The successful Project Manager has the ability to maintain a full overview of the project and
see the impact that current and future events will have on project outcomes (“helicopter”)
whilst absorbing enough detail to know whether or not the project remains on course to
achieve its objectives.
One of the opportunity/project manager’s vital roles is to monitor and analyse HSE,
cost, schedule and quality performance and team morale and act up on the findings. An
essential element in this is the completeness and quality of project reporting. The whole of
the activity is known as the Management Control Loop and this is shown in Figure 4.9.1.
Key points for monitoring and controlling progress are:
- set up a physical progress and cost measurement system
- monitor progress and identify variance against the schedule and cost
- always look ahead and compare forecast duration/cost with time/budget remaining
- take action to remedy variances
- cost reports should emphasise variances and trends
- cost control requires continuous forecasting, and action to contain potential overruns
Reporting
Regular reporting of progress (schedule and cost) is a key tool in project execution. Progress
reports are essential for owner and engineer alike in that they provide a systematic and
disciplined means of progress measurement and, for project team personnel, a means of
effective communication.
The principles of progress reporting are:
• all data should originate from single sources and be subject to quality checks;
• reports should be brief and concentrate on the reporting of deviations to plan and
the reason for this rather than voluminous statements on progress as predicted;
• as projects progress there may be issues and concerns that could arise and threaten
the Project objectives. The report should also be used to highlight key issues and
concerns as they arise, and to outline the measures planned to combat them.
Report frequency is generally monthly, and based on updated planning and scheduling
data. Internal reports are often generated weekly, and form part of the agenda of the
project’s internal weekly Progress Meeting, at which deviations to planned progress and
newly arising issues and concerns should be examined.
The project reporting procedures should commence from day one of the execution
phase. This gets the project team into the routine of writing the reports and streamlining
the process while the activity levels are still quite low.
As the activity level picks up, aspects such as presentation style, content, time-table,
distribution, etc., will all have been ironed out and hence production of the reports will
take less effort.
The project manager has an obligation to report the status of the project to its sponsors,
partners, management or authorities. The objectives of reporting are to:
• identify clearly the current status of work
• compare actual achievement with the targets planned
• focus on critical areas and key concerns
• propose solutions or actions for problems or concerns identified
• permit effective management control and corrective action by producing reports
regularly and promptly
A status report should be concise and forward looking, and should use exception
reporting. It should highlight both the positive and negative variance of cost, time and
other performance measures against the project objectives. It should also note current
concerns, and their resolution. The report should consider the audience for whom it is
written, and should contain pictures or graphs in preference to lengthy descriptions. It is
also important that reports are produced and distributed on time.
Other forms of reporting such as weekly e-mails, and third-party reports are very much
OU specific and depend on agreements made between the various parties.
In a multi-project environment, there is a movement towards integrated work
management systems, which allow all parties to read the status of all OU projects from a
common computerised database. This minimises the effort and cost of producing paper
reports, which only have a short life duration. Some computer examples from the
Engineering Work Management System
are shown in the Figures 4.9.2 and 4.9.3.
It is vital that the project
team is kept well aware of
the project successes,
issues and progress and a
monthly team meeting
open to everyone
(including contractors) is
recommended (often know
as a Dog-and Pony
Show!)at which the
opportunity/project
managers would report
and comment on the
progress and the current
issues and what lies in
store in the future.
As well as written reports, visual presentations to OU senior management and partners
may well be necessary. These should address key factors and not descend into detail
unless absolutely necessary.
A suggested agenda for such presentation would be:
• Highlights
• Issues
• HSE
• Progress
• Cost
Some of the aspects for consideration with respect to project reporting are:
• can paper reports be minimized by using electronic data reporting?
(i.e. EWMS – Engineering Work Management Systems).
• are reports tailored to the needs of the recipient?
• are they easily interpreted?
• do they highlight problems?
• is a fixed reference agreed against which long term performance can be monitored?
• to what action is the report expected to lead?
• are the reports structured to its audience by activity, field, licences, etc.?
• could words and figures be replaced by graphs or photos?
• have standard reports been considered?
The following table lists some of the common project performance indicator reports that may be needed:
Progress against Plan
To help the opportunity project manager to keep track of costs, time and use of resources,
a number of reports and control tools are commonly used to identify deviation from the
original plan.
Project controls are designed to focus on one or more of the three major components of
an activity i.e. Cost, Schedules (Time), and Performance Levels (Resources and Quality).
By establishing a regular (weekly or monthly) reporting system, the project manager can
track the progress of a project and detect any variance from the plan. If there is
significant variation, it is a sign that the project is deviating from the agreed plan and the
project manager has to decide what corrective action to take, and to act promptly.
Examples of status reports that track progress and detect variance are discussed below.
An Overall Progress Report,
provides a high-level
overview of the progress of
the project. An overall
percentage progress figure
versus the planned figure is
a prime indicator for people
outside the project team to
show how the project is
performing and is a normal management reporting requirement. More detailed
reporting is, however,
needed for management
control, see (Performance Indicators).
Figure 4.9.5 shows the project broken down into its main activities, with a bar indicating
the planned duration of the project. The chart may also show key milestones.
The normal method of calculating and reporting progress is based on a Value of Work
Done (VOWD) basis, but this may vary depending on the deliverables of the project or
the phase that the project is in.
(For instance, during Phase 1, Identify and Assess, and Phase 2, Select, it is more informative to report by milestone completion.) The planned
VOWD for each activity provides the percentage weightings between the activities. On a
monthly basis, the progress (VOWD) is summated per sub-activity to the activity level.
The weighting factors per activity are then applied to derive an overall project progress
Figure – i.e. 43.8% in the example shown. The percentage progress can also be drawn as
an S-curve, as indicated on the right-hand side of the chart. The progress of individual
activities can be depicted by shading of the horizontal bars as shown in Figure 4.10.5 below.
In a table below the curve, in Figure 4.9.5, the planned and actual progress Figures can
be listed. Where planning sensitivities have been run, i.e. using earliest and latest activity
start times, these can be included in the table for reference or could be shown as an
envelope around the plan line on the curve.
Schedule Performance is reported in the form of a Gantt Chart, ( Figure 4.9.6)
A baseline schedule is developed for the project and ‘frozen’ for reporting purposes prior
to the start of execution. Then during the execution phase of the project, the
computerized planning package allow actual progress/performance figures to be entered,
together with an estimate of the time required to complete the project. These are
displayed as a second line below the frozen baseline.
By using the computerized planning package, the dependencies between the activities are
retained and hence it shows the knock-on effect of changes of one activity onto the others.
Resource performance can also be reported (Figure 4.9.7). This may be required, for
instance, for activities which are manpower intensive, such as Hook-up and
Commissioning.
The curve can show the planned cumulative manpower usage profile, against which the
actual totals can be plotted.
In reporting both hook-up and commissioning hours, a distinction is usually made
between three manhour classifications- direct, indirect and non-productive.
Direct hours: those hours spent directly on the job (e.g. erecting steel, welding, pulling
cable, painting etc.)
Indirect hours: those hours spent supporting the direct hours (e.g. scaffolding, moving
materials to the site, providing temporary utilities such as lighting/power/water etc.
Non-productive hours: those paid hours not spent on either direct or indirect activities
(e.g. attending safety meetings, meal breaks, permit delays or site shutdowns etc.)
Each of the above is estimated and then actuals are measured against plan. Labour
productivity is measured as the ratio of actual direct hours to planned direct hours for
the work achieved.
Cost Performance is normally reported as shown in Figure 4.9.8 below. In this Figure
several key cost numbers are given. Along the top of the Figure is the budget amount,
comprising the control estimate plus a contingency amount. Reported on a monthly basis
is the VOWD and the current commitment level. The commitment level goes up in steps
as major commitments (typically contracts or purchase orders) are awarded. For each
activity the VOWD is reported and compared against the originally planned VOWD curve.
A good indicator of
ongoing efficiency against
the overall manhour
estimate is know as the
Effective Manhour Ratio.
This is the ratio of the
actual total hours booked (direct/indirect/nonproductive) to do a piece of work versus the direct hours achieved (i.e. the number of hours allowed in the estimate for the achievement of that piece of work.) This can be compared to the planned ratio.
Cost performance is also reported in tabular format, as shown in Figure 4.9.9. This form
of table can be used at different levels and summated up to the highest project level.
Monitoring, Analyzing and Correcting
Change control
Before examining the aspects of monitoring and control, it is worth reiterating just how
important it is to have an effective technical change management process in place in
order to ensure effective executive control.
Monitoring and Analysis
Regardless of the effort spent on planning the project, there will always be unpredictable
or uncontrollable events that can threaten the success of the project. One of the
experienced opportunity/project manager’s attributes should be the ability to detect such
problems early enough and have the experience to take the appropriate corrective action
in order to keep the project on track.
The project manager needs to monitor both project performance and project morale and
both can be checked using the same sources as shown in Figure 4.9.10.
The opportunity/project manager needs to ensure that reporting is prompt, accurate and
to the relevant detail so that he/she has a good basis for monitoring the status of the job.
He/she should read and analyze as many reports as possible and monitor that relevant
managers are also reading and analyzing the reports and are taking or discussing
corrective actions that might be taken to address deviations from the plan, either in
cost/schedule/quality terms or in logic terms.
An important part of the monitoring process is the programme of audits and reviews for
the project (Verification Plan).
Monitoring that this is proceeding as planned and that
actions identified as a result of the audits and reviews are being captured, actioned and
closed-out is part of the manager’s monitoring duties.
Monitoring and analysis of work/activity progress must be done on an ongoing basis
during all opportunity realization phases in support of controlling the work and remedial
action must be taken with respect to deviation from project objectives.
An analysis is also carried out at the end of the project to review the major deviations
from plan and to assimilate the main learning points. These result in a project debrief
report and learning must be fed back as improvements to processes, standards, procedures,
cost databases, etc. to help improve the performance of subsequent similar projects.
8
Performance Indicators (PIs) are aimed towards assessing how well the project execution
is performed against the approved plan. They are performance norms, for monitoring
project execution shortfalls either against the project’s objectives or targets or for
monitoring on-going improvements. For example, the project’s Lost Time Injury
Frequency (LTIF) vs. the target set for the project. They need to be easily calculated
and act as a counter check against the mass of data available/generated in the normal
reporting process. PIs can be developed at different levels within a project.
9
As well as project manager level PIs, activity execution supervisors should be encouraged
to develop a number of key PIs for their own activities in order to monitor performance.
This could be performance against end targets or performance trends against time for
repetitive events, e.g. turn-around time for document approvals.
The PIs should measure the performance of an activity in terms of:
• efficiency (effective at least cost)
• effectiveness (activity completed without defects, customer satisfied)
• flexibility (effective and efficient in face of change)
• speed of response
PIs should only be developed for activities, or groups of activities, for which it is possible
to define a clear output and some identifiable impact (or risk) to the activity’s
performance/targets. Over time the PIs can be built-up into trends, which can also be
used as input data for benchmarking on future projects, Figure 4.10.10.
An excellent way of monitoring/controlling cost is by tracking the drawdown of project
activity allowances and contingencies for the various elements of the work by the various budget holders. A suitable format for this is shown in Figure 4.9.12.
Positive variances (being ahead of schedule or under budget) may allow for re-planning
to complete the project earlier than planned or for less cost. Negative variances (being
behind schedule or over budget) may require the project manager to correct the situation
by re-allocation of resources from non-critical activities. Additional resources
(e.g. overtime) in order to keep non-critical activities on target, helps prevent non-critical
activities slipping to the extent that they become, or cause others to become, critical.
As slippage in one area or another is a fact of life on projects, it is the project manager’s
task to get back on schedule. There are various ways to achieve this, e.g. by re-allocating
or increasing resources or by alternating some of the activities, etc. Deviations from the
plan cannot be left unaddressed, irrespective of time-pressures or difficulty. Whichever
corrective plan is decided upon, it needs the highest level of attention to steer it back on
course. If that is not possible, a new course for the project to follow must be agreed. In
the worst case, when control has been lost, a detailed recovery plan is needed and this
will require the full backing of the project’s sponsor.
While it is important to effect an adequate analysis so as to reach the right conclusions,
this should not be taken too far or otherwise corrective action will be too late. A proper
balance is needed between analysis and corrective action so that analysis does not lead
to paralysis.
The project team is one of the key resources that a project manager has to manage.
His/her goal should therefore be to establish and maintain a well motivated, high
performing team. The current trend towards integrated teams with extensive contractor
input emphasizes the increasing importance of Team Cohesion.
Inevitably, personal conflicts will arise. The project manager has to sense for and seek to
resolve them, so they do not detract the individuals attentions away from achieving the
project’s goal. ‘Management by walkabout’, where the project manager informally talks
to team members can be a most effective way of carrying out this sort of sensing exercise.
In some instances, team building/coaching workshops may be required under the
guidance of a facilitator.
A significant amount of project time is spent in meetings, either internal meetings within
the project team or external, with contractors or the project sponsors. An area where the
project manager can often improve the efficiency of his team’s time management is by
monitoring and enhancing the effectiveness of project meetings. Guidelines, or even some
coaching, may help to improve the preparation for, the running and the follow-up of
meetings.