Author: Bonnie Biafore

Bonnie Biafore is the author of O'Reilly's Microsoft Project: The Missing Manual (2007, 2010, and 2013 editions) and Microsoft Press' Successful Project Management: Applying Best Practices and Real-World Techniques with Microsoft Project. She's recorded Project Essential Training (for 2010 and 2013), Project Management Fundamentals, Managing Small Projects, and other courses for As a consultant, she manages projects for clients and wins accolades for her ability to herd cats. She has also written a humorous novel about hitmen and stupid criminals. You can learn more at Bonnie's website or email her at

Webinar: The Art of Reporting

Event Description: Get the full scoop on what’s new in Microsoft Project 2013 reporting and how to develop valuable reports. Discover which reports come with the product and how to create reports that seem to have disappeared, specifically time-phased reporting. About the Presenters John Riopel has over 25 years of experience as a Program/Project Manager in government service and commercial industries implementing and managing internal, civil, commercial, and government projects. John’s technical background in Microsoft Project spans the entire evolution of the Microsoft Project toolset, with a deep understanding of how to apply these technology constructs and concepts to real-world project management challenges. John is certified as a Project Management Professional (PMP) by the Project Management Institute (PMI), a Microsoft Certified Professional (MCP) in Enterprise Project Management Technologies, a Microsoft Certified Technical Specialist (MCTS), and serves on the Board of Directors for the Microsoft Project Users Group (MPUG) Boston Chapter.   Learn more about at Bonnie Biafore is the author of twenty-six books including Project 2010: The Missing Manual, Successful Project Management (award-winner in the 2012 STC International Competition), QuickBooks 2013: The Missing Manual (now Intuit’s Official Guide to QuickBooks), Your Project Management Coach, and more. She has recorded Project 2010 Essentials, Project Management Fundamentals, and Managing Small Projects for Her first novel, Fresh Squeezed, a comedic thriller with hit men and stupid criminals is now available in print and e-book. Learn more at Have you watched this webinar recording? Tell MPUG viewers what you think! [WPCR_INSERT]

How to Handle Fixed Price Contracts in Your Project Schedule

How to Handle Fixed Price Contracts in Your Project Schedule

A fixed-price contract means someone has agreed to deliver a chunk of work for a fixed amount of money. That’s a sweet deal, both financially and project-management-wise. If the contractor’s cost surpasses the agreed-upon price, the contractor eats the overage. In addition, you don’t have to assign resources to the task that represents the contract or track the work hours that the contractor spends. All you need to know is when you’re going to get the deliverables.  Great, so you have one of these contracts in your project. How do you represent it in your Project schedule? Because you don’t need to assign resources or track work hours, work resources aren’t the way to go in Project. All you really need for a fixed-price contract is a delivery date and the fixed price. For that reason, a cost resource or the Fixed Cost field are both possibilities. To see which one makes the most sense, let’s look at the nitty-gritty details of how each of these features works. You can assign the same cost resource to multiple tasks, even if the cost is different for each task. If the same contractor or vendor performs fixed-price contracts for you time and again, you could set up a cost resource for the contractor and then assign that resource to each fixed-price contract task they do. The fixed-price value goes in when you assign the cost resource to the task. Sounds good so far, but there’s one catch. Cost resources don’t roll up into earned value fields. As you can see in the figure, the Actual Cost field shows $3,200 for the work performed on task1. However, actual cost for task2 doesn’t show up in the Actual Cost field. On the other hand, if you use budget resources to compare budgeted and planned costs, budget resources do include values for cost resources. Tip: If a task has work and cost resources assigned to it, you have to explicitly update the actual cost of the cost resources. (You can fill in the Actual Cost field or % Work Complete.) The Fixed Cost field is the other option. Unlike a cost resource, values in Fixed Cost fields do roll up into earned value fields, so this is a good option, if you want to see fixed cost in your earned value analysis. However, budget resources don’t take Fixed Cost into account. The Fixed Cost field has other fine points worth noting. Project doesn’t have a separate field for actual fixed costs. The value in the Fixed Cost field is the total of your estimated fixed costs and actual fixed costs. Values in the Fixed Cost field don’t roll up into outline summary tasks or the project summary task. That’s so you can enter a fixed cost for a project phase or the project as a whole. To specify when the fixed cost hits your books, you can fill in the Fixed Cost Accrual field for the task. The default, Prorated, spreads the cost over the task duration. Setting Fixed Cost Accrual to Start or End schedules the fixed cost at the beginning or end of the task. To document the purpose of the value in a Fixed Cost field, add a note to the task. When you enter actual progress information on a task, Project calculates the actual cost for the fixed cost along with the work and material costs.   Bottom line: You’re out of luck if you use both earned value fields and budget resources. If you opt for a cost resource, you can see fixed-price contracts in budget numbers but not earned value. The Fixed Cost field shows fixed-price contracts in earned value, but you won’t be able to compare those contracts to your budget using budget resources.  

Microsoft Project 2013: The Missing Manual

Microsoft Project 2013: The Missing Manual

Earned Value Analysis Earned value analysis is like the idea behind that old Smith Barney slogan, “We make money the old fashioned way—we earn it.” Earned value analysis measures progress according to how much of your project’s value (its cost) you’ve earned so far by completing work. Project customers, sponsors, and stakeholders want to know how far along a project is. Earned value alone tells you only how much of the project’s cost you’ve earned—it doesn’t say anything about the schedule. Other earned value measures provide a picture of schedule status. If a project has spent half its budget, consumed half its forecast duration, and completed half of its work, you’re all set. However, if the budget and duration are half spent, but the work is only 25 percent complete, something is wrong. You have only 50 percent of the budget and duration left to complete 75 percent of the work. Gauging Performance with Earned Value Measures Earned value analysis uses several calculations to measure schedule and cost status. However, all earned value measures are based on three basic measurements: Planned cost for scheduled work. In project-management circles, you’ll hear planned value described as the budgeted cost of work scheduled (or BCWS, which is also the name of the corresponding Project field). In English, planned value is the cost you expected to incur for the work scheduled through the status date—that is, the baseline cost for the work that should have been completed as of the status date.For example, suppose you’re managing a tiger-taming project that’s scheduled to tame 24 tigers over 24 months for a total cost of $240,000—$10,000 per tiger. According to that plan, 10 tigers should be tamed at the end of 10 months at a planned value of $100,000. Planned cost for completed work. This measure is called earned value because it represents the baseline cost you’ve earned by completing work as of the status date. It’s also known as budgeted cost of work performed or BCWP (the name of the corresponding Project field). For example, if you’ve tamed six tigers as of the status date, then the earned value is $60,000. Actual cost of completed work. Actual cost is easy: It’s how much you actually spent as of the status date. For example, if you’ve spent $50,000 through the first 10 months of tiger taming, that’s your actual cost of completed work. This measure is sometimes called actual cost of work performed or ACWP (again, the name of the Project field). Tactical Note: Earned value analysis requires a baseline in your Project file, so you have a plan to compare to. If you haven’t set a baseline yet, all the earned value fields are zero. You also have to set a status date and enter actual values as of that date to show what you’ve accomplished and how much it cost. Analyzing an Earned Value Graph Because planned value, earned value, and actual cost are all monetary values, you can compare them to evaluate schedule and cost performance. In earned value graphs, the relative positions of the three lines for these measures show whether the project is on schedule and within budget. Gleaning schedule and cost performance from an earned value graph is easy once you know how to compare planned value, earned value, and actual costs. The Earned Value Report, a new graphical report shown in Figure 14-5, graphs all three measures over time. Here’s how you evaluate schedule and cost performance with these three measures: Schedule performance. The comparison between planned value and earned value is what provides you with a schedule status. Planned value is the baseline cost for the work you expected to complete, while earned value is the baseline cost of the work that’s actually complete. If earned value is less than planned value (like $60,000 versus $100,000 in the tiger-taming project), less work is complete than you expected—thus, the project is behind schedule. If earned value is greater than planned value, then more work is complete than you expected, and the project is ahead of schedule. Cost performance. This is the difference between earned value and actual cost. If the earned value is greater than the actual cost, then the work performed cost less than you planned—the project is under budget. For example, the earned value for the tiger taming project is $60,000, while the actual is only $50,000, so it’s $10,000 under budget. If earned value is less than the actual cost, then the project is over budget. View the entire excerpt     Thinking Like a Project Pro: Bonnie Biafore   Being a Microsoft Project expert, share with the MPUG community a favorite tip to using Microsoft Project like a Pro? I’ll give you two tips, because choosing only one is too tough. These tips might elicit some “Well, duh!”s from the audience, but I end up talking about them with a lot of my clients. Get task dependencies set up correctly. Dependencies are a big part of how Project calculates a project schedule. Get to know each type of task dependency (finish-to-start, finish-to-finish, start-to-start, and start-to-finish) so you can choose the right type of dependency. (I have some fun examples for each type in my book.) Use lag time (positive or negative) to fine-tune task dependencies.Stay away from links to summary tasks. Instead, include milestones to flag the start and finish of portions of a project, and link work tasks and milestones. That way, you can see all the schedule logic even if you hide the summary tasks. A view of only summary tasks shows a high-level schedule perspective without task link spaghetti. Make the most of milestones. The familiar diamond shape of milestone tasks is appropriate, because milestones really are gems. They come in handy in all sorts of ways.You can add milestones to mark the beginning of portions of a project. That way, if that part of the project is delayed, you can reschedule the milestone, and Project takes care of rescheduling all the work tasks that follow. Milestones are great at the end of summary tasks for showing the progress that’s been made.You can also include milestones for decisions and approvals. For example, if you can’t start the next project phase until management makes a decision or approves funding, add a milestone for that decision or approval. Then, when you record the actual date for the decision or approval, Project reschedules the work tasks accordingly.Milestones also come in handy to represent deliveries. You don’t necessarily care what’s going on at a supplier’s warehouse. What matters to your project is when the materials you need show up. What can readers expect to be able to do better after reading your book, “Microsoft Project 2013: The Missing Manual”? What is your writing style? O’Reilly Missing Manuals focus on “why” before getting into “how”. I start each section of the book with the project management case for a Project feature (why the heck would I need this in managing a project?), and then how to use it effectively. So you won’t read something like “To add a freeblesnap, click this, then click that, then press Enter,” and then wonder what’s a freeblesnap and why you’d want to add one. If you find a section with a missing why, shoot me an email. I’ll fix it. This approach helps readers learn a little bit more about project management and how to use Project at the same time. However —- with each revision of my Project Missing Manual, there is always at least one “feature” whose purpose escapes me. When that happens, I ask my tech reviewers, friends in the Project community, and Project forums. Every once in a while, a feature remains a mystery. I also try to make examples funny. Project management and Project books can get downright dry and dull. I yacked up hairballs reading a couple of PM books. Do you have a favorite feature of Project 2013 that you can share with our audience? If you could turn one feature “off,” what would it be? I really like the new graphical reports. They make it easy to see what’s going on in a project and they’re easier to work with than visual reports. For instance, you can produce an earned value graph in no time. However, I miss the old text reports. You can recreate a lot of them with graphical reports, but they aren’t built-in. For part b of the question, I wish Project default settings were set up for people who use Project to calculate the schedule. Default Project option settings these days are set up for the beginner-level user. One example is that the option for task mode is set to Manually Scheduled out of the box. Sure, Microsoft is trying to make Project less intimidating to beginners, at the expense of project managers who manage schedules day in day out. Maybe Project could have an option with two settings, like Casual and Scheduler. With the Casual setting, Project would choose Project options for someone who mainly does manual scheduling. Selecting Scheduler would set up the program to calculate the schedule and put other more advanced settings in place. Managing your consulting company, writing, and contributing to the project community must be incredibly time consuming. How do find time? You’re right. Managing myself is incredibly time-consuming. I’m a bad employee and an even worse boss. I have gotten everything done by working a lot–weekends and sometimes pretty late into the night. As of this Spring, I’m starting to rein in my workweek. I keep things organized, almost to the point of being OCD. That helps me get a lot done, because I don’t have to look for things and I know what’s due when. I build templates for documents, projects, and tracking what I work on. I really absorb the software I use, so I can be more productive with it. That’s just the way I’m wired. That’s probably why I ended up writing books. I learned about small business accounting and QuickBooks in managing my little one-person corporation but that led to the QuickBooks Missing Manual. I learned about project management and Project in my job and that led to a boatload of books and courses on both those topics. One bit of my mad science is working on my to-do list to maximize my energy level. Working on items in order of importance is good most of the time, but if I feel my motivation waning, I’ll knock out something easy and not so important. Scratching something off my list gives me an energy boost that can help me slam through another much tougher task. Do you have a motto, credo or general slogan that you live by? In those exercises that ask how you want people to remember you, my answer is “She was tough but fair.” I’ve always been tough, but I’m getting better at the fair part as time passes. I believe in sharing with others, whether it’s knowledge, power, or the last scoop of ice cream. Karma is a positive reality to me. By sharing with others, I end up receiving a lot in return. One caveat: sometimes, I have to say no, because good karma still doesn’t increase the hours in a day.  

Certificate Series – Project Management with Microsoft Project Essentials, Session 3

Project Management Institute (PMI)® Professional Development Units (PDUs): This Webinar is eligible for 2 PMI® PDU in the Technical Category of the Talent Triangle. Instructors Community Favourites Bonnie Biafore and Sam Huffman Bonnie Biafore is the author of twenty-six books including Project 2010: The Missing Manual, Successful Project Management (award-winner in the 2012 STC International Competition), QuickBooks 2013: The Missing Manual (now Intuit’s Official Guide to QuickBooks), Your Project Management Coach, and more. She has recorded Project 2010 Essentials, Project Management Fundamentals, and Managing Small Projects for Her first novel, Fresh Squeezed, a comedic thriller with hit men and stupid criminals is now available in print and e-book. Learn more at Sam Huffman has been delivering training for The Versatile Company since 1996. Prior to joining Versatile, he gained insight into Microsoft Project while working at Microsoft as a member of the Microsoft Project development and support team. He has maintained his intimate knowledge of Microsoft Project with each new release and is considered a leading authority on the tool, including the newest enterprise features of Project and Project Server. During his tenure at Versatile, Sam has honed his instruction skills by delivering programs for approximately 2000 people every year. His reputation for delivering practical wisdom with an upbeat style makes him one of Versatile’s most requested instructors. Sam is a frequent content contributor to MPUG and speaks to large groups often about MS Project, enterprise project management and the discipline of project management as a foundation for success. Visit Sam’s Blog Session Outline Level 300, Session 3: Evaluating and Communicating with Microsoft Project Setting baselines Updating strategies and best practices Updating Percent Complete Actual Dates and Duration Actual Hours and Costs Working with Project views and tables Filtering and grouping project information Using views and reports to evaluate project status (schedule, cost) Working with Text-based reports Working with visual reports Sharing Project information with other programs (excel, outlook, pictures to other programs) these are just slides Taking Corrective Action Closing a Project 1. Checklist of Activities 2. Saving a Project as a Template Have you watched this webinar recording? Tell MPUG viewers what you think! [WPCR_INSERT]

Certificate Series – Project Management with Microsoft Project Essentials, Session 2

Project Management Institute (PMI)® Professional Development Units (PDUs): This Webinar is eligible for 2 PMI® PDU in the Technical Category of the Talent Triangle. Watch session 3 Speakers: Bonnie Biafore and Sam Huffman Session Outline Level 200, Session 2: Working Effectively with Microsoft Project and Resources Understanding work, material, and cost resources Adding resources to your project Defining in Resource Sheet Defining in Dialog box Resource settings you need to know and understand Setting resource costs Setting resource working time Assigning resources to tasks Using split-screen views to manage task resource assignments Two Powerful Examples: Gantt/Task Form with Resource Work Detail use for resource assignments and Resource Allocation View and Details Adding and removing resources from tasks Have you watched this webinar recording? Tell MPUG viewers what you think! [WPCR_INSERT]

Certificate Series – Project Management with Microsoft Project Essentials, Session 1

Project Management Institute (PMI)® Professional Development Units (PDUs): This Webinar is eligible for 2 PMI® PDU in the Technical Category of the Talent Triangle. Watch session 2 Speakers: Bonnie Biafore and Sam Huffman What Is a Project? What Is Project Management? Key Goals & Challenges Facing Projects How Does Microsoft Project Fit into Project Management Learning Your Way Around Microsoft Project (Ribbon, views) Recommended Microsoft Project options Creating a Microsoft Project file (includes start date, schedule from) Working with calendars Creating tasks (names, durations) Organizing your tasks into a work breakdown structure Manually and automatically scheduling tasks Linking tasks Evaluating the schedule (Project Statistics, finish dates, critical path) Have you watched this webinar recording? Tell MPUG viewers what you think! [WPCR_INSERT]

Your Project Management Coach: Managing a Portfolio of Projects

Managing a Portfolio of Projects Many financial investors maintain a balanced investment portfolio a collection of different financial assets such as stocks, bonds, and cash. The assets in a portfolio work in their unique ways to help investors meet their ultimate goals, whether it’s finally shipping the kids off to a prestigious college, building a dream home in the mountains, or swimming and golfing every day in a comfortable retirement. Just like the multiple types of assets in a financial investment portfolio, organizations often undertake multiple projects at one time. These projects might advance different strategic goals. One project might work to optimize and reduce costs in the delivery of a current service, another might strive to develop a product to meet a new market opportunity, and another might endeavor to develop strategic partnerships with key customers. Even though the three projects are focused on very different aspects of the business, they’re all working together for the organizations success. Furthermore, those three projects are indeed an investment: in money, resources, and time. The expectation is that the investment in these projects will return substantial benefits. It makes sense that an organization would want to proactively examine, evaluate, and carefully select the projects that are to become part of the organizations focused project portfolio. This chapter defines project portfolio management and how it can benefit an organization. You learn the role that the portfolio manager plays in evaluating and prioritizing projects for inclusion in the portfolio. What Is Project Portfolio Management A project portfolio is a collection of projects in an organization. The projects that make up the portfolio (a portfolio project) have some point in common with one another. It can be as tight a connection as projects within a particular program or department. Or, the projects might have nothing else in common but the fact that they all benefit the company that’s running them. Project portfolio management (PPM) involves evaluation, support, and oversight of the projects in the portfolio. It sets the portfolio strategy to begin with, and then the portfolio manager works with executive management to evaluate, prioritize, and select the projects that should be part of the portfolio. Once the project portfolio mix is established, the portfolio manager typically tracks and manages the portfolio. The portfolio manager can be a committee of senior executives or it can be a single executive who keeps the rest of the executive team informed. Although typically thought of as being the domain of large enterprises, project portfolio management is scalable to all organization sizes. A project portfolio might consist of dozens of projects in a larger organization or a handful of projects in a smaller one. THE PORTFOLIO MANAGER AND THE PMO While the portfolio manager selects and prioritizes projects for the portfolio, a project management office (PMO) standardizes and supports project management processes for multiple projects throughout an organization. Overlap between the PMO and the portfolio manager happens if the PMO tracks project proposals and prepares them for consideration by the portfolio manager or when PMO manager is a member of a portfolio management committee. Instead of treating projects as one-off ad hoc endeavors, project portfolio management takes a strategic perspective toward projects, measuring and calculating them as the investments they are. Because significant money, resources, and time are devoted to each project, an organization can use project portfolio management to ensure not only that more projects are successful but also that the projects are successful in a way that adds value and benefit to the organization. Specifically, project portfolio management: Identifies the portfolio strategy. Evaluates and analyzes project proposals against established criteria. Prioritizes and sequences projects based on overall business value as well as availability of funding and resources, maintaining an optimal pipeline flow of projects from concept to completion. Selects, maintains, and periodically rebalances the appropriate mix of projects in support of the organization’s strategic goals as well as the relationship with other projects in the portfolio. Tracks overall schedule and cost performance, as well as resource utilization and scope management of the projects in the portfolio. Evaluates overall performance of ongoing projects and decides whether projects continue to the next checkpoint or are postponed or canceled. PROJECTS, PROGRAMS, AND PORTFOLIOS Whats the difference between programs and portfolios, and where do individual projects fit in? As described previously, a project portfolio is a collection of projects in an organization that have at least one thing in common, even if the connection is only that they’re being done within the same organization. A program is an overarching endeavor within an organization to produce a specific outcome delivering long-term benefits to the organization. Within the program there are typically several projects that serve the program goals. Those projects can be considered the programs project portfolio. In addition, programs often include operations and other non-project activities. So the hierarchy of projects, programs, and portfolios can be structured in a variety of ways according to the organization’s needs. Projects and programs can be part of the organizations entire project portfolio. Projects can also exist independent of any program or portfolio. Evaluating and Prioritizing Projects for the Portfolio With the development of the portfolio strategy, you’re ready to create project selection criteria. Alignment with the organization’s strategic goals, the cost of the project and the expected return on investment, resource availability, and the relationship with other projects in the portfolio pipeline are typical examples of project selection criteria. After you have those criteria in place, the portfolio manager can start to build the portfolio. CROSS-REFERENCE PMP Exam: The information in this section relates to the PMP Exam’s Domain I: Initiating the Project, Task 1, “Perform project assessment based upon available information and meetings with the sponsor, customer, and other subject matter experts, in order to evaluate the feasibility of new products or services within the given assumptions and/or constraints.” Typically a project review board, which includes the portfolio manager, is the entity that assesses new project proposals. This board evaluates each project idea or proposal that’s submitted for inclusion in the portfolio against the project selection criteria. If the project review board uses objective scoring against the criteria, it has a basis for prioritizing the project proposals. The projects with the highest scores have a shot at being prioritized higher. However, a high score doesnt guarantee that the project will be approved. The portfolio manager or the project review board must consider these additional factors when determining the fate of a project proposal: What is the overall business value of the project Business value is typically identified as part of the project selection criteria, but there might be other factors related to business value that are not necessarily reflected in the criteria. Such factors can result in a greater or lesser weight for a project. How much will the project cost, and when will this funding be available? When will the necessary resources be available to work on the project? In fact, there are some methods of project selection that use resource availability as a front-line measurement. When is the best timing for the start and finish of this project? Looking at the other projects currently taking place and on deck to start soon, the portfolio manager needs to manage the project pipeline, that is, the timing of all projects from their start to finish. This pipeline management ensures proper timing and pacing of projects so that costs and resources flow steadily over time and that benefits realized from successful projects also flow with the appropriate pacing over time. Does this project help fulfill one of the strategic goals that is otherwise neglected? Sometimes one or two of an organization’s strategic goals get most of the attention from hot new projects, while the other goals languish on the sidelines. Achieving a balanced mix of projects that enable an organization to work toward all of its strategic goals is a good reason to give a higher priority to a lower scoring project idea. For example, a strategic goal to implement green manufacturing techniques might receive a lower score if it’s competing with other goals that concern profitability and customer service. But if the organization is philosophically committed to the goal, it’ll bump up the priority on related project ideas. When a project evaluates well and prioritizes high, it’s likely to be approved. Upon approval, the project obtains funding and a start date is set according to the constraints imposed by the pipeline management. Evaluation of a project continues even after the project has been approved for implementation. To ensure that the project is living up to expectations, the portfolio manager and project review board will continue to assess project performance and benefits as the project moves through its phases, milestones, or other checkpoints. Theyll also assess changes and emerging realities in their industry and their business environment. Tracking and Managing the Project Portfolio As portfolio projects are approved and implemented by the individual project managers and their teams, the portfolio manager keeps a macro-level eye on all of them. Project managers are expected to keep the portfolio manager apprised of overall schedule and cost performance as well as overall resource utilization and scope management of each project. The more standardized this information is, the better the portfolio manager can compare project performance on an apples-to-apples basis. CROSS-REFERENCE PMP Exam: The information in this section relates to the PMP Exam’s Domain IV: Monitoring and Controlling the Project, Task 1, “Measure project performance using appropriate tools and techniques, in order to identify and quantify any variances, perform approved corrective actions, and communicate with relevant stakeholders.” Tracking Portfolio Projects The project manager is responsible for tracking all the task details of the project, which he obtains from his team members on a regular schedule. He’s the keeper of the details for every aspect of his project. The portfolio manager, on the other hand, doesn’t track projects at this level. In most cases, the portfolio manager examines portfolio projects, getting answers to the following types of questions: How far ahead or behind the overall project finish date is the project expected to be? How far above or below the overall budget is the project estimated to cost? How well are portfolio project resources being utilized? Are there any large instances of overutilization or underutilization of team members? Can or should resources be shifted from one portfolio project to another? If so, when How much would such a shift impact schedules? Has project scope changed? If so, how much Will any large scope changes affect the project finish date or final cost? While resource utilization and scope changes are more qualitative in nature, the finish date and cost are quantitative and easier to measure and compare. Because of this, project finish date and cost projections tend to be the data most closely tracked by portfolio managers. The earned value schedule performance indicator (SPI) and cost performance indicator (CPI) provide comparable measurements of schedule and cost for a project. In fact, periodically comparing the SPI and CPI of all portfolio projects can provide an excellent analysis. Conducting Checkpoint Evaluations In addition to the periodic check-in of schedule, cost, resources, and scope, the portfolio manager (possibly along with the project review board) is responsible for evaluating the project at certain checkpoints. These checkpoints might be milestones or stage gates. The purpose of this evaluation is to determine whether the project is still on track to deliver the expected benefits to the organization. Recall that when a project is in the idea or proposal form, it is ideally evaluated against specific criteria to determine whether it should move on to the project planning processes. Even after elaborate work is done to develop the project plan, another evaluation takes place to determine whether the project should be implemented. With such careful assessments during the early initiating and planning processes, it makes sense that this philosophy would carry through to the execut- ing processes. The fact that a project plan has been approved for implementation doesn’t mean it should not be evaluated again. Quite the contrary -as a project is executed, it can go in a number of different directions. New information is uncovered and unforeseen events occur, which might produce project results that aren’t as rosy as originally anticipated. This information-in addition to facts about schedule, cost, resources, and scope-can help the portfolio manager evaluate whether the project is on target, off target, or beyond hope. The project might be in danger of finishing too late to meet a make-or-break market window. Or the project might be costing too much to provide the required return on investment. Even a project that’s performing beautifully in terms of schedule and cost might have other red flags. For example, a newly introduced technology might indicate that a product under development will be obsolete before it hits the market. Or, a shift in consumer spending patterns might indicate that a service you’ve been developing wont be profitable after all. As with an investment portfolio, the project portfolio needs to be reviewed periodically for its mix and balance. The portfolio manager needs to be sure that the portfolio that was properly balanced six months ago is still in position to deliver the expected benefits. One or more of the portfolio projects might need to be adjusted in some way to bring them back in alignment with the portfolio strategy. One project might need to be put on hold and another one canceled, with their funding and resources transferred to another project that has more promise to actually deliver the goods. So each evaluation checkpoint is an opportunity for the portfolio manager to objectively review the project and determine whether it is still on track to deliver the expected benefits and meet the success criteria. If it is, the project passes the evaluation and is allowed to continue executing to the next checkpoint. If it is not, one choice is to scale back by cutting resources, reducing funding, or putting the project on hold. Another option is to cancel the project altogether. As dire as this might sound, defunding or canceling a project can actually be a positive move. Not only does the organization cut its losses on a project that will not produce the expected benefits, but it frees up resources and funding for other projects that are likely to be more productive and profitable. Reporting on Portfolio Projects The portfolio manager needs to report portfolio status to the other members of the executive team. They need to know the high-level performance status of the portfolio projects. SPI and CPI of the portfolio projects can be very helpful here. If any projects are falling significantly behind schedule or spending too much money, they’ll want to know corrective actions and the prognosis for the projects. Most of all, they’ll want to know that the projects are on track to realize the expected benefits for the expected cost. Managing Portfolio Details In addition to tracking, evaluating, and reporting on the portfolio, the following are additional portfolio management responsibilities: Accessing portfolio project information: The portfolio manager needs access to all high-level project information. This information is readily available in the project notebook. Such information might include the project goal and objectives, success criteria, scope statement, stakeholder registry or contact list, project charter, and list of deliverables. The portfolio manager might also want additional detail, such as the work breakdown structure and project schedule. Resolving portfolio problems: The portfolio manager should keep an ear to the ground regarding issues and red flags about portfolio projects. If there’s a change that might affect project prioritization, the portfolio manager should get involved. Assisting with post-implementation review: At the appropriate time after a portfolio project ends, the portfolio manager might participate in a post-implementation review (PIR) that helps determine whether success criteria were met. Information gained from post-implementation reviews can shed light on future decisions about new project ideas, and how such proposals should be evaluated and measured. Summary When an organization carries out multiple projects, it can benefit from project portfolio management (PPM). Project portfolio management starts with a project portfolio strategy. It serves to evaluate, prioritize, and select the right projects for the portfolio, striving for balance among a mix of project types to achieve the organizations strategic goals. During project execution, portfolio management tracks the high-level aspects of the portfolio projects, including forecasted project finish dates and budget performance, as well as resource utilization and scope management.   To download the companion content, go to the Wiley Booksite and select download forms in the right column. From Your Project Management Coach : Applying Best Practices for Managing Projects in the Real World, Chapter 24: Managing a Portfolio of Projects,by Bonnie Biafore and Teresa Stover, published with the authorization ofJohn Wiley & Sons, Inc. 10475 Crosspoint Blvd. Indianapolis, IN 46256. Copyright 2012 by John Wiley & Sons, Inc. Purchase Your Project Management Coach: Best Practices for Managing Projects in the Real World by Bonnie Biafore and Teresa Stover.  

Certification Insider: Analyzing Variance with Microsoft Project

Whether you’re still planning or in the middle of the project execution maelstrom, Microsoft Project calculates scheduled values, which are the forecast values at the moment you look at them. Once the project is underway, the scheduled values are likely to drift away from the baseline you set. And those variances are the clues that your project needs attention and about what you might have to do to restore it to health. The topic of comparing progress against a baseline is something you’ll want to understand thoroughly in order to pass Microsoft certification exams for Project 2010 (70-178). Scheduled values take into account actual values you’ve recorded and the forecasts for the work that remains. If you’re still planning, scheduled values are pure forecast. When the project is done, the scheduled values equal the actual values. Variances are the difference between scheduled and baseline values. One quick caveat: If all the variances are zero, chances are you haven’t set a baseline yet. You can’t have a variance between scheduled and baseline values if there’s no baseline. Looking at variances at the project level is a first step for sniffing out problems. You can see project-wide measures by looking at the Project Summary Task in a Gantt chart view. To see different variances in the project summary task row, apply the Variance, Work, or Cost tables to the view. (The screenshot shows the project summary task with the Work table.) You can also see variances in the Project Statistics dialog box (on the Project tab, click Project Information and in the Project Information dialog box, click Project Statistics) or by running the Project Summary text report. When Start, Finish, Duration, and Work variances are greater than zero, the project may be behind schedule. Work and Cost variances greater than zero could mean the project is over budget. Another way to scope out potential problems is by comparing the percent complete for Duration (% Complete) and Work (% Work Complete). If duration has a higher percent complete than work, the project has more work remaining than the duration to perform it in. (However, contouring tasks so more work occurs later on has the same effect. Finding delayed tasks can help you correct course before things get completely out of hand. Project has several filters and reports for looking for delays — even ones that haven’t occurred yet. The Should Start By filter and the Should Have Started Tasks report list tasks that should have started by the date you specify — such as your most recent status date — but haven’t. They look for tasks whose Start values are earlier than the task should-start-by date as well as those that don’t have any Actual Start values. You can also look for tasks whose finish dates are late or whose work hours are greater than the baseline work. Slipping tasks have finish dates that are later than their baseline finish dates. The Slipping Tasks filter and the Slipping Tasks report both show slipping tasks. The Slipped/Late Progress filter shows slipping tasks and tasks whose actual work is less than the amount that should be done. The finish date may not have changed, but it could if you don’t take action. If work takes more time than you estimated, task durations and costs can increase. The Work Overbudget filter shows tasks whose actual work is greater than the baseline work, so the tasks are already in trouble. You can’t do anything about completed tasks, but you should investigate why the work hours increased. If the issue is lower productivity, you might have to replace resources or eliminate obstacles for your team members. Similar to overbudget work, you can use Project tables (Cost), filters (Cost Overbudget), and reports (Cost Overbudget) to look for overbudget costs. Earned value analysis puts project progress into dollars and measures how much of the project cost you’ve earned so far through completed work. You have to set up a few things in Project before you can use earned value analysis. Set a baseline so you have baseline values to compare to. Enter actual values for the work that has been completed. Set a status date (Choose Project | Properties | Project Information. In the Project Information dialog box, choose the date in the Status Date box. Set the options for how Project calculates earned value. You can specify the baseline Project uses. You can also tell Project to use % Complete to calculate variance or Physical % Complete. In the Project Options dialog box, go to Advanced and look for the “Calculation options for this project” label. If you use the Physical % Complete field to calculate earned value, you have to enter values for your tasks. For example, you can set Physical % Complete to 0%, 50%, or 100% depending on whether tasks are unstarted, in progress, or complete. Or, you can copy the value from the % Work Complete field into Physical % Complete. Three measures represent the pillars of earned value analysis: Planned cost for scheduled work is also known as the budgeted cost of work scheduled (or BCWS, which is the name of the corresponding Project field). This is the cost you estimated for the work scheduled through the status date — in other words, the baseline cost for the work that should be completed as of the status date. Planned cost for completed work is called earned value, because it’s the baseline cost the project has earned with completed work as of the status date. The other name is budgeted cost of work performed or BCWP. Actual cost of completed work is how much you actually spent as of the status date. Because planned value, earned value, and actual cost are all measured as money, you can compare them to check schedule and cost performance. The Earned Value Over Time visual report, found in Project 2010, shown in the screenshot, presents all three measures over time. If earned value is less than planned value, less work is actually completed than you estimated, so the project is behind schedule. If the earned value is greater than the actual cost, the work you’ve completed cost less than you estimated so the project is under budget. Additional Earned Value Measures One tricky bit in Project is getting Cost Variance and CV fields straight. For example, if the Cost Variance field shows a variance of $1,000, then the CV field shows a variance of ($1,000) or -$1,000. The CV field is earned value minus actual cost; so when CV is a positive value, the project or task is under budget, a desirable (or positive) result. The Cost Variance field is the Cost field minus the Baseline Cost field, so it’s a positive value when the project or task is over budget. You can look at earned value measures in several places. The Earned Value table shows earned value measures for every task. The Earned Value Cost Indicators table includes basic earned value fields and adds CV% (CV as a percentage of the planned value), Cost Performance Index (CPI), and To-Complete Cost Performance Index (TCPI). The Earned Value Schedule Indicators table includes planned value (BCWS), earned value (BCWP), plus schedule-oriented measures, such as Schedule Variance (SV), Cost Variance (CV), SV%, and Schedule Performance Index (SPI). The Earned Value Over Time visual report initially shows the graph of earned value over time. You can modify this report to show earned value for specific time periods or specific tasks. Think You Know Variances? Test Yourself! The earned value graph for your project looks like the one here. Where does the project stand in terms of schedule and budget A: The project is over budget and behind schedule. B: The project is under budget and ahead of schedule. C: The project is over budget and ahead of schedule. D: The project is under budget and behind schedule. No peeking! Scroll below the book ordering information to read the answer to this quiz. Order the MCTS Self-Paced Training Kit (Exam 70-632): Managing Projects with Microsoft Office Project 2007. To learn more about Microsoft certification, read, “Microsoft Project Management Certification: How to Get Started.”   Bonnie Biafore is the author of O’Reilly’s Microsoft Project 2010: The Missing Manual and Microsoft Press’ On Time! On Track! On Target! Managing Your Projects Successfully with Microsoft Project. She’sdeveloping a Project 2010 course for As a consultant, she manages projects for clients and wins accolades for her ability to herd cats. You can learn more at Bonnie’s website or email her at         The Answer to Test Yourself! In this example, the actual cost is less than the planned value, so the project is under budget. The earned value is also less than the planned value, which means that the project is behind schedule. A is incorrect. The actual cost is less than the planned value, so the project is under budget. B is incorrect. The actual cost is less than the planned value, so the project is under budget. C is incorrect. The actual cost is less than the planned value, so the project is under budget. The actual cost is less than the planned value, so the project is under budget. D is correct.