This document provides an overview of earned value management (EVM) and how to set up a Primavera P6 project schedule to support EVM calculations and analysis. It discusses the key requirements for using P6 for EVM, including having a time-phased schedule, cost-loaded schedule, and regular progress updates. It also reviews the different EVM calculations that can be performed in P6, such as earned value, planned value, actual costs, cost performance index, and estimate at completion. Finally, it encourages properly configuring P6 according to the presented best practices in order to clearly track project performance over time using EVM.

1. REMINDER
Check in on the
COLLABORATE mobile app
Earned Value & P6
Prepared by:
Elaine Britt Krazer, PMP
Align Projects, LLC
A new perspective on project
performance and P6 usage.
Clearing up myths about EV
Session ID#: 15429

2. WELCOME!
This is a subtitle or bulleted list

3. WHY EV?
■ 360 perspective of progress
■ Balances the triple constraint
■ Identifies a common denominator for fidelity in reporting
■ Provides a common structure for governance
■ Gives the team a focus

4. EXAMPLE
THEME PARK TRANSPORT

5. EXAMPLE
THEME PARK TRANSPORT
5 STOPS
5 MILES
$1M PER MILE
BUDGET $5M
SCHEDULE 5 MONTHS
WITH ONE MILE PER MONTH

6. EXAMPLE
THEME PARK TRANSPORT

7. EXAMPLE
THEME PARK TRANSPORT

8. TEAM MEETING:
PM: I love you guys,
you are why we have
that award!
Well, you won’t
like me when you
see site photos…

9. TEAM MEETING:
GAK!
Whiskey Tango
Foxtrot!
We have
completed only 2
miles.

10. EARNED VALUE
■ It is about integrity,
▪ Have you spent what you said you would BY THIS TIME?
▪ Have you completed what you said you would BY THIS TIME?
▪ IF we continue this trend, will we deliver what we said we would
OVER TIME?
■ Requires then,
▪ A time-phased plan (schedule)
▪ A spend plan over time (cost loaded schedule)
▪ Regular intervals of progress reporting (status updates on cost
and schedule)
▪ A report of physical, actual accomplished work & what remains?
▪ A schedule that reflects actuals and planned information (exact
mirror of project work)

11. P6 REQUIREMENTS FOR EV
■ A time-phased plan (schedule)
■ A spend plan over time (cost loaded

12. P6 REQUIREMENTS FOR EV
■ A spend plan over time (cost loaded schedule)
■ Regular intervals of progress reporting (status updates on
cost and schedule)
■ A report of physical, actual accomplished work & what
remains?
■ A schedule that reflects actuals and planned information (exact
mirror of project work)

13. Schedule? Why does that affect Project
Outcomes?
■ “Its not attached to the reality
of the actual project”
■ WHY NOT?!?!?!
■ Update cycle too long
■ Info not gathered correctly or
fully
■ Too cheap to buy a scheduler,
especially a good one
■ Scheduler role seen as
administrative, not analytic
■ Old school, not informed of best
practices or experienced a good
schedule’s effectiveness
■ Waste of money on P6
Questions? Answers!

16. They don’t want the project to
move…but projects DO move!
We assume we know dates, but P6
tells us dates we don’t know…and it
is based on progress.
Tell P6 what you know, it tells you
what next before you know it.

17. REMINDER
Check in on the
COLLABORATE mobile app
So now we know we need P6 and a
schedule…let’s set it up!
Pre Work
Global Settings
All subsequent settings

18. Pre Work– GET READY!
■ Industry, role, why P6
■ Strategic Plan
■ Contracts and type
■ Workflow (PROJECT not
PRODUCT)
■ Roles for each step
■ Reports we rely on
■ Data we wish we had so we
can make better decisions
■ Future plans for P6
■ Cost decision
■ Risks, issues decision
■ Chains
■ Which projects to input
■ Settings and setup
■ Improvements and cycle
times
■ Training and security
■ Admin settings, layouts,
views, and communications
■ Integrations, settings and
licensing

19. Global settings—GET SET!
■ EPS-OBS alignment
▪ Security
▪ Summary data needs
▪ Efficiency
■ Admin settings
■ Project and WBS templates (settings)
■ Resources, Roles
■ Codes—a few is better than many
■ UDF—none is better than some
■ Costs prep
■ Risks, issues decision

20. Other settings—AIM!
■ Settings at global, eps, project, wbs,
activity, step, resource and USER
levels
■ Backups, restoration, training
■ Role-based step by step for each
part of the process
■ Serves as pilot for P6 setup
■ Serves as BOT
■ Previews for each level of the
organization WIIFM
■ Provides marketing opportunities for
the upcoming adoption

21. GO! (adopt it, use it, keep it clean!)
■ Use the process, even if it is a bad one
▪ Data tells you what to fix or enhance
▪ Data gives you proof to go to management
with requests
■ Follow input cycles with precision
■ Don’t be afraid of the truth P6 tells
■ Baseline is stable, no project is
■ Stop light reports have red on them
■ Bad news gets worse
■ Schedule view = Site view
■ Respect the scheduler and schedule
■ Have a disciplined change system

22. Adoption elements
■ Senior, higher-level support
■ Licensing appropriate
■ Training is applicable, relevant, accessible and mandatory
■ Documentation available, guided, short, use-case, maintained
■ Management understands value, or is made to accept it
■ Users use it as prescribed
■ Users are heard in a forum
■ System is technically stable, speedy, available
■ Marketing is done ahead of time
■ As many team members as can be, should be
■ Meetings are not beatings and have no paper

23. Armed with
properly
configured P6,
you can clearly
see a path
through your
project…

24. EV Calculations in P6
■ AC (ACWP) = Actual labor cost + Actual Non Labor Cost + Actual
Material Cost + Actual Expense Cost
▪ Also Actual Total Cost
■ Cost Performance Index (CPI)
▪ A CPI greater than 1 means that Earned Value is greater than the
actual amount spent. A CPI of less than 1 means that the Earned Value
is less the. n the actual amount spent.
▪ CPI = EV / Actual Cost
■ Cost Variance (CV)
▪ Cost Variance is the difference between the Earned Value and the
actual cost of that activity.
▪ CV = EV - Actual Cost

25. EV Calculations in P6
■ Earned Value Cost (BCWP or EV)
▪ Earned Value Cost (EV) is the portion of the budgeted total cost of the activity
that is actually completed as of the project data date. Also known as the
Budgeted Cost of Work Performed for the activity. The method for computing the
performance percent complete depends on the Earned Value technique selected
for the activity's WBS.
▪ EV = BAC * Performance % Complete
■ Estimate At Completion (EAC)
▪ EAC is the estimated cost at completion for the activity.
EAC = Actual Cost + ETC.

26. EV Calculations in P6
■ Estimate to Complete (ETC)
▪ Estimate to complete is the estimated cost left to complete on the activity. The
calculation can be customized at the WBS level (On the 'Earned Value' tab in the
WBS view).
It can be computed as either:
■ ETC = Remaining Total Cost for the activity
▪ ETC = PF * (BAC - EV)
▪ Where 'PF' is a multiplier to weight the ETC calculation. This can be
either '1', '1/CPI' or '1/(SPI * CPI)' or user defined amount.
▪ HOWEVER: the only one that takes the schedule into true
consideration is 1/(SPI * CPI)

27. EV Calculations in P6
■ Planned Value Cost (BCWS or PV)
■ Planned Value Cost (PV) is the portion of the budgeted total cost of the
activity that is scheduled to be completed as of the project data date
according to the baseline dates. Also known as the Budgeted Cost of Work
Scheduled for the activity. The Schedule % Complete specifies how much
of the activity's original duration has been completed so far based on the
baseline dates.
PV = BAC * Schedule % Complete
■ Schedule Performance Index (SPI)
■ An SPI greater than 1 means that Earned Value is greater than the Planned
Value. An SPI of less than 1 means that the Earned Value is less then the
Planned Value.
SPI = EV / PV

28. EV Calculations in P6
■ BAC
▪ Uses Baseline Budgeted (Planned) Values or BAC depending
on settings at Enterprise level in Admin
▪ If the 'Earned Value Calculation' is set to 'Budgeted Values with
Planned dates' or 'Budgeted Values with Current Dates':
▪ BAC = BL Budgeted Labor Cost + BL Budgeted Non-Labor Cost + BL
Budgeted Material Cost + BL Budgeted Expense Cost.
▪ If the 'Earned Value Calculation' is set to 'At Completion Values
with Current Dates':
▪ BAC = BL At Completion Labor Cost + BL At Completion Non-Labor
Cost + BL At Completion Material Cost + BL At Completion Expense
Cost

29. Portfolio EV

30. Earned Value in P6
We appreciate your feedback and insight
You may complete the session evaluation either
on paper or online via the mobile app
Elaine Britt Krazer, PMP
Oracle certified implementation Specialist
Oracle Partner
www.AlignProjects.com