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Evm power point 25 august 2015 prams co (2)
Earned value management (EVM) provides visibility into a project's technical, cost, and schedule performance. It integrates cost, schedule, and technical data to evaluate progress and forecast completion costs. For a project to use EVM effectively, it must establish measurable work, develop a measurable plan and schedule, decide what work will be completed over time, track work accomplished, and verify costs. Taking action on variances is also important for managing performance.
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Evm power point 25 august 2015 prams co (2)
- 1. Roger H. Mandel 858-735-2038 RMandel@PramsCo.com EarnedValue Management Overview for understanding of the value of EVM analytical data
- 2. Concept of EarnedValue Management (EVM) • A tool for the Customer and Supplier to have visibility into technical, cost and planned progress http://www.acq.osd.mil/evm • Integrates the cost, planned (schedule) and technical aspects into programmatic report synopses • Insight into progress that provided information on cost and planned (schedule) performance data • Visually depicts budget efficiencies for both time and cost • Time-phased budgets to specific tasks and/or statements of work
- 3. Management Needs • Indicateswork progress that properly relates cost, schedule and technical accomplishments • Data presented are valid, timely, and can be audited Supplies management with information at a practical level of summarization • Data presented to the customer are from the same internal EVM system used by the supplier to manage the project
- 4. Guideline Concepts • Theguideline approach established the framework of an integrated cost, schedule, and technical management system • EVM Guidelines provides rules for a system that is acceptable and that provides valid, timely data that can be audited • The guidelines can be used for Research and Development, construction, modification, and production projects
- 5. Industry Standards • Industryrecognizes the importance of earned value in managing both supplies and services • There are thirty two (32) Guidelines from industry standard that should become your baseline in determining the validity of any earned value management system
- 6. Management System • Indesigning, implementing and improving the EVM system, the objective should be to do what makes sense • The management system that meets the letter of the criteria but not their intent will not support management’s needs
- 7. Compliance will facilitate: •Timely baseline development and control will provide information break down by product as well as by organizational function • Objective measurement of accomplishment against the plan that summarized reporting to higher management for use in decision-making • With reporting discipline and in objective analysis of variances, will direct management actions to manage cost and schedule performance
- 8. Earned Value Management •TO BE EFFECTIVE: ESTABLISH MEASURABLE EFFORTS - You cannot manage what you cannot measure DEVELOP A PLAN THAT IS MEASURABLE - That becomes your budget DECIDE WHAT WORK IS TO BE ACCOMPLISHED OVER TIME - That becomes your baseline plan ESTABLISH WHAT WORK HAS BEEN ACCOMPLISHED - That is your work earned or earned value VERIFY THE COST TO ACCOMPLISH THAT WORK - That is what has been expended
- 9. Earned Value Management •TAKE ACTION DUE TO SCHEDULE VARIANCES: What was to be accomplished at this point in time? What has been accomplished at this point in time? – The difference is the Schedule Variance – Determine cause, effect and mitigation • TAKE ACTION DUE TO COST VARIANCES: What has been accomplished at this point in time? What was the cost to accomplish the efforts at this point in time? – The difference is the Cost Variance – Determine cause, effect and mitigation
- 10. Earned Value Management Master Planning Selected Reporting Elements ADA Products Software Tools Standards ADA Study ADA Controls ADA Interface CPCO#1 MOS CPCO #2 MOL CPCO #3 MAC Marketing Functional Manager ADA Applications Control Account Control Account Control Account Program Manager Engineering Functional Manager Software Engineering Security Systems Control Account Operations Functional Manager Hardware Engineering LAN Applications Control Account Control Account Planning Packages Contract Work Breakdown Structure & Organization Breakdown Structure Product Development Software Instigation Program Selected PSWBS Elements OBS DATA SUMMARIZATION W B S D A T A S U M M I Z A T I O N Functional Organization Work Packages Planned Earned Expended BAC EAC CWBS Extension
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- 12. Cumulative Project Trends TRENDSTATUS REPORT 0 50 100 150 200 250 300 350 400 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 TIME RELATED LABORHOURSorDOLLARS Earned Progress Expended Scheduled Planned
- 13. Cumulative Project Trends TRENDSTATUS REPORT 0 20 40 60 80 100 120 140 160 180 200 1 2 3 4 5 6 7 TIME RELATED LABORHOURSorDOLLARS Earned Progress Expended Scheduled Planned COST VARIANCE SCHEDULE VARIANCE
- 14. Status and Trends Redindicates at least 3 weeks negative Schedule Variance AS OF DATE 23-Nov-03 Task No. Tasking Status SV Status CV Percent Earned 2110 Task Lead Degrading 71.5% 2220 Modeling Degrading 82.2% 2230 Integration Degrading Degrading 76.6% 2310 Docs Degrading 77.1% 3110 Software Degrading 72.6% 3210 SW Devel Improving Degrading 91.0% 3215 KG-84 WF Improving Degrading 80.6% 3224 KWR-46 W/F Improving Degrading 96.1% 3330 Gen Infras Improving Degrading 83.5% 3410 HMI Desg Holding Degrading 87.3% 3624 Algor Holding Degrading 96.0% 5120 Envir. Test Improving Holding 98.1% OVER ALL Improving Degrading 82.4% About 2 weeks behind schedule About 2 weeks behind schedule About 7 weeks behind schedule About 1 week behind schedule About 3 weeks behind schedule About 2 weeks behind schedule About 1 week behind schedule About 2 weeks behind schedule About 6 weeks behind schedule About 3 weeks behind schedule About 5 weeks behind schedule Schedule Position Green Block WAVEFORMS Task Status due to change in Cumulative Schedule & Cost Variances. Positive Performance SV is Schedule Variance. The difference between Earned and Planned CV is Cost Variance. The difference between Earned and Expended.
- 15. Estimate at Completion(EAC) Development MCS S/W MCS 15855 Form: 28-Feb-02 To: 23-Nov-03 EAC 6 3 FUTURE Dollars or Hours EFF. PRODUCT CUM. Periods Periods EST. TCPI %of % @ CATEGORY EFF. EFF. EFF. EFF. BAC LRE TO LRE EAC BAC Prog EAC Project Mgmt 94.1% 76.1% 56.0% 50.0% $3,243,748 $3,720,714 67.6% $4,063,375 12.0% 79.7% 79.8% MCS Systems 96.3% 89.3% 57.9% 50.0% 5,554,948 6,005,669 80.9% 6,924,546 20.5% 78.3% 80.2% MCS S/W Dev. 76.2% 47.5% 39.7% 35.0% 7,460,475 11,038,572 43.2% 11,713,646 27.6% 83.4% 63.7% Hardware 102.2% 62.6% 58.3% 58.3% 954,518 1,008,655 0.0% 934,044 3.5% 100.0% 102.2% Testing 75.4% 59.7% 40.7% 35.0% 801,306 1,070,940 72.0% 1,267,302 3.0% 83.3% 63.2% MFG 90.4% 43.8% 14.9% 10.0% 2,275,732 2,607,016 54.5% 3,599,423 8.4% 94.7% 63.2% ILS 95.3% 50.6% 62.4% 50.0% 1,192,135 1,255,701 94.0% 1,537,874 4.4% 74.7% 77.5% Closeout N/A N/A N/A 80.0% 152,364 151,142 100.8% 190,455 0.6% 0.0% 80.0% CAS 414 104.4% 150.3% -283.8% 75.0% 149,154 147,209 88.9% 152,584 0.6% 82.7% 97.8% G & A 88.5% 65.7% 57.1% 50.0% 5,255,485 6,430,939 59.7% 6,727,024 19.4% 82.7% 78.1% PMB 87.1% 60.8% 47.3% 72.9% $27,039,865 $33,436,557 60.5% $37,110,272 100% 82.4% 72.9% WR BAC/EAC Developed by: Roger H. Mandel LRE Remain S/W for Chris Newborn Budget at Completion (BAC) is the authorized budget. Latest Revised Estimate (LRE) is latest revised estimate. Progress (Prog.). Cost efficiency (EFF)
- 16. Formula Card PERFORMANCE INDICESDeveloped by: RMandel @PramsCo.Com Less than 1.0 is unfavorable Cost Efficiencies (Expended) Earned Expended Schedule Efficiencies (Planned) Dollars Earned Planned Percent OVERALL STATUS Items Budget at Completion (BAC) Earned BAC Expended BAC TO COMPLETE PERFORMANCE INDEX Work Remaining Unexpended Budget Time Line BAC - Earned Cost Variance (CV) = Earned - Expended BAC - Expended Earned Latest Revised Estimate by the supplier (LRE) Expended Estimate at Completion is your projection (EAC) Schedule Variance (SV) = Earned - Planned You can substitute LRE or EAC for BAC in the Denominator Earned ESTIMATE at COMPLETION (EAC) Planned BAC - Earned Variance at Completion (VAC) = BAC - LRE Projected Efficiencies Note: Negatives are unfavorable x 100 x 100 Cost Variance % (CV%) = Schedule Variance % (SV%) = EAC = EXPENDED + Cost Performance Index (CPI) = Schedule Performance Index (SPI) = Percent Complete = Percent Spent = TCPI BAC = TCPI BAC = 1 2 3 4 5 6 7 8 9 10 11 12 13 EXPENDED or CONSUMED EARNED or ACCOMPLISHED SCHEDULED or PLANNED BUDGETED Cost Variance Schedule Variance Time Now BAC
- 17. Purpose of EarnedValue Management • What does Earned Value Management do for Management? Measurement of accomplished efforts against the plan so management can effectively make risk management decisions In designing, implementing and improving the EVM system, the objective is to do what makes sense Directs management’s decisions for cost and schedules performance
- 18. Conclusion • EVM isa proven value over many years Integrates cost, schedule and technical performance Provides planning and control discipline on projects • Reports summarize objective data from the internal system The program achieves improvements where accountability derives systems effectiveness • American National Standards Institute (ANSI) It is now part of the International Standards Organization’s requirement to become certified as a ISO 9000 organization • Electronics Industries Alliance (EIS) • ANSI/EIS-748-C The new ANSI standard on Earned Value Management System guidelines has been approved
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- 20. Contract Performance Report IntegratedProgram Management Report Format 2
- 21. Quick Look File: CPRSoftware Customer The Government Form: 28-Feb-02 To: 23-Nov-03 WO Example Description: 1 2 3 4 5 6 Scheduled Planned Earned Expended Budget at Completion Latest Revised Estimate Date BCWS BCWP ACWP BAC LRE 1 Jan-02 $0 $0 $0 $13,612,328 $13,582,985 2 Feb-02 $1,708,000 $1,708,074 $1,708,074 $13,612,328 $13,582,985 3 Mar-02 $2,672,000 $2,333,343 $2,324,376 $13,612,328 $13,582,985 4 Apr-02 $3,712,187 $2,882,122 $3,047,592 $13,642,344 $13,688,913 5 May-02 $4,742,291 $3,633,938 $3,974,360 $13,911,373 $14,206,861 6 Jun-02 $6,052,344 $4,622,395 $5,376,493 $13,911,373 $14,693,310 7 Jul-02 $6,810,848 $5,325,287 $6,404,564 $13,911,373 $15,640,541 8 Aug-02 $7,745,218 $5,973,591 $7,465,236 $13,911,373 $16,090,229 9 Sep-02 $8,623,791 $6,853,744 $9,029,286 $13,911,373 $22,830,318 10 Oct-02 $9,480,043 $7,661,221 $10,214,832 $13,907,817 $22,830,320 11 Nov-02 $10,166,968 $8,262,559 $10,970,763 $13,907,817 $22,830,320 12 Dec-02 $11,027,853 $8,828,656 $12,026,907 $13,907,817 $22,830,320 13 Jan-03 $11,641,078 $9,361,548 $13,018,779 $14,530,683 $22,830,320 14 Feb-03 $12,200,000 $12,631,080 $14,256,473 $14,530,683 $22,830,320 15 Mar-03 $15,811,258 $15,900,611 $15,942,365 $26,956,128 $26,830,128 16 Apr-03 $17,117,885 $16,905,911 $17,150,254 $26,956,129 $26,956,128 17 May-03 $18,389,493 $17,904,295 $18,377,464 $27,018,953 $27,018,953 18 Jun-03 $19,804,083 $19,232,824 $20,020,315 $27,134,209 $27,134,209 19 Jul-03 $20,765,126 $19,996,797 $21,208,817 $27,134,209 $29,887,669 20 Aug-03 $21,584,712 $20,775,864 $22,392,161 $27,134,209 $29,728,716 21 Sep-03 $22,417,694 $21,351,286 $23,312,705 $27,166,410 $29,762,938 22 Oct-03 $22,937,994 $21,908,166 $24,483,585 $27,166,410 $33,573,719 23 Nov-03 23,111,327$ $22,292,564 $25,595,345 $27,039,864 33,436,558$ 24 Dec-03 Limited Rate Initial Production $0 $4 $8 $12 $16 $20 $24 $28 $32 1 3 5 7 9 11 13 15 17 19 21 23Millions Report Period as of (Date) LRE Expended Budget Earned Scheduled
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- 29. Data Graph The differenttrends indicate a growth in variances for Schedule and Cost to the baseline.
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- 31. Current Status Red indicatesat least 3 weeks negative Schedule Variance AS OF DATE 23-Nov-03 Task No. Tasking Status SV Status CV Percent Earned 2110 Task Lead Degrading 71.5% 2220 Modeling Degrading 82.2% 2230 Integration Degrading Degrading 76.6% 2310 Docs Degrading 77.1% 3110 Software Degrading 72.6% 3210 SW Devel Improving Degrading 91.0% 3215 KG-84 WF Improving Degrading 80.6% 3224 KWR-46 W/F Improving Degrading 96.1% 3330 Gen Infras Improving Degrading 83.5% 3410 HMI Desg Holding Degrading 87.3% 3624 Algor Holding Degrading 96.0% 5120 Envir. Test Improving Holding 98.1% OVER ALL Improving Degrading 82.4% About 2 weeks behind schedule About 2 weeks behind schedule About 7 weeks behind schedule About 1 week behind schedule About 3 weeks behind schedule About 2 weeks behind schedule About 1 week behind schedule About 2 weeks behind schedule About 6 weeks behind schedule About 3 weeks behind schedule About 5 weeks behind schedule Schedule Position Green Block WAVEFORMS Task Status due to change in Cumulative Schedule & Cost Variances. Positive Performance
- 32. EVM Raw Data BudgetBudget Task No. Tasking 23-Nov-03 26-Oct-03 28-Sep-03 23-Nov-03 26-Oct-03 28-Sep-03 26-Oct-03 26-Jan-03 2110 Task Lead 0 0 0 (41,082) (39,752) (37,854) 796,664 345,151 2220 Modeling (46,318) (37,703) (18,973) 7,373 5,333 18,275 1,386,515 562,650 2230 Integration (144,315) (117,391) (69,293) (252,295) (182,046) (112,483) 1,674,815 719,464 2310 Docs (37,782) (24,909) (16,334) 145,764 139,545 138,685 1,219,216 708,123 3110 Software 0 0 0 (124,101) (107,432) (77,210) 1,075,813 578,523 3210 SW Devel (16,355) (31,240) (28,534) (278,586) (220,061) (200,295) 606,436 759,116 3215 KG-84 WF (69,776) (74,261) (89,587) (195,634) (177,074) (149,091) 733,675 0 3224 KWR-46 W/F (6,597) (16,510) (32,578) (257,393) (254,874) (235,503) 170,454 35,277 3330 Gen Infras (143,193) (279,663) (285,591) (765,474) (631,822) (470,757) 2,979,646 665,355 3410 HMI Desg (14,039) (16,407) (18,944) (38,269) (32,027) (23,986) 427,674 346,158 3624 Algor (15,223) (15,223) (30,466) (84,922) (76,293) (77,887) 384,855 135,611 5120 Envir. Test (12,036) (23,903) (49,435) (238,256) (233,592) (188,158) 632,769 391,628 OVER ALL (818,763) (1,029,828) (1,066,408) (3,302,781) (2,575,419) (1,961,419) 27,166,410 14,530,683 WAVEFORMS Cumulative SV Cumulative CV
- 33. UNCLASSIFIED//FOUOUNCLASSIFIED//FOUO UNCLASSIFIED//FOUOUNCLASSIFIED//FOUO 33 EAC CalculationSheet Software Example Form: 28-Feb-02 To: 23-Nov-03 EAC 6 3 FUTURE Dollars or Hours EFF. PRODUCT CUM. Periods Periods EST. TCPI % of % @ CATEGORY EFF. EFF. EFF. EFF. BAC LRE TO LRE EAC BAC Prog EAC Project Mgmt 94.1% 76.1% 56.0% 50.0% $3,243,748 $3,720,714 67.6% $4,063,375 12.0% 79.7% 79.8% MCS Systems 96.3% 89.3% 57.9% 50.0% 5,554,948 6,005,669 80.9% 6,924,546 20.5% 78.3% 80.2% MCS S/W Dev. 76.2% 47.5% 39.7% 35.0% 7,460,475 11,038,572 43.2% 11,713,646 27.6% 83.4% 63.7% Hardware 102.2% 62.6% 58.3% 58.3% 954,518 1,008,655 0.0% 934,044 3.5% 100.0% 102.2% Testing 75.4% 59.7% 40.7% 35.0% 801,306 1,070,940 72.0% 1,267,302 3.0% 83.3% 63.2% MFG 90.4% 43.8% 14.9% 10.0% 2,275,732 2,607,016 54.5% 3,599,423 8.4% 94.7% 63.2% ILS 95.3% 50.6% 62.4% 50.0% 1,192,135 1,255,701 94.0% 1,537,874 4.4% 74.7% 77.5% Closeout N/A N/A N/A 80.0% 152,364 151,142 100.8% 190,455 0.6% 0.0% 80.0% CAS 414 104.4% 150.3% -283.8% 75.0% 149,154 147,209 88.9% 152,584 0.6% 82.7% 97.8% G & A 88.5% 65.7% 57.1% 50.0% 5,255,485 6,430,939 59.7% 6,727,024 19.4% 82.7% 78.1% PMB 87.1% 60.8% 47.3% 72.9% $27,039,865 $33,436,557 60.5% $37,110,272 100% 82.4% 72.9% WR BAC/EAC Developed by: Roger H. Mandel LRE Remain
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- 35. Definitions and Acronyms Varianceat Completion (VAC): The difference between the total budgets assigned to a contract, WBS element, organizational entity ACRONYMS ACE: Actual Cost Expended ACWP: Actual Cost of Work Performed (Expended Resources in $) BAC: Budget at Completion in $ BCWP: Budgeted Cost for Work Performed in $ BCWS: Budgeted Cost for Work Scheduled in $ CPI: Cost Performance Index CV: Cost Variance CV%: Cost Variance as a percent ETC: Estimate to Complete EV: Earned Value PMB: Performance Measurement Baseline SPI: Schedule Performance Index SV: Schedule Variance SV%: Schedule Variance as a percent TCPI: To Complete Performance Indices VAC: Variance at Completion RMandel@PramsCo.com r cost account and the estimate at completion. Variance at Completion equals Budget at Completion less Estimate at Completion. It represents the amount o expected overrun or under run.
Editor's Notes
- #2 Roger H. Mandel 2 Mar 2015
- #3 Only one data base used by the vendor and compiled to present to the customer. Cost Performance Report changed to Contract Performance Report and now Integrated Program Management Report that contains 7 formats. Generally all budgets are in dollars. Cost is consumed budget or as an obligation such as an account payable. Work packages that are budgeted and time phased in time to start and schedule time to complete. Work package is such as IKEA purchased furniture. Inside is your work package to assumable the furniture.
- #4 What was planned to be accomplished in dollars over a specific period of time Valid being true Timely such a weeks or monthly per the Vendors account system. Auditable can be verified. Objective verse subjective. Objective could be a brick wall Subjective a like developing software and the results are not well defined.
- #5 Well defined well written guidelines Rule to be used Some Federal agencies developed their own shortened (abbreviated) guidelines such as HHS.
- #6 First saw EVM used outside the DoD for the Sewage Outflow Treatment Plant in south bay. Major corporations used EVM with their internal R&D projects.
- #9 If you cannot measure it you cannot manage it What matters gets measured You cannot manage what you cannot measure What is measured gets managed What gets measured can get improved Failing to plan is planning to fail Earned Value Management measures the efforts so you can manage the efforts
- #10 Schedule Variance of greater than 1.05 and less than 0.95 is a triggering point to determine cause, effect and the development of a mitigation plan. Cost Variance of greater than 1.05 and less than 0.95 is a triggering point to determine cause, effect and the development of a mitigation plan. Develop a trend and do not use only one data point. I was once told that to develop trend you should have 8 data points. In project management and the use of EVM data you should start with no less than 3 data points.
- #11 To manage a project you must know who is responsible and the WBS to OBS does that for you.
- #12 How are we doing? As of period 5 are we on schedule and on cost? Should the trends continue will we consume the budget and when will the project be 100% complete?
- #13 Visual
- #14 Just made larger
- #15 How are we doing? Senior Engineer requested the chart and requested status and trends. This customer support.
- #16 Where should we concentrate?
- #21 Real project that was not successful concerning, it came in over budget and late to the original schedule.