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Agenda
Understand basic concepts How to evaluate performance How to manage using Earned Value Questions
Questions to be Answered
PAST PRESENT FUTURE
How much work has been completed? How much work has been completed? How much should have been completed? How much should have been completed? How much has been spent? How much has been spent? How much should have been spent? How much should have been spent?
When will we finish? When will we finish? What will it cost at the end? What will it cost at the end? How can we control the trend? How can we control the trend?
Performance Assessment
Fund based analysis
Calculate % Completion = (Funds used) / (Budget Cost) Weakness Late detection of Budget or Time Overruns
Works fine only if the project is on-track Ignores Scope & Time
Physical Progress vs. Financial Progress
Budget
100.00
Utilized
Physical-1
50.00
Physical-2
18
Spending
16
Cumulative Spending
14
12
14
10 12
10
6 4
2 2
JUL
AUG
SEP
OCT 1999
NOV
DEC
JAN
FEB
MAR
APR
MAY
Detail scale (left):
JUN 2000
X 1000
JUL
AUG
SEP
OCT
NOV
Resource/Cost Profile Legend Total of All Resources Peak early cost per Week (Current Estimate) Current estimate curve Earned value curve Scheduled budget curve Cumulative scale (right): X 100000
Assume
Effort uniformly distributed over time
Calculate
% Completion = (Days used) / (Total duration)
Weakness
Late detection of Budget and Time Overruns
Project 1
1000 1010 1020 1030 1040 1050 Project Start Activity A Activity B Activity C Activity D Project Finish 0 5 8 2 3 0 0 5 8 2 3 0 0 24MAR03 0 24MAR03 0 29MAR03 0 29MAR03 0 06APR03 0 28MAR03 05APR03 30MAR03 08APR03 08APR03 P1 P1 P1 P1 P1 P1 0.00 0.00 0.00 0.00 0.00 0.00 Project Start Activity A Activity B Activity C Activity D Project Finish
Project 2
2000 2010 2020 2030 2040 2050 Project Start Activity A Activity B Activity C Activity D Project Finish 0 5 8 2 3 0 0 5 8 2 3 0 0 24MAR03 0 24MAR03 0 29MAR03 0 29MAR03 0 06APR03 0 28MAR03 05APR03 30MAR03 08APR03 08APR03 P2 P2 P2 P2 P2 P2 0.00 0.00 0.00 0.00 0.00 0.00
x 10 Nos
11
80
10 70
9 60 8
50
6 40 5
30
3 20
2 10
Resource/Cost Profile Legend WORK Total early usage per Day (Current Estimate) Current estimate curve Earned value curve Planned value curve
Start Date Finish Date Data Date Run Date 24MAR03 08APR03 24MAR03 24MAR03 20:02 Early Bar Float Bar Progress Bar Critical Activity EVPM
1
X 10Nos
17
24 MAR
31
14 APR
21 2003
28
12 MAY
19
26
Sheet 1 of 1
Expert Systems (Pvt) Ltd Earned Value Presentatin Examples Classic Schedule Layout
Date
Revision
Checked
Approved
What is EVMS?
EVMS is the primary project
management tool... that integrates the scope, schedule, and cost parameters of the contract.
COST
SCHEDULE
Scope
Budgeted Cost for Work Scheduled Budgeted Cost for Work Performed Actual Cost of Work Performed
BCWS
BCWP
ACWP
Estimate at Completion
EAC
The Project
..If I add up all the individual BCWS I get the BAC37.2 lakhs..
At the end...
At the end of the contract, when all work has been completed:
Ive earned all of my budget (Rs. 37.2 lakhs)
BCWP (cumulative) =
L i n e
Mo Yr
O N
D J
M A M
O N D
1 2 3 4
Sys Integ Cintract award ADPE Instal & checkout Medical equip automatic checkout/test Equip Integration Software development Developmental testing System testing Facility mod (opnl site) ADPE Instal & checkout (opnl site) Med equip Installation Prototype test/evaluation Initial operational test and evaluation Engineering development
5 6 7 8 9 10 11 12 13 14 15
Now
Control Phase
So, your project has been base lined and work has started Is everything going according to plan? Next step in the process:
figure out your status figure out the problems figure out what you need to do to fix them figure out what the impact might be
Percent Complete
VALUE concept
Were at the end of the third month, we have completed earthworks, foundationstructure is in process.
You earn value the same way You earn value the same way as it was budgeted in baseline as it was budgeted in baseline
Status at Month 3
BAC = 37.22 lakhs BCWS = 19.82 lakhs BCWP = 14.50 lakhs ACWP = 16.40 lakhs
Activity ID
Activity Description
Orig Dur
Budget (BAC)
Planned (BCWS)
Earned (BCWP)
Actual (ACWP)
Months 5
General
Subtotal 1000 1110 Project Start Project Complete 210 0 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Project Start Project Complete
Foundation
Subtotal 1010 1020 Earthworks Foundation upto Plinth 54 18 24 850,000.00 50,000.00 800,000.00 850,000.00 50,000.00 800,000.00 850,000.00 50,000.00 800,000.00 950,000.00 60,000.00 890,000.00 Earthworks Foundation upto Plinth
Structure Work
Subtotal 1030 1040 Super-structure Block Masonry 51 50 15 1,536,000.00 1,440,000.00 96,000.00 1,132,800.00 1,036,800.00 96,000.00 600,000.00 504,000.00 96,000.00 690,000.00 584,000.00 106,000.00 Block Masonry Super-structure
Finishes
Subtotal 1050 1100 1090 1070 1060 1080 Plaster Plumbing Electrical Works Flooring Paint Wood Work 105 40 15 25 45 40 20 1,336,000.00 192,000.00 100,000.00 200,000.00 300,000.00 144,000.00 400,000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
x 100000
EAC
10
40
ACWP
BCWS BAC
36
32
28
24
20
16
BCWP
12
2
Resource/Cost Profile Legend Total of All Resources Total early cost per Month (Current Estimate) Current estimate curve Earned value curve Planned value curve Detail scale (left): X 100000 Cumulative scale (right): X 100000
5 Months
10
Sheet 1 of 1
Schedule Variance
BUDGET BASED
BC WS BC WP
Value of work that was planned to be completed Value of work that has been completed
BAC = 37.22 lakhs BCWS = 19.82 lakhs BCWP = 14.50 lakhs ACWP = 16.40 lakhs
SCHEDULE VARIANCE is the difference between work scheduled SCHEDULE VARIANCE is the difference between work scheduled and work performed (expressed in terms of budget dollars) and work performed (expressed in terms of budget dollars)
formula: formula:
example: example:
BC WS BC WP
Value of work that was planned to be completed Value of work that has been completed
BAC = 37.22 lakhs BCWS = 19.82 lakhs BCWP = 14.50 lakhs ACWP = 16.40 lakhs
SCHEDULE Performance Index is the ratio between work SCHEDULE Performance Index is the ratio between work scheduled and work performed (expressed in terms of budget) scheduled and work performed (expressed in terms of budget)
formula: formula:
example: example:
EV Analysis
SV
AC
SPI (Schedule Performance) SPI (Schedule Performance) EV / /PV [1.0=On schedule] EV PV [1.0=On schedule] EV TIME
Cost Variance
PERFORMANCE BASED
BC WP AC WP
of the work I actually performed, how much did I budget for it to cost? of the work I actually performed, how much did it actually cost?
BAC = 37.22 lakhs BCWS = 19.82 lakhs BCWP = 14.50 lakhs ACWP = 16.40 lakhs
COST VARIANCE is the difference between budgeted cost COST VARIANCE is the difference between budgeted cost
and actual cost and actual cost
formula: formula:
example: example:
BC WP AC WP
of the work I actually performed, how much did I budget for it to cost? of the work I actually performed, how much did it actually cost?
BAC = 37.22 lakhs BCWS = 19.82 lakhs BCWP = 14.50 lakhs ACWP = 16.40 lakhs
COST VARIANCE is the ratio between earned value COST VARIANCE is the ratio between earned value
and actual cost and actual cost
formula: formula:
example: example:
CPI = BCWP / /ACWP = 14.5 / /16.4 CPI = BCWP ACWP = 14.5 16.4 CPI= 0.88 CPI= 0.88 (we are overshooting budget by 12%) (we are overshooting budget by 12%)
EV Analysis
CPI (Cost Performance) CPI (Cost Performance) EV / /AC [1.0=On budget] EV AC [1.0=On budget]
COST
Target
CV AC
EV TIME
Budget Status
budget status budget status
% spent = ACWP = 16.4/37.2 = 44% % spent = ACWP = 16.4/37.2 = 44% BAC BAC
BAC = 37.22 lakhs BCWS = 19.82 lakhs BCWP = 14.50 lakhs ACWP = 16.40 lakhs
also called latest revised estimate (LRE), indicated final cost, etc.
BAC CPI
BAC = 37.22 lakhs BCWS = 19.82 lakhs BCWP = 14.50 lakhs ACWP = 16.40 lakhs
= =
ACWPcum + Budgeted Cost of Work Remaining CPI3 ACWPcum + Budgeted Cost of Work Remaining .8(CPI) +.2(SPI) ACWPcum + Budgeted Cost of Work Remaining CPI * SPI
B AC E AC
job is supposed to cost and what the total job is now expected to cost. job is supposed to cost and what the total job is now expected to cost.
VARIANCE AT COMPLETION is the difference between what the total VARIANCE AT COMPLETION is the difference between what the total FORMULA: FORMULA: Example: Example: VAC = BAC --EAC VAC = BAC EAC VAC = 37.2 42.3 VAC = 37.2 42.3 VAC = --5.1 (negative = overrun) VAC = 5.1 (negative = overrun)
VAC
EV Analysis
CPI (Cost Performance) CPI (Cost Performance) EV / /AC [1.0=On budget] EV AC [1.0=On budget]
Delay Current COST Target ETC SV CV AC SPI (Schedule Performance) SPI (Schedule Performance) EV / /PV [1.0=On schedule] EV PV [1.0=On schedule] EV TIME
BCWS ACWP
cv sv
Rs
BCWP
TIME
8 months
schedule variance = BCWP - BCWS = negative number cost variance = BCWP - ACWP = negative number
Pop Quiz
BCWS BCWP
$
ACWP
TIME NOW
Exercise 5
Performance Indices
COST PERF INDEX (CPI) = BCWP COST PERF INDEX (CPI) = BCWP ACWP ACWP
GOOD
1.2
SCHED PERF INDEX (SPI) = BCWP SCHED PERF INDEX (SPI) = BCWP BCWS BCWS
1.1
TIME
1.0 BAD .9
CPI SPI
.8
Project A
Weekly SPI
1.20
0.85
0.90 0.60
0.77
0.73
0.74
0.76
SPI
0.30 0.00 8Jan 15Jan 22Jan 29Jan 5Feb 12Feb 19Feb 26Feb 5Mar 12Mar
Complete
Remaining
Total
Project B
SPI 1.20 1.00 0.80 0.60 0.40 0.20
3 n -Ja 1 -Ja 0 n 1 -Ja 7 n 2 -Ja 4 n 1 -N v 5 o 2 -N v 2 o 2 -N v 9 o 3 -Ja 1 n 1 o -N v 8 o -N v 7 e -F b 1 -D c 3 e 2 -D c 0 e 2 -D c 7 e 1 -F b 4 e 1 -O 8 ct 2 -O 5 ct 6 e -D c 0.63 1.08 0.88
0.81
0.77
0.76
0.75
0.69
0.68
0.67
0.62
0.60
SPI
0.00
Complete
Remaining
Total
SPI Period
0.55 0.67 0.75 0.25 0.04 0.69 0.38 0.44 0.07 0.28 1.91 0.63 0.22 0.48 0.66 0.79 0.34 0.28 0.37 1.37
SPI Accumulated
0.55 0.58 0.62 0.55 0.50 0.51 0.50 0.49 0.44 0.43 0.46 0.47 0.45 0.45 0.46 0.47 0.46 0.44 0.44 0.45
TSPI
1.08 1.10 1.14 1.22 1.29 1.30 1.36 1.40 1.56 1.66 1.66 1.73 1.98 2.17 2.27 2.41 2.93 3.39 4.53 4.85
SPIe 0.56 0.59 0.69 0.64 0.56 0.52 0.50 0.48 0.44 0.43 0.43 0.42 0.42 0.40 0.39 0.38 0.38 0.37 0.37 0.37
Value
0.30
0.35
0.40
0.45
0.50
0.55
0.60
0.65
0.70
Week
12 /2 6/ 20 1/ 04 2/ 20 1/ 05 9/ 2 1/ 005 16 /2 1/ 005 23 /2 1/ 005 30 /2 0 2/ 05 6/ 2 2/ 005 13 /2 2/ 005 20 /2 2/ 005 27 /2 0 3/ 05 6/ 2 3/ 005 13 /2 3/ 005 20 /2 3/ 005 27 /2 0 4/ 05 3/ 2 4/ 005 10 /2 4/ 005 17 /2 4/ 005 24 /2 0 5/ 05 1/ 20 5/ 05 8/ 20 05
SPIe SPI
Projected Finish Date 16-Aug-05 27-Jul-05 17-Jun-05 7-Jul-05 28-May-05 8-May-05 18-Apr-05
Period 5 10
26 -D ec -0 4 2Ja n05 9Ja n 16 -05 -J an 23 -05 -J an 30 -05 -J an -0 5 6Fe b13 0 -F 5 eb -0 20 -F 5 eb -0 27 -F 5 eb -0 5 6M ar 13 -05 -M ar -0 20 -M 5 ar -0 27 -M 5 ar -0 5 3A pr 10 -05 -A pr 17 -05 -A pr 24 -05 -A pr -0 15 M ay -0 85 M ay -0 5
Rs (million)
20
25
30
35
Portfolio Performance
Project Portfolio Performance
1.20 1.15
1.10
1.05 CsPr r a c o t e fo m n e
1.00 0.80 0.85 0.90 0.95 1.00 1.05 1.10 1.15 1.20
BAC
0.95
0.90
0.85
EAC =
BAC CPI
at 15% complete point in program early stages! no one pays enough attention in the
GOAL: To Verify That Effective Variance Analysis Processes Are Applied To Identify, Correct, And Report Problems POTENTIAL PROBLEM INDICATORS: Zero variances Monthly trends turning negative or downward Schedule variances generally indicate cost will follow Actuals > Latest Revised Estimates (LRE) BCWP increases with no increase in ACWP Negative data elements
Benefits of EVPM
Accurate picture of project status
cost, schedule, and technical
Early and accurate identification of trends and problems Basis for course correction Bring project in on schedule and cost
Q&A