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CIOB Malaysia 2013

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CIOB Malaysia 2013

  1. 1. Dr. Tahir HanifPhD MSc MCIOB FAPM FACostE MIC CMC FRICSM A L AY S I AInternational Construction ConferenceSunway Putra HotelKuala LumpurMalaysia5th – 6th June 20131Dr. Tahir Hanif, CIOB Malaysia 2013
  2. 2. Presentation Outline2Dr. Tahir Hanif, CIOB Malaysia 2013 (Part 1) Earned Value Management (Part 2) The ‘Earned Schedule’ Concept (Part 3) The Challenges With Implementing Earned Value (Part 4) Introducing ‘Imperium’ (Part 5) Worked Example To Demonstrate How Imperium Works (Part 6) Conclusion Questions & Answers
  3. 3. A Few Words Of Caution! Management methods are NOT EXACT science! All methods are appropriate & suitable It all depends on what needs to achieved Project size, complexity and necessity The aim is to detect ‘deviations’ so that action can be takenDr. Tahir Hanif, CIOB Malaysia 2013 3
  4. 4. EARNED VALUE MANAGEMENTPart 1Dr. Tahir Hanif, CIOB Malaysia 2013 4
  5. 5. The Earned Value Concept Developed by the US defence industry (1967) Originally called “Cost and Schedule Control System Criteria (C/SCSC)” Integrates cost and time to determine productivity Used on large scale projects (heavy engineering and Oil & Gas)5Dr. Tahir Hanif, CIOB Malaysia 2013
  6. 6. Resource ProfileEarned Value „Rich Picture‟Dr. Tahir Hanif, CIOB Malaysia 2013 6WBSOBS CBSXxxxResponsibilityMatrixStatementOf WorkProject PhasesTimelineSource : graphic developed from BS 6079Cost Profile
  7. 7. CostVarianceScheduleVarianceEACThe Mechanics Of Earned Value7Dr. Tahir Hanif, CIOB Malaysia 2013$tBCWS = Budgeted Cost of Work ScheduledBCWP = Budgeted Cost of Work PerformedACWP = Actual Cost of Work PerformedTerminologyBCWSACWPBCWPBAC = Budget At CompletionBACScheduleOverrunETC = Estimate To CompleteETCEAC = Estimate At CompletionCostOverrunManagement ReserveVACVAC = Variance At Completion
  8. 8. Earned Value MetricsDr. Tahir Hanif, CIOB Malaysia 2013 8CostPerformanceIndex(CPI)Schedule Performance Index (SPI)UNDERBudgetOVERBudgetBEHIND Schedule AHEAD of ScheduleUnderBudget /BehindScheduleUnderBudget /Ahead ofScheduleOver Budget/ BehindScheduleOver Budget/ Ahead ofSchedule1
  9. 9. Measuring Progress On SiteDr. Tahir Hanif, CIOB Malaysia 2013 91) Units of work(m2, Nr, m3, lm, etc)2) Quantity of work(e.g 24m2)3) % complete = Work completed X 100Work AssignedProjectPhaseElementActivity Activity ActivityElementPhaseElement
  10. 10. THE ‘EARNED SCHEDULE’CONCEPTPart 2Dr. Tahir Hanif, CIOB Malaysia 2013 10
  11. 11. The Emergence Of Earned Schedule SPI (Schedule Performance Index) accurate for 2/3 of the project but notreliable for the last 1/3 SV (Schedule Variance) equates ‘Time’ in terms of monetary valueDr. Tahir Hanif, CIOB Malaysia 2013 11ScheduleVariance(EV)$tBCWSBCWPEarnedScheduleActual Time (AT)(ES)Schedule Variance(SVt)Remaining TimeProject DurationSchedule Variance (t): SV(t) = ES – ATSchedule Performance Index: SPI (t) = ES /ATEstimate At Completion: EAC(t) = PD / SPI(t)
  12. 12. Earned Schedule ExplainedDr. Tahir Hanif, CIOB Malaysia 2013 12$t1002003004005006007001 2 3 4 5Earned Schedule (ES)Earned ValueSPI = BCWP / BCWS= 120 / 175= 0.68Actual Time(AT)Earned ValueCalculationEarned ScheduleSPI (t) = ES / AT= 1 / 2= 0.50BCWSBCWP
  13. 13. Earned Schedule Explained (Cont‟d)Dr. Tahir Hanif, CIOB Malaysia 2013 13$t1002003004005006007001 2 3 4 5Earned Schedule (ES)Earned ValueSPI = BCWP / BCWS= 170 / 225= 0.75Actual Time(AT)Earned ValueCalculationEarned ScheduleSPI (t) = ES / AT= 2 / 3= 0.67BCWSBCWP
  14. 14. Earned Schedule Explained (Cont‟d)Dr. Tahir Hanif, CIOB Malaysia 2013 14$t1002003004005006007001 2 3 4 5Earned Schedule (ES)Earned ValueSPI = BCWP / BCWS= 620 / 575= 1.07Actual Time(AT)Earned ValueCalculationEarned ScheduleSPI (t) = ES / AT= 4.4 / 4= 1.10BCWSBCWP
  15. 15. THE CHALLENGES WITHIMPLEMENTING EARNED VALUEPart 3Dr. Tahir Hanif, CIOB Malaysia 2013 15
  16. 16. Assessing The Suitability Of Methods16Dr. Tahir Hanif, CIOB Malaysia 2013
  17. 17. Anatomy Of A Typical Mega ProjectDr. Tahir Hanif, CIOB Malaysia 2013 17Mega ProjectDesignConsultantDesignStaffConsultantDesignStaffConsultantDesignStaffConstructionConsultant ContractorSubContractorSiteOperativesSubContractorSiteOperativesConsultant
  18. 18. Reporting Time LagDr. Tahir Hanif, CIOB Malaysia 2013 18Contractor ConsultantProjectManagerClient
  19. 19. Keeping Up With „Changes‟ !19OtherRequestRequestsforChangeReview /ApproveChangeAddChangesto ScopeScopeMeasureProgress“Issue”Occurs“Risk”OccursInstructChangeWorksExecutedDr. Tahir Hanif, CIOB Malaysia 2013
  20. 20. Challenge With System ImplementationsDr. Tahir Hanif, CIOB Malaysia 2013 20Structure Participation
  21. 21. Earned Value Awareness Not everyone understands what it means !Dr. Tahir Hanif, CIOB Malaysia 2013 21Operative Contractor ProjectManagerConsultant ClientProject ControlsManager
  22. 22. Why Are We ...? Using earned value for dynamic environments Relying on others to provide the information Creating elaborate Work Breakdown Structures Using a method that is difficult to implement Spending wasted effort to pursue reporting Waiting for information!22Dr. Tahir Hanif, CIOB Malaysia 2013
  23. 23. INTRODUCING ‘IMPERIUM’Part 4Dr. Tahir Hanif, CIOB Malaysia 2013 23
  24. 24.  Aimed at client reporting Based on Earned Value thinking Focused on TIME and BUDGET expenditure Uses modified terminology No need for elaborate WBS structures Focused on project delivery Reports produced quickly Client makes the assessment24Dr. Tahir Hanif, CIOB Malaysia 2013* Latin:Having power over others
  25. 25. Two Dimensions To DeliveryDr. Tahir Hanif, CIOB Malaysia 2013 25Time BudgetDeliverable(s)
  26. 26. Top Down Approach Of Management26 Clients assess supply chain performance Are budgets being spent?Dr. Tahir Hanif, CIOB Malaysia 2013ClientProjectManagerConsultant DesignerContractorSubContractorSubContractorSubContractor
  27. 27. Robust Pre-Selection Framework27Agree theSCOPE ofwork1QUANTIFYwhat needs tobe delivered2SELECT thefirm to deliverthe finalproduct 3DELIVER theproduct4Dr. Tahir Hanif, CIOB Malaysia 2013
  28. 28. Simple Work Breakdown StructuresDr. Tahir Hanif, CIOB Malaysia 2013 28Traditional Earned Value
  29. 29. Measuring Progress Using ImperiumDr. Tahir Hanif, CIOB Malaysia 2013 291) Units of work(m2, Nr, m3, lm, etc)2) Quantity of work(e.g 24m2)3) % complete = Work completed X 100Work AssignedProjectPhaseElementActivity Activity ActivityElementPhaseElementClient FocusContractor Focus
  30. 30. Looking At The Detail!Dr. Tahir Hanif, CIOB Malaysia 2013 30WorkExecutedWorkAssessedGrossValuationAmendedValueCertifiedValue% WorkCompleteBudgetIndex (BI)TimeIndex (TI)AdjustScopeInstructextraworksApproveChangeReviewChangeRequestForChangeRiskOccursIssuesbecomerisksOtherRequest
  31. 31. New TerminologyDr. Tahir Hanif, CIOB Malaysia 2013 31Abbreviation Description CalculationATE Actual Time ExpenditureABE Actual Budget ExpenditureBR Burn Rate (Forecast / Actual) x 100%TI Time Index ForecastTime / ActualTimeBI Budget Index ForecastBudget / ActualBudgetDI Deliverable Index ForecastDeliverable(s) / ActualDeliverable(s)
  32. 32. WORKED EXAMPLE TODEMONSTRATE HOW IMPERIUMWORKSPart 5Dr. Tahir Hanif, CIOB Malaysia 2013 32
  33. 33. Basis Of Thinking1. Understand Scope2. Assess Time3. Assess Budget4. Understand Performance5. Taking remedial action(s)6. Start at Step 4, until scope is deliveredDr. Tahir Hanif, CIOB Malaysia 2013 33AssessTimeUnderstandScopeTakeRemedialActionUnderstandperformanceAssessBudgetMissionProject Team
  34. 34. Understand the ScopeDr. Tahir Hanif, CIOB Malaysia 2013 34KeyDeliverablesStage 1 Stage 2 Stage 3 Stage 4 Stage 51 1 1 1 1Totals [1] [1] [1] [1] [1]cumulative [1] [2] [3] [4] [5]
  35. 35. Assessing „Time‟ & „Budget‟35Dr. Tahir Hanif, CIOB Malaysia 2013Time(Days)Stage 1 Stage 2 Stage 3 Stage 4 Stage 5TASK 1.1 [1] TASK 2.1 [2] TASK 3.1 [5] TASK 4.1 [7] TASK 5.1 [7]TASK 1.2 [2] TASK 2.2 [3] TASK 3.2 [6] TASK 4.2 [6] TASK 5.2 [6]TASK 1.3 [3] TASK 2.3 [4] TASK 3.3 [4] TASK 4.3 [5] TASK 5.3 [6]TASK 1.4 [2] TASK 3.4 [3]Totals [8] [9] [18] [18] [19]cumulative [8] [17] [35] [53] [72]Budget($)Stage 1 Stage 2 Stage 3 Stage 4 Stage 5TASK 1.1 [100] TASK 2.1 [100] TASK 3.1 [500] TASK 4.1 [200] TASK 5.1 [100]TASK 1.2 [50] TASK 2.2 [150] TASK 3.2 [400] TASK 4.2 [100] TASK 5.2 [100]TASK 1.3 [70] TASK 2.3 [100] TASK 3.3 [300] TASK 4.3 [500] TASK 5.3 [200]TASK 1.4 [60] TASK 3.4 [400]Totals [280] [350] [1,600] [800] [400]cumulative [280] [630] [2,230] [3,030] [3,430]
  36. 36. Stage 1Dr. Tahir Hanif, CIOB Malaysia 2013 36TimeStage102030405060701 2 3 4 580BudgetStage5001000150020002500300035001 2 3 4 54000ProjectStageActualTime(ATE)ATEcumBurnRate (T)Stage 1 8 8 100% lProjectStageActualBudget(ABE)ABEcumBurnRate (B)Stage 1 280 280 100% l8173553722806302230303034300 < 50%50 < 80%80 < 100%
  37. 37. Dr. Tahir Hanif, CIOB Malaysia 2013 37
  38. 38. Stage 2Dr. Tahir Hanif, CIOB Malaysia 2013 38Stage102030405060701 2 3 4 580Stage5001000150020002500300035001 2 3 4 54000ProjectStageActualTime(ATE)ATEcumBurnRate (T)Stage 2 5 13 56% lProjectStageActualBudget(ABE)ABEcumBurnRate (B)Stage 2 250 530 71% l280630223030303430817355372Time Budget0 < 50%50 < 80%80 < 100%
  39. 39. Dr. Tahir Hanif, CIOB Malaysia 2013 39
  40. 40. Stage 3Dr. Tahir Hanif, CIOB Malaysia 2013 40Stage102030405060701 2 3 4 580Stage5001000150020002500300035001 2 3 4 54000ProjectStageActualTime(ATE)ATEcumBurnRate (T)Stage 3 15 28 83% lProjectStageActualBudget(ABE)ABEcumBurnRate (B)Stage 3 1200 1730 75% l280630223030303430817355372Time Budget0 < 50%50 < 80%80 < 100%
  41. 41. Dr. Tahir Hanif, CIOB Malaysia 2013 41
  42. 42. P6 VersionDr. Tahir Hanif, CIOB Malaysia 2013 42
  43. 43. CONCLUSIONPart 6Dr. Tahir Hanif, CIOB Malaysia 2013 43
  44. 44. In Summary ... Focused on expenditure of budgets & time Uses basic measures Better reporting for Clients Less administration Easy to implement & use Constant focus on DELIVERY!44Dr. Tahir Hanif, CIOB Malaysia 2013
  45. 45. QUESTIONS & ANSWERSThank you for listening!“Terima Kasih kerana sudi mendengarpembentangan kertas kerja saya.”45Dr. Tahir Hanif, CIOB Malaysia 2013

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