Establishing Project Control: Schedule, Cost, and Quality

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All projects must be rigorously monitored at regular intervals throughout their lifecycles to ensure that required technical performance occurs on schedule and within the approved budget. To gauge a project's success, project managers devise measures that help control quality, schedule, and cost. The results of the measurements are assembled into formal and informal reports, which are used by both senior management and the project team to identify deviations from planned performance and their causes. The team can then take corrective actions to limit the impact of these deviations on the project's schedule, budget, or resources.

The causes of schedule slips, cost overruns, and quality problems are often viewed differently by different parties. Table 1 lists the top 15 reasons for schedule slips and budget overruns, as ranked by project leaders and senior managers. These rankings, which were developed from detailed interviews conducted by Thamhain and Wilemon (1995), suggest that project managers are more concerned with customer or management driven changes, the technical complexities of the project, and staffing. Senior management, on the other hand, tends to "focus more on what should and can be done to avoid problems. . . the practical implication of this finding is that senior management expects proper project planning, organizing, and tracking from project leaders. They further believe that "external" criteria, such as customer changes and project complexities, impact project performance only if the project had not been defined properly and sound management practices ignored" (Thamhain & Wilemon, 1995).

Establishing Measures as a Means of Project Control

Meyer (1994) identifies four basic steps to create process measures:

(1) Define what kinds of factors such as time, cost, quality, and product performance are critical;

(2) Map the cross-functional process used to deliver results;

(3) Identify the critical tasks and capabilities required; and

(4) Design measures to track those tasks and capabilities.

To build support within the organization for the measurement system, the project team itself should play a leading role in deciding which process measures should be used. The complete measurement system should consist of no more than 15 specific measures (Kaplan & Norton, 1993) and include only those that are useful. The system should be flexible and capable of reporting unforeseen changes in project performance. Because establishing project controls can be very expensive, it is essential that monitoring costs should not exceed the value derived from control. Where possible the system should be simple to operate, maintain, and modify (Meredith & Mantel, 1995).

At the same time, senior management and the project team should agree to a set of specific "boundaries," which, once crossed, signal that the project has developed a serious problem that may require management assistance or intervention. It is important to note that the relative importance and value of specific measurements may change as a project progresses. As the priorities and goals change, the measures used by the project team should be revised [TABULAR DATA FOR TABLE 1 OMITTED] accordingly (Meyer, 1994). To ensure that the measures are still valid, team members should audit the measurement system regularly.

Project controls may also vary in degree, i.e., the project team may prefer to use very loose controls or ones that are applied stringently. Each team should use tools best suited to its activities. "Project managers must consider the environment in which they are working when they choose a control system for their project. Just because a control system worked well for one project does not mean it will produce success in another project" (Might, 1984).

In developing a system of project control measures, it is important to make a distinction between results measures and process measures. …