matthew t. davis pmp, mcts, mcitp
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Matthew T. Davis PMP, MCTS, MCITP. PC313. EVM De-Mystified! Understanding E a rned Value Management in Project. Matthew T. Davis, PMP, MCITP. EVM De-Mystified. Presentation Summary. EVM Analysis Views and Reports in Pro Views and Reports in PWA. EVM Overview Key Concepts Terminology - PowerPoint PPT PresentationTRANSCRIPT
Anaheim, CA | February 2-5, 2014
Matthew T. DavisPMP, MCTS, MCITP
Matthew T. Davis, PMP, MCITP
EVM De-Mystified!Understanding Earned Value Management in Project
PC313
EVM De-Mystified
EVM OverviewKey ConceptsTerminologyInterpretation
EVM ModelingData RequirementsProcess NeedsModeling Options
EVM AnalysisViews and Reports in ProViews and Reports in PWA
DemoEVM FundamentalsA day in the life of an EVM Project
Q&A
Presentation Summary
ResourcesSchedule Cost
Are we on schedule?
Will we be on budget?
Are our resources delivering?
Will we meet customer expectations?
Can we keep our promises?
The Ultimate PM Challenge
AccountabilityEfficiencyValue
Simple Questions. What’s your answer?
EVM Overview – Key ConceptsWhat is EVM?
‘A method for measuring project performance. It indicates how much of the budget should have been spent, in view of
the amount of work done so far and the baseline cost for the task, assignment, or
resources.’
- Microsoft Project 2003 User Guide
Other Definitions"A methodology used to measure and communicate the real physical
progress of a project taking into account the work complete, the time taken and the costs incurred to complete that work.“
- Project Magazine
"An integrated management control system for assessing, understanding and quantifying what a contractor or field activity is achieving with program dollars. EVM provides project management with objective,
accurate and timely data for effective decision making.“- NASA
"A method for measuring project performance. It compares the amount of work that was planned with what was actually accomplished to determine
if cost and schedule performance is as planned.“- Englert and Associates, Inc
EVM Overview – Working DefinitionWhat is EVM?
A project management technique for measuring project performance and
progress. It combines measurements of Scope, Schedule, and Cost in a single
integrated system which enables extremely accurate forecasts of project
performance.
EVM Analysis ComponentsThree fundamental values calculated for each task PV – Planned Value (BCWS)AC (ACWP) – Actual Cost of Work PerformedEV – Earned Value (BCWP)
EVM Analysis Components - PVPV (BCWS) is the budgeted cost of tasks as scheduled based on the costs of resources (people, equipment, and material) assigned to those tasks, plus any fixed costs. Shows how much of the budget SHOULD have been spent at a point in time, based on the baseline cost of the task, assignment, or resource. PV is calculated as the cumulative time-phased baseline costs up to the status date.
EVM Analysis Components – AC (ACWP)AC (ACWP) is the cost that has actually been incurred to date for a task, resource, or assignment.
What cost have I incurred so far?
EVM Analysis Components – EV (BCWP)EV (BCWP) is the value of the work performed by the status date, measured in currency. This is literally the value earned by the work performed.
For example, if after 2 days 60% percent of the work on a task has been completed, you might expect to have spent 60 percent of the total task budget, or $60 of a $100 task. (Or not!)
EVM Analysis Components - RecapThree fundamental values calculated for each task PV – Planned Value (BCWS)
How much should I have spent for work PLANNED to this point in time (Status Date)
AC (ACWP) – Actual Cost of Work PerformedHow much did I ACTUALLY spend for the work PERFORMED so far?
EV – Earned Value (BCWP)How much VALUE should I have for the cost of work PERFORMED so far?(Status Date)
“We’ve spent all the money and more, we’re
behind schedule, and the house is only 25% done.”
Understanding EV – ‘Emotional Value’What these elements are really telling you...
0100
EVM
Typical EVM Graph
The Indices: CPI, SPI and TCPIDerived from previous 3 valuesCPI - Cost Performance IndexSPI - Schedule Performance IndexTCPI - To Complete Performance Index
The Indices: CPI, SPI and TCPICPI - Cost Performance Indexshows the efficiency of the resources>1 is good, <1 is badSPI - Schedule Performance Indexshows the efficiency of the time utilized >1 is good, <1 is badTCPI – To Complete Performance IndexRatio of work remaining to funds remaining
“Yeah, we’re supposed to be done next week but we’ve been working for
18 weeks! We need another 6 weeks.”
Understanding The Indices (Or Idiocies!)What CPI, SPI and TCPI is really telling you...
SPI CPI TCPI01234
EVM
Funds Remaining
Work Remaining
Funds Remaining
Work Remaining
TCPI – To Complete Performance Index
TCPI < 1
TCPI = 1
TCPI > 1
Data Requirements in ProjectDependencies / Dynamic Tasks / Critical PathNo Task Constraints – Unless they are REALAll Task have a Predecessor and Successor or implied successor
Resources with CostsStandard Rate at minimumAccurate Max Units – Single or Group Resources OKConsider Cost Per Use Values and Non-Work Resource Types
Resource AssignmentsRecommend Work Modeling vs. 100% Unit AllocationsLoaded per resource / task as work (not duration based)Consider Work, Contours, Overtime, and Task Calendars
Data Requirements in ProjectComplete BaselineStart / Finish DatesWork / Cost/ DurationNo Missing Baseline Values
Status DateDetermines date for EVM Calculations
Actuals / ProgressActual Work / Remaining WorkActual Start / Finish Dates
Data Requirements in ProjectStart / Finish Dates for TasksBaseline Start / FinishPlanned Start / FinishActual Start / Finish
Process NeedsWork / Effort EstimationResource SchedulingBaseline ManagementActuals Updates & AnalysisRe-Planning
Process Needs
Work / Effort Estimation
Team / SME Based
Quantifiable
Manageable
Assumptions Known
Clear ‘Done’ State
Resource Scheduling
May not be ‘Levelling Delay’
Other Methods include Team Planner, Overtime, Weekend Task Calendars, Additional Resources, etc.
Actuals Updates & Analysis
% complete vs. Actual Work
Start / Finish Dates
Duration Based
Physical % complete
Baseline Management
When to baseline?
When can I re-baseline?
Ensure new added tasks are baselined
The EVM baseline vs. ‘other baselines’
Re-Planning
No completed tasks in the future!
Re-Estimate in-progress tasks
Re-Schedule Incomplete Work
Process NeedsTypical ScheduleMaintenance Cycle
Weekly?Monthly?Quarterly?
Work Effort Estimation
Resource Schedulin
g
Baseline Managem
ent
Actuals Updates & Analysis
Re-Planning
EVM Modeling Options in Project• % Complete is duration based and is
calculated by Project when entering Actual Start/Actual Finish or Actual Work
• Physical % Complete is always entered manually by you. Allows for a more accurate measure of real work performed when duration is not a good indicator.
Data Requirements in ProjectEVM Fundamentals – A Day In The Life EVM Reporting & Analysis
EVM De-Mystified Demo
Challenges with EVMProjects will look ‘RED’ all the time!
Are estimates too optimistic?Are resource availability assumptions too
high?Getting Actuals is too hard!
Consider SharePoint Sync UpdatesConsider Project Online
Stakeholders won’t understand EVM Reports!Simple charts and graphs always tell a
story
MonitorControlDeliver
Are we on schedule?
Will we be on budget?
Are our resources delivering?
Will we meet customer expectations?
Can we keep our promises?
The Real Value of EVM
UnderstandRespondTrust
It’s not just about reporting. It’s about driving results.
Additional Resourceshttp://office.microsoft.com/en-us/project-help/earned-value-analysis-for-the-rest-of-us-HA102840086.aspx
http://office.microsoft.com/en-us/project-help/applying-earned-value-analysis-to-your-project-HA001021179.aspx
www.pm-providers.com
Microsoft Project Earned Value Fields• ACWP Fields• Baseline Cost (BAC) Fields• BCWP Fields• BCWS Fields• CPI Fields• CV Fields• CV% Fields• EAC (Task Field)
• Earned Value Method (Task Field)• Physical % Complete (Task Field)• SPI Fields• SV Fields• SV % Fields• TCPI (Task Field)• VAC Fields
Fields values are calculated by Project based on Task level data
www.pm-providers.com
Q&A
EVM De-Mystified
Anaheim, CA | February 2-5, 2014