Readings:  Implementation of Electronic Health Record

What will it take to successfully complete information system projects on time and under budget?  Much more than comes to mind at first. 

Phases of Project Management

The implementation of Electronic Health Records (EHR) can be broken into the five broad phases:  initiate, plan, execute and control.  Each of these phases are further explained using an outline provided by Claudine Beron:

Initiation Phase

A project has five phases:  Initiation, Planning, Execution, Control and Closing .  The first phase is the initiation phase, where the project is selected and defined.  In the planning phase, decisions are made about what should be done when should various activities be done.  Execution and control phases generally occur together.  In the execution phase, the project team tries to do what was planned.  In the controlling phase, project manager measures project’s accomplishments and compares it to expectations.  The last phase is the closing phase.  In this phase, the project deliverables are accepted and success celebrated.

Project initiation phase, in our view, is the most important phase of the project management.  This phase is important because during this phase the project is selected and defined.  Select the wrong project and you would be wasting your time and effort in subsequent phases, albeit you would be doing so efficiently.  Select the right project and you might change your organization, even if you do not do so efficiently.   To make sure that the right project is selected, the business case for the project must be clear.  A return on investment should be calculated.   It must be clear what problem is being addressed and why.  There should be data supporting the existence and extent of the problem.  Projects usually involve a lot of effort of a diverse set of people.  For everyone to understand why they are undertaking the effort there should be good data on the extent of the problem and the importance of the problem.

In addition, you need to let the customer define the problem.  Perhaps, you can provide quotes about frustrated customers, perhaps you can record a customer speaking about their frustrations.  Video tape a customer and let them talk about the issues.  Do something, anything, that could bring home the message of the importance of the problem.  Using various media highlight the customer’s point of view.  Numbers and statistics are great for defining the extent of the problem, but what people remember is the customer’s voice.  Projects take a long time to complete and if you spend time articulating why the project was undertaken, then everyone in the organization will remain committed to the project and will maintain their effort.  They will see and remember the logic of why they have undertaken the effort.  Give the project team a clear message of why the work they are doing is important.  For example, if you are implementing an Electronic Health Record, record a customer who had received wrong medication.  Make it clear how EHR will reduce medication errors.  Efforts spent in clarifying the purpose of a project will help teams remember the importance of their role.  They will see themselves as heroes coming to improve the organization as opposed to enforcers making people work in new and unwanted ways.

The project initiation phase marks the beginning of the project or phase and formally authorizes the project.  For a successful project, the objectives and requirements should be well defined at the start of the project.  Here are a list of tasks that a project manager should undertake during the project initiation phase:

  • Educate your organization on EHR and the project
  • Identify owners & stakeholders and get buy-in
  • Identify subject matter experts in each area considered
  • Understand the environment today (high level only)
  • Describe the organization by bed numbers, type of care (acute / long term / etc.) and types of patients
  • Describe services provided today (note difference if more than one environment)
  • List legacy systems in place
    • Which one’s Interfaces (HL-7 ver 2.0?, NCPDP, etc)
    • Understand quality and extent of extant data
  • Understand the skill set of clinical and IT staff
  • Identify skills that are needed but not available on project team
  • Develop business case that include preliminary scope requirements
  • Understand budget cycle and internal politics
  • Understand procurement process (if vendors are used)

Before a project is undertaken, the risks to success should be examined.  The longer the project, the more likely chances for failure.  Risk assessment helps the project manager understand what might go wrong and plan for it.  As part of risk assessment, the project manager should review similar projects in the organization or outside the organization.  The project manager should see what lessons were learned in these other implementations. 

The environment should be assessed.  The budget of the project should be examined and threats to future continuation of the project should be anticipated.  Availability of other resources, like key people, should be examined.  Alternative courses of accomplishing the project should be examined before one starts the project.

In the initiation phase, all stake holders should be identified.  Stakeholders are people who have to make a decision about the continuation of the project.  These include the employees who directly implement the project, supervisors who might have sponsored the project and in some way the customer who has to accept the product of the project.  Project managers must communicate to different groups of stakeholders.  At least three broad groups can be recognized in Information Technology projects.  Stakeholders that are interested in the value of IT investments.  These include those who make investment decisions, employees that decide about requirements, and customers or employees who use IT services.  Another group  of stakeholders are employees who provide these services.  These include managers, developers and operators.  Finally there is group of IT professionals focused on security, privacy and assurance services.  These stakeholders might be internal or external to the organization. 

Finally, the project scope should be defined and documented.  Since many people are involved, the communications about scope of the project should be clear and should not be left to paper communication.  Various employees should be detailed.  Detailing is the process of walking a person through a new way of doing things, e.g. when a pharmaceutical salesman walks the doctor through use of a new medication.  Everyone pretends that the project has been completed.  In this make belief world, questions about the scope of the project are fully answered.  For example, in implementing a new computerized physician order entry, a pretend patient visits might be arranged, the clinician asked to pretend to enter data, and the events in the electronic health record might be reported.  Successful project managers go beyond paper work.  They use media effectively in project initiation.  They include a recording of the customer’s voice as one of the reasons why the project was undertaken.  They use media to engage different groups of stakeholders.   They get a sign off that is real and not just paper work.

Planning Phase

In the project planning phase the plans for the project are detailed.  The activities that need to be carried out are listed and a schedule developed, budgets drafted and people assigned to do various tasks.  The overall elements of a detailed project plan include:

  1. Project team
    • Selection
    • Description
  2. Work plan
  3. Time and cost of activities
  4. Project risks
  5. Communication plan
  6. Other management plans

Time spent up front identifying the proper needs and structure for organizing and managing a project saves countless hours of confusion and rework during the Executing and Monitoring and Controlling Process Groups. Project planning defines project activities that will be performed, the products that will be produced, and describes how these activities will be accomplished and managed. Project planning defines each major task, estimates the time, resources and cost required, and provides a framework for management review and control. Planning involves identifying and documenting scope, tasks, schedules, cost, risk, quality, and staffing needs. This planning process includes the following:

  • On Site Assessment of the Environment
  • Detail questions/interviews for each clinical area to implemented modules based on preliminary scope
  • Develop Gap analysis of actual systems and resources
  • Build Draft Project Plan/WBS & Schedule
  • Confirm Scope requirements
  • Prepare Budget and Resource needs assessment
  • Develop Request for Proposal (RFP) for Vendor Services, if applicable
  • Evaluate Proposals for winning bid with lead clinical staff included Validate start date and terms and conditions
  • Select Vendor and approve start date
  • Update Schedule and Project Plan/WBS
  • Verify Staffing by Organization and Assignments
  • Verify Training by Organization and Assignment
  • Order Hardware/Software for Test/Development and Production Site(s)
  • Start up meeting to bring all stakeholders together

An important component of planning is communication.  The communication plan lists who will be informed of the progress of the project and at what frequency.  Given that these days there are easy access to media, it is important to think through the communication medium as well.  The communication plan should include at least two groups of people, the various sponsors of the project and the frontline people affected by the project. At designated intervals, an executive summary should be emailed to project sponsors.  Do not wait till a problem occurs.  Maintain frequent reporting to project sponsors so that the progress of the project unfolds for the sponsors as it does for the project manager.  The same goes for frontline employees.  Periodic communication of progress helps people anticipate the coming project.  These periodic communications keep the organization focused on the project.  A plan should always indicate the frequency of communication and medium of communication for various groups involved in the project.






Medical executive committee

Project status


Verbal report



Project status


Written report

Project manager

Project manager

Activity status

At start and weekly


Project team member

Table 1:  Example of a Communication Plan for three of the many groups that receive reports

A project manager should think of himself as a director of a movie.  He should regularly prepare and distribute media about the project.  You never thought that you went to school to study management and you will end up preparing short video clips and presentations but this is what savvy modern project managers have to do.  They need to use media to reach large number of employees and manage their expectations.

Planning also involves deciding for contingencies of how the project scope might change.  A process should be designed to communicate the need for change, the scope of the change, the implication of the change for budget and finish time, and the decision making process to deliberate whether to go ahead with the change.  Changes in scope are almost always necessary for large projects because no one, even the best project manager, can anticipate all contingencies.  Sooner or later something surprising comes up that has been overlooked.  We go to build the hospital extension and we find that the land includes buried ammunition from World War two.  We go to create an electronic health record and find out that our hospital is merging with another with an incompatible record system.  In large projects scope changes are inevitable and should not be resisted.  These changes indicate the desire to be make the project more central to the mission of the organization and they should be looked at as corrections in project direction.  Instead of resisting these corrections, project managers should have a process in place to manage them efficiently and without rework or work stoppage. 

A formal approval of plans is needed before the project execution starts.  Again, it is not enough to keep plans on paper.  It is important to make people live and imagine the changes.  Detailing various groups is part of getting the final approval.  Role playing of the new procedures might be a good way of making everyone understand the pending changes. 

In the planning phase, surprising things come up.  What seemed like a well functioning organization may in close scrutiny look quite different.  The expansion of electronic health record assumes that there is a function system in place.  In close scrutiny one might find the reality very different.  Labs are available on the computer but in reality everyone calls in their labs because that is faster and paper records are kept of orders.  A gap analysis helps sort out the validity of assumptions of sponsors of the project against the reality of frontline clinicians working and taking care of patients. 

In large projects, a project manager has to also prepare request for proposals and plan a system for vendor selection.   

Finally comes three activities that are typically done using software programs.  These are breaking down the project into discrete and related tasks, estimating the resources and time each task takes and creating a schedule for the various tasks that includes assignment of task to specific people.  We will return to these three tasks in other lectures. 

There is a formal end to planning.  All team members are gathered and alerted to the start of execution.  The communication plan is used to alert the sponsors and the larger number of employees that might be affected by the project.

Execution Phase

In the execution phase project, managers do six different tasks including completing plans, managing project resources, encouraging teamwork, communicating project’s progress, managing project issues and conducting quality control.  The Project Management Plan is completed and baseline values and projections are recorded before the start of project execution.  The Project Team’s and specifically the project manager’s focus now shifts from planning the project efforts to participating in, observing, and analyzing the work being done. In this phase, the activities anticipated in the project plan are executed, resulting in the completion of the project deliverables and achievement of the project objectives. The tasks of the project manager and project team include:   

  1. To conduct, coordinate and manage the ongoing work activities
  2. To perform quality assurance activities continuously to ensure project objectives are being met or achieved
  3. To monitor identified risks for triggering events and implement containment or contingency strategies as necessary
  4. To distribute information to project stakeholders
  5. To manage change.

In short, it means coordinating and managing the project resources while executing the Project Management Plan, performing the planned project activities, and ensuring they are completed efficiently.  These activities include:

  • Build Test/Development System
  • Include staff responsible for ongoing maintenance for training
  • Document System (Build Guide, Configuration Guide)
  • Test System prior to implementing EHR
  • Load EHR and Configure Modules mapped to current services Foundation (Foundation, FileMan, HL7, Kernel, all mandatory) Basic (Lab, Pharmacy, Scheduling, etc)
  • Standard (CPRS, Problem List, etc) Extended (Hepatitis C, Medical Clinical Services, etc)
  • Include staff identified as subject matter experts to validate configuration of modules and training
  • Test System prior to ghosting to Production System
  • Provide 1st Round training while system is Test/Development
  • Verify configuration and usability by end users at Pilot Site
  • Deploy Pilot Site (Production Site)
  • Train SMEs and End-Users at Pilot Site
  • Evaluation of course material essential
  • Obtain Site Completion Sign off by owner
  • Deploy Disaster Recovery Site
  • Include staff responsible for ongoing maintenance Deploy and Test at Additional Sites
  • Validate any differences in site by site services
  • Train SMEs and End-Users
  • Obtain Site Completion
  • Sign off by owner Implement and Support.

In health care projects, project managers are typically supervising professionals who do not follow plans and do not fee responsible to the project manager.  It is important to keep these professionals motivated and focused on the project plans.  In these situations effective management matters. 

Unfortunately, most people have wrong ideas about what is management.  They think that their common sense ideas will work.  But management is more complicated and management of professionals is specially difficult.  The key to motivating professionals is to get them engaged in planning for change.  Professionals are more likely to complete a task if they have participated in its planning.  Overwhelming data show that participation in planning is important in later effective execution of the plans.  Effective project managers would empower and facilitate team member’s participation in planning. 

It is important to organize projects so that these projects and actions are in the long run self interest of team members.  This is not just about paying people to do the work but also articulating how the proposed change will improve work life of the professionals involved, how it might affect their patient care, how it might affect their relationship to other providers and so on.  In each case, it is important to list the benefits that the team members will personally receive.  Overwhelming data shows that self interest, if defined broadly to include benefits beyond pay, motivates professionals.

But participation and self interest is not the entire story.  Many professionals who have suggested changes that are in their self interest fail to carry it out.  A project manager needs to do a lot more than articulate the pros and cons of conducting a project.  We know from research on information processing that too much information is counter productive.  Human beings have a limit on how much information they can process.  A project manager can help the success of a project by simplifying why a project is being done and keeping the message in front of professionals involved. 

Consider for an example, health professionals engaged in reducing medication errors.  They meet several times to understand what causes medication errors and they perceive it to be in their professional interest to reduce these errors.  They want to do better.  But safety committees have had a hard time reducing medication errors.  The problem remains elusive because these errors are rare and human beings, even experts and super human beings, have a difficult time to think about them.  We asked members of a safety committee to estimate the frequency of various errors.  They provided many estimates.  The arrived at a consensus about these estimates.  It all looked good until we looked at the data.  All of the estimates were off.  We asked them to list causes of errors, the causes they listed had no relations to the causes observed after analysis of data.  In short, when the problem is rare, our intuitions fool us.  A project manager can help professionals in solving the right problem by making sure that relevant data are analyzed and at hand and the focus of the project. 

How the project manager explains causes of various events matters.  Data on attribution theory shows that if success is attributed to the employee and initial failure attributed to the environment, employees are more likely to try.  Project managers can explain accomplishment of and delay in project milestones in different ways.  If project team has to continue to work hard and accomplish the tasks, it is important that they feel optimistic about their chances for success, it is important that they see themselves as successful.  This perception of success is important in eventual success of the project. 

This may sound funny to project managers that are focused on tasks, but what really helps people succeed is having a support group.  By support group we mean people you can turn to and express your frustration with a change.  Change is more likely to occur when those attempting the change believe the people they respect are also changing, wanting them to change, and will help them succeed.  Again, here perception is what matters.  The support group need not do anything but only to listen and validate and express empathy with the person.  People who are going through change need to believe that if they fail, they fail not only themselves but also their social support group. A project manager can provide for social support by putting together brownbag lunches where team members come and talk about their experiences.  The project manager can invite people from outside to come in and discuss same issues.  In short, the project manager should create the environment in which support groups can flourish and help project team members.

It is important for the project manger to keep the team motivated through use of various media.  The project manager can use media in several different ways.  Media can be used to repeatedly remind project team of the upcoming milestones.  Media can also be used to highlight the reason the project was undertaken by often video taping or audio taping patient experiences.  Media can also be used to report progress of the project and celebrate success of the project.  Data show that media advocacy, even when done with a small group of employees, is an effective tool in bringing about change.

Project Managers need to do a lot more than motivating project team members through appeals to self interest.  We have laid out a series of activities that can radically improve chances of project completion including recognizing information processing limitations and staying with the central project message, attributing success to team members and failure to the environment, providing support groups to hear about team members’ efforts, and using mass media tools to advertise to project team and their immediate personnel.  All of these additional steps work without making a rational case.  They work because project team members need to feel good about the change. 

Besides completing plans, project managers must also manage project resources.  Information technology projects have a poor track record of finishing under budget.  It is important to examine cost of projects over the entire life cycle of the project.  During the execution phase of the project many unanticipated costs show up that should have been included in the budget but were not. It is important to improve the accuracy of the budget.  Many information technology projects are constructed from cost of components.  Often important component costs are ignored through the process.  An alternative to estimating the cost of a project from its components is to derive the cost from the total budget of the organization.  These costs include indirect costs, for example cost of management, cost of utilities and cost of information systems.  Cost derived from the entire organization budget are likely to be more inclusive of the true cost of a project.  During the execution phase of the project it is important to correct wrong budget estimates and have a more realistic budget.

No matter how the project budget has been set, it is important to count the project expenditures to date and compare it to the planned expenditures.  Earned value management is a project management technique that combines scope, time and cost data.  We will review this technique in detail later in this lecture. 

Most project work is accomplished in teams.  Most involve employees from different working units of the organization.  Having an effective team, that works well together, is important.  There is a considerable literature on how team’s effectiveness can be improved.  Two broad approaches can be identified in the literature.  There is a set of recommendations that describe what to watch out for in a team, sort of principles of effective teams.   These include ideas such as taking teams through forming, storming norming and performing phases.  In the forming phase, team members learn about each other.  In the storming phase, project manager tries to reduce conflict in the team by having team members focus on the task at hand and not their relationships to each other.  In the norming phase, the team begins to lay out work expectations and norms that everyone is expected to follow.  Team members use these norms as a reference point and openly acknowledge that they are members of the team.  In the performing phase the actual work gets done with little attention to other issues.  One method of improving teamwork is to notice the phases the team goes through and make sure that team members bond with each other over time. 

Another method of improving teamwork is to change team meeting processes, for example, requiring all meetings to start with a reading of the agenda and end with an evaluation.  Other well know methods of improving team process include brainstorming of ideas before evaluating, Nominal group technique and Delphi.  A more detailed lecture on teamwork is presented later in the course. 

Another key activity of the project manager during the execution phase is communication.  Status reports are prepared and sent to designated sponsors.  These report focus on four questions:

  1. Tasks completed on time?
  2. If not, what is needed?
  3. What is next?
  4. Issues interfering with tasks

The first question addressed is whether scheduled tasks being completed on time. The second question is if tasks are not completed on time, what is needed to improve on time completion of the project.  Status report should also address what is coming up next and whether it can start on time.  Work scheduled to start between now and the next status report should be reported.  Next project milestones should be listed.  Finally status reports need to indicate if there are any issues or unforeseen risks that is emerging.  Any risks that require mitigation activities should be highlighted.  General announcements about the project should also be given in status reports. Status reports should be delivered to all stakeholders, including project sponsors and project team members.  The frequency of the reports depends on who is receiving them and should follow the communication plan.  As one moves up the organization structure, fewer status reports are sent.  Team members receive the most reports.  All stakeholders receive reports at least once a month. 

Another activity that is common in the execution phase is issue management.  When an issue arises it should be assigned a thicket number and its resolution should be planned like any project.  It should be assigned to specific team members to resolve the issue.  Complication issues should have a task work breakdown, budget and time schedule.  When a team member reports that the issue has been resolved, the project manager should check with the end customer to verify that in fact what team members call resolution does in fact solve the problem for the end customer. Many project management software allow tracking issues as well. 

Finally quality of project should be tracked by examining the impact of the project on customer’s satisfaction.  In addition, impact on customer’s health outcomes, cost of delivering care market share should also be traced.  Projects should be not only good for the patient but also for the organization.  So if a project increases patient satisfaction, this not enough, it should also increase the organization’s market share.  If a project reduces medication error, this is not enough, it should also reduce cost of duplicative work.  More details about quality control is provided in the lecture on project control. 

Project execution requires strong communication and leadership

Control Phase

Project performance must be monitored and measured regularly to identify variances from the project plan. Occasionally, current projects of the on-line era, also demand a change in an objective or a deliverable. Hence the methodology is equipped with a flexible yet well-defined process to control and manage the changes being requested to the project scope and objectives, and allows revisiting of the above phases anytime during the project life cycle.  Some of the main processes that can occur during this phase are:

  1. Scope Change
  2. Control Risk Monitoring and control
  3. Cost control
  4. Performance Reporting

Specific activities may include:

  • Control Validate throughout the project that scope is aligned with deliverables
  • Changes documented in Change Request with owners signature
  • Risk Monitoring and Control
  • Develop Risk and Issue logs
  • Meet on weekly basis with team/owners to document and discuss mitigation strategies
  • Engage now owners if mitigation strategies aren’t working – don’t wait
  • Cost control Review and document with team hours allotted and scope of work to be done
  • Manage weekly/bi-weekly/monthly timesheet reporting
  • Manage subcontractors, if any to their contracts
  • Manage weekly/bi-weekly/monthly timesheet reporting
  • Manage ODC’s and document any discrepancies in estimated .vs. actual cost
  • Report to owner when 75% of project is complete
  • Performance Reporting
  • Provide monthly reports on financials and milestone/deliverables completed based on schedule and project plan.

During this phase, project manager monitors project outcomes and associated risks.  When a problem arises or is likely to arise, the project manager takes corrective action and reports progress to stakeholders.  Projects fail for many reasons.  Health care organizations are complex, with professional players who have semi-independent roles.  In multi-year projects, changes in regulations is a factor.  In almost all failures, poor communication is a key factor.  When communication is poor, organizational resistance to change is high.  Other reasons mentioned on why projects fail include constant and seemingly small changes in scope that affect the long term effectiveness of projects.  Projects may fail when no one is clearly responsible for its success and when organizational priorities are shifting.  Finally projects fail because they were bad ideas that did not reflect the customer’s needs. 

In order to monitor project’s progress, project managers often have to forecast "Estimated Time to Completion" and "Budget at Completion."  These two measures tell us how efficiently the project is being run.  In addition, project managers need to measure the quality of the project and this is often done by measuring how well the project is accomplishing its original goals.  These goals should be described in terms of patient’s experiences. 

A key impact to measure is patient satisfaction with care.  Other factors to measure is patient’s health status, including impact on mortality or morbidity with care.  Still another factor to measure is cost of care.  Lets look at an example.  What should we monitor while we are implementing an IT help desk.  We can start with the obvious two measures of project efficiency, that is estimated time to completion and budget at completion.  Next we could measure the impact on employee satisfaction with IT services.  Is this a good idea?  It could be but it is not the impact on the end customer.  We should ask what benefits emerge from clinicians who are satisfied with the IT services, perhaps more use of the electronic health record.  This is still not a patient outcome.  We should ask what benefits emerge from more use of electronic health record.  Perhaps a lower number of medication errors as documented in improved patient health status.  If this is true then we should also expect lower cost of care, as patients maybe discharged earlier.  All of this could also mean higher satisfaction with care.  The point is that project managers need to monitor both project’s progress as well as its impact on patient outcomes.

Measurement of progress in the project is often done using the earned value management method.  We will start with some terminology about earned value, then show how various terms are related to each other and end with how the project manager uses the earned value to improve project control.  The baseline budget of a project is the original planned budget plus approved new items.  Planned value refers to the total cost planned to be spent on an activity.  This is the same as the budget amount for an activity plus approved adjustments.  In the plot in Figure 1, we see an example of expenditures in various months for a project.  The X-axis shows months since start of the project and the Y-axis shows total expenditures up to each month. 

Figure 1:  Planned value over time

The plot in Figure 1 shows that we had planned to finish in 9 months.  For example, the plot shows that we planned to spend $60,000 by month 4. 

Actual cost refers to the total direct and indirect costs incurred by the project. 

Actual cost = Direct cost + Indirect cost

Actual cost refers to the total direct and indirect costs incurred by the project.  The plot in Figure 2 shows actual and planned costs of a project together. 

Figure 2:  Actual and planned costs over time

The solid lines in Figure 2 show actual values and the dashed line indicates the forecasted values.  The dashed line shows the forecast of actual cost passed current date if we continue to perform on the project at the same rate.  The forecast of actual expenditures to project’s end is referred to as budget at completion or BAC.  This is a key variable that project managers track in their projects and report to their stakeholders.

Earned value is the value of work completed to date.  It can be calculated from planned value times rate of performance. 

Earned value

Rate of performance is the ratio of percent of actual work completed to the percentage of worked planned to be completed. 

Rate of Performance Calculation

Note that the percent of actual work completed depends in part of the work done is on the critical path.  The Figure 3 shows the planned cost, actual cost and earned value on the same scale.  Note how earned value is shown in solid green up to time now and how the green dashed line shows the earned value up to planned end date.  The actual cost is shown in blue and continues till end of project which is a month later. 

Figure 3:  Actual, planned and earned value

Cost variance is the earned value minus the actual cost.  If cost variance is negative it means that it cost more to do the work than it was planned.  Schedule variance is earned value minus the planned value.  A negative schedule value means that it took longer than planned to perform the task. 

Cost variance
Schedule variance

The cost performance index is the ratio of earned value to actual cost.  It can be used to project cost overruns.  The schedule performance index is the ratio of earned value to planned value and can be used to project time overruns. 

Cost performance index
Schedule Performance Index

The estimate cost at completion is calculated as the ratio of the project’s entire budget divided by cost performance index.  This estimate assumes that we progress with the project at the same rate as last calculated rate of performance. 

Estimated Cost at Completion

The estimate time to complete the project is calculated by dividing the original time estimate by the schedule performance index.  Again, this estimate assumes that we continue to perform in the rest of tasks of the project at the current rate. 

Estimated Time to Completion 

Lets look at an example.   In this example, by week 2 we have completed 75% of the planned tasks.  We had budgeted $30,000 to complete these tasks but we have spent only $15,000 to do so.  We were planning to complete the entire project for $80,000.  The question is how much will the entire project be over or under the budgeted amount.   


Current Week
Two Status

Other Weeks

Week Ten
(Project End)

Schedule performance index




Cumulative planned value




Cumulative actual cost




Table 2:  Performance in an Example Project

The first step is to find out the earned value in week two.  We can find this from the fact that the schedule performance index is the ratio of earned value and planned value.  Therefore, earned value is the product of planned value and the schedule performance index.  This will yield that the earned value in week 2 is $30,000 times 0.75 or $22,500:

Earned value = $30,000*.75=$22,500

The next step is to calculate the cost performance index.  This is the ratio of earned value to actual cost, as per formula above.  In our case, the cost performance index at week 2 is given by:

Cost Performance Index = $22,500/$15,000 = 1.5

Now, we can calculate the budget at completion of the project.  This is calculated as the ratio of planned budget divided by the cost performance index.  In our case this will be:

Estimate of Budget at Completion = $80,000/1.5 = $53,333.

So, the project is under budget by the difference of $80,000 and $53,333 or $26,667.  We can also determine when the project will end.  The planned project end is 10 weeks divided by .75 or 13.33 weeks.  So the project will finish 3.33 weeks late and $26,667 under budget.

When monitoring a project, it is important to start the effort by reconfirming the plans.  Then project’s progress is assessed and at designated intervals reported to key people through status reports.  When necessary a corrective action is taken.  If more resources are necessary to get the project back on target, then a formal request needs to be made.  If the project cannot finish on time and under budget, it is important to figure out the consequences of the delay on remaining activities of the organization.  Project control requires monitoring progress using earned value.

Closing Phase

The last major Process Group of a project’s life cycle is the project Closing Process Group. Project closeout is performed after all defined project objectives have been met and the customer has formally accepted the project’s deliverables and end product or, in some instances, when a project has been cancelled or terminated early. Project closeout is fairly routine, but it is an important process. By properly completing the project closeout, organizations can benefit from lessons learned and information compiled at closure.  Activities may include:

  • Complete closeout of any contracts subcontractors/product vendors
  • Document licensing and warrantee for systems
  • Sign off of customer acceptance
  • Attach site completion sign off’s
  • Closeout of any financial matters
  • Prepare final reports
  • Conduct a project review with all stakeholders
  • Document lessons learned
  • Complete, collect and archive project records
  • Celebrate!

Celebrating project's end is important.  The purpose of such celebrations is not just to have fun.  These rituals allow the project team to break up in constructive ways.  These celebrations allow the organization to acknowledge the end of the project. 

Return to Course page.   This page was edited 05/16/2013 by Farrokh Alemi, Ph.D.