The document outlines key aspects of project management with a focus on earned value analysis (EVA) to assess project performance in terms of budget and schedule. It provides a simple project case illustrating cost and schedule variances based on the actual work accomplished versus planned work. Additionally, it emphasizes the importance of regular status reporting and the predictability of project costs using EVA techniques, even at early project completion stages.

1. Linking Budgets and Resources within Project Timeline Bruce Fieggen Vice President of Project Management Q Pharma Corp.

2. Some key questions arise during a project: What percentage of the project is complete? How far behind schedule are you? When will the project finish? How far over budget are you? How much will the project cost when done? Project Performance

3. Earned Value Analysis What Is Earned Value Analysis (EVA)? A way to determine “what you got for what you spent” An objective measure of the value of the work performed Compares the planned costs with the actual costs for all tasks Can provide: Indication whether project is on/under/over budget Indication whether project is on/ahead/behind schedule Expected total cost at the completion of the project

4. Time-Phased Budget 110 572.5 2620 2045 180 229 $$ 000’s $$ Million Accumulated Costs Monthly Costs 110 682.5 3302.5 5347.5 5527.5 5765.5 Plan Actual Dec Nov Oct Sept Aug July 1 2 3 4 5 6 0 .3 .6 .9 1.2 1.5 1.8 2.1 2.4 2.7

5. Simple Project Example Client is paying vendor $5,000 per document to create 10 documents over 10 weeks assuming 40 hours per week at $125 per hour. Where is the project after 5 weeks? Only 4 documents turned over from vendor. The vendor billed us 240 hours for the generation of the four reports. $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 PV = $25,000 EV = $20,000 AC = $30,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 Week 5 M T W T F S M T W T F S M T W T F S M T W T F S M T W T F S M T W T F M T W T F M T W T F M T W T F M T W T F M T W T F M T W T F M T W T F M T W T F M T W T F M T W T F M T W T F M T W T F M T W T F M T W T F M T W T F M T W T F M T W T F M T W T F M T W T F

6. Cost overrun is easy to determine Vendor spent $30,000 doing $20,000 worth of work So Cost Variance equals Earned Value minus Actual Cost CV = EV – AC = - $10,000 Schedule delay uses the same kind of formula Vendor did $20,000 worth of work in the time they were supposed to do $25,000 worth of work So Schedule Variance equals Earned Value minus Planned Value SV = EV – PV = - $5,000 Simple Project Example

7. Earned Value

8. Predictability Calculating Cost Variance and Performance Cost Performance Index typically changes little over the life of a project. Thousands of projects, large and small have been audited by US Military and they found that when the project is 15% complete, they can predict, using these techniques, within 10%, the final project cost.

9. Status Reporting 29.0% $29,612 30.3% $102,143 % Spent Actual Costs through November 7, 2004 % Complete Total Budget Budget % Complete reflects information as of this report date: November 7, 2004

10. Planning Phase

11. Baselining

12. Implementation Phase ID Task Name Duration Baseline Start Baseline Finish Start Finish Pre % Wo Baseline Co Cost Actual C 0 TotalChrom Validation 578 days Mon 10/6/03 Fri 3/26/04 Mon 10/6/03 Fri 3/26/04 20% $102,143 $100,901 $29,612 1 Project Management 92.5 days Tue 10/7/03 Fri 3/26/04 Tue 10/7/03 Fri 2/20/04 61% $13,039 $12,854 $6,675 2 Hold Kickoff meeting 4 hrs Tue 10/7/03 Tue 10/7/03 Tue 10/7/03 Tue 10/7/03 100% $1,800 $2,400 $2,400 3 Document Project Plan 2 days Tue 10/7/03 Thu 10/9/03 Tue 10/7/03 Thu 10/9/03 2 100% $2,400 $2,400 $2,400 4 Establish Meeting Schedule 5 mins Tue 10/7/03 Tue 10/7/03 Tue 10/7/03 Tue 10/7/03 2 100% $13 $0 $0 5 Ongoing Project Management 90 days Thu 10/9/03 Fri 3/26/04 Thu 10/9/03 Fri 2/20/04 3 30% $8,827 $8,054 $1,875 6 Project Validation Plan (PVP) 29 days Mon 10/6/03 Wed 10/29/03 Mon 10/6/03 Thu 11/13/03 97% $8,400 $7,200 $7,200 7 Develop PVP 6 days Mon 10/6/03 Mon 10/13/03 Mon 10/6/03 Mon 10/13/03 100% $4,800 $4,350 $4,350 8 Review PVP (CSSC QA) 2 days Tue 10/14/03 Wed 10/15/03 Tue 10/14/03 Wed 10/15/03 7 100% $1,200 $675 $675 9 Revise PVP 1 day Thu 10/16/03 Thu 10/16/03 Thu 10/16/03 Thu 10/16/03 8 100% $1,200 $600 $600 10 Review PVP (Client) 5 days Fri 10/17/03 Thu 10/23/03 Fri 10/17/03 Thu 10/23/03 9 100% $0 $0 $0 11 Revise PVP 1 day Fri 10/24/03 Fri 10/24/03 Fri 10/24/03 Fri 10/24/03 10 100% $1,200 $1,575 $1,575 12 Finalize/Approve VP 14 days Mon 10/27/03 Wed 10/29/03 Mon 10/27/03 Thu 11/13/03 11 95% $0 $0 $0 13 User Requirements (URS) 25 days Tue 10/14/03 Mon 11/17/03 Tue 10/14/03 Mon 11/17/03 82% $7,200 $7,737 $7,737 14 Modify existing URS 9 days Tue 10/14/03 Fri 10/24/03 Tue 10/14/03 Fri 10/24/03 7 100% $3,600 $3,812 $3,812 15 Review URS (CSSC QA) 1 day Mon 10/27/03 Mon 10/27/03 Mon 10/27/03 Mon 10/27/03 14 100% $1,200 $1,200 $1,200 16 Revise URS 1 day Tue 10/28/03 Tue 10/28/03 Tue 10/28/03 Tue 10/28/03 15 100% $1,200 $1,200 $1,200 17 Review URS (Client) 10 days Wed 10/29/03 Tue 11/11/03 Wed 10/29/03 Tue 11/11/03 16 100% $0 $0 $0 18 Revise URS 1 day Wed 11/12/03 Wed 11/12/03 Wed 11/12/03 Wed 11/12/03 17 100% $1,200 $1,525 $1,525 19 Approve URS 3 days Thu 11/13/03 Mon 11/17/03 Thu 11/13/03 Mon 11/17/03 18 0% $0 $0 $0 20 Functional Specifications (FS) 39.85 days Tue 11/18/03 Mon 12/8/03 Wed 10/8/03 Thu 12/4/03 12% $6,000 $7,209 $3,100 27 Design Specifications (DS) 41 days Fri 11/21/03 Tue 12/30/03 Fri 11/14/03 Mon 1/19/04 14% $9,600 $8,888 $2,900 34 Installed TotalChrom Applicatio 24 days Mon 11/10/03 Mon 12/15/03 Mon 11/10/03 Mon 12/15/03 0% $0 $0 $0 43 Installation Operation Qualifica 61 days Mon 12/1/03 Fri 1/16/04 Tue 11/4/03 Wed 2/4/04 2% $24,000 $23,114 $2,000 44 Modify IOQ 50 days Mon 12/1/03 Wed 12/31/03 Tue 11/4/03 Tue 1/20/04 32F 15% $19,200 $18,314 $2,000 45 Review IOQ (CSSC QA) 2 days Fri 1/2/04 Mon 1/5/04 Wed 1/21/04 Thu 1/22/04 44 0% $2,400 $2,400 $0 46 Revise IOQ 1 day Tue 1/6/04 Tue 1/6/04 Fri 1/23/04 Fri 1/23/04 45 0% $1,200 $1,200 $0 47 Review IOQ (Client) 5 days Wed 1/7/04 Tue 1/13/04 Mon 1/26/04 Fri 1/30/04 46 0% $0 $0 $0 48 Revise IOQ 1 day Wed 1/14/04 Wed 1/14/04 Mon 2/2/04 Mon 2/2/04 47 0% $1,200 $1,200 $0 49 Approve IOQ 2 days Thu 1/15/04 Fri 1/16/04 Tue 2/3/04 Wed 2/4/04 48 0% $0 $0 $0 Bruce,C Bruce Bruce Canda Jeff Canda Nina, Cand Ni Cand Jeff Cand Ni Ca N Oct Nov Qtr 4, 2003

13. Cost Calculation

14. Earned Value $0 $0 $0 $0 95% Finalize/Approve PVP $1,200 $1,575 $1,575 $1,200 100% Revise PVP $0 $0 $0 $0 100% Review PVP (Client) $1,200 $600 $600 $1,200 100% Revise PVP $1,200 $675 $675 $1,200 100% Review PVP (CSSC QA) $4,800 $4,350 $4,350 $4,800 100% Develop PVP $7,200 $7,200 $8,400 97% Project Validation Plan (PVP) $2,648 $1,875 $8,054 $8,827 30% Ongoing Project Management $13 $0 $0 $13 100% Establish Meeting Schedule $2,400 $2,400 $2,400 $2,400 100% Document Project Plan $1,800 $2,400 $2,400 $1,800 100% Hold Kickoff meeting $6,675 $12,852 $13,039 61% Project Management $29,612 $100,901 $102,143 20% TotalChrom Validation % Budget Spent % Complete Earned Value Actual Cost Cost Base Cost % Comp Task

15. Earned Value $0 $0 $0 $0 95% Finalize/Approve PVP $1,200 $1,575 $1,575 $1,200 100% Revise PVP $0 $0 $0 $0 100% Review PVP (Client) $1,200 $600 $600 $1,200 100% Revise PVP $1,200 $675 $675 $1,200 100% Review PVP (CSSC QA) $4,800 $4,350 $4,350 $4,800 100% Develop PVP $7,200 $7,200 $8,400 97% Project Validation Plan (PVP) $2,648 $1,875 $8,054 $8,827 30% Ongoing Project Management $13 $0 $0 $13 100% Establish Meeting Schedule $2,400 $2,400 $2,400 $2,400 100% Document Project Plan $1,800 $2,400 $2,400 $1,800 100% Hold Kickoff meeting $6,675 $12,852 $13,039 61% Project Management $30,980 $29,612 $100,901 $102,143 20% TotalChrom Validation % Budget Spent % Complete Earned Value Actual Cost Cost Base Cost % Comp Task

16. Percent Complete $0 $0 $0 $0 95% Finalize/Approve PVP $1,200 $1,575 $1,575 $1,200 100% Revise PVP $0 $0 $0 $0 100% Review PVP (Client) $1,200 $600 $600 $1,200 100% Revise PVP $1,200 $675 $675 $1,200 100% Review PVP (CSSC QA) $4,800 $4,350 $4,350 $4,800 100% Develop PVP $7,200 $7,200 $8,400 97% Project Validation Plan (PVP) $2,648 $1,875 $8,054 $8,827 30% Ongoing Project Management $13 $0 $0 $13 100% Establish Meeting Schedule $2,400 $2,400 $2,400 $2,400 100% Document Project Plan $1,800 $2,400 $2,400 $1,800 100% Hold Kickoff meeting $6,675 $12,852 $13,039 61% Project Management 30.3% $30,980 $29,612 $100,901 $102,143 20% TotalChrom Validation % Budget Spent % Complete Earned Value Actual Cost Cost Base Cost % Comp Task

17. Implementation Phase ID Task Name Duration Baseline Start Baseline Finish Start Finish Pre % Wo Baseline Co Cost Actual C 0 TotalChrom Validation 578 days Mon 10/6/03 Fri 3/26/04 Mon 10/6/03 Fri 3/26/04 20% $102,143 $100,901 $29,612 1 Project Management 92.5 days Tue 10/7/03 Fri 3/26/04 Tue 10/7/03 Fri 2/20/04 61% $13,039 $12,854 $6,675 2 Hold Kickoff meeting 4 hrs Tue 10/7/03 Tue 10/7/03 Tue 10/7/03 Tue 10/7/03 100% $1,800 $2,400 $2,400 3 Document Project Plan 2 days Tue 10/7/03 Thu 10/9/03 Tue 10/7/03 Thu 10/9/03 2 100% $2,400 $2,400 $2,400 4 Establish Meeting Schedule 5 mins Tue 10/7/03 Tue 10/7/03 Tue 10/7/03 Tue 10/7/03 2 100% $13 $0 $0 5 Ongoing Project Management 90 days Thu 10/9/03 Fri 3/26/04 Thu 10/9/03 Fri 2/20/04 3 30% $8,827 $8,054 $1,875 6 Project Validation Plan (PVP) 29 days Mon 10/6/03 Wed 10/29/03 Mon 10/6/03 Thu 11/13/03 97% $8,400 $7,200 $7,200 7 Develop PVP 6 days Mon 10/6/03 Mon 10/13/03 Mon 10/6/03 Mon 10/13/03 100% $4,800 $4,350 $4,350 8 Review PVP (CSSC QA) 2 days Tue 10/14/03 Wed 10/15/03 Tue 10/14/03 Wed 10/15/03 7 100% $1,200 $675 $675 9 Revise PVP 1 day Thu 10/16/03 Thu 10/16/03 Thu 10/16/03 Thu 10/16/03 8 100% $1,200 $600 $600 10 Review PVP (Client) 5 days Fri 10/17/03 Thu 10/23/03 Fri 10/17/03 Thu 10/23/03 9 100% $0 $0 $0 11 Revise PVP 1 day Fri 10/24/03 Fri 10/24/03 Fri 10/24/03 Fri 10/24/03 10 100% $1,200 $1,575 $1,575 12 Finalize/Approve VP 14 days Mon 10/27/03 Wed 10/29/03 Mon 10/27/03 Thu 11/13/03 11 95% $0 $0 $0 13 User Requirements (URS) 25 days Tue 10/14/03 Mon 11/17/03 Tue 10/14/03 Mon 11/17/03 82% $7,200 $7,737 $7,737 14 Modify existing URS 9 days Tue 10/14/03 Fri 10/24/03 Tue 10/14/03 Fri 10/24/03 7 100% $3,600 $3,812 $3,812 15 Review URS (CSSC QA) 1 day Mon 10/27/03 Mon 10/27/03 Mon 10/27/03 Mon 10/27/03 14 100% $1,200 $1,200 $1,200 16 Revise URS 1 day Tue 10/28/03 Tue 10/28/03 Tue 10/28/03 Tue 10/28/03 15 100% $1,200 $1,200 $1,200 17 Review URS (Client) 10 days Wed 10/29/03 Tue 11/11/03 Wed 10/29/03 Tue 11/11/03 16 100% $0 $0 $0 18 Revise URS 1 day Wed 11/12/03 Wed 11/12/03 Wed 11/12/03 Wed 11/12/03 17 100% $1,200 $1,525 $1,525 19 Approve URS 3 days Thu 11/13/03 Mon 11/17/03 Thu 11/13/03 Mon 11/17/03 18 0% $0 $0 $0 20 Functional Specifications (FS) 39.85 days Tue 11/18/03 Mon 12/8/03 Wed 10/8/03 Thu 12/4/03 12% $6,000 $7,209 $3,100 27 Design Specifications (DS) 41 days Fri 11/21/03 Tue 12/30/03 Fri 11/14/03 Mon 1/19/04 14% $9,600 $8,888 $2,900 34 Installed TotalChrom Applicatio 24 days Mon 11/10/03 Mon 12/15/03 Mon 11/10/03 Mon 12/15/03 0% $0 $0 $0 43 Installation Operation Qualifica 61 days Mon 12/1/03 Fri 1/16/04 Tue 11/4/03 Wed 2/4/04 2% $24,000 $23,114 $2,000 44 Modify IOQ 50 days Mon 12/1/03 Wed 12/31/03 Tue 11/4/03 Tue 1/20/04 32F 15% $19,200 $18,314 $2,000 45 Review IOQ (CSSC QA) 2 days Fri 1/2/04 Mon 1/5/04 Wed 1/21/04 Thu 1/22/04 44 0% $2,400 $2,400 $0 46 Revise IOQ 1 day Tue 1/6/04 Tue 1/6/04 Fri 1/23/04 Fri 1/23/04 45 0% $1,200 $1,200 $0 47 Review IOQ (Client) 5 days Wed 1/7/04 Tue 1/13/04 Mon 1/26/04 Fri 1/30/04 46 0% $0 $0 $0 48 Revise IOQ 1 day Wed 1/14/04 Wed 1/14/04 Mon 2/2/04 Mon 2/2/04 47 0% $1,200 $1,200 $0 49 Approve IOQ 2 days Thu 1/15/04 Fri 1/16/04 Tue 2/3/04 Wed 2/4/04 48 0% $0 $0 $0 Bruce,Ca Bruce Bruce Canda Jeff Canda Nina, Cand Cand] Jeff Can Oct Nov Qtr 4, 2003

18. % Budget Spent $0 $0 $0 $0 95% Finalize/Approve PVP $1,200 $1,575 $1,575 $1,200 100% Revise PVP $0 $0 $0 $0 100% Review PVP (Client) $1,200 $600 $600 $1,200 100% Revise PVP $1,200 $675 $675 $1,200 100% Review PVP (CSSC QA) $4,800 $4,350 $4,350 $4,800 100% Develop PVP $7,200 $7,200 $8,400 97% Project Validation Plan (PVP) $2,648 $1,875 $8,054 $8,827 30% Ongoing Project Management $13 $0 $0 $13 100% Establish Meeting Schedule $2,400 $2,400 $2,400 $2,400 100% Document Project Plan $1,800 $2,400 $2,400 $1,800 100% Hold Kickoff meeting $6,675 $12,852 $13,039 61% Project Management 29.0% 30.3% $30,980 $29,612 $100,901 $102,143 20% TotalChrom Validation % Budget Spent % Complete Earned Value Actual Cost Cost Base Cost % Comp Task

19. Status Reporting 29.0% $29,612 30.3% $102,143 % Spent Actual Costs % Complete Total Budget Budget % Complete reflects information as of this report date: November 7, 2004

20. Where do we find these answers objectively? What percentage of the project is complete? How far behind schedule are you? When will the project finish? How far over budget are you? How much will the project cost when done? Project Performance EVA Gantt Chart Gantt Chart EVA EVA

21. Bruce Fieggen , Vice President of Project Management Q Pharma Corp. 22 South Street Morristown, NJ 07960 973.656.0248 ext 2050 [email_address] www.qpharmacorp.com Questions?