Controlling Schedule and Cost with Project Schedule

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The project schedule is a document that, if properly prepared, is usable for planning, execution, monitoring/controlling, and communicating the delivery of the scope to the stakeholders. The main purpose of a project schedule is to represent the plan to deliver the project scope over time. A project schedule, in its simplest form, could be a chart of work elements with associated schedule dates of when work elements and milestones (usually the completion of a deliverable) are planned to occur. In addition to guiding the work, the project schedule is used to communicate to all stakeholders when certain work elements and project events are expected to be accomplished.

The project schedule is also the tool that links the project elements of work to the resources needed to accomplish that work. As a minimum, the project schedule includes the following components:

  1. All activities
  2. A planned start date for the project
  3. Planned start dates for each activity
  4. Planned finish dates for each activity
  5. Planned finish date for the project
  6. Resource assignments
  7. Calendar based
  8. Activity durations
  9. The “flow” (sequence) of the various activities
  10. The relationships of activities
  11. An identified critical path(s)
  12. Total and free float

A. How to Develop a Project Schedule

PMI® has a Develop Schedule process and the main output is the project schedule. This is the result of four previous processes plus the work of up to eight tools and techniques for the Develop Schedule process. The previous processes are:

  1. Define Activities (work elements)
  2. Sequence Activities
  3. Estimate Activity Resources
  4. Estimate Activity Duration

The tools and techniques available to develop the schedule are:

  1. Schedule network analysis
  2. Critical Path Method
  3. Critical Chain Method
  4. Resource leveling
  5. What-if scenarios
  6. Leads and lags
  7. Schedule compression
  8. Scheduling tools

B. Why a Project Schedule is Important

Based on the work above, we now have a schedule for:

  1. Individual Activities
  2. Work Packages
  3. Deliverables
  4. The Total Project

This level of detail allows a project manager evaluate the schedule performance of the project from the top down or from the bottom up. If a deliverable is slipping or is in danger of slipping, the project manager can drill down until he/she finds the problem or potential problem. One other very powerful tool that will help in this analysis is the Earned Value Method (EVM). EVM can assist you in evaluating project schedule performance (what have accomplished related to the plan), calculate a Schedule Performance Index (SPI) which is a representation of the effectiveness of accomplishing your planned schedule.

EVM can also calculate a Schedule Variance (SV) which is the difference between the value of the work completed and value of the planned work. This will tell you the magnitude of the behind schedule, ahead of schedule, or if zero you are on schedule. EVM can be applied down to the work element level, if the appropriate level of detail exists. EVM does have several draw backs, but there are solutions to the draw backs:

  1. EVM ignores the critical path. There are two thing we can do to solve this problem.
    • Perform a separate CP analysis.
    • Strip out all non-CP work elements and perform a second EVM analysis.
  2. As the project nears completion, EVM breaks down for schedule analysis. This is because as the project nears completion, EV approaches PV, and in fact reaches PV at project completion. SV and SPI lose their meaning.

Variance analysis is another tool to help the project manager understand why work elements (or above) are behind or ahead of schedule. The Time Management Plan probably sets thresholds for behind schedule (say 5%), a different threshold for ahead of schedule (say 10%), to trigger your attention. Understanding why work elements are behind schedule will assist the project manager in developing solutions (action plans) to bring the project back within acceptable ranges. Understanding why work elements are significantly ahead of schedule will assist the project manager in feeding this information forward to new project schedule development.

Regardless of care or execution, project schedule slippages will occur. This is just another fact of the project world. While they cannot all be eliminated, they can be reduced for future projects. Some (not many) projects will finish very close to the schedule date. More projects will finish within acceptable ranges (+/-5%). Others (we hope not many) will finish well outside the acceptable range (>10% behind or ahead). Using the techniques outlined here will reduce the number of projects in this category and reduce the size of the behind variances.

C. Tips on How to Successfully Manage a Project Schedule

  1. Use all of the tips from “Successfully Managing a Project Budget”.
  2. Avoid the pitfalls in Section IV.
  3. Get reports, even if you have to have them customized, from your scheduling software that tells YOU what is going on with the project and schedule accomplishment.
  4. When work elements slip, analyze the cause and impact. Take action as necessary. These things will not fix themselves.
  5. When resources do not materialize as planned and agreed, estimate the impact, and communicate this to management!
  6. When things go wrong, analyze why, estimate the impact, communicate with stakeholders and take action to bring the schedule accomplishment back within acceptable ranges.

Reproduced from Global Knowledge White Paper: Importance of Schedule and Cost Control

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