped into the
project so that it will move back into line with the schedule plan. Again, nothing is conclusive with only the
cost line graph.
The next three figures compare a schedule status report against a resource loading status report and a cost line
graph. A first glance at the schedule in Figure 8-6 gives the impression that this project appears to be in very
good shape. However, a review of the resource and cost graphs shows that a substantial amount of effort and
money appears to have been expended in order to keep on schedule.
In Figure 8-7, the schedule is slipping dramatically, yet the resources and dollars have stayed pretty much in
line. Because this schedule has slipped so much, it appears that this project will not come in on time. Has
everyone been informed that this project is going to slip its target date? A manager reviewing this report
might think, “It™s not realistic to expect that the resources will start dropping off, or the budget. Looks like we
should be negotiating to keep some of the resources on the project in order to make up for lost time. We™ll
also want to project an overbudget position at completion”and we may want to cancel the project if the
benefits planned will not be accomplished”.
In Figure 8-8, the schedule is slipping too. Completion dates for work activities have been extended, probably
because the resources planned for the project have not been available. The underbudget situation is not
necessarily good news, since the projections seem to indicate a final late completion and overbudget situation.
Figure 8-4 Resource loading chart.




Figure 8-5 Cost line graph.




Figure 8-6 Multiple baselines.




Figure 8-7 Multiple baselines with slippage.




Figure 8-8 Multiple baselines with slippage and underbudget situation.

Trend Analysis
In the preceding section, we analyzed snapshots of a project at a moment in time. However, there is more to
reporting project status than just telling people what happened as of yesterday. It is important to look at trends
and to project what will ultimately happen in terms of time, resources, and/or dollars if the trend continues.
Trend analysis is a useful tool for project control since it enables you to compare the target with the
destination. Let™s compare two illustrations in order to illustrate the benefits of trend analysis.
Figure 8-9 illustrates the cost analysis curve for a project as of the completion of a specific control period. The
target represents the current plan”what the project manager is aiming for in terms of schedule and cost. The
destination represents the current forecast for schedule and cost completion. There is usually some
discrepancy between the target and the destination. The same graph can be produced with person-hours as its
y-axis; in this case, the destination represents the current forecast for schedule completion and person-hours at
completion. The problem is that the destination changes from month to month, and the graph does not allow
the project manager to perceive the change in the destination.


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Project Management
by Joan Knudson and Ira Bitz
AMACOM Books
ISBN: 0814450431 Pub Date: 01/01/91

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Trend analysis, on the other hand, focuses on the changes in the destination. It allows you to see the changes
Title
over time and to decide whether the trend is alarming, though the current forecast indicates that the project
will be completed within the plan plus the contingency allocated to it. In Figure 8-10, the most recent
forecasted completion date, as of the end of the sixth month, is twelve and a half months, but the trend
indicates fourteen and a half months. Since the plan plus contingency for the project is fourteen months, it
----------- looks as if the project may be in trouble. The trend analysis has provided an early warning of the problem.
Figure 8-11 indicates that the trended cost at completion will be $25,000 over budget. Since the graph
indicates a contingency of $100,000, the cost does not appear to be a problem. In fact, the manager of this
project might do well to spend additional funds in order to shorten the period of performance, if possible.
Similarly, the resource trend in Figure 8-12 indicates that the ceiling on human resources for the project will
not be approached, given the current trend. Just over 40 percent of the reserves are forecasted to be utilized by
the trended completion date of fourteen and a half months.
The trend in the utilization of contingency can also be tracked. Here a word of warning is appropriate:
Tracking contingency utilization requires a good deal of planning. First, the risks must be identified. Then the
time frame for each risk must be anticipated. Figure 8-13 presents a sample of such a trend analysis. In this
example, contingency utilization started out well over planned utilization, dropped below planned utilization,
and has climbed again in the last month. Overall the trend is somewhat alarming.




Figure 8-9. Cost analysis curve.




Figure 8-10 Schedule trend analysis.
Figure 8-11 Cost trend.




Figure 8-12 Resource trend analysis.




Figure 8-13 Contingency utilization.

Trend analysis is not a precise tool; however, it is a critical component of an early warning system since it
enables you to see problems before they become alarming. Some form of trend analysis is appropriate on all
projects.

Preparing and Conducting Status Review Meetings
Your project has been underway for one week. Is it time for a project review meeting? Absolutely yes. In
project management, it is not a matter of whether you™ll get into trouble; rather, it is a matter of how soon you
will get into trouble and how fast you can get out of it. At the very first review meeting ask: Were the
milestones met? If the answer is yes, review the deliverables in detail. Have they been quality controlled? And
will the people or functional area(s) who will use these deliverables find them acceptable?
Slippage can create disastrous delays and backlogs. Assume the project has ten milestones that have to be met
each week, and on Week 1 you have missed five of them. Consequently, the next week, fifteen milestones
must be completed”the ten required for the second week in addition to the five that were not completed the
first week. Run this scenario out, and you will have a pyramid of delayed milestones, indicating a project in
deep trouble. When milestones are not being met, address these questions during the first project review
meeting:
• Why are the milestones not completed?
• What is the impact?
• When will the work be done?
• Is an alternative action plan needed?
• What is the date(s) required to get back on schedule?
In order to resolve these issues, you must prepare for project status review meetings.

How to Prepare for a Review Meeting
• Define the objective of the meeting clearly. Each project review meeting cannot cover in detail all of
the project issues”the schedule, budget, resource utilization, quality, technical, and design
considerations. Therefore, the objective should be focused and determined by the participants.
For example, if the attendees are the management committee and/or the customer, they will want to know
about what has gone wrong, what you have done to fix it, and what, if any, support you need from them. If the
audience is the project team, you will be concerned about the fundamental nitty-gritty areas. You and the team
want to know about what has been done, what slipped, what impact the slippage had, what you will do about
it, and what is coming up in the near future. With these issues in perspective, you have the basis for a renewed
commitment to completion.
• Prepare a well-thought-out agenda. Allocate your agenda time wisely. Cover the most important
topics early when people are alert and will address them with vigor. On your copy of the agenda, insert
the scheduled time for each topic in the margin. Allow some buffer time should the topic take longer
than expected. Preview the agenda with the appropriate people to ensure that you have not omitted
anything, included anything that is extraneous, or neglected to clarify the objective of each topic.
• Invite the essential people. It serves no purpose to have all concerned parties attend each meeting.

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