Earned value and project management deliverables

[Jan M.]

I’m wondering about how to represent project management tasks in MS Project.
I’ve come to thinking to keep those tasks in a separate plan:

1)Most of planning effort occurs before the plan is baselined.
2)If you use a hammock task for project management activities, the work load
is levelled on all duration of the project, but actual work is not likely to
occur in a levelled way. The effect is the earned value indicators
“contaminated” by project management deliverables which don’t really add
value to the project.

I’d like to know how you people are dealing with project management
deliverables:

1)Hammock task or very detailed tasks (ex.: recurring tasks for meeting)?
2)Do you baseline them? If so, when?
3)Are those activities included in the plan? Are they tracked in a separate
file if tracked at all?

Thanks

[John]

I’m wondering about how to represent project management tasks in MS Project.
1)Most of planning effort occurs before the plan is baselined.
2)If you use a hammock task for project management activities, the work load
is levelled on all duration of the project, but actual work is not likely to
occur in a levelled way. The effect is the earned value indicators
“contaminated” by project management deliverables which don’t really add
value to the project.
I’d like to know how you people are dealing with project management
1)Hammock task or very detailed tasks (ex.: recurring tasks for meeting)?
2)Do you baseline them? If so, when?
3)Are those activities included in the plan? Are they tracked in a separate
file if tracked at all?
Thanks

Jan,
I can give you my perspective, I'm sure other people have a different
view.

Project Management (PM) activities are definitely part of the overall
project just like the efforts of many service activities. There are
general activities that are performed whether the project exists or not.
For example, a PM must maintain contact and continuity with the
corporate PM structure. These type of activities are covered by overhead
(included in the bid rate and eventual price to the customer) and are
NOT included in the project plan because they are not specific to any
particular project. Other PM activities however are specific to a
project. For example, developing, maintaining, tracking and reporting
project schedules. Often there is not a specific deliverable or
"product" other than perhaps a contractually required periodic report or
similar.

The specific project PM activities can be grouped into a Level of Effort
(LOE) type task. LOE tasks are shown on the project schedule, they are
baselined and they are tracked, although LOE activities always have a
CPI and SPI of 1.0 because credit is taken simply for "existing".
Because of this fact, the total amount of LOE allowed in a project must
be limited and closely monitored to insure the LOE activity is still
valid and applicable.

Program Management activities (and any other directly relatable project
activities) should be included in the project plan and not put into a
separate file or plan. If handled outside the main project, part of the
program cost is lost (or at least not directly accounted).

We never use hammock tasks. Rather, we schedule LOE activities on a
month by month basis (our reporting period is monthly). Resource
leveling never enters the picture because LOE activities are level
loaded and the loading for each reporting period can be tailored when
the plan is initially developed. And showing LOE activities in discrete
reporting period portions makes it very easy to adjust the LOE part of
the project plan downstream. If there are specific PM deliverables,
(e.g. periodic contract reports), they can be shown separately on the
overall project schedule. They are no different than any other program
deliverable that is tracked.

This is my perspective. I hope it helps.
John
Project MVP

[Jan M.]

John,

Thanks for such a complete answer!

Here are a couple of questions:

-Can you develop a little on "scheduling LOE on a month by month basis"? Are
you referring to recurring tasks?

-I'm not sure I understand what you say by LOE activities are level loaded.

-I agree with you CPI and SPI of LOE tasks should be kept at 1. I just don't
know how to do it in MS Project: I use MS Project to calculate earned value
and I track actual work in MS Project, so I can't see how I can keep EV,PV
and AC equals all the time. I'd like to avoid exporting data to another
application to calculate earned value.

Thanks

Jan M.

Post by John

I’m wondering about how to represent project management tasks in MS Project.
1)Most of planning effort occurs before the plan is baselined.
2)If you use a hammock task for project management activities, the work load
is levelled on all duration of the project, but actual work is not likely to
occur in a levelled way. The effect is the earned value indicators
“contaminated” by project management deliverables which don’t really add
value to the project.
I’d like to know how you people are dealing with project management
1)Hammock task or very detailed tasks (ex.: recurring tasks for meeting)?
2)Do you baseline them? If so, when?
3)Are those activities included in the plan? Are they tracked in a separate
file if tracked at all?
Thanks

Jan,
I can give you my perspective, I'm sure other people have a different
view.
Project Management (PM) activities are definitely part of the overall
project just like the efforts of many service activities. There are
general activities that are performed whether the project exists or not.
For example, a PM must maintain contact and continuity with the
corporate PM structure. These type of activities are covered by overhead
(included in the bid rate and eventual price to the customer) and are
NOT included in the project plan because they are not specific to any
particular project. Other PM activities however are specific to a
project. For example, developing, maintaining, tracking and reporting
project schedules. Often there is not a specific deliverable or
"product" other than perhaps a contractually required periodic report or
similar.
The specific project PM activities can be grouped into a Level of Effort
(LOE) type task. LOE tasks are shown on the project schedule, they are
baselined and they are tracked, although LOE activities always have a
CPI and SPI of 1.0 because credit is taken simply for "existing".
Because of this fact, the total amount of LOE allowed in a project must
be limited and closely monitored to insure the LOE activity is still
valid and applicable.
Program Management activities (and any other directly relatable project
activities) should be included in the project plan and not put into a
separate file or plan. If handled outside the main project, part of the
program cost is lost (or at least not directly accounted).
We never use hammock tasks. Rather, we schedule LOE activities on a
month by month basis (our reporting period is monthly). Resource
leveling never enters the picture because LOE activities are level
loaded and the loading for each reporting period can be tailored when
the plan is initially developed. And showing LOE activities in discrete
reporting period portions makes it very easy to adjust the LOE part of
the project plan downstream. If there are specific PM deliverables,
(e.g. periodic contract reports), they can be shown separately on the
overall project schedule. They are no different than any other program
deliverable that is tracked.
This is my perspective. I hope it helps.
John
Project MVP

[John]

In article <7AF716A6-EFCA-49FC-B2CA-***@microsoft.com>,
Jan M. <***@discussions.microsoft.com> wrote:
Jan,

Post by Jan M.
John,
Thanks for such a complete answer!

You're welcome

Post by Jan M.
-Can you develop a little on "scheduling LOE on a month by month basis"? Are
you referring to recurring tasks?

Month by month LOE tasks may or may not be considered "recurring". It's
kind of a matter of interpretation. Let's say the project needs a PM for
all of 2005 (i.e. Jan 3 through Dec 30). This particular PM effort has
no specific deliverables so the whole year"s effort is considered LOE. I
would set up a series of tasks, one each month, with perhaps the Task
Names of: "Perform PM support for Jan", "Perform PM support for Feb",
etc. Are those recurring tasks, yeah, probably so. Whether the tasks are
planned using the recurring task function of Project or whether they are
entered discretely is a matter of user choice.

Post by Jan M.
-I'm not sure I understand what you say by LOE activities are level loaded.

After thinking more about my answer on this, LOE does NOT necessarily
need to be level loaded. Normally it would be but perhaps there is more
intensive LOE activity toward the beginning or end of a month and less
in the middle. In this case, a contour could be applied but I'm not sure
that it matters a whole lot because if the task is LOE, taking "credit"
is automatic and since status is on a monthly basis, it doesn't really
matter that more hours were actually accrued in the first and last week
of the month. Another scenario could however be that on a particular
project there is more PM activity during certain months (e.g. preparing
for quarterly reviews). In that case, resource loading need not be the
same for all months in the year. Each month is loaded flat but months
are not loaded the same.

Post by Jan M.
-I agree with you CPI and SPI of LOE tasks should be kept at 1. I just don't
know how to do it in MS Project: I use MS Project to calculate earned value
and I track actual work in MS Project, so I can't see how I can keep EV,PV
and AC equals all the time. I'd like to avoid exporting data to another
application to calculate earned value.

Once again I was a little to hasty in my response. For LOE tasks, SPI is
guaranteed to always be "1", but CPI is not. (We actually had a case
where one of our support activities had a ballooning positive CPI. Their
support was planned as LOE but no one actually worked on the task. It
wasn't discovered for a few months because their piece of the program
was overshadowed by activities with much larger budgets. Obviously we
had to re-think and re-plan their whole support activity in light of the
fact that a significant portion of their "budget" had been "blown").

For LOE tasks SPI is guaranteed to be "1" because "credit" is given for
simply existing (e.g. the PM was at work and therefore supported the
program this month), hence BCWP is always equal to BCWS. In our system,
all performers, except those under LOE, reported status. Tasks covered
by LOE were automatically credited by the system - no user statusing
required.

Hopefully, this clarifies some things.

John
Project MVP

Post by Jan M.
Thanks
Jan M.

[Jan M.]

John,

what did you do to make sure BWCP equals BWCS in MS Project? I thought of
using Tools/Tracking/Update project/Update work as complete to.../Set 0%-100%
complete/Selected tasks. Is that the way you did it?

My only problem right now would be with people not statusing LOE tasks. I
understand LOE tasks should be given credit simply by existing:this is fine
as far as earned value calculations are concerned, but what about tracking
actual hours worked? Don't they affect your budget? And this info should
prove useful for future planning. How did you manage that?

Thanks.

Jan M.

Post by John
Jan,

Post by Jan M.
John,
Thanks for such a complete answer!

You're welcome

Post by Jan M.
-Can you develop a little on "scheduling LOE on a month by month basis"? Are
you referring to recurring tasks?

Month by month LOE tasks may or may not be considered "recurring". It's
kind of a matter of interpretation. Let's say the project needs a PM for
all of 2005 (i.e. Jan 3 through Dec 30). This particular PM effort has
no specific deliverables so the whole year"s effort is considered LOE. I
would set up a series of tasks, one each month, with perhaps the Task
Names of: "Perform PM support for Jan", "Perform PM support for Feb",
etc. Are those recurring tasks, yeah, probably so. Whether the tasks are
planned using the recurring task function of Project or whether they are
entered discretely is a matter of user choice.

Post by Jan M.
-I'm not sure I understand what you say by LOE activities are level loaded.

After thinking more about my answer on this, LOE does NOT necessarily
need to be level loaded. Normally it would be but perhaps there is more
intensive LOE activity toward the beginning or end of a month and less
in the middle. In this case, a contour could be applied but I'm not sure
that it matters a whole lot because if the task is LOE, taking "credit"
is automatic and since status is on a monthly basis, it doesn't really
matter that more hours were actually accrued in the first and last week
of the month. Another scenario could however be that on a particular
project there is more PM activity during certain months (e.g. preparing
for quarterly reviews). In that case, resource loading need not be the
same for all months in the year. Each month is loaded flat but months
are not loaded the same.

Post by Jan M.
-I agree with you CPI and SPI of LOE tasks should be kept at 1. I just don't
know how to do it in MS Project: I use MS Project to calculate earned value
and I track actual work in MS Project, so I can't see how I can keep EV,PV
and AC equals all the time. I'd like to avoid exporting data to another
application to calculate earned value.

Once again I was a little to hasty in my response. For LOE tasks, SPI is
guaranteed to always be "1", but CPI is not. (We actually had a case
where one of our support activities had a ballooning positive CPI. Their
support was planned as LOE but no one actually worked on the task. It
wasn't discovered for a few months because their piece of the program
was overshadowed by activities with much larger budgets. Obviously we
had to re-think and re-plan their whole support activity in light of the
fact that a significant portion of their "budget" had been "blown").
For LOE tasks SPI is guaranteed to be "1" because "credit" is given for
simply existing (e.g. the PM was at work and therefore supported the
program this month), hence BCWP is always equal to BCWS. In our system,
all performers, except those under LOE, reported status. Tasks covered
by LOE were automatically credited by the system - no user statusing
required.
Hopefully, this clarifies some things.
John
Project MVP

Post by Jan M.
Thanks
Jan M.

[John]

Post by Jan M.
John,
what did you do to make sure BWCP equals BWCS in MS Project? I thought of
using Tools/Tracking/Update project/Update work as complete to.../Set 0%-100%
complete/Selected tasks. Is that the way you did it?
My only problem right now would be with people not statusing LOE tasks. I
understand LOE tasks should be given credit simply by existing:this is fine
as far as earned value calculations are concerned, but what about tracking
actual hours worked? Don't they affect your budget? And this info should
prove useful for future planning. How did you manage that?
Thanks.
Jan M.

Jan,
Sorry for the delay in responding - other priorities got in the way.

The best method for updating an LOE task is to use the process you
mentioned (i.e. Tools/Tracking/Update Project). If you have a lot of LOE
tasks, you could apply a filter for them and then update them as a group.

Actual Work (or Actual Cost) in Project is really a misnomer, at least
in my opinion. It is a calculated field based on the Work and the % Work
Complete values input by the user. It should as a minimum be a user
input field. I think Microsoft tried to somewhat counter this issue by
adding the % Physical field in Project 2003. I haven't studied or used
it enough to know if it helps.

At our company, our total earned value analysis was actually done in
another application - Microframe's MPM. The basic Project data was
planned in Project and then uploaded to MPM at the program start. Cost
Account Managers (CAMs) tracked their progress in their Project file and
then on a monthly basis status data was uploaded into MPM and combined
with actual data from the timekeeping system to calculate earned value
metrics. Therefore, we in fact did have "actual" work and cost. If I
were trying to do everything in Project, I would probably first take a
hard look at whether % Physical Complete could help or more likely, I
would use custom fields (with formulas or VBA) to input actual data and
calculate earned value metrics.

Actual values do not affect the budget but they do effect how much of
the budget is remaining. In our world, budget is a fixed value
determined by customer/management/CAM negotiations. It is the top level
baseline value for each CAM's part of the overall program. Actuals go
against the budget and in the end determine whether the task came in on,
over, or under (atta boy!) budget. If necessary, and a valid case can be
made, the CAM can formally request a budget increase (i.e. increased
scope, unknown unknowns, etc.). In some cases, "unused budget" is taken
from one CAM and given to another CAM, using very formalized rules and
customer approval.

One of the best tools I had for estimating a new program was historical
data from previous programs. This consisted of data from our accounting
system and was in the form of actual hours against a particular charge
number. With that data, all I had to do was present a reasonable
relationship for a complexity factor. For example, on a previous program
if it took 10,000 hours to design a widget, I might say that on the
proposed program the widget is 1.5 times more complex and therefore will
take 15,000 hours. Historical data is great. It may not mean much for
predicting in the stock market, but for tangible labor effort, it is
invaluable.

Hope this helps.
John
Project MVP

[Jan M.]

John,

I forgot to tell you that we are using Project Server to track our projects.
Team members are updating actual and remaining work so %Work complete is
calculated by MS Project. That's why I'm having a hard time with those LOE
tasks: I still don't know how to track actual work in one hand, and "give
credit simply for existing" on the other hand.

I am not satisfied with MS Project as far as earned value is concerned. I
see that you are using another application to calculate earned value, can I
ask why is that?

I have read great books about MS Project and great books about earned value,
but still, I haven't found a good one about using earned value with MS
Project. Please let me know if you are aware of such a book.

Jan M.

Post by John

Post by Jan M.
John,
what did you do to make sure BWCP equals BWCS in MS Project? I thought of
using Tools/Tracking/Update project/Update work as complete to.../Set 0%-100%
complete/Selected tasks. Is that the way you did it?
My only problem right now would be with people not statusing LOE tasks. I
understand LOE tasks should be given credit simply by existing:this is fine
as far as earned value calculations are concerned, but what about tracking
actual hours worked? Don't they affect your budget? And this info should
prove useful for future planning. How did you manage that?
Thanks.
Jan M.

Jan,
Sorry for the delay in responding - other priorities got in the way.
The best method for updating an LOE task is to use the process you
mentioned (i.e. Tools/Tracking/Update Project). If you have a lot of LOE
tasks, you could apply a filter for them and then update them as a group.
Actual Work (or Actual Cost) in Project is really a misnomer, at least
in my opinion. It is a calculated field based on the Work and the % Work
Complete values input by the user. It should as a minimum be a user
input field. I think Microsoft tried to somewhat counter this issue by
adding the % Physical field in Project 2003. I haven't studied or used
it enough to know if it helps.
At our company, our total earned value analysis was actually done in
another application - Microframe's MPM. The basic Project data was
planned in Project and then uploaded to MPM at the program start. Cost
Account Managers (CAMs) tracked their progress in their Project file and
then on a monthly basis status data was uploaded into MPM and combined
with actual data from the timekeeping system to calculate earned value
metrics. Therefore, we in fact did have "actual" work and cost. If I
were trying to do everything in Project, I would probably first take a
hard look at whether % Physical Complete could help or more likely, I
would use custom fields (with formulas or VBA) to input actual data and
calculate earned value metrics.
Actual values do not affect the budget but they do effect how much of
the budget is remaining. In our world, budget is a fixed value
determined by customer/management/CAM negotiations. It is the top level
baseline value for each CAM's part of the overall program. Actuals go
against the budget and in the end determine whether the task came in on,
over, or under (atta boy!) budget. If necessary, and a valid case can be
made, the CAM can formally request a budget increase (i.e. increased
scope, unknown unknowns, etc.). In some cases, "unused budget" is taken
from one CAM and given to another CAM, using very formalized rules and
customer approval.
One of the best tools I had for estimating a new program was historical
data from previous programs. This consisted of data from our accounting
system and was in the form of actual hours against a particular charge
number. With that data, all I had to do was present a reasonable
relationship for a complexity factor. For example, on a previous program
if it took 10,000 hours to design a widget, I might say that on the
proposed program the widget is 1.5 times more complex and therefore will
take 15,000 hours. Historical data is great. It may not mean much for
predicting in the stock market, but for tangible labor effort, it is
invaluable.
Hope this helps.
John
Project MVP

[John]

Post by Jan M.
John,
I forgot to tell you that we are using Project Server to track our projects.
Team members are updating actual and remaining work so %Work complete is
calculated by MS Project. That's why I'm having a hard time with those LOE
tasks: I still don't know how to track actual work in one hand, and "give
credit simply for existing" on the other hand.
I am not satisfied with MS Project as far as earned value is concerned. I
see that you are using another application to calculate earned value, can I
ask why is that?
I have read great books about MS Project and great books about earned value,
but still, I haven't found a good one about using earned value with MS
Project. Please let me know if you are aware of such a book.
Jan M.

Jan,
I don't use Project Server so I don't know if it has better features for
handling actuals but I doubt it. The basics of Project, including earned
value calculations, are going to be the same whether it is Project
Standard, Project Professional or Project Server.

As I said in my previous response, if you want to track actuals for LOE
type tasks in Project you will need to use spare fields with formulas or
use VBA. With the "standard" earned value fields in Project I know of no
way to take full credit (BCWP) and not have Project also automatically
take full credit for cost (ACWP). I suppose it is possible to jockey the
Work field each month to allow SPI to be "1" and yet have CPI track to
the actuals but that seems pretty mickey mouse to me.

In our case I don't know if MicroFrame's MPM came first or Project came
first as far as using either as our scheduling/earned value
applications. My guess is that MPM is much better suited to working with
corporate financial systems, while Project is much better suited for use
by CAMs to plan and track their project activities.

I'm not big on reading books so I don't have any knowledge of or
recommendations about books or articles about earned value in MS
Project. Maybe someone else will jump in with a suggestion or two.

John
Project MVP

[Jan M.]

Thanks a lot John.

Jan M.

Post by John

Post by Jan M.
John,
I forgot to tell you that we are using Project Server to track our projects.
Team members are updating actual and remaining work so %Work complete is
calculated by MS Project. That's why I'm having a hard time with those LOE
tasks: I still don't know how to track actual work in one hand, and "give
credit simply for existing" on the other hand.
I am not satisfied with MS Project as far as earned value is concerned. I
see that you are using another application to calculate earned value, can I
ask why is that?
I have read great books about MS Project and great books about earned value,
but still, I haven't found a good one about using earned value with MS
Project. Please let me know if you are aware of such a book.
Jan M.

Jan,
I don't use Project Server so I don't know if it has better features for
handling actuals but I doubt it. The basics of Project, including earned
value calculations, are going to be the same whether it is Project
Standard, Project Professional or Project Server.
As I said in my previous response, if you want to track actuals for LOE
type tasks in Project you will need to use spare fields with formulas or
use VBA. With the "standard" earned value fields in Project I know of no
way to take full credit (BCWP) and not have Project also automatically
take full credit for cost (ACWP). I suppose it is possible to jockey the
Work field each month to allow SPI to be "1" and yet have CPI track to
the actuals but that seems pretty mickey mouse to me.
In our case I don't know if MicroFrame's MPM came first or Project came
first as far as using either as our scheduling/earned value
applications. My guess is that MPM is much better suited to working with
corporate financial systems, while Project is much better suited for use
by CAMs to plan and track their project activities.
I'm not big on reading books so I don't have any knowledge of or
recommendations about books or articles about earned value in MS
Project. Maybe someone else will jump in with a suggestion or two.
John
Project MVP

[John]

Post by Jan M.
Thanks a lot John.
Jan M.

Jan,
You're welcome.

John

[Steve House [Project MVP]]

Couple of comments

I think of "budget" for earned value purposes as meaning "projected actual
cost" and not an amount we're allowed to spend by senior managment - bottom
up as opposed to top down budgeting in other words. As I just posted in
another thread, if your task is to produce 100 fids, you estimate it will
take 40 man-hours and your resource costs $10/hour, the BAC is really
measuring the projected cost per fid, $4.00 in this case. BCWS is the
estimated cost of the number of fids you expected to make by the status
date, BCWP is the estimated cost of the number of fids you actually DID make
by the status date, and ACWP is the amount you actually PAID to make the
number of fids completed.
--
Steve House [MVP]
MS Project Trainer & Consultant
Visit http://www.mvps.org/project/faqs.htm for the FAQs

Post by John

Post by Jan M.
John,
what did you do to make sure BWCP equals BWCS in MS Project? I thought of
using Tools/Tracking/Update project/Update work as complete to.../Set 0%-100%
complete/Selected tasks. Is that the way you did it?
My only problem right now would be with people not statusing LOE tasks. I
understand LOE tasks should be given credit simply by existing:this is fine
as far as earned value calculations are concerned, but what about tracking
actual hours worked? Don't they affect your budget? And this info should
prove useful for future planning. How did you manage that?
Thanks.
Jan M.

Jan,
Sorry for the delay in responding - other priorities got in the way.
The best method for updating an LOE task is to use the process you
mentioned (i.e. Tools/Tracking/Update Project). If you have a lot of LOE
tasks, you could apply a filter for them and then update them as a group.
Actual Work (or Actual Cost) in Project is really a misnomer, at least
in my opinion. It is a calculated field based on the Work and the % Work
Complete values input by the user. It should as a minimum be a user
input field. I think Microsoft tried to somewhat counter this issue by
adding the % Physical field in Project 2003. I haven't studied or used
it enough to know if it helps.
At our company, our total earned value analysis was actually done in
another application - Microframe's MPM. The basic Project data was
planned in Project and then uploaded to MPM at the program start. Cost
Account Managers (CAMs) tracked their progress in their Project file and
then on a monthly basis status data was uploaded into MPM and combined
with actual data from the timekeeping system to calculate earned value
metrics. Therefore, we in fact did have "actual" work and cost. If I
were trying to do everything in Project, I would probably first take a
hard look at whether % Physical Complete could help or more likely, I
would use custom fields (with formulas or VBA) to input actual data and
calculate earned value metrics.
Actual values do not affect the budget but they do effect how much of
the budget is remaining. In our world, budget is a fixed value
determined by customer/management/CAM negotiations. It is the top level
baseline value for each CAM's part of the overall program. Actuals go
against the budget and in the end determine whether the task came in on,
over, or under (atta boy!) budget. If necessary, and a valid case can be
made, the CAM can formally request a budget increase (i.e. increased
scope, unknown unknowns, etc.). In some cases, "unused budget" is taken
from one CAM and given to another CAM, using very formalized rules and
customer approval.
One of the best tools I had for estimating a new program was historical
data from previous programs. This consisted of data from our accounting
system and was in the form of actual hours against a particular charge
number. With that data, all I had to do was present a reasonable
relationship for a complexity factor. For example, on a previous program
if it took 10,000 hours to design a widget, I might say that on the
proposed program the widget is 1.5 times more complex and therefore will
take 15,000 hours. Historical data is great. It may not mean much for
predicting in the stock market, but for tangible labor effort, it is
invaluable.
Hope this helps.
John
Project MVP