A project manager receives information in preparation for reporting the project's monthly performance to the project steering committee.
+ Actual progress = 2 units
+ Planned progress = 3 units
+ Actual cost (AC) = 2 units
+ Budgeted cost = 3 units
What statement should the project manager make to the project steering committee?
Correct Answer: C
Explanation
According to the PMBOK Guide, project performance reporting is the process of collecting, analyzing, and communicating information on the project progress and status to the project stakeholders. Project performance reporting involves the use of various tools and techniques, such as earned value management (EVM), variance analysis, trend analysis, forecasting, and performance reviews. Project performance reporting helps the project manager and the project team to monitor and control the project performance, identify and resolve issues, manage risks and changes, and implement corrective and preventive actions.
In this question, the project manager has to report the project's monthly performance to the project steering committee, based on the information provided. The information shows that the actual progress of the project is
2 units, while the planned progress is 3 units. This means that the project is behind schedule, and has not achieved the expected level of work completion. The information also shows that the actual cost of the project is 2 units, while the budgeted cost is 3 units. This means that the project is under the planned expenditure, and has spent less than the expected amount of money. The project manager should use EVM to calculate the schedule variance (SV) and the cost variance (CV) of the project, and compare them with the baseline values.
The SV is the difference between the earned value (EV) and the planned value (PV) of the project, and indicates how much ahead or behind schedule the project is. The CV is the difference between the EV and the actual cost (AC) of the project, and indicates how much over or under budget the project is. The EV is the value of the work actually performed by the project. Based on the information given, the EV can be calculated as follows:
EV = (AC / PV) x PV = (2 / 3) x 3 = 2 units
The SV and CV can then be calculated as follows:
SV = EV - PV = 2 - 3 = -1 unit
CV = EV - AC = 2 - 2 = 0 unit
The negative SV indicates that the project is behind schedule, and the zero CV indicates that the project is on budget. The project manager should report these values to the project steering committee, and explain the reasons and impacts of the schedule variance. The project manager should also report the actions taken or planned to expedite the delayed activities, and to bring the project back on track. The project manager should not claim that the project has a cost savings, as this may not reflect the true value of the project, and may not compensate for the schedule delay. The project manager should also not suggest that no further actions should be taken, as this may imply a lack of concern or responsibility for the project performance.
Therefore, the best statement that the project manager should make to the project steering committee is:
C: The project is currently behind schedule with a corresponding lower cost, and every effort is being made to expedite the delayed activities.
References:
PMBOK Guide, 6th edition, pages 260-261, 267-268, 333-334
Project Performance Reporting: Key Performance Reports
Project Management Tools & Templates
ProjectManagement.com - PMO Monthly Status Report
How to Write an Effective Monthly Report [+ Templates]
Project Management Monthly Reporting Procedure & Formats
