INTEGRATED COST

AND SCHEDULE
CONTROL I N
PROJECT
MANAGEMENT
SECOND EDITION
Ursula Kuehn, PMI> EVP
m
MANAGEMENTCONCEPTS
CONTENTS
Preface xxi
Acknowledgments xxix
Part 1Project Management and the
Integrated Process 1
Chapter 1Basic Concepts 3
Success 3
The Project 4
Project Management 5
Stakeholders 6
The Project Team 7
The Project Manager 8
Project Documentation 9
1
Chapter 2The Integrated Process 11
The Integrated Cost and Schedule Control Processes 11
Balancing the Triple Constraint 14
The Work Breakdown Structure 16
The Guidance System 19
Integrated Cost and Schedule Control in the
Federal Government 20
Part 2The Initiation Process 23
a
Chapter 3Defining the Scope 25
Customer-Focused Scope Decisions 26
Customer Expectations of What They Can
Get for Their Money 28
Building and Using a Deliverable-Oriented WBS 30
viii INTEGRATED COST AND SCHEDULE CONTROL
Chapter 4Estimating the Cost and Duration of
Work Packages 41
Determining Work Packages 41
Estimating Work Package Effort 42
Including Risk Identification in Work Package
Estimates 46
Translating Effort to the Cost of a Work Package 50
How Individual Productivity Impacts the Cost
Estimate 51
The Control Account 59
The Planning Package 59
Translating Effort to Duration of a Work Package
Using Availability 60
Chapter 5Balancing the Scope to the Budget 65
Determining Other Stakeholder Needs/Wants 70
Baselining the Scope 71
The Initiating Process in the Federal Government 71
The Control Account Manager and Organizational
Breakdown Structure 75
Part 3The Planning Process 77
Chapter 6Understanding Workflow and How Work
Packages Relate 81
;?Finish-to-Start 82
Start-to-Start 83
Finish-to-Finish 84
Start-to-Finish 86
Lag and Lead 87
Constraints 91
Chapter 7Building a Network Schedule 93
Network Scheduling Using the Arrow
Diagramming Method 94
Network Scheduling Using the Precedence
Diagramming Method 104
Compressing Our Example Schedule 108
Planning Our Example Resources 119
Compressing Our Example Even More 122
Contents ix
Chapter 8Analyzing and Adjusting the Schedule 127
Forward Pass 127
Backward Pass 130
Calculating Float 134
Identifying the Critical Path 135
Calculating Free Float 136
Forward and Backward Pass with Start-to-Start
Relationship 140
Forward and Backward Pass with Finish-to-Finish
Relationship 142
Compressing the Network Schedule 146
Resolving Resource Conflict 147
Task and Resource Information 152
Chapter 9Analyzing Schedule Risk 155
Analyzing the Critical Path Using PERT 155
Merge Bias 170
Merge Bias 172
Monte Carlo Simulation 173
Chapter 10Readdressing the Scope to Balance
the Triple Constraint 177
De-Scoping the Project 177
Displaying the Integrated Cost and Schedule Plan 177
Project Planning in the Federal Government 179
Control Account Plan :'. 181
Integrated Master Plan and Integrated
Master Schedule 181
Responsibility Assignment Matrix 183
Work Authorization Document 183
Part 4The Execution and Controlling Process 185
Chapter 11Establishing a Performance Measurement
Baseline 187
Budget at Completion 189
Displaying the Baseline on the Network Schedule 190
Changing the Baseline 192
INTEGRATED COST AND SCHEDULE CONTROL
Chapter 12The Federal Integrated Baseline Review 197
IBR Process 198
IBR Preparation and PMB Assessment 201
IBR Execution 204
IBR Results Review and Management Processes 206
Chapter 13Collecting Cost and Schedule
Performance Metrics 207
Planned Value 209
Actual Cost 212
Earned Value 215
Calculating Earned Value for Level of Effort 217
Determining Project Status Data Using
Only Effort Hours 220
Earned Schedule 220
Chapter 14Performing Earned Value Analysis 223
Using Earned Value Analysis to Analyze Cost
and Schedule Performance 223
Variance Analysis 225
Performance Index Analysis 227
Project Percentage Analysis 238
Using Earned Value Analysis to Forecast Future
Cost Issues 240
How Much Could the Entire Project Cost? 241
How Much Will Be Needed to Complete the Project? 242
Are We Over or Under the Budget at Completion? 243
What Performance Do We Need to Get Back on Track?.. .243
Understanding ANSI/EIA-748 249
Organization 249
Planning, Scheduling, and Budgeting 251
Accounting Considerations 254
Analysis and Management Reports 256
$ Revisions and Data Maintenance 257
Chapter 15Steering Future Performance
Back Toward the Baseline 259
Contents xi
Chapter 16Contract Performance Reports Required
by the Federal Government 265
Header Information, Formats 14 266
Government Contractor 266
Contract 266
Project 266
Report Period 267
Format 1Work Breakdown Structure 267
Quantity 267
Negotiated Cost 267
Estimated Cost of Authorized Unpriced Work 270
Target Profit/Fee 270
Target Price 270
Estimated Price 270
Contract Ceiling 270
Estimated Contract Ceiling 271
Over-Target Baseline/Over-Target Schedule 271
Estimated Cost at Completion 271
Management Estimate at Completion. 271
Estimate at CompletionBased on a Simple
Formula of BAC/CPI 272
Estimate at CompletionBased on the
Formula EAC = AC + (BAC-EV)/SPI*CPI 272
Contract Budget Base 272
Variance 272
Authorized Representative. 272
Performance Data 273
Column (1) Work Breakdown Structure Number 273
Column (2) Work Breakdown Structure Elements 273
Cost of Money 273
General and Administrative 273
Undistributed Budget 274
Subtotal (Performance Measurement Baseline) 274
$ Management Reserve 274
Total 275
" Columns (2) through (22) 275
Columns (1), (3), (4), and (5) 275
xii INTEGRATED COST AND SCHEDULE CONTROL
Columns (6) and (13)Planned Value
(Budgeted Cost of Work Scheduled) 275
Columns (7) and (14)Earned Value
(Budgeted Cost of Work Performed) 275
Columns (8) and (15)Actual Cost
(Actual Cost of Work Performed) 276
Columns (9) and (16)Schedule Variance 276
Columns (10) and (17)Cost Variance 276
Columns (11) and (18)Schedule Performance
Index 277
Columns (12) and (19)Cost Performance Index 277
Column (20)Planned Value in Time 278
Column (21)Earned Value in Time .278
Column (22)Schedule Variance in Time 278
Column (23)Schedule Performance
Index in Time 278
Column (24)Budget at Completion 279
Column (25)Estimate at Completion 279
Column (26)Variance at Completion .
;
279
Column (27)To-Complete Performance Index 279
Format 2Organizational Breakdown Structure 280
Column (1) Organizational Category 280
Cost of Money 281
General aftd Administrative. 281
Undistributed Budget 281
Subtotal (Performance Measurement Baseline) 281
Management Reserve 281
Total..'. 284
Columns (2) through (18) 284
Format 3Baseline 284
Baseline Data 284
Original Negotiated Cost 284
Negotiated Changes 284
H Current Negotiated Cost 285
Estimated Cost of Authorized Unpriced Work 285
" Project Budget Base 285
Total Allocated Budget 285
Difference 285
Contents xiii
Contract Start Date 288
Contract Definitization Date 288
Planned Completion Date 288
Performance Measurement Schedule Inconsistent with
Contractual Schedule 288
Over-Target Schedule Agreement 289
Indicators of a Performance Measurement Schedule
Inconsistent with the Contractual Schedule 289
Contract Completion Date 289
Estimated Completion Date 289
Performance Data 290
Column (1)Performance Measurement Baseline
(Beginning of Period) 290
Baseline Changes 290
Performance Measurement Baseline (End of Period).. .290
Management Reserve 291
Total 291
Column (2)Planned ValueCumulative to Date . . . .291
Column (3)Planned Value for Report Period 291
Columns (4) through (14) 292
Column (15)Undistributed Budget 292
Column (16)Total Budget 292
Format 4Staffing 293
Performance Data 293
Column (i)Labor Category 293
This doesn't seem right to me 293
Total 296
Columri (2)ActualCurrent Period 296
Column (2)ActualEnd of Current Period
(Cumulative) 296
Columns (4) Through (14)Forecast
(Non-Cumulative) 296
Column (15)Forecast at Completion 297
format 5Explanations And Problem Analysis 297
General 297
Total Project 299
Cost and Schedule Variances 299
Setting Variance Analysis Thresholds 300
xiv INTEGRATED COST AND SCHEDULE CONTROL
Management Estimate at Completion 300
Undistributed Budget 301
Management Reserve Changes 301
Baseline Changes 301
Staffing Level Changes 301
Part 5The Closeout Process 303
Chapter 17Analyzing the Cost and Schedule Metrics
of Deliverables 305
Chapter 18Archiving Cost and Schedule Data for
Continuous Process Improvement 309
Index 311