Using The Earned Value Method To Calculate Project Delays In Terms Of Time A simplified approach derived from “Practice Standard for Earned Value Management” ISBN: 1-930699-42-5 Published by: Project Management Institute, Inc.

1. Using The Earned Value Method To
Calculate Project Delays In Terms Of
Time
By: Ahmed Elsayed
Experienced Planning Engineer with a demonstrated history of working in
the civil engineering industry. Certified Project Management Professional
(PMP®) Skilled in Primavera P6, Project Estimation, and Construction
Management. Have a Bachelor's degree (Bsc.) Civil Engineering focused
in Construction Management & Planning from Cairo University.

2. Reference Used
• “Practice Standard for Earned Value
Management”
ISBN: 1-930699-42-5
Published by: Project Management Institute, Inc.
Schedule Analysis & Forecasting 225 Oct.2015

3. Earned Value Method
• The Practice Standard “Practice Standard for
Earned Value Management” mentions two
methods to calculate Schedule Variance (SV) &
Schedule Performance Index (SPI).
• The two methods are:
1.Cost Based Method.
2.Time Based Method.
Schedule Analysis & Forecasting 325 Oct.2015

4. Cost Based Method
Schedule Analysis & Forecasting 425 Oct.2015

5. Cost Based Method
• The Cost Based Method is based on comparing
the Planned Value(PV) and the Earned Value(EV)
for work done at a certain moment of time.
• Based on Cost the SV & SPI are calculated as
follows:
SV= EV-PV SPI= EV/PV
Schedule Analysis & Forecasting 525 Oct.2015

6. Cost Based Method
• For example:
For a certain project , a progress report is
prepared at a certain date, It was found that
the Earned Value till the date is 32 M ($) & the
planned Value according to the schedule was
48 M ($). So the SV will be:
SV= EV-PV = 32 M – 48 M = -16 M ($)
Schedule Analysis & Forecasting 625 Oct.2015

7. Cost Based Method
• Schedule variance also can be represented as
a percentage by dividing it by the planned
Value:
SV= EV-PV = 32 M – 48 M = -16 M ($)
SV% = SV/PV = -16 M/48 M = -33%
Schedule Analysis & Forecasting 725 Oct.2015

8. Cost Based Method
• Schedule Performance is calculated by
dividing the Earned value by the Planned
Value, So the SPI will be:
SPI= EV/PV = 32 M / 48 M = 0.67
Schedule Analysis & Forecasting 825 Oct.2015

9. Cost Based Method
So from the example above:
• The SV indicates that a quantity
of work worth 16 M ($) was
supposed to be finished, but
actually it wasn’t:
• THE SV% & the SPI indicate that
33% of the planned work wasn’t
finished.
• But all these don’t refer to
delayed time.
SV = -16 M ($)
SV($)= -33%
SPI = 0.67
Schedule Analysis & Forecasting 925 Oct.2015

10. Why Cost based method cannot
be used to judge time?
Schedule Analysis & Forecasting 1025 Oct.2015

11. Cost Based Method
At the end of the Project, EV will be equal to the
planned value, So the SV & the SPI will be as
follows:
Which means that all work is done. But it neglects
the time delay, Even if the project stayed for 6
months later than it’s planned finish date.
SPI= EV/PV = 1
SV= EV - PV = zero
Schedule Analysis & Forecasting 1125 Oct.2015

12. Time Based Method
Schedule Analysis & Forecasting 1225 Oct.2015

13. Time Based Method
• The “Practice Standard for Earned Value
Management” states another method for
schedule analysis based on time.
• This method compares the Actual Time (AT)
vs the Planned Time (PT) for a fixed amount of
work (the work done till now)
Schedule Analysis & Forecasting 1325 Oct.2015

14. Time Based Method
• Based on Time the SV & SPI are calculated as
follows:
SPI(t)= PT/ATSV(t)= PT - AT
Schedule Analysis & Forecasting 1425 Oct.2015

15. Time Based Method
• For example:
• After four months of the project start, we
found that the amount of work done till now
was supposed to be done in three months
only. So the PT= 3 months & the AT= 4 months
SPI(t)= PT/AT = 3/4 = 0.75
SV(t)= PT – AT = 3 – 4 = -1 months
Schedule Analysis & Forecasting 1525 Oct.2015

16. Time Based Method
• The SV(t) means that the work has a delayed
time of one month and the SPI(t) means that
25% of work time is wasted.
SPI(t)= 0.75SV(t)= -1 months
Schedule Analysis & Forecasting 1625 Oct.2015

17. Time Based Method
• Let’s consider an example for a project which
was supposed to be finished within 12
months, it actually took 18 months to finish
work.
• We are calculating the SV(t) & the SPI(t) at the
end of the project. It will be as follows:
SPI(t)= PT/AT = 12/18 = 0.67
SV(t)= PT – AT = 12 – 18 = -6 months
Schedule Analysis & Forecasting 1725 Oct.2015

18. Time Based Method
• The above information means that the project
had a 6 months delay & 33% of it’s planned
time was wasted.
SPI(t)= 0.67SV(t)= -6 months
Schedule Analysis & Forecasting 1825 Oct.2015

19. Cost Based vs. Time Based
Cost Based Time Based
Assumptions Compares Cost of planned
work at certain date to the
Cost of actual work done till
the same Date.
Compares the Actual time
elapsed to do a certain amount
of work to the planned time
supposed to be elapsed for the
same amount of work.
Schedule
variance (output)
The SV output indicates the
cost of delayed work till a
certain date
The SV output indicates the
amount of wasted time (Delay)
till date
Schedule
performance
Index (output)
The SPI output indicates the
efficiency of work based on
scope (or Cost)
The SPI output indicates the
efficiency of work based on time
At the End of the
Project
If time delay occurred
SV = 0 days
SPI = 1
If time delay occurred
SV = - (x) days
SPI < 1
Schedule Analysis & Forecasting 1925 Oct.2015

20. Cost Based vs. Time Based
At the same Date
At the same CostSchedule Analysis & Forecasting 2025 Oct.2015

21. Application to an example Project
• At the 13th of Oct. 2015 for the example project
• No. of Elapsed days (from project start) (AT) = 338 days
• Cost of Actual Work done (EV) = 30,045,060 $
• Cost of planned work at the same date (PV) = 69,915,599.05 $
• This amount of work done till that date was supposed to be
done by 9th of July 2015,
• So the planned time (PT) = 242 days
Schedule Analysis & Forecasting 2125 Oct.2015

22. Application to an example Project
• Based on Cost:
• Based on Time:
EV= 30,045,060 $
PV= 69,915,599.05 $
AT= 338 days
PT= 242 dayes
SV= EV- PV= 30,045,060 - 69,915,599
So, SV = -39,870,539 $
SPI = EV/PV = 30,045,060 / 69,915,599 = 0.4297
SV(t)= PT – AT = 242 – 338 = 96 days
SPI(t)= PT / AT = 242 / 338 = 0.716
Schedule Analysis & Forecasting 2225 Oct.2015

23. Application to an example Project
• For the equation =
• We actually don’t know a formal reference to
this equation. However we can deduce it’s
logic to a certain extent.
Delay= (1-SPI)*Elapsed days
Schedule Analysis & Forecasting 2325 Oct.2015

24. How to use this equation ??
Delay= (1-SPI)*Elapsed days
Schedule Analysis & Forecasting 2425 Oct.2015

25. Application to an example Project
• Based on the last calculations for SV(t) & SPI (t)
• Let’s apply the equation for the SPI:
We used the SPI calculated on time basis to recalculate the
delay time (which is the same as the SV)
SV(t)= PT – AT = 242 – 338 = -96 days
SPI(t)= PT / AT = 242 / 338 = 0.716
Delay= (1-SPI)*Elapsed days = (1- 0.716)*338= 96 days which is
exactly equal to the value of SV(t)
Schedule Analysis & Forecasting 2525 Oct.2015

26. Application to an example Project
• For the cost basis method:
• Let’s apply the equation for the SPI:
• But if applied like this:
SV= EV- PV= 30,045,060 - 69,915,599
So, SV = -39,870,539 $
SPI = EV/PV = 30,045,060 / 69,915,599.05 = 0.4297
Delay= (1-SPI)*Elapsed days = (1- 0.4297)*338= 192 days which
is not equal to the value of SV
Delay= (1-SPI)*PV = (1- 0.4297)*69,915,599.05= 39,870,539 $
which is exactly equal to the value of SV
Schedule Analysis & Forecasting 2625 Oct.2015

27. • Where is the Problem ??
Schedule Analysis & Forecasting 2725 Oct.2015

28. The Problem is:
• We can use the SPI (based on cost Basis)
to calculate the cost of delayed work, but
we cannot use it to calculate the amount
of delayed time.
• To calculate the delayed time we use the
SPI(t) (based on time basis).
Schedule Analysis & Forecasting 2825 Oct.2015

29. The Problem is:
• Based on all mentioned before, The equations
Are useless –but not wrong- as they are just another
method to calculate the Schedule variance (SV)
provided that the proper SPI is used in the proper
equation.
Delay= (1-SPI(t))*Elapsed days
Or
Delay= (1-SPI)*Planned Value
Schedule Analysis & Forecasting 2925 Oct.2015