"I see eyes in my soup": How Delivery Hero implemented the safety system for ...
Figuring out where you are and does your contractor agree?
1. Figuring Out:
Where Are You?
&
Does your Contractor Agree?
Roger D. H. Warburton, PhD, PMP
Associate Professor,
Metropolitan College, Boston University
2. The
“How ya doin?”
Problem
Contractor: We’re a little behind, but
it’s not a problem.
We’ll make it up.
What do you say?
8. Here’s the bill!
Month 11
Budget Actual
$1,470,000 $1,869,000
There is a better way!
9. How Do We Measure
“Progress?”
Against the plan …..
Planned 0.77 miles
Actual 0.66 miles
You can always measure something!
10. What Was Accomplished?
Miles of Roadway
Lines of code
designed, written, tested
Drawings completed WBS:
Reports delivered Deliverable
Units delivered Oriented
Square Meters of Paint
Hierarchy
Feet of Steel Erected
Cubic Yards of Tunnel Dug Out
11. You Already Have The Data
You are the PM.
The Mayor wants to know the
status of the project.
Monthly Reports:
What was planned?
What was accomplished?
What did it cost?
12. End of Month 2
1) Measure Progress:
Planned 1.54 miles
Actual 1.49 miles
2) Report Costs:
Planned $294,000
Actual $329,000
13. The “Value” of a Mile
Plan: 7.7 miles
Cost: $1,470,000
Planned Cost / Mile = $190,909
Complete ½ mile:
“Value” = $190,909 ÷ 2
= $95,455
14. The “Value” of a Mile
Plan: 7.7 miles
Cost: $1,470,000
Planned Cost / Mile = $190,909
Complete ½ mile:
“Value” = $190,909 / 2
Earned
= $95,455
Value
15. Glossary
Planned Value, PV
The sum of the value of the work planned
Earned Value, EV
The sum of the value of work performed
Actual Cost, AC
The sum of the costs incurred
16. Glossary
Budget At Completion, BAC
Estimated At Completion, EAC
Estimate To Complete, ETC EAC
Time Now
Budget, BAC Estimate
To Complete
ETC
$
Actual Costs
To Date
19. SPI: Schedule Efficiency
Schedule Performance Index, SPI
Planned 1.54 miles
Actual 1.43 miles
You are behind schedule
20. How Much Behind?
Schedule Variance, SV
Planned 1.54 miles
Actual 1.43 miles
You are $21,000 behind schedule!
21. Route 93 Status: Month 4
You are the PM.
The Mayor wants to know the status of
the project.
(Miles Completed) Cost
Month Planned Completed Planned Actual
1 0.77 0.77 $147,000 $181,000
2 0.77 0.66 $147,000 $161,000
3 0.77 0.62 $147,000 $187,000
4 0.77 0.58 $147,000 $177,000
Plot Everything!
31. Earned Value Management (EVM)
Provides early warning of trouble
EAC reliable ~ 20% into a project
Christensen & Heise, 1992
DOD experience >400 programs since 1977
Without exception:
The cumulative CPI does not
significantly improve during the
period of 15% through 85% of the
contract
In fact it tends to decline!
32. “I did not use EVM because …”
“Not needed on small projects”
“Hard to apply” (Kim, 2000)
“The implementation
requirements, terminology, and the countless
Contractor
rules and interpretations, are perceived as
Excuses
overly restrictive” (Fleming & Koppelman, 2005)
It is difficult to find a balance between the utility
of the EV technique . . . versus the effort it takes
to implement (Quentin & Koppelman, 2005)
34. PMBOK 4th Edition
The to-complete performance index
(TCPI) is the calculated projection of
cost performance that must be
achieved on the remaining work to
meet a specified management goal,
such as the BAC or the EAC.
35. TCPI
A simple formula to change
the world!
“Once our customers start
calculating TCPI, we will no
longer be able to fudge project
cost!”