Institute for International Research

Project 2002
Measuring Projects Performance
Project 2002 Mohammad Sherbini

Presentation Topics
Why should we measure performance ? What to measure ? How to measure ? Case Study. Who should measure performance ? Whom to report to ?

Project 2002 Mohammad Sherbini

Definitions
Measuring * : to regulate by standards Performance * : something accomplished. * Webster Dictionary

It is a management tool that measures work performed and results achieved.

Project 2002 Mohammad Sherbini

Why should we measure Performance?

If you cant measure it, you cant manage it. over 95% of projects were unable to meet on-time compliance. One accurate measurement is worth more than a thousand expert opinions.

Project 2002 Mohammad Sherbini

Why should we measure Performance?

Rewards, and recognition should be linked to performance measurements. Performance measurements predicts the final cost needed for the project.

Project 2002 Mohammad Sherbini

What to measure ?

Goal / Objective

Time

X
Project 2002 Mohammad Sherbini

Cost

What to measure ?
Pre-project measurements:
to generate the base-line metrics.

Measurements :
To be taken during the project which reveal whether key performance milestones are being met.

Post project measurements:

to reveal whether the completed project has delivered the specified project outputs and achieved the specified outcomes for specified cost.
Project 2002 Mohammad Sherbini

What to measure ?
Criteria for good Performance Measures : Responsibility linked Meaningful Organizationally Acceptable Comprehensive Balanced Timely Credible Cost Effective Compatible Simple

Project 2002 Mohammad Sherbini

How to measure ?

Establish missions & Goals.

Select key performance measures.

Determine data requirements.

Determine baseline performance.

Review and update performance measures.

Measure actual performance and report results.

Use benchmarking to establish targets.

Project 2002 Mohammad Sherbini

What to measure Performance?

Various methods: 1) Benchmarking. 2) Tracking & Monitoring System. 3) Earned Value Analysis (EVA). 4) Balanced Scorecard (BSC).

Project 2002 Mohammad Sherbini

1) Benchmarking.
Is being incorporated into the strategic Planning and Quality Improvement process. Based of history or similar project or process. Combine empirical information and expert knowledge to perform model based benchmarking.

Project 2002 Mohammad Sherbini

Benchmarking.
How to ? Plan. Data Collection And Data Analysis. Identification of Best Practice. Implementation.

Project 2002 Mohammad Sherbini

Benchmarking Planning.
Preparing for Change. Selecting Core Processes. Forming Benchmarking Team(s). Defining Activities And Measures.

Project 2002 Mohammad Sherbini

Benchmarking Data Collection/Analysis.

Measuring the process. Comparing with Expectations. Comparing With Other Sites. Swap Teams. Compare Findings.

Project 2002 Mohammad Sherbini

Benchmarking Identification of Best Practice.

Time. Cost. Customer/Organization Satisfaction.

Project 2002 Mohammad Sherbini

2) Tracking & Monitoring System.

Systems that monitor and report progress on implementing goals and objectives. It is a progress reporting system developed to track and monitor performance measurement.

Project 2002 Mohammad Sherbini

Tracking & Monitoring System.

How to develop a tracking document ? Set Goals. Set objectives. Develop action plans. Identification of implementation team. Communication: Comments and Explanation . Information on current progress status.

Project 2002 Mohammad Sherbini

3) Earned Value Analysis (EVA).

It Compares the amount of work was planned with what was actually accomplished to determine if cost and schedule performance is as planned. It integrate scope, cost and schedule measures to help the project management team assess project performance.

Project 2002 Mohammad Sherbini

Earned Value Analysis (EVA).

How to ? By Establishing the following: Cost Performance Index (CPI). Schedule Performance Index (SPI). Cost Variance (CV). Schedule Variance (SV). Estimate At Completion (EAC).

Project 2002 Mohammad Sherbini

The Original Project Chart.

450,000.0 400,000.0 350,000.0 300,000.0 250,000.0 200,000.0 150,000.0 100,000.0 50,000.0 0.0

Project Baseline

Jan-2001

Feb-2001

Mar-2001

Apr-2001

May-2001

Jun-2001

Jul-2001

Project 2002 Mohammad Sherbini

Project Cost after 3 Months 50%

450,000.0 400,000.0 350,000.0 300,000.0 250,000.0 200,000.0 150,000.0 100,000.0 50,000.0 0.0

Budget Cost 172,118 SR Actual Cost 158,138 SR

Actual cost Curve

Jan-2001

Feb-2001

Mar-2001

Apr-2001

May-2001

Jun-2001

Jul-2001

Project 2002 Mohammad Sherbini

Project Cost after 3 Months 50%

450,000.0 400,000.0 350,000.0 300,000.0 250,000.0 200,000.0 150,000.0 100,000.0 50,000.0 0.0

Budget Cost 172,118 SR Actual Cost 158,138 SR Earned Value 124,316 SR

Earned Value Curve

Jan-2001

Feb-2001

Mar-2001

Apr-2001

May-2001

Jun-2001

Jul-2001

Project 2002 Mohammad Sherbini

Cost Performance Index (CPI) at 50%.

CPI= Earned Value Actual Cost 124,316 158,138 0.786
Budget Cost 172,118 SR Actual Cost 158,138 SR Earned Value 124,316 SR

CPI=

Project 2002 Mohammad Sherbini

Schedule Performance Index (SPI) at 50%.

SPI= Earned Value Budget Cost 124,316 172,118 0.722
Budget Cost 172,118 SR Actual Cost 158,138 SR Earned Value 124,316 SR

SPI=

Project 2002 Mohammad Sherbini

Cost Variance (CV) at 50%.

CV= Actual Cost - Earned Value
Budget Cost 172,118 SR Actual Cost 158,138 SR Earned Value 124,316 SR

CV= 158,138 - 124,316 = 33,822 SR.

Project 2002 Mohammad Sherbini

Schedule Variance (SV) at 50%.

SV= Budget Cost - Earned Value
Budget Cost 172,118 SR Actual Cost 158,138 SR Earned Value 124,316 SR

SV= 172,118 - 124,316 = 47,802 SR.

Project 2002 Mohammad Sherbini

Estimate At Completion (EAC).

Lowest CPI EAC= Budget Value CPI
Budget Cost 172,118 SR Actual Cost 158,138 SR Earned Value 124,316 SR

386,396 SR. CPI EAC= = 491,597 SR. 0.786

Project 2002 Mohammad Sherbini

Estimate At Completion (EAC).

High -End SPI * CPI = 0.786 X 0.722 = 0.568 Budget Value CPI SPI EAC = SPI CPI = 386,396 0.568 = 680,248
Budget Cost 172,118 SR Actual Cost 158,138 SR Earned Value 124,316 SR

Project 2002 Mohammad Sherbini

Project Cost after 6 Months 100%

450,000.0 400,000.0 350,000.0 300,000.0 250,000.0 200,000.0 150,000.0 100,000.0 50,000.0 0.0

Budget Cost 386,396 SR Actual Cost 388,871 SR Earned Value 386,408 SR

Jan-2001

Feb-2001

Mar-2001

Apr-2001

May-2001

Jun-2001

Jul-2001

Project 2002 Mohammad Sherbini

4) Balanced Scorecard (BSC).

The balanced scorecard translate the organization s strategic objectives into a set of performance indicators. It monitors both the current performance and its efforts to improve processes, motivate and educate employees, and enhance its ability to learn and improve.

Project 2002 Mohammad Sherbini

Balanced Scorecard (BSC).

Strategic Perspectives
How do our Customers see us?

Customers

What must we excel at?

Financial

Mission Vision Strategy

Internal Business Processes

Do we get the best deal for our organization?

Learning And Growth

Do we continue to improve and create value?

Project 2002 Mohammad Sherbini

Who should measure Performance ?

Project Managers ? Project Account Controller ? Financial Manager ? Owner or Organization ?

Project 2002 Mohammad Sherbini

Whom to report to ?
To Organization . To Project Team Leader(s). To Project Team members.

Project 2002 Mohammad Sherbini

Useful References:
Guidelines for Performance Measurement. DOE/G/120.1-5.
Department of Energy, June 1996.

Program Performance Measures: Federal Agency Collection and Use of Performance Data. GAO/GGD-92-65. General Accounting
Office, May 1992.

Performance Measurement Guide. Department of Treasury, Financial

Management Service, 1993.

Fundamentals of Project Performance Measurement. By Kemps

Roberts.

Project 2002 Mohammad Sherbini

Institute for International Research

Project 2002
Measuring Projects Performance

Thank You
Email : Sherbini@medicom.com.sa GSM: +966 5 444 8713
Project 2002 Mohammad Sherbini