Once the baseline is set, work on the project can begin. Performance measurement and impact analysis begin at this point as well.

Performance measurement is the process of collecting performance information and comparing actual performance against planned performance from the baselines. We need to identify variances.

There are three areas of performance measurement that must be considered – schedule, cost, and scope – corresponding with our baselines.

The frequency and approach should be defined in the Project Management Plan, with the schedule component in the Schedule Management Plan.

Scope

For scope or technical performance measurement, deliverables are measured against completion criteria that are established during the planning process. Results are approved or sent back for rework.

The completion criteria may consist of:

• Peer reviews and expert reviews.
• Checklists that are validated against the deliverables.
• Testing of the deliverable – usually against expected results.

Cost

For cost performance measurement, actual costs for a specific time period are collected, and compared to the estimated baseline costs.

Variances are identified, and analyzed, to determine both the reason for the variance and the size. By determining the cause, you may be able to try to mitigate future issues.

Typically, a threshold is defined, and if overruns exceed that threshold, they are further analyzed. You must determine whether corrective action is advantageous to try to bring the costs back in line with estimates.

Schedule

Schedule performance is measured by comparing actual start and actual finish dates in your project to the schedule baseline to look for variances. Variance analysis also allows focus on problem schedule areas. As with cost variances, schedule variances are analyzed for cause and magnitude and to look for patterns. If the variances exceed a certain threshold, additional analysis is performed.

By determining the cause, you may be able to try to mitigate future issues:

– If tasks are running late, is it because they are taking longer than expected, or because they are not starting on time?

– If they are not starting on time, what is causing them to start late: are the needed inputs for the task not available (late predecessors); are the resources promised not available; are the resources available and assigned, but not working on the tasks?

– Are the tasks that are late from a certain department or type of effort?

Again you must determine whether corrective action is needed to try to bring the schedule back in line with the baseline plan. When looking at ways to bring the schedule back in line, it is critical to analyze potential solutions from a cost perspective as well as a schedule perspective. Should the money be spent to compress the schedule?

If you develop a schedule model that follows good techniques, and keep it up to date with status and changes, it can provide significant value in managing the project.

** The schedule model must reflect these best practices:

• The tasks must cover the entire project scope.
• The task durations and work estimates must reflect the best current estimate with all information known at this time.
• The schedule model must have links representing the interrelationships of the tasks.
• Lag values should only be used for SS and FF links.
• Appropriate date constraints must be applied to start and finish milestones to drive the forward and backward passes.
• Task status must be applied up to the status date, and all changes that have been approved through the change control process must be incorporated into the schedule model.