Analyzing variances of task and resource costs in MS Project
With the reportCost Overruns (tab reports > custom > cost overruns) you can easily see the changes (compared to the baseline) and which tasks or resources became more expensive or cheaper.
The task cost variance chart
The report contains two charts and two tables. The Task Cost Variance chart is a line chart that shows the cost variance for every top-level tasks of your project. Directly below the chart you see a table with the % complete and current cost data for the same top-level tasks as in the chart. The chart is a great visualization of the table below; it’s clearly visible that the task ‘preparation’ costs less than baselined (-$998).
The resource cost variance chart
The Resource Cost Variance chart is a bar chart that shows the Cost Variance for every work and cost resource in your project. (Cost Variance = Cost – Baseline Cost). You easily spot here that (work) resource Edwin is a little over $300.- cheaper than baselined. In the table directly below you can see the Cost, Baseline Cost and Cost Variance for every work resource.
What’s your opinion
What do you think of the cost management functionality in MS Project 2013/2016?
Share your opinion in the comments below.
With the report ‘Cashflow‘ you can see the progress of the project costs compared to the baseline. Also, three Earned Value Management metrics are introduced here:
ACWP stands for actual costs work performed. This is the same as actual Cost.
BCWS means budgeted cost work scheduled (according to the baseline). In other words: these are the actual costs we would have at this point in time, when we would exactly progressed according to the baseline schedule.
BCWP stands for the budgeted cost work performed, in other words: what did we expect to pay for the actual work that has been progressed at this point in time.
Again, the table shows only the top-level tasks. If you want to drill down, click the table, and in the right menu select the outline level you want:
Earned value for your project
Do you consider using this report in MS Project? What would be the biggest benefit for you?
In a meeting or a series of meetings, where you have all important experts and your (core) team members present, you start identifying all items that should be part of your project to deliver your main or end deliverable. This also includes ‘management deliverables’ such as documents you use for project control. Think of documents like a Project Initiation Document, communication plan, risk register, etcetera. This breakdown of a product is called the PBS (Product Breakdown Structure).
If, for instance you consider the example of a motorcycle, the main deliverable ‘engine’ is further subdivided into: Transmission, Head, Battery. Head is further subdivided into Pistons and Rings. Note that you could keep doing this up to the bolts and screws level, and thereby easily overdo this breaking down.
WBS (Work Breakdown Structure)
For planning and estimatingpurposes it is wise to stop at a certain point, and start mentioning the work (tasks) that is needed to produce these elements of the PBS. This is where your WBS (Work Breakdown Structure) starts. Since you are creating a model, just as a maquette as model for a building, it should not be too detailed. For various reasons it is widely recommended to stop listing the work, when the activities have a duration of 5 days. For instance, if your project is remodeling the backyard, ‘build shed’ is the right level of detail, and ‘pick up screwdriver’ is not. Although you might not want to forget this crucial activity of picking up the screwdriver, your schedule should not resort into a checklist or manual (you will learn more about estimating in our course Task Management).
This breakdown of the main deliverable forms the backbone of your project plan and as such it is essential to give this process the proper attention. For this reason, it was our well-considered choice to explain linking and automating the schedule in our online training about Critical Path Management (Intermediate course).
“I cannot read the Gantt Charts”
“My manager cannot read Gantt Charts” is a remark we hear quite often. We think that this manager is just not able to read this particular Gantt Chart. Since scheduling is about modeling, one of its primary purposes is being a communication means. Think of this before you start randomly typing in the products and tasks.
The correct order in your schedule
When you start planning, pay good attention to the order in which you enter the PBS elements into the plan. Ideally this is a chronological order with the first to be delivered PBS elements located higher in the schedule and the last to be delivered PBS elements lower in the schedule. This way your schedule will look like a waterfall and enhances readability drastically.
This is a good example:
The work breakdown structure (WBS) consists of all the activities that are needed to be able to deliver a PBS element. Whereas the PBS element is logically a summary task, the activities leading up to the delivery of this PBS element are the tasks beneath (indent/outdent) this summary task, and have a <verb + noun> naming convention (e.g. level building site).
With this structure all activities’ effort/cost/etc. will be summarized on the summary task, which makes progress tracking and learning from estimates per PBS-element extremely convenient.
The video clip below shows how to create summary tasks with underlying tasks:
Everything well structured
The purpose of this step is to create a complete overview of all needed activities to complete the deliverables within your scope. This will result in a schedule like the example below:
PBS & WBS best practices
There are several PBS and WBS best practices that we want to share with you in this course. We have translated them into a ‘hands-on’ list of do’s and don’ts.
Summary tasks are ideal for ‘phases’.
Make sure that 100% of the PBS elements defined in the project scope is represented in your PBS.
Make sure that 100% of the work defined in the project scope is represented in your WBS.
Each PBS element, regardless of level, should answer to the following question: ‘what needs to be delivered before we can call the project a success?’
Be specific in naming the elements (example: unit test vs perform unit test for module XYZ).
Each PBS/work element should be unique and the meaning can be interpreted without viewing the context by each team member.
‘Miscellaneous’ is not a PBS element.
The PBS/WBS should not contain elements that are out of scope, such as external activities or the work of an external supplier outside the scope.
As summary tasks are not real activities which need to be performed, it is very important to ensure that summary tasks NEVER:
Have resources assigned
Are used to track progress (do this in the tasks)
Do you have more?
Which DO’s and DON’Ts would you add to the list above?
Share them in the comments below.
The standard reports ‘Resource Cost Overview‘ and ‘Task Cost Overview’ provide useful graphs and a clear overview of the costs of the work in progress.
To open the reports click:
Select from the dropdown menu ‘Costs’
Resource Cost Overview & Task Cost Overview
3 areas with information about the cost of resources in your project
The Cost Status chart is a combination chart that displays the Actual Cost and Remaining Cost per (work) resource in stacked columns, as well as a line for Baseline Cost. You can see in the example that the resource Edwin is expected to cost the most, but that he costs less than the baseline cost. The reason for this could be a lower rate, less hours or a combination of both.
The Cost Distribution pie-chart shows how cost are spread out amongst different resource types (work, material, cost).
The Cost Details table shows for each (work) resource in your project team the Actual Work, Actual Cost and Standard Rate (Actual Cost = Actual Work x Standard Rate).
The Task Cost Overview also shows 3 areas
This time with information about the cost of tasks in your project:
The Cost Status chart is a combination chart that shows the Actual Cost and Remaining Cost in stacked columns for each top-level task as well as a line for Baseline Cost.
The Cost Distribution chart shows how costs are spread out amongst tasks based on the Status field: complete, on schedule, late and future task.
Complete: The task is 100 percent complete
Future task: Start date is greater than the Status Date
On Schedule: The timephased cumulative percent complete is spread to at least the day before the Status Date
Late task: The timephased cumulative percent complete does not reach midnight on the day before the Status Date
In the example you can see that the biggest chunk of costs is for future tasks.
The Cost Details table shows for each top-level task of your project the Fixed Cost, Actual Cost, Remaining Cost, Cost, Baseline Cost and Cost Variance (Cost = Actual Cost + Remaining Cost; Cost Variance = Cost – Baseline Cost). Also in this table you can cleary see that the final assembly costs $200.- more than baselined.
Standard cost reports in MS Project
We are very enthusiastic about these standard reports in MS Project; what about you?
From time to time it may be necessary to add tasks to the project schedule after the baseline has been set. When these changes affect the agreed project schedule beyond the project’s tolerances, a new baseline should be set. When no new baseline needs to be set, you can decide to add these new tasks to the baseline.
In case you want to add new tasks to the baseline:
Select the newly added task(s)
Select tab Project and then select Set Baseline
To add the new task(s) to the baseline, select Set Baseline
Select the Selected tasks option
In the screenshot below you see a baselined project schedule where the duration is equal to the baseline duration:
In the screenshot below you will see the result of adding an extra task to the baseline as described above. See that the Baseline Duration of summary task ‘deliverable 2’ is not affected. Additional options when setting the baseline for ‘Selected tasks’ (Roll up baselines):
From subtask into selected summary task(s)
If you select the new task (‘extra task added’) as well as the corresponding summary task (deliverable 2), choose ‘Selected tasks’ and select the ‘From subtasks into selected summary task(s)’ check box, MS Project rolls up the baseline information from ‘extra task added’ into the baseline information of the selected summary task. (See the Baseline Duration of the ‘deliverable 2’ in the example below compared to the situation above.)
To all summary tasks
If you select the new task (‘extra task added’), choose ‘Selected tasks’ and select the ‘To all summary tasks’ check box, MS Project rolls up the baseline information from the new task to all the summary tasks. Be careful with this option as it changes the baseline to the highest level. See Baseline Duration on line 1 (‘project ABC’) in the example below compared to the situation above. If on the highest level the Project Plan Triangle stays intact (you took hours for contingency for example) it is OK to roll up. In other cases, do not use this option.
Adding tasks to the baseline in MS Project
What are your questions about adding tasks to the baseline? Share them in the comments below, we’d love to help you.
Why is MS Project limited in displaying the resource critical path?
Possibly you have already realized that after adding resources, the Critical Path will not show as neatly as you might have hoped. Formatting the Critical Path to appear in red will often lead to a broken, fragmented Critical Path.
In MS Project, Task 1 and Task 2 are not considered Critical, or driving predecessors.
Why? And what now?
The reason for this is that Microsoft Project treats tasks as critical when their Total Slack (buffer) is zero or less. When you use features like calendars and hard dates in Microsoft Project, many tasks will have some Total Slack, which breaks the Critical Path. Only by using an add-in, such as the one we recommend (PathsPro), you will be able to find the complete Critical Path.
The PathsPro add-on
With the PathsPro add-on, these will be flagged as being critical.
Answers to all of the following questions with the add-on:
All tasks in my schedule are critical! If you have challenging deadlines, all tasks in your schedule may turn red. Where should I start optimizing?
What is my most-Critical Path?
I don’t understand my Critical Path! Why is this task on the Critical Path?
Why is there a gap between critical tasks? It will show where weekends or holidays explain gaps between critical tasks.
Why is this critical task so long? It will show where resource vacations stretch the durations of critical task bars.
My Critical Path has huge gaps! Why does the Critical Path in my schedule only explain parts of the project duration? It will show if a task is driven by a resource dependency.
Why do I not see a complete Critical Path that explains the entire project duration? Commonly used features (like hard dates, task/resource/project calendars and elapsed durations/lags) can cause these gaps.
I leveled the workloads and now my Critical Path is broken! Do you have unlimited resources? Anybody? If you work with people who are not always available when you need them, you are in a resource-constrained project. When resources get overloaded and you level their workloads, the Critical Path will have huge gaps and explain only parts of the project duration. The add-in will display the Complete Critical Path in your schedule, also known as the Resource-Critical Path that explains your entire project duration.
I cannot find the Critical Path across my subprojects! You have created links between projects and now you want to find the Critical Path to a major milestone in your large program schedule.
In MS Project without add-on it is difficult to explain gaps on the Critical Path:
With the PathsPro add-on, each gap is explained. This will seriously increase the level of understanding for a (delayed) schedule.
Reading the above you might come to the same conclusion as we did: if you are serious about managing a project, you cannot live without the insights that can only be delivered when using this add-on.
Share your thoughts about the add-on in the comments below!
Resource Usage is one of the assignment views, just like the view Task Usage. These views are basically the same, as they show e.g. hours/remaining availability per day per assignment.
When to use the resource usage and the task usage views?
Use these views if you need to deviate from the default 100% on assignment units. For instance if you want people to work 50% of their time to one task and 50% on another task.
Also use this view if you want to learn more about the assignment, like the work contour, assignment units or peak units.
Good to know
Note that if you change the timescale of this view to for instance months, you get a pretty good overview of the amount of hours you have already scheduled. By right-mouse-click > overallocation or remaining availability, you see how you are doing compared to your resource availability.
How to deal with % assignment on a task, effectiveness and absence?
People are not 100% working effectively on a task due to:
Part-time days or vacation
Toilet visits/smoking/social talk
Obligations to other projects
Obligations to line organization
The common belief (and chosen approach) is that planning for 80% effectiveness will account for all these situations. Simply putting in 80% as units to a task however, is NOT the CORRECT way to go for different reasons.
How to deal with absence and project time correctly?
The gurus in the field agree that the preferred way is as follows:
Vacation, standard day off – Block days in resource calendar
Sickness, cannot be planned – When it happens, progress tracking will uncover the day(s) that was not worked. Maternity leave, or recovering from surgery can be planned in the resource calendar.
Problem solving – Increase the amount of (remaining) work, since issue resolution is also part of the task.
Daydreaming, toilet visits, smoking, social talk – Increase the amount of (remaining) work, since for the work column it is more realistic to estimate the gross amount of work. It happens, we are all human right? However, this time will be charged to your project… Your job to keep this within boundaries.
Project meetings – Individual meetings can be planned with Outlook but if the time consumption of these meetings is significant, block a weekly average using the recurring task feature. Note that the series will form the summary task and the occurrences are the tasks to which you can assign resources.
All-personnel meeting or Friday afternoon drink – Think whether you should plan 1h interruptions. Will this unavailability have such a significant impact to your milestone dates that it is worth to put in the admin?
Other projects – Don’t plan, it is not your scope. If you have a resource allocated to your project for 0.5 FTE, change the Max Units in the resource sheet to 50%, or edit the availability periods in the calendar.
Line activities – Don’t plan, same as above.
Unavailability in your project
Can you find yourself in these 3 ways of dealing with absence and project time or do you have any other thoughts? Share it in the comments below.