Mark blum ubc tool box execution - powerpoint presentation
- 1. BIG Structural Engineering Corporation The "BIG" engineering project Bigger is better, because it reflects our profit motives“ By: Mark Blum University of British Columbia Project Management PM TOOL KIT ASSIGNMENT: Course IL821W14A
- 2. Executive Summary & Background This presentation is with regards to, the current budget and schedule overruns in, “The BIG Engineering project” utilizing Earned Value Analysis. Earned Value Analysis (EVA); has been used by the U.S. Defence Department since the 1960s and they have found it to be an accurate forecasting tool. Their statistical analysis has shown that once a project is 10% complete, the overrun at completion will not be less than the current overrun. They also found that once a project is 20% complete, the (CPI) Cost Performance Index does not vary from its current value by more than 10%*. * QUOTE: UBC Project Management Course Manual This project is currently over budget regarding it’s, C.P.I and other key indicators. - Something needs to be done to change this course …
- 3. Section I This project is behind schedule and over budget as of the end of 1Q10. The project is 25% complete, this means we need to achieve overall savings during the remaining 75% of the project. -How do we do this? This meeting is to review options Actual and projected cost comparisons @ 24%completion of Project V.A.C (Current "Variance at completion" - $168,618.40 A.C (Actual cost to date) 629522 (Schedual Variance) -Over budget. - 248660 E.A.C (Estimated Cost @ completion) 1988478.4 AC (Actual cost to date) SV (Schedual Variance) -Over budget. EAC (Estimated Cost @ completion) VAC (Current "Varance at completion"
- 4. Making Sense of Dollars and Cents $0.00 $100,000.00 $200,000.00 $300,000.00 $400,000.00 $500,000.00 $600,000.00 $700,000.00 $800,000.00 $900,000.00 PlannedValue-PV(BCWS) EarnedValue-EV(BCWP) AC(ACWP) Series1 Column #1 Planned Value PV (BCWS) Cumulative, budgeted cost of work scheduled (How much money we budgeted) which is: $824,800.00 Column #2 Earned Value - EV (BCWP ) Cumulative budgeted cost of work performed or Earned Value. (This is what is paid for and completed). which is: $576,140.00 Column #3 Actual Cost (ACWP) Cumulative actual cost of work performed or (What we paid for so far) which is $629,522.00
- 5. Current Project Status I have conducted an analysis of the projects progress to date, to determine the reason, costs and the schedule are exceeding expectations and underperforming. 1. The Schedule Performance Index is 0.7, and there is a cost Variance of 0.92. ( anything less than 1 is over budget) 2. The schedule variance is $248, 660.00 Dollars over budgeted allocations. 3. The cost Variance is $53,382.00 Dollars over budgeted allocations. WHY ?
- 6. Earned Value Analysis tracks money expended compares it to budgeted allocations for actual performance. E.V.A. is a very good way to monitor progress; - and to be proactive. When resource allocations have not been fulfilled, as planned or budgeted for: • This unfulfilled work, causes budgetary deficiencies and cost overruns. • In this project, the categories of Design / Planning / Control and Scope are not in compliance with the plan. • In this project “TASKS” are showing very low resource utilization compliance, with planned results and particularly scheduled results pointing towards exceeding both the scheduled and budget projections. • When “Planned value” and “Actual cost” are not equal, this creates budgeted cost overruns. • This is due to non performance as per my analysis caused by the under performance of resources. • In a domino effect; This affects both earned value, and critical schedules to complete the project. • You can see from the Ms. Project budget cost over runs are due largely do to scheduling issues, or in simpler terms; -Work is not being performed as schedule by resources.
- 7. Summary of Calculations Note: *These values have been rounded off. Earned Value Calculations* PV = Planned Value $825,000 AC = Actual Cost to date $630,000 EV = Earned Value – What is completed $576,000 SV = Schedule Variance ($249,000) CV = Cost Variance ($53,000) SPI = Schedule Performance Index .70 CPI = Cost Performance Index .92 EAC = Estimate at completion $2,000,000 VAC = Variance at completion ($169,000) BAC = Budget at completion $1,819,000 ETC = Estimate at completion $1,676,000
- 8. Section II Specific Solutions What is the essence of the issue? It appears we have an issue with resource non-performance causing budget overruns. Delays in getting work (tasks), done on time as scheduled, are going to result cost increases given current projections, if corrective action is not taken as soon as possible. Resources not availing themselves to the project, are therefore causing delays and increased costs. How do we rectify this problem? It is critical that all departments : implement the resources necessary for the project tasks suffering from non conformity in order to succeed according to our plan, to bring the project back on track, so that we can achieve project completion both; On Time & On Budget.
- 9. Specific Solutions How should we proceed proactively / concretely and prevent the projected cost over runs? After this meeting, I will supply a list of resources that are under performing to each department by email. 1. I will be sending an excel spread sheet by email after this meeting to each affected senior manager explaining these areas are under performing. The yellow highlighted areas are an itemized list for each task/resource that is non conforming. 1. You can forward this to each of the affected department managers, and determine the reason for non performance, and how this can be overcome and to allocate the specified non-performing resources on a priority bases. 2. This list will enable you to address the problems with resources that are causing these budgetary overruns due to non performance, so that we can bring the project back on track. What are the costs of these recommendations ? These recommendations will not change the projects scope, but rather bring the budgets and time schedule back in line with the allocations. It is critical that the change control committee approve the requirement that resources be allocated without further delay to bring the project back on track with the allocated budgets and expedite the performance of all resources towards their fulfillment.
- 10. Section III Decisions - management needs to make Actions needed I am confident that each department will make the adjustments necessary to allocate resources once I provide this listing and you have seen the listing of non performers. You can now pin point where you need to take action and where are the compliance issues, provide motivation, to either meet or exceed the expectations of our plan in the spirit of true team work. Thank you! Mark Blum © 2014 Mark Blum ALL RIGHTS RESERVED