project monitoring and control using earned value analysis...how is the project doing on schedule?...
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Project Monitoring and Control
Using Earned Value Analysis
Tej S. Dhakar, PhD Ex-PMP
Chair, Quantitative Studies, Operations and
Project Management Department
School of Business
Southern New Hampshire University
The Project Control Process
Monitor and control schedule, cost and performance
Four Step Process
Step 1: Setting a baseline plan.
Network planning
Resource scheduling
Expediting
The Project Control Process
Step 2: Measuring progress and performance.
Time performance is the easiest to measure
Cost performance is more difficult
Performance with respect to meeting specifications and requirements can be met by on-site inspections and measurements.
The Project Control Process
Step 3: Comparing plan against actual.
Measure deviation
Step 4: Taking actions
If there are significant deviations, make corrections.
If there is change in scope, revise the baseline plans.
Project Monitoring Tools
Project Monitoring Tools to track time and/or cost
performance
Project S-Curve
Milestone Analysis
Control charts
Tracking and baseline Gantt charts
Earned Value System
The Project S-Curve
Elapsed Time (in weeks)105 45403530252015 50
20
60
40
Cumulative Cost
($ in thousands)
Cumulative
Budgeted Cost
Cumulative
Actual Cost
$10,000 Negative Var
Tracking Gantt Chart
Earned Value Cost/Schedule System
Developed by DOD in 1960s.
An integrated project management system used to
compare the actual and planned schedule and
costs.
Most large companies use this system.
Digital Camera Prototype Project
Baseline Gantt Chart
Planned Value (PV)
Budgeted cost of the work scheduled.
Budgeted at Completion (BAC)
Total budgeted cost for the project
Project Baseline
Digital Camera Prototype Project
Baseline
Baseline budget needs are in thousands of dollars
Earned Value (EV)
Budgeted cost of the work completed
Percentage of work completed times the budgeted cost.
Actual Cost (AC)
The actual cost of the work completed.
Project Status Measures
Earned Value Analysis Concept
PV EV
AC
Ahe
ad
Overspend
Scheduled Performed
Actual
Budget
Schedule
Cost
Schedule Variance (SV) = EV - PV
Cost Variance (CV) = EV - AC
Which is better?
Positive or Negative Variance?
Project Variance Measures
Digital Camera Project Status After Six
Weeks
The project started as planned on Monday August
8, 2016.
Today’s date is September 19, 2016 (end of week
6).
Design and Specs took 2 weeks to complete at a
total cost of $20K.
Shell & Power took 3 weeks to complete at a total
cost of $25K.
Digital Camera Project Status After Six
Weeks
Zoom System took 2 weeks to complete at a total
cost of $30K.
Memory/Software is in progress with 4 weeks
completed and one week remaining. Cost to date is
$100K.
All of the tasks started on time.
Status Report – At the End of Week 6
Task % Complete EV PV AC SV CV
A Finished 20 20 20 0 0
B Finished 15 15 25 0 -10
C 80% 80 100 100 -20 -20
D Finished 35 35 30 0 +5
E 0 % 0 0 0 0 0
F 0 % 0 0 0 0 0
Cumulative Totals 150 170 175 -20 -25
How is the project doing on schedule?
Schedule variance (SV)
SV = EV – PV = 150-170 = -20.
Schedule Performance Index (SPI)
SPI = EV/PV = 150/170 = 0.88
SV% = 𝑆𝑉
𝑃𝑉100 =
−20
170(100) = -12%
Measures of Total Project Performance
How is the project doing on cost?
Cost variance (CV)
CV = EV – AC = 150-175 = - 25
Cost Performance Index (CPI)
CPI = EV/AC =150/175 =0.86
CV% = 𝐶𝑉
𝐸𝑉100 =
−25
175x100 = -14%
Measures of Total Project Performance
How much of the projected has been
completed?
Percent Complete Index Budgeted (PCIB)
PCIB = EV/BAC = 150/320 = 47%
Measures of Total Project Performance
What is the expected performance of the
project at completion?
Estimated at Completion (EAC)
EAC = BAC / CPI = 320/0.86 = 372K
Variance at Completion (VAC)
VAC = BAC-EAC = 320- 372 = -52K
Projected Project Performance
To Complete Performance Index (TCPI)
TCPI = (BAC – EV) / (BAC – AC)
= (320-150)/ (320-175)
= 170/145
= 1.17
Projected Project Performance
Earned Value Portfolio Management
System
Determine the schedule and cost variance for
various projects.
How well the company is managing its portfolio of
projects?
Comparison of projects across the company.
Project Monitoring and Control
Using Earned Value Analysis
Questions??