GRACE · Module 9 · Managing Execution 2: Leading with Data

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1The review

The monthly review starts on the 25th

It’s the 25th, and your prebill is open. The current phase has used half of its target effort.

How far along is the phase? To what percent complete should you bill?

That number alone can’t tell you.

To answer the question, you need 3 things. The first is a baseline, which is the plan you built in Module 5. The second is an account of where the project is now. BST gives you that when it compares the plan with the effort the project has incurred. The third is an assessment of progress, which you make in 2 ways. You review the work, and BST runs a calculation each month after you update the project.

With those 3 in place, you do 2 jobs. You find the phase’s current position, and you forecast how it will finish. This is the monthly review. You run it every month with the prebill, for every project you lead.

This lesson walks the review on one phase, Oakhaven Design Development, on a recreation of the PM dashboard. Then you make the calls yourself on 2 other projects.

Recall, before you go on

From memory. What does the Module 8 Friday routine compare, and where does a gap go? Then name the profit goal and the margin floor from the Module 5 plan.

Module 8 compares the plan with what is true on 4 lines, work, time, effort and fee earned. A gap you can close goes on next week’s PM Plan as a Priority. A gap beyond your authority goes to the PIC. The Module 5 plan set a 20 percent profit goal and a 15 percent margin floor. The monthly review uses both.

By the end of Module 9, you’ll be able to:

✓Read Budget Effort, Effort, Revenue, Effort Remaining and the Effort Performance Index the way Grace uses them, and find each one on the PM dashboard.
✓Update the Estimated Hours with your team and calculate percent complete as Effort to date divided by Estimated Effort.
✓Calculate this month’s invoice, and take the AR action the Module 3 AR Guide sets for an invoice at its age.
✓Put a phase in one of 3 states, then choose the first recovery lever and its owner.
✓Run the weekly check, and act when Hours Remaining drops below zero.

2The terms

Read the dashboard the way Grace uses it

The PM dashboard is the Project and Resource Management screen in BST, on the My Projects Review tab. The Project Scorecard lists your projects. BST uses the word Task for a contract phase, so each row here is one phase. The BST technical sessions show you where to find the screen. This lesson shows you how to read it.

Select a term to see its column. The selected row is Oakhaven Design Development.

Budget Effort is the contract fee for the Task. Grace says fee in conversation. BST records it as Budget Effort, and this lesson uses the BST term.

Effort is cost. Grace sets each Effort rate at the average direct labor rate for the resource class times a uniform overhead ratio. That rate pays for the person and the overhead, with little or no profit. So Effort shows what the phase has cost Grace to date.

Target effort has no column. You set it. It is the Budget Effort less your profit goal. With a 20 percent goal, plan to spend about 80 percent of the Budget Effort as Effort. On Oakhaven DD that is $224,000 of $280,000.

Revenue is the Budget Effort earned to date. It comes from percent complete, and percent complete comes from the hour projections you keep up to date. The Effort Performance Index is Revenue divided by Effort, so it shows the profit earned to date as a ratio. The dashboard does not show it by default, so add it as a column. 1.0 is break even, and at a 20 percent goal the plan’s Index is 1.25.

Read this column with care

Effort Remaining is the Budget Effort minus the Effort to date. It shows the Budget Effort that is left. Spend all of it and the phase finishes with no profit. The effort the work actually needs comes from your team’s estimate, in step 3.

Effort is cost. Plan to finish with Effort at or below your target effort, about 80 percent of the Budget Effort at a 20 percent profit goal.

3Steps 1 to 5

Find the position and forecast the finish

The first 5 steps give you the current position and the forecast. Step through them on Oakhaven DD. Each step marks the fields it reads.

Compare the Effort to date with the effort budgeted. Read it against the plan for this date, against the target effort, and against the Budget Effort. BST shows the last one as Effort Percent Complete. All 3 measure money spent.
Assess the work that is complete. Check each major task against the Module 5 plan and the Phase Roadmap, then review the work with the team. The result is a list of the tasks that are finished and the tasks that are still open.
Update the Estimated Hours. With the team, person by person, estimate the hours each person needs to finish. Each person’s Estimated Hours are their hours to date plus their hours to finish. You make sure the hours are updated by working with the Project Accountant. BST multiplies them by the rate and records the result as Estimated Effort.
Read the Estimated Effort. It is the total effort the phase will use by the end. BST also holds an Effort At Completion, or EAC. EAC is the accounting value BST uses to recognize revenue. The Project Accountant updates EAC from Estimated Effort when the two differ by a large amount.
Calculate percent complete. Divide the Effort to date by the Estimated Effort. Then compare the Estimated Effort with the target effort to make the forecast.

Percent complete = Effort to date ÷ Estimated Effort

What Oakhaven shows

Oakhaven DD spent exactly what its plan expected by this date, $112,000. That is 50 percent of the $224,000 target effort, so the phase looks half done.

The team review found senior staff on the estimate reconciliation and the elevations work not started. The team’s estimate brings Estimated Effort to $280,000. Percent complete is $112,000 divided by $280,000, or 40 percent.

The 50 percent measured money spent. The 40 percent measures the work done. And the forecast uses the whole Budget Effort, so the phase keeps none of its $56,000 of planned profit.

Where Estimated Effort lands decides the forecast. At or below the target effort, the phase keeps its planned profit. Between the target and the 15 percent floor, profit drops below the plan. Past the floor, or past the Budget Effort, the phase is off track. Oakhaven DD lands on the Budget Effort line.

Update the Estimated Hours before you read any other number. Percent complete, Revenue and the forecast all come from them.

4Steps 6 to 8

Bill, collect, judge the phase, and plan the next month

Steps 6 to 8 turn the position and the forecast into action. Step through them on the same phase.

Step 6. Bill to percent complete

Invoice = percent complete × Budget Effort, minus the total billed to date

Bill every month. Work in progress, or WIP, is revenue the team has earned that is not invoiced yet. WIP grows through the month as the team works. When you send the invoice, WIP becomes Accounts Receivable. On a chart over several months, the line rises each month and drops at each invoice.

Read the WIP sawtooth for 2 problems. A peak that does not drop means earned fee stayed off the invoice. Peaks that get higher each month mean the phase is billed below its percent complete, and the unbilled amount grows.

BST measures the delay in days. Unbilled Days is how long earned work waits for an invoice, and Grace’s limit is 30 days, one billing cycle. Receivable Days is how long an invoice waits for payment. Add the 2 to get days to cash. You control the first part.

Step 7. Check the AR report

Look at each open invoice on the phase and its age. Then follow Grace’s collections protocol in the Module 3 AR Guide. Accounting follows up with the client’s accounts payable team. The specific ask at day 45 and the call at day 60, with the PIC aware, belong to you. When you send the aging report to Accounting, you still own the collection.

Judge the phase

Before step 8, put the phase in one of 3 states. Each state has a test and a response.

State	Test	Response
On track	Estimated Effort is at or below the target effort, and the work due is done.	Continue with the plan.
At risk	The forecast profit is below the plan, and at or above the margin floor in your Module 5 plan. Or the weekly check shows an early warning, such as hours on plan and work behind.	Work the recovery levers. A gap you can close goes on next week’s PM Plan as a Priority.
Off track	The forecast profit is below the margin floor, a milestone was missed, or Estimated Effort is above the Budget Effort.	Update the forecast and size the gap. Take a recommendation to the PIC. It has 4 parts, the situation, the options, your recommendation and the first action.

For a phase at risk or off track, use the 4 recovery levers in this order.

Close the open decision that is holding up the work.
Rework the resource plan. Give each task to the lowest cost role that can do it well, and keep senior time for oversight.
Re scope the remaining work to fit the remaining Budget Effort.
Price the changes to the scope, when scope changes drive the problem.

Oakhaven DD is off track. Estimated Effort equals the Budget Effort, so the forecast profit is zero, below the 15 percent floor. No open decision is causing the gap, so the Project Manager uses lever two. The recommendation to the PIC is to move the elevations work to a second Design Professional and to reduce senior and Principal time to oversight and review.

Step 8. Plan the next month

Build the plan from what the review found. It shows who works on which task, each person’s hours by week, the handoffs, and any recovery actions. Work with the Project Accountant to schedule the hours in BST. Updating the Estimated Hours changes Estimated Effort only, so without this step the dashboard compares next month against an old schedule. Then tell the team the plan, and start the work.

Name the state, then do its response this month. Off track goes to the PIC. At risk goes on your PM Plan.

5Practice

Make the calls on 2 projects

Oakhaven was the worked example. Now you decide. Two more rows sit on the same dashboard, Pinewood Branch Library DD and Magnolia Street Fire Station CD. Each one comes with a case card that holds the facts the scorecard does not show. For each project you make 3 calls. Classify the state, pick the first lever and its owner, then set the invoice and the AR action.

Practice

Make the calls

Two projects, three calls each. The dashboard above marks the fields each call reads. Pick the call you would make.

Pinewood · Call 1 of 3

Case card · Pinewood Branch Library · DD

Budget Effort	$186,500. Profit goal 20 percent, so target effort $149,200.
Effort to date	$101,840
Team’s Estimated Effort	$203,680, so percent complete is 50 percent
Margin floor in the Module 5 plan	15 percent
Milestones	The 50 percent DD set went out 12 days late.
From the team review	The Library Board has not approved the finish palette. The team has redrawn the children’s area twice while it waits.
Billing and AR	Billed to date $70,000. Unbilled Days 42.10. No invoice is past 30 days.

What state is the phase in?

The callOff track. Estimated Effort of $203,680 is above the $186,500 Budget Effort, and a milestone was missed. The forecast is a loss of $17,180, and the 50 percent set went out late. Either fact makes the phase off track. The response is to update the forecast, size the gap, and take a recommendation to the PIC.

Look againThe Index reads the profit earned to date. The state comes from the forecast. Estimated Effort is above the Budget Effort, so the phase is forecast to lose money, and a milestone was missed.

Look againHalf the Budget Effort spent at 50 percent complete still finishes over the Budget Effort, because the team needs $203,680 in total. Use the forecast, then the milestones.

Pinewood · Call 2 of 3
Which lever comes first, and who owns the next step?
The callLever one, close the open decision on the finish palette. Take the recommendation to the PIC, with situation, options, recommendation and first action. The redraws come from a decision the Library Board has not made. Close that first. The phase is off track, so the recommendation goes to the PIC.
Look againA lower cost role still redraws the same area while the board waits. Close the open decision first. An off track phase also goes to the PIC as a recommendation.
Look againPricing a change is lever four, and it applies when scope changed. The first lever is the open decision that is holding up the work.
Pinewood · Call 3 of 3
What do you bill, and why now?
The callInvoice $23,250 this month. Unbilled Days of 42 is past Grace’s 30 day limit, and that delay is yours to fix. 50 percent × $186,500 = $93,250 earned. Minus $70,000 billed to date = $23,250. Earned work has waited more than one billing cycle.
Look againHolding the invoice leaves a WIP peak that does not drop. The team earned this fee. Bill it, and work the board decision separately.
Look againRevenue is the total earned to date. Subtract the $70,000 already billed. The invoice is $23,250.

Magnolia · Call 1 of 3

Case card · Magnolia Street Fire Station · CD

Budget Effort	$410,000. Profit goal 20 percent, so target effort $328,000.
Effort to date	$241,500. Index 1.19.
Team’s Estimated Effort	$345,000, so percent complete is 70 percent
Margin floor in the Module 5 plan	15 percent
Milestones	All met.
From the team review	A Senior Architect charged 60 hours to wall sections the plan gave to a Design Professional. No decision is waiting on the client.
Billing and AR	Billed to date $252,000. One invoice of $31,000 is at day 62 with no payment.

What state is the phase in?

The callAt risk. Forecast profit is $65,000, about 15.9 percent, below the 20 percent plan and above the 15 percent floor. $410,000 minus $345,000 = $65,000 forecast profit, 15.9 percent. Below the plan and above the floor is at risk. The response is to work the recovery levers.

Look againThe Index shows the profit earned to date. The forecast is lower. Estimated Effort of $345,000 is above the $328,000 target, so the phase will not keep all of its planned profit.

Look againOff track needs a forecast below the floor, a missed milestone, or Estimated Effort above the Budget Effort. The forecast is still above the 15 percent floor, Estimated Effort is below the Budget Effort, and every milestone was met.

Magnolia · Call 2 of 3
Which lever comes first, and who owns the next step?
The callLever two, rework the resource plan so wall sections go back to a Design Professional. You own it. Put it on next week’s PM Plan as a Priority. No decision is waiting on the client, so lever one does not apply. The cause is higher cost staff on lower cost work, which is lever two. An at risk gap you can close goes on next week’s PM Plan.
Look againThe four part recommendation is the off track response. This phase is at risk, and the fix is inside your authority.
Look againThe levers run in order. Re scoping comes after you correct who does the work. Start with lever two.
Magnolia · Call 3 of 3
What do you bill, and what AR action is yours?
The callInvoice $35,000. Then make the day 60 call on the $31,000 invoice, with the PIC aware. 70 percent × $410,000 = $287,000 earned. Minus $252,000 billed = $35,000. The AR Guide gives the day 45 ask and the day 60 call to the Project Manager.
Look againAccounting follows up, and you still own the collection. At day 62 the next step is your call, with the PIC aware.
Look againReceivable Days is an average across the open invoices. One invoice is already at day 62. Act on the invoice, not the average.

What the six calls show

The state comes from the forecast and the milestones. The Index shows only the profit earned to date.
The levers run in order. An open decision comes before staffing, and staffing comes before scope.
Off track goes to the PIC. At risk is yours to fix on next week’s PM Plan.
Bill to percent complete every month, and work the AR Guide on the invoice, not on the average.

6Every week

Run the weekly check

By the time you arrive at the prebill, nothing should surprise you. The weekly check finds problems between monthly reviews. Run it yourself first, then take what you find to the team.

Compare hours. Task Schedule Hours shows the scheduled hours for each person on each task, by week. Compare them with the timesheet hours for the same week. Use the PM Plan from Module 8 to see which tasks were planned for the week.
Check the work. Compare the time and Effort recorded on the project with the work completed that week.
Check Hours Remaining. When the team works to the schedule, Hours Remaining stays at zero. When it drops below zero, the team is charging hours faster than scheduled. Decide if the work needs more Estimated Hours, or if future scheduled hours can come out, and make the change with the Project Accountant.

Hours Remaining = Estimated Hours, minus hours to date, minus hours scheduled to finish

Hours	Work	What it means
On plan	Done	The week went to plan.
On plan	Behind	The team is making less progress per hour than the plan assumed. This is an early warning, so the phase is at risk.
Under plan	Behind	The staffing is short, or the work started late.

Take the gaps to the weekly project team meeting. If you can close a gap, put the fix on next week’s PM Plan as a Priority. If a gap is outside your authority, take it to the PIC.

7Transfer

Put it to work

On your own project, at this month’s prebill

Pick one active phase. Write down its Budget Effort, your target effort and the Effort to date.
Update the Estimated Hours with your team, person by person, and work with the Project Accountant to enter them.
Calculate percent complete as Effort to date divided by Estimated Effort, and bill to it.
Name the state of the phase. If it is at risk or off track, write the first lever, its owner and a date.
Put the weekly check on your calendar, on the same day each week, until the next monthly review.

The whole process runs on 3 words. Investigate your data regularly to understand the status of your project. Measure the size of the adjustment you need to stay on track. Act to drive the performance of the team toward the result you want.

Challenge, from memory

Name the 8 steps of the monthly review in order. Then give the 3 tests that make a phase off track.

Compare the Effort to date with the effort budgeted. Assess the work that is complete. Update the Estimated Hours. Read the Estimated Effort. Calculate percent complete. Calculate the amount to bill. Check the AR report. Plan the next month. A phase is off track when the forecast profit is below the margin floor, a milestone was missed, or Estimated Effort is above the Budget Effort.

Next. The Quick Reference is your job aid for the prebill. The Monthly Review Field Resource prints the whole review on one sheet, front and back.

Then Module 10, Managing Change. When the review finds that scope changed, Module 10 is the next step.

Sources for this page. Module 9 videos, 9A Position and Forecast and 9B Bill, Collect and Act. BST terms and the Estimated Hours, Estimated Effort and EAC relationship as reviewed by the Grace BST trainer. Collections protocol from the Module 3 AR Guide. The dashboard is a recreation with fictional data.