Chapter 10: Monitoring and Information Systems

Learning Objective
1. Explain the monitoring function, relating it to project planning and
control.
2. Identify the role of monitoring in the project implementation process.
3. Define the techniques for monitoring progress.
4. Differentiate the requirements for monitoring, the data needs, and
reporting considerations.
5. Describe the common project reporting problems.

Chapter Outline
10.1 The Introduction
 Monitoring is collecting, recording, and reporting information concerning
any and all aspects of project performance that the project manager or
others in the organization wish to know
 Our fundamental approach to evaluation and control of projects is that these
activities are, at base, the opposite sides of project selection and planning.
 For a continuously operating project selection system, monitoring the critical
project measures as the project proceeds through its life cycle.
 The other uses for monitoring (e.g., auditing, learning from past mistakes,
or keeping senior management informed), important as they are, must be
considered secondary to the control function when constructing the
monitoring system.
10.1 The Planning-Monitoring-Controlling Cycle
 Some organizations do not spend sufficient time and effort on planning and
controlling projects.
 It is far easier to focus on doing, “stop all the talk and get on with the work.”
The planning (budgeting and scheduling) methods we propose “put the
hassles up front.” It is useful to perceive the control process as a closed-
loop system.

I. Designing the Monitoring System

A. The first step in setting up any monitoring system is to
identify the key factors to be controlled.
B. The best sources of items to be monitored are the project
action plan and the risk management plan.
C. “Collect everything” is inappropriate as a monitoring policy.

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 II. How to Collect Data
A. It is necessary to define precisely what pieces of
information should be gathered.
B. A large proportion of all data collected takes one of the
following forms, each of which is suitable for some types
of measures.
a. Frequency counts- A simple tally of the
occurrence of an event.
b. Raw numbers- Dates, dollars, hours, physical
amounts of resources used
c. Subjective numeric ratings-These numbers are
subjective estimates, usually of a quality, made by
knowledgeable individuals or groups.
d. Indicators- When the PM cannot measure some
aspect of system performance directly, it may be
possible to find an indirect measure or indicator.
e. Verbal measures- Measures for such performance
characteristics

10.2 Information Needs and Reporting

 Information about the detail of a project should be monitor and reported

accordingly.
 The structure of the report should always reflect on the WBS

 The reporting process

A. The frequency of report should be enough to allow control to
be exerted during or before period in which the task is
scheduled for completion.
B. Every report should be available in times it is needed to use
and report should be scheduled in the project plan.
C. The nature of the monitoring report should be consistent with
the logic of the planning.
D. Benefits of detailed, timely report that delivered to the proper
people:
a. Mutual understanding of the goals of the project
b. Awareness of the progress of parallel activities and of
the problems associated with coordination among
activities
c. More realistic planning for the needs of all groups and
individuals working on the project
d. Understanding the relationships of individual tasks to
one another and to the overall project

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 e. Early warning signals of potential problems and delays
in the project
f. Minimizing the confusion associated with change by
reducing delays in communicating the change
g. Faster management action in response to
unacceptable or inappropriate work
h. Higher visibility to top management, including attention
directed to the immediate needs of the project
i. Keeping the client and other interested outside parties
up to date on project status, particularly regarding
project costs, milestones, and deliverables.

 Report types
A. Three types of report
a. Routine – It is issued on a regular basis. Senior used
periodic report while PM used a milestone report.
b. Exception - It is useful in two cases, first is they are
directly oriented to project management decision and
second, they may issue when a decision is made on an
exception basis
c. Special analysis - It is used to disseminate the result
of a special studies
 Meetings
A. Most often, reports are delivered in face-to-face meetings,
and in telephone conference calls.
B. A few simple rules can remove most of the pain associated
with project meetings.
a. Use meetings for making group decisions.
b. Have preset starting and stopping times
c. Make sure that you (and others) do your homework
prior to the meeting
d. If you chair the meeting, take your own minutes.
e. Avoid attributing remarks or viewpoints to individuals in
the minutes.
f. Avoid overly formal rules of procedure.
g. If a serious problem or crisis arises, call a meeting for
the purpose of dealing with that issue only.

 Common reporting
A. Three common difficulties in the design of project reports.
a. There is usually too much detail, both in the reports
themselves and in the input being solicited from
workers.

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 b. Poor interface between the project information system
and the parent firm’s information system.
c. Poor correspondence between the planning and the
monitoring systems.

10.3 Earned Value Analysis

 The monitoring of performance for the entire project is also crucial because
performance is the raison d’être of the project. One way of measuring
overall performance is by using an aggregate performance measure called
earned value.
 Earned value analysis has the same technique as Estimating Project
Budgets (Chapter 7) that also depends on actual costs early in the life of a
project is based on earned value analysis.

I. Earned Value Chart and Calculations

A. A serious difficulty with comparing actual expenditures against
budgeted or baseline expenditures for any given time period is
that the comparison fails to take into account the amount of work
accomplished relative to the cost incurred.
B. Making an overall estimate of the percent completion of a project
without careful study of each of its tasks and work units is not
sensible—though some people make such estimates
nonetheless.
a. There are several conventions used to aid in estimating
percent completion:
i. The 50–50 rule Fifty percent completion is assumed
when the task is begun, and the remaining 50
percent when the work is complete
ii. The 0–100 percent rule. This rule allows no credit
for work until the task is complete.
iii. Critical input use rule. This rule assigns task
progress according to the amount of a critical input
that has been used.
iv. The proportionality rule. This commonly used rule
is also based on proportionalities, but uses time (or
cost) as the critical input

II. MSP Variance and Earned Value Reports

A. It includes all the budget, actual, and earned value fi gures for
each work package in the project, as well as projections at
completion.

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 B. The three columns of data on the right, BAC, FAC, and Variance,
are “Budget at Completion,” “Forecast at Completion,” and the
Variance or difference between BAC and FAC.
C. For all activities that have been completed, BAC EV and FAC AC.
D. When the two work packages are completed, however, and if
there is still a cost variance, then BAC and FAC will no longer be
equal. For a completed work package, the cost variance EV – AC
BAC – FAC.

III. Milestone Reporting

A. Milestone reports serve to keep all parties up to date on what has
been accomplished.
B. If accomplishments are inadequate or late, these reports serve
as starting points for remedial planning.

10.4 Computerized PMIS (Project Management Information Systems)

 Diagramming, scheduling, and tracking all these tasks is clearly a job for
the computer, and computerized PMISs were one of the earlier business
applications for computers.
 With the development and proliferation of desktop (and laptop) computers,
and servers, and the corresponding availability of a wide variety of project
management software, project managers now use at least one PMIS.
 The PMIS trend has been to integrate the project management software
with spreadsheets, databases, word processors, communication, graphics,
and the other capabilities of Windows-based software packages.
 There exist a great number of computerized PMISs that are available for
PMs, with software evaluations occurring regularly in various magazines.
A. The most common error of this type is managing the PMIS rather
than the project itself. This and other such errors are described
by Thamhain (1987):
i. Computer paralysis - Excessive computer involvement
with computer activity replacing project management; loss
of touch with the project and its realities.
ii. PMIS verification - PMIS reports may mask real project
problems, be massaged to look good, or simply verify that
real problems exist, yet are not acted upon.
iii. Information overload - Too many reports, too detailed, or
the distribution of reports, charts, tables, data, and general
information from the PMIS to too many people overwhelms
managers and effectively hides problems.

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 iv. Project isolation - The PMIS reports replace useful and
frequent communication between the project manager and
top management, or even between the PM and the project
team.
v. Computer dependence - PM or top management wait for
the computer reports/results to react to problems rather than
being proactive and avoiding problems in the first place.
vi. PMIS misdirection - Due to the unequal coverage of the
PMIS, certain project subareas are over managed and other
areas receive inadequate attention; symptoms of problems
are monitored and managed (budget overruns, schedule
slippages), rather than the problems themselves.

I. Choosing Software
A. When choosing project management software, the potential user
should read several software surveys conducted with project
managers, for example, Fox et al., 1998 and Libratore et al., 2003.
B. Software that appeals to software specialists is not necessarily the
optimal choice for the PM.

o The following characteristics of generally desirable

attributes in project management software are based on
a number of user surveys and the comments of
experienced PMs.
i. Friendliness - For the novice user, this includes clear
and logical manuals, help screens, tutorials, a menu-
driven structure, easy editing, and so on.
ii. Schedules - Gantt charts are mandatory, as well as
automatic recalculation with updates of times, costs,
and resources.
iii. Calendars - Either a job shop and/or calendar dates
are necessary, plus the ability to indicate working days,
nonworking days, and holidays for each resource used.
iv. Budgets - The ability to include a budget for planning,
monitoring, and control.
v. Reports - Individualizing report formats is most
desirable.
vi. Graphics - The ability to see the schedule and
interactions is especially important.
vii. Charts - Charts for responsibility and histograms for
resources were deemed particularly useful.
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 viii. Migration - The ability to transfer data to and from
spreadsheets, word processors, database programs,
graphics programs, and desired add-on programs.
ix. Consolidation - ability to aggregate multiple projects
into a single database for determination of total
resource usage and detection of resource conflicts.

o Six areas of PMIS internal capabilities

i. Project planning
ii. Resource management
iii. Risk management
iv. Tracking/monitoring
v. Report generation
vi. Decision aiding

o A general PMIS selection process roughly based on Levine’s

excellent work (1987) is as follows:
i. Establish a comprehensive set of selection criteria,
considering capabilities in project planning, resource
management, tracking/monitoring, report generation,
earned value/variance analysis, risk management.
ii. Set priorities for the criteria, separating “must have”
items from “nice to have” items and “not needed” items.
iii. Conduct a preliminary evaluation of the software
packages relative to the criteria using vendor supplied
data, product reviews, and software surveys.
iv. Limit the candidate packages to three and obtain
demos of each, evaluating the vendors at the same
time in terms of interest, software maintenance, and
support.
v. Evaluate each package with a standard project typical
of your current and projected future needs.
vi. Negotiate on price, particularly if you are making a
volume purchase or contemplating a site license.

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Chapter Summary
 The key things to be planned, monitored, and controlled are time
(schedule), cost (budget), and performance (specifications).
 To identify the key factors to be controlled is the first step in setting up any
monitoring system.
 To gather and report data is the purpose of the monitoring system.
 The purpose of the control system is to act on the data.
 The relationship of project reports to the project action plan or WBS is the
key to the determination of both report content and frequency.
 The nature of the monitoring reports should be consistent with the logic of
the planning, budgeting, and scheduling systems.
 Three distinct types of reports: routine, exception, and special analysis.
 There are three common difficulties in the design of project reports: first,
there is usually too much detail, both in the reports themselves and in the
input being solicited from workers. Second, the poor interface between the
project information system and he parent fi rm’s information system. Third,
poor correspondence between the planning and the monitoring systems.
 Earned value analysis is the monitoring of performance for the whole task
is also essential because performance is the “raison d’être” of the project.
One way of measuring overall performance is by using an aggregate
performance measure called earned value.
 There are several conventions used to aid in estimating percent completion:
The 50–50 rule where the fifty percent completion is assumed when the task
is begun, and the remaining 50 percent when the work is complete.
 Also, we have the 0–100 percent rule where this rule allows no credit for
work until the task is complete. With this highly conservative rule, the project
always seems to be running late, until the very end of the project when it
appears to suddenly catch up.
 Critical input use rule where this rule ascribes task progress according to
the amount of a critical input that has been used. Apparently, the rule is
more exact if the task uses this input in direct amount to the true
development being made.
 The proportionality rule where usually used rule is also based on
proportionalities, but uses time or cost as the critical input. It thus splits
actual task time-to-date by the scheduled time for the task and/or actual
task cost-to-date by total cost task rate to calculate percent complete.
 There is also the milestone reporting that these reports show project status
at a specific time. They serve to keep all events up to date on what has
been accomplished. If actions are inadequate or late, these reports serve
as initial points for helpful planning.
 Project managers’ preferred PMIS features were friendliness, schedules,
calendars, budgets, reports, graphics, networks, charts, migration, and
consolidation.

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Assessment
A. Multiple choice.

1. This kind of level is need for a detailed information about the individual tasks
and the factors affecting such tasks.

a) Senior Management Level

b) Lower Level Management
c) Higher Level Management
d) Middle Level Management
2. It is used to disseminate the results of special studies conducted as part of the
project or as a response to special problems that arise during the project.

a) Report Analysis
b) Project Report
c) Project Plan Report
d) Special Analysis
3. The scheduled time for the work completed less the actual time.

a) Schedule Variance
b) Time Variance
c) Working Time
d) Working Variance

4. It is the most popular rule, probably because it is relatively fair and doesn’t
require the effort of attempting to estimate task progress.

a) The 50-50 Rule

b) The Critical Input Use Rule
c) The 50-100 Rule
d) The 0-100 Percent Rule
5. Individual task performance must be monitored carefully because the _______
and _______ between individual tasks is important.

a) Hour and Ability

b) Task and Coordination
c) Duration and Capability
d) Timing and Coordination

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B. Write TRUE if the statement is correct but if it’s false, change the
underlined word to make the whole statement true.

1. The measurement of project performance usually poses the most difficult data
gathering problem.
2. The data are usually hard to collect and are reported as events per unit time or
events as a percent of a standard number.
3. The monitoring systems focus mainly on time and cost as measures of
performance, not specifications.
4. Closely monitoring project work is often justified with the argument that keeping
close track of progress will reduce the amount of crashing required near the
end of the project.
5. In Subjective Numeric Ratings, numbers are objective estimates, usually of a
quality made by knowledgeable individuals or groups.

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