Question

Monitoring and controlling a project portfolio is an on-going process. How and when it is performed is determined by the needs of the organization. One way that monitoring and controlling a project portfolio is different from establishing it initially is that the process includes evaluating on-going projects and rebalancing the portfolio. The evaluation of on-going projects involves determining if the project continues to support the objectives of the portfolio in terms of alignment with organizational strategy and project performance. The criteria used to assess the continued alignment of the project to organizational strategy are typically the same as when the project was first proposed for funding. The assessment of project performance against expected time and cost parameters is done using quantitative techniques, such as Earned Value Management.

For this Discussion:

Why is it important to monitor and control a project portfolio on an on-going basis? What are the risks of not doing this?

What is category balancing? What is triple constraint balancing? Provide examples of each.

Can category balancing and triple constraint balancing be used concurrently? Why or why not?

What is Earned Value Management (EVM)? How is it used in monitoring and controlling a project portfolio? Provide an example.

Answer 1

It is critical to monitor and control a project portfolio on an on-going basis as that will help in identifying any kind of deviations from the normal flow of the project quite early. The early detection of deviation facilitates solution implementation as well as the cost of correction is kept minimal. So the project budget as well as schedule is maintained.

If project monitoring and controlling is not done on a regular basis, following can happen to the project:

• Project may get prone to risks
• Project may fall behind schedule
• Project may go over-budget
• Errors may creep in the project

Category balancing is the major entity which tries to balance the project under various categories or constraints.

Triple constraint balancing facilitates the balancing of project on 3 dimensions – cost, quality and time. The project managers try to facilitate the triple constraint balancing in project by keeping the cost, quality as well as project time within its pre-decided scope.

• Cost : Project budget
• Quality : Appraisal cost
• Time: Project schedule

Triple constraint balancing is a type of category balancing, so they are inherently the same thing. Thus they can be easily used together.

The Earned value Management (EVM) is a statistical tool used to track the current status and progress of a project. It also helps in forecasting the future performance. This tool integrated the cost, schedule and scope of the project systematically to provide accurate results.

The Traditional Management approach uses 2 data sources- the estimated budget of the project and the actual expenditure. This approach compares the both expenditures and highlights the difference between what was planned and what actually got spent.

The advantage the EVM has over traditional management approach is that in EVM, three data sources are taken into consideration:

• The budget value
• The actual value
• The earned value of the work done

These 3 aspects help in highlighting the cost variance as well as the schedule variance of the project. Cost variance is the difference between the estimated and the actual cost and the overrun in budget. Schedule variance highlights the difference in project status in proposed timeline and actual timeline.

EVM is a more holistic approach of measuring the project schedule over the traditional approach.