An Introduction to Trend Analysis

In project management, it is useful to discern trends in the quality data to determine if the project is progressing according to quality expectations. Trend analysis is a technique that tells project managers whether quality goals are being achieved according to the quality management plan.

Trend analysis is a mathematical technique using statistical methods that provide an equation that best fits data in a scatter diagram. Scatter diagrams are simple X and Y axis diagrams with an independent variable, such as time, as the X axis, and the dependent variable as the Y axis. Trend analysis determines the best or most appropriate equation and measures the fit of the equation to the data. Trend analysis is also known as "curve fitting."

Fitting a curve is often done by the least squares method, a mathematical method in which the distance between the data points and a possible line is minimized over its length. This gives the most statistically accurate representation. These lines are often called "regression lines."

Trend analysis is a useful tool for cost and schedule performance, and quality control. The utility of the trend analysis is that it gives a clear and understandable indication of change caused by every incremental change of the independent variable. One of the more useful functions of trend analysis is predicting, or forecasting.

The different lines mean a variety of different things could have occurred in a process. Line and curve shapes indicate whether a process is behaving according to the quality control norms.

• Lines of positive correlation - Lines of positive correlation indicate the desired value y is increasing. This is good if improvement is sought, but bad if the line continues past a specified value.
• Lines of negative correlation - Negative correlation indicates y is decreasing. This is good if the tolerance of a process is coming closer to a desired value, but bad if that same value is exceeded.
• No correlation - A diagram with no correlation means the data is inconsistent. The process is out of control, and immediate steps are necessary to bring the process under control.
• No slope lines - A line with no slope means there is no change. This is indicative of a stable process.
• Curvilinear line - Curvilinear lines indicate a cyclical process or a process decreasing or increasing at a non-uniform rate. Cyclical patterns indicate a possible worn out process. A curvilinear line indicates a complex relationship with the independent variable.

Of all the different lines, curved lines are the most difficult to make conclusions from because of their shape. Other statistical analysis must be used to determine at which point the objective value has been met or exceeded.

Trend analysis allows project managers and teams to predict a pattern and come up with a formula that accurately reflects a data set. As long as the appropriate quantity of data have been selected, accurate predictions can be made of a process. Trend analysis is also useful for determining at which point a quality concern may become an issue based on historic data. Trend analysis is often useful when used in conjunction with other tools and techniques.

Methods for Evaluating Project Performance

Author Thomas S. Monson said: "When performance is measured, performance improves. When performance is measured and reported back, the rate of improvement accelerates."

In the area of project management, performance measurement techniques are used to assess the magnitude of deviations from the original project plan. As such, they are an important aspect of project schedule control, allowing the project team to determine whether a schedule variance requires corrective action.

There are four basic performance measurement techniques: performance reviews, trend analysis, earned value analysis, and information distribution.

1. Performance reviews
   Performance reviews are meetings held to assess project status. Most project managers schedule weekly, bi-weekly, or monthly reviews to keep the management team abreast of the project's status. By conducting frequent performance reviews, variances are more readily detected and can be addressed sooner which prevents further deviation from the plan.
   
   
2. Trend analysis
   Trend analysis involves examining project results over several reporting periods to determine if performance is improving or deteriorating. By plotting report results on a graph, management can determine whether schedule performance is progressing or regressing.
   
   Companies use trend analysis for long-term projects, to compare status over several periods. Either a three-month, four-month, or six-month moving average is used to predict project trends. Trending provides management with advance warning of adverse trends, and allows for corrective action to be taken to rectify the situation. Companies also use trend analysis data to plan future projects that are similar in nature.
   
   
3. Earned value analysis
   Earned value analysis is the most commonly used method of performance measurement. It integrates scope, cost, and schedule measures to assist the management team in assessing project performance.
   
   Earned value analysis compares the amount of planned work to what was actually accomplished. This involves calculating three key values for each activity that is performed.
   

- The planned value in a project is the approved estimate of cost planned to be spent on an activity during a given time period. - The actual cost in a project is the total costs involved in completing the work for an activity in a given time period. - The earned value for a project is the value of the work actually completed during a period of time. These calculations allow project managers to see whether cost and schedule performance is proceeding as planned.

4. Information distribution tools and techniques
   Information distribution tools and techniques make necessary information available to project stakeholders in a timely manner.
   
   Information regarding a project's performance is essential to bring about project success. Too little or incorrect information could lead to misunderstandings and changes that are not really necessary.
   
   Clear communication and shared information retrieval and distribution methods are the basic tools and techniques for ensuring that important information is distributed.
   
   Communication skills are used to exchange information. Whether communication is written, oral, internal, external, formal, informal, vertical, or horizontal—the sender must ensure that the information is clear and complete while the receiver confirms that it is properly understood.
   
   Information retrieval systems allow information to be shared by project team members and stakeholders. Such systems may include project management software, electronic databases, and manual filing systems.
   
   Information distribution methods ensure that important project information is distributed to the stakeholders. Project meetings, voice mail, electronic mail, fax, videoconferencing, project intranet, hard-copy documentation, and shared databases are all effective distribution methods.
   

Performance reviews, trend analysis, earned value analysis, and information distribution tools and techniques are important in assessing the magnitude of any project variations. Using these techniques to determine whether a project is performing as planned will help you maintain a concise and controlled project schedule.