13 Feb 2012

Work Progress Indicators

This post is about building and presenting information about the current progress of the work, which is one of the most important parts of a project progress report.
The presented approach for project reporting is to use indicators, which are numerical and graphical representations of information. They are also called key performance indicators (KPIs), and they are built from project metrics. They present the information in a way it is very quick to read and understand, which improves the effectiveness of the project progress reports.

The information about the progress of the work can be represented with an indicator to show the actual progress of the work compared to the planned progress. It can be shown as a time evolution chart, which helps understanding both the current status and its trend. The following image shows an example of work progress indicator.

Looking at the diagram it is possible to easily identify if the actual progress is ahead with respect to the plan (actual progress higher than planned progress, like in the first points of the diagram), so the situation of the project is good, or the opposite, when the actual progres is worse than the plan (like in the last part of the diagram).

The progress indicator is therefore a comparison between the percentage of project completed, and the percentage of the project expected to be completed at a given time. It is also possible to create another indicator based on it, which would be the deviation of the progress, calculated as the ratio between the actual and expected progress, shown in the diagram below.

The diagram shows first negative deviation, which means that the progress is better than planned, and in the last part a positive deviation, which means nearly a 20% deviation in the progress with respect to the plan.
The work progress indicator is a key information to contribute to the project management and planning:
  • If the indicator shows that the current progress is less than expected, it is necessary to take actions to increase the production, which can be for example to dedicate more time or make team bigger, etc.
  • It is also possible to derive from the indicator the information about what would be the expected end of the activity if the progress continues in the same way, based on the progress deviation indicator. So, if it is not possible to take measures to reduce the deviation, this information can be used to re-plan the activity, and agree with the client a new end date if necessary. The diagram below represents the evolution of the estimated end (calculated from the progress deviation), compared to the planned end.

The diagram represent the impact of the deviation in the project end date, so it is possible to make decisions about if the progress of the work is acceptable or not, considering the time constraints of the project.

In order to create the work progress indicator it is important to understand how to obtain accurate source information, the current progress and the planned progress.
For determining the planned progress, there are many different ways to do it, depending on the type of project. An interesting case is for manpower based projects, like typical consultancy or engineering projects, in which there is normally a defined start and end dates.
The most simplified solution has been used in the first diagram above. It simply assumes that the work is distributed equaly along the execution period. Then, the planned progress at a given time can be obtained from the calculation of the percentage of the period used. For example, if the day of the reporting is the end of the sixth month of a project of 10 months, the planned completion can be set to 60%. This calculation is very easy, and it gives very good results in projects in which the effort is approximately equaliy distributed along the period.

A further sophistication is to calculate the planned progress using the information from lower level work packages or activities within the project. Projects are normally organised into lower level work packages, which may have more likely a constant effort distribution. For example, if a project is divided into different phases (e.g. preparation, design, execution, and support), each one can be a different work package with their defined start and end dates. They may have very different effort profiles, e.g the execution is the biggest, and the support is a small package over a large period. The solution would be to calculate the planned progress of each work package separately (using the approach proposed above, based on the work package period used), and then aggregate them at the level of projects. The aggregation needs to apply a weight to each work package based on their effort budget. This approach gives a more accurate view of the project plan, as shown in the diagram below, in which the plan is first more relaxed, and later it expects higher progress.

The other important aspect is how to calculate the actual progress of the work in a given moment, which is the actual work progress information. The accuracy of this information is very important to understand the real status of the project. The use of objective information is the recommended approach, for example, if the project is about producing products, it would be possible to measure the amount of items already created.

However, in many cases it is not possible to measure the progress in an objective way, like in many manpower based projects. In this case, the proposed approach is to make calculations bawd on effort estimates. There is normally and estimation of the effort required to complete the activity or project. The information about the effort already dedicated would be easy to get, but it would be useful only in case the estimation of the work is fixed (for example, if there is a fixed effort budget to be used). In other cases, the way to calculate the progress has to be to re-estimate the remaining effort at each moment. The actual progress of the work can then be calculated as the ratio between total estimate and the estimate of the remaining work (which would be the percentage pending, so 100% minus that number would give the percentage of work done). In the cases in which the original total estimate turns wrong, it has to be updated, considering the effort acctually done and the estimated remaining effort, so the progress calculation is more accurate than using the original estimate.

The estimation of the remaining work may not be easy in big projects. The same mechanisms used for the calculation of the initial estimation of the work can be applied periodically to re-estimate the pending work. In those cases, it is necessary to go to lower level activities, and estimate them independently, to finally aggregate the information at project level. A good recommendation is to ask to the people involved in the work how much time they will need to complete the assigned activities, because they are the ones which can provide best estimates.

As summary, we have seen that the general approach of providing a work progress indicator in project reports provides very useful information to evaluate the status of the project and to take measures to improve it or re-plan it. It will depend on the specific project the way to calculate the planned and actual work progress at the reporting time, so we have commented some ideas for the case manpower based projects, like consultancy or engineering projects.

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