Managers frequently face the following question: “how to identify deviations in company projects”? To solve this doubt, many invest in complicated analyses of costs, dates, schedules, among other information, wasting a lot of time and obtaining results with difficulty. The S-curve is an excellent managerial tool for project monitoring that can solve the issue of deviations much more easily. And best of all: it is already available in the Strategic Management software.
The S-curve consists of a graph where the Y-axis represents costs and the X-axis represents the elapsed project time. The resulting graph, shaped like an “S,” occurs due to the typical lifecycle of projects. At the beginning of the work, efforts are reduced, and the curve is close to horizontal. It gradually becomes vertical as efforts increase.
Guilherme Barbassa, director at Stratec, explains that the S-curve is a graph that provides information on the physical and financial progress of a project. “This feature is very useful because you can easily identify deviations from what was planned,” he states.
According to Cláudio Bastos Boaventura, Business and Projects Manager at Stratec, the “S” curve is used in the earned value analysis approach in projects, where the performance indicator is related to the budgeted cost for the execution of activities and the actual cost incurred. “It brings, in a simple and more didactic way, most of the project's efforts that are converted into financial values or indices to be compared to the expected performance. If you completed a task below expectations and spent more than you should have, there's a problem to be solved. If you executed as planned and managed to reduce your spending for that activity, you exceeded expectations,” he explains.
Boaventura further explains that the “S” curve and earned value analysis aid strategic management by providing indicators that allow an assessment of the physical and financial “health” of all projects, especially strategic ones. It is through proper planning, specific measurements, and efficient monitoring that we can adjust the direction of projects and the strategic plans of institutions towards the expected success. “After all, what are steering wheels for in cars if not to adjust the vehicle's path? In today's markets and environments with constant fluctuations, the percentage of straight and perfect paths tends towards zero, and if we are not attentive to the oscillations, we will go off the track at the first curve. With adequate instruments and tools, we may not be perfect, but we will drastically reduce the risks of ‘hitting the first pole’,” he jokes.
See also: “Defining Functions and Responsibilities in Projects”
Another advantage of this instrument is that it allows not only project managers but also senior management of the organization to have a data-based assessment of the situation, knowing the plan, measuring the present, and estimating the future. Boaventura warns that many public and private organizations see their projects go off track due to a lack of knowledge or opportunity to change the organization's culture, because there are many market instruments and tools that were made to facilitate the lives of those who execute, manage, or direct.
Barbassa points out that this graph is usually analyzed with some indicators, but it, by itself, is already a summary of the projects. The director also draws attention to the fact that besides the S-curve, the software automatically calculates the indicators SPI, CPI, PV, CV, SV, EV, AC, BAC, EAC, ETC, and VAC.
Image credit: Google Images
