To view recording: http://youtu.be/hn7zXzotNjM or watch the video at end of the slide For other Informa Webinars: http://www.informa-mea.com/webinars Since its inception in the 1960s, Earned Value Management (EVM) has grown to become the cornerstone in the management of projects. There is no doubt that planning projects is essential for success, however, after the planning phase is completed, project managers find themselves with a multitude of parameters to be achieved in various areas. The most visible of those areas are time, cost and scope (quality). Each of the parameters can be monitored and measured reasonably well. However, the “sum” of those parameters has proven hard to calculate, hence, leaving project managers with no clear overall picture of the project status. EVM has proven to be the right approach to get this “whole picture” of the project status, enabling the manager to determine current status, distance from the planned status, and the future outlook. This webinar will shed light on the common sense behind EVM, its main components, and how to use it to increase project success probabilities in your organisation.

1. Earned Value Management:
Pure Common Sense
chasing And Procurement:
What’s The Diffe
A. Elkhodary
rence?
Ian Moody
The Webinar Will Begin Shortly

2. Agenda
 Welcome
 Housekeeping notes
 Session starts
 Q&A
 End of webinar

3. Housekeeping
 Slides will be available on our SlideShare page; the link will be emailed to you
 Recording of the webinar will be available to download; the link will be emailed
to you
 Take the time to complete a post-webinar survey that will pop up at the end
 You can type your questions throughout the session
 Time will be allocated in the end for the speaker to address your questions

4. Your Presenter
Ashraf Kodari
Ashraf Kodari, an independent management consultant, and has gained experience through
multiple positions in the elds of utility operations, project management, training management,
facility management, and health and safety in North America and the Middle East.
During his professional career, spanning over 26 years, Ashraf has spent 15 years
managing/sponsoring projects and programs in different elds, including; utilities, training,
construction, organisational engineering and IT.

5. Once upon a time …
Traditional Project Tracking

6. GANTT Chart ..
Float
TIME
Scheduled duration

7. GANTT Chart … TODAY
Float TIME
Scheduled duration
Actual duration

8. Cost Tracking
0
50
100
150
200
250
300
350
400
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Budget
Actual

9. Traditional Project Tracking
 PM looks at schedule and tries to make sense of
data to see if project is on schedule or not.
 Consider if some activities are ahead and some are
behind … how do you sum up status
 Sponsor/Senior Management compare planned
expenditures to actual expenditures as project
progress indicator

10. Alternative: EVM!
 Started in the 1960s based on US Department of
Defense (DOD) Cost/Schedule Control System
Criteria (C/SCSC)
 In the 1990s, it was mandated for all federal
agencies in the US

11. 1. Management
2. Value
3. Earned
So what do the words in EVM mean?

12. Definitions for this workshop
Management/
Control

13. Definitions for this workshop
Management/
Control
 Includes:
• Setting desired values (planning)
• Measuring and comparing
• Decision making, problem solving
and implementation.

14. Valuable Questions
 If you decide you want to buy a house with certain
features to live in, and you are willing to pay $1M for
it …
 then you find the house with the features @ $1M …
Would you buy the house?
 What is the value of the house for you?
 Then if the house prices drop by 10%, what is the value
of your house now?

15. Definitions for this workshopVALUE
 What a customer is willing to pay for a
product, service, result or behavior
 What a “seller” would accept to part
with a product, service or behavior

16. Value progression in projects 1
 Customer is willing to pay certain price ($X) to
obtain certain products or services in a specific
amount of time.
 Value of product or service to customer is $X
 Customer set the value

17. Value progression in projects 2
 Sponsors/ Senior Management (of seller
organization) determine that they are willing to pay
$(X-M) to produce the product or service achieving
$M gains for shareholders.
 Value of product/service to sponsors is $(X-M)
 Sponsor set the value

18. Value progression in projects/programs 3
 Project Manager (PM) breaks down product/service to
components
 PM estimates resource requirements to achieve components
 Estimates are aggregated. If the sum is < $(X-M) then
agreement on value exists between PM & Sponsor
 PM is now willing to invest $Y for each component, where
∑Y < (X-M)
 PM set the value Scope
defined
WBS
Cost/Time
Planning
Baseline Set

19. DefinitionsEARNED
 Resources consumed and product,
service or behavior achieved
 Past Tense!
 The work has been done, and the
planned value was achieved

20. Questions … again
 If you set the value for activity A to be $1000
 You finish activity A, but you consumed $1400 in
resources …
 Did you earn any value, if so … how much?

21. More details
EVM Parameters

22. EVM Base Parameters PV
PlannedValue
(PV)
 Budgeted Cost of Work Scheduled
(BCWS)
 What the PM decided this work is worth
and approved by sponsor
 Phased over planned time for resource
expenditures to take place
 Future Value : Not a Fact

23. 2/5/2015A. Elkhodary2
3
Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Planned Value (PV) $100 $500 $1,200 $2,200 $3,500 $5,500 $8,500 $13,500 $16,000 $17,000
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
Planned (Desired) Value ASSUMPTION

24. EVM Base Parameters AC
ActualCost
(AC)
 Actual Cost of Work Performed (ACWP)
 The real cost of resources spent (how
much will accounting pay for the work)
 Mapped to work packages or activities
in progress or already finished
 Past Value : Measured Value: A Fact

25. 2/5/2015A. Elkhodary2
5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Actual Cost (AC) $100 $205 $1,200 $2,500 $5,000 $8,000 $13,000
Planned Value (PV) $100 $500 $1,200 $2,200 $3,500 $5,500 $8,500 $13,500 $16,000 $17,000
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
Planned (Desired) Value Assumption
vs.
Actual (Measured) Cost Fact

26. EVM Base Parameters EV
EarnedValue
(EV)
 Budgeted Cost of Work Performed
(BCWP)
 What the work performed was planned to
cost
 Unique amounts to each activity
 Past Value : Measured Value: A Fact …
with a twist!

27. 2/5/2015A. Elkhodary2
7
Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Earned Value (EV) $100 $500 $1,500 $2,500 $3,000 $4,000 $6,500
Planned Value (PV) $100 $500 $1,200 $2,200 $3,500 $5,500 $8,500 $13,500 $16,000 $17,000
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
Planned (Desired) Value Assumption
vs.
Earned (Measured) Value Fact

28. How it fits together
EVM Parameters together

29. EV vs. PV
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Planned (Desired) Value Assumption
vs.
Earned (Measured) Value Fact
 If we compare EV to PV
we get an indication of
schedule performance
 Value of work
completed vs. Value of
work that should have
been completed by now
 SV = EV - PV
SV

30. AC vs. PV
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Planned (Desired) Value Assumption
vs.
Actual (Measured) Cost Fact
 If we compare AC to
PV we get an
indication of ???
 Remember “Traditional
Project Tracking” slide?
?

31. 2/5/2015A. Elkhodary3
1
Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Earned Value (EV) $100 $500 $1,500 $2,500 $3,000 $4,000 $6,500
Actual Cost (AC) $100 $205 $1,200 $2,500 $5,000 $8,000 $13,000
Planned Value (PV) $100 $500 $1,200 $2,200 $3,500 $5,500 $8,500 $13,500 $16,000 $17,000
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
Desired & Measured Values
Compare
SV
CV

32. Your own crystal ball!
Using EVM to forecast

33. Cost forecasting using EVM
 ETC=BAC-EV
 ETC=(BAC-EV)/CPI
 EAC=AC+(BAC-EV)
 EAC=BAC/CPI
 EAC=AC+ETC
How much more money What is the expected final cost

34. 2/5/2015A. Elkhodary3
4
Vocabulary
Variable Abbreviation
Schedule Variance SV
Cost Variance CV
Schedule Performance Index SPI
Cost Performance Index CPI
Estimate At Completion EAC
Estimate To Complete ETC

35. Thank you
QUESTIONS?