Principles of Project Management: Cost and Schedule Variance Analysis

This presentation discusses the cost and schedule variance analysis of a project and emphasizes on the importance of effective leadership and management style. It also provides recommendations for hiring a suitable project manager.

Principles of Project Management

Introduction
• Purpose is to emphasize on leadership and management style
• Analyze the case study
• Role of Project Management
• Deployment of Fitouts
• Consider crucial aspects for project status report

Cost Variance
• Actual cost = $ 675,000
Actual completion of the project can be calculated as average of the completion of
four floors till the date:
= (75 % + 25 % + 25 % + 0 %) / 4
= 31.25 %
• BAC (Budget at Completion) of the entire fitout project = $ 1,200,000
• Cost Variance = Earned Value of the Project - Actual cost
= $ 375,000 – $ 675,000
= - $ 300,000

Schedule Variance
• BAC (Budget at Completion) of the entire fitout project = $ 1,200,000
Planned completion of the project = average of the completion of four floors:
= (100 % + 50 % + 50 % + 0 %) / 4
= 50 %
• Planned Value of the project
= Planned Completion (%) * BAC
= 50 % X 1,200,000 = $ 600,000
• Schedule Variance = Earned Value – Planned Value
= $ 375,000 – $ 600,000
= - $ 225,000

Interpretation
• Since the cost variance values is negative, this states that the project is
still undergoing within the budget
• Negative value of the schedule variance depicts project is not in the track
of the completion within the expected time
• Schedule of the project need proper consideration
• New milestones with new timeline should be proposed

List of Additional Information
• Executive overview
• Project identifiers
• Identify the possible strategies
• Project summary
• Project status report
• Include the deliverables and the milestones
• Current percentage of the work completed
• Actual start date
• Actual finish date

Leadership Behavior
• Previous manager was not suitable
• He does not have the effective communication strategy
• Improper managerial skills
• Improper leadership skills
• He should have the quality of listening to others
• He should take better decision-making
• He should pass the organizational zoo model of leadership

Organizational Zoo Model

Organizational Zoo Model Cont.
• This model suggests reflect, plan, do, and observe
• A leader should analyze the different course of the action
• Every discussion and develops member's reasoning before the association
• "Appearance in real life" and "Reflection on Action."
• Combining intelligent practice with discussion structure, conduct
investigation, and analogy is special.

Recruitment of a New Project
Manager
• Emphasis should be on the personal and professional behavior
• Manager should be capable of considering a broad aspect of the actions
• He or she should consider the value of the contribution of every team member
• A metaphor test can be executed for analyzing the behavior of the individual

Overview of existing team
environment
• Project manager was not suitable for executing the project
• Negligence of the team members
• Improper communication
• Wrong decision-making
• Irresponsible decisions

Conclusion
Based on the above facts, it can be concluded that the previous project that manager
was lagging in many aspects and that led to certain point that can be a difficulty for
new project manager to bring back the project on the track. The above report presents
the cost and schedule variance that stated how the project was effected in the sense of
the timeline because of the improper communication and leadership of the project
manager.

Recommendation
It can be recommended that hiring a project manager that passes the tests of
the organizational zoo can be better suited for the project delivery and
accomplishment of the objectives and outputs of the project.

References
• Binder, J., 2016. Global project management: communication, collaboration and management across borders. Routledge.
• Boud, D., Cohen, R. and Sampson, J. eds., 2014. Peer learning in higher education: Learning from and with each other. Routledge.
• Fleming, Q.W. and Koppelman, J.M., 2016, December. Earned value project management. Project Management Institute.
• JOSEPH. PHILLIPS, P.M.P., CBAP, I. and PMP, C., 2018. PMP PROJECT MANAGEMENT PROFESSIONAL STUDY GUIDE. McGraw-
Hill Education.
• Kerzner, H. and Kerzner, H.R., 2017. Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.
• Kerzner, H., 2018. Project management best practices: Achieving global excellence. John Wiley & Sons.
• Meredith, J.R., Shafer, S.M., Mantel Jr, S.J. and Sutton, M.M., 2016. Project management in practice. Wiley Global Education.
• Meredith, J.R., Shafer, S.M., Mantel Jr, S.J. and Sutton, M.M., 2016. Project management in practice. Wiley Global Education.
• Schwalbe, K., 2015. Information technology project management. Cengage Learning.
• Turner, R., 2016. Gower handbook of project management. Routledge.
• Verzuh, E., 2015. The fast forward MBA in project management. John Wiley & Sons.
• Walker, A., 2015. Project management in construction. John Wiley & Sons.