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PROJECTS CONTROL

Guide Lines for projects control implementation


using the earned value tools, and technique.

Missions

Support Projects/Programs managers on projects control using EVM tools


& Technique for integrate management of Projects Scope, Time, and
Cost.
VISION: Management With the
Lights ON
Successful projects are standard;
there is a continuous improvement of
planning on one hand, and budget and
schedule control on the other.

Earned Value is needed


because...
o Preventing scope creep.
o Improving communication and visibility with
stakeholders.
o Performance tracking, and forecasting
o Enable measures for different types of
tasks.
o Roll up progress of many tasks into an
overall project status.

EVM can answering management questions


that are critical to the success of every
project,
such
o Are
we as:
ahead of or behind schedule?

o How efficiently are we using our time?


o When is the project likely to be
completed?
o Are we under or over our budget?
o How efficiently are we using our
resources?
o What is the remaining work likely to
cost?

Earned Value Management (EVM)


EVM Develops and Monitors Within Planning & Execution Phases.
Key practice of the project control process consist of two phases

Establish a Performance
Measurement Baseline (PMB)

Budget

Measure and analyze


performance against the baseline

Schedule

PV

TIME
CONTROL

Actual
Progress

Actual Cost

EV

COST
CONTROL

AC

Earned Value Management (EVM)


Its a project management technique thats required the formation of an
Integrated Baseline against which Performance can be measured for the
duration of the project.
EVM Develops and Monitors Three Key dimension for each work
package.

Establishment of a Performance Measurement Baseline


WBS Work Breakdown Structure

Define the Scope of Work

Decompose Deliverables into Work

01

Firs
t

Decompose work scope to


a manageable level [WBS]

Package
Decompose
to Manageable
Level
Develop
the Baseline
Schedule

Activities
Define
the Major Project Milestones

Logical Relations Between Activities, and

02

WBS
Developthe
Baseline
Schedule
Estimate
Project
Budget

Quantities Survey

Develop CBS

Estimated Material, Labors, and Non-

03

Seco
nd

Thir
d

Develop the Baseline


Schedule

Estimate the Project


Budget

Labors Cost
Develop
Baseline
Budget Measurement
Develop
the
Performance
Baseline

Assign Budget Resources to Baseline


Schedule

Resources Leveling & Balancing

04

Fou
r

Develop the Performance


Measurement Baseline

Establish a Performance Measurement Baseline (PMB)

Does Planned Resource Consumption Make Sense?


1. DEFINE THE WORK

$ Resources

2. SCHEDULE THE WORK

Program
Budget

Front Loaded
Normal

400

End Loaded

300

3. ALLOCATE BUDGETS

200
100
Time
J

EVM Performance Analysis and Forecasting


The EVM Three Key dimension

Record resource usage during project

01

execution

Calculate The EVM Three


Key dimension

Objectively measure the physical work

progress
The Time & Cost Variances
Calculate AC - Actual Cost, and EV earned
Schedule Variance (SV)
value
Cost Variance (CV)

Firs
t

02

Seco
nd

Calculate the Time &


Cost Variances

Variance at Complete (VAC)

The Project Key Performance Indicates

Schedule Performance Index (SPI)

Cost Performance Index (CPI)

To-Complete Performance Index (TCPI)

Forecast at Completion Project Status

Time Estimate at Completion (EACt)

Estimate at Completion (EAC)

Variance at Completion (VAC)

03
04

Thir
d

Fou
r

Calculate the Project


Key Performance
Indicates

Forecast at
Completion Project
Status

Earned Value Management Three Key dimension

Planned Value (PV):

Earned Value (AC):

Actual Cost (AC):

Describes how far along a


project is supposed to be at any
given point in the project
schedule. The authorized Budget
assigned to the Activities, or
Work Breakdown structure
Performance measurement baseline ..

Is the value of work performed


expressed in terms of the
approved budget assigned to
that work for an Activity or Work
Breakdown Structure

Is an indication of the level of


resources that have been
expended to achieve the actual
work performed to date or in a
time period.

The planned (Budget) cost to


complete the work that has been
done

The costs actually incurred and


recorded in accomplishing the work
performed (BCWP) within a given
time period

Budget that is spread over . . .


time, to accomplish the scope of
work
and against which
progress can be measured
when all work has been phased,
cumulative BCWS = BAC

Earned Value = Assigned Budget for


each work task * the physical work
progress

Labor
Material (Subcontractor/vendor)
Other, Equipment's, computer costs,
etc.
Indirect Costs

Earned Value Management Three Key dimension

Schedule Analysis and Forecasting:

10

How are we doing TIME wise? EV Vs. PV

Schedule Variance (SV):

Schedule Performance Index

Time Estimate at Completion

Are

How efficiently are we using our

When are we likely to finish the

schedule?

time?

work?

SV
= EV... Ahead
PV SV% = SV / PV
+ Value
Value Behind

SPI = EV / PV
SPI > 1 ... Ahead
SPI < 1 Behind

Example: If the project is 25 percent


behind schedule, meaning that 25
percent of the planned work has not
been accomplished.

This SPI indicates that work is being


accomplished
percent
efficiency,
usually used also for compare various
projects performance together.

EACt
SPI)the/ (BAC
/
Using =
the(BAC
SPI /and
average
Planned Value per unit of time, can
MONTHS)
generate a rough estimate of when
the project will be completed, if
current trends continue, compared to
when it was originally supposed to be
completed.

we

ahead

or

behind

Cost Analysis and Forecasting:

11

How are we doing COST wise? EV Vs. AC

Cost Variance (CV):

Cost Performance Index:

Cost Estimate at Completion

Are we under or over budget?

How efficiently are we using our

CV = EV AC CV% = CV / EV

resources?

+ Value ... Under-Budget [Save]

Value Over-Budget [NonRecoverable Loss]

CPI = EV / AC
SPI > 1 ... Under-Budget [Save]
SPI < 1 Over-Budget [NonRecoverable Loss]

The Estimate at Completion (EAC)


tells a manager where the cost of a
project is likely to end up if current
performance trends continue.

Cost Variance (CV) is a measure of


cost performance on Budget. The
EVM CV is particularly Critical
because it indicate the relationship of
Physical Performance to the Cost
Spend.

If we translate this into dollars, it


would mean that Project has a cost
efficiency of $0.xx worth of work for
every dollar spent to date, usually
used also for compare various
projects performance together.

Variance at Completion:
Will

we

finish

budget
VAC = BAC EAC

under

or

over

Estimate at Complete (EAC)


Estimate at Complete (EAC) technique thats depend on various factors as
contract type, and previous key performance indicates.

EAC
Estimate At Complete

Usually calculated within one of the following formulas.


Forecast for ETC Work
Performed at the Budget Rate

EAC = AC + (BAC-EV)

Forecast for ETC Work


Performed at the Present CPI

EAC=BAC/Cumulative CPI

Forecast for ETC Work


Considering Both SPI & CPI

EAC=AC+[(BAC-EV)/(CPI*SPI)]

12

To-Complete Performance Index (TCPI)


Which can tell a manager the efficiency that must be achieved for a project to
meet a specified endpoint such as the Budget at Completion (BAC). This means
that for Project EZ to achieve BAC, performance must improve from a CPI of
0.83 to a TCPI of 1.07 for the remaining work.
To-Complete Performance
Index:
How efficiently must we use
our remaining resources?

13

Final EVM Trend Analysis

14

Does It Given You All Information You Need To Know?


At
Complete
Variance

Risk

Time Now

Management Reserve
Resources

ACWP
(Actual
Cost)
Cost
Varianc
e
Schedul

400
BCWP
(Earned
Value)

300

Schedule Slip

BCWS
(Planne
d Value)

e
Varianc
e

200
100

M
A
Approx. Time
Variance

Time
J

Final EVM Trend Analysis

[REPORT]

Does It Given You All Information You Need To Know?


Analysis

15

Example:
The best way to understand an EVM example is
to solve it.

Problem: A project has a budget of


10M and schedule for 10 months. It
is assumed that the total budget will
be spent equally each month until the
10th month is reached. After 2 months
the project manager finds that only
5% of the work is finished and a total
of 1M spent.

16

Solution:
PV = 2M
EV = 10M * 0.05 = 0.5M
AV = 1M
CV = EV-AC = 0.5-1 = -0.5M
CV% = 100 * (CV/EV) = 100*(-0.5/0.5) = -100%
overrun
SV = EV-PV = 0.5-2 = -1.5 months
SV% = 100 * (SV/PV) = 100*(-1.5/2) = -75% behind
CPI = EV/AC = 0.5/1 = 0.5
SPI = EV/PV = 0.5/2 = 0.25
EAC = BAC/CPI = 10/0.5 = 20M
ETC = (BAC-EV) / CPI = (10-0.5)/0.5 = 19M
Time to compete = (10-0.5)/0.25 = 38 Months
This project will take TOTAL 20M (19+1) and 40
(38+2) Months to complete.

Questions?
Comments?

PART ONE COMPLETE


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NOW
EVM Implementation
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