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
Comparison with other methods
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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
Comparison with other methods
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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
Comparison with other methods
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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
Comparison with other methods
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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
Comparison with other methods
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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.
Comparison with other methods
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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
EV Management in Practise
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Level of detail
Examples of levels
The project lifecycle stage
The workstream (activity grouping)
EV Management in Practise
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Baseline timing
EV Management in Practise
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Baseline timing
EV Management in Practise
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Rebaseline and reprofile (2)
EV Management in Practise
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Example EV Report
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Example EV Report (2)
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Example EV Report (3)
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Example EV Report
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