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Project Change impacts on KPIs

2 replies [Last post]
Tue, 2017-05-23 16:47
Emma Lang
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I have a project which is around 4 months old. The budget was set very early on and I now have KPIs (Planned, Earned, Actuals, SPI / CPI etc) set up which are measured against the baseline of the project. We have identified a number of changes to the baseline scope. These have been agreed by the project team and new hours allocated to the project. The impact to the project can be clearly seen as it is already behind schedule, currently showing an SPI of 0.75!

I am trying to figure out what the best practice is in terms of the KPIs. Earned Value is measured against the baseline planned to date.

  • Should I be adding the new hours into the project? Using P6 this doesn't really work as I cannot get a reading on the Earned Value Labour Units because these hours have not been added to the baseline. 
  • If I am to rebaseline, this will make my project look as if it all on track whereas in reality it is not. 

The current work around for the project is to produce one set of KPIs showing all actuals booked to the project and a separate set of KPIs removing the hours which have been spent specifically on the change activities. 

Any advice would be appreciated.

Thanks

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Replies

Thu, 2017-05-25 16:32
#1
Rafael Davila
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Earned value method as a tool for project control

-  "If the project is to be managed consciously, these occurrences should be then investigated into by means of more accurate methods."

Too much emphasis on KPIs can be misleading, they are what they are, overly simplified measures that do not tell the whole story. As said in the referenced article Best Practice is to use EV KPIs as a reference among many and investigate occurrences by means of more accurate methods. 

The use of EVM from CPM Schedule as a payment tool on fixed price contracts can be a drag.

EVA does not distinguish between the works done on critical activities and activities with sufficient floats. A project could be late but EVA will not notice this problem if Earned Value exceeds Planned Value.  Keep in mind some EV metrics are flawed such as SPI but EV still might have some value, in such case use EV KPIs but do not overlook other KPIs.

We keep a table in Excel a list of the KPIs values as periodically reported. We keep comments on the cells whose values are of concern as the mere values do not tell the whole story, here some analysis is in order.  If your software does not provide for trend analysis here is a good place to look and record trends of concern. 

Among other KPIs to Consider:

  • Management decisions shall be based on trend analysis. Follow KPIs for Probability trends.
  • Change Orders are of major concern.  Follow KPIs regarding staus of Change Orders.
    • Number of approved Change Orders to date.
    • Number of pending Change Orders.
    • Average time to reach Change Order approval.
    • Time value of Change Orders to Date.
    • Cost value of Change orders to date.
    • Approved Change Order value as % of original contract.
    • Approved Change Order time extension as % of original contract duration.
    • Potential Time value of pending Change Orders.
    • Potential Cost value of pending Change Orders. 

  • Schedule Margin

  • Other Project Control metrics [Project Control Methodology] shall also be reported, among them
    • Time Buffers
      • Cost Buffers
      • Activities with high Criticality Index. 

For rebaseline the following link might give you some clues.

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Wed, 2017-05-24 12:40
#2
Zoltan Palffy
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  • Should I be adding the new hours into the project? Using P6 this doesn't really work as I cannot get a reading on the Earned Value Labour Units because these hours have not been added to the baseline. 

yes you should add new hours for NEW work including new actvities based on changes. This is the whole point you want to see the added manhours and durations this is where you will get a time extension basesd on a TIA.

  • If I am to rebaseline, this will make my project look as if it all on track whereas in reality it is not. When you get a time extension this will be the basis for your REVISED baseline.
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