evm power point 25 august 2015 prams co (2)
TRANSCRIPT
Roger H. [email protected]
Earned Value ManagementOverview for understanding of the value of EVM analytical data
Concept of Earned Value Management (EVM)
• A tool for the Customer and Supplier to have visibility into technical, cost and planned progress
http://www.acq.osd.mil/evm
• Integrates the cost, planned (schedule) and technical aspects into programmatic report synopses
• Insight into progress that provided information on cost and planned (schedule) performance data
• Visually depicts budget efficiencies for both time and cost
• Time-phased budgets to specific tasks and/or statements of work
Management Needs
• Indicates work progress that properly relates cost, schedule and technical accomplishments
• Data presented are valid, timely, and can be audited Supplies management with information at a practical level of
summarization
• Data presented to the customer are from the same internal EVM system used by the supplier to manage the project
Guideline Concepts
• The guideline approach established the framework of an integrated cost, schedule, and technical management system
• EVM Guidelines provides rules for a system that is acceptable and that provides valid, timely data that can be audited
• The guidelines can be used for Research and Development, construction, modification, and production projects
Industry Standards
• Industry recognizes the importance of earned value in managing both supplies and services
• There are thirty two (32) Guidelines from industry standard that should become your baseline in determining the validity of any earned value management system
Management System
• In designing, implementing and improving the EVM system, the objective should be to do what makes sense
• The management system that meets the letter of the criteria but not their intent will not support management’s needs
Compliance will facilitate:
• Timely baseline development and control will provide information break down by product as well as by organizational function
• Objective measurement of accomplishment against the plan that summarized reporting to higher management for use in decision-making
• With reporting discipline and in objective analysis of variances, will direct management actions to manage cost and schedule performance
Earned Value Management
• TO BE EFFECTIVE: ESTABLISH MEASURABLE EFFORTS - You cannot manage
what you cannot measure
DEVELOP A PLAN THAT IS MEASURABLE - That becomes your budget
DECIDE WHAT WORK IS TO BE ACCOMPLISHED OVER TIME - That becomes your baseline plan
ESTABLISH WHAT WORK HAS BEEN ACCOMPLISHED - That is your work earned or earned value
VERIFY THE COST TO ACCOMPLISH THAT WORK - That is what has been expended
Earned Value Management
• TAKE ACTION DUE TO SCHEDULE VARIANCES: What was to be accomplished at this point in time? What has been accomplished at this point in time?
– The difference is the Schedule Variance– Determine cause, effect and mitigation
• TAKE ACTION DUE TO COST VARIANCES: What has been accomplished at this point in time? What was the cost to accomplish the efforts at this point in time?
– The difference is the Cost Variance– Determine cause, effect and mitigation
Earned Value Management
MasterPlanning
SelectedReportingElements
ADAProducts
SoftwareTools Standards
ADA Study
ADA Controls
ADA Interface
CPCO #1MOS
CPCO #2MOL
CPCO #3MAC
MarketingFunctionalManager
ADAApplications
ControlAccount
ControlAccount
ControlAccount
ProgramManager
EngineeringFunctionalManager
SoftwareEngineering
SecuritySystems
ControlAccount
OperationsFunctionalManager
HardwareEngineering
LANApplications
ControlAccount
ControlAccount
PlanningPackages
Contract Work Breakdown Structure &Organization Breakdown Structure
ProductDevelopment
Software Instigation Program
SelectedPSWBS
Elements
OBS DATA SUMMARIZATION
WBS
DATA
SUMMIZATION
FunctionalOrganization
WorkPackages
PlannedEarnedExpendedBACEAC
CWBSExtension
Cumulative Project Trends
Cumulative Project Trends
TREND STATUS REPORT
0
50
100
150
200
250
300
350
400
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
TIME RELATED
LA
BO
R H
OU
RS
or D
OL
LA
RS
Earned Progress
Expended
Scheduled Planned
Cumulative Project Trends
TREND STATUS REPORT
0
20
40
60
80
100
120
140
160
180
200
1 2 3 4 5 6 7
TIME RELATED
LA
BO
R H
OU
RS
or D
OL
LA
RS
Earned Progress
Expended
Scheduled Planned
COST VARIANCE
SCHEDULE VARIANCE
Status and Trends
Red indicates at least 3 weeks negative Schedule Variance
AS OF DATE
23-Nov-03TaskNo. Tasking
StatusSV
StatusCV
PercentEarned
2110 Task Lead Degrading 71.5%2220 Modeling Degrading 82.2%2230 Integration Degrading Degrading 76.6%2310 Docs Degrading 77.1%3110 Software Degrading 72.6%3210 SW Devel Improving Degrading 91.0%3215 KG-84 WF Improving Degrading 80.6%3224 KWR-46 W/F Improving Degrading 96.1%3330 Gen Infras Improving Degrading 83.5%3410 HMI Desg Holding Degrading 87.3%3624 Algor Holding Degrading 96.0%5120 Envir. Test Improving Holding 98.1%
OVER ALL Improving Degrading 82.4%
About 2 weeks behind schedule
About 2 weeks behind schedule
About 7 weeks behind schedule
About 1 week behind scheduleAbout 3 weeks behind schedule
About 2 weeks behind schedule
About 1 week behind schedule
About 2 weeks behind schedule
About 6 weeks behind schedule
About 3 weeks behind scheduleAbout 5 weeks behind schedule
SchedulePosition
Green Block
WAVEFORMS
Task Status due to change in Cumulative Schedule & Cost Variances.Positive Performance
SV is Schedule Variance. The difference between Earned and PlannedCV is Cost Variance. The difference between Earned and Expended.
Estimate at Completion (EAC) Development
MCS S/WMCS 15855 Form: 28-Feb-02 To: 23-Nov-03 EAC 6 3 FUTURE Dollars or Hours EFF.
PRODUCT CUM. Periods Periods EST. TCPI % of % @CATEGORY EFF. EFF. EFF. EFF. BAC LRE TO LRE EAC BAC Prog EAC
Project Mgmt 94.1% 76.1% 56.0% 50.0% $3,243,748 $3,720,714 67.6% $4,063,375 12.0% 79.7% 79.8%MCS Systems 96.3% 89.3% 57.9% 50.0% 5,554,948 6,005,669 80.9% 6,924,546 20.5% 78.3% 80.2%MCS S/W Dev. 76.2% 47.5% 39.7% 35.0% 7,460,475 11,038,572 43.2% 11,713,646 27.6% 83.4% 63.7%Hardware 102.2% 62.6% 58.3% 58.3% 954,518 1,008,655 0.0% 934,044 3.5% 100.0% 102.2%Testing 75.4% 59.7% 40.7% 35.0% 801,306 1,070,940 72.0% 1,267,302 3.0% 83.3% 63.2%MFG 90.4% 43.8% 14.9% 10.0% 2,275,732 2,607,016 54.5% 3,599,423 8.4% 94.7% 63.2%ILS 95.3% 50.6% 62.4% 50.0% 1,192,135 1,255,701 94.0% 1,537,874 4.4% 74.7% 77.5%Closeout N/A N/A N/A 80.0% 152,364 151,142 100.8% 190,455 0.6% 0.0% 80.0%CAS 414 104.4% 150.3% -283.8% 75.0% 149,154 147,209 88.9% 152,584 0.6% 82.7% 97.8%G & A 88.5% 65.7% 57.1% 50.0% 5,255,485 6,430,939 59.7% 6,727,024 19.4% 82.7% 78.1%PMB 87.1% 60.8% 47.3% 72.9% $27,039,865 $33,436,557 60.5% $37,110,272 100% 82.4% 72.9%
WR BAC/EAC
Developed by: Roger H. Mandel LRE Remain
S/W for Chris Newborn
Budget at Completion (BAC) is the authorized budget. Latest Revised Estimate (LRE) is latest revised estimate. Progress (Prog.). Cost efficiency (EFF)
Formula Card
PERFORMANCE INDICES Developed by: RMandel @PramsCo.Com
Less than 1.0 is unfavorable
Cost Efficiencies (Expended)
EarnedExpended
Schedule Efficiencies (Planned)Dollars
EarnedPlanned Percent
OVERALL STATUS ItemsBudget at Completion (BAC)
EarnedBAC
ExpendedBAC
TO COMPLETE PERFORMANCE INDEX
Work RemainingUnexpended Budget Time Line
BAC - Earned Cost Variance (CV) = Earned - ExpendedBAC - Expended
EarnedLatest Revised Estimate by the supplier (LRE) ExpendedEstimate at Completion is your projection (EAC)
Schedule Variance (SV) = Earned - PlannedYou can substitute LRE or EAC for BAC in the Denominator
EarnedESTIMATE at COMPLETION (EAC) Planned
BAC - Earned Variance at Completion (VAC) = BAC - LREProjected Efficiencies
Note: Negatives are unfavorable
x 100
x 100
Cost Variance % (CV%) =
Schedule Variance % (SV%) =
EAC = EXPENDED +
Cost Performance Index (CPI) =
Schedule Performance Index (SPI) =
Percent Complete =
Percent Spent =
TCPI BAC =
TCPI BAC =
1 2 3 4 5 6 7 8 9 10 11 12 13
EXPENDED orCONSUMED
EARNED orACCOMPLISHED
SCHEDULED or PLANNED
BUDGETED
Cost Variance
ScheduleVariance
Time Now
BAC
Purpose of Earned Value Management
• What does Earned Value Management do for Management?
Measurement of accomplished efforts against the plan so management can effectively make risk management decisions
In designing, implementing and improving the EVM system, the objective is to do what makes sense
Directs management’s decisions for cost and schedules performance
Conclusion• EVM is a proven value over many years
Integrates cost, schedule and technical performance Provides planning and control discipline on projects
• Reports summarize objective data from the internal system The program achieves improvements where accountability
derives systems effectiveness
• American National Standards Institute (ANSI) It is now part of the International Standards Organization’s
requirement to become certified as a ISO 9000 organization
• Electronics Industries Alliance (EIS)
• ANSI/EIS-748-C The new ANSI standard on Earned Value Management System
guidelines has been approved
Back Up
Contract Performance ReportIntegrated Program Management Report Format 2
Quick Look
File: CPR Software Customer The Government Form: 28-Feb-02 To: 23-Nov-03WO Example Description:
1 2 3 4 5 6
ScheduledPlanned Earned Expended
Budget at Completion
LatestRevisedEstimate
Date BCWS BCWP ACWP BAC LRE1 Jan-02 $0 $0 $0 $13,612,328 $13,582,9852 Feb-02 $1,708,000 $1,708,074 $1,708,074 $13,612,328 $13,582,9853 Mar-02 $2,672,000 $2,333,343 $2,324,376 $13,612,328 $13,582,9854 Apr-02 $3,712,187 $2,882,122 $3,047,592 $13,642,344 $13,688,9135 May-02 $4,742,291 $3,633,938 $3,974,360 $13,911,373 $14,206,8616 Jun-02 $6,052,344 $4,622,395 $5,376,493 $13,911,373 $14,693,3107 Jul-02 $6,810,848 $5,325,287 $6,404,564 $13,911,373 $15,640,5418 Aug-02 $7,745,218 $5,973,591 $7,465,236 $13,911,373 $16,090,2299 Sep-02 $8,623,791 $6,853,744 $9,029,286 $13,911,373 $22,830,318
10 Oct-02 $9,480,043 $7,661,221 $10,214,832 $13,907,817 $22,830,32011 Nov-02 $10,166,968 $8,262,559 $10,970,763 $13,907,817 $22,830,32012 Dec-02 $11,027,853 $8,828,656 $12,026,907 $13,907,817 $22,830,32013 Jan-03 $11,641,078 $9,361,548 $13,018,779 $14,530,683 $22,830,32014 Feb-03 $12,200,000 $12,631,080 $14,256,473 $14,530,683 $22,830,32015 Mar-03 $15,811,258 $15,900,611 $15,942,365 $26,956,128 $26,830,12816 Apr-03 $17,117,885 $16,905,911 $17,150,254 $26,956,129 $26,956,12817 May-03 $18,389,493 $17,904,295 $18,377,464 $27,018,953 $27,018,95318 Jun-03 $19,804,083 $19,232,824 $20,020,315 $27,134,209 $27,134,20919 Jul-03 $20,765,126 $19,996,797 $21,208,817 $27,134,209 $29,887,66920 Aug-03 $21,584,712 $20,775,864 $22,392,161 $27,134,209 $29,728,71621 Sep-03 $22,417,694 $21,351,286 $23,312,705 $27,166,410 $29,762,93822 Oct-03 $22,937,994 $21,908,166 $24,483,585 $27,166,410 $33,573,71923 Nov-03 23,111,327$ $22,292,564 $25,595,345 $27,039,864 33,436,558$ 24 Dec-03
Limited Rate Initial Production
$0
$4
$8
$12
$16
$20
$24
$28
$32
1 3 5 7 9 11 13 15 17 19 21 23M
illio
nsReport Period as of (Date)
LRE
Expended
Budget
Earned
Scheduled
Cumulative data
Historical Trends
Historical Trends
Historical Trends
Cumulative Status
EAC Development
Data Collections
Data Graph
The different trends indicate a growth in variances for Schedule and Cost to the baseline.
Data Graph
Current Status
Red indicates at least 3 weeks negative Schedule Variance
AS OF DATE
23-Nov-03TaskNo. Tasking
StatusSV
StatusCV
PercentEarned
2110 Task Lead Degrading 71.5%2220 Modeling Degrading 82.2%2230 Integration Degrading Degrading 76.6%2310 Docs Degrading 77.1%3110 Software Degrading 72.6%3210 SW Devel Improving Degrading 91.0%3215 KG-84 WF Improving Degrading 80.6%3224 KWR-46 W/F Improving Degrading 96.1%3330 Gen Infras Improving Degrading 83.5%3410 HMI Desg Holding Degrading 87.3%3624 Algor Holding Degrading 96.0%5120 Envir. Test Improving Holding 98.1%
OVER ALL Improving Degrading 82.4%
About 2 weeks behind schedule
About 2 weeks behind schedule
About 7 weeks behind schedule
About 1 week behind scheduleAbout 3 weeks behind schedule
About 2 weeks behind schedule
About 1 week behind schedule
About 2 weeks behind schedule
About 6 weeks behind schedule
About 3 weeks behind scheduleAbout 5 weeks behind schedule
SchedulePosition
Green Block
WAVEFORMS
Task Status due to change in Cumulative Schedule & Cost Variances.Positive Performance
EVM Raw Data
Budget Budget
TaskNo. Tasking 23-Nov-03
26-Oct-0328-Sep-03
23-Nov-0326-Oct-03
28-Sep-0326-Oct-03
26-Jan-032110 Task Lead 0 0 0 (41,082) (39,752) (37,854) 796,664 345,1512220 Modeling (46,318) (37,703) (18,973) 7,373 5,333 18,275 1,386,515 562,6502230 Integration (144,315) (117,391) (69,293) (252,295) (182,046) (112,483) 1,674,815 719,4642310 Docs (37,782) (24,909) (16,334) 145,764 139,545 138,685 1,219,216 708,1233110 Software 0 0 0 (124,101) (107,432) (77,210) 1,075,813 578,5233210 SW Devel (16,355) (31,240) (28,534) (278,586) (220,061) (200,295) 606,436 759,1163215 KG-84 WF (69,776) (74,261) (89,587) (195,634) (177,074) (149,091) 733,675 03224 KWR-46 W/F (6,597) (16,510) (32,578) (257,393) (254,874) (235,503) 170,454 35,2773330 Gen Infras (143,193) (279,663) (285,591) (765,474) (631,822) (470,757) 2,979,646 665,3553410 HMI Desg (14,039) (16,407) (18,944) (38,269) (32,027) (23,986) 427,674 346,1583624 Algor (15,223) (15,223) (30,466) (84,922) (76,293) (77,887) 384,855 135,6115120 Envir. Test (12,036) (23,903) (49,435) (238,256) (233,592) (188,158) 632,769 391,628
OVER ALL (818,763) (1,029,828) (1,066,408) (3,302,781) (2,575,419) (1,961,419) 27,166,410 14,530,683
WAVEFORMS Cumulative SV Cumulative CV
UNCLASSIFIED//FOUOUNCLASSIFIED//FOUO
UNCLASSIFIED//FOUOUNCLASSIFIED//FOUO 33
EAC Calculation Sheet
SoftwareExample Form: 28-Feb-02 To: 23-Nov-03 EAC 6 3 FUTURE Dollars or Hours EFF.
PRODUCT CUM. Periods Periods EST. TCPI % of % @CATEGORY EFF. EFF. EFF. EFF. BAC LRE TO LRE EAC BAC Prog EAC
Project Mgmt 94.1% 76.1% 56.0% 50.0% $3,243,748 $3,720,714 67.6% $4,063,375 12.0% 79.7% 79.8%MCS Systems 96.3% 89.3% 57.9% 50.0% 5,554,948 6,005,669 80.9% 6,924,546 20.5% 78.3% 80.2%MCS S/W Dev. 76.2% 47.5% 39.7% 35.0% 7,460,475 11,038,572 43.2% 11,713,646 27.6% 83.4% 63.7%Hardware 102.2% 62.6% 58.3% 58.3% 954,518 1,008,655 0.0% 934,044 3.5% 100.0% 102.2%Testing 75.4% 59.7% 40.7% 35.0% 801,306 1,070,940 72.0% 1,267,302 3.0% 83.3% 63.2%MFG 90.4% 43.8% 14.9% 10.0% 2,275,732 2,607,016 54.5% 3,599,423 8.4% 94.7% 63.2%ILS 95.3% 50.6% 62.4% 50.0% 1,192,135 1,255,701 94.0% 1,537,874 4.4% 74.7% 77.5%Closeout N/A N/A N/A 80.0% 152,364 151,142 100.8% 190,455 0.6% 0.0% 80.0%CAS 414 104.4% 150.3% -283.8% 75.0% 149,154 147,209 88.9% 152,584 0.6% 82.7% 97.8%G & A 88.5% 65.7% 57.1% 50.0% 5,255,485 6,430,939 59.7% 6,727,024 19.4% 82.7% 78.1%PMB 87.1% 60.8% 47.3% 72.9% $27,039,865 $33,436,557 60.5% $37,110,272 100% 82.4% 72.9%
WR BAC/EAC
Developed by: Roger H. Mandel LRE Remain
Definition
Definitions and Acronyms
Variance at Completion (VAC): The difference between the total budgets assigned to a contract, WBS element, organizational entity
ACRONYMS
ACE: Actual Cost Expended ACWP: Actual Cost of Work Performed (Expended Resources in $) BAC: Budget at Completion in $ BCWP: Budgeted Cost for Work Performed in $ BCWS: Budgeted Cost for Work Scheduled in $ CPI: Cost Performance Index CV: Cost Variance CV%: Cost Variance as a percent ETC: Estimate to Complete EV: Earned Value PMB: Performance Measurement Baseline SPI: Schedule Performance Index SV: Schedule Variance SV%: Schedule Variance as a percent TCPI: To Complete Performance Indices VAC: Variance at Completion
or cost account and the estimate at completion. Variance at Completion equals Budget at Completion less Estimate at Completion. It represents the amount of expected overrun or under run.