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Costs

The costs of completing the project may exceed the value of the deliverables that will be produced by it. This catastrophic situation must be reported immediately.

The elements that must be considered in analysing the costs of the project are:

1. the total project budget;
2. the budget for the period under review;
3. the accumulated budget to date, for all periods up to and including the period under review;
4. the actual costs for the review period;
5. any deviation between the budget and the costs;
6. the actual costs to date;
7. the accumulated deviation to date.

Progress

The diagnosis may suggest that the project will ever be completed. This catastrophic situation must be reported immediately.

The diagnosis may suggest that the project will not be completed by at least one critical date. If that date must be met, often because the deliverables will have no value after it, then this is a catastrophic situation and must be reported immediately.

Progress will be determined from:

1. the achievement in the period;
2. the achievement to date;
3. the work remaining to be done to complete the project;
4. the progress deviation for the review period, being the difference between the actual and expected progress for the period;
5. the progress deviation to date.

Performance

This topic will include the organization and management of the project.

It will include the performance of contractors.

The customer's performance should also be reviewed.

Performance is measured on:

1. the cost ratio for the period under review, being the ratio of actual costs against budgeted costs;
2. the progress ratio for the period, being the actual work against the planned work completed in the period;
3. the cost-progress ratio for the period, which indicates whether a unit of progress is being achieved for a unit of cost, and should be 1 or greater;
4. the cost ratio to date;
5. the progress ratio to date; and hence
6. the cost-progress ratio to date.

The over- or under-run to date is calculated as the accumulated value to date less the accumulated actual costs to date.

The projected final cost is calculated as the actual costs to date plus the estimated work remaining divided by the cost-progress ratio.

The projected final over- or under-run can be calculated as the projected final cost less the total project budget.

The following is a sample calculation for a four-month project with a total budget of $120,000.

		Month
Item	Calc	1	2	3	4	5
Budget - total	[A]	120	120	120	120	120
Budget - period	[B]	15	35	40	30	0
Budget - to date	[C]=sum[B]	15	50	90	120	120
Actual costs - period	[D]	13	36	46	57	35
Budget deviation- period	[E]=[B]-[D]	2	-1	-6	-27	-35
Actual costs - to date	[F]=sum[D]	13	49	95	152	187
Accumulated deviation - to date	[G]=[C]-[F]	2	1	-5	-32	-67
Achievement - period	[H]	13	36	10	30	31
Achievement - to date	[I]=sum[H]	13	49	59	89	120
Estimated work remaining - period	[J]=[A]-[I]	107	71	61	31	0
Progress deviation - period	[K]=[H]-[B]	-2	1	-30	0	31
Progress deviation - to date	[M]=[I]-[C]	-2	-1	-31	-31	0
Cost ratio - period	[N]=[D]/[B]	0.87	1.03	1.15	1.90
Progress ratio - period	[O]=[I]/[B]	0.87	1.40	1.48	2.97
Cost-progress ratio - period	[P]=[I]/[D]	1.00	1.36	1.28	1.56
Cost ratio - to date	[Q]=[F]/[C]	0.87	0.98	1.06	1.27	1.56
Progress ratio - to date	[R]=[I]/[C]	0.87	0.98	0.66	0.74	1.00
Cost-progress ratio - to date	[S]=[I]/[F]	1.00	1.00	0.62	0.59	0.64
(Over) under run - to date	[T]=[I]-[F]	0	0	-36	-63	-67
Projected final cost	[U]=[F]+[I]/[S]	120	120	193	205	187
Projected final (over) under run	[V]=[U]-[A]	0	0	73	85	67

Performance worksheet

When some elements of this table are graphed, some difficulties become clearly highlighted.

Figure 105.1: Performance graph

Four curves have been placed on the graph. From the top, they are:

• the projected final cost, which clearly exceeds the planned expenditure, which is the horizontal straight line at 120;
• the actual cost to date, which meets the projected final cost at the point of completion, which is clearly beyond the planned schedule, which is the line below it;
• the planned budget to date, which meets the horizontal line at the planned project end; and
• the value of work done, which indicates that the project will overrun, as progress does not match the planned schedule, which is the line above it.

A graph of this nature can be very useful in demonstrating the current and future situation of the project.

It should be noted that the situation was out of control by the third month, when a project diagnosis would have demonstrated this fact and corrective action might have been taken. By the third month, progress had failed to meet expectations, with a potential cost over-run, although costs were still on budget at this time.

Quality

This section will include the technical quality of the deliverables being developed by the project.

It may be that the technical quality of the deliverables is so poor that they will, in effect, have no real value. This catastrophic situation must be reported immediately.

Again, where the diagnostician has been asked to examine these aspects of the deliverables, it may be that the costs of using or maintaining the deliverables beyond the project is so great that the deliverables will not be used. This situation should be reported immediately.

Some particular areas of quality that can be assessed in IS projects are:

1. design;
2. programming: bugs, testing, etc.;
3. human interfaces: GUIs, displays, reports, documentation, on-line help, training, etc.;
4. system interfaces: compatibility with operating environment, adherence to DBMS protocols, etc.;
5. data interfaces: data duplication, referential integrity, etc.;
6. performance: response times, update immediacy, etc.;
7. maintenance: ease of maintenance, documentation, etc.;
8. expansion: ease of expansion, ability to add new features, etc.;
9. security.

Compliance

Some principal areas that can be examined for compliance are:

1. system requirements documentation;
2. design standards;
3. project management standards;
4. contractual performance;
5. payment schedules.

Expectations

This area will also cover the nature of the relationship between the customer, the project team and any contractors.