Integrating Schedule and Budget Management for Effective Project Control
PERT/Cost is a project management technique that integrates the schedule analysis of PERT with cost accounting to provide comprehensive project control. It enables managers to track both schedule performance and cost performance simultaneously.
Originally developed by the U.S. Department of Defense, PERT/Cost helps answer critical questions:
Combines time and cost data in a single management system, providing a complete picture of project performance.
Organizes project into manageable work packages with assigned budgets and schedules.
Measures work accomplished against planned schedule and budget (precursor to modern EVM).
Identifies potential cost overruns and schedule delays before they become critical.
Provides quantitative measures of schedule and cost efficiency.
Predicts final project costs and completion dates based on current performance.
Break down the project into discrete work packages that can be:
Allocate budgets to work packages according to the project schedule (planned value):
Track actual costs incurred for each work package:
Measure earned value (work actually completed):
Calculate schedule and cost variances:
Compute efficiency ratios:
Estimate final project costs and completion date:
[Diagram showing the continuous cycle of planning, measuring, analyzing, and correcting]
| Work Package | PV (BCWS) | EV (BCWP) | AC (ACWP) | SV | CV | SPI | CPI |
|---|---|---|---|---|---|---|---|
| Requirements | $15,000 | $12,000 | $14,000 | -$3,000 | -$2,000 | 0.80 | 0.86 |
| Design | $20,000 | $22,000 | $19,000 | $2,000 | $3,000 | 1.10 | 1.16 |
| Development | $30,000 | $25,000 | $28,000 | -$5,000 | -$3,000 | 0.83 | 0.89 |
| Testing | $10,000 | $8,000 | $9,000 | -$2,000 | -$1,000 | 0.80 | 0.89 |
| Total | $75,000 | $67,000 | $70,000 | -$8,000 | -$3,000 | 0.89 | 0.96 |
Project Budget: $500,000 | Planned Duration: 6 months
At 3-month review:
Analysis:
Action Plan: Implemented corrective measures including additional resources for delayed tasks and stricter cost controls.
Create sufficiently detailed work packages (typically 40-200 hours) for accurate tracking.
Establish frequent reporting cycles (weekly or biweekly) to maintain control.
Use integrated project management software that combines scheduling and cost data.
Ensure all team members understand the PERT/Cost methodology and their reporting responsibilities.
Act quickly on variance trends rather than waiting for problems to become critical.
Maintain historical data from previous projects to improve future estimates.
While traditional PERT/Cost has evolved into Earned Value Management (EVM), its core principles remain fundamental to project control. Modern project management software often incorporates PERT/Cost concepts through: