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    019 Earned-Value-Management-Quick-Start-Guide

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    marwan elsir

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    019 Earned-Value-Management-Quick-Start-Guide

    Uploaded by

    marwan elsir
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    019 Earned-Value-Management-Quick-Start-Guide

    Uploaded by

    marwan elsir

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    Earned Value Management Guide

    PLANNED VALUE EARNED VALUE


    “Planned Value is the authorized budget assigned to work to be “Earned Value is the value of work performed expressed in terms of
    accomplished for an activity or WBS component.” (PMBOK Guide) the approved budget assigned to that work for an activity or WBS
    PV = Planned percent completion x total budget component.” (PMBOK Guide)
    EV = Actual percent completion x total budget of project

    Example Example
    You have to finish your project in 6 months for a budgeted cost of You have to finish your project in 6 months for a budgeted cost of
    £150,000. 3 months have already passed and your schedule says that £150,000. 3 months have already passed. You’ve spend £80,000, but
    50% of the work should be completed. only 45% of the work has been completed so far.

    PV = Planned % of completion x total budget = 50% x £150,000 = EV = % of completion x total budget = 45% x £150,000 = £67,500
    £75,000

    ACTUAL COSTS
    “Actual Cost is the total cost actually incurred in accomplishing work
    performed for an activity or WBS component.” (PMBOK Guide)
    AC = Total amount of money spent to date

    Example
    You have to finish your project in 6 months for a budgeted cost of
    £150,000. 3 months have already spent £80,000, but only 45% of the
    work has been completed so far.

    AC = amount of money spent so far = £80,000

    SCHEDULE PERFORMANCE x SCHEDULE VARIANCE


    INDEX (SV)
    (SPI) 11
    How much ahead or behind schedule
    are you?
    SPI = EV / PV SV = EV - PV
    SPI > 1 = ahead of schedule SV = negative = behind schedule
    SPI < 1 = behind schedule SV = positive = ahead of schedule

    COST PERFORMANCE INDEX COST VARIANCE


    (CPI) (CV)
    How much over or under budget are
    you?
    CPI = EV / AC CV = EV - AC
    CPI > 1 = under budget CV = negative = over budget
    CPI < 1 = over budget CV = positive = under budget

    PERFORMANCE REPORTING
    150,000
    Schedule Variance

    Cost Variance

    100,000
    Cost (in £)

    50,000

    0
    1 2 3 4 5 6
    Time (Months)

    Planned Value Earned Value Actual Cost


    Earned Value Management Guide

    BUDGET AT COMPLETE ESTIMATE AT COMPLETE


    “The total authorised budget for achieving the project scope of work. “Actual direct costs, plus indirect costs allocable to the contract,
    It is equal to the sum of all allocated budgets plus any management plus the estimate of costs for remaining authorised work.” (EVM
    reserve.” (EVM Guide) Guide)
    BAC = Base Cost Estimate + Management Reserve + Undistributed EAC = Actual Cost (AC) + Estimate to Complete (ETC)
    Funds

    Example Example
    You have to finish your project in 6 months for an estimated cost of You have to finish your project in 6 months for a budgeted cost of
    £135,000. The project will carry £15,000 Contingency. £150,000. 3 months have already passed. You’ve spend £80,000 and
    estimate the remaining work to complete the project to be £94,000.
    BAC = £135,000 + £15,000 = £150,000
    EAC = £80,000 + £94,000 = £174,000

    VARIANCE AT COMPLETE
    “The difference between the total budget assigned to a WBS element
    or control account and the estimate at completion.” (EVM Guide)
    VAC = Budget at Complete (BAC – Estimate at Complete (EAC)

    Example
    You have to finish your project in 6 months for a budgeted cost of
    £150,000. After 3 months you forecast the completion cost to be
    £174,000.

    VAC = £150,000 - £174,000 = (£24,000)

    TO COMPLETE PERFORMANCE TO COMPLETE PERFORMANCE


    INDEX - BUDGET INDEX - FORECAST
    (TCPIBAC) (TCPIEAC)
    Projected efficiency needed to come in Projected efficiency needed to come in
    at BAC. at EAC.

    TCPI (BAC) = BAC - EV / BAC - AC TCPI (EAC) = EAC - EV / EAC - AC


    TCPI > 1 = efficiency required to meet BAC TCPI > 1 = efficiency required to meet EAC
    TCPI < 1 = opportunity available to meet BAC TCPI < 1 = opportunity available to meet EAC

    CONFIDENCE IN CONTRACT VALUE


    (CI)
    Based on current performance, do we
    expect to meet our current forecast?

    ( CPICUM
    TCPIBAC
    -1
    ) x 100 CI > 0 = potential cost underrun
    CI < 0 = potential cost overrun

    INDEPENDENT ESTIMATE AT COMPLETE


    (iEAC)
    How accurate is the project managers current forecast of
    project outturn costs? Based on current cost efficiency
    what will the EAC be?

    iEAC = ACWP + Forecast Factor (BAC – EV) Example


    Where FF = 1 / CPI, You have to finish your project in 6 months for a budgeted cost of
    or 1 / (0.8 CPI + 0.2 SPI); £150,000. After 3 months you forecast the completion cost to be
    £174,000 with a current CPI of 0.84. Is the project managers forecast
    or 1 / CPI * SPI
    reflective of current project performance?

    iEAC = £80,000 + (1 / 0.84 = 1.19 * £82,500 = £98,175) =


    £178,175

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