2 guide_earned value presentation slides.ppt

7/29/2019 2 GUIDE_Earned Value Presentation Slides.ppt

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Earned Value Management


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Agenda

Comparison with other Methods

EV Management in Practise Earned Value Planned Value

Actual Costs

Schedule Performance Index

Cost Performance Index

General Introduction to EV Reporting

Introduction


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Example, PV

PV: Value of work scheduledto have been completedat a certain moment in time.

PV = planned % complete * baseline cost

Introduction


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EV = actual % complete * baseline cost

EV: Value of work actually accomplishedat a certain

moment in time.

Example, EV

Introduction


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AC: Value that gives insight in how much is paid forthe work actually accomplished.

Actual Costs

Introduction


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How much Value was originally Planned to have been

Delivered (as of today)?

Planned Value (PV)

How Much Value was Actually Delivered (as of today)?

Earned Value (EV)

How Much has the Project Cost (as of today)?

Actual Cost (AC)

Earned Value explained

Introduction


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EV and PV Curve

Introduction


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%Complete = Earned Value / Budget at Completion * 100 %Spent = Actual Costs / Budget at Completion * 100 % Over/Under Spent = [(Actual Cost / Earned Value) - 1] * 100

EV Calculations

Introduction


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Cost Variance (CV) =Earned Value (EV)

Actual Costs (AC)

Schedule Variance (SV) =Earned Value (EV) Planned Value (PV)

Variance Analysis

Introduction


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Scheduled Performance IndexPerformance Indicators: SPI

PV

EVSPI

1SPI Ahead of schedule1SPI

1SPI

Behind schedule

Exactly on track

Example: 83.0480

400SPI

Introduction


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Cost Performance IndexPerformance Indicators: CPI

AC

EVCPI

Better than budget

Worse than budget

On Budget

1CPI

1CPI

1CPI

Example: 11.1360

400CPI

Introduction


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Combining SPI and CPI

Introduction


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Critical Ratio (CR) = CPI * SPI

Critical ratio

Over all Project performance is excellent1CR

1CR

1CR

Over all Project performance is poor

Project Performance on target

Introduction


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Ability to influence SPI and SPIAbility to Influence SPI and CPI

AbilitytoInflu

enceSPIandCPI

High ability

to change

Moderate

ability to

change

Low ability to

change

0% 50% 100%75%25%

% Project Complete

As we proceed further through the project,

our ability to change the SPI and CPI values

decreases exponentially. Very early in the project,

the SPI and CPI values are elastic. However,

starting very early in the project, the SPI and CPIvalues will increasingly reflect the final project

condition

Ability to Influence SPI and CPI

AbilitytoInflu

enceSPIandCPI

High ability

to change

Moderate

ability to

change

Low ability to

change

0% 50% 100%75%25%

% Project Complete

As we proceed further through the project,

our ability to change the SPI and CPI values

decreases exponentially. Very early in the project,

the SPI and CPI values are elastic. However,

starting very early in the project, the SPI and CPIvalues will increasingly reflect the final project

condition

Introduction


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Forecast the future project status Estimate at Completion

= Actual Costs to + [(Budget at Completion Earned Value) / CPI]

= Actual Costs to date date + (Budget at Completion

Earned Value)= Actual Costs to date + a new estimate for all remaining work

Schedule delay or acceleration=(SPI-1)Approved Baseline duration)

Estimated duration at completion= Approved Baseline Duration + Current Schedule Delay or Acceleration= Actual Time Used + (1/SPI) * Remaining Baseline Duration

Forecasting


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Advantages of EV Reporting Early warnings Costs Forecasting Communication (External) Control

Comparison with other methods


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Project to date cost versus budgetEV compared to other methods

Advantages Simple

Little effort required

DisadvantagesNo insight in actual finished work

Questionable monetary relativity



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Project to date versus planned budget at moment in timeEV compared to other methods(2)

Advantages More insight in monetary relativity

DisadvantagesNo insight in which work has beenaccomplished

No insight in value of finished work



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Milestone trackingEV compared to other methods(3)

AdvantagesInsight in accomplished work

DisadvantagesNo insight in monetary status

No insight in value of accomplished

work



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Combination of milestone tracking and project to date versus plannedbudget at moment in timeEV compared to other methods(4)

Advantages Insight in accomplished work

More insight in monetary

relativity

DisadvantagesNo insight in value of accomplished

work



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Standard EV ManagementEV compared to other methods(5)

AdvantagesForecasting ability

Insight in value of

accomplished work in the

current and future situation

External control

Disadvantages Requires realistic planning

More time consuming to administer



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EV SimplificationEV compared to other methods(6)

AdvantagesSimple, using informationreadily available to most

projects

Common indicators for

comparison with other projects

Disadvantages Relies on realistic estimate of %Complete, (or EV) which may by

nature be more subjective than

tracking the accumulated completion

values of many measurable smaller

units.Assumes that progress and spend

forecasts are linear, which is

normally not the true case.



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Method of EV Calculation;

Tracking and Reporting Frequency

Threshold Establishment What Cost Elements comprise Planned Value

Whether to track resource actual hours including

Overtime or a standard 8 hour day.

Which resource labour costs should be included? Level of detail of EV management

Baseline Timing

EV Management in Practise

Key Decisions


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EV management Methods Percentage complete

Physical percentage complete

Fixed percentage from start



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Level of detail

Examples of levels

The project lifecycle stage

The workstream (activity grouping)


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