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Earned Value Management Fundamentals
Welcome to the course
Introduction
Before getting started, please use the comments area below to
introduce yourself (you’re colleagues want to meet you!)
Tell us the business sector/industry you’re coming from,
your company name if you like, your experience with project
management so far and if you have ever been involved with the
challenging world of Earned Value!
What are your expectations from the course?
Let’s get started!
The ‘Earned Value Fundamentals’ is an introduction course to the
Earned Value Management world (or the Project Controls world!)
We take for granted that you know how to plan a project, develop
the WBS and create activities taking into account the resources
availability. You also know how to distribute the project budget.
Purpose of the course is to understand the Schedule – Cost
integration and learn how Earned Value will help you make
realistic forecasts and get early warning signals that will support
your decision making when planning preventive actions.
Enjoy the course!
identify
stakeholders
scope
WBS
activities
resources
costs
communications
coordinate
resources
manage
stakeholders
scope
schedule
costs
resources
reporting
lessons learnt
dismiss team
close project
Planning Executing ClosingMonitor &
Control
Initiating
The Project Management lifecycle
Planning Executing
Monitor &
Control
The Project Management lifecycle
WBS
Schedule - Critical Path Method
Distribute Budget – Cost Profile
Allocate Resources
Project Baseline
Record Progress / Actuals
- Dates
- Costs
- Resources
Results & Reporting
Progress
Changes
Variances from the Baseline
Planning
WBS
Schedule - Critical Path Method
Distribute Budget – Cost Profile
Allocate Resources
Project Baseline
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 01 02 03 04 05 06 07 09
planned
baseline
Planning
WBS
Critical Path Method
Distribute Budget – Cost Profile
Allocate Resources
Project Baseline
Executing
Record Progress / Actuals
- Dates
- Costs
- Resources
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 01 02 03 04 05 06 07 09
planned
baseline
actual
status
date
Planning
WBS
Critical Path Method
Distribute Budget – Cost Profile
Allocate Resources
Project Baseline
Executing
Monitor &
Control
Results & Reporting
Progress
Changes
Variances from the Baseline
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 01 02 03 04 05 06 07 09
planned
baseline
actual
status
date
Earned Value ElementsEarned Value ElementsEarned Value ElementsEarned Value Elements
Planning Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 01 02 03 04 05 06 07 09
planned
baseline
Project:
Project: Replacement of pits and
ducts along a 200m pavement.
Project Duration: 25w
Budgeted Cost: $250.000
Project Baseline:
Planning Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 01 02 03 04 05 06 07 09
planned
baseline
Project:
Project: Replacement of pits and
ducts along a 200m pavement.
Project Duration: 25w
Budgeted Cost: $250.000
Project Baseline:
For training purposes, we
shall focus on the first project
activity that will guide us
through the Earned Value
Elements.
Planning Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 01 02 03 04 05 06 07 09
planned
baseline
Project:
Project: Replacement of pits and
ducts along a 200m pavement.
Activity:
Lay 50m of ducts
Baseline Duration: 3weeks – 15days
Baseline Cost: $10.000
Project Duration: 25w
Budgeted Cost: $250.000
Project Baseline:
Cost profile:
Week 1: $3.000
Week 2: $5.000
Week 3: $2.000
$250,000
Planning Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 01 02 03 04 05 06 07 09
planned
baseline
Activity:
Lay 50m of ducts
Baseline Duration: 3weeks – 15days
Baseline Cost: $10.000
Cost profile:
Week 1: $3.000
Week 2: $5.000
Week 3: $2.000 $3.000
$8.000
$10.000
15m
40m
50m
The schedule has been developed. The baseline is set.
We have planned to lay 50m of ducts within 15 days.
The budgeted cost is $10.000 and it is cumulatively
distributed along the activity duration.
Planning Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 01 02 03 04 05 06 07 09
planned
baseline
Activity:
Lay 50m of ducts
Baseline Duration: 3weeks – 15days
Baseline Cost: $10.000
Cost profile:
Week 1: $3.000
Week 2: $5.000
Week 3: $2.000 $3.000
$8.000
$10.000
15m
40m
50m
Budget At Completion
(BAC): $10.000
Distribution over the activity duration
Week 1: $3.000
Week 2: $5.000
Week 3: $2.000
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 01 02 03 04 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
The schedule has been
developed. The baseline is set
and the BAC has been agreed.
We have planned to lay 50m
of ducts within 15 days.
The baseline cost, is $10.000
and it is cumulatively
distributed along the activity
duration.
The BAC is not standing alone.
For each week of the activity a
specific amount of work has
been planned to be performed.
Budget At Completion (BAC): $10.000
Period Cumulative
$3.000 $3.000
$5.000 $8.000
$2.000 $10.000
Work Planned: 50m of ducts
Period Cumulative
Week 1: 15m 15m
Week 2: 25m 40m
Week 3: 10m 50m
Activity Duration: 15d
Period Cumulative
5d 5d
5d 10d
5d 15d
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 01 02 03 04 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
One week later we update the project progress…
The schedule has been
developed. The baseline is set
and the BAC has been agreed.
We have planned to lay 50m
of ducts within 15 days.
The baseline cost, is $10.000
and it is cumulatively
distributed along the activity
duration.
The BAC is not standing alone.
For each week of the activity a
specific amount of work has
been planned to be performed.
Executing Project Week
Activity:
Lay 50m of ducts
Baseline Duration: 3weeks – 15days
Baseline Cost: $10.000
Cost profile:
Week 1: $3.000
Week 2: $5.000
Week 3: $2.000
We planned to lay 15meters within the first five days.
However, one week later when the progress updated,
only 10m were completed.
The actual activity cost is so far $3.000.
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
Executing Project Week
Activity:
Lay 50m of ducts
Baseline Duration: 3weeks – 15days
Baseline Cost: $10.000
Cost profile:
Week 1: $3.000
Week 2: $5.000
Week 3: $2.000
We planned to lay 15meters within the first five days.
However, one week later when the progress updated,
only 10m were completed.
The actual activity cost is so far $3.000.
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
Actual Cost (AC) on Week 1: $3.000
Actual Cost is the cost of work
performed by the day the progress
updated. It’s not necessarily the cost
that has been paid to the contractor.
Executing Project Week
Activity:
Lay 50m of ducts
Baseline Duration: 3weeks – 15days
Baseline Cost: $10.000
Cost profile:
Week 1: $3.000
Week 2: $5.000
Week 3: $2.000
We planned to lay 15meters within the first five days.
However, one week later when the progress updated,
only 10m were completed.
The actual activity cost is so far $3.000.
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
Actual Cost (AC) on Week 1: $3.000
Actual Cost is the cost of work
performed by the day the progress
updated. It’s not necessarily the cost
that has been paid to the contractor.
You may also see the AC as Actual Cost of Work Performed (ACWP).
The Actual Cost, or Actual Cost of Work Performed (ACWP) consists of:
Actual [Labor + Non labor (equipment and machinery) + Material (the cost of ducts) + Expenses
(like training, but expenses do not apply to all the project activities)]
Executing Project Week
Activity:
Lay 50m of ducts
Baseline Duration: 3weeks – 15days
Baseline Cost: $10.000
Cost profile:
Week 1: $3.000
Week 2: $5.000
Week 3: $2.000
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
Actual Cost (AC) on Week 1: $3.000
Actual Cost is the cost of work
performed by the day the progress
updated. It’s not necessarily the cost
that has been paid to the contractor.
Week 1 Planned Actual
Work 15m 10m
Cost $3.000 $3.000
Project Week
How is the project doing?
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
Question:
Project Week
How is the project doing?
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
Question:
Monitor & Control
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
How is the project doing?
Question:
How much work should have
been done so far?
How much did the work cost?
How much work has been
actually done?
Monitor & Control
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
How is the project doing?
Question:
Budget At Completion (BAC): $10.000
Period Cumulative
$3.000 $3.000
$5.000 $8.000
$2.000 $10.000
Work Planned: 50m of ducts
Period Cumulative
Week 1: 15m 15m
Week 2: 25m 40m
Week 3: 10m 50m
Activity Duration: 15d
Period Cumulative
5d 5d
5d 10d
5d 15d
Planned Value Cost (PVC) or
Budgeted Cost of Work Scheduled
(BCWS)
How much work should have been
done at the end of week 1?
Planned Value is the target against
which we are measuring the progress
How much work should have
been done so far?
How much did the work cost?
How much work has been
actually done?
Monitor & Control
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
How is the project doing?
Question:
Budget At Completion (BAC): $10.000
Period Cumulative
$3.000 $3.000
$5.000 $8.000
$2.000 $10.000
Work Planned: 50m of ducts
Period Cumulative
Week 1: 15m 15m
Week 2: 25m 40m
Week 3: 10m 50m
Activity Duration: 15d
Period Cumulative
5d 5d
5d 10d
5d 15d
Planned Value Cost (PVC) or
Budgeted Cost of Work Scheduled
(BCWS)
How much work should have been
done at the end of week 1?
Planned Value is the target against
which we are measuring the progress
Planned Value Cost at the end of Week 1
How much work should have
been done so far?
How much did the work cost?
How much work has been
actually done?
Monitor & Control
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
How is the project doing?
Question:
Budget At Completion (BAC): $10.000
Period Cumulative
$3.000 $3.000
$5.000 $8.000
$2.000 $10.000
Work Planned: 50m of ducts
Period Cumulative
Week 1: 15m 15m
Week 2: 25m 40m
Week 3: 10m 50m
Activity Duration: 15d
Period Cumulative
5d 5d
5d 10d
5d 15d
PVC = BAC x Planned % Complete Planned Value Cost at the end of Week 1
We planned to complete 30% of the
Budget At Completion ($10.000) at the
end of the week 1.
PVC = $10.000 x 30% = $3.000
How much work should have
been done so far?
How much did the work cost?
How much work has been
actually done?
Monitor & Control
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
How is the project doing?
Question:
How much work should have
been done so far?
How much did the work cost?
How much work has been
actually done?
Budget At Completion (BAC): $10.000
Period Cumulative
$3.000 $3.000
$5.000 $8.000
$2.000 $10.000
Work Planned: 50m of ducts
Period Cumulative
Week 1: 15m 15m
Week 2: 25m 40m
Week 3: 10m 50m
Activity Duration: 15d
Period Cumulative
5d 5d
5d 10d
5d 15d
PVC = BAC x Planned % Complete Planned Value Cost at the end of Week 1
We planned to complete 30% of the
Budget At Completion ($10.000) at the
end of the week 1.
PVC = $10.000 x 30% = $3.000
PVC = $10.000 x 30% = $3.000
Monitor & Control
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
How is the project doing?
Question:
How much work should have
been done so far?
How much did the work cost?
How much work has been
actually done?
Actual Cost (AC) is the Actual Cost
of Work Performed until the status
date (you may also see ACWP).
The Actual Cost of the work at the end
of the week1 is $3.000.
PVC = $10.000 x 30% = $3.000
Monitor & Control
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
How is the project doing?
Question:
How much work should have
been done so far?
How much did the work cost?
How much work has been
actually done?
Actual Cost (AC) is the Actual Cost
of Work Performed until the status
date (you may also see ACWP).
The Actual Cost of the work at the end
of the week1 is $3.000.
PVC = $10.000 x 30% = $3.000
AC= $3.000
Monitor & Control
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
How is the project doing?
Question:
How much work should have
been done so far?
How much did the work cost?
How much work has been
actually done?
Actual Cost (AC) is the Actual Cost
of Work Performed until the status
date (you may also see ACWP).
The Actual Cost of the work at the end
of the week1 is $3.000.
PVC = $10.000 x 30% = $3.000
AC= $3.000 It doesn’t look that bad, right?
Monitor & Control
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
How is the project doing?
Question:
How much work should have
been done so far?
How much did the work cost?
How much work has been
actually done?
Earned Value (EV) signifies how
much work has been actually done.
To measure the EV we need to know:
- BAC
- Performance % Complete
EV = BAC x Performance % Complete
PVC = $10.000 x 30% = $3.000
AC= $3.000
Monitor & Control
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
How is the project doing?
Question:
How much work should have
been done so far?
How much did the work cost?
How much work has been
actually done?
Earned Value (EV) signifies how
much work has been actually done.
To measure the EV we need to know:
- BAC
- Performance % Complete
EV = BAC x Performance % Complete
PVC = $10.000 x 30% = $3.000
AC= $3.000
EV = BAC x Performance % Complete
We planned to perform 15m at the end of week 1 which is the 33,33% of the total work.
However, we performed only 10m, which the 20% of the total work.
EV = $10.000 x 20% = $2.000
Monitor & Control
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
How is the project doing?
Question:
How much work should have
been done so far?
How much did the work cost?
How much work has been
actually done?
Earned Value (EV) signifies how
much work has been actually done.
To measure the EV we need to know:
- BAC
- Performance % Complete
EV = BAC x Performance % Complete
PVC = $10.000 x 30% = $3.000
AC= $3.000
EV = BAC x Performance % Complete
We planned to perform 15m at the end of week 1 which is the 33,33% of the total work.
However, we performed only 10m, which the 20% of the total work.
EV = $10.000 x 20% = $2.000
EV = $10.000 x 20% = $2.000
Monitor & Control
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
How is the project doing?
Question:
How much work should have
been done so far?
How much did the work cost?
How much work has been
actually done?
Earned Value (EV) signifies how
much work has been actually done.
To measure the EV we need to know:
- BAC
- Performance % Complete
EV = BAC x Performance % Complete
PVC = $10.000 x 30% = $3.000
AC= $3.000
EV = BAC x Performance % Complete
We planned to perform 15m at the end of week 1 which is the 33,33% of the total work.
However, we performed only 10m, which the 20% of the total work.
EV = $10.000 x 20% = $2.000
EV = $10.000 x 20% = $2.000
Monitor & Control
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
How is the project doing?
Question:
How much work should have
been done so far?
How much did the work cost?
How much work has been
actually done?
Earned Value (EV) signifies how
much work has been actually done.
To measure the EV we need to know:
- BAC
- Performance % Complete
EV = BAC x Performance % Complete
PVC = $10.000 x 30% = $3.000
AC= $3.000
EV = BAC x Performance % Complete
EV = $10.000 x 20% = $2.000
Earned Value explains whether the Actual Cost (AC) has been spent
effectively (Performance % Complete) providing the physical results that
was estimated to (Planned Value).
How is the project doing?
Question: Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
PVC = $10.000 x 30% = $3.000
AC= $3.000
EV = BAC x Performance % Complete
EV = $10.000 x 20% = $2.000
Earned Value explains whether the Actual Cost (AC) has been spent
effectively (Performance % Complete) delivering the physical results
that was estimated to (Planned Value).
The project is not doing
very well…
Here are the facts:
Answer:
PVC = $10.000 x 30% = $3.000
AC= $3.000
EV = $10.000 x 20% = $2.000
Earned Value elements
within the Project Management lifecycle
Planning Executing Closing
Monitor &
Control
Planned
Value Cost
Actual
Cost
Earned
Value
Initiating
EV = BAC x Performance % CompletePVC = BAC x Planned % Complete
Earned Value elements
within the Project Management lifecycle
Planning Executing Closing
Monitor &
Control
Planned
Value Cost
Actual
Cost
Earned
Value
Initiating
BCWP: Budgeted Cost
of Work Performed
BCWS: Budgeted Cost
of Work Scheduled
ACWP: Actual Cost
of Work Performed
Earned Value elements
within the Project Management lifecycle
Planning Executing Closing
Monitor &
Control
Planned
Value Cost
Actual
Cost
Earned
Value
Initiating
BCWP: Budgeted Cost
of Work Performed
BCWS: Budgeted Cost
of Work Scheduled
ACWP: Actual Cost
of Work Performed
Why two terms for the same thing?
Earned Value elements
within the Project Management lifecycle
Planning Executing Closing
Monitor &
Control
Planned
Value Cost
Actual
Cost
Earned
Value
Initiating
BCWP: Budgeted Cost
of Work Performed
BCWS: Budgeted Cost
of Work Scheduled
ACWP: Actual Cost
of Work Performed
Why two terms for the same thing?
New term !
Earned Value elements
within the Project Management lifecycle
Planning Executing Closing
Monitor &
Control
Planned
Value Cost
Actual
Cost
Earned
Value
Initiating
BCWP: Budgeted Cost
of Work Performed
BCWS: Budgeted Cost
of Work Scheduled
ACWP: Actual Cost
of Work Performed
Why two terms for the same thing?
New term !
Old term !
Earned Value elements
within the Project Management lifecycle
Planning Executing Closing
Monitor &
Control
Planned
Value Cost
Actual
Cost
Earned
Value
Initiating
BCWP: Budgeted Cost
of Work Performed
BCWS: Budgeted Cost
of Work Scheduled
ACWP: Actual Cost
of Work Performed
Why two terms for the same thing?
New term !
Old term !
Both correct and both in use!
Measuring the Earned Value
the Performance % Complete type
EV = BAC x Performance % Complete
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
Earned value is all about
measuring the work performed.
The Performance % Complete should
provide realistic and tangible
information for the project’s progress.
It is selected during the project
planning and can be different for each
Work Package.
Althouth there are several methods in
this course we focus in three methods,
proven to be best practices.
PVC = $10.000 x 30% = $3.000
AC= $3.000
EV = BAC x Performance % Complete
Performance % Complete
Percent Complete Estimates
Weighted Milestones
Fixed Formula
EV = $10.000 x 20% = $2.000
Performance % Complete
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
Percent Complete Estimates
PVC = $10.000 x 30% = $3.000
AC= $3.000
EV = BAC x Performance % Complete
EV = $10.000 x 20% = $2.000
Performance % Complete
It's the most commonly used
measurement method as it's easy to
administer within the already complex
project environment. However it is
subjective and often relies on the
project manger's perspective.
Expert judgment, experience and
comprehensive understanding of the
project scope are the requirements to
maximize the benefits of the %
complete estimates in the project.
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
Percent Complete Estimates
PVC = $10.000 x 30% = $3.000
AC= $3.000
EV = BAC x Performance % Complete
EV = $10.000 x 20% = $2.000
Performance % Complete
It's the most commonly used
measurement method as it's easy to
administer within the already complex
project environment. However it is
subjective and often relies on the
project manger's perspective.
Expert judgment, experience and
comprehensive understanding of the
project scope are the requirements to
maximize the benefits of the %
complete estimates in the project.
However, it can be less subjective when tangible measurement is involved; like in our example
the meters of the pits and ducts planned to complete per week (or per reporting period).
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline
Weighted Milestones PVC = $10.000 x 30% = $3.000
AC= $3.000
EV = BAC x Performance % Complete
EV = $10.000 x 20% = $2.000
Performance % Complete
The planned work is divided into
segments.
Each Weighted Milestone represents
the percent of the work planned to be
achieved within the period.
You can use it for work packages that
exceed one measurement period.
The milestone values should be set
before the work starts.
The challenge is to agree on the
values and make it clear to everyone
involved what the values represent.
25%
60%
100%
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline
Fixed Formula PVC = $10.000 x 30% = $3.000
AC= $3.000
EV = BAC x Performance % Complete
EV = $10.000 x 20% = $2.000
Performance % Complete
It can be used in short duration
activities.
Once the work starts, the 50% of the
work is considered as completed. At
the end of it the 100% is completed.
Other examples are:
10/90
25/75
0/100
50% 100%
50/50
Forecasting the project’s future using EVM
Forecasting the project’s future using EVM
it's time to get some meaningful results from the project
and try to forecast the future of the project realistically
Forecasting the project’s future using EVM
it's time to get some meaningful results from the project
and try to forecast the future of the project realistically
Estimate To Complete
How can we estimate the cost
left to perform until the
completion of the activity?
Question:
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
AC= $3.000
EV = $10.000 x 20% = $2.000
Estimate To Complete cost
ETC:
Answer:
ETC = Remaining cost of work
(40m*$200/m)
ETC = $8.000
PVC = $3.000
AC = $3.000
EV = $2.000
BAC = $10.000
PVC = $10.000 x 30% = $3.000
How can we estimate the cost
left to perform until the
completion of the activity?
Question:
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
AC= $3.000
Why do we Estimate To Complete?
Because the remaining cost of work is not always fixed. It may vary depending on several factors,
like additional changes that may change the budget.
Perhaps we will be able to complete the activity earlier and therefore cost less, or later than
planned, or use more resources which causes increased cost.
EV = $10.000 x 20% = $2.000
Estimate To Complete cost
ETC:
Answer:
PVC = $3.000
AC = $3.000
EV = $2.000
BAC = $10.000
PVC = $10.000 x 30% = $3.000
ETC = Remaining cost of work
(40m*$200/m)
ETC = $8.000
Forecasting the project’s future using EVM
it's time to get some meaningful results from the project
and try to forecast the future of the project realistically
Estimate At Completion
So, at the end of the activity
how much will it cost?
Question:
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
AC= $3.000
Why do we Estimate At Completion?
Because the variable used to forecast the cost at the completion of the activity/project is the ETC.
Therefore, is not a fixed figure and can be adjusted in the future.
EV = $10.000 x 20% = $2.000
The Estimate At Completion
cost EAC:
Answer:
EAC = ETC + AC
EAC = $8.000 + $3.000 = $11.000
PVC = $3.000
AC = $3.000
EV = $2.000
BAC = $10.000
ETC = $8.000
PVC = $10.000 x 30% = $3.000
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
AC= $3.000
EV = $10.000 x 20% = $2.000
EAC = $11.000
PVC = $3.000
AC = $3.000
EV = $2.000
BAC = $10.000
ETC = $8.000
PVC = $10.000 x 30% = $3.000
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
AC= $3.000
EV = $10.000 x 20% = $2.000
EAC = $11.000
PVC = $3.000
AC = $3.000
EV = $2.000
BAC = $10.000
ETC = $8.000
PVC = $10.000 x 30% = $3.000
How is Earned Value involved with all this?
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
AC= $3.000
EV = $10.000 x 20% = $2.000
EAC = $11.000
PVC = $3.000
AC = $3.000
EV = $2.000
BAC = $10.000
ETC = $8.000
PVC = $10.000 x 30% = $3.000
Earned Value and Cost Performance
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
AC= $3.000
EV = $10.000 x 20% = $2.000
EAC = $11.000
PVC = $3.000
AC = $3.000
EV = $2.000
BAC = $10.000
ETC = $8.000
PVC = $10.000 x 30% = $3.000
Don’t forget that our activity is already underperforming.
The ETC and EAC reflect the current status of the activity/project. However, at this point they don’t
include the cost of delay or underperformance.
Identifying the cost variance between the AC and EV enable us a more realistic picture of the
activity performance at the current time period.
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
AC= $3.000
EV = $10.000 x 20% = $2.000
EAC = $11.000
PVC = $3.000
AC = $3.000
EV = $2.000
BAC = $10.000
ETC = $8.000
PVC = $10.000 x 30% = $3.000
Cost Variance (CV) = EV - AC
CV = $2.000 - $3.000 = $-1.000
CV = $-1.000
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
AC= $3.000
EV = $10.000 x 20% = $2.000
EAC = $10.000
PVC = $3.000
AC = $3.000
EV = $2.000
BAC = $10.000
ETC = $7.000
PVC = $10.000 x 30% = $3.000
CV = $-1.000
Which is the relationship between the AC and the EV?
Cost Performance Index (CPI) = EV / AC
CPI = $2.000 / $3.000 = 0.67
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
AC= $3.000
EV = $10.000 x 20% = $2.000
EAC = $10.000
PVC = $3.000
AC = $3.000
EV = $2.000
BAC = $10.000
ETC = $7.000
PVC = $10.000 x 30% = $3.000
CV = $-1.000
Which is the relationship between the AC and the EV?
Cost Performance Index (CPI) = EV / AC
CPI = $2.000 / $3.000 = 0.67
In simple terms, for each dollar spent, only 0.67 worth paying!
CPI = 0.67
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
AC= $3.000
EV = $10.000 x 20% = $2.000
EAC = $10.000
PVC = $3.000
AC = $3.000
EV = $2.000
BAC = $10.000
ETC = $7.000
PVC = $10.000 x 30% = $3.000
Earned Value and Schedule Performance
CV = $-1.000 CPI = 0.67
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
AC= $3.000
EV = $10.000 x 20% = $2.000
EAC = $10.000
PVC = $3.000
AC = $3.000
EV = $2.000
BAC = $10.000
ETC = $7.000
PVC = $10.000 x 30% = $3.000
CV = $-1.000 CPI = 0.67
As with the CV, we want to identify and compare the work planned to perform within a time period
with the work accomplished.
The Schedule Variance (SV) will provide us with the right information. It is expressed in in
monetary values.
SV = EV – PV
SV = $2.000 - $3.000 = $-1.000
SV = $-1.000
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
AC= $3.000
EV = $10.000 x 20% = $2.000
EAC = $10.000
PVC = $3.000
AC = $3.000
EV = $2.000
BAC = $10.000
ETC = $7.000
PVC = $10.000 x 30% = $3.000
CV = $-1.000 CPI = 0.67
SV = $-1.000
How the Planned and the Earned Value are related?
Schedule Performance Index (SPI) = EV / PV
SPI = $2.000 / $3.000 = 0.67
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
AC= $3.000
EV = $10.000 x 20% = $2.000
EAC = $10.000
PVC = $3.000
AC = $3.000
EV = $2.000
BAC = $10.000
ETC = $7.000
PVC = $10.000 x 30% = $3.000
CV = $-1.000 CPI = 0.67
SV = $-1.000
How the Planned and the Earned Value are related?
Schedule Performance Index (SPI) = EV / PV
SPI = $2.000 / $3.000 = 0.67
SPI = 0.67
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
AC= $3.000
EV = $10.000 x 20% = $2.000
EAC = $10.000
PVC = $3.000
AC = $3.000
EV = $2.000
BAC = $10.000
ETC = $7.000
PVC = $10.000 x 30% = $3.000
CV = $-1.000 CPI = 0.67
SV = $-1.000
CPI, SPI rule:
CPI > 1 more work done than what actually paid for.
CPI = 1 you got exactly what you paid for.
CPI < 1 less work done than what actually paid for.
SPI > 1 - ahead of schedule. The work accomplished is more that the work planned.
SPI = 1 - the work accomplished is exactly the work planned.
SPI < 1 - behind schedule. The work accomplished is less than planned.
SPI = 0.67
Reporting
Earned Value
Reporting
Earned Value
Now that we know what Earned Value means, how it’s used and why
it can make a big difference in a project, we need to know how to
present and report data.
Reporting
Earned Value
Now that we know what Earned Value means, how it’s used and why
it can make a big difference in a project, we need to know how to
present and report data.
Tables and diagrams help to communicate the message clearly and
can be used in meetings for decision making.
Reporting
Earned Value
Now that we know what Earned Value means, how it’s used and why
it can make a big difference in a project, we need to know how to
present and report data.
Tables and diagrams help to communicate the message clearly and
can be used in meetings for decision making.
The Earned Value data are reported cumulatively.
The cumulative data represent a comprehensive project picture as they
incorporate the overall project performance up to date.
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
PVC
AC
EV
BAC:
Activity: Lay 50m of ducts
Week 1
ETC
CV
$10.000
$3.000
$3.000
$2.000
$8.000
$11.000
$-1.000
SV $-1.000
EAC
35m
$9.000
The first reporting period (week 1)
we have the following results:
Back to our example
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
BAC:
Activity: Lay 50m of ducts
Week 1
$10.000
35m
$9.000
1
0.5
1.5
0.67
0.67
CPI SPI
W1
The first reporting period (week 1)
we have the following results:
PVC
AC
EV
ETC
CV
$3.000
$3.000
$2.000
$8.000
$11.000
$-1.000
SV $-1.000
EAC
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
BAC:
Activity: Lay 50m of ducts
Week 1
$10.000
35m
$9.000
1
0.5
1.5
0.67
0.67
CPI SPI
W1
The second reporting period (week
2) the activity performance is:
PVC
AC
EV
ETC
CV
$3.000
$3.000
$2.000
$8.000
$11.000
$-1.000
SV $-1.000
EAC
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
PVC
AC
EV
BAC:
Activity: Lay 50m of ducts
Week 1 Week 2
ETC
CV
$10.000
$3.000
$3.000
$2.000
$8.000
$11.000
$-1.000
$8.000
$9.000
$7.000
$3.000
$12.000
$-2.000
SV $-1.000 $-1.000
EAC
35m
$9.000
1
0.5
1.5
0.67
0.67
CPI SPI
W1
The second reporting period (week
2) the activity performance is:
Project Week
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09
planned
baseline$3.000
$8.000
$10.000
15m
40m
50m
10m
PVC
AC
EV
BAC:
Activity: Lay 50m of ducts
Week 1 Week 2
ETC
CV
$10.000
$3.000
$3.000
$2.000
$8.000
$11.000
$-1.000
$8.000
$9.000
$7.000
$3.000
$12.000
$-2.000
SV $-1.000 $-1.000
EAC
35m
$9.000
1
0.5
1.5
0.67
0.78
0.67
0.87
CPI SPI
W1 W2
The second reporting period (week
2) the activity performance is:
Reporting
Earned Value
When reporting Earned Value, consistency is everything!
Only when the reporting periods are relevant you can get
meaningful reports!
Thanks for attending
EVM Fundamentals!
Denise Fotopoulou

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Earned Value fundamentals

  • 1. Earned Value Management Fundamentals Welcome to the course
  • 2. Introduction Before getting started, please use the comments area below to introduce yourself (you’re colleagues want to meet you!) Tell us the business sector/industry you’re coming from, your company name if you like, your experience with project management so far and if you have ever been involved with the challenging world of Earned Value! What are your expectations from the course?
  • 3. Let’s get started! The ‘Earned Value Fundamentals’ is an introduction course to the Earned Value Management world (or the Project Controls world!) We take for granted that you know how to plan a project, develop the WBS and create activities taking into account the resources availability. You also know how to distribute the project budget. Purpose of the course is to understand the Schedule – Cost integration and learn how Earned Value will help you make realistic forecasts and get early warning signals that will support your decision making when planning preventive actions. Enjoy the course!
  • 5. Planning Executing Monitor & Control The Project Management lifecycle WBS Schedule - Critical Path Method Distribute Budget – Cost Profile Allocate Resources Project Baseline Record Progress / Actuals - Dates - Costs - Resources Results & Reporting Progress Changes Variances from the Baseline
  • 6. Planning WBS Schedule - Critical Path Method Distribute Budget – Cost Profile Allocate Resources Project Baseline Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 01 02 03 04 05 06 07 09 planned baseline
  • 7. Planning WBS Critical Path Method Distribute Budget – Cost Profile Allocate Resources Project Baseline Executing Record Progress / Actuals - Dates - Costs - Resources Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 01 02 03 04 05 06 07 09 planned baseline actual status date
  • 8. Planning WBS Critical Path Method Distribute Budget – Cost Profile Allocate Resources Project Baseline Executing Monitor & Control Results & Reporting Progress Changes Variances from the Baseline Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 01 02 03 04 05 06 07 09 planned baseline actual status date
  • 9. Earned Value ElementsEarned Value ElementsEarned Value ElementsEarned Value Elements
  • 10. Planning Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 01 02 03 04 05 06 07 09 planned baseline Project: Project: Replacement of pits and ducts along a 200m pavement. Project Duration: 25w Budgeted Cost: $250.000 Project Baseline:
  • 11. Planning Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 01 02 03 04 05 06 07 09 planned baseline Project: Project: Replacement of pits and ducts along a 200m pavement. Project Duration: 25w Budgeted Cost: $250.000 Project Baseline: For training purposes, we shall focus on the first project activity that will guide us through the Earned Value Elements.
  • 12. Planning Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 01 02 03 04 05 06 07 09 planned baseline Project: Project: Replacement of pits and ducts along a 200m pavement. Activity: Lay 50m of ducts Baseline Duration: 3weeks – 15days Baseline Cost: $10.000 Project Duration: 25w Budgeted Cost: $250.000 Project Baseline: Cost profile: Week 1: $3.000 Week 2: $5.000 Week 3: $2.000 $250,000
  • 13. Planning Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 01 02 03 04 05 06 07 09 planned baseline Activity: Lay 50m of ducts Baseline Duration: 3weeks – 15days Baseline Cost: $10.000 Cost profile: Week 1: $3.000 Week 2: $5.000 Week 3: $2.000 $3.000 $8.000 $10.000 15m 40m 50m The schedule has been developed. The baseline is set. We have planned to lay 50m of ducts within 15 days. The budgeted cost is $10.000 and it is cumulatively distributed along the activity duration.
  • 14. Planning Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 01 02 03 04 05 06 07 09 planned baseline Activity: Lay 50m of ducts Baseline Duration: 3weeks – 15days Baseline Cost: $10.000 Cost profile: Week 1: $3.000 Week 2: $5.000 Week 3: $2.000 $3.000 $8.000 $10.000 15m 40m 50m Budget At Completion (BAC): $10.000 Distribution over the activity duration Week 1: $3.000 Week 2: $5.000 Week 3: $2.000
  • 15. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 01 02 03 04 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m The schedule has been developed. The baseline is set and the BAC has been agreed. We have planned to lay 50m of ducts within 15 days. The baseline cost, is $10.000 and it is cumulatively distributed along the activity duration. The BAC is not standing alone. For each week of the activity a specific amount of work has been planned to be performed. Budget At Completion (BAC): $10.000 Period Cumulative $3.000 $3.000 $5.000 $8.000 $2.000 $10.000 Work Planned: 50m of ducts Period Cumulative Week 1: 15m 15m Week 2: 25m 40m Week 3: 10m 50m Activity Duration: 15d Period Cumulative 5d 5d 5d 10d 5d 15d
  • 16. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 01 02 03 04 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m One week later we update the project progress… The schedule has been developed. The baseline is set and the BAC has been agreed. We have planned to lay 50m of ducts within 15 days. The baseline cost, is $10.000 and it is cumulatively distributed along the activity duration. The BAC is not standing alone. For each week of the activity a specific amount of work has been planned to be performed.
  • 17. Executing Project Week Activity: Lay 50m of ducts Baseline Duration: 3weeks – 15days Baseline Cost: $10.000 Cost profile: Week 1: $3.000 Week 2: $5.000 Week 3: $2.000 We planned to lay 15meters within the first five days. However, one week later when the progress updated, only 10m were completed. The actual activity cost is so far $3.000. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m
  • 18. Executing Project Week Activity: Lay 50m of ducts Baseline Duration: 3weeks – 15days Baseline Cost: $10.000 Cost profile: Week 1: $3.000 Week 2: $5.000 Week 3: $2.000 We planned to lay 15meters within the first five days. However, one week later when the progress updated, only 10m were completed. The actual activity cost is so far $3.000. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m Actual Cost (AC) on Week 1: $3.000 Actual Cost is the cost of work performed by the day the progress updated. It’s not necessarily the cost that has been paid to the contractor.
  • 19. Executing Project Week Activity: Lay 50m of ducts Baseline Duration: 3weeks – 15days Baseline Cost: $10.000 Cost profile: Week 1: $3.000 Week 2: $5.000 Week 3: $2.000 We planned to lay 15meters within the first five days. However, one week later when the progress updated, only 10m were completed. The actual activity cost is so far $3.000. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m Actual Cost (AC) on Week 1: $3.000 Actual Cost is the cost of work performed by the day the progress updated. It’s not necessarily the cost that has been paid to the contractor. You may also see the AC as Actual Cost of Work Performed (ACWP). The Actual Cost, or Actual Cost of Work Performed (ACWP) consists of: Actual [Labor + Non labor (equipment and machinery) + Material (the cost of ducts) + Expenses (like training, but expenses do not apply to all the project activities)]
  • 20. Executing Project Week Activity: Lay 50m of ducts Baseline Duration: 3weeks – 15days Baseline Cost: $10.000 Cost profile: Week 1: $3.000 Week 2: $5.000 Week 3: $2.000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m Actual Cost (AC) on Week 1: $3.000 Actual Cost is the cost of work performed by the day the progress updated. It’s not necessarily the cost that has been paid to the contractor. Week 1 Planned Actual Work 15m 10m Cost $3.000 $3.000
  • 21. Project Week How is the project doing? 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m Question:
  • 22. Project Week How is the project doing? 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m Question:
  • 23. Monitor & Control Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m How is the project doing? Question: How much work should have been done so far? How much did the work cost? How much work has been actually done?
  • 24. Monitor & Control Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m How is the project doing? Question: Budget At Completion (BAC): $10.000 Period Cumulative $3.000 $3.000 $5.000 $8.000 $2.000 $10.000 Work Planned: 50m of ducts Period Cumulative Week 1: 15m 15m Week 2: 25m 40m Week 3: 10m 50m Activity Duration: 15d Period Cumulative 5d 5d 5d 10d 5d 15d Planned Value Cost (PVC) or Budgeted Cost of Work Scheduled (BCWS) How much work should have been done at the end of week 1? Planned Value is the target against which we are measuring the progress How much work should have been done so far? How much did the work cost? How much work has been actually done?
  • 25. Monitor & Control Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m How is the project doing? Question: Budget At Completion (BAC): $10.000 Period Cumulative $3.000 $3.000 $5.000 $8.000 $2.000 $10.000 Work Planned: 50m of ducts Period Cumulative Week 1: 15m 15m Week 2: 25m 40m Week 3: 10m 50m Activity Duration: 15d Period Cumulative 5d 5d 5d 10d 5d 15d Planned Value Cost (PVC) or Budgeted Cost of Work Scheduled (BCWS) How much work should have been done at the end of week 1? Planned Value is the target against which we are measuring the progress Planned Value Cost at the end of Week 1 How much work should have been done so far? How much did the work cost? How much work has been actually done?
  • 26. Monitor & Control Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m How is the project doing? Question: Budget At Completion (BAC): $10.000 Period Cumulative $3.000 $3.000 $5.000 $8.000 $2.000 $10.000 Work Planned: 50m of ducts Period Cumulative Week 1: 15m 15m Week 2: 25m 40m Week 3: 10m 50m Activity Duration: 15d Period Cumulative 5d 5d 5d 10d 5d 15d PVC = BAC x Planned % Complete Planned Value Cost at the end of Week 1 We planned to complete 30% of the Budget At Completion ($10.000) at the end of the week 1. PVC = $10.000 x 30% = $3.000 How much work should have been done so far? How much did the work cost? How much work has been actually done?
  • 27. Monitor & Control Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m How is the project doing? Question: How much work should have been done so far? How much did the work cost? How much work has been actually done? Budget At Completion (BAC): $10.000 Period Cumulative $3.000 $3.000 $5.000 $8.000 $2.000 $10.000 Work Planned: 50m of ducts Period Cumulative Week 1: 15m 15m Week 2: 25m 40m Week 3: 10m 50m Activity Duration: 15d Period Cumulative 5d 5d 5d 10d 5d 15d PVC = BAC x Planned % Complete Planned Value Cost at the end of Week 1 We planned to complete 30% of the Budget At Completion ($10.000) at the end of the week 1. PVC = $10.000 x 30% = $3.000 PVC = $10.000 x 30% = $3.000
  • 28. Monitor & Control Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m How is the project doing? Question: How much work should have been done so far? How much did the work cost? How much work has been actually done? Actual Cost (AC) is the Actual Cost of Work Performed until the status date (you may also see ACWP). The Actual Cost of the work at the end of the week1 is $3.000. PVC = $10.000 x 30% = $3.000
  • 29. Monitor & Control Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m How is the project doing? Question: How much work should have been done so far? How much did the work cost? How much work has been actually done? Actual Cost (AC) is the Actual Cost of Work Performed until the status date (you may also see ACWP). The Actual Cost of the work at the end of the week1 is $3.000. PVC = $10.000 x 30% = $3.000 AC= $3.000
  • 30. Monitor & Control Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m How is the project doing? Question: How much work should have been done so far? How much did the work cost? How much work has been actually done? Actual Cost (AC) is the Actual Cost of Work Performed until the status date (you may also see ACWP). The Actual Cost of the work at the end of the week1 is $3.000. PVC = $10.000 x 30% = $3.000 AC= $3.000 It doesn’t look that bad, right?
  • 31. Monitor & Control Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m How is the project doing? Question: How much work should have been done so far? How much did the work cost? How much work has been actually done? Earned Value (EV) signifies how much work has been actually done. To measure the EV we need to know: - BAC - Performance % Complete EV = BAC x Performance % Complete PVC = $10.000 x 30% = $3.000 AC= $3.000
  • 32. Monitor & Control Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m How is the project doing? Question: How much work should have been done so far? How much did the work cost? How much work has been actually done? Earned Value (EV) signifies how much work has been actually done. To measure the EV we need to know: - BAC - Performance % Complete EV = BAC x Performance % Complete PVC = $10.000 x 30% = $3.000 AC= $3.000 EV = BAC x Performance % Complete We planned to perform 15m at the end of week 1 which is the 33,33% of the total work. However, we performed only 10m, which the 20% of the total work. EV = $10.000 x 20% = $2.000
  • 33. Monitor & Control Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m How is the project doing? Question: How much work should have been done so far? How much did the work cost? How much work has been actually done? Earned Value (EV) signifies how much work has been actually done. To measure the EV we need to know: - BAC - Performance % Complete EV = BAC x Performance % Complete PVC = $10.000 x 30% = $3.000 AC= $3.000 EV = BAC x Performance % Complete We planned to perform 15m at the end of week 1 which is the 33,33% of the total work. However, we performed only 10m, which the 20% of the total work. EV = $10.000 x 20% = $2.000 EV = $10.000 x 20% = $2.000
  • 34. Monitor & Control Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m How is the project doing? Question: How much work should have been done so far? How much did the work cost? How much work has been actually done? Earned Value (EV) signifies how much work has been actually done. To measure the EV we need to know: - BAC - Performance % Complete EV = BAC x Performance % Complete PVC = $10.000 x 30% = $3.000 AC= $3.000 EV = BAC x Performance % Complete We planned to perform 15m at the end of week 1 which is the 33,33% of the total work. However, we performed only 10m, which the 20% of the total work. EV = $10.000 x 20% = $2.000 EV = $10.000 x 20% = $2.000
  • 35. Monitor & Control Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m How is the project doing? Question: How much work should have been done so far? How much did the work cost? How much work has been actually done? Earned Value (EV) signifies how much work has been actually done. To measure the EV we need to know: - BAC - Performance % Complete EV = BAC x Performance % Complete PVC = $10.000 x 30% = $3.000 AC= $3.000 EV = BAC x Performance % Complete EV = $10.000 x 20% = $2.000 Earned Value explains whether the Actual Cost (AC) has been spent effectively (Performance % Complete) providing the physical results that was estimated to (Planned Value).
  • 36. How is the project doing? Question: Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m PVC = $10.000 x 30% = $3.000 AC= $3.000 EV = BAC x Performance % Complete EV = $10.000 x 20% = $2.000 Earned Value explains whether the Actual Cost (AC) has been spent effectively (Performance % Complete) delivering the physical results that was estimated to (Planned Value). The project is not doing very well… Here are the facts: Answer: PVC = $10.000 x 30% = $3.000 AC= $3.000 EV = $10.000 x 20% = $2.000
  • 37. Earned Value elements within the Project Management lifecycle Planning Executing Closing Monitor & Control Planned Value Cost Actual Cost Earned Value Initiating EV = BAC x Performance % CompletePVC = BAC x Planned % Complete
  • 38. Earned Value elements within the Project Management lifecycle Planning Executing Closing Monitor & Control Planned Value Cost Actual Cost Earned Value Initiating BCWP: Budgeted Cost of Work Performed BCWS: Budgeted Cost of Work Scheduled ACWP: Actual Cost of Work Performed
  • 39. Earned Value elements within the Project Management lifecycle Planning Executing Closing Monitor & Control Planned Value Cost Actual Cost Earned Value Initiating BCWP: Budgeted Cost of Work Performed BCWS: Budgeted Cost of Work Scheduled ACWP: Actual Cost of Work Performed Why two terms for the same thing?
  • 40. Earned Value elements within the Project Management lifecycle Planning Executing Closing Monitor & Control Planned Value Cost Actual Cost Earned Value Initiating BCWP: Budgeted Cost of Work Performed BCWS: Budgeted Cost of Work Scheduled ACWP: Actual Cost of Work Performed Why two terms for the same thing? New term !
  • 41. Earned Value elements within the Project Management lifecycle Planning Executing Closing Monitor & Control Planned Value Cost Actual Cost Earned Value Initiating BCWP: Budgeted Cost of Work Performed BCWS: Budgeted Cost of Work Scheduled ACWP: Actual Cost of Work Performed Why two terms for the same thing? New term ! Old term !
  • 42. Earned Value elements within the Project Management lifecycle Planning Executing Closing Monitor & Control Planned Value Cost Actual Cost Earned Value Initiating BCWP: Budgeted Cost of Work Performed BCWS: Budgeted Cost of Work Scheduled ACWP: Actual Cost of Work Performed Why two terms for the same thing? New term ! Old term ! Both correct and both in use!
  • 43. Measuring the Earned Value the Performance % Complete type EV = BAC x Performance % Complete
  • 44. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m Earned value is all about measuring the work performed. The Performance % Complete should provide realistic and tangible information for the project’s progress. It is selected during the project planning and can be different for each Work Package. Althouth there are several methods in this course we focus in three methods, proven to be best practices. PVC = $10.000 x 30% = $3.000 AC= $3.000 EV = BAC x Performance % Complete Performance % Complete Percent Complete Estimates Weighted Milestones Fixed Formula EV = $10.000 x 20% = $2.000 Performance % Complete
  • 45. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m Percent Complete Estimates PVC = $10.000 x 30% = $3.000 AC= $3.000 EV = BAC x Performance % Complete EV = $10.000 x 20% = $2.000 Performance % Complete It's the most commonly used measurement method as it's easy to administer within the already complex project environment. However it is subjective and often relies on the project manger's perspective. Expert judgment, experience and comprehensive understanding of the project scope are the requirements to maximize the benefits of the % complete estimates in the project.
  • 46. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m Percent Complete Estimates PVC = $10.000 x 30% = $3.000 AC= $3.000 EV = BAC x Performance % Complete EV = $10.000 x 20% = $2.000 Performance % Complete It's the most commonly used measurement method as it's easy to administer within the already complex project environment. However it is subjective and often relies on the project manger's perspective. Expert judgment, experience and comprehensive understanding of the project scope are the requirements to maximize the benefits of the % complete estimates in the project. However, it can be less subjective when tangible measurement is involved; like in our example the meters of the pits and ducts planned to complete per week (or per reporting period).
  • 47. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline Weighted Milestones PVC = $10.000 x 30% = $3.000 AC= $3.000 EV = BAC x Performance % Complete EV = $10.000 x 20% = $2.000 Performance % Complete The planned work is divided into segments. Each Weighted Milestone represents the percent of the work planned to be achieved within the period. You can use it for work packages that exceed one measurement period. The milestone values should be set before the work starts. The challenge is to agree on the values and make it clear to everyone involved what the values represent. 25% 60% 100%
  • 48. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline Fixed Formula PVC = $10.000 x 30% = $3.000 AC= $3.000 EV = BAC x Performance % Complete EV = $10.000 x 20% = $2.000 Performance % Complete It can be used in short duration activities. Once the work starts, the 50% of the work is considered as completed. At the end of it the 100% is completed. Other examples are: 10/90 25/75 0/100 50% 100% 50/50
  • 49. Forecasting the project’s future using EVM
  • 50. Forecasting the project’s future using EVM it's time to get some meaningful results from the project and try to forecast the future of the project realistically
  • 51. Forecasting the project’s future using EVM it's time to get some meaningful results from the project and try to forecast the future of the project realistically Estimate To Complete
  • 52. How can we estimate the cost left to perform until the completion of the activity? Question: Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m AC= $3.000 EV = $10.000 x 20% = $2.000 Estimate To Complete cost ETC: Answer: ETC = Remaining cost of work (40m*$200/m) ETC = $8.000 PVC = $3.000 AC = $3.000 EV = $2.000 BAC = $10.000 PVC = $10.000 x 30% = $3.000
  • 53. How can we estimate the cost left to perform until the completion of the activity? Question: Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m AC= $3.000 Why do we Estimate To Complete? Because the remaining cost of work is not always fixed. It may vary depending on several factors, like additional changes that may change the budget. Perhaps we will be able to complete the activity earlier and therefore cost less, or later than planned, or use more resources which causes increased cost. EV = $10.000 x 20% = $2.000 Estimate To Complete cost ETC: Answer: PVC = $3.000 AC = $3.000 EV = $2.000 BAC = $10.000 PVC = $10.000 x 30% = $3.000 ETC = Remaining cost of work (40m*$200/m) ETC = $8.000
  • 54. Forecasting the project’s future using EVM it's time to get some meaningful results from the project and try to forecast the future of the project realistically Estimate At Completion
  • 55. So, at the end of the activity how much will it cost? Question: Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m AC= $3.000 Why do we Estimate At Completion? Because the variable used to forecast the cost at the completion of the activity/project is the ETC. Therefore, is not a fixed figure and can be adjusted in the future. EV = $10.000 x 20% = $2.000 The Estimate At Completion cost EAC: Answer: EAC = ETC + AC EAC = $8.000 + $3.000 = $11.000 PVC = $3.000 AC = $3.000 EV = $2.000 BAC = $10.000 ETC = $8.000 PVC = $10.000 x 30% = $3.000
  • 56. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m AC= $3.000 EV = $10.000 x 20% = $2.000 EAC = $11.000 PVC = $3.000 AC = $3.000 EV = $2.000 BAC = $10.000 ETC = $8.000 PVC = $10.000 x 30% = $3.000
  • 57. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m AC= $3.000 EV = $10.000 x 20% = $2.000 EAC = $11.000 PVC = $3.000 AC = $3.000 EV = $2.000 BAC = $10.000 ETC = $8.000 PVC = $10.000 x 30% = $3.000 How is Earned Value involved with all this?
  • 58. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m AC= $3.000 EV = $10.000 x 20% = $2.000 EAC = $11.000 PVC = $3.000 AC = $3.000 EV = $2.000 BAC = $10.000 ETC = $8.000 PVC = $10.000 x 30% = $3.000 Earned Value and Cost Performance
  • 59. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m AC= $3.000 EV = $10.000 x 20% = $2.000 EAC = $11.000 PVC = $3.000 AC = $3.000 EV = $2.000 BAC = $10.000 ETC = $8.000 PVC = $10.000 x 30% = $3.000 Don’t forget that our activity is already underperforming. The ETC and EAC reflect the current status of the activity/project. However, at this point they don’t include the cost of delay or underperformance. Identifying the cost variance between the AC and EV enable us a more realistic picture of the activity performance at the current time period.
  • 60. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m AC= $3.000 EV = $10.000 x 20% = $2.000 EAC = $11.000 PVC = $3.000 AC = $3.000 EV = $2.000 BAC = $10.000 ETC = $8.000 PVC = $10.000 x 30% = $3.000 Cost Variance (CV) = EV - AC CV = $2.000 - $3.000 = $-1.000 CV = $-1.000
  • 61. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m AC= $3.000 EV = $10.000 x 20% = $2.000 EAC = $10.000 PVC = $3.000 AC = $3.000 EV = $2.000 BAC = $10.000 ETC = $7.000 PVC = $10.000 x 30% = $3.000 CV = $-1.000 Which is the relationship between the AC and the EV? Cost Performance Index (CPI) = EV / AC CPI = $2.000 / $3.000 = 0.67
  • 62. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m AC= $3.000 EV = $10.000 x 20% = $2.000 EAC = $10.000 PVC = $3.000 AC = $3.000 EV = $2.000 BAC = $10.000 ETC = $7.000 PVC = $10.000 x 30% = $3.000 CV = $-1.000 Which is the relationship between the AC and the EV? Cost Performance Index (CPI) = EV / AC CPI = $2.000 / $3.000 = 0.67 In simple terms, for each dollar spent, only 0.67 worth paying! CPI = 0.67
  • 63. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m AC= $3.000 EV = $10.000 x 20% = $2.000 EAC = $10.000 PVC = $3.000 AC = $3.000 EV = $2.000 BAC = $10.000 ETC = $7.000 PVC = $10.000 x 30% = $3.000 Earned Value and Schedule Performance CV = $-1.000 CPI = 0.67
  • 64. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m AC= $3.000 EV = $10.000 x 20% = $2.000 EAC = $10.000 PVC = $3.000 AC = $3.000 EV = $2.000 BAC = $10.000 ETC = $7.000 PVC = $10.000 x 30% = $3.000 CV = $-1.000 CPI = 0.67 As with the CV, we want to identify and compare the work planned to perform within a time period with the work accomplished. The Schedule Variance (SV) will provide us with the right information. It is expressed in in monetary values. SV = EV – PV SV = $2.000 - $3.000 = $-1.000 SV = $-1.000
  • 65. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m AC= $3.000 EV = $10.000 x 20% = $2.000 EAC = $10.000 PVC = $3.000 AC = $3.000 EV = $2.000 BAC = $10.000 ETC = $7.000 PVC = $10.000 x 30% = $3.000 CV = $-1.000 CPI = 0.67 SV = $-1.000 How the Planned and the Earned Value are related? Schedule Performance Index (SPI) = EV / PV SPI = $2.000 / $3.000 = 0.67
  • 66. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m AC= $3.000 EV = $10.000 x 20% = $2.000 EAC = $10.000 PVC = $3.000 AC = $3.000 EV = $2.000 BAC = $10.000 ETC = $7.000 PVC = $10.000 x 30% = $3.000 CV = $-1.000 CPI = 0.67 SV = $-1.000 How the Planned and the Earned Value are related? Schedule Performance Index (SPI) = EV / PV SPI = $2.000 / $3.000 = 0.67 SPI = 0.67
  • 67. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m AC= $3.000 EV = $10.000 x 20% = $2.000 EAC = $10.000 PVC = $3.000 AC = $3.000 EV = $2.000 BAC = $10.000 ETC = $7.000 PVC = $10.000 x 30% = $3.000 CV = $-1.000 CPI = 0.67 SV = $-1.000 CPI, SPI rule: CPI > 1 more work done than what actually paid for. CPI = 1 you got exactly what you paid for. CPI < 1 less work done than what actually paid for. SPI > 1 - ahead of schedule. The work accomplished is more that the work planned. SPI = 1 - the work accomplished is exactly the work planned. SPI < 1 - behind schedule. The work accomplished is less than planned. SPI = 0.67
  • 69. Reporting Earned Value Now that we know what Earned Value means, how it’s used and why it can make a big difference in a project, we need to know how to present and report data.
  • 70. Reporting Earned Value Now that we know what Earned Value means, how it’s used and why it can make a big difference in a project, we need to know how to present and report data. Tables and diagrams help to communicate the message clearly and can be used in meetings for decision making.
  • 71. Reporting Earned Value Now that we know what Earned Value means, how it’s used and why it can make a big difference in a project, we need to know how to present and report data. Tables and diagrams help to communicate the message clearly and can be used in meetings for decision making. The Earned Value data are reported cumulatively. The cumulative data represent a comprehensive project picture as they incorporate the overall project performance up to date.
  • 72. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m PVC AC EV BAC: Activity: Lay 50m of ducts Week 1 ETC CV $10.000 $3.000 $3.000 $2.000 $8.000 $11.000 $-1.000 SV $-1.000 EAC 35m $9.000 The first reporting period (week 1) we have the following results: Back to our example
  • 73. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m BAC: Activity: Lay 50m of ducts Week 1 $10.000 35m $9.000 1 0.5 1.5 0.67 0.67 CPI SPI W1 The first reporting period (week 1) we have the following results: PVC AC EV ETC CV $3.000 $3.000 $2.000 $8.000 $11.000 $-1.000 SV $-1.000 EAC
  • 74. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m BAC: Activity: Lay 50m of ducts Week 1 $10.000 35m $9.000 1 0.5 1.5 0.67 0.67 CPI SPI W1 The second reporting period (week 2) the activity performance is: PVC AC EV ETC CV $3.000 $3.000 $2.000 $8.000 $11.000 $-1.000 SV $-1.000 EAC
  • 75. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m PVC AC EV BAC: Activity: Lay 50m of ducts Week 1 Week 2 ETC CV $10.000 $3.000 $3.000 $2.000 $8.000 $11.000 $-1.000 $8.000 $9.000 $7.000 $3.000 $12.000 $-2.000 SV $-1.000 $-1.000 EAC 35m $9.000 1 0.5 1.5 0.67 0.67 CPI SPI W1 The second reporting period (week 2) the activity performance is:
  • 76. Project Week 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32080401020304 03 0401 02 05 06 07 09 planned baseline$3.000 $8.000 $10.000 15m 40m 50m 10m PVC AC EV BAC: Activity: Lay 50m of ducts Week 1 Week 2 ETC CV $10.000 $3.000 $3.000 $2.000 $8.000 $11.000 $-1.000 $8.000 $9.000 $7.000 $3.000 $12.000 $-2.000 SV $-1.000 $-1.000 EAC 35m $9.000 1 0.5 1.5 0.67 0.78 0.67 0.87 CPI SPI W1 W2 The second reporting period (week 2) the activity performance is:
  • 77. Reporting Earned Value When reporting Earned Value, consistency is everything! Only when the reporting periods are relevant you can get meaningful reports!
  • 78. Thanks for attending EVM Fundamentals! Denise Fotopoulou