Intro to Project Management: Project Schedule Management - Milestones Definition Types

What This Is

Milestones are significant events or accomplishments in a project that mark the completion of a major phase or deliverable. They are crucial for successful project delivery as they provide a clear understanding of progress, help manage stakeholder expectations, and enable informed decision-making. For instance, in a software development project, a milestone might be the completion of the alpha version, which is a significant step towards the final product release.

Key Terms & Formulas

• Milestone: A significant event or accomplishment in a project that marks the completion of a major phase or deliverable.
• Milestone List: A document that lists all the milestones in a project, including their description, target date, and responsible team member.
• Critical Path Method (CPM): A technique used to identify the longest sequence of dependent activities that determines the minimum duration required to complete a project.
• Program Evaluation and Review Technique (PERT): A method used to analyze and represent the tasks involved in completing a project, including their duration and dependencies.
• EV = % complete × BAC (Earned Value = percent complete times Budget at Completion): A formula used to calculate the earned value of a project, which represents the value of work completed.
• BCWS = BAC × % complete (Budgeted Cost of Work Scheduled = Budget at Completion times percent complete): A formula used to calculate the budgeted cost of work scheduled, which represents the planned cost of work completed.
• BCWP = EV (Budgeted Cost of Work Performed = Earned Value): A formula used to calculate the budgeted cost of work performed, which represents the actual cost of work completed.
• CV = BCWS - BCWP (Cost Variance = Budgeted Cost of Work Scheduled - Budgeted Cost of Work Performed): A formula used to calculate the cost variance, which represents the difference between the planned and actual cost of work completed.
• SV = EV - AC (Schedule Variance = Earned Value - Actual Cost): A formula used to calculate the schedule variance, which represents the difference between the earned value and the actual cost of work completed.
• CPI = EV / AC (Cost Performance Index = Earned Value / Actual Cost): A formula used to calculate the cost performance index, which represents the ratio of earned value to actual cost.
• SPI = EV / BCWS (Schedule Performance Index = Earned Value / Budgeted Cost of Work Scheduled): A formula used to calculate the schedule performance index, which represents the ratio of earned value to budgeted cost of work scheduled.

Step-by-Step / Process Flow

1. Identify Milestones: Determine the significant events or accomplishments in a project that mark the completion of a major phase or deliverable.
2. Create a Milestone List: Document all the milestones in a project, including their description, target date, and responsible team member.
3. Develop a Critical Path: Use the Critical Path Method (CPM) or Program Evaluation and Review Technique (PERT) to identify the longest sequence of dependent activities that determines the minimum duration required to complete a project.
4. Monitor and Control Milestones: Track the progress of milestones and take corrective action if there are any deviations from the planned schedule or budget.
5. Update the Project Schedule: Revise the project schedule to reflect any changes to the milestones or dependencies.

Common Mistakes

• Mistake: Failing to identify all the significant events or accomplishments in a project that mark the completion of a major phase or deliverable.
• Correction: Conduct a thorough analysis of the project scope, timeline, and budget to identify all the milestones.
• Mistake: Not documenting the milestones in a project.
• Correction: Create a milestone list that includes the description, target date, and responsible team member for each milestone.
• Mistake: Not using a critical path method or program evaluation and review technique to identify the longest sequence of dependent activities.
• Correction: Use CPM or PERT to identify the critical path and develop a project schedule that takes into account the dependencies and duration of each activity.

Exam Tips

• Tip: Be able to explain the difference between a milestone and a deliverable.
• Tip: Understand how to calculate the earned value, budgeted cost of work scheduled, and budgeted cost of work performed.
• Tip: Be able to identify the critical path in a project and explain how it is used to develop a project schedule.

Quick Practice Questions

1. If the CPI is 0.8, is the project under or over budget? Answer: Under budget. Explanation: A CPI of 0.8 indicates that the project is earning 80% of its budgeted cost, which means it is under budget.
2. If the EV is $100,000 and the AC is $120,000, what is the CV? Answer: -$20,000. Explanation: The CV is calculated as BCWS - BCWP, which is $120,000 - $100,000 = -$20,000.
3. If the SPI is 1.2, is the project ahead or behind schedule? Answer: Ahead of schedule. Explanation: An SPI of 1.2 indicates that the project is earning 120% of its budgeted cost, which means it is ahead of schedule.

Last-Minute Cram Sheet

• Milestone: A significant event or accomplishment in a project that marks the completion of a major phase or deliverable.
• Milestone List: A document that lists all the milestones in a project, including their description, target date, and responsible team member.
• Critical Path Method (CPM): A technique used to identify the longest sequence of dependent activities that determines the minimum duration required to complete a project.
• Program Evaluation and Review Technique (PERT): A method used to analyze and represent the tasks involved in completing a project, including their duration and dependencies.
• EV = % complete × BAC (Earned Value = percent complete times Budget at Completion).
• BCWS = BAC × % complete (Budgeted Cost of Work Scheduled = Budget at Completion times percent complete).
• BCWP = EV (Budgeted Cost of Work Performed = Earned Value).
• CV = BCWS - BCWP (Cost Variance = Budgeted Cost of Work Scheduled - Budgeted Cost of Work Performed).
• SV = EV - AC (Schedule Variance = Earned Value - Actual Cost).
• CPI = EV / AC (Cost Performance Index = Earned Value / Actual Cost).
• SPI = EV / BCWS (Schedule Performance Index = Earned Value / Budgeted Cost of Work Scheduled).
• Milestones are not the same as deliverables – milestones mark the completion of a major phase or deliverable, while deliverables are the actual products or services produced by the project.
• The critical path is not the same as the project schedule – the critical path is the longest sequence of dependent activities that determines the minimum duration required to complete a project, while the project schedule is a detailed plan that shows the start and finish dates of each activity.