What Is Project Control?

Project control refers to all the activities and processes available to successfully manage project risks. For the PMP test, project control entails a total of 12 distinctive processes out of the 44 project management processes in the body of work.

In essence, project control is all the effective activities that the project manager performs to keep project performance and resource utilization at optimal levels. The magnitude and frequency of these activities are dictated by the size and organizational impact of the project. No matter the size of the project, there are three core elements of effective project control:

• Effective definition of project baseline and milestones

• Effective tracking of your project activities and resource utilization

• Effective risk definition for proposed corrective or preventive actions

You could think of this as having a

• Good, flexible plan

• Good management plan

• Good tracking and risk management

All these elements help to prescribe a measured and controlled execution environment.

Why is project control important? In general, all project failures and cancellations can be tracked back to the lack of effective controls in one or more of these areas: scope, cost, quality, and risk management.

Figure 6.1 depicts how the process groups of the project management methodology are related, and that all of them must be monitored and controlled for effective project completion.

Figure 6.1. The project control framework.

Factors That Cause Project Change

In order to effectively control a project, the project manager must prepare organizational processes that work like sentinels on the fence. These sentinels help the project manager identify events (people, cultural, or strategic) that might force a change to the project or the environment where the project is executing. In other words your project is influenced by elements outside of its normal execution and identified risks. These processes can include elements, such as

• Execution trend analysis

• Risk trigger management

• Forecast reports (just like the weather)

• Work package progress status and variances reports

• Lessons learned from similar projects

• Best practices

• Corporate strategy committee resolutions

Some examples of project control processes and their elements are

• You could use earned value analysis to determine how your project is performing against the planned activities, schedule, and cost.

• You can prescribe corrective or preventive actions after performing trend analysis in work package variances.

• You can identify a potential project change request after evaluating defect and frequency control charts.

• When executing enterprise projects, you can arrange a monthly meeting with the company CEO to discuss progress and new corporate initiatives.

Project control is an iterative process. Milestones tend to have a compilation of work packages and deliverables under them, so if you only do project control activities at their completion, you might learn of problems late in the project. Like the autopilot in an airplane, the main function of project control is to make frequent minor course corrections instead of waiting until you are several degrees and miles off the flight plan.

Approving Project Changes

When an opportunity for change is identified, you must make the time to acknowledge the request for change, evaluate its associated risks, and consider its potential not for just the timeline but also scope, cost, staff, quality, make/buy, and communication. This process helps you to identify if the change is gold plating or if it has direct impact to the project deliverables and its return on investment.

What is gold plating? Gold plating is a change to the project or a work package within the project that has not gone through an adequate change control management process.

After you have determined that a proposed change has merit and supports the project objectives, the change request is submitted to the project control team for final determinations. For the most part, the interaction with the control board is defined in the planning stage and can remain in place until the completion of the project. In the event that your organization has a project management office, the members of the change control board can change to accommodate strategic impact or affected areas in your organization.

What is a change control board? A change control board is an enterprise decision body tasked with approving the changes to projects or their impact in strategic initiatives.

In addition, you should monitor any trends that might point to an inadequate requirements definition in the planning stage of your project.

The Project Feedback Loop

You know that projects have five distinctive processes: initiate, plan, execute, control, closure (IPECC). But what of the external changes that occur during the execution of your project? This is where iterative information gathering and dissemination processes serve as information feedback loops.

One of the challenges of the traditional waterfall methodology approaches is that they do not provide for methods to incorporate organizational changes midstream and do not verify their range to target impacts. In other words, a project without feedback loops makes the assumption that nothing will change throughout the life of project; the requirements will not change or are frozen.

What is waterfall methodology? With the waterfall methodology first comes the analysis, then design, then implementation, and then testing completes the process; each phase flows naturally into the next phase, like water over a series of falls, without going upstream.

A project with frozen structure and processes is bound to fail because it does not take into account any discoveries or organizational changes that might occur during its execution.

Remember that sometimes enterprise changes have a direct effect on the viability of the project. Some examples of events that you might want to be made aware of in advance are

• A hostile takeover

• A divestment of a business unit

• Personnel or resource availability reduction

• A corporate relocation

Providing Corrective Action for a Project

After evaluating your work package progress reports and the earned value analysis calculation, you have come to the realization your project has fallen behind and is beyond recovery under its current execution and control framework.

What is earned value analysis? Earned value analysis in its simplest form is the value of the work performed to date against the project baseline expectations. The steps to calculating earned value (and other project-related values) are covered in the "Identifying Variance with Earned Value Management" section.

Your recourse is to implement corrective or preventive actions or a change request to align the project execution with its expected results and timelines.

A corrective or preventive action control is a control that is implemented in order to bring future project events and tasks into alignment with the project plan and its baseline.

Some options available at this time could be to

• Update the project baseline to reflect your current situation.

• Crash the schedule. Add people (internal/external) or resources to the tasks that have fallen behind and have a direct impact on the critical path; the down side is that this might cause unscheduled expenses.

• Fast track. Rearrange your activities in order to perform activities in parallel.

• Outsource the project or the affected part.

• Reduce the scope of the project.

Remember that the whole idea behind a corrective or preventive control is to help preserve the healthy execution of your project and maximize its resource utilizations.

Some of the items used to measure and keep control of the schedule and cost variances are seen in Table 6.1.

Table 6.1. Items Used to Measure and Keep Control of Schedule and Cost Variances

Item	Description
Planned value or budgeted cost of work scheduled (BCWS)	The budgeted cost of the work according to the schedule.
Budgeted at completion	The project baseline cost.
Earned value	The value of the work performed to date against the project schedule. Use the formula % completed x budgeted at completion.
Actual cost or actual cost of work performed (ACWP)	Cost of the work performed to date.
Scheduled variance	The difference between the earned value less the planned value.
Cost variance	The difference between the earned value less the actual cost.
Cost performance index	The result from dividing the earned value by the actual cost. A result less than one suggests that the project is at budget risk.
Scheduled performance index	The result of dividing the earned value by the planned value. A result less than one suggests that the project is at schedule risk.
Estimate at completion	The result of dividing the budget at completion into the cost performance index.
Estimated to completion	The result of subtracting the estimate at completion from the actual cost.
Variance at completion	The result of subtracting the estimated at completion from the budget at completion.

Using the WBS to Control the Project Scope

The scope control process is the process tasked with effective control of the scope and deliverables of the project. Its main component is the scope baseline. The scope baseline defines the project scope and its associated deliverables and documents the acceptance parameters of the final product. This baseline helps in clarifying any details that might have been left in a to-be-determined (TBD) mode during the project initiation phase or items that require further clarification with the project sponsor of its stakeholders. Your project process indicators in this process are

• The work breakdown structure

• Work package progress reports

What is a work breakdown structure? A work breakdown structure (WBS) decomposes the project work into manageable chunks or work packages.

What is a work package? A work package is the lowest descriptive level in a WBS.

The idea behind effectively defining the work breakdown structure is to create the roadmap that defines all the activities that will be executed in order to accomplish the project goal.

The WBS is one of those elements that morphs and changes as time and resource utilization passes. Why? As you perform the tasks outlined in your baseline, the recorded changes accommodate any differences between the planned theory and the actual execution.

An effective WBS assists the stakeholder to understand the activities and events that help in delivering the project promise, as well as outlining internal and external resource use. The entire project execution looks at the WBS to inquire about present, past, and future deliverables and their effectiveness.

Due to its nature and importance, the creation of the WBS should not be taken lightly. It should be viewed as the one element that all project participants must consider when formulating an opinion.

Identifying Variance with Earned Value Management

Earned value analysis is a tool used to help in identifying how well the team is performing and where the project might end up in comparison to the project plan. It was initially conceived by the United States Department of Defense (DoD) as a tool to standardize the way contractors report on the progress of their assigned projects.

The three key variables involved in the project earned value analysis are

• Budgeted cost for work scheduled (BCWS)

• Budgeted cost for work performed (BCWP)

• Actual cost for work performed (ACWP)

BCWS is also referred to as planned value. The total BCWS or planned value for a project can be called the budget at completion (BAC).

ACWP is also referred to as actual cost (AC).

BCWP is also referred to as earned value (EV).

In order to successfully report on earned value management, your project must have a well-defined WBS and an effective task planned versus actual performance reporting system.

A basic utilization example is as follows:

The budgeted cost for work scheduled (BCWS), or PV, is the planned value of the work according to the project budget. The BCWS of a 12 milestone/144 work packages project is $200,000 , and the cost for every three milestones has been estimated at $50,000.

The actual cost for work performed (ACWP) is how much you really have incurred in the project. In this example, you are at milestone 6 and the project has used $80,000; therefore, your ACWP is $80,000.

The budgeted cost for work performed (BCWP), or EV, is the value of how much work has been completed. So while your ACWP is $80,000, your BCWP is $100,000.

Armed with this information, you can determine derivative calculations such as the schedule performance index (SPI) and the cost performance index (CPI).

In this example, the calculations are

SPI	=	EV/PV or BCWP/BCWS
	=	100000/200000
	=	.5; your project is behind schedule
CPI	=	EV/AC or BCWP/ACWP
	=	100000/80000
	=	1.25; your project is using less money than expected

Measuring Quality Control

In the project context, quality is not only defined as delivering the right thing at the right time and at the right cost, but also delivering to customer expectations. As such, you, the project manager, have to ensure that the required metrics, tolerances, reports, and checklists are in place to ensure a quality prone execution and delivery sandbox is in place.

Some of the tools available to the project manager in controlling quality are

• The Ishikawa (also called the fishbone or cause and effect) diagram

• Control charts, such as the ones available using Three or Six Sigma

  • Six Sigma 99.99% defect free or about 0.002 defective parts per million

  • Three Sigma 99.73% defect free or about 2,700 defective parts per million

• Pareto chart (the 80/20 rule)

• Statistical sampling, such as the ones used in the standard audit processes

Diagrams and Charts Used to Measure Quality Control

The three diagrams that follow are typical diagrams or charts used to help monitor quality control:

• Ishikawa diagram This diagram type can be easily identified because it resembles fish bones. It is used to determine the root cause of a defect (see Figure 6.2).

  Figure 6.2. A root cause diagram.

  

  
  

  Remember that a product or task defect is the symptom, but not the cause of the problem. This is why the Ishikawa diagram is effective in graphically displaying what might be causing a problem at the end of the production line.

• Control charts Control charts are a statistical tool used to identify process points that are outside of the normal flow of a process. They help to graphically display process execution boundaries, its trending, and its overall performance over time (see Figure 6.3).

  Figure 6.3. A trending and performance control chart.

  

  
  

• Pareto charts Also know as the 80/20 rule. Vilfredo Pareto postulated that the distribution of income and wealth follows a regular logarithmic pattern where 20% of the population controls 80% of the wealth. Subsequently in 1937 Dr. Joseph M. Juran adapted Pareto's economic observations to business applications, which he called the "vital few and trivial many." Translated to project terms, 80% of the problems are caused by 20% of the activities (see Figure 6.4).

  Figure 6.4. A Pareto chart displaying error trend in a software development project.

  

  
  

Managing Your Project Team

You can not manage what you do not measure. Team performance entails tracking team performance against the expectations of the project and its deliverables. No matter what type of organization you work for, the project resources need to be recognized as temporal and shared by functional or project managers.

Because of the realities of project environments, the project manager must be aware of

• Staff acquisition practices in his organization

• Negotiation techniques

• The ways that power influences behavior

• How people tend to deal with conflict

• How people participate in a team environment

Because individuals tend to work and react differently in groups versus individually, you need to keep track of the tone of the team and the individual. For the individual you can use behavioral theories such as

• MacGregor's Theory Y

• MacGregor's Theory X

• Maslow's Hierarchy of Needs

• Ouchi's Theory Z

Popular Behavioral Theories Used in Human Resource Management

Managers manage differently, but there has been a sizable body of research on the ways managers see and lead their employees. This section touches on some of the theories you should understand for project team management and for the exam. In essence, the following theories speak to the way individuals are motivated and might behave by themselves or in a group:

• MacGregor's Theory X Individuals can not be trusted to perform on their own, avoid responsibility, and need to be directed at all times.

• MacGregor's Theory Y Individuals are willing to work unsupervised and have an inherent desire to achieve.

• Maslow's Hierarchy of Needs All individuals are motivated by a basic set of needs that must be satisfied before they can perform their job:

  • Physiological (lowest)

  • Safety

  • Social

  • Esteem

  • Self-actualization (highest)

• Ouchi's Theory Z Individuals tend to be more participative and are capable of performing many and varied tasks. It emphasizes practices such as job rotation, succession planning, generalists versus specialists, and the need for continuous training.

Communicating How Your Project Is Performing

Communicating with the world is one of your primary jobs. As a communicator, you must understand the mechanics involved in sending a message. There has to be an initiator, who encodes and sends the message, and the receiver who decodes, acknowledges, and, last but not least, confirms that he received the message.

In the normal exchange of information with your entire project team you will find methods and techniques that help you with formal and informal communication. Formal methods include items such as contracts, status reports, public speeches, and performance appraisals. Informal methods are those such as "The Scuttlebutt," email, and telephone conversations.

One way to determine how complex communication will be in a project is to determine its communication channels by using the formula (n x (n - 1))/2, where n represents the number of participants in a project. For example, a project with 10 participants requires 45 communication channels.

With this in mind, you need to understand that you might have to adjust the message and its delivery method based on the audience and the level of impact the project might have on the individuals with whom you are communicating. For example, consider the adjustments in communication that might have to occur between a board member and the person doing the work. For the worker, getting information about revenue projections and return on investment might be of little or no consequence in her daily duties. Giving the worker figures on how many additional widgets can be made in an hour, however, would definitely have an impact on her duties and equipment maintenance cycles.

In addition, you must be cognitive that when delivering a message, nonverbal communication and physical appearance have a direct effect on the message being delivered. For example, you are tasked with delivering a message to a construction team. First, you need to make sure that you use language and colloquialism appropriate to the construction group. This approach might not work the same way when giving a project update to the company senior team. At the same time, you need to make sure that the message and intentions are clearly understood by the audience to whom you are delivering the message.

Examples of common tools used to communicate are a budget, a contract, a teleconference, and a chart.

Risk Monitoring and Risk Control

Project risk control and monitoring is where you keep track of how your qualitative or quantitative risk responses are performing against the plan, as well as the place where new risks to the project are managed.

There could be cases in which risk might be identified as having a material impact to the enterprise but not to your project. For these risk types, your project must allow an alternate communication path that forwards alerts to the enterprise risk management functions. In addition, you must remember that risks can have negative and positive impacts. For example, you are leading a project for a bridge that will interconnect two roads with a maximum traffic flow of 10,000 cars and 300 tons, but a weather event forces a traffic change from other roads, doubling the capacity requirements for your bridge for at least 18 months after you complete the project. Although it has nothing to do with your deliverable, you must account for it and make recommendations on how to address the matter.

Remember that to determine how much of an affect a risk will have, you need to multiply its probability times its material impact. As the probability of risk materialization increases, your risk register should make resource (money, equipment, people, and time) allocations ahead of time, thus increasing your reserves. You must also have as part of your risk management plan the processes that would replenish these reserves before they become depleted.

The purpose of project risk control is to

• Identify the events that can have a direct effect in the project deliverables

• Assign qualitative and quantitative weight the probability and consequences of those events that might affect the project deliverables

• Produce alternate paths of execution for events that are out of your control or can not be mitigated

• Implement a continuous process for identifying, qualifying, quantifying, and responding to new risks

The utility theory assigns subjective value to a management decision in risk mitigation strategies in uncertain conditions.

In the risk register, you account for positive and negative risks. A positive risk is a risk taken by the project because its potential benefits outweigh the traditional approach. A negative risk is one that could negatively influence the cost of the project or its schedule.

Some of the techniques you can implement to evaluate your risk control and monitoring effectiveness is to compare actual risk resolution practices versus those that were planned at the time the risk was identified. If you identify any deviations (negative or positive), you could implement a corrective action in your risk management plan.

Risk triggers are those events that will cause the threat of a risk to become a reality. For example, you have identified the fact that you only have one water pump station available and the replacement takes six weeks to arrive. In the middle of your irrigation and recycling process tests, you discover that water pressure tends to fluctuate beyond pump tolerance levels. If you do not find a way to solve this problem, your risk will become a reality.

Remember that for each identified risk, you must provide a response plan. It is not much help to you if the risk becomes a reality and you do not have an alternate execution path or an emergency procurement plan.

Business risks and pure risks are different because a pure risk takes into account impacts on loss of financial profits. Business risk concentrates on events that might cause a company to lose position with its investors or have financial difficulty.

In addition, your risk reserves must be evaluated in order to determine the best way to replenish them. Some examples of events that could have a negative impact in your risk mitigation and control strategies are

• Resource shortage

• Scope creep

• Contractual issues

• Lack of key resource availability

Contract Administration

Contract administration is when the vendor or service performance is compared to the contractual service level agreements (SLA). Due to its implications and its potential impact across several sections of your project or the enterprise, all team members must be aware of the legal ramifications of any change in the contractual relationship. In addition, project-vendor disbursements tend to tie the SLAs and deliverables to direct cash expenditures.

At all cost, you must avoid any undocumented or unapproved cash disbursements or change that might go against your project deliverables.

In general, the project contract administrator is from the contract management office and/or your legal department and has the authority to issue change requests or early terminations.

Remember that all communications pertaining to contract administration must follow formal channels and be logged in your project log.

Your contract administration process should include mechanisms that allow for contract renegotiation, management response, and payment terms definitions.