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Milestone trends and cost trends
in project management
 
  Prin(z)  
 

There are complex methods in project management, ranging from simple scheduling to multi-project planning with resources. The actual integration of project planning into business process is the difficult part. Lack of acceptance and inconsistent execution are two hurdles which many project management systems fail to overcome. Controlling and reporting mechanisms regulate ongoing planning and plans.
The project information center "Prin(z)" covers two substantial inspection procedures, the milestone and the cost trend analyses. With its extensive report possibilities and various interfaces, Prin(z) offers badly needed project controlling to your business.

Evolution of project management tools

More and more projects are planned and logged in cooperation. The current development of tools mirrors the this trend: Three important developments have arisen: First, increasing quantities of project data are stored in efficient, relational databases (e.g. Project Central / Microsoft Project ®). Second, managing projects in networked, browser based systems (e.g. Actano RPLAN ®). And third, project planning has embedded itself in process management (e.g. ProcessContinuum / Project Planner ®).

Focusing on project processes

Due to overlaps and parallelisms, projects can no longer be considered as serial process chains, rather they are a process network. Process steps are milestones in a development cycle which give feedback information about reaching a desired status or a given target. Milestones represent the turning points of one process part to further follow-up processes and all linked tasks.
Therefor, the effects of a milestone shift are more global than in a serial process chain; parallel and overlapping process shifts have effects on the entire network. If or when a milestone shifts it has direct effects on the process success.
In addition, due to hard competition development times have become shorter. Floats are usually omitted completely and more and more process steps run parallel. The shift of only one milestone can involve the missing of delivery dates or the delay of follow-up orders, which might have direct consequences to cash flow. To react to negative developments quickly, it is necessary to analyze milestones regularly.

Project control & project reports

During the course of a project, date deviations occur. The plan is updated and differences in the comparison of planned and actual values show up. These differences, however don't tell the whole picture. When projects last many years, a single delay is unlikely to endanger the finishing date, however if the dates of a work package shift very often, further delays become very likely. Thus, extensions of deadlines become interesting only in chronological comparison, overviewing all modifications at one point of time, because they enable forecasts based on the existing trend.
Milestones are the perfect point of reference for chronologic comparisons as they are project-crucial processes. A 'Milestone Trend Analysis' (MTA) takes the modifications of the milestone dates and visualizes them in a diagram.
Considering the planning of an individual project in a process network, strategic decisions can be derived for the improvement and adjustment of the entire process definition by comparing selected milestones in different projects or processes. Continual shifts of a milestone in a certain process can refer to a general fault in the process definition.
Milestone Trend Analyses (MTAs) are used very successfully in many R&D areas, however they are usually created manually and not using the assigned project management system.

Trends are represented in an MTA chart:

milestone chart

The horizontal axis of the triangle raster represents the reporting period is laid and the vertical axis represents the planning period with an identical time scale. The milestones are differentiated by symbols or colours and updated periodically. Each update creates a new entry, so each milestone is represented by a polygon. If the reported milestone date deviates from the originally planned date, the polygon leaves the horizontal line:

Horizontal line> deadline is kept
Rising line> deadline is exceeded at each reporting date
Falling line > milestone is due to be accomplished earlier and earlier.

Typical MTA curves:

milestone trend charts a) and b)

a) normal lines
A typical course of the curve during 'normal' implementation of the project. Small deviations of a deadline are balanced up- and downwards. The probability for meeting the final date is high.

b) steep rising lines
Date predictions were too optimistic. The completion date of the project will not be met.

milestone trend charts c) and d)

c) turn of trend lines
Until a shortly before the scheduled completion, the deadlines appeared to be accurate. Towards the end, sudden & substantial extensions of deadlines were announced. Date predictions were unrealistic; a timely control intervention was made impossible.

d) diverging lines
If interdependent work packages diverge in their date predictions strongly, then very likely one of the tendencies is not realistic. The project planning must be revised.

milestone trend charts e) and f)

e) falling lines
If all milestone lines indicate a constant date advancement, assumingly planned floats were too large. The responsible planners should be more optimistic in their future predictions.

f) zigzag line
If all milestone paths show a repetitive zigzag, this reveals a substantial uncertainty in date predictions. Thus also the prediction of the final completion date is to be regarded as extremely uncertain.

Return on investment (ROI)

The advantages of a graphically visualized milestone trend analysis for the enterprise might already be seen after a few report dates. Coworkers develop a increased awareness for deadlines, since the date development is graphically obvious for them. A copy of the diagrams, either as hardcopy or email (e.g. as pdf), is also a good basis for communication in and before the meeting-hours of the project team. Improvements for future project plans & processes can be derived from the predictions of the trend analysis: It becomes easier to realistically calculated customer estimates. If extensions of deadlines are foreseen in time and agreed upon with the customer, contract penalties can be avoided or at least reduced. Delayed invoices resulting from project delays can be accomodated for in liquidity plans.

MTA is the most important instrument for controlling deadlines
Burghardt, M. (2001). Introduction to project management. Publicis MCD, ISBN 3895781630.

 

What is cost trend analysis?

Cost trend analysis (CTA) is a method for controlling costs in projects.

The planned cost line (base line) is compared to the actual costs (actual). If deviations occur, a cost divergence shows up between these lines in the course of the project. Additionally a forecast (preview) can be generated for an effort estimation or cost estimation.

cost control chart

Comparing planned to actual costs is an essential project control method
Burghardt, M. (2001). Introduction to project management. Publicis MCD, ISBN 3895781630.

Execution in practice

Many enterprises still do trend analyses on 'black boards' or Word processors due to missing software support. An uncontrolled growth of most diverse graphs is developed, which are only isolated solutions. These procedures are unsuitable for establishing an enterprise-wide standard for project controlling.

Prin(z) - the project information center

Prin(z) closes the gap and helps to integrate recognized standard analysis methods in project management into your business. In addition to the main features MTA (milestone trend analysis) and CTA (cost trend analysis), Prin(z) offers a logging function, flexible and global reporting, multiplicity of organizational possibilities and import/export filters. As an Add-On product for PM systems Prin(z) can be used standalone or with interfaces to Microsoft Project ® or Actano RPlan ®.

Advantages of the Prin(z)-MTA

  • planned/actual comparison of milestone dates
  • project-to-project comparison of milestones
  • visualization in an MTA chart
  • traffic light for milestones' status
  • documentation of the most important plan modifications
  • logging function for risk/problems and planned internal actions/solutions
  • export as text file or diagram
  • clear and uniform reporting
  • enables an easy interpretation and thus a fast reaction to date delays

milestone trend analysis in Prin(z)

Advantages of the Prin(z)-CTA

  • planned/actual comparison for efforts/costs
  • status is plotted (planned costs, actual costs, trend, budget ...)
  • export as text file or diagram
  • documentation of the most important cost modifications
  • logging function for risk/problems and planned internal actions/solutions
  • clear and uniform reporting
  • enables an easy interpretation and a fast reaction to cost changes

cost trend analysis in Prin(z)

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