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KANAKA MAHA LAKSHMI THALLI
THIS BOOK IS DEDICATED TO THE ALMIGHTY, WHO
ALWAYS SHOWERS HER BLESSINGS ON HER
CHILDREN.
3
2007, POME, Gautam_Koppala, All Rights Reserved
PROJECTS AND OPERATIONS
MANAGEMENT EXPOSED
(POME)
Part “PROJECT CLOSING”
A COLLECTION AMELIORATED BY
GAUTAM KOPPALA V.T.
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2007, POME, Gautam_Koppala, All Rights Reserved
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2007, POME, Gautam_Koppala, All Rights Reserved
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You are the only person who can revolutionise your life.
You are the only person who can influence your happiness,
your realisation and your success.
You are the only person who can help yourself.
Your life does not change, when your boss changes,
when your friends change, when your parents change,
when your partner changes, when your company changes.
Your life changes when YOU change,
when you go beyond your limiting beliefs,
when you realize that you are the only one responsible for your life.
Project
RAG Status R 0
Prepared by: Date Prepared: Phase:
Deliver Delivery
y Date Date
25
Foreca Rema
Source Budget Actual Remaining Forecast Source Budget Actual Remaining st Source Budget Actual ining Forecas
0 0 0
26
A: SET UP - INITIATION Y N COMMENTS 5 Have you identified the critical path for the
project?
B: SET UP - DEFINITION
D: DELIVERY
4 Have you carried out a stakeholder 3 Do you have a clear procedure for
analysis and planned accordingly? managing change?
5 Have you assessed risks and put a plan 4 Have you developed a planned versus
into action to monitor them? actual schedule? How up to date is it?
6 Are you clear what is driving the project 5 Tolerance – have you an agreed tolerance
Quality, Cost or Time (1 only) figure?
7 Have clear project review procedures 6 Variations – are these quickly flagged?
been established?
30
If NO – go back
5. Service Sales to to step 2
establish customer
needs. If YES – go to
step 4
65
Is the
7.Does the
customer have
customer to
an account set be offered 1/
up? standard
warranty,
2/extended
warranty or
3/service
8. Set up contract.
customer account
6. Customer
Customer
decides on
9. Inform customer standard
of contract details warranty,
and call out
procedure
extended
warranty or
service
contract.
66
7. Does the
customer
have an
account set
up?
If yes – go to
step 9
If no – go to
step 8
8. Set up
Service
Admin customer
account in
financial
system and
service
management
system
9. Inform
Service
67
Provide the
customer with
a start-up
pack
containing
GCCC
numbers, Call
out and
dispatch
process,
details of
warranty
obligations
(call out
times,
response
times, PM
included or
excluded
,etc..).
68
Project Name :
Project No :
Site Address :
69
General Contractor :
Electr. Subcontractor :
Mech. Subcontractor :
Consultant :
Project Execution Team
Subcontractor :
Address :
Contact Person :
Title :
Tel/Fax :
GSM :
e-mail :
Notes
:
70
Systems Installed :
Notes
:
OHSE Classification :
Hazard and Risk assessment :
Site safetyplan :
Notes
:
71
72
73
Large Scale Project Drawings Floor or site plans showing cable routes, system
(ACAD)As-Built locations etc. (i.e. fire detector locations and *
cabling)
74
Handover Date :
Project Binders Location :
Project Backup :
Project Data :
Project Manager :
signature
Field Service/ Facility Manager :
signature
Solution&Service Delivery
Leader(s) :
signature(s)
76
PERSONNEL
TASKS/ACTIVITIES
90
The purpose of stakeholder analysis is to inform the project manager and sponsor who should contribute to the project, where barriers might
be, and the actions that need to be taken prior to detailed project planning.
Stakeholder Their interest or What the project needs Perceived attitudes Actions to take
from them and/or risks
requirement from the
project
91
Main milestones/phases shown on higher chart, and sub-milestones for each phase on charts below
MILESTONES Responsibility
93
Project:
Deliverables due Due R/A/G Action to take to bring deliverable or task back on schedule
date *
95
96
97
98
Project Manager
Date
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Project
RAG Status R 0
Prepared by: Date Prepared: Phase:
Deliver Delivery
y Date Date
111
Foreca Rema
Source Budget Actual Remaining Forecast Source Budget Actual Remaining st Source Budget Actual ining Forecas
0 0 0
112
A: SET UP - INITIATION Y N COMMENTS 13 Have you identified the critical path for the
project?
B: SET UP - DEFINITION
D: DELIVERY
13 Have you carried out a stakeholder 9 Do you have a clear procedure for
analysis and planned accordingly? managing change?
14 Have you assessed risks and put a plan 10 Have you developed a planned versus
15 Are you clear what is driving the project 11 Tolerance – have you an agreed tolerance
been established?
116
Rating Value
Organization Question
Weight Description Scale Value = Rating x
Characteristics Number
(0-5) Weight/100
Degree to which the organization values innovation
Innovative 23.0 1 and creativity over organizational stability 0 0.0
Degree to which the organization can make
independent, product-related decisions without
Independent 21.0 2 consulting other organizations 0 0.0
Organization's willingness to accept and work with
Risk Tolerance 13.0 3 uncertainty 0 0.0
Organization's ability to allocate resources full time to
Resource Allocation 10.0 4 one project rather than assign to multiple projects 0 0.0
Organization's ability to understand and embrace
multiple approaches to documentation and measuring
Flexibility 15.0 5 project progress 0 0.0
Degree to which the organization is able to partner
Customer Focus 18.0 6 with their customers 0 0.0
What? Who? When? Where? How? Why? Done
152
Division/Program:
FY:
1st Estimate 2nd Estimate Actual Approved Amount of Percentage of
Amount Budget Variance Variance
Operating Income
Sales
Donations
Savings
Loans
Total Operating Income
Operating Expenses
Personnel
Salaries
Wages
Benefits
Travel and Per Diem
Airfare
Mileage
Lodging
Meals
Purchases
© ESI
Equipment
Materials
Subcontractors
Overhead
Utilities
Rent
Insurance
Total Operating Expenses
Operating Gain/Loss
Contingency reserves
Net Gain/Loss
© ESI
Site handover Format:
© ESI
© ESI
Training and Development
Hands on Training be provided to the customer team for Understanding of Engineering Drawings,
Product Knowledge, Installation, Testing, Labelling and Administration, Relocation and Maintenance
POME Prescribe:
About Personal organization:
© ESI
Nothing beats being organized. Keep an organized filing system, for instance, even something
as simple as storing documents chronologically will go a long way in saving you time and stress
when you need to locate information.
Keep a daily journal where you jot down the day’s highlights. Then, set aside an hour on
Friday/ Saturday night/evening to analyze your week. What did you do wrong? What did you do
right? What will you do differently the next time in a similar situation? This practice will help
you grow professionally and personally in the long run.
Make daily lists and cross things off. Keep a personal scorecard and grade yourself weekly.
Buy a Daily Planner; now actually use it.
POME LIGHTER VEI:
© ESI
PROJECT GATIG FOR
SUCCESS AD
PROJECT REVIEWS
© ESI
Project Gating for Success and Project Reviews:
As stated in the previous section, the implementation of POME methodology requires active
management-level involvement and oversight. To further address this requirement Project Gating and
Project Reviews are required as part of the methodology.
Regular reviews should be scheduled by management to insure proper performance and management
in the areas identified in the implementation phase of the methodology. Large complex projects
require more in depth reviews vs. small non-complex projects which may only require basic
performance indicator reviews.
For projects that are small in size and not complex, reviews may be conducted by the Program or
Regional Project Leader directly with the Project Manager in one on one session or as part of
staff/group review sessions. In either of these cases formal meeting agendas/minutes may not be
required, or summary review notations and actions may be used to record the review activities.
Summary notations may include project performance indicators, progress indicators, and financial
indicators, a brief summary paragraph of the project scope, a summary of the current issues and
projected completion schedule. Actions will be recorded and tracked as part of the specific project
records.
© ESI
For projects that are large by dollar volume and/or technically complex or high risk in nature more
formal reviews shall be conducted. These reviews will at minimum be conducted by management
periodically during the project life cycle, and may include more extensive gating reviews and/or
executive management reviews as described below. These reviews or gating sessions will be
documented using the standard gating or review tools or regional review documentation, rather than
standard meeting agendas/minutes. Actions will be recorded and tracked as part of the specific project
records.
Project reviews will be conducted, attended, and acknowledged/signed off per the following matrix:
Acknowledgement of the project reviews may be accomplished by distribution of the review notations
via e-mail.. Acknowledgement of the review notations is complete with the distribution of the review
notations unless corrections or objections are raised.
Executive Project Reviews:
An Executive Review is a review where members of Project Operations and Regional management
teams scrutinize business and Projects risks associated with a selected project. Business risks for
example can come from financial issues, deviation from our prescribed methodologies, the type of
contract (T&M, target price, fixed fee), resource constraints, leadership issues, quality/client
satisfaction issues or safety issues. The goal is to sample a minimum of 25% of the backlog contract
value as reflected by current PoC Revenue. Executive reviews may be conducted in place of quarterly
reviews
The criteria for selecting a project or program that will be placed on the list for Executive Review
during a fiscal quarter is described below. The following selection criteria are in order of precedent for
selection of projects to be reviewed.
1. Projects that have any Cost, Schedule or Technically not possible setup, in the Project Balanced
© ESI
Score Card (PBS).
2. Projects that have greater order values.
3. Projects that were reviewed in the previous quarter with follow up actions assigned.
4. Projects that have had an PoC adjustment in the last two quarters.
5. Projects that in the view of management have inherent risk issues.
6. Minimum of one project from each business area or program
7. Project being managed by a project manager who has not been involved in an Executive Review in
the prior 2 quarters.
Attendees shall include:
PMC Director - Mandatory
PCO Regional Manager (if applicable) – Mandatory
Program or Regional PMC Manager – Mandatory
Regional Finance Manager – Mandatory
Local Finance Manager – Mandatory
Project Manager – Mandatory
Project PCO Lead (if applicable) - Mandatory
Global Finance Manager – Optional
Regional Representative – Optional
GPO V.P. – Optional
Regional Contract Manager – Optional
In addition, the following Statements of Representation should be acknowledged (signed off) by the
Functional Groups as follows:
• Project Management
Concurrence with the project Revenue, Margin and Percentage of Complete (PoC) confidence of +/-
X% and that the business strategy and project management methodology being employed on the
project ensure effective project management.
• Project Controls
Concurrence with the project POC confidence of +/- X% and that the project control processes and
tools being employed on the project effectively track project performance, facilitate project control and
accurately forecast the project estimate to complete.
• Finance
© ESI
Concurrence with the project Revenue, Margin and PoC confidence of +/- X% and that the financial
processes and tools being employed by the business effectively track project financial performance,
facilitate project financial control and accurately forecast the project revenue and gross margin.
Manage Project Variance:
Managing the costs, schedule, and resources is one of the most important functions that the project
manager performs. These three key performance measurements are critical elements in keeping the
project under control. The key facets of performance measurement are the requirements to integrate
the management of cost, schedule, and resource use, with the technical aspects of a project and to
provide information relating these data in a coherent, systematic fashion, using a recognized
management approach.
Using PMIS information and applying the "earned value" concept, the project manager is able to
determine cost and schedule variances and take corrective action to ensure that the project stays on
track. The "earned value" concept, which is based on the central theory of performance measurement,
embodies the principle that obtaining an accurate measure of how a project is progressing requires an
objective assessment of work performed. When compared with project expenditures, this assessment
of work performed provides a true variance against cost and replaces the more traditional technique
that compares expenditures with spend plans. In essence, it recognizes the basic premise that funds
can be spent and hours of work can be logged that is disproportionate to the work being done.
Resource use is also a key indicator of project performance. The project manager must periodically
evaluate resource use and determine where and when to apply corrective actions such as resource
reallocation.
This process is carried out primarily during the Implementation Phase but also in the project Closeout
Phase.
Project Status Reporting and Project Review:
A key component of effective project control is the review of project status and the timely
communication of such to the project team, management, and the customer. At the start of the
project, the project manager establishes the frequency and content of status reports, as well as the
project review process, which is meant not only to track project progress, but also to solicit
management and customer support in resolving problems. These processes must be well defined in the
communication and documentation plans. A tool must be provided to assist the project manager with
his or her reporting duties to management in conjunction with effective tracking and control of projects
in PMIS..
The project manager must also establish a routine for collecting project report information, which is
necessary for tracking, controlling, and managing project performance. Such recurring events may
take place weekly or monthly and are as defined in the communication plan.
© ESI
Measuring Work Effort:
The project work effort is the expenditure of human resources' time on project tasks. The level of
effort refers to how many people are working on the project (also referred to as project head count).
Because some resources may be working on more than one project at a time, it is necessary to track
their individual effort as it relates to the project at hand. The process of measuring project work effort
includes the following activities:
Project resources report actual hours worked on a specific work package. This information is
reported weekly on the time sheet and entered into the labor system by the project administrator or
the individual contributor. It is recommended that project administration staff (project manager,
project administrator, and others working on the project but not on specific work packages) also
submit weekly time sheets charging their time to project administration, so that all costs associated
with the project are captured.
The project manager receives a weekly labor tracking report containing numerous data fields. This
report provides the information necessary to evaluate, at the work package level, the hours expended
to date, PoC, efficiency factor, and other important elements that will help the project manager to
assess work progress on the project.
Contracted professionals or vendors performing specific time-constrained project work also provide
accurate reporting of hours worked so that their time can be included in the calculation.
Earned Value Analysis Method:
Earned value analysis was introduced by the Department of Defense in 1960 as a methodology for
project managers to evaluate project progress. It is now used in some form by every agency as a
performance measurement tool. Simply stated earned value is defined as the amount of planned work
that has been accomplished to date or the value that has been earned by the project so far.
The key aspect of performance measurement is to integrate the management of cost, schedule, and
technical performance of a project and to provide information relating these data in a coherent and
systematic fashion, using a management-recognized base. It assumes that early warning is the key to
averting disastrous consequences.
The theory behind performance measurement is that to obtain an accurate measure of how a project is
progressing, an objective assessment of work performed must be developed. When compared with
project expenditures, this assessment of work performed provides a true variance against cost and
replaces the more traditional technique that compares expenditures with spend plans.
The key elements of earned value analysis are the BCWP, BCWS, and ACWP. These terms are
described in the following table:
© ESI
Budgeted Cost of Work Performed (BCWP)
BCWP is the term used for work accomplished. It is a numerical representation of the value, in
dollars, of the work completed. BCWP is also known as earned value because the value associated
with a particular work package is earned when the task is completed. It is important that the
BCWP be an accurate and timely measure of the completion status of a particular effort. If a work
package is 50 percent completed, then the BCWP should be 50 percent of the total budget for that
work package.
Budgeted Cost of Work Scheduled (BCWS)
BCWS is a numerical representation of scheduled work. Although similar to a time-phased budget
or spend plan, BCWS has two significant differences: it is directly related to a period of time when
a specific segment of work is scheduled, rather than when expenditures are booked, and it always
relates to the overall planned budget for a given scope of work, as opposed to functional or
corporate budgets. Because BCWS should be based on the schedule for when the work is to be
performed, it is not only time phased but also work phased.
Actual Cost of Work Performed (ACWP)
ACWP represents the actual costs incurred (direct and indirect) related to a specific work package
or the sum of all of the work packages performed during a specific period (usually from project
start to date). These costs should reconcile with the supplier's incurred cost ledgers, which are
regularly audited by the customer in the case of cost-plus contracts.
The most important variances that can occur on a project are schedule and cost variances. The
following table describes these variances and the process for calculating them using the earned value
analysis method:
Schedule Variance (SV)
SV is calculated by subtracting the budgeted cost of work scheduled from the budgeted cost of
work performed:
SV = BCWP – BCWS
SV provides an indication of whether work is being accomplished on schedule. Although an
excellent indicator of the status of work in progress, SV is not a time measurement tool. It
provides a measurement of the degree of variance from the original plan, in terms of monetary
© ESI
units. It is the difference between the value of the work actually performed and the value of the
work scheduled to be performed.
Cost Variance (CV)
CV is calculated by subtracting the actual cost of work performed from the budgeted cost of work
performed:
CV = BCWP – ACWP
CV represents the difference between what was expected to be spent for the work that was
performed (cost estimate) and what was actually spent. It is a clear indication of past cost
performance. CV is not based on a spending plan, thus avoiding the common problem of assuming
that the project is on target simply because the resources consumed during a given time period
match the resources planned for that period. Because it is not tied directly to schedule
performance, it does not suffer the same shortcomings as cumulative cost curves. Those curves do
not reflect the value of the work being accomplished.
The project manager can use earned value analysis data to determine the level of effort and cost
needed to restore any project variances. Earned value analysis provides several additional
mathematical formulas that the project manager can use to track and control project schedule and
budget. This information is presented in the following table:
Budget at Completion (BAC)
BAC is the estimated total cost of the project, or a work package, when completed. When
combined with project contingency or management reserve funds, BAC equals the total project
budget.
Estimate to Complete (ETC)
ETC is an estimate of how much more money this project will require.
Estimate at Completion (EAC); Latest Revised Estimate (LRE)
EAC or LRE, consists of the current measured cost plus the estimated remaining cost. EAC should
be calculated consistently from period to period with consideration given to factors such as
performance to date, anticipated risks, and work volume. Because of the importance of this
estimate, it is recommended that it be calculated and reported monthly. The formulas for EAC are
© ESI
as follows:
EAC = ACWP + ETC
or
EAC = BAC/CPI
Cost Performance Index (CPI)
The cost performance index is a numeric representation of how effective the project has been to
date in terms of cost. CPI is calculated as follows:
CPI = BCWP/ACWP
The cost performance index is often used to predict the magnitude of possible cost overrun using
the following formula:
Original Cost Estimate/CPI = Projected Cost at Completion
Schedule Performance Index (SPI)
SPI has the same functionality as CPI, except that SPI measures schedule instead of cost. SPI
provides information on schedule performance at any given point during the project. SPI is
calculated as follows:
SPI = BCWP/BCWS
Percent Complete
Percent complete is an estimate, expressed as a percent, of the amount of work that has been
completed on an activity, a group of activities, or on the project as a whole, regardless of the
amount expended to achieve that much work. It can be calculated as follows:
Percent Complete = BCWP/BAC
Percent Spent
© ESI
Percent spent is an important tool to the project manager seeking information on the percent of
budget expended to date or on the difference between percent complete and percent spent. If the
project is running on time and within budget, percent spent and percent complete should be
identical. If percent spent is significantly more than the percent complete, the project manager will
need to identify the cause and take corrective action, if necessary, to prevent a project overrun on
cost. Percent spent is calculated as follows:
Percent Spent = ACWP/BAC
Variance at Completion (VAC)
VAC is the difference between BAC and EAC. VAC is an early flag indicating how far off the project
will be. It represents the predicted cost position (over or under budget) when all work is
completed. Comparing VAC to CV is an easy way to determine whether things are expected to get
better or worse. VAC is calculated as follows:
VAC = BAC – EAC
Earned value analysis provides a valuable tool for the project manager to use in evaluating project
performance. Awareness of the earned value, SV, and CV is important throughout the project life
cycle. CPI, SPI, and VAC are more accurate and, thus, useful in the later stages of the project. EAC or
LRE should be calculated and reported monthly, although they too become more meaningful as the
project matures. Percent complete and percent spent information is valid and useful throughout the
project.
Taking Cost Control Actions:
Earned value analysis of cost variances can be performed by the project manager concurrently with
the weekly project review. This review will enable the project manager to identify variances from the
initial estimates; classify them as routine, minor, or major (according to the established threshold);
and take necessary corrective action. The following table describes possible corrective actions for cost
variances:
Labor Cost Higher Than Planned
Look for incorrect reporting on time sheets or incorrect charges through PMIS. Make corrections,
if necessary.
Look at resource use. Are resources being fully used? Are all of the resources needed? Make
adjustments in use of resources, if appropriate.
© ESI
Look at the scope of work. Has the scope of work changed? If so, was the cost baseline updated?
Was the estimate a poor one? Make appropriate adjustments, re-estimate, and submit information
to management for review and possible resolution.
Material Cost Higher Than Planned
Is more material being used than initially estimated? If so, did this situation occur as a result of
approved changes? If so, was the baseline updated? Update the baseline, if appropriate.
Is the cost/unit higher than planned? If so, why? Can another source or supplier be used? Get
Procurement involved.
Look at the material consumption versus the schedule. Is it possible that the material
requirements are as planned but are being consumed ahead of schedule? Re-estimate total material
requirements.
Subcontractor/ Vendor Cost to Date Higher Than Planned
Review contractor's invoices and compare to milestones and invoice schedule. Is the
subcontractor ahead of schedule? Are there incorrect invoices? If so, correct them.
Has the subcontractor/vendor scope of work changed? If so, was the cost baseline updated?
Update the baseline, if appropriate.
Miscellaneous Cost Higher Than Planned
Pre approve travel; review and approve all travel expenses.
Review and approve invoices.
Review and approve supplier requisitions.
Expected Overall Project Cost Overrun, with Inability to Correct
Is the overrun a result of poor estimates? Or is it a result of uncontrollable events? Can cost
overrun be passed to the customer? Escalate the issue to senior management.
Make necessary adjustments to the baseline, if required, as approved by management.
Project review meetings are necessary to show that progress is being made on a project. There are
three types of review meetings:
Project team review meetings
© ESI
Executive management review meetings
Customer project review meetings
Most projects have weekly, bimonthly, or monthly meetings in order to keep the project manager and
his team informed about the project's status. These meetings are flexible and should be called only if
they will benefit the team.
Executive management has the right to require monthly status review meetings. However, if the
project manager believes that other meeting dates are better (because they occur at a point where
progress can be identified), then he should request them.
Customer review meetings are often the most critical and most inflexibly scheduled. Project managers
must allow time to prepare handouts and literature well in advance of the meeting.
POME Prescribe:
About Communication:
Clear, open communication is a prerequisite for a healthy, result-oriented work environment.
Keep them posted: A lack of information is a fertile ground for rumor, gossip and insecurity. Keep the team in
the loop about information concerning and affecting them.
When in doubt, ask: Don’t refrain from asking “stupid” questions – they may save miscommunication and
misunderstandings, resulting in saved time and money!
It is bad policy to wait till your team members find out important information concerning them from other
sources. That information should come from you.
Ask questions and listen to suggestions.
Feedback: Provide it often and ask for it. Keep an open mind. (Tip: Don’t expect all feedback to be pleasant
and positive.)
Listen: It’s always important to listen, but even more so in tough times. Listen for undertones.
Be Open: While you should not be a dumping ground for grievances, you SHOULD be accessible enough for
team members to openly discuss concerns or delays. (Tip: If you are not open, you'll find out about the
concern or delay later in the game when there is less time to fix it.)
Touch Base: One-on-one and in meetings, meet up with your team members (or family members). (Sitting in
front of the television with the family does not count as touching base!)
© ESI
“There is only one person
who is capable to set limits
to your growth:
© ESI
186
© 2007, POME, Gautam_Koppala, All Rights Reserved
WE CAME, WE SAW, WE
COQUERED, AD WE
RULE
187
© 2007, POME, Gautam_Koppala, All Rights Reserved
Any Questions?
Comments? For
better
improvement
Contact:
georgegautam@gmail.com
00918912550564
188
© 2007, POME, Gautam_Koppala, All Rights Reserved
189
© 2007, POME, Gautam_Koppala, All Rights Reserved
Heated gold becomes ornament. Beaten copper becomes
wires. Depleted
stone becomes statue. So the more pain you get in life you
become more valuable.