Earned value management
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Earned Value Management. How do we get started?. What is it?. A planning process An internal policy A contract requirement A way to measure performance A way to identify problems A forecasting tool A way of doing business. What is it?.

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Earned Value Management

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Earned value management

Earned Value Management

How do we get started?


What is it

What is it?

  • A planning process

  • An internal policy

  • A contract requirement

  • A way to measure performance

  • A way to identify problems

  • A forecasting tool

  • A way of doing business


What is it1

What is it?

A way to integrate scope, schedule, and resources all at once!


How is it used

How is it used?

  • A reporting tool

    • Satisfy the contract reporting requirements

    • “filling the square”

  • As a decision-making tool

    • To evaluate project planning

    • To communicate status

    • To forecast resource needs


Language of evm

Language of EVM

  • Budgeted Cost of Work Scheduled (BCWS)

    • The plan to spend budget

  • Actual Cost of Work Performed (ACWP)

    • The costs of the work that has occurred

  • Budgeted Cost of Work Performed (BCWP)

    • What was performed (what it should have cost)

    • This is EARNED VALUE


Language of evm1

Language of EVM

  • Schedule Variance SV = BCWP – BCWS

    • On/Off plan in dollars (>0 is ahead, 0 is on target, <0 is behind)

  • Schedule Performance Index SPI = BCWP/BCWS

    • On/off plan as a ratio (>1 is ahead, 1 is on target, <1 is behind)

  • Cost Variance CV = BCWP – ACWP

    • Over/under running (>0 is underrun, 0 is on target, <0 is overrun)

  • Cost Performance Index CPI = BCWP/ACWP

    • Return on actual costs (>1 is under, 1 is on target, <1 is over)


Language of evm2

Language of EVM

  • Budget Authority for unknowns

    • Management Reserve

  • Budget at Complete, BAC

    • The budget to do the work

  • Estimate to Complete, ETC

    • Estimate of the cost to do the remaining work

  • Estimate at Complete

    • Best guess of cost of entire cost of project

  • Latest Revised Estimate

    • Contractor’s best guess of cost of entire cost of project


In a picture

In a Picture

EAC

Management Reserve

BAC

PMB

Schedule Variance

Cost Variance

$

ACWP

BCWS

BCWP

time

Time

Now

Completion

Date


How do we do this

How do we do this?

  • Performance Measurement Baseline

    • Scope

      • Identify the scope of work

      • WBS

      • Extend to Work package level


How do we do this1

How do we do this?

  • Performance Measurement Baseline

    • Schedule

      • Arrange work packages in order

      • Schedule start and finish

      • Classify work and choose EV technique


How do we do this2

How do we do this?

  • Performance Measurement Baseline

    • Budget

      • Identify needed resources (budget)

      • Spread budget

      • Calculate Cumulative BCWS


How do we do this3

How do we do this?

  • Performance measurement baseline

    Graph Cum BCWS


Example

Example

TaskCostStartEnd

WP1913

WP21237

WP32834

WP5869

WP510110


Example1

1

2

3

4

5

6

7

8

9

10

WP1

WP2

WP3

WP4

Monthly BCWS

Cumulative BCWS

WP5

Example


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