A simple slideshow looking at EVA as a Project Performance tool

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Project Performance
Measurement -
Earned Value
Simon Robertson
© 2010 Robertson Consulting Ltd June 2010

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Benefits of EVM
• An up-to-date accurate status of the
project
• Solid input to proactively make corrections
• Allows managing stakeholder expectations
• Historic reference for future estimates
• No surprises to the customer
• More accurate representation of on-time
completion
© 2010 Robertson Consulting Ltd 2

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MSProject 2010 & EVM
© 2010 Robertson Consulting Ltd When? Just after you develop the Schedule….. 3

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MSProject 2010 & EVM
• Important Issue
Indicators
o Cost overrun – may be
working additional hours to
keep timeline
o Time overrun – may be
availability of resources
limited
o Cost and Time overrun –
may be project control,
poor quality, rework was
necessary
© 2010 Robertson Consulting Ltd
• Steps to prepare
o Ensure all Resources and
Materials are in MSProject
o Ensure all planning complete
and schedule agreed
o Establish project baseline from
where the variances will be
calculated and presented
o Add Columns to reflect the EV
measures
o Prepare project management
documents to meet the
tracking and reporting
requirements from the various
project stakeholders
o Set expectations with the
project team, address any
concerns and get buy-in
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MSProject 2010 & EVM
Typical Measures
o Planned Value (PV) – amount budgeted
to be spent between task’s start date and
the status date
o Actual Cost (AC) – amount spent while
preforming work on a task during a given
period
o Earned Value (EV) – amount that that
should have been spent for a given
percentage of work performed on a task
© 2010 Robertson Consulting Ltd 5

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MSProject 2010 & EVM
Typical Variance Metrics
oCost Variance(CV) – links spending
to earned value
CV = EV – AC or BCWP - ACWP
oSchedule Variance (SV) – links the
work accomplished (earned) with
planned
SV = EV – PV or BCWP - BCWS
© 2010 Robertson Consulting Ltd 6

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MSProject 2010 & EVM
Typical Performance Indicators
o Cost Performance Index
CPI = EV/AC or BCWP/ACWP
o Schedule Performance Index
SPI = EV/PV or BCWP/BCWS
o Critical Ratio (?)
CR = CPI x SPI or BCWP2/ACWP x
BCWS
© 2010 Robertson Consulting Ltd 7

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MSProject 2010 & EVM
Typical Forecasting Metrics
o Estimate at Completion (EAC)– apply CPI and SPI
as performance factors (PF)
o Mathematical EAC (uses PF = 1)
EACm = (BAC – EV) + AC
or EACm = BAC – CV
o Low End EAC (uses PF = CPI)
EACL= [(BAC-EV)/ (CPI)] + AC
Or EACL = (BAC)/ (CPI)
o High End EAC (uses PF = CPI x SPI)
EACH = [(BAC – EV)/(CPI x SPI)] + AC
© 2010 Robertson Consulting Ltd 8

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MSProject 2010 & EVM
Typical Cost Corrective Action Metrics
o To Complete Performance Index (TCPI)
TCPI = (Work remaining)/ (Funds Remaining)
o To stay within original BAC
TCPI = (BAC – EV) / (BAC – AC)
o To stay within newly forecasted LRE where
baseline remains at original BAC
TCPI = (BAC – EV) / (LRE – AC )
Where LRE (Latest Revised Estimate)
LRE (or EACE) = ETC + AC
© 2010 Robertson Consulting Ltd 9

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MSProject 2010 & EVM
Typical Schedule Corrective Action Metrics
o To Complete Schedule Performance Index
(TCSPI)
TCSPI = (Unearned Duration Remaining)/ (Actual
Duration Remaining)
o To stay within original PMB
TCSPI = [PD – (AD)(SPI)] / [(PD - AD)]
o To stay within the latest revised Schedule (LRS)
where baseline remains at original PMB
TCSPI = ([PD – (AD)(SPI)] / [(LRS - AD)]
© 2010 Robertson Consulting Ltd 10

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Typical Information Collection Table
Values Variance Performance Index
WBS Element
Planned
Value (PV)
Earned
Value
Actual
Cost
(AC)
Schedule
EV-PV
Cost
EV-AC
Schedule
EV/PV
Cost
EV/AC
1.0 Pre-Pilot
Plan
63,000 58,000 62,500 (5,000) (4,500) 0.92 0.93
2.0 Checklists 64,000 48,000 46,800 (16,000) 1,200 0.75 1.03
3.0 Curriculum 23,000 20,000 23,500 (3,000) (3,500) 0.87 0.85
4.0 Mid-Term
Evaluation
68,000 68,000 72,500 - (4,500) 1.00 0.94
5.0
Implementation
Support
12,000 10,000 10,000 (2,000) - 0.83 1.00
6.0 Practice
Manual
7,000 6,200 6,000 (800) 200 0.89 1.03
7.0 Roll-out
Plan
20,000 13,500 18,100 (6,500) (4,600) 0.68 0.75
Totals 257,000 223,700 239,400 (33,000) (15,700) 0.87 0.93
© 2010 Robertson Consulting Ltd 11

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Earned Value Analysis
0
1
2
3
4
5
6
7
Initiation Planning Execution Close Down
Actual
Budgetted
Earned Value
CV
SV
CV = EV – AC (BCWP – ACWP)
CPI = EV/ AC ( BCWP / ACWP)
SV = EV – PV (BCWP – BCWS)
SPI = EV/PV (BCWP/BCWS)
CR = CPI x SPI ((BCWP2 / (ACWP x BCWS))
STATUS
DATE
12© 2010 Robertson Consulting Ltd
Analysis Design Develop Deploy Operate

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Earned Value Useful Notes
Main EV measures:
 CV = EV – AC (BCWP- ACWP)
 SV = EV – PV (BCWP-BCWS)
 Above result “0” is on target
 CPI = EV/AC (BCWP/ACWP)
 SPI = EV/PV (BCWP/BCWS)
 CPI, SPI = 1 is on target
 CR = CPI x SPI
 CR >= 1.0 is good
Integrates Scope, Time and Cost
• Cost Variance (CV)
• Schedule Variance (SV)
• Time Variance (TV)
• Earned Value (EV = BCWP)
• Actual Cost (AC = ACWP) – (if per time
= Burn rate)
• Planned Value (PV = BCWS)
• Budget at Completion (BAC)
• Schedule at Completion (SAC)
• Cost Performance Index (CPI)
• Schedule Performance Index (SPI)
• Critical Ratio (CR)
13© 2010 Robertson Consulting Ltd

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Can I help further?
• Training in Earned Value
• PMI Training
• Project Consultancy – making it work on the ground
• Project Management Maturity Model Assessment
• Organisational Maturity Model Assessment
• Bespoke Training or facilitation solutions
Simon Robertson
+44 (0)7967300344
simon@robertsonconsulting.co.uk
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