Project Management: A

Managerial Approach 4/e

By Jack R. Meredith and Samuel J. Mantel, Jr.

Published by John Wiley & Sons, Inc.

Presentation prepared by RTBM WebGroup

Project Management
A Managerial Approach

Chapter 11

Project Control
Project Control
Control is the last element in the
implementation cycle of planning-
monitoring-controlling
Control is focused on three elements
of a project
 Performance
 Cost
 Time
Chapter 11-1
Controlling Performance
 There are several things that can cause a
project’s performance to require control:
 Unexpected technical problems arise
 Insufficient resources are available when
needed
 Insurmountable technical difficulties are present
 Quality or reliability problems occur
 Client requires changes in specifications
 Interfunctional complications arise
 Technological breakthroughs affect the project
Chapter 11-2
Controlling Cost

 There are several things that can cause a

project’s cost to require control:
 Technical difficulties require more resources
 The scope of the work increase
 Initial bids were too low
 Reporting was poor or untimely
 Budgeting was inadequate
 Corrective control was not exercised in time
 Input price changes occurred

Chapter 11-3
Controlling Time
 There are several things that can cause a
project’s schedule to require control:
 Technical difficulties took longer than planned to
resolve
 Initial time estimates were optimistic
 Task sequencing was incorrect
 Required inputs of material, personnel, or
equipment were unavailable when needed
 Necessary preceding tasks were incomplete
 Customer generated change orders required rework
 Governmental regulations were altered
Chapter 11-4
Purposes of Control
 There are two fundamental objectives of
control:
 1. The regulation of results through the alteration
of activities
 2. The stewardship of organizational assets
 The project manager needs to be equally
attentive to both regulation and conservation
 The project manager must guard the physical
assets of the organization, its human
resources, and its financial resources
Chapter 11-5
 Physical Asset Control
 Requires control of the use of physical assets
 Concerned with asset maintenance, whether
preventive or corrective
 Also the timing of maintenance or replacement as
well as the quality of maintenance
 Setting up maintenance schedules in such a way as
to keep the equipment in operating condition while
minimizing interference to ongoing work
 Physical inventory whether equipment or material
must also be controlled

Chapter 11-6
Human Resource Control
 Stewardship of human resources
requires controlling and maintaining
the growth and development of people
 Projects provide fertile ground for
cultivating people
 Because projects are unique, it is
possible for people working on projects
to gain a wide range of experience in a
reasonably short period of time

Chapter 11-7
Financial Resource Control

 The techniques of financial control, both

conservation and regulation, are well
known:
 Current asset controls
 Project budgets
 Capital investment controls
 These controls are exercised through a
series of analyses and audits conducted
by the accounting/controller function
Chapter 11-8
Financial Resource Control
 Representation of the accounting/controlling
function on the project team is mandatory
 The parent organization is responsible for
the conservation and proper use of
resources owned by the client or charged to
the client
 Due diligence requires that the organization
proposing a project conduct a reasonable
investigation, verification, and disclosure of
all material facts relevant to the firm’s ability
to conduct the project Chapter 11-9
Three Types of Control
Processes

Decisions must be made concerning:

 At what points in the project will control
be exerted
 What is to be controlled
 How it will be measured
 How much deviation will be tolerated
 How to spot and correct potential
deviations before they occur
Chapter 11-10
Three Types of Control
Processes

 No matter what the purpose in

controlling a project there are two
basic types of control mechanisms
that can be used:
 Go/no-go control
 Post control
 Cybernetic control is a third, but less
common control mechanism that is
rarely directly applicable to projects.
Chapter 11-11
Go/No-go Controls
 Take the form of testing to see if some
specific precondition has been met
 Most of the control in project management
falls into this category
 This type of control can be used on almost
every aspect of a project
 Must exercise judgment in the use of go/no-
go controls
 Go/no-go controls operate only when and if
the controller uses them
Chapter 11-12
Information Requirements for
Go/no-go Controls

 The project proposal, plans specifications,

schedules and budgets contain all the
information needed to apply go/no-go
controls to the project
 Milestones are the key events that serve as
a focus for ongoing control activity
 These milestones are the project’s
deliverables in the form of in-process output
or final output
Chapter 11-13
Postcontrol
 Postcontrols are applied after the fact
 Directed toward improving the chances for
future projects to meet their goals
 It is applied through a relatively formal
document that contains four distinct
sections:
 The project objectives
 Milestones, checkpoints, and budgets
 The final report on project
 Recommendations for performance and process
improvement Chapter 11-14
Characteristics of a Control
System
 A good control system:
 Should be flexible
 Should be cost effective
 Must be truly useful
 Must satisfy the real needs of the project
 Must operate in a timely manner
 Sensors and monitors should be sufficiently
accurate and precise to control the project within
the limits that are functional for the client and
parent organization
Chapter 11-15
Characteristics of a Control
System

 A good control system (cont.):

 Should be as simple as possible
 Should be easy to maintain
 Should be capable of being extended or
otherwise altered
 Should be fully documented when installed
 the documentation should include a complete training
program in system operation

Chapter 11-16
Control Systems
 All control systems use feedback as a control
process
 The control of performance, cost, and time
usually require different input data:
 Performance - engineering change notices, test
results, quality checks, rework tickets, scrap rates
 Cost - budgets to actual cash flows, purchase
orders, absenteeism, income reports, labor hour
charges, accounting variance reports
 Schedule - benchmark reports, status reports,
PERT/CPM networks, earned value graphs, Gantt
charts, WBS, and action plans Chapter 11-17
Control Tools
 Some of the most important tools available for
the project manager to use in controlling the
project are variance analysis and trend
projection
 A budget plan or expected growth curve of
time or cost for a certain task is plotted
 Actual values are plotted as a dashed line as
the work is actually finished
 At each point in time a new projection from
the actual data is used to forecast what will
occur in the future Chapter 11-18
Control Tools

Trend projection

Chapter 11-19
Critical Ratio Control Charts

 The critical ratio is made up of two parts:

 The ratio of actual progress to scheduled
progress
 The ratio of budgeted cost to actual cost
 The critical ratio is a good measure of the
general health of the project
 By combining two ratios, it weighs them
equally, allowing a “bad” ratio to be offset
by a “good” ratio
Chapter 11-20
Critical Ratio
Task Actual Schedule Budgeted Actual Critcal
d
Number Progres Cost Cost Ratio
s Progress
1 (2 / 3) X (6 / 4) = 1.0

2 (2 / 3) X (6 / 6) = .67

3 (3 / 3) X (4 / 6) = .67

4 (3 / 2) X (6 / 6) = 1.5

5 (3 / 3) X (6 / 4) = 1.5

Chapter 11-21
Critical Ratio

Critical ratio control chart

Chapter 11-22
Benchmarking
A recent addition to the arsenal of of
project control tools is benchmarking
Benchmarking makes comparisons to “best
in class” practices across organizations
Some successful organizations have been
benchmarked on their best practices and
key success factors for projects being
conducted in functional organizations

Chapter 11-23
Best Practices and Keys to
Success
There were four major areas found to
help projects in functional organizations:
 Promoting the benefits of project
management
 Personnel pay for project management skills
and high risk projects through bonuses,
stock options, and other incentives
 Methodology
 Results of project management

Chapter 11-24
Control as a Function of
Management
 The purpose of controlling is always the
same: to bring the actual schedule, budget,
and deliverables of the project into
reasonably close congruence with the
planned schedule, budget, and deliverables

 The job of the project manager is to set

controls that will encourage those
behaviors that are deemed desirable and
discourage those that are not
Chapter 11-25
Cybernetic Controls
Cybernetic control is a system of control
through which a critical resource is held at
the desired level by a self-regulating
mechanism.
For cybernetic control to work, standards
must be set, actual results must be reliably
measured, standards and results must
be compared and the resulting comparison
must be feedback to management for
action. Chapter 11-26
 Go/No-go Controls
 Response to go/no-go controls tends to be
neutral or negative
 “Barely good enough” results are just as
acceptable as “perfect” results
 The system makes it difficult for the worker
to take pride in high quality work because
the system does not recognize gradations of
quality
 The fact that this kind of control emphasizes
“good enough” performance is no excuse for
the nonchalant application of carelessChapter 11-27
 Postcontrols
 Postcontrols are seen as much the same as
a report card
 They may serve as the basis for reward or
punishment, but they are received too late
to change current performance
 Because postcontrols are placed on the
process of conducting a project, they may
be applied to such areas as: communication,
cooperation, quality of project management,
and the nature of interaction with the client
Chapter 11-28
Balance in a Control System
 General features of a balanced control system:
 Built with cognizance of the fact that investment in
control is subject to sharply diminishing returns
 Recognizes that as control increases past some
point, innovative activity is more and more
damped, and then finally shut off completely
 Directed toward the correction of error rather than
toward punishment
 Exerts control only to the degree required to
achieve its objectives
 Utilizes the lowest degree of hassle consistent with
accomplishing its goals Chapter 11-29
Control of Creative Activities
 The more creativity involved, the greater the degree
of uncertainty surrounding outcomes
 Too much control tends to inhibit creativity
 Control is not necessarily the enemy of creativity, nor
does creative activity imply complete uncertainty of
 There are three general approaches to control
creative projects:
 Progress review
 Personnel reassignment
 Control of input resources

Chapter 11-30
Progress Review
 The progress review focuses on the process
of reaching outcomes rather than on the
outcomes per se
 The process is controllable even if the
precise results are not
 Control should be instituted at each project
milestone
 The object of control is to ensure that the
research design is sound and is being
carried out as planned or amended
Chapter 11-31
Personnel Reassignment
 This type of control is straightforward -
individuals who are productive are kept
 Those who are not, are moved to other
jobs or to other organizations
 While it is not difficult to identify those
who fall in the top and bottom quartiles, it
is usually quite hard to make clear
distinctions between the people in the
middle quartiles
Chapter 11-32
Control of Input Resources

 The focus is on efficiency

 The ability to manipulate input resources
carries with it considerable control over
output
 Considerable resource expenditure may
occur with no visible results, but suddenly
many outcomes may be delivered
 The milestones for application of resource
control must be chosen with great care
Chapter 11-33
 Control of Change and Scope
Creep
 Coping with changes and changing priorities is
perceived as the most important single problem
facing the project manager
 The most common changes are due to the
natural tendency of the client and project team
members to try to improve the product or service
 The later these changes are made in the project,
the more difficult and costly they are to complete
 Without control, a continuing accumulation of
little changes can have a major negative impact
on the project’s schedule and cost
Chapter 11-34
Control of Change and Scope
Creep
 The project manager’s best hope is to control
the process by which change is introduced and
accomplished
 This can be done with a formal change control
system that is able to:
 Review all requested changes and identify all task
impacts
 Translate those impacts into project performance, cost,
and schedule
 Evaluate the benefits and costs of the requested
changes
 Accept or reject the changes and communicate to all
concerned parties Chapter 11-35
 Ensure that changes are implemented properly
Effective Change Control
Procedure
 The following guidelines, applied with
reasonable rigor, can be used to effectively
control changes:
 1. All project contracts or agreements must include a
description of how requests for a
change in the project’s plan, budget,
schedule, and/or deliverables, will be
introduced and processed
 2. Any change in a project will be in the form of a
change order that will include a description of
the agreed-upon change together with any
changes in the plan, budget, schedule, and/or
deliverables that result from the changeChapter 11-36
Effective Change Control
Procedure
 3. Changes must be approved, in writing, by the
client’s agent as well as by an appropriate
representative of senior management of
the firm responsible for carrying out the project
 4. The project manager must be consulted on all
desired changes prior to the preparation and
approval of the change order. The
project manager’s approval, however, is not
required
 5. Once the change order has been completed and
approved, the project master plan should be
amended to reflect the change, and the
change order becomes part of the master plan
Chapter 11-37
Summary

Control is directed to performance,

cost, and time
The two fundamental purposes of
control are to regulate results through
altering activity and to conserve the
organization’s physical, human, and
financial assets
The two main types of control
processes are go/no-go and postcontrol
Chapter 11-38
Summary
The postcontrol report contains four
sections:
 Project objectives
 Milestones and budgets
 Final project results
 Recommendations for improvement+
The trend projection curve, critical
ratios, and the control chart are
useful control tools Chapter 11-39
Summary

 Control systems have a close relationship

to motivation and should be well-
balanced: that is cost effective,
appropriate to the desired end results,
and not overdone
 Three approaches to the control of
creativity are progress review, personnel
reassignment, and control of inputs
 The biggest single problem facing a
project manager is the control of change
Chapter 11-40
Project Control

Questions?

Chapter 11-41
Project Control

Picture Files
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Figure 11-7
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Figure 11-8
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Figure 11-9
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Table Files
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