Project Control Process

Project Control Process

1. Setting Project Standards: Targets are set for each project activity in terms of time, cost, quality etc. They serve ads standards for control. Project planning is used to set such standards.
2. Performance Monitoring: Actual performance of each project activity is measured to provide feedback. Project reporting system is the source of such information.
3. Find Performance Deviations: The actual performance is compared with the standards to find out deviation for each activity. The causes and incidence of deviatiions are analyzed.
4. Corrective Actions: Corrective actions are taken to improve performance in future period. This is the crux of project control. It remedies the deviations to keep the system stable.
1. Project control system should focus on critical points in which performance deviatiions cause  the greatest damage to the project. It should find and resolve problems to get the project back on track.

Areas for Project Control

1. Time Control: Time control can be of two types:
• Normal Time Control: It is the estimated time for completion of an activity. Increase beyond this time is not likely to result in cost reduction.
• Crash Time Control: It is the estimated time of completion of an activity which cannot be reduced further irrespective  of cost considerations.
• Every project has an optimal time schedule which is effectively controlled to check overruns. Time delays result in cost overruns.
2. Cost Control: It involves the following:

• Setting up standard costing and budgetary control systems for the project. Project accounts capture costs as they are committed.
• Allocating responsibilities for cost control at task level.
• Ensuring proper allocation of costs to project codes; ensuring that costs are properly authorized.
• Measuring actual costs and comparing them with standard costs to prepare cost reports.
• Identifying deviations to take corrective actions to control cost overruns and maintain financial discipline.
• Value engineering can be used for Cost Reduction.

Types of Project Costs can be:

1. Budgeted Cost: Estimated during project planning.
2. Contracted Cost: Cost provided in the contract.
3. Committed Cost: Cost of purchase orders issued.
4. Earned Value: Cost of work in progress.
5. Invoiced Cost: Accrued Cost/ Invoice by contractor.
6. Incurred Cost: Payment authorized.

Control

Control is a managerial process. It is interrelated with planning. Planning provides standards for control. Control measures actual performance and compares it with standards to identify deviations. Deviations are analyzed to take corrective actions.

• Control is a continuous process. To be effective, it should give attention to critical control points or benchmarks where deviations adversely affect the attainment of targets.

Types of Control
Control can be of the following types:

The Process of Control

1. Pre-control (Feed-forward control): It is inputs-based. It is initiated before the start of the activity. It anticipates problems in advance and takes preventive corrective actions. Examples are specifications for quality control, capital budgeting methods, acquisition of right human resources.
2. Concurrent Control (Yes/No Control): It is transformation based. It is initiated during the implementation of the activity. It consists of actions to ensure that operations are being conducted according to plans. Problems are corrected as they arise. Example is quality control from process to process.
3. Post Control (Feedback Control): It is output based. It is initiated after the completion of the activity. It is based on feedback of performance results. Example is financial analysis.

Control Cycle
Control is a cyclical process. It involves the following steps:
1. Setting Standards (What should be done?)
Planning sets standards fro performance. Standards are the starting point of control. They are target or yardstick of performance.

• Standards can be in terms of quality, quantity, costs, income and time. Standard costs, standard operating time, sales goals per salespersone, quality standards, kilometers per liter are example of standards.
• Standards should be clearly understandable. They should be reasonable. Employees should see them fair and attainable.

2. Measuring Performance (What actually was done?)
The second step in control is measurement of actual performance within a given period. It is a continuous on-going process to get feedback.

• Internal reports relating to quantity, quality, costs, income, time etc., provide information about actual performance.

3. Finding Deviations (Extent and causes of difference)

 The third step in control is comparison of actual performance with standards. Performance can be equal to, be higher, or be lower than standards.

• The magnitude of deviation is identified. The causes and incidence of deviation are analyzed.
• The responsibility for deviation is located.

4. Corrective Actions (Future standards)
The performance is evaluated in terms of deviations. Corrective actions are taken. The actions can be:

• Do nothing: If the performance deviations are withing allowable tolerance, status quo is maintained.
• Correct deviations: Actions are taken to correct the deviations. They can be more training, better raw materials, improvements in design, greater motivation etc.
• Change Standards: Standards are revised to make the appropriate and realistic.
• Control should focus on critical control points. They are of areas where deviations from standards will cause the greatest damage to project. Corrective actions can be most effectively applied to such critical control points.