4 earned value

8/2/2019 4 Earned Value

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Steve Barron 20041

Earned Value


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Steve Barron 20042

Ex

pendit

ure

Time

Actual

Planned

Measuring Performance

Endvu


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Steve Barron: Project Management (inPractice)3

Assigning Value


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28/03/2012

Steve Barron: Project

Management (in Practice)4

50/50 technique

50% of planned value earned at start 50% of planned value earned at end

short duration activities (no more than 3reporting periods)

AgnnVu


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28/03/2012



0/100 Technique

No value earned at start

100% of planned value earned at end activities that start and end in one reporting

period

AgnnVu


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28/03/2012



Milestones

%age of value assigned to achievement of

each milestone within activity activities having a duration of 3 or more

reporting periods

AgnnVu


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28/03/2012



Percentage complete

estimate of work complete at point in time

longer duration activities - most easilyperformed in production environment

AgnnVu


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28/03/2012



Level of effort

based on passage of time management & supervision activities

AgnnVu


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Steve Barron 20049

Expenditure

Time

Planned Cost

Actual Cost

Earned Value

Earned Value (Completed Cost)

BCWS

ACWP

BCWP

Endvu


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Steve Barron 200410

BCWS

Budgeted Cost for Work Scheduledi.e. planned budgetACWPActual Cost for Work Performedi.e. actual costs incurredBCWPBudgeted Cost for Work Performedi.e. Earned Value

Planned

Actual

Earned Value

Endvu


11/25

Steve Barron 200411

1 2 3 4 5 6 7

Activity1

Activity2

Activity3

Activity4

Activity5

Activity6

50/50

0/100

50/50

0/100

Milestones

0/100

M1

M2

M3

M4

M5M6

M7

M8

M9

M10

Consider this planned schedule

EVTechnique

3

4

3

2

58

3

8

8

4

Value of Milestone

Endvu


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Steve Barron 200412

1 2 3 4 5 6 7

The Planned plot planned time and planned value

0

10

20

30

40

50

M1 3

M2 4

7

M3 3

M4 2

M5 5

10

17

M6 8

8

25

M7 8

M8 3

M9 4

15

40

M10 8

8

48

Endvu


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Steve Barron 200413

1 2 3 4 5 6 7

Activity1

Activity2

Activity3

Activity4

Activity5

Activity6

50/50

0/100

50/50

0/100

Milestones

0/100

M1

M2

M3

M4

M5M6

M7

M8

M9

M10

EVTechnique

3

4

3

2

58 3

8

8

4

Value of Milestone

4

The actual events occurred as follows

M2 4

M33

3

M5

6

M64

On time!

M9

4

M10

10

7

Actual Valueof Milestone

Endvu


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Steve Barron 200414

1 2 3 4 5 6 7

Activity1

Activity2

Activity3

Activity4

Activity5

Activity6

50/50

0/100

50/50

0/100

Milestones

0/100

M1

M2

M3

M4

M5M6

M7

M8

M9

M10

The actual events occurred as follows

EVTechnique

4

4

3

3

67

4

8

10

4

Actual Valueof Milestone

Endvu


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Steve Barron 200415

7

17

25

40

48

1 2 3 4 5 6 7

The Actual plot actual time and actual value

0

10

20

30

40

50

M1 4

M3 3

7

M2 4

M4 3

7

14

M5 6

6

20

M6 7

M7 8

M8 4

19

39

M9 4

4

M1010

10

53

43

Endvu


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Steve Barron 200416

Earned Value

Planned

Actual

Time Cost

Plan Plan

PlanActual

Actual Actual

Planned

Actual

Earned Value

Milestone: 1 2 3 4 5 6 7 8 9 10

Period 2 2 3 3 3 4 5 5 5 6 PlanValue 3 4 3 2 5 8 8 3 4 8 Plan EV

Period 2 3 2 3 4 5 5 5 6 7 Act EV

Value 4 4 3 3 6 7 8 4 4 10 Act

Endvu


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Steve Barron 200417

1 2 3 4 5 6 7

The Earned Value plot actual time and planned value

0

10

20

30

40

50

M1 3

M3 3

6

M2 4

M4 2

6

12

M5 5

5

17

M6 8

M7 8

M8 3

19

36

M9 4

4

M10 8

8

48

40

Endvu


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Steve Barron 200418

1 2 3 4 5 6 7

All three plots for milestones 1 - 10

0

10

20

30

40

50

EV

Planned

Actual

Endvu


19/25

Steve Barron 200419

Planned

Actual

Earned Value

EV - Actual = CV, Cost Variance

EV - Planned = SV, Schedule VarianceVariances of zero indicate the project is proceeding as plannedNegative variances are unfavourable

CV

SV

Variances

Endvu


20/25

Steve Barron 200420

Interpretation of VariancesCV SV Status

BCWP-ACWP BCWP-BCWS

Project:

-ve cost more

+ve overachieving

Spend:

ACWP>BCWP>BCWS overspent

Project:

-ve cost more

-ve underachieving

Spend:

BCWS>ACWP>BCWP overspent

Planned

Actual

EVCV

SV

CV

SV

Planned

Actual

EV

CV = Cost Variance SV = Schedule Variance

Endvu


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Steve Barron 200421

CPI (Cost Performance Index) = BCWP / ACWP

SPI (Schedule Performance Index) = BCWP / BCWS

Indices greater than one are favourable

Planned

Actual

EV

Indices of Performance

Endvu


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Steve Barron 200422

Estimate to Completion (EtC)

(BAC - EV) / CPIwhere BAC = Budget at Completion

CPI = Cost Performance Index (i.e. BCWP/ACWP)

Planned

Actual

EV

BAC

BAC - EV

1/CPI

Time nowCompletion

Prediction of projectexpenditure from nowto completionbased upon pastperformance

Endvu


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Steve Barron 200423

Estimate at Completion

Actual + (BAC - EV) / CPIor Actual + EtC

where BAC = Budget at Completion

CPI = Cost Performance Index (i.e. EV/Actual)

EtC = Estimate to Completion

Planned

Actual

EV

BAC

BAC - BCWP

Endvu


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Earned Value - Trends

Steve Barron 200424

Cost

Variance

positive

negative

variance

Management

Reserve

Schedule

Variance

In the early stages of the project, the Cost Variance is above theSchedule Variance, indicating that the project is overspent, but themain problem is that it is underachieveing. Management reserve hasbeen pumped into the project to help recover the schedule.


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Earned Value - Trends

Steve Barron 200425

Cost

Variance

positive

negative

variance

Management

Reserve

Schedule

Variance

As the project progresses and the schedule initially recovers, theCost Variance becomes more negative, indicating that costs aregoing out of control, even though more management reserve is beinginvested. Finally, the Schedule Variance falls lower still, indicatingmore delays and costs are drastically increasing.

4 earned value

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