Remember these 3 things
EV profiles budget over time using standard techniques.
How will we know we’ve delivered it?
EV monitors budget against physical progress.
Where are we?
EV calculates value for money by monitoring how efficiently
we are turning budget into deliverable.
How are we doing?
What is your cultural IQ?
Is asal bapak senan?
1.A mystical form of spirituality?
2.A method of reinforcing economic and social alliances?
3.A tradition of keeping bad news hidden?
Asal bapak senan is the Indonesian tradition of honouring
their boss by shielding him from bad news in public. It
means ‘keeping father happy’. Supervisors are often told
what they want to hear.
So how do we track % complete?
Do we have
N15 N22 N29 N06 D13 D20 D27 D03
0 1 2 3 4 5
S e t B a s e l i n e
In the Stage Plan set the baseline
Includes resource allocation by name
Assign costs by name
The Cost calculation based on resource
In MS Project setting the
baseline creates the BCWS
(the Planned Value)
0 1 2 3 4 5
8. Work Performed
The project is underway
We collect Actual Cost information by WBS
element through timesheet analysis
We have weekly reviews to collect % complete
and remaining duration
This is reported through a checkpoint report
In MS Project setting the baseline creates
the BCWS (the planned value)
As we update the Actual duration and
remaining duration the CPI is calculated
Earning the value
For example on an IT Project
Training is 0-100 : either you are
trained or not trained!
Design could be by weighted
25% on completion of a design
50% on issuing a design document
25% on design signoff
US Survey says…..
over 800 military programs show
no program has ever improved performance
better than the following EAC calculation
EAC = BAC
at 15% complete point in program
No-one pays enough attention in the
Courtesy of Steve Wake
US Survey says…..
Estimate at Complete
• Thanks to CPI and SPIt, and a
budget that represents all the work
to be done (BAC), .. it is possible to
predict when the project will be
done and how much will be spent
getting there… There is common
knowledge and statistical evidence
showing this assumption to be
valid. The project work is as difficult
as it is. Page 34
Case Study : Key Performance Indicator
A mathematical projection
EAC = BAC / CPI
Estimate at Complete = Budget at
Complete / Cost Performance Index
– BAC is £150,000
– CPI is 0.95
– EAC = £150,000 / 0.95
– EAC = £157,895
This is a quick method of identifying of the
estimate at complete(EAC).
It does not involve bottom up analysis but
does provide a metric and financial value
‘However when there is a significant
technical issue, only detailed planning of
the remaining work can result in a valid
1. Performance Based Earned Value . Paul J Solomon and Ralph R Young, ISBN 9780471721888, page 100
A bottom up calculation
EAC = AC + ETC
Estimate at Complete = Actual Costs plus
Estimate to Complete
At End Stage Assessment we now have
– Budget At Complete (BAC)
– Estimate To Complete (ETC)
– Estimate At Complete (EAC)
Is the project still financially viable based
on the Estimate at Complete?
– Used at End Stage Assessment
We assess risk by type of work and make
budget provision on this basis
We consider unknown risks based on a %
assessment of the total work
The methods used to monitor physical
progress in Earned Value can be used in
PRINCE2® projects, large or small, simple
or complex, any industry.
The Earned Value Management Maturity Model, Ray W Stratton, ISBN 1-56726180-9
Earned Value Project Management, 3rd Edition, Quentin W Fleming and Joel M Koppelman,
EVA in the UK, Steve Wake
APM Body of Knowledge, 5th Edition, Association for Project Management, ISBN 1-903494-
Interfacing Risk and Earned Value Management, Association for Project Management,
The Mythical Man Month and Other Essays on Software Engineering, Frederick Brooks,
‘Project and Programme Accounting, a practical guide for Professional Service
Organisations and IT’, John Chapman, Project Manager Today Publications, ISBN: 1-
Earned Value Management using Microsoft Office Project, Sham Dayal, J.Ross Publishing,
Work Breakdown Structures, The Foundation for Project Management Excellence, Eric S
Norman, Shelly A Brotherton, Robert T Fried, Wiley, ISBN 978-0470-17712-9
Performance Based Earned Value, Paul J Solomon, Ralph R Young, Wiley Interscience,
Thank you to…
John Chapman, Touchstone Ltd
John Flaherty, OTC Optima
Alex Davis, MOD
… and members of the EVM SIG