10.4. Reporting Project Performance (PMBOK, Section 10.3)
Throughout the project, customers and other stakeholders are going to need updates on the project performance. The work performance information—the status of what's been completed and what's left to do—is always at the heart of performance reporting. Stakeholders want to be kept abreast of how the project is performing.
Performance reporting is the process of collecting, organizing, and disseminating information on how project resources are being used to complete the project objectives. In other words, the people footing the bill and who are affected by the outcome of the project need some confirmation that things are going the way the project manager has promised.
Performance reporting covers more than just cost and schedule, although these are the most common concerns. Another huge issue is the influence of risks on the project's success. The project manager and the project team must continue to monitor and evaluate risks, including pending risks and their impact on the project's success.
Another major concern with reporting is the level of quality. No one will praise the project manager and the project team for completing the project on time and on budget if the quality of the work is unacceptable. In fact, the project could be declared a failure and cancelled as a result of poor quality, or the project team may be forced to redo the work, business could be lost, or individuals could even be harmed as a result of the poor quality of the project work.
10.4.1. Examining the Tools for Performance Reporting
You want, need, and are required to report performance on your project's status, time, cost variables, and more. You'll need some tools to get this job done quickly and correctly. You already know that the work performance information is one of the primary inputs to this process, but you'll need five tools that'll make this task even easier (and better). Here are the five reporting tools you need to know for the PMI exam:
Information presentation tools You need some way to present your fantastic and not-so-fantastic news to management and other stakeholders. This tool is just any old software package that can incorporate some spreadsheet, presentation, and graphics abilities to present your overall project performance. (The exam will stay vendor-neutral, but for ease here, I'm going to say it: think Microsoft PowerPoint.)
Performance information gathering and compilation You need a methodology to capture the project's health and status at any time. This system can be manual, which doesn't sound like much, nor is it very likely in today's push-button world. More likely, you'll pull this information from your project management information system. The specific information you're after is status, forecasting, performance, and project progress.
Status review meetings You'll learn about the status of your project through many avenues, but the most common is through the project's status meetings. These regularly scheduled meetings measure what's been done, what's left to do, and the overall health of the project.
Time reporting systems Remember Chapter 6 on time management? Good. The time reporting system is the collection of actual time spent completing project management and project tasks to complete the project scope statement.
Cost reporting systems I know you remember Chapter 7. This system, like its time-based counterpart, is the system to record actual monies spent on the project. The difference, of course, between the actual and the estimate is a cost variance.
10.4.2. Reviewing Project Performance
The project manager will host performance review meetings to ascertain the progress and level of success the project team is having with the project work. Performance review meetings focus on the work that has been completed and how the work results are living up to the time and cost estimates. In addition, the project manager and the project team will evaluate the project scope to protect it from change and creep. The project manager and the project team will also examine quality and its effect on the project as a whole. Finally, the project manager must lead a discussion on pending or past risks and then determine any new risks, as well as the overall risk likelihood and its potential impact on the project's success.
10.4.3. Analyzing Project Variances
Performance review meetings are not the only tools the project manager uses to assess project performance. Prior to the performance reviews, or spurred by a performance review, the project manager needs to examine the time, scope, quality, and cost variances within the project. The project manager will examine the estimates supplied for the time and cost of activities and compare it to the time and cost actually experienced.
The goals of analyzing project variances include the following:
Prevent future variances
Determine the root cause of variances
Determine if the variances are an anomaly or if the estimates were flawed
Determine if the variances are within a predetermined acceptable range, such as −10 percent or +5 percent
Determine if the variances can be expected on future project work
In addition to examining the time and cost variances, which are the most common, the project manager must examine any scope, resource, and quality variances. A change in the scope can skew time and cost predictions. A variance in resources, such as the expected performance by a given resource, can alter the project schedule and even the predicted costs of a project. Quality variances may result in rework, lost time, lost monies, and even the rejection of the project product.
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10.4.4. Examining the Results of Performance Reporting
The goal of performance reporting is to share information regarding the project's performance with the appropriate stakeholders. Of course, performance reporting is not something done only at the end of the project or after a project phase. Instead, it is done according to a regular schedule, as detailed in the communication plan or as project conditions warrant. Outputs of performance reporting include such things as:
Performance reports These are the results and summation of the project performance analysis. The communications management plan will detail the type of report needed, based on the conditions within the project, the timing of the communication, and the demands of the project stakeholder.
Forecasting Will the project end on schedule? Will the project be on budget? How much longer will it take to complete the project? And how much more money will this project need to finish? Earned value management can answer many of these questions for the project management team.
Change requests Performance results may prompt change requests to some areas of the project. The change requests should flow into the change control system (CCS) for consideration and then be approved or denied.
Recommended corrective actions Corrective actions center on bringing future project performance back in alignment with the project plan.