38 Project Control

Vishal Kumar

    1.  Learning Outcome

 

After completing this module, students will be able to:

  1. Understand the concept of a project control
  2. Understand the scope of the project control
  3. Know the techniques of project control

  2. Introduction: Control is one of the most important functions of project management. It implies measurement of project performance against the standards and taking corrective actions for deviations to ensure achievement of project goals. The objective of project control is to ensure that everything occurs in conformities with the standards. An unexamined project is not worth for an entrepreneur. Therefore, he has to review the performance of the project time to time from different aspects. An efficient and effective control system enables the project manager to achieve the desired results and helps to predict deviations before they actually occur.

 

In the words of Koontz & O’Donell “Controlling is the measurement & correction of performance activities of subordinates in order to make sure that the enterprise objectives and plans desired to obtain them as being accomplished”.

 

According to Theo Haimann, “Controlling is the process of checking whether or not proper progress is being made towards the objectives and goals and acting if necessary, to correct any deviation”.

 

Thus, the control process has the following steps:

a. Establishment of standard performance.

b. Observing actual performance.

c. Comparison of actual performance with the standards.

d. Taking Corrective action.

    Project control is the process of monitoring, evaluating and compared planned results with actual results to determine the progress toward the project cost, schedule and technical performance objectives, as well as the projects strategic fit with the objectives of the organization.

 

 

3. Scope of Project Control: After launching of the project, control becomes the dominant concern of the project manager. In the initiation stage a project manager has to establish the control which involves establishing organization, contracts, schedules budgets, systems and procedures etc and their proper implementation. During next stage, he has to control the ongoing activities of the project when it enters into the production phase. The primary objective of establishing control is the completion of the project and that too within time, cost and according  to  specifications.  Project  control  has  a  direct  correlation  to  project  progress  and  stakeholders’ expectations. On the basis of the above discussions, the scope of the project can be discussed in the following parts:

 

a) Progress Control

b) Quality Control

c) Schedule Control

d) Cost Control

    a) Progress Control

 

The primary objective of every project manager is to complete the project. The success of the project depends upon timely completion of the project, within the framework of allocated budget and it must perform up to the desired satisfaction. An ideal project is one which is carefully selected and prepared, thoroughly appraised/analyzed, closely supervised and consistently evaluated. The basis or progress control should be the control of the tasks which occur at the last level of the work breakdown structure. Completion of one task leads to next level of higher level of work and ultimately the whole project. At each stage the progress of the tasks is measured and controlled. The following are the instruments which are used to control the progress of the project:

  • Preparation of Tasks List
  • Measurement of Progress
  • Follow up
  • Controlling Overall Project Progress
  1. Preparation of Tasks List: The first step in controlling the progress of the project is the preparation of a task list. Every employee involved in the project should be asked to prepare a list of tasks involved in their particular activity. Once the task list is prepared, it is very easy to estimate the total quantum of work and the efforts required to complete that work. The list can then be used for keeping track of what has been completed and what remains to be completed. The objective of preparing tasks list is also to functional control of the project i.e. those tasks which require time and do not have much value should be eliminated. It will reduce the work and cost of the project. A task list also specifies the scope of the work. It has to be approved before it is taken up for Implementation. An approved list becomes a work order. If any change is to be made in the work order, it will need the approval and a change order will be required for that. After finalizing the tasks list, it is implemented for progress measurement and control.
  2. Measurement of Progress: Progress measurement is one of the crucial task of every project manager for the successful completion of the project. He has to measure the progress of the project at every stage to analyze and compare actual performance with the standard. Measurement of individual task is very simple but the problem arises when he has to measure the aggregate performance of the tasks which is full of complexities. Therefore, all tasks cannot be measured by the same unit and the different tasks do not have the same milestones. The overall progress of the project can be measured by assigning weightage to each level of task in  proportion  to  its  contribution  towards  the  total  installed  cost.  It  can  further  be  analyzed  by  giving weightage in proportion to the efforts contributed for the completion of the task. Therefore, for each category of tasks, a list of milestones will be established before the task to measure the progress of the activity.
  3. Follow Up: To ensure the successful implementation of the plans, proper monitoring and follow up of the project activities is required. It will not only expedite the functioning of the project rather help the organisation to make things move. Once the things start moving, they do not necessarily move in the planned way. So, for the timely completion of the project follow up is essential on day to day basis. Follow up can be done through proper information system, reporting, review of the progress and finding reasons for variance in actual and standard performance. It identifies the steps required to accelerate progress and fixes responsibility for taking these steps.
  4. Controlling Overall Project Progress: There must be balanced progress in all stages of a project. There are different phases of the project and the progress of one phase must support the other so that there should be balance in each phase. In the initial stage the balance in progress does not become so obvious, but when the progress of the whole project is viewed, any imbalance in different phases of the project becomes the main issue. Moreover, at the lower level if there is a gap between the actual progress achieved and the progress committed, it can be reviewed and controlled but at higher levels it has no meaning because it becomes uncontrollable. Thus, for progress review at higher levels of management, it is necessary to know what progress is required in a particular phase of a project to keep the project moving at the desired rate of progress.

    b) Quality Control

 

The Quality control is a process using which “an organization seeks to ensure that the product quality is maintained/improved and manufacturing defects/variations are reduced or eliminated”. Quality control requires the companies to set up an environment in which both entrepreneur and employees put in the best efforts to achieve perfection. This can be done by providing training to employees, setting up benchmarks, testing/inspecting products to check for variations using statistical quality control tools. Quality control is setting up a framework of well-defined control limits. The control limits help in standardization of production and quality aspects. Quality control is “all about setting standards about how much variation is acceptable”. For organizations that have adopted quality control as a continuous improvement process, Statistical Quality Control and Statistical Process Control are commonly used tools. “A quality control approach can be highly effective at preventing defective products from reaching the customer. But at the same time if the defect levels are very high, the company’s profitability will suffer and this can only be handled if steps are taken to find out and eliminate the root causes of variations taking place”. Quality control can be performed through three tools such as, inspection, quality assurance, and total quality management. These three tools are as follows:

  • Inspection: Refers to the method that detects quality problems at the end of the production process before they reach the final customer. It emphasizes testing of products to uncover products that do not meet specifications. It is a traditional method that enterprises use to achieve the quality standard. In the enterprise, the inspectors of quality control department check the finished items and reject defective or substandard products. Once the causes of problems are identified, the quality control department tries to change that aspect of production process and procedure to solve the quality problems that occur more often. This control technique has some drawbacks, such as inspection does not add any value to the finished products and services as it is done after the transformation process. Moreover, inspection is an expensive process, in terms of both tangible and intangible costs. For example, materials, labor, time, employee morale, and lost sales.
  • Quality Assurance: It refers to the method that focuses the efforts on improving quality. It is guided by the belief that “quality comes from improvement of the process not from inspection.” In detail, it attempts to improve and stabilize production, and associated processes, so that the issues related to the quality of the product are minimized. A quality assurance process may involve the following:
  1. Testing of previous articles
  2. Planning to improve
  3. Incorporating improvement
  4. Reviewing new item and improvements
  5. Testing of the new item

    One quality assurance process involves product evaluation and testing to determine whether they meet standards, such as performance measures. As a result, quality assurance can involve delays in production until all corrective steps have been undertaken. Inspection is treated as one aspect of the overall quality assurance process.

  • Total Quality Management (TQM): Total Quality Management is an integrated approach adopted by the management with the objective to focus on quality and continuous improvement in all the functional and operational areas of the business. It has been observed that over the time period TQM has contributed substantially in improving the overall capability of the business and helped in sustaining the competitive advantage. TQM focuses on improvements from the very basic foundation of the business. It has also been opined that TQM is not an inclusive solution to all the problems of the business and it cannot solve managerial problems. Customer satisfaction is the key driving force of total quality management. TQM is said to be an enhancement of the conventional way of doing business. For better understanding of TQM, let us break it in following way:

*Total – Total means summation of the whole *Quality – Quality is the degree of excellence

*Management – management is getting things done through others through planning, organizing, controlling, coordinating directing etc.

 

Thus, it is clear that product is treated as quality product when it meets certain or all dimensions of the quality. But quality dimensions as applicable to manufacturing cannot not be applied to service sector. Since the products produced by manufacturing organisations are tangible and can be seen, touched and measured directly for example apparels can be touched and quality can be assessed by touching them, similarly in case of cars, computers etc.it is easy to ascertain quality. Therefore, in case of manufacturing organizations, definition of ‘quality’ mainly stress upon tangibility as feature of quality. Similarly, it includes conformance which means customers can see whether the product meets the pre-determined standards or not. Performance, reliability, durability and other features can also be easily judged. The degree of perception of quality of each customer vary.

 

Now, in service organizations, a product is intangible. It cannot be touched or completely seen, it can only be experienced. For example, in case of hospitals, services can be experienced only. Similarly, quality of holiday packages or resorts can be experienced only. These cannot be touched or seen. It is the intangibility of the product, which makes it different from the manufacturing organizations. Since it can be experienced only so the perception of quality is highly subjective. Other than tangibility, some features of quality in service sector includes Courtesy and friendliness of the one who is serving, Promptness in delivery of service, atmosphere where the service is delivered and consistency in delivey of service i.e. everytime the same standards are delivered.

 

c) Schedule Control

 

A project manager has to concentrate on monitoring schedules. Schedule is the process of monitoring status of the project in order to update the project progress and manage the changes in the schedule. The project manager has to control the schedule and make sure that all activities are line up with the schedule baseline. It is the proactive task of the project manager. Schedule control is the regular activity of the project manager throughout the project until all the activities have been completed. Schedule control is concerned with:

  • Determining the current status of the project,
  • Ascertaining factors responsible for the changes,
  • Determining the variance in the project schedule, and
  • Managing the variance

  After calculating the updated schedule and budget, they have to be compared with baseline schedule and budget to analyze and compare the actual performance with the budgeted. The variance between the baseline schedule and budget and updated schedule and budget determines that whether the project is going as per schedule or behind the time schedule. This process continues till the end of the project. Thus, schedule control includes the following steps:

  • Complete analysis of the schedule to measure the performance of each activity and making analysis to determine the variance.
  • Deciding what corrective action should be taken.
  • Revising the current plan to incorporate the changes, and
  • Revaluation of the schedule after corrective action

    The process will be continued till the planned corrective actions do not result in an acceptable schedule. Thus schedule controlling is a continuous process in order to measuring the performance of the activities as per schedule baseline.

 

Techniques of Schedule Control

The following are the techniques used to control the schedule:

i. Variance Analysis: Variance analysis is a technique to determine the variance in the planned schedule and actual time taken to complete any activity. It compares planning data with actual performance in order to discover delays or variations in the project schedule. For example, the production process of a project is compared its scheduled start, duration and anticipated completion date with its actual start, duration and completion date in order to calculate the variance in that activity.

 

ii. Progress Reporting: Progress reporting is a technique to report the timely start and completion of the activities and the remaining duration of unfinished activities. In this technique normally a percentage is used to differentiate between the scheduled time and actual time taken to perform the activity.

 

iii. Performance Measurement: Under this method, the project performance is reviewed and compared with project plan. It assesses the reasons for delay and other deviations in completing any activity of the project. This technique helps the project manager to compare the performance of the activities and determine if corrective or proactive action is needed for the project. It can be done with the help of the following:

  • Schedule comparison bar charts
  • Project management software
  • Schedule change control system
  • Schedule Variance, and
  • Schedule performance index

    iv. Resource Leveling: Resource Leveling is a technique used by the project manager to review the allocation of resources to existing or new tasks. It will normally cause the resources to be leveled in order to control schedule.

 

v. Schedule Compression: Under this method the techniques like crashing, fast-tracking etc are used to control the schedule. The objective here is to determine an approach either to reduce the plans duration or to accommodate resource limitations.

 

d) Cost Control

 

Cost control is the process of monitoring the cost status of the project and controlling the same. The project manager has to monitor and control the budget of the project. The basic objective of controlling cost is that the project must stay within funding limitations. Under this process the project manager finds the variance in budgeted cost and actual cost and also make necessary actions to ascertain the reasons for such variance. He must control the factors contributing such variance. He should take appropriate steps to bring the actual cost in line with the budgeted cost either by modifying the future plans or changing the way to performing the work. For small projects it is easy to analyze the cost for the whole project but as the project becomes larger and more complex, ‘cost centres’ are to be established at various segments of the project.

 

Techniques of Cost Control

There are many techniques used to control the cost. Some of these are discussed as below:

i. Project Budgeting: The term Project Budgeting refers to long term planning for proposed capital expenditure and their financing. It includes both raising of long-term funds as well as their utilization. It is defined as a firm’s formal process of investment in capital assets. Project budgeting is the decision making process by which a firm evaluates the acquisition of its major long term/fixed assets. It involves an enterprise’s decision to invest its current resources for addition, disposition, modification and replacement of fixed assets. Thus, Project Budgeting consists in planning the deployment of available capital for the purpose of maximising the long term profitability of an enterprise. Adhering to the project budget at all times is the key to the profit from project.

 

ii. Tracking of Costs: Tracking of costs is another method to control the costs of the project. Keeping track of all actual costs is also equally important as any other technique. At the foremost the project manager has to make the budget of all the activities to be undertaken in the project and keep track of the budget in each phase of the project. The actual costs will have to be tracked against the periodic targets that have been set out in the budget. These targets could be on a monthly or weekly basis or even yearly if the project will go on for long.

 

iii. Time Management: Another technique to control cost is effective time management. This technique is not only useful in cost control but in various management areas. Time management plays an important role in controlling activities as the delay in completion of any activity will increase the cost of the project. Therefore, the project manager would need to constantly remind his team about the deadlines of the project in order to ensure that work is completed on time.

 

iv. Earned Value Management: Earned Value Management is an effective technique for controlling cost. Its strength is that it looks at cost, time, and task completed within the scope of the project simultaneously. It uses a work breakdown structure (WBS) and budget created during the development stage, but tracks these metrics during the implementation stage of the project. This technique is particularly helpful for large project.

 

v. Forecasting: Under this technique the project manager not only consider the historical facts but also take into account the future costs and revenues. Forecasting uses techniques for determining new cost values on the basis of the experiences made during the project.

 

vi. Project Performance Reviews: In order to check the health of the project, project performance reviews are required. The performance of the project is reviewed with the help of cost and schedule. However, other parameters such as scope, quality and team morale may also be used for this purpose. Project performance reviews use earned value analysis and forecasting to compare cost performance.

 

4. Summary: Project control is the process of monitoring, evaluating and compared planned results with actual results to determine the progress toward the project cost, schedule and technical performance objectives, as well as the projects strategic fit with the objectives of the organization. It becomes the dominant concern of the project manager. The primary objective of establishing control is the completion of the project and that too within time, cost and according to specifications. The success of the project depends upon timely completion of the project, within the framework of allocated budget and it must perform up to the desired satisfaction. An ideal project is one which is carefully selected and prepared, thoroughly appraised/analyzed, closely supervised and consistently evaluated.

 

Learn More
Suggested Readings:
  1. Bhudhiraja Ankur, Bhatnagar Bhawna, Entrepreneurship Development & Small Business Management, Vayu Education of India.
  2. Sood S.K, Renu Arora, Small, Medium Business and Entrepreneurship, Kalyani Publishers.
  3. Janakiram B, Raveendra P.V., & Srirama V. K. (2010). Role and Challenges of Entrepreneurship Development. New Delhi-110028: Excel Books.
  4. Prasain G. P. (2003). Entrepreneurship Development. New Delhi-110002: Jain Book Agency.
  5. Robert D Hisrich (2007). Entrepreneurship. New Delhi. Tata McGraw-Hill Publishing Company Limited.
  6. http://simdega.nic.in/fii.html
  7. http://www.dcmsme.gov.in/policies/policies.htm
  8. http://economictimes.indiatimes.com/small-biz/entrepreneurship
Points to ponder:
  1. Project Control:- Project control is the process of monitoring, evaluating and compared planned results with actual results to determine the progress toward the project cost, schedule and technical performance objectives, as well as the projects strategic fit with the objectives of the organization.
  2. Quality Control: The Quality control is a process using which “an organization seeks to ensure that the product quality is maintained/improved and manufacturing defects/variations are reduced or eliminated”. Quality control requires the companies to set up an environment in which both entrepreneur and employees put in the best efforts to achieve perfection.
  3. Total Quality Management (TQM): Total Quality Management is an integrated approach adopted by the management with the objective to focus on quality and continuous improvement in all the functional and operational areas of the business.
  4. Schedule Control: Schedule is the process of monitoring status of the project in order to update the project progress and manage the changes in the schedule.
  5. Variance Analysis: Variance analysis is a technique to determine the variance in the planned schedule and actual time taken to complete any activity. It compares planning data with actual performance in order to discover delays or variations in the project schedule.