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Chapter 10

Measuring and Controlling Project Performance

The PMP® exam content from the executing the project, and the monitoring and controlling the project performance domain covered in this chapter includes the following:

• Task 1: Measure project performance using appropriate tools and techniques in order to identify and quantify any variances, perform approved corrective actions, and communicate with relevant stakeholders.
• Task 2: Manage changes to the project scope, schedule, and costs by updating the project plan and communicating approved changes to the team in order to ensure that revised project goals are met.
• Task 4: Implement approved changes according to the change management plan, in order to meet project requirements.
• Task 5: Assess corrective actions on the issue register and determine next steps for unresolved issues by using appropriate tools and techniques in order to minimize the impact on project schedule, cost, and resources.
• Knowledge and Skills:
  • Performance measurement and tracking techniques (for example, EV, CPM, and PERT)
  • Project control limits (for example, thresholds and tolerance)
  • Project performance metrics (for example, efforts, costs, and milestones)
  • Variance and trend analysis techniques
  • Project plan management techniques
  • Change management techniques
  • Integrated change control processes

This chapter introduces the Monitoring and Controlling process group. The Monitoring and Controlling process group involves taking measurements and performing inspections to find out whether there are variances in the plan. If you discover variances, you need to take corrective action to get the project back on track and repeat the affected project Planning processes to make adjustments to the plan as a result of resolving the variances.

We’ll start with the Monitor and Control Project Work process. This involves tracking, reviewing, adjusting, and controlling progress to meet the project performance objectives. We’ll also look at Administer Procurements, Report Performance, and Perform Integrated Change Control.

Administer Procurements is where contract performance is monitored, procurement relationships are managed, and corrections or changes are implemented where needed.

Performance reports are an output of the Report Performance process and are used during the Monitoring and Controlling processes, along with tools and techniques, to measure project performance. These measurements and control tools allow the project manager to take corrective action during the Monitoring and Controlling processes to remedy wayward project results and realign future project results with the project management plan.

Perform Integrated Change Control lays the foundation for all the control processes—such as Monitor and Control Risk, Control Costs, and Control Schedule—that we’ll talk about in Chapter 11, “Controlling Work Results.” During this discussion, I’ll take time to explain how change control and configuration management works. When you read these sections, remember that the information from the Perform Integrated Change Control process applies to all the control processes we’ll talk about in Chapter 11.

You’ve learned a lot about project management by this point and have just a few more topics to add to your study list. Keep up the good work. You’re getting closer to exam day.

Monitoring and Controlling Project Work

The processes in the Monitoring and Controlling process group concentrate on monitoring and measuring project performance to identify variances from the project plan and get it back on track.

The Monitor and Control Project Work process is concerned with monitoring all the processes in the Initiating, Planning, Executing, and Closing process groups. Collecting data, measuring results, and reporting on performance information are some of the activities you’ll perform during this process.

According to the PMBOK® Guide, the Monitor and Control Project Work process involves the following:

• Reporting and comparing actual project results against the project management plan
• Analyzing performance data and determining whether corrective or preventive action should be recommended
• Monitoring the project for risks to make certain they’re identified and reported, their status is documented, and the appropriate risk response plans have been put into action
• Documenting all appropriate product information throughout the life of the project
• Gathering, recording, and documenting project information that provides project status, measurements of progress, and forecasting to update cost and schedule information that is reported to stakeholders, project team members, management, and others
• Monitoring approved change requests

Monitor and Control Project Work Inputs

The inputs of this process include the project management plan, performance reports, enterprise environmental factors, and organizational process assets. The enterprise environmental factors of this process include elements such as standards, work authorization systems, risk tolerances of your stakeholders, and project management information systems. Let’s look briefly at work authorization systems.

A work authorization system is a subsystem of the project management system. This is a formal, documented procedure that describes how to authorize work and how to begin that work in the correct sequence and at the right time. This system describes the steps needed to issue a work authorization, the documents needed, the method or system you’ll use to record and track the authorization information, and the approval levels required to authorize the work. You should understand the complexity of the project and balance the cost of instituting a work authorization system against the benefit you’ll receive from it. This might be overkill on small projects, and verbal instructions might work just as well. For purposes of the exam, understand that project work is assigned and committed via a work authorization system.

Work is usually authorized using a form that describes the task, the responsible party, anticipated start and end dates, special instructions, and whatever else is particular to the activity or project. Depending on the organizational structure, the work is generally assigned and authorized by either the project manager or the functional manager. Remember that the system includes documentation on who has the authority to issue work authorization orders.

The only tool and technique of this process is expert judgment, so we’ll move right to the outputs next.

Monitor and Control Project Work Outputs

The outputs of the Monitor and Control Project Work process will also look familiar. They are as follows:

• Change requests
• Project management plan updates
• Project document updates

Remember from Chapter 9, “Conducting Procurements and Sharing Information,” that change requests may take the form of corrective actions, preventive actions, or defect repairs. Corrective actions bring the work of the project into alignment with expected future performance. Preventive actions are implemented to help reduce the probability of negative project risks. Defect repairs either correct or replace components that are substandard or malfunctioning.

Project management plan updates may include updates to one or more of the management plans, including schedule, cost, or quality, and may require updates to the baselines, including scope, schedule, and cost performance.

Project document updates may include updates to forecasts, performance reports, and the issue log.

Administering Procurements

We’ll now take another look at the procurement arena. We learned about Conduct Procurements in Chapter 9. Now that the contract has been awarded, you need to administer it.

The Administer Procurements process concerns monitoring the vendor’s performance and ensuring that all the requirements of the contract are met. When multiple vendors are providing goods and services to the project, Administer Procurements entails coordinating the interfaces among all the vendors as well as administering each of the contracts. If vendor A has a due date that will impact whether vendor B can perform their service, the management and coordination of the two vendors become important. Vendor A’s contract and due dates must be monitored closely because failure to perform could impact another vendor’s ability to perform, not to mention the project schedule. You can see how this situation could multiply quickly when you have six or seven or more vendors involved.

Depending on the size of the organization, administering the contract might fall to someone in the procurement department. This doesn’t mean you’re off the hook as the project manager. It’s still your responsibility to oversee the process and make sure the project objectives are being met, regardless of whether a vendor is performing the activities or your project team members are performing the activities. You’ll be the one monitoring the performance of the vendor and informing them when and if performance is lacking. You’ll also monitor the contract’s financial conditions. For example, the seller should be paid in a timely manner when they’ve satisfactorily met the conditions of the contract, and it will be up to you to let the procurement department know it’s OK to pay the vendor. If administering the contract is your responsibility, you might have to terminate the contract when the vendor violates the terms or doesn’t meet the agreed-upon deliverables. If the procurement department has this responsibility, you’ll have to document the situation and provide this to the procurement department so that they can enforce or terminate the contract.

Administering the contract is closely linked with project management processes. You’ll monitor the progress of the contract, execute plans, track costs, measure outputs, approve changes, take corrective action, and report on status, just as you do for the project itself. According to the PMBOK® Guide, you must integrate and coordinate the Direct and Manage Project Execution, Report Performance, Perform Quality Control, Perform Integrated Change Control, and Monitor and Control Risk processes during the Administer Procurements process.

Contracting Inputs

Administer Procurements has six inputs:

• Procurement documents
• Project management plan
• Contract
• Performance reports
• Approved change requests
• Work performance information

Procurement documents and the project management plan are outputs from previous processes. We will cover performance reports in more detail in the section “Establishing Performance Measurements” later in this chapter. Performance reports for the Administer Procurements process include information related to the seller (or vendor).

Approved Change Requests

Sometimes as you get into the work of the project, you’ll discover that changes need to be made. This could entail changes to the contract as well. Approved change requests are used to process the project or contract changes and might include things such as modifications to deliverables, changes to the product or service of the project, changes in contract terms, or termination for poor performance. Contracts can be amended at any time prior to contract completion, provided the changes are agreed to by all parties and conform to the change control processes outlined in the contract.

Work Performance Information

Work performance information concerns monitoring work results and examining the vendor’s deliverables. This includes monitoring their work results against the project management plan and making certain activities are performed correctly and in sequence. You’ll need to determine which deliverables are complete and which ones have not been completed to date. You’ll also need to consider the quality of the deliverables and the costs that have been incurred to date.

Vendors request payment for the goods or services delivered in the form of seller invoices. Seller invoices should describe the work that was completed or the materials that were delivered and should include any supporting documentation necessary to describe what was delivered. The contract should state what type of supporting documentation is needed with the invoice.

Administering Procurements Tools and Techniques

The Administer Procurements process has several tools and techniques:

• Contract change control system
• Procurement performance reviews
• Inspections and audits
• Performance reporting
• Payment systems
• Claims administration
• Records management system

You will look at each of these in the following sections.

Contract Change Control System

Much like the management plans found in the Planning processes, the contract change control system describes the processes needed to make contract changes. Because the contract is a legal document, changes to it require the agreement of all parties. A formal process must be established to process and authorize (or deny) changes. (Authorization levels are defined in the organizational policies.)

The purpose of the contract change control system is to establish a formal process for submitting change requests. It documents how to submit changes, establishes the approval process, and outlines authority levels. It includes a tracking system to number the change requests and record their status. The procedures for dispute resolution are spelled out in the contract change control system as well.

The change control system, along with all the management plan outputs, becomes part of the Perform Integrated Change Control process that I’ll discuss later in this chapter.

Procurement Performance Reviews

Procurement performance reviews examine the seller’s performance on the contract to date. These reviews can be conducted at the end of the contract or at intervals during the contract period. Procurement reviews examine the contract terms and seller performance for elements such as these:

• Meeting project scope
• Meeting project quality
• Staying within project budgets
• Meeting the project schedule

The performance reviews themselves might take the form of quality audits or inspections of documents as well as the work of the product itself. The point of the review is to determine where the seller is succeeding at meeting scope, quality, cost, and schedule issues, for example, or where they’re not measuring up. If the seller is not in compliance, action must be taken to either get them back into compliance or terminate the contract. The yardstick you’re using to measure their performance against is the contract SOW and the terms of the contract. When the RFP is included as part of the contract, you might also use it to determine contract compliance.

Inspections and Audits

I talked about quality audits as part of the Perform Quality Assurance process. The idea is the same here. The buyer, or some designated third party, will physically inspect the work of the seller and perform audits to determine whether there are any deficiencies in the seller’s product or service.

Performance Reporting

Performance reporting is a large part of project management. This tool and technique entails providing your managers and stakeholders with information about the vendor’s progress in meeting the contract objectives. This information is also part of the Report Performance process that I’ll discuss in depth later in this chapter.

Payment Systems

Vendors submit seller invoices as an input to this process, and the payment systems tool and technique is used to issue payments. The organization might have a dedicated department, such as accounts payable, that handles vendor payments, or it might fall to the project manager. In either case, follow the policies and procedures the organization has established regarding vendor payments and make certain the payments themselves adhere to the contract terms.

Claims Administration

Claims administration involves documenting, monitoring, and managing contested changes to the contract. Changes that cannot be agreed upon are called contested changes. Contested changes usually involve a disagreement about the compensation to the vendor for implementing the change. You might believe the change is not significant enough to justify additional compensation, whereas the vendor believes they’ll lose money by implementing the change free of charge. Contested changes are also known as disputes, claims, or appeals. These can be settled directly between the parties themselves, through the court system, or by a process called arbitration. Arbitration involves bringing all parties to the table with a third, disinterested party who is not a participant in the contract to try to reach an agreement. The purpose of arbitration is to reach an agreement without having to go to court.

Records Management System

It has been a while since I’ve talked about documentation, but discussing the records management system reminds me of the importance of having an organized system for contract documentation. A records management system involves not just documentation, but policies, control functions, and automated tools. These can all be considered part of the project management information system you use to manage project documents and should include your contract documents. Records management systems typically index documents for easy filing and retrieval.

Managing Contract Outputs

The outputs to the Administer Procurements process are as follows:

• Procurement documentation
• Organizational process asset updates
• Change requests
• Project management plan updates

These outputs relate to the tools and techniques just talked about and, in practice, work hand in hand with them. I’ve talked about project management plan updates before and I don’t have anything new to add here. The remaining outputs have some additional information you need to know.

Procurement Documentation

Here’s your favorite topic again. This output includes (but isn’t limited to) all of the following:

• Contract
• Performance information
• Warranties
• Financial information (such as invoices and payment records)
• Inspection and audit results
• Supporting schedules
• Approved and unapproved changes

The records management system I talked about earlier is the perfect place to keep all these documents.

Organizational Process Asset Updates

Organizational process assets updates consist of organizational policies, procedures, and so on. Three elements of this output relate to contracts:

Correspondence Correspondence is information that needs to be communicated in writing to either the seller or the buyer. Examples include changes to the contract, clarification of contract terms, results of buyer audits and inspections, and notification of performance issues. You’ll use correspondence to inform the vendor if their performance is unsatisfactory. If they don’t correct it, you’ll use correspondence again to notify a vendor that you’re terminating the contract because performance is below expectations and is not satisfying the requirements of the contract.

Payment schedules and requests Many times, contracts are written such that payment is made based on a predefined performance schedule. For example, perhaps the first payment is made after 25 percent of the product or service is completed, or maybe the payment schedule is based on milestone completion. In any case, as the project manager, you will verify that the vendor’s work (or delivery) meets expectations before the payment is authorized. It’s almost always your responsibility as the project manager to verify that the terms of the contract to date have or have not been satisfied. Depending on your organizational policies, someone from the accounting or procurement department might request written notification from you that the vendor has completed a milestone or made a delivery. Monitoring the work of the vendor is as important as monitoring the work of your team members.

If the procurement department is responsible for paying the contractor, then that department manages the payment schedule (which is one of the terms of the contract). The seller submits a payment request, an inspection or review of their performance is conducted to make certain the terms of the contract were fulfilled, and the payment is made.

Seller performance evaluation Seller performance evaluation is a written record of the seller’s performance on the contract and is prepared by the buyer. It should include information about whether the seller successfully met contract dates, whether the seller fulfilled the requirements of the contract and/or contract statement of work, whether the work was satisfactory, and so on. Seller performance evaluations can be used as a basis for terminating the existing contract if performance is not satisfactory. It can also be used to determine penalty fees in the case of unsatisfactory performance or incentives that are due according to the terms of the contract. They should also indicate whether the vendor should be allowed to bid on future work. Seller performance evaluations can also be included as part of the qualified sellers lists.

Change Requests

Requested contract changes are coordinated with the Direct and Manage Project Execution and Perform Integrated Change Control processes so that any changes impacting the project are communicated to the project team and appropriate actions are put into place to realign the objectives. This might also mean you’ll have to change or modify the project management plan, the cost performance baseline, or the project schedule. That requires you to jump back to the Planning process group to bring the project management plan, or other documents, up-to-date. Once the plan is updated, the Direct and Manage Project Execution process might require changes as well to get the work of the project in line with the new plan. Remember that project management is an iterative process, and it’s not unusual to revisit the Planning or Executing processes, particularly as changes are made or corrective actions are put into place.

Contract changes will not always impact the project management plan, however. For example, late delivery of key equipment probably would impact the project management plan, but changes in the vendor payment schedule probably would not. It’s important that you are kept abreast of any changes to the contract so that you can evaluate whether the project management plan needs adjusting.

Establishing Performance Measurements

As mentioned, the Monitoring and Controlling process group concentrates on monitoring and measuring project performance to identify variances from the project plan. Report Performance is the process where the collection of baseline data occurs and is documented and reported. Report Performance is part of the Communications Management Knowledge Area, as is the Manage Stakeholder Expectations process. Therefore, it involves collecting information regarding project progress and project accomplishments and reporting it to the stakeholders. This information might also be reported to project team members, the management team, and other interested parties. Reporting might include information concerning project quality, costs, scope, project schedules, procurement, and risk, and it can be presented in the form of status reports, progress measurements, or forecasts.

Report Performance Inputs

You’ve examined most of the inputs to the Report Performance process previously. They are as follows:

• Project management plan
• Work performance information
• Work performance measurements
• Budget forecasts
• Organizational process assets

The project management plan contains the project management baseline data (typically cost, schedule, and scope factors), which you’ll use to monitor and compare results. Deviations from this data are reported to management. Work performance measures are taken primarily during the Control Cost, Control Schedule, and Perform Quality Control processes, which we’ll look at in the next chapter.

Report Performance Tools and Techniques

The following are tools and techniques of this process:

• Variance analysis
• Forecasting methods
• Communication methods
• Reporting systems

We will talk in depth about variance analysis in Chapter 11, and we’ll examine the remaining tools and techniques next.

Forecasting Methods

Forecasting involves examining the actual project performance data to date and making predictions about future project performance based on this data. According to the PMBOK® Guide, forecasting methods fall into four different categories, and each category has several types of forecasting methods. We’ll look at a brief description of each of the categories next. The methods listed within these categories are beyond the scope of this book to describe.

Time series methods These forecasting methods use historical data to predict future performance. Earned value, moving average, extrapolation, trend estimation, linear prediction, and growth curve are some of the methods the PMBOK® Guide states fall into this category. We’ll cover earned value in Chapter 11.

Causal/econometric methods Causal methods are based on the ability to identify variables that may cause or influence the forecast. A drop in interest rates, for example, may spur an increase in home sales. The methods included in this category are regression analysis, autoregressive moving average (ARMA), and econometrics.

Judgmental methods If your mom is anything like mine, you were taught not to be judgmental. This category of forecasting does just that, only it doesn’t judge people. It uses opinions, intuitive judgments, and probability estimates to determine possible future results. Methods within this category include composite forecasts, the Delphi method, surveys, technology forecasting, scenario building, and forecast by analogy.

Other methods Other types of forecasting methods include simulation (like Monte Carlo analysis), probabilistic forecasting, and ensemble forecasting.

Communication Methods

Communication methods in this process include status review meetings. Status meetings are a type of interactive communication and are important functions during the course of the project. (I introduced status review meetings with the Distribute Information Process in the previous chapter.) The purpose of the status meeting is to provide updated information regarding the progress of the project. These are not show-and-tell meetings. If you have a prototype to demo, set up a different time to do that. Status meetings are meant to exchange information and provide project updates. They are a way to formally exchange project information. It’s not unusual for projects to have three or four status meetings conducted for different audiences. They can occur between the project team and project manager, between the project manager and stakeholders, between the project manager and users or customers, between the project manager and the management team, and so on.

Notice that the project manager is always included in status review meetings. Take care that you don’t overburden yourself with meetings that aren’t necessary or meetings that could be combined with other meetings. Having any more than three or four status meetings per month is unwieldy.

The project manager is usually the expediter of the status meeting. As such, it’s your job to use status meetings wisely. Don’t waste your team’s time or the stakeholders’ time either. Notify attendees in writing of the meeting time and place. Publish an agenda prior to the meeting, and stick to the agenda during the meeting. Every so often, summarize what has been discussed during the meeting. Don’t let side discussions lead you down rabbit trails, and keep irrelevant conversations to a minimum. It’s also good to publish status meeting notes at the conclusion of the meeting, especially if any action items resulted from the meeting. This will give you a document trail and serve as a reminder to the meeting participants of what actions need to be resolved and who is responsible for each action item.

It’s important that project team members are honest with the project manager and that the project manager is in turn honest about what they report. A few years ago, a department in my agency took on a project of gargantuan proportions and unfortunately didn’t employ good project management techniques. One of the biggest problems with this project was that the project manager did not listen to the highly skilled project team members. The team members warned of problems and setbacks, but the project manager didn’t want to hear about it. The project manager took their reports to be of the “Chicken Little” ilk and refused to believe the sky was falling. Unfortunately, the sky was falling! Because the project manager didn’t believe the reports, she refused to report the true status of the project to the stakeholders and oversight committees. Millions of dollars were wasted on a project that was doomed for failure while the project manager continued to report that the project was on time and activities were completed when in fact they were not.

There are hundreds of project stories like this, and I’ll bet you’ve got one or two from your experiences as well. Don’t let your project become the next bad example. Above all, be honest in your reporting. No one likes bad news, but bad news delivered too late along with millions of dollars wasted is a guaranteed career showstopper.

Reporting Systems

Reporting systems are used to record, store, and distribute information about the project, including cost, schedule progress, and performance information. According to the PMBOK® Guide, spreadsheet analysis, presentations, table reporting, and graphic capabilities are types of distribution formats.

Report Performance Outputs

The Report Performance process has several outputs:

• Performance reports
• Organizational process assets updates
• Change requests

Performance reports are the primary output of this process. It’s here that performance information is documented and reported to the stakeholders as outlined in the communication management plan. These reports might take many forms, including S curves (cost baselines are recorded this way), bar charts, tables, and histograms. Earned value information and variance analysis is often reported during this process as well. We’ll examine the earned value topic in the next chapter during the discussion of the Control Costs process.

Performance reports may range from simply stated status reports to highly detailed reports. Dashboards are an example of a simple report that may use indicators like red-yellow-green to show the status of each area of the project at a glance. Red means the item being reported is in trouble or behind schedule, yellow means it’s in danger and corrective action should be taken, and green means all is well.

More detailed reports may include the following elements according to the PMBOK® Guide:

• Analysis of project performance for previous periods
• Risk and issue status
• Work completed in the current reporting period
• Work expected to be completed during the next reporting period
• Changes approved in the current reporting period (or a summary if there are numerous changes)
• Results of variance analysis
• Time completion forecasts and cost forecasts
• Other information stakeholders want or need to know

The updates needed to the organizational process assets output won’t be a surprise. They include lessons learned documentation, report formats, causes of issues, and corrective actions taken. The change requests process includes recommended corrective actions to bring performance in alignment with the project management plan and preventive actions to reduce probable future negative performance.

Managing Perform Integrated Change Control

The Perform Integrated Change Control process serves as an overseer, so to speak, of the Monitoring and Controlling processes. This is where you establish the project’s change control process. Changes, which encompass corrective actions, preventive actions, and defect repair, are common outputs across all the Monitoring and Controlling processes. (Don’t forget that change requests are also an output of the Direct and Manage Project Execution process, which is an Executing process.) Both processes can generate the change requests that are managed through the Perform Integrated Change Control process.

You’re likely to see exam questions on several topics that involve change and the Perform Integrated Change Control process. Configuration management, for example, isn’t listed as a tool and technique of this process, but you really can’t perform the Perform Integrated Change Control process without it. I’ll discuss this shortly. First, though, you’ll look at change, what it is, and how it comes about.

Changes come about on projects for many reasons. It’s the project manager’s responsibility to manage these changes and see to it that organizational policies regarding changes are implemented. Changes don’t necessarily mean negative consequences. Changes can produce positive results as well. It’s important that you manage this process carefully, because too many changes—even one significant change—will impact cost, schedule, scope, and/or quality. Once a change request has been submitted, you have some decisions to make. Ask yourself questions such as these:

• Should the change be implemented?
• If so, what’s the cost to the project in terms of project constraints: cost, time, scope, and quality?
• Will the benefits gained by making the change increase or decrease the chances of project completion?

Just because a change is requested doesn’t mean you have to implement it. You’ll always want to discover the reasons for the change to determine whether they’re justifiable, and you’ll want to know the cost of the change. Remember that cost can take the form of increased time. Let’s say the change you’re considering will result in a later schedule completion date. That means you’ll need human resources longer than expected. If you’ve leased equipment or project resources for the team members to use during the course of the project, a later completion date means your team needs the leased equipment for a longer period of time. All this translates to increased costs. Time equals money, as the saying goes, so manage time changes wisely, and dig deep to find the impacts that time changes might make on the budget.

How Change Occurs

As the project progresses, the stakeholders or customers might request a change directly. Team members might also recommend changes as the project progresses. For example, once the project is underway, they might discover more efficient ways of performing tasks or producing the product of the project and recommend changes to accommodate the new efficiencies. Changes might also come about as a result of mistakes that were made earlier in the project in the Planning or Executing processes. (However, I hope you’ve applied all the great practices and techniques I’ve talked about to date and you didn’t experience many of these.)

Changes to the project might occur indirectly as a result of contingency plans, other changes, or team members performing favors for the stakeholders by making that one little change without telling anyone about it. Many times, the project manager is the last to know about changes such as these. There’s a fine line here because you don’t want to discourage good working relationships between team members and stakeholders, yet at the same time, you want to ensure that all changes come through the change control process. If a dozen little changes slip through like this, your project scope suddenly exits stage left.

Change Control Concerns

Perform Integrated Change Control, according to the PMBOK® Guide, is primarily concerned with the following:

• Influencing the factors that cause change control processes to be circumvented
• Promptly reviewing and analyzing change requests
• Managing approved changes
• Maintaining the integrity of the project baselines (including scope, quality, schedule, cost, and performance measurement baseline) and incorporating approved changes into the project management plan and other project documents
• Promptly reviewing and analyzing corrective and preventive actions
• Coordinating and managing changes across the project
• Documenting requested changes and their impacts

Factors that might cause change include project constraints, stakeholder requests, team member recommendations, vendor issues, and many others. You’ll want to understand the factors that are influencing or bringing about change and how a proposed change might impact the project if implemented. Performance measures and corrective actions might dictate that a project change is needed as well.

Managing changes might involve making changes to the project scope, schedule, or cost performance baseline, also known as the performance measurement baseline. This baseline might also involve quality or technical elements. The performance measurement baseline is the approved project management plan that describes the work of the project. This is used through Executing and Monitoring and Controlling to measure project performance and determine deviations from the plan. It’s your responsibility to maintain the reliability of the performance measurement baselines. Changes that impact an existing or completed project management process will require updates to those processes, which might mean additional passes through the appropriate Planning and Executing processes.

The management plans created during the Planning process group should reflect the changes as well, which might require updates to the project management plan or the project scope statement. This requires a close eye on coordination among all the processes that are impacted. For example, changes might require updates to risk response alternatives, schedule, cost, resource requirements, or other elements. Changes that impact product scope always require an update to the project scope.

I caution you to not change baselines at the drop of a hat. Examine the changes, their justification, and their impacts thoroughly before making changes to the baselines. Make certain your project sponsor approves baseline changes and that the project sponsor understands why the change occurred and how it will impact the project. Be sure to keep a copy of the original baseline for comparison purposes and for lessons learned.

Configuration Management

Configuration management is generally a subsystem of the project management information system. It involves managing approved changes and project baselines. I’ll talk about each of these topics later in this chapter.

The following items are what the PMBOK® Guide notes as activities associated with configuration change management in the Perform Integrated Change Control process:

Configuration identification Configuration identification describes the characteristics of the product, service, or result of the project. This description is the basis that’s used to verify when changes are made and how they’re managed. Configuration identification is also used to label products or documents, manage changes, and verify changes.

Configuration status accounting This activity doesn’t really have to do with financials as you might guess from its title. It’s about accounting for the status of the changes by documenting and storing the configuration information needed to effectively manage the product information. This includes the approved configuration identification, the status of proposed changes, and the status of changes currently being implemented.

Configuration verification and auditing Verification and audits are performed to determine whether the configuration item is accurate and correct and to make certain the performance requirements have been met. It assures that changes are registered in the configuration management system and that they are assessed, approved, tracked, and implemented correctly.

Change Control System

If you were to allow changes to occur to the project whenever requested, you would probably never complete the project. Stakeholders, the customer, and end users would continually change the project requirements if given the opportunity to do so. That’s why careful planning and scope definition are important in the beginning of the project. It’s your job as project manager to drive out all the compelling needs and requirements of the project during the Planning process so that important requirements aren’t suddenly “remembered” halfway through the project. However, we’re all human, and sometimes things are not known, weren’t thought about, or simply weren’t discovered until a certain point during the project. Stakeholders will probably start thinking in a direction they weren’t considering during the Planning process, and new requirements will come to light. This is where the change control system comes into play.

The Purpose of the Change Control System

Change control systems are documented procedures that describe how the deliverables of the project and associated project documentation are controlled, changed, and approved. It also often describes how to submit change requests and how to manage change requests. They may include preprinted change request forms that provide a place to record general project information such as the name and project number, the date, and the details regarding the change request. Change control systems are usually subsystems of the configuration management system.

The change control system also tracks the status of change requests, including their approval status. Not all change requests will receive approval. Those changes that are not approved are also tracked, communicated to the appropriate stakeholders, and filed in the change control log for future reference.

The change control system might define the level of authority needed to approve changes, if it wasn’t previously defined in the configuration management system. Some change requests could receive approval based on the project manager’s decision; others might need to be reviewed and formally approved by the project sponsor, executive management, and so on.

Procedures that detail how emergency changes are approved should be defined as well. For example, you and your team might be putting in some weekend hours and be close to the completion of a deliverable when you discover that thing 1 will not talk to thing 2 no matter what you do. The team brainstorms and comes up with a brilliant solution that requires a change request. Do you stop work right then and wait until the change control board or committee can meet sometime next week and make a decision, or do you—the project manager—make the decision to go forward with this solution and explain the change to the appropriate parties later? That answer depends on the change procedures you have in place to handle situations like this and on the authority you have to make emergency changes as outlined in the change control system.

Many organizations have formal change control or change request systems in place. If that’s the case, you can easily adopt those procedures and use the existing system to manage project change. But if no procedures exist, you’ll have to define them.

The PMBOK® Guide states three objectives you should know about for implementing and using configuration management systems and change control processes:

• Establish a method to consistently identify changes, request changes to project baselines, and analyze and determine the value and effectiveness of the changes.
• Continuously authenticate and improve project performance by evaluating the impact of each change.
• Communicate all change requests—whether approved, rejected, or delayed—to all the stakeholders.

Requirements for Change

At the beginning of all projects, you should require two things regarding change. First, require that all change requests be submitted in writing. This is to clarify the change and make sure there’s no confusion about what’s requested. It also allows the project team to accurately estimate the time it will take to incorporate the change.

Second, require that all change requests must go through the formal change control system. Make sure no one is allowed to go directly to team members and request changes without the project manager knowing about them. Also make certain your stakeholders understand that going around the project manager can cause schedule delays, cost overruns, and sacrifices to quality and that it isn’t good change management practice. From the beginning of the project, encourage the stakeholders to use the formal procedures laid out in the change control system to request changes.

Change Control Board

In some organizations, a change control board (CCB) is established to review all change requests. The board is given the authority to approve or deny change requests as defined by the organization. It’s important that its authority is clearly defined and that separate procedures exist for emergency changes. The CCB might meet only once a week, once every other week, or even once a month, depending on the project. When emergencies arise, the established procedures allow the project manager to implement the change on the spot. This always requires follow-up with the CCB and completion of a formal change request, even though it’s after the fact.

CCB members might include stakeholders, managers, project team members, and others who might not have any connection to the project at hand. Some organizations have permanent CCBs that are staffed by full-time employees dedicated to managing change for the entire organization, not just project change. You might want to consider establishing a CCB for your project if the organization does not have one.

Some organizations use other types of review boards that have the same responsibilities as the CCB. Some other names you might see are technical assessment board (TAB), technical review board (TRB), engineering review board (ERB), and configuration control board (CCB).

Perform Integrated Change Control Inputs, Tools and Techniques, and Outputs

The inputs for the Perform Integrated Change Control process are as follows:

• Project management plan
• Work performance information
• Change requests
• Enterprise environmental factors
• Organizational process assets

Remember that the project management plan includes all the documents that make up that plan. According the PMBOK® Guide, the documents included in the project management plan include the following:

• Change management plan
• Communications management plan
• Configuration management plan
• Cost management plan
• Cost performance baseline
• Human resource plan
• Process improvement plan
• Quality management plan
• Requirements management plan
• Risk management plan
• Schedule baseline
• Schedule management plan
• Scope baseline
• Scope management plan

All other documents (such as the issue log, quality checklists, statement of work, and many more) are considered project documents.

You’ve seen all the tools and techniques for Perform Integrated Change Control in previous processes:

• Expert judgment
• Change control meetings

The outputs of the Perform Integrated Change Control process are as follows:

• Change request status updates
• Project management plan updates
• Project document updates

Change request status updates include change requests that have been accepted or rejected. Project management plan updates are typically required as a result of an approved change or corrective action, especially those changes that impact a project baseline. It may sound obvious, but I’ll tell you anyway: changes made to baselines should reflect changes from the current point in time forward. You cannot change past performance. These changes are noted in the change control system or the configuration management system, and stakeholders are informed at the status meetings of the changes that have occurred, their impacts, and where the description of the changes can be found.

You should document all the actions taken in the Perform Integrated Change Control process (whether implemented or not) as part of the project document updates output. You should also record the reason for the change request. In other words, how did this particular change request come about? How did it change the original project management plan? Is this something you could or should have known about in the Planning processes? You also should note the corrective action taken and the justification for choosing that particular corrective action as part of lessons learned. You can use the information you capture here in your configuration management system as lessons learned for future projects. When you take on a new project, it’s a good idea to review the lessons learned from similar projects so that you can plan appropriately and avoid, where possible, the variances that occurred in those projects.

In the next chapter, you’ll explore the individual change control processes (like Control Cost and Control Schedule) and the measurement tools you’ll use to provide the variance measurements that are gathered and reported to the stakeholder via the Report Performance process that we discussed earlier in this chapter.

Understanding How This Applies to Your Next Project

I’ve learned from experience the value of having a change control process in place for all projects. I’ve never managed a project that didn’t encounter change—and there are hundreds of reasons that bring about change. One of the ways to help reduce the amount of change you might experience is to make certain you’ve documented the requirements of the project accurately and have obtained sign-off from the stakeholders. Beware! Just because the stakeholders have agreed to the requirements doesn’t mean they won’t want change. As you elaborate the deliverables and requirements, the product or end result becomes clearer, and that means some elements not previously known or at least not known in their entirety early in the planning process will require change.

If you don’t already have a change control process in place, I recommend setting one up before you begin your next project. Document the procedures for requesting, tracking, and approving or denying changes. Make them one of the agenda items for discussion at your project kickoff meeting. It’s easier to enforce change procedures (and deny changes that are out of scope) if the process is discussed with the stakeholders early in the project. You will likely want to include important stakeholders on the change control board, and that will give you another great opportunity to discuss and reinforce the process.

Administering contracts and procurements, as I mentioned earlier, may be managed by someone in your procurement department. In my experience, there is always someone from this department involved from the request process through contract administration. However, it will likely be up to you to monitor vendor performance, make sure deliverable dates are met, and verify timecards against the submitted invoice.

Summary

This chapter examined several change control processes starting with the Monitor and Control Project Work process. This process is responsible for reviewing, tracking, and controlling project progress. It ensures that the performance objectives outlined in the project management plan are met.

The Administer Procurements process is concerned with managing vendor relationships, monitoring performance, and implementing changes or corrections when necessary. Both buyer and seller are responsible for administering the contract (or other procurement vehicle) to assure that contractual obligations are being met.

Perform Integrated Change Control is an important part of the project process. It’s your responsibility as project manager to manage change and implement corrective action where needed to keep the project on track with the plan. Perform Integrated Change Control concerns influencing the things that cause change and managing the change once it has occurred. One or more of the project baselines may be affected when change occurs. Managing change might involve changes to the project plan, the project schedule, the project budget, project scope, and so on. Changes that impact processes you’ve already completed require updates to those processes. Corrective action is often a result of a change and ensures that the future performance of the project lines up with the project management plan.

Configuration management systems typically include change control systems that document the procedures to manage change and how change requests are implemented. Change requests might come in written or verbal forms, but ideally you should ask for all your change requests in writing. Change requests are processed through a formal change control system, and configuration control boards have the authority to approve or deny change requests.

Exam Essentials

Name the outputs of the Monitor and Control Project Work process. The outputs are change requests (which include corrective action, preventive action, and defect repair), project management plan updates, and project document updates.

Name the processes that integrate with the Administer Procurement process. Direct and Manage Project Execution, Report Performance, Perform Quality Control, Perform Integrated Change Control, and Monitor and Control Risk.

Describe the purpose of the Report Performance process. Report Performance concerns collecting and distributing performance information about the project, including status reports, progress to date, and forecasts.

Name the purpose of the Perform Integrated Change Control process. Perform Integrated Change Control is performed throughout the life of the project and involves reviewing all the project change requests, establishing a configuration management and change control process, and approving or denying changes.

Be able to define the purpose of a configuration management system. Configuration management systems are documented procedures that describe the process for submitting change requests, the processes for tracking changes and their disposition, and the processes for defining the approval levels for approving and denying changes. The configuration management system also includes a process for authorizing the changes. Change control systems are generally a subset of the configuration management system. Configuration management also describes the characteristics of the product of the project and ensures accuracy and completeness of the description.

Be able to describe a CCB. The change control board (CCB) has the authority to approve or deny change requests. Their authority is defined and outlined by the organization. A CCB is made up of stakeholders.

Key Terms

The processes introduced in this chapter give you the tools and techniques you need to keep your projects on track and to manage change. Know these processes by the PMI® terms if you want to be successful in obtaining your PMP certification.

Administer Procurements

Monitor and Control Project Work

Perform Integrated Change Control

Report Performance

You’ve learned a lot of new key words in this chapter. PMI has worked hard to develop and define standard project management terms that apply across industries. Here is a list of some of the terms you came across in this chapter:

change control board (CCB)	disputes
change control system	forecasting
claims	performance measurement baselines
claims administration	performance review
configuration management	seller invoices
contested changes	status review meetings
contract change control system

Review Questions

1. You are a project manager for an international marketing firm. You are ready to assign resources to your new project using a work authorization system. Which of the following statements is not true?

A. Work authorization systems clarify and initiate the work for each work package.

B. Work authorization systems are written procedures defined by the organization.

C. Work authorization systems are used throughout the project Execution processes.

D. Work authorization systems are a tool and technique of the Monitor and Control Project Work process.

2. You are working on a project and discover that one of the business users responsible for testing the product never completed this activity. She has written an email requesting that one of your team members drop everything to assist her with a problem that could have been avoided if she would have performed the test. This employee reports to a stakeholder, not to the project team. You estimate that the project might not be completed on time as a result of this missed activity. All of the following are true except for which one?

A. You should recommend a corrective action to bring the expected future project performance back into line with the project management plan because of this employee’s failure to perform this activity.

B. You should recommend a preventive action to reduce the possibility of future project performance veering off track because of this employee’s failure to perform this activity.

C. You should recommend a change request, which is an output of the Monitor and Control Project Work process, to get the project performance back in alignment with the project management plan.

D. You might have to request a change to the project schedule as a result of this missed activity.

3. Which one of the following is the most preferred method of settling claims and disputes according to the PMBOK® Guide?

A. Arbitration

B. Collaboration

C. ADR

D. Negotiation

4. Which option includes all of the tools and techniques of the Administer Procurements process?

A. Contract change control system, expert judgment, inspection and audits, performance reporting, payment systems, claims administration, and records management system.

B. Contract change control system, procurement performance reviews, inspection and audits, performance reporting, payment systems, claims administration, configuration management system, and records management system.

C. Contract change control system, expert judgment, inspection and audits, performance reporting, payment systems, claims administration, configuration management system, and records management system.

D. Contract change control system, procurement performance reviews, inspection and audits, performance reporting, payment systems, claims administration, and records management system.

5. You are a project manager for an engineering company. Your company won the bid to add ramp-metering lights to several on-ramps along a stretch of highway at the south end of the city. You subcontracted a portion of the project to another company. The subcontractor’s work involves digging the holes and setting the lamp poles in concrete. The subcontractor’s performance to date does not meet the contract requirements. Which of the following is not a valid option?

A. You document the poor performance in written form and send the correspondence to the subcontractor.

B. You terminate the contract for poor performance and submit a change request through Administer Procurements.

C. You submit a change request through Administer Procurements demanding that the subcontractor comply with the terms of the contract.

D. You agree to meet with the subcontractor to see whether a satisfactory solution can be reached.

6. The Administer Procurements process is closely integrated with all of the following processes except for which one?

A. Direct and Manage Project Execution

B. Perform Quality Assurance

C. Perform Integrated Change Control

D. Report Performance

7. You are holding a regularly scheduled status meeting for your project. You know all of the following are true regarding status meetings except which one?

A. Status meetings are a type of interactive communication.

B. Status meetings are a type of communication method, which is a tool and technique of the Report Performance process.

C. Status meetings are a way to formally exchange information and update the stakeholders regarding project status.

D. Status meetings should be held throughout the project and at regularly scheduled intervals.

8. You are performing actions such as analyzing past performance, assessing the current status of risks and issues, describing the work completed this period, and summarizing the changes approved this period. Which process are you performing?

A. Report Performance

B. Perform Integrated Change Control

C. Monitor and Control Project Work

D. Administer Procurements

9. All of the following are tools and techniques of the Report Performance process except which one?

A. Records management system

B. Communication methods

C. Variance analysis

D. Forecasting methods

10. The Delphi method, technology forecasting, and forecast by analogy are examples of what category of forecasting methods?

A. Time series

B. Judgmental

C. Causal

D. Econometric

11. Your project is progressing as planned. The project team has come up with a demo that the sales team will use when making presentations to prospective clients. You will do which of the following at your next stakeholder project status meeting?

A. Preview the demo for stakeholders, and obtain their approval and sign-off.

B. Report on the progress of the demo, and note that it’s a completed task.

C. Review the technical documentation of the demo, and obtain approval and sign-off.

D. Report that the demo has created a change request that’s been documented in the change control system.

12. All of the following statements are true regarding forecasting except which one?

A. Forecasting predicts future project performance based on actual performance to date.

B. Forecasting is a Monitor and Control Project Work tool and technique.

C. Causal/econometric methods and judgmental methods are two categories of forecasting.

D. One category of forecasting consists of time series methods.

13. You are a project manager for Bluebird Technologies. Bluebird writes custom billing applications for several industries. A schedule change has been requested. From the perspective of the Perform Integrated Change Control, change is concerned with all of the following except which one?

A. Influencing factors that circumvent the change control process

B. Issuing change requests

C. Reviewing change

D. Maintaining the integrity of baselines

14. You are a project manager for Bluebird Technologies. Bluebird writes custom billing applications for several industries. One of your users verbally requests changes to one of the screen displays. You explain to her that the change needs to go through the change control system, which is a subset of the configuration management system. You explain that a change control system does all of the following except for which one?

A. Documents procedures for change requests

B. Tracks the status of change requests

C. Describes the management impacts of change

D. Determines whether changes are approved or denied

15. You are a project manager for Star Light Strings. Star Light manufactures strings of lights for outdoor displays. Its products range from simple light strings to elaborate lights with animal designs, bug designs, memorabilia, and so on. Your newest project requires a change. You have documented the characteristics of the product and its functionality using which of the following tools and techniques?

A. Change control system

B. Corrective action

C. Configuration management

D. Updates to the project management plan

16. You are a project manager for Star Light Strings. Star Light manufactures strings of lights for outdoor display. Its products range from simple light strings to elaborate lights with animal designs, bug designs, memorabilia, and so on. Your newest project requires a change. One of the business unit managers submitted a change through the change control system, which utilizes a CCB. Which of the following is true regarding the CCB?

A. The CCB describes how change requests are managed.

B. The CCB requires all change requests in writing.

C. The CCB approves or denies change requests.

D. The CCB requires updates to the appropriate management plan.

17. All of the following are activities of the configuration management system except for which one?

A. Variance analysis

B. Identification

C. Status accounting

D. Verification and auditing

18. According the PMBOK® Guide, this system centrally manages approved changes and baselines within a project.

A. Records management system

B. Change control system

C. Work authorization system

D. Configuration management system

19. You are performing the following activities: comparing actual performance against the project plan, assessing performance to determine if a corrective action is necessary, identifying new risks, providing forecasts to update current cost and schedule data, and monitoring implementation of approved changes. Which process are you in?

A. Perform Integrated Change Control

B. Report Performance

C. Monitor and Control Project Work

D. Monitor and Control Risks

20. All of the following are acronyms for other boards that fulfill the same responsibilities as a change control board except for which one?

A. TAB

B. TRB

C. ARB

D. ERB

Answers to Review Questions

1. D. Work authorization systems are a tool used during Project Execution processes and are a subset of the project management information system considered part of the enterprise environmental factors input of the Monitor and Control Project Work process. They formally initiate the work of each work package and clarify the assignments.

2. B. You are in the Monitor and Control Project Work process and should recommend a change request that can take the form of a corrective action. Preventive actions reduce the possibility of negative impacts from risk events and do not apply to this situation.

3. D. Negotiation is the preferred method of settling claims or disputes in the Administer Procurements process.

4. D. The tools and techniques of the Administer Procurements process are contract change control system, procurement performance reviews, inspection and audits, performance reporting, payment systems, claims administration, and records management system.

5. C. The contract change control system describes the processes you’ll use to make changes to the contract; it is not a means of communication. The changes might include contract term changes, date changes, and termination of a contract.

6. B. According to the PMBOK® Guide, the Administer Procurements process is closely coordinated with the Direct and Manage Project Execution, Report Performance, Perform Quality Control, Perform Integrated Change Control, and Monitoring and Control Risk processes.

7. A. According to the PMBOK® Guide, status meetings are a form of interactive communication.

8. A. This question describes the Report Performance process, which is concerned with collecting and reporting information regarding project progress and project accomplishments to the stakeholders.

9. A. The tools and techniques of the Report Performance process are variance analysis, forecasting methods, communication methods, and reporting systems.

10. B. The Delphi method, technology forecasting, scenario building, and forecast by analogy are all in the judgmental methods category of forecasting.

11. B. Status meetings are to report on the progress of the project. They are not for demos or show-and-tell. Option D could be correct but there isn’t enough information in the question to know that a change request was submitted.

12. B. Forecasting is a tool and technique of the Report Performance process.

13. B. Change requests are submitted through other processes like the Monitor and Control Project Work process, and they are reviewed, tracked, managed, analyzed, and documented in this process.

14. D. Change control systems are documented procedures that describe how to submit change requests. They track the status of the change requests, document the management impacts of change, track the change approval status, and define the level of authority needed to approve changes. Change control systems do not approve or deny the changes—that’s the responsibility of the change control board (CCB).

15. C. The key to this question was that the characteristics of the product were documented with this tool. Configuration management documents the physical characteristics and the functionality of the product of the project.

16. C. Change control boards (CCBs) review change requests and have the authority to approve or deny them. Their authority is defined by the configuration control and change control process.

17. A. The three activities associated with configuration management are configuration identification, configuration status accounting, and configuration verification and auditing.

18. D. Configuration management systems are a way to manage approved changes and baselines.

19. C. These are elements with which the Monitor and Control Project Work process is concerned.

20. C. The TAB stands for technical assessment board, TRB is a technical review board, and ERB is an engineering review board.