Budget tracking presentation

1. BIG Structural Engineering Corporation
The "BIG" engineering project
Bigger is better, because it reflects our profit motives“
By: Mark Blum
University of British Columbia
Project Management
PM TOOL KIT ASSIGNMENT: Course IL821W14A

2. Executive Summary & Background
This presentation is with regards to, the current
budget and schedule overruns in, “The BIG
Engineering project” utilizing Earned Value
Analysis.
Earned Value Analysis (EVA); has been used by the U.S. Defence Department since the 1960s and
they have found it to be an accurate forecasting tool. Their statistical analysis has shown that
once a project is 10% complete, the overrun at completion will not be less than the current
overrun.
They also found that once a project is 20% complete, the (CPI) Cost Performance Index does not vary
from its current value by more than 10%*.
* QUOTE: UBC Project Management Course Manual
This project is currently over budget regarding it’s, C.P.I
and other key indicators.
- Something needs to be done to change this course …

3. Section I
This project is behind schedule and over budget as of the end of 1Q10.
The project is 25% complete, this means we need to achieve overall savings
during the remaining 75% of the project. -How do we do this?
This meeting is to review options
Actual and projected cost comparisons
@
24%completion of Project
V.A.C (Current
"Variance at
completion" -
$168,618.40
A.C (Actual cost to
date) 629522
(Schedual Variance)
-Over budget. -
248660
E.A.C (Estimated
Cost @ completion)
1988478.4
AC (Actual cost to
date)
SV (Schedual
Variance) -Over
budget.
EAC (Estimated
Cost @ completion)
VAC (Current
"Varance at
completion"

4. Making Sense of Dollars and Cents
$0.00
$100,000.00
$200,000.00
$300,000.00
$400,000.00
$500,000.00
$600,000.00
$700,000.00
$800,000.00
$900,000.00
PlannedValue-PV(BCWS) EarnedValue-EV(BCWP) AC(ACWP)
Series1
Column #1
Planned Value PV (BCWS)
Cumulative, budgeted cost of work scheduled
(How much money we budgeted)
which is: $824,800.00
Column #2
Earned Value - EV (BCWP )
Cumulative budgeted cost of work
performed or Earned Value.
(This is what is paid for and completed).
which is: $576,140.00
Column #3
Actual Cost (ACWP)
Cumulative actual cost of work
performed or (What we paid for so far)
which is $629,522.00

5. Current Project Status
I have conducted an analysis of the projects progress to date,
to determine the reason, costs and the schedule are
exceeding expectations and underperforming.
1. The Schedule Performance Index is 0.7, and there is a cost Variance of 0.92.
( anything less than 1 is over budget)
2. The schedule variance is $248, 660.00 Dollars over budgeted allocations.
3. The cost Variance is $53,382.00 Dollars over budgeted allocations.
WHY ?

6. Earned Value Analysis tracks money expended
compares it to budgeted allocations for actual
performance.
E.V.A. is a very good way to monitor progress; - and to be proactive.
When resource allocations have not been fulfilled, as planned or budgeted for:
• This unfulfilled work, causes budgetary deficiencies and cost overruns.
• In this project, the categories of Design / Planning / Control and Scope are not in compliance with the plan.
• In this project “TASKS” are showing very low resource utilization compliance, with planned results and
particularly scheduled results pointing towards exceeding both the scheduled and budget projections.
• When “Planned value” and “Actual cost” are not equal, this creates budgeted cost overruns.
• This is due to non performance as per my analysis caused by the under performance of resources.
• In a domino effect; This affects both earned value, and critical schedules to complete the project.
• You can see from the Ms. Project budget cost over runs are due largely do to scheduling issues, or in simpler
terms;
-Work is not being performed as schedule by resources.

7. Summary of Calculations
Note: *These values have been rounded off.
Earned Value Calculations*
PV = Planned Value $825,000
AC = Actual Cost to date $630,000
EV = Earned Value
– What is completed
$576,000
SV = Schedule Variance ($249,000)
CV = Cost Variance ($53,000)
SPI = Schedule Performance Index .70
CPI = Cost Performance Index .92
EAC = Estimate at completion $2,000,000
VAC = Variance at completion ($169,000)
BAC = Budget at completion $1,819,000
ETC = Estimate at completion $1,676,000

8. Section II
Specific Solutions
What is the essence
of the issue?
It appears we have an issue with resource
non-performance causing budget
overruns.
Delays in getting work (tasks), done on
time as scheduled, are going to
result cost increases given current
projections, if corrective action is
not taken as soon as possible.
Resources not availing themselves to the
project, are therefore causing
delays and increased costs.
How do we rectify
this problem?
It is critical that all departments :
implement the resources necessary for the
project tasks suffering from non
conformity in order to succeed
according to our plan, to bring the
project back on track, so that we can
achieve project completion both;
On Time & On Budget.

9. Specific Solutions
How should we proceed proactively /
concretely and prevent the
projected cost over runs?
After this meeting, I will supply a list of resources that are
under performing to each department by email.
1. I will be sending an excel spread sheet by email
after this meeting to each affected senior manager
explaining these areas are under performing. The
yellow highlighted areas are an itemized list for each
task/resource that is non conforming.
1. You can forward this to each of the affected
department managers, and determine the reason
for non performance, and how this can be overcome
and to allocate the specified non-performing
resources on a priority bases.
2. This list will enable you to address the problems
with resources that are causing these budgetary
overruns due to non performance, so that we can
bring the project back on track.
What are the
costs of these
recommendations ?
These recommendations will not
change the projects
scope, but rather bring the
budgets and time
schedule back in line with
the allocations.
It is critical that the change
control committee
approve the requirement
that resources be
allocated without further
delay to bring the project
back on track with the
allocated budgets and
expedite the performance
of all resources towards
their fulfillment.

10. Section III
Decisions - management needs to make
Actions needed
I am confident that each department will make the adjustments necessary
to allocate resources once I provide this listing and you have seen the listing of non
performers. You can now pin point where you need to take action and where
are the compliance issues, provide motivation, to either meet or exceed
the expectations of our plan in the spirit of true team work.
Thank you!
Mark Blum
© 2014 Mark Blum ALL RIGHTS RESERVED