The document discusses key aspects of earned value management (EVM). It begins by explaining that EVM establishes a standard for project performance measurement and stakeholder management. It then outlines the three key components of EVM: time-phased budgeting, capturing work progression, and providing timely project analysis. The document also examines how leadership, strategic management, and technical project management all interact with EVM. It provides examples to illustrate EVM concepts like variances, metrics, and how EVM data can be analyzed and used for decision making. In summarizing, the document emphasizes that EVM provides both quantitative data and qualitative insights to support program control.

1. 1
EVM: Go Beyond the
Numbers
Jonathan Shriqui, PMP

2. 2

3. WHAT IS THE PURPOSE OF EVM?
To establish a common standard of project
performance measurement & stakeholder
management, regardless of program size or
industry.
To provide early warning signs of deviation from
plan.
3

4. WHAT IS EVM?
Not a single process
Grouping of 32 guidelines (EIA-748-C)
Management technique:
• Establish a time phased budget of the SOW
• Captures the progression of work
• Provide reliable & timely information for
project management analysis & actions
4

5. 3 Key components to EVM
PMI Talent Triangle:
Leadership
Strategic and Business
Management
Technical Project
Management
5

6. Role of Leadership with EVM
6
Leadership is the foundation of EVM:
Set the organizational tone
Fosters a culture of EVM
Tailors business process to support EVM
Utilizes EVM info to support leadership
decisions

7. 7
EVM Challenges to Leadership
Leadership must accept that EVM:
May be lengthy to implement
Requires tools & training
May be process heavy
Requires a business rhythm
Acceptance that EVM requires TIME.

8. 8
EVM Benefits to Leadership
Leadership should receive the following benefits:
Provide early warning signs of potential
project issues
Integration of scope, schedule & cost
Credibility of program control
Stakeholder Communication
Enhanced Risk Management

9. 9
Strategic and Business Management
Business Maturity
Business Operations
Customer Relationship

10. Strategic & Business Management
10
Business Maturity
• Capability Maturity Model Integration
• CMMI Rating from 1 to 5
The CMMI principal is that “the quality of a
system or product is highly influenced by the
process used to develop and maintain it”*

11. Business Maturity
11
EVMS will most
likely be effective
in a org. that
reflects a CMMI
rating of 3 or
above

12. Strategic & Business Management
Business Operations
12
- Reporting
- Cash Flow Forecasting
- Resource Forecasting
- Risk Management

13. Strategic & Business Management
13
Business Operations / Reporting
• EVM Culture
• EVM lingo & metrics in review meeting
• EVM understood/used by senior management
• EVM data should remain constant throughout the
various level of reporting

14. Strategic & Business Management
14
• Business Operation
- Cash Profiling
- Resource Reqs.
Your ETC is your
Forecast.
USE INPUT FROM YOUR
CAMs.

15. Strategic & Business Management
15
• Business Operations / EVM &Risk Management
– Both work cohesively, not in silos
Mgmt Reserve > Risk Register + VAC
If not, engage in stakeholder awareness

16. Customer / Stakeholder Relationship
16
The outputs of EVM process (variance reporting)
should be the source of data for stakeholder mgmt
The project is:
Over/under cost because…
Late/ahead of schedule because…
The key risks are…
Our mitigation/enhancement plan is…
Program Control Instills
Stakeholder Confidence

17. 17
Technical Project Management
EVM Basics
Small Project

18. 18
Business world: “Cash Is King”
EVM world: “Schedule Is King”
A realistic, achievable & logical schedule is
key with EVM
WHO IS KING?

19. EVM 101
Time
Budget versus Actual
2D Project (Business)
Management
$’s
Budget
Actual
Time Now
Under spent ?
Behind
Schedule ?
$’s
3D Project
Management
Time
Plan
Costs
Time Now
Budget versus Actual
Earned
Schedule
Cost

20. 7. Reporting
- CAM reports (e.g. one page reports,
SWOT, SOFT)
- Variance Reports (by exception)
- Recovery Plans
2. Schedule
- Work & Planning packages
- Resource
- Time-phased budget
1.Scope
- Contract / SOW
- WBS, OBS, RAM &
WBS Dictionary
- Control Accounts
5. Costs
- Booking / charge numbers
- Actual costs / bookings
6. Analysis
- Trend analysis
- Variance analysis
- TCPI, IEAC
- Other PM analysis (e.g.
Critical Path Analysis)
8. Risk & Opportunity
- Exposure (financial, schedule & performance)
- Costed Mitigation / Realisation actions
9. Change
- Change Requests
- Change Log
- Baseline
maintenance
- Re-planning
- Formal control of
scope & budget
changes
4. Status Data (Progress) & Forecasts
- Achievements (earned value)
- Estimates to complete
3. EV “Engine”
- PMB
- Performance data
- EVM reports (CPR1-5,
trends & SPA graph)

21. 21
Bathroom Renovation

22. 22
Our Budget - BAC
Item BAC
Flooring $1,600
Vanity $1,900
Shower $2,000
Bathtub $1,500
Total $7,000

23. 23
BCWS
Budgeted Cost of Work Scheduled
23
The BCWS is your time phased BAC
∑BCWS = BAC = YOUR DOLLARIZED PLAN
Week 1 Week 2 Week 3 BAC
Flooring $1,600 $1,600
Vanity $1,000 $900 $1,900
Shower $1,000 $1,000 $2,000
Bathtub $1,000 $500 $1,500
Period Total $2,600 $2,000 $2,400 $7,000

24. 24
BCWS
Budgeted Cost of Work Scheduled – Week 1
Our PLAN is to perform $2,600 of defined scope in week 1.
• Old Floor Removal = 6hrs @ 50$/h = $300
• Purchase materials (tiles, grout, etc) = $500
• Tile Installation = 16hrs @ 50$/h = $800
• Purchase & delivery of bathtub = $1,000
$2,600 BCWS Week1

25. 25
ACWP
Actual Cost of Work Performed
ACTUAL cost of the EARNED scope.
BAC:
• Planned Direct Cost
• Planned Indirect Cost
• Planned Material Cost
ACWP:
• Actual Direct Cost
• Actual Indirect Cost
• Actual Materials Cost

26. 26
Our Cost – ACWP – Week 1
BCWS W1 ACWP W1
Removal $300 VS $100
Material $500 VS $500
Installation $800 VS $700
Bathtub $1,000 VS $1,000
Period Total $2,600 VS $2,300
But what did we accomplish?

27. 27
BCWP
Budgeted Cost of Work Performed
What did we “earn” in relation to our plan?
What did we accomplish?
What did we start/finish?
What is the status of the scope?

28. 28
What was accomplished in week 1?
Earned / Planned
– Removal 100% completed – we earned $300/$300
– Purchased 100% of materials – we earned $500/$500
– Installed 25% of the tile – we earned $200/$800
– Purchased & installed bathtub - we earned $1,500/ $1,000
$2,500/$2,600
BCWP
Budgeted Cost of Work Performed – Week 1

29. 29
The key to good EV is proper “statusing”
A realistic and achievable schedule
Selecting appropriate EV Technique:
• LOE, % complete, 50/50, Milestone, units complete,
apportioned (0-100, 50-50, 20-80, etc)
Be honest and objective!
BCWP
Budgeted Cost of Work Performed

30. 30
SV
P - S
SPI
P / S
CV
P - A
CPI
P / A
$0 1.0 +$200 3.0
$0 1.0 $0 1.0
($600) 0.25 ($500) 0.28
+$500 1.5 +$500 1.5
($100) 0.96 +$200 1.09
BCWS
W1
BCWP
W1
ACWP
W1
Removal $300 $300 $100
Material $500 $500 $500
Installation $800 $200 $700
Bathtub $1,000 $1,500 $1000
Period Total $2,600 $2,500 $2,300
EV Metrics – Week 1
SV = BCWP – BCWS SPI = BCWP/BCWS
CV = BCWP – ACWP CPI = BCWP/ACWP

31. Time Now
BCWS 100 100 100 100 100 100 100 100 BCWS 400
BCWP 0 400 0 0 0 0 0 0 BCWP 400
SPI 1.0
BCWS 100 100 100 100 100 100 100 100 BCWS 400
BCWP 0 200 0 200 0 0 0 0 BCWP 400
SPI 1.0
BCWS 100 100 100 100 100 100 100 100 BCWS 400
BCWP 100 100 100 100 0 0 0 0 BCWP 400
SPI 1.0
“My SPI is 1.0, but my project is late!?”

32. 32
SPI, CPI, EAC, TCPI, iEAC,
BEI, VAC, BAC, BCWR,
UB, MR, PMB, etc.
So What? I need
information,
not data!

33. 33
BCWS
W1
BCWP
W1
ACWP
W1
Installation $800 $200 $700
SV
P - S
SPI
P / S
CV
P - A
CPI
P / A
($600) 0.25 ($500) 0.28
Why SV? Inspection determined that the grading of the
existing subfloor was out of tolerance. Leveling of the subfloor
was required for proper tile installation.
Why CV? Due to the unleveled subfloor, the purchase of self-
leveling cement and extra labour was required to level subfloor.
Variance Analysis
Why SV?
Why CV?
Contracts Management

34. 34
BCWS
W1
BCWP
W1
ACWP
W1
Installation $800 $200 $700
Impact Analysis
SV
P - S
SPI
P / S
CV
P - A
CPI
P / A
($600) 0.25 ($500) 0.28
Schedule Impact: Delays due to releveling the subfloor may
affect the start date of the vanity installation. Tile installation is
now on the critical path.
Cost Impact: Extra material and extra labour effort will
increase the estimate at complete (EAC). Will incur storage
costs for the vanity (offsite) if floor is not finished on time.
Schedule Management
Supply Chain
Management
Risk Management

35. 35
BCWS
W1
BCWP
W1
ACWP
W1
Installation $800 $200 $700
SV
P - S
SPI
P / S
CV
P - A
CPI
P / A
($600) 0.25 ($500) 0.28
Schedule : Consider diverting resources to minimize schedule
delays and getting off the critical path.
Cost: Recommend absorbing the cost of additional
resources to avoid paying storage and transportation costs
Schedule Management
Cost Growth
Mitigation Plan

36. Importance of CAM training
36
CAM training & experience will affect the quality of:
• Performance Assessment
• Variance Analysis
• Impact Analysis
• Mitigation plans
• Ultimately the data used influence the outcome.

37. 37
Lets go 15 years into the future…

38. 38
Vertical EV
38
$’000 BCWS BCWP ACWP
Foundation $300 $300 $100
Framing $500 $500 $800
Electrical $800 $200 $700
Plumbing $1,000 $1,500 $1000
Period Total $2,600 $2,500 $2,600
SV SPI CV CPI
$0 1.0 +$200 3.0
$0 1.0 $(300) 0.6
($600) 0.25 $(500) 0.28
+$500 1.5 +$500 1.5
($100) 0.96 $(100) 0.96
Labour $800 $400 $600
Material $600 $500 $400
Subcontract $1,200 $1,600 $1,600
Period Total $2,600 $2,500 $2,600
$(400) 0.5 $(200) 0.7
($100) 0.8 +$100 1.25
+$400 1.3 $0 1.0
($100) 0.96 $(100) 0.96
But my schedule is late!

39. 39
3939
Resources BCWS BCWP ACWP
Labour $800 $400 $600
Material $600 $500 $400
Subcontract $1,200 $1,600 $1,600
Period Total $2,600 $2,500 $2,600
SV SPI CV CPI
$(400) 0.5 $(200) 0.7
($100) 0.8 +$100 1.25
+$400 1.3 $0 1.0
($100) 0.96 $(100) 0.96
Vertical EV
LOE $400 $400 $500
Discrete $400 $0 $100
Period Total $800 $400 $600
$0 1.0 $(100) 0.7
($400) 0.0 $(100) 0.0
($100) 0.5 $(200) 0.7

40. 40
Horizontal EV
Date SPI
CUR - SPI 0.90
CUM - SPI 0.94
3 Month 0.85
6 Month 0.86
9 Month 0.89
• Trends without graph
• Shifts in program momentum
• Labour vs Material
• Discrete Labour Only
𝟗 𝒎𝒐𝒏𝒕𝒉 𝑺𝑷𝑰 =
𝑩𝑪𝑾𝑺 𝒄𝒖𝒎 − 𝑩𝑪𝑾𝑺 𝒄𝒖𝒎 𝟗 𝒎𝒐𝒏𝒕𝒉𝒔 𝒂𝒈𝒐
𝑩𝑪𝑾𝑷 𝒄𝒖𝒎 − 𝑩𝑪𝑾𝑷 𝒄𝒖𝒎 𝟗 𝒎𝒐𝒏𝒕𝒉𝒔 𝒂𝒈𝒐

41. 41
EVM
Outputs
Program
Control
• Quantitative Data
• SPI, CPI
• Qualitative Information
• We were late because…
• We spent more because…
• Our mitigation plan is…

42. 42
EVM is NOT a quality tool!
You must PLAN for quality WITHIN your project.

43. 43
Another 15 years later…

44. 44
EVMS: Contractual Requirement
Customer
Contractor
Expectation of Program Control
Common Knowledge & Lingo

45. 45
• Customer:
• Ability to understand & assess
EVM data
• Ability to conduct audit
• Define your reporting reqs
(CDRL/SDRL)
EVMS: Contractual Requirement
• Contractor:
– Ability to produce EVM
data (CDRL/SDRL)
– Ready to be audited
– Adhere to an EVM
culture / processes

46. 46
EVM SOW
An improper or too vague EVM SOW may result
in an EVMS that is:
- Contractually compliant
- But has little or zero value added
- May cause more “pain” than gain

47. 47
Refine your EVM SOW
• EVMS that complies with a standard (EIA 748-C)
• % of LOE labour shall not be greater then X%
• EVM as a SDRL to subcontractors
• A task shall not have a duration longer then X days
• Reporting shall be at the X level of the WBS or CA.
• Expectation EVM analysis and recovery.

48. 48
Always remember…
Good decisions are based
on knowledge and not on
numbers.
- Plato

49. 49
For more information…
•Thank you for your participation today!
•For more information on the contents of this
presentation, please feel free to contact me
as follows:
o Jonathan Shriqui, PMP
o jshriqui@fleetech.com
o 613-255-6520
o www.fleetech.com

50. Time Permitting…
50

51. EVM Practical Uses