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Friday, July 8, 2011

Chapter 81: Performance Reporting

While you are directing and managing the project execution, the work results and the progress toward creating the project results are generated. Just producing the results is no guarantee of success. Success is determined by the performance with which the results are being produced. You need to know the performance to keep the project on the right track. Furthermore, the stakeholders need to know with what rate, efficiency, and work quality the resources are being used to deliver the project output. For this, you need to collect the project performance data and use this data to make performance measurements while controlling the scope, schedule, and cost. You use this data and performance measurements to prepare performance reports, which in turn are used for distributing information and controlling risks.

Remember that, the stakeholders need to be aware of what is happening in the project and hence these reports must be shared on a timely/regular basis with all people who need to know the progress.

The high level idea can be understood by looking at the picture below:

Performance reporting is the process of collecting performance information, putting it into the distribution format, and distributing it. Performance reporting, for brevity, is also called reporting and is focused on the following components:
Project status - The current state of the project.
Project progress - The progress made with some previous state as a reference.
Forecast - The prediction of the progress in the future based on the progress in the past.

It is easy to confuse the Report Performance Process with the Distribute Information Process that we discussed a few chapters ago. Though there may be some overlaps between the two processes, they are not the same. Distributing information means distributing all the relevant information, whereas performance reporting focuses on the performance part of the information. You can use the information distribution system to report performance.

The formal name for the process used for performance reporting is Report Performance. It can be illustrated using the picture below:

Inputs to Performance Reporting

The core of performance reporting is to use performance measurements to prepare performance reports. The following items are needed as an input to the performance reporting process:

Performance measurements - These measurements are mostly made in other monitoring and controlling processes, such as control scope, control schedule, and control cost. However, you may need to make some measurements during the performance reporting process.

Work performance data - To make performance measurements and to put them in the right perspective, you need the work performance data that you collected during monitoring and controlling project execution.

Project management plan - This plan has project baselines, such as scope baseline, schedule baseline, and cost baseline. The work performance data is compared to these baselines to make performance measurements.

Organizational process assets - The organizational process assets that may come in handy in preparing the performance reports include report templates, measurement guidelines, and variance limits accepted in the organization.

Tools and Techniques for Performance Reporting

Tools and techniques used in performance reporting include communication methods, variance analysis, forecasting techniques, and reporting systems. Communication methods were discussed in Chapter 40, and variance analysis will be discussed very soon.
Forecasting techniques include the following:
Earned value forecasting techniques - The forecasting techniques based on the earned value analysis. We will discuss this later.
Extrapolation techniques - Extrapolation is a scientific method to predict future results based on past data. It makes use of concepts such as trend, growth, and decay. These techniques are also called time series methods.
Causal methods - These techniques are based on predicting the behavior of a variable by identifying the underlying causes of that behavior. Regression analysis is an example of such methods.
Judgmental techniques - These techniques use intuitive judgment in making predictions and can also use other methods, such as analogy and the Delphi technique.

Reporting systems - A reporting system is used to collect, store, maintain, and distribute information. Modern reporting systems often include software tools. There can be specialized reporting systems to support performance reporting, including:
Cost reporting system - This system can store and report the cost expended on the project and on its different activities and aspects.
Time reporting system - This system can store and report how much time has been expended on the project and on its different activities and aspects.

Output of Performance Reporting

Performance reports are an obvious output of performance reporting. The full list of outputs from this process is:

Project performance reports - Performance reports present relevant information from work performance data and performance measurements in a suitable format. The relevancy and suitability depend on the audience; the stakeholders that are the consumers of these reports. The report format may include presentation elements such as tables, bar charts, and histograms in order to make the information easy to understand. The performance reports can contain the following:
Summary of work performance information - Results from the comparison of the actual work results to the planned performance; i.e., the performance baseline.
Current status - The current state in which the project is right now.
Progress - Progress made from some reference point in the past. The status refers to where the things are right now, and the progress refers to what has been accomplished since a previous status.

Status & Progress reports are an integral part of any project and the project manager has to send this information to the stakeholders like the project customer or his boss. They in-turn can track the project health and suggest any change of course in case they feel the project is not heading in the right direction.

Forecasts - Performance reporting includes making forecasts based on past performance. These forecasts include estimates such as what the total cost incurred at project completion will be, called estimate at completion (EAC) and how much cost will be incurred to complete the remaining project, called estimate to complete (ETC). These forecasts can be updated as more performance information comes in as the project moves on.

Change requests - Measuring and communicating performance may generate change requests, which must be processed through integrated change control before implementation. For example, performance reporting may expose that certain aspects of the project are not on the right track or the project is not performing as expected by the stakeholders. The forecasting may expose danger ahead. All this can generate recommendations for corrective and preventive actions.

Updates to organizational process assets - During performance reporting, there will be lots of revelations by performance measurements and feedback from the stakeholders. This will result in updating the organizational process assets, such as lessons learned.

Prev: Monitoring & Controlling Risks

Next: Summary - Monitoring & Controlling Quality and Risk

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