earned value and p6 - oracle primavera p6 collaborate 14

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REMINDER Check in on the COLLABORATE mobile app Earned Value & P6 Prepared by: Elaine Britt Krazer, PMP Align Projects, LLC A new perspective on project performance and P6 usage. Clearing up myths about EV Session ID#: 15429

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Page 1: Earned value and P6 - Oracle Primavera P6 Collaborate 14

REMINDER

Check in on the

COLLABORATE mobile app

Earned Value & P6

Prepared by:

Elaine Britt Krazer, PMP

Align Projects, LLC

A new perspective on project performance and P6 usage.

Clearing up myths about EV

Session ID#: 15429

Page 2: Earned value and P6 - Oracle Primavera P6 Collaborate 14

WELCOME!

This is a subtitle or bulleted list

Page 3: Earned value and P6 - Oracle Primavera P6 Collaborate 14

WHY EV?

■ 360 perspective of progress

■ Balances the triple constraint

■ Identifies a common denominator for fidelity in reporting

■ Provides a common structure for governance

■ Gives the team a focus

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EXAMPLE

THEME PARK TRANSPORT

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EXAMPLE

THEME PARK TRANSPORT

5 STOPS

5 MILES

$1M PER MILE

BUDGET $5M

SCHEDULE 5 MONTHS

WITH ONE MILE PER MONTH

Page 6: Earned value and P6 - Oracle Primavera P6 Collaborate 14

EXAMPLE

THEME PARK TRANSPORT

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EXAMPLE

THEME PARK TRANSPORT

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TEAM MEETING:

PM: I love you guys, you are why we have that award!

Well, you won’t like me when you see site photos…

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TEAM MEETING:

GAK! Whiskey Tango

Foxtrot!

We have completed only 2

miles.

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EARNED VALUE

■ It is about integrity,

▪ Have you spent what you said you would BY THIS TIME?

▪ Have you completed what you said you would BY THIS TIME?

▪ IF we continue this trend, will we deliver what we said we would

OVER TIME?

■ Requires then,

▪ A time-phased plan (schedule)

▪ A spend plan over time (cost loaded schedule)

▪ Regular intervals of progress reporting (status updates on cost

and schedule)

▪ A report of physical, actual accomplished work & what remains?

▪ A schedule that reflects actuals and planned information (exact

mirror of project work)

Page 11: Earned value and P6 - Oracle Primavera P6 Collaborate 14

P6 REQUIREMENTS FOR EV

■ A time-phased plan (schedule)

■ A spend plan over time (cost loaded

Page 12: Earned value and P6 - Oracle Primavera P6 Collaborate 14

P6 REQUIREMENTS FOR EV

■ A spend plan over time (cost loaded schedule)

■ Regular intervals of progress reporting (status updates on cost and schedule)

■ A report of physical, actual accomplished work & what remains?

■ A schedule that reflects actuals and planned information (exact

mirror of project work)

Page 13: Earned value and P6 - Oracle Primavera P6 Collaborate 14

Schedule? Why does that affect Project Outcomes?

■ “Its not attached to the reality

of the actual project”

■ WHY NOT?!?!?!

■ Update cycle too long

■ Info not gathered correctly or

fully

■ Too cheap to buy a scheduler,

especially a good one

■ Scheduler role seen as

administrative, not analytic

■ Old school, not informed of best

practices or experienced a good

schedule’s effectiveness

■ Waste of money on P6

Questions? Answers!

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They don’t want the project to move…but projects DO move!

We assume we know dates, but P6 tells us dates we don’t know…and it is based on progress.

Tell P6 what you know, it tells you what next before you know it.

Page 17: Earned value and P6 - Oracle Primavera P6 Collaborate 14

REMINDER

Check in on the

COLLABORATE mobile app

So now we know we need P6 and a schedule…let’s set it up!

Pre Work

Global Settings

All subsequent settings

Page 18: Earned value and P6 - Oracle Primavera P6 Collaborate 14

Pre Work– GET READY!

■ Industry, role, why P6

■ Strategic Plan

■ Contracts and type

■ Workflow (PROJECT not

PRODUCT)

■ Roles for each step

■ Reports we rely on

■ Data we wish we had so we

can make better decisions

■ Future plans for P6

■ Cost decision

■ Risks, issues decision

■ Chains

■ Which projects to input

■ Settings and setup

■ Improvements and cycle

times

■ Training and security

■ Admin settings, layouts,

views, and communications

■ Integrations, settings and

licensing

Page 19: Earned value and P6 - Oracle Primavera P6 Collaborate 14

Global settings—GET SET!

■ EPS-OBS alignment

▪ Security

▪ Summary data needs

▪ Efficiency

■ Admin settings

■ Project and WBS templates (settings)

■ Resources, Roles

■ Codes—a few is better than many

■ UDF—none is better than some

■ Costs prep

■ Risks, issues decision

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Other settings—AIM!

■ Settings at global, eps, project, wbs, activity, step, resource and USER levels

■ Backups, restoration, training

■ Role-based step by step for each part of the process

■ Serves as pilot for P6 setup

■ Serves as BOT

■ Previews for each level of the organization WIIFM

■ Provides marketing opportunities for the upcoming adoption

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GO! (adopt it, use it, keep it clean!)

■ Use the process, even if it is a bad one

▪ Data tells you what to fix or enhance

▪ Data gives you proof to go to management

with requests

■ Follow input cycles with precision

■ Don’t be afraid of the truth P6 tells

■ Baseline is stable, no project is

■ Stop light reports have red on them

■ Bad news gets worse

■ Schedule view = Site view

■ Respect the scheduler and schedule

■ Have a disciplined change system

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Adoption elements

■ Senior, higher-level support

■ Licensing appropriate

■ Training is applicable, relevant, accessible and mandatory

■ Documentation available, guided, short, use-case, maintained

■ Management understands value, or is made to accept it

■ Users use it as prescribed

■ Users are heard in a forum

■ System is technically stable, speedy, available

■ Marketing is done ahead of time

■ As many team members as can be, should be

■ Meetings are not beatings and have no paper

Page 23: Earned value and P6 - Oracle Primavera P6 Collaborate 14

Armed with properly configured P6, you can clearly see a path through your project…

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EV Calculations in P6

■ AC (ACWP) = Actual labor cost + Actual Non Labor Cost + Actual

Material Cost + Actual Expense Cost

▪ Also Actual Total Cost

■ Cost Performance Index (CPI)

▪ A CPI greater than 1 means that Earned Value is greater than the

actual amount spent. A CPI of less than 1 means that the Earned Value

is less the. n the actual amount spent.

▪ CPI = EV / Actual Cost

■ Cost Variance (CV)

▪ Cost Variance is the difference between the Earned Value and the

actual cost of that activity.

▪ CV = EV - Actual Cost

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EV Calculations in P6

■ Earned Value Cost (BCWP or EV)

▪ Earned Value Cost (EV) is the portion of the budgeted total cost of the activity

that is actually completed as of the project data date. Also known as the

Budgeted Cost of Work Performed for the activity. The method for computing the

performance percent complete depends on the Earned Value technique selected

for the activity's WBS.

▪ EV = BAC * Performance % Complete

■ Estimate At Completion (EAC)

▪ EAC is the estimated cost at completion for the activity.

EAC = Actual Cost + ETC.

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EV Calculations in P6

■ Estimate to Complete (ETC)

▪ Estimate to complete is the estimated cost left to complete on the activity. The

calculation can be customized at the WBS level (On the 'Earned Value' tab in the

WBS view).

It can be computed as either:

■ ETC = Remaining Total Cost for the activity

▪ ETC = PF * (BAC - EV)

▪ Where 'PF' is a multiplier to weight the ETC calculation. This can be

either '1', '1/CPI' or '1/(SPI * CPI)' or user defined amount.

▪ HOWEVER: the only one that takes the schedule into true

consideration is 1/(SPI * CPI)

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EV Calculations in P6

■ Planned Value Cost (BCWS or PV)

■ Planned Value Cost (PV) is the portion of the budgeted total cost of the

activity that is scheduled to be completed as of the project data date

according to the baseline dates. Also known as the Budgeted Cost of Work

Scheduled for the activity. The Schedule % Complete specifies how much

of the activity's original duration has been completed so far based on the

baseline dates.

PV = BAC * Schedule % Complete

■ Schedule Performance Index (SPI)

■ An SPI greater than 1 means that Earned Value is greater than the Planned

Value. An SPI of less than 1 means that the Earned Value is less then the

Planned Value.

SPI = EV / PV

Page 28: Earned value and P6 - Oracle Primavera P6 Collaborate 14

EV Calculations in P6

■ BAC

▪ Uses Baseline Budgeted (Planned) Values or BAC depending

on settings at Enterprise level in Admin

▪ If the 'Earned Value Calculation' is set to 'Budgeted Values with

Planned dates' or 'Budgeted Values with Current Dates':

▪ BAC = BL Budgeted Labor Cost + BL Budgeted Non-Labor Cost + BL

Budgeted Material Cost + BL Budgeted Expense Cost.

▪ If the 'Earned Value Calculation' is set to 'At Completion Values

with Current Dates':

▪ BAC = BL At Completion Labor Cost + BL At Completion Non-Labor

Cost + BL At Completion Material Cost + BL At Completion Expense

Cost

Page 29: Earned value and P6 - Oracle Primavera P6 Collaborate 14

Portfolio EV

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Earned Value in P6We appreciate your feedback and insight

You may complete the session evaluation either

on paper or online via the mobile app

Elaine Britt Krazer, PMPOracle certified implementation Specialist

Oracle Partnerwww.AlignProjects.com