إدارة القيمة المكتسبة مفيدة ومخادعة في التحكم في المشروعات فيديو دورة الأساسيات: http://prof.planner.teachable.com/p/evm-basics/ دورة المستوى المتقدم: http://www.slideshare.net/MohamedMaged8/contracts-classification للمزيد: https://www.facebook.com/groups/prof.cost.engineers/

1. Earned Value Management
Leading & misleading in Project Control
Prepared by:
Engr. Mohamed Maged, PMP
Admin of:
https://www.facebook.com/Prof.Planner
‫المكتسبة‬ ‫القيمة‬ ‫إدارة‬–‫المشروعات‬ ‫في‬ ‫التحكم‬ ‫في‬ ‫ومخادعة‬ ‫مفيدة‬

2. Instructor: Mohamed Maged
Senior Project Control Engineer, B.Sc. of Civil engineering – Ain Shams
University, with experience in MENA region of (construction, infrastructure,
and roads) Mega projects, in professions of Contract administration, Procurement,
Tender estimating, Cost control, Planning & Claim analysis.
Instructor of Planning & Project Management:
- Construction Management Planning and Control (CMPC).
- Delay, Claim and Dispute Resolution (DCDR) in PMBOK, FIDIC & SCL protocol.
- Project Management Professional (PMP).
- Free lectures with cooperation of Egyptian Engineers Association in Saudi:
- Product oriented construction management
- Top 10 planning fundamentals
- Scope creep – cases and preventive actions
- Claims and dispute resolution in FIDIC

3. Mohamed Maged (Prof. Planner)
Admin of the biggest online community of Arab Planners (10,000+)
(Facebook Page: to be prof. planner, related group: Best Advice for
Planners – Public group)
Achievements of 3 Years: http://www.slideshare.net/MohamedMaged8/3-years-acheivements
P P&C Academy (recently launched): http://prof.planner.teachable.com/
SlideShare: www.slideshare.net/MohamedMaged8/
YouTube Channel: https://www.youtube.com/ArabPlanners.
Arranged Two Annual Conferences of Planning and Project Management (Anniversary of
Facebook Page: Prof.Planner)- American University in Cairo, August 2014 & 2015.

4. References:
1- A GUIDE TO THE PROJECT MANAGEMENT BODY
OF KNOWLEDGE (PMBOK® Guide) – Fifth Edition.
2- Practice Standard for EARNED VALUE MANAGEMET – PMI Global
STANDARD.
3- EARNED VALUE Project Management - QUENWT. FILEMNING and JOEL M.
KOPPELMAN.
4- Skills & Knowledge of Cost Engineering – AACE International.
5- EARNED VALUE MANAGEMENT APM GUIDELINE FOR THE UK.
6- Earned Value Professional (EVP) Certification Study Guide– AACE International.
7- CMPC Course Material – Construction Management Planning & Control
(Prof.Planner).
8- Construction Project Scheduling and Control - Saleh Mubarak.
9- Project Management, Planning, and Control - Albert Lester.
10- Other posts and slide-shares from internet.

5. Lecture Topics
Project Control
Performance M. Baseline
WBS & Control Accounts
Concept of Cost Control
Why Earned Value?
Earned Value Analysis
Earned Value Forecasting
Earned Schedule
Finance & Cash flow
Schedule Total Float
Tricky or Misleading
Study & Practice

6. September 21,
2016
6
Project control is the continuous practice of
1. monitoring work progress,
2. comparing it to baseline budget and schedule,
3. detecting any deviations and their causes, and
4. taking a corrective action wherever and whenever necessary.
Also called Project tracking, Project monitoring & Follow up.
Project Control

7. 7
Create WBS. subdividing project deliverables and
project work (including management work) into
smaller, more manageable components, can be used
as communications tool.
Tools & Techniques:
Decomposition. A technique used for dividing and
subdividing the project scope and project
deliverables into smaller, more manageable parts
(e.g. by phase or by major deliverables).
Manageable Level
of Control

8. 8
WBS Dividing –
Scope Baseline
- Lowest level in WBS called Work Package, then it can be decomposed to Schedule Activities.

9. 9
•‫ع‬ ‫ا‬‫ا‬ ‫امعمى‬‫ا‬‫م‬Baseline Programme‫؟ع‬‫ع‬ ‫ا‬‫ا‬‫م‬ ‫اتعبرمى‬‫ا‬ ‫م‬ ‫اممزعبر‬‫ا‬ ‫ااعبرنا‬‫ا‬‫ه‬accepted‫ااع‬‫ا‬‫ن‬ ‫ايى‬
‫ييااعمامعيا‬ ‫ع‬ ‫مام‬ ‫يايعاااتعامراأعبع‬ ،‫ا‬ ‫اع‬ ‫معملمرناأع‬ ‫ابساأع‬ ‫ع‬ ‫ا‬ ‫معبراجاععبريهعع‬ ‫عي‬ ‫مس‬‫ع‬ ‫ثاععلا‬
‫مععملع‬ ‫تعي‬ ‫م‬ ‫ممزعبر‬ ‫برنا‬revised baseline‫منىأ‬ ‫رلم‬.
Baseline Schedule

10. 10
Cash Flow
Cost Baseline. The
approved version of
the time-phased
project budget,
excluding any
management
reserves.

11. 11
Work Package -
Control Account

12. 12
Cost Aggregation. Summing the lower-level cost estimates for a given
cost control account.
Planning Package. Control Account. A management control point to
earned value.
Reserve analysis. Budget reserve analysis can establish both the
contingency reserves and the management reserves.
Contingency Reserve. Allowance for identified risks that are accepted
(known unknown).
Management Reserve. for unforeseen work that is within scope
(unknown unknown).
Funding Limit Reconciliation. comparing the planned expenditure
against any limits.
Cost Rolling-up

13. 13
Control Account
Responsibility
There are three
main types of
organizational
structures:
functional, matrix,
and project
The above
organizational
process flow of
work authorization is
captured in Work
Authorization
Documents (WADs)
that take many
forms.

14. September 21,
2016
14
- Cost control is related to cash out of Contractor most
probably.
- It is the process of comparing the estimated to be spent
for each (CA / activity / work package) and the actual.
- Therefore, You are comparing apple to apple.
Cost Control

15. 15
Scheduling and estimating are related and their relationships is probably one of
the most important relationships in project management.
These two areas intersected in many ways such as the following:
1) The estimator need to know how long the project will last in order to estimate
certain cost , particularly overhead.
2) Scheduling and Estimating department collaborate to provide information to
the procurement department.
3) Resource allocation and resource leveling may be cost related, although
these are scheduling issues.
Proper Estimating
(planning) is Very
Important for
Control

16. September 21,
2016
16
What is an updated schedule?
A living copy schedule reflecting project performance data at a given
data date regarding completed activities, in progress activities, and
change in the logic, cost, and resources and allocated at any level.
What is data date?
The data date is the date as of which all progress on a project is
reported.
It is also called as- of date, cut-off date and status date .
Schedule Update

17. September 21,
2016
17
Output of Update
Baseline
Cash Flow:
Time phased
Budget Value
of Planned
Work
Schedule
Update:
Up to date
Actual Value
of Performed
Work &
remaining

18. September 21,
2016
18
 Earned Value Management
(EVM), started in 1800’s as a
method for integrated
project cost and schedule
control, then in the 1960’s,
was designed by the U.S. Air
Force and named the
Cost/Schedule Planning and
Control System.
Earned Value
History

19. September 21,
2016
19
Earned Value
Terminology
 Earned Value (EV)
Analysis: Earned
Value analysis is an
integrated cost-
schedule approach
to monitor and
analyze the progress
in a project.

20. September 21,
2016
20
Earned Value
Analysis
 When EV is useless:
If the WP = WS
which happens for
sure at the project
completion if the
scope is the same.

21. 21
Earned Value Management
This’s Why Earned
Value…
EVM has been called
“ ”

22. September 21,
2016
22
Earned Value
Reporting - Costs
ACWP
BCWP
CPI
ACWPBCWPCV

 CPI = 1, on budget
CPI < 1, over budget
CPI > 1, under budget
 Budgeted Cost of Work Performed (BCWP) = earned value
 Actual Cost of Work Performed (ACWP) = actual cost
 Cost Variance (CV): Difference between earned and actual costs for
the completed work
 Cost Performance Index (CPI or CI): as following

23. September 21,
2016
23
Earned Value Reporting
- Schedule
 Budgeted Cost of Work Performed (BCWP): earned value
 Budgeted Cost of Work Scheduled (BCWS): planned value
 Schedule Variance (SV): Difference between the value of work that was planned
to be accomplished and the value of the work that was actually completed
 Schedule Performance Index (SPI or SI): as following
BCWS
BCWP
SPI
BCWSBCWPSV

 SPI = 1, on schedule
SPI < 1, behind schedule
SPI > 1, ahead of schedule

24. 24
Earned Value -
Forecasting
24
(earned)
(actual)
(budgeted)
Forecasted cost variance (FCV) =
CV ∕ % Complete =
$400 ∕ 26.7% = $1, 500
Schedule variance in days (SV, days) =
SV ($) ∕ Daily planned budget =
$-1,067 ∕ $266.67 = - 4 days
Forecasted schedule variance (FSV) =
SV ∕ %Complete =
-4 ∕ 26.7% = -15 days

25. September 21,
2016
25
A simple problem will help to illustrate the
application of the principles of earned
value . A project has been defined that
consist of 12 activities for which the
estimated cost and duration have been
defined see figure .
After three and a half month , the activates
1,2,4,5,7 are completed and (6) is half
complete and (8) is three–fourth complete
and (3) is half complete. The incurred cost
to date are 152000$ . What is the status of
this project in terms of the schedule and
the budget?
Example
Activity cost m1 m2 m3 m4 m5 m6
1 $22000
2 $10000
3 $18000
4 $30000
5 $50000
6 $40000
7 $6000
8 $16000
9 $13000
10 $4000
11 $34000
12 $14000

26. 26
Solution
ACWP =152000$
BCWS=22000+30000+50000+10000+18000+0.5(40000+
6000+16000)=161000$
BCWP=22000+30000+50000+10000+6000+0,5(40000)
+0.75(16000)+0.5(18000)= 159000$
SV= BCWP-BCWS= -2000$ its behind schedule
CV=BCWP-ACWP= 7000$ under the budget
EAC=ACWP+(BAC-BCWP)=152000+(257000-159000)
= 250000$

27. September 21,
2016
27
Earned Value:
Cost and Time
Status
Cost +
CV
Time
SV
III
III IV
-
- +

28. 28
(Factors)
Earned Value Summary

29. 29

30. 30
(Forecast & TCPI)
-Magnify the cost
variance.
-Maintain the variance
till end.
-More accurate.
-Time (SV) affect he
cost as well as (CV).
Budget value of
remaining work /
Value of cost to
spend (up to
Budget or to
Estimate)

31. 31
(EV)

32. September 21,
2016
32
Time-Based
Measures:
Earned Schedule
SPI(time) = PT / AT
AT: Actual Time of Work
Performed (till Data date) (actual
time expended to date (ATE) for a
particular earned value)
PT: Planned Time of Work
Performed (originally planned
duration (OD) for that earned value)

33. September 21,
2016
33
Scope & Time
Forecast Time:
EAC(t) = BAC(t) / SPI
Scope Control:
Schedule factors based
on cost.
Time Control:
Schedule factors based
on time.
Estimated Duration

34. September 21,
2016
34
- We can measure: Earned Quantity, Earned Workhours
& Credit ($) WH of actual quantity as per budget unit
rate, then Productivity Index (PI)= $ / unit.
Physical Units -
Resources
- EVM requires the recording of resource utilization in
resource units (i.e. labor, materials, and the like) for the
work performed to compare with budget of resource
units , and capture the actual costs.
- Lump Sum Projects Measurements

35. 35
Cash flow:
Cash-out vs Cash-in
Turnover: Inflation &
interest
Economics, Estimating,
Accounting & Finance
(EFCC – course)
Funding gap: budget
overrun
0%
20%
40%
60%
80%
100%
Month01
Month02
Month03
Month04
Month05
Month06
Month07
Month08
Month09
Month10
Month11
Month12
Month13
Month14
Month15
Month16
Month17
Month18
Month19
Month20
PAC
FAC
Cash in Received net
advance added
Cash out

36. September 21,
2016
36
Total Float Vs EVM
Schedule Factors
Misleading in Each:
1- Out of sequence can disturb the results
of EVM schedule factors specially if the
progress of critical path is different.
2- Availability of resources and resource
usage in remaining works can affect the
rationality of the total float specially if
many paths overlapped in the remaining
duration.

37. 37
Some amount of knowledge brings more……
Earned Value
Management -
Tricky or Misleading

38. 38
Soon more courses in the regard at: http://prof.planner.teachable.com/
Economics, Estimating, Accounting, Finance & Cost Control Topics
Cost Engineering
Earned Value Basics - Arabic https://www.facebook.com/groups/prof.cost.engineers/

39. Study & Practice
Additional References:
• https://www.humphreys-assoc.com/evms/EIA-748.php
• https://www.humphreys-assoc.com/uploads/commerce/images/pdf/HumphreysPMUsingEV3rd-2014-1006.pdf
• http://www.aacei.org/cert/EVP_CertificationChecklist.pdf
Certificates:
• EVP – AACE International
• Control Account Manager (CAM)
39

40. Mohamed Maged (Related Available Videos)

41. Thank You
Don’t Hesitate to contact….
M.Maged
magedkom@gmail.com
mobile : 00966-580264968