Project Performance Measurement Earned Value A Starter

Project Performance Measurement Earned Value A Starter

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  1 Project Performance Measurement - EarnedValue Simon Robertson © 2010 Robertson Consulting Ltd June 2010
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  2 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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  3 MSProject 2010 &EVM © 2010 Robertson Consulting Ltd When? Just after you develop the Schedule….. 3
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  4 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 4
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  5 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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  6 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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  7 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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  8 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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  9 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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  10 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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  11 Typical Information CollectionTable 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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  12 Earned Value Analysis 0 1 2 3 4 5 6 7 InitiationPlanning 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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  13 Earned Value UsefulNotes 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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  14 Can I helpfurther? • 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 [email protected] 14