Using Rules of Credit to Produce More Accurate Progress & Performance Reports
Accurately calculating physical percent complete is an essential component to the timely identification of variances to your baseline plan. It also plays an important role in ensuring the integrity of activity durations in the project schedule and associated completion dates.
What are Rules of Credit?
The best way to understand rules of credit is to evaluate an activity that you perform daily – brushing your teeth. At least we hope you perform it daily.
Since you brush your teeth daily, you likely have a good feel for how long It should take on a normal day. Let’s assume you recorded the time it took for 30 straight days, and you averaged 3.5 minutes – this will now serve as the baseline amount of time in which you should be able to brush your teeth. But there are several tasks associated with brushing your teeth. Let’s break the task down into its smaller tasks and calculate the respective weighting for each task as compared to the total time:
Tap Chart to Enlarge
Let’s say one day you were about 50% done putting toothpaste on your toothbrush and it only took you 0.75 minutes to get to that point.
Tap Chart to Enlarge
Your total percent complete for the overall task of brushing your teeth would be:
(17% * 100%) + (5% * 100%) + (5% * 50%) = 24.5%
Your earned man hours (currently in minutes) would be:
24.5% * 3.5 minutes = 0.86 minutes
Your performance thus far would be (we will us earned/actual, although some use the inverse):
0.86 / 0.75 = 1.14
This means you’re brushing your teeth (so far) faster than you planned (budgeted) and are therefore ahead of schedule.
So why go through all the effort to break down this task into smaller sub-tasks? There are plenty of reasons:
Accuracy. It provides a much more accurate progress and performance calculation. Let’s say I asked you one morning, “How far along are you with brushing your teeth?” Your natural reaction if you haven’t already physically brushed your teeth is to respond with 0%. However, what if you had already gotten out of bed, walked to the bathroom sink, run water over your toothbrush and put toothpaste on the brush? You have “earned” some of the credit toward brushing your teeth even though the task has not been completed. This would result in underreported progress (in this example) and lead to a miscalculation of your performance. If a Design Engineer or Field Superintendent isn’t getting credit for what they have accomplished in between major activity completions, their performance may be perceived as poor when that’s not truly the case.
Intermediate Progress. It’s important when performing activities that have long durations to capture intermediate progress. If you envision a schedule item for “Concrete Foundation XYZ” that requires 14 days, and you only actualize that activity once it’s complete, you are missing out on all the progress earned for the activities completed during the process, including excavation, formwork, rebar etc.
Simplification. It’s unrealistic to think you can track this level of detail in a project schedule. At best, you would track the task of “brush teeth”. Otherwise, you will end up with a schedule containing so many tasks it’s either unmanageable, or you must hire an army of planners and schedulers which isn’t cheap. It’s more feasible to use a progress and performance tracking system that is set up for simplifying the process of tracking detailed activity progress.
Identify Deviations Faster. You will be able to identify deviations from your baseline plan earlier. The more detailed the tracking, the faster you can recognize where things are falling behind. If you only track high-level activities, it may be too late to influence the outcome after you recognize variances.
Key items to consider:
Make sure you evaluate the right level of detail to track based on your resource availability, complexity of the project and reporting requirements.
Consider integrating your progress tracking system with your schedule so that you can push percent complete into your schedule and better analyze activity durations and status.
Create standard rule of credit templates (or one for each project type) that can be used from project to project. This will make project setup much quicker and standardize reporting processes.
Normalize all your activities by assigning them man-hours. Even if you decide to track installed quantities, you should assign the activity man-hours. Quantities have varying units of measure and thus cannot easily be weighted in a total percent complete calculation
Check out Cloud EPC’s enterprise progress and performance dashboard to see the outputs from capturing progress via rules of credit.
About Cloud EPC
Cloud EPC is a cloud-based enterprise project management and project controls system for the Engineering, Procurement and Construction industries. With cutting-edge technology and an extremely user-friendly interface, the application is redefining the way organizations track and manage project cost, change management, progress & performance, safety, reporting and enterprise business intelligence. To learn more about Cloud EPC, contact us at 800.909.5181 or firstname.lastname@example.org.