Transcript Document

Earned Value
Analysis
How is project health
measured?
• Scope, time and cost
• Key Questions
– Is the project performing to budget?
– Is the project on schedule to deliver the
agreed scope?
Budget Plan Vs. Actual Costs
Time Now
Total Budget
Budget
€
Actual Costs
Time
Earned Value Characteristics
• Point in Time Evaluation
• How much work did you PLAN to
complete? (Planned Value)
• How much work did you ACTUALLY
complete? (Earned Value)
• How much did you spend to
complete the work? (Actual Cost)
EVA Example
• Project
– € 10,000
– 4 weeks.
• Week 3:
– 50% complete
– actual costs to date $9,000
Progress
• Planned Value (PV) = $7,500
• Actual Cost (AC) = $9,000
• Earned Value (EV) = $5,000
Earned Value?
•
Accomplishment is
(planned) work that
has been carried out
successfully.
•
The budgeted cost of
that work quantifies
the accomplishment.
•
This is called ‘earned
value’
€
time
Basic definitions
• How much work
should be done?
• Budget
–Budgeted Cost for Work
Scheduled (BCWS)
• How much work
is done?
• Earned Value (EV)
• How much did it
cost?
• Actuals
–Budgeted Cost for Work
Performed (BCWP)
–Actual Cost of Work
Performed (ACWP)
Variance
€
SV
CV
time
• CV (Cost Variance)
– BCWP - ACWP
– earned value actual cost
• SV (Schedule
Variance)
– BCWP - BCWS
– earned value planned value
Performance Indices
1.1
1.0
0.9
0.8
CPI
1.1
SPI (Schedule
1.0
Performance Index)
0.9
0.8
CPI (Cost Performance
Index)
– BCWP/ACWP
– earned/actual
SPI
–
–
BCWP/BCWS
earned/planned
What is the project health?
• Schedule Variance
– = EV – PV = $5,000 – $7,500 = - $2,500
• Schedule Performance Index (SPI)
– = EV/PV = $5,000 / $7,500 = .66
• Cost Variance
– = EV – AC = $5,000 - $9,000 = - $4,000
• Cost Performance Index (CPI)
– = EV/AC = $5,000 / $9,000 = .55
Conclusion
• Objective metrics indicate the project
is behind schedule and over budget.
• On-target projects have an SPI and
CPI of 1 or greater
Survey says…..
• over 800 DoD programs show that .....
– no program has ever improved their
performance better than the performance at
the 15% complete point
– Once a project is 10% complete, the overrun
at completion will not be less than the current
overrun.
– Once a project is 20% complete, the CPI does
not vary from its current value by more than
10%.
Estimates at Completion (EAC)
Now
EAC
€
ACWP
Actual Costs
Time
Estimate To Complete
ETC
Independent Forecasts of EAC
• EAC: a statistical forecast of final project
costs
– Basic Formula:
Actual Costs + Remaining Work (BAC - EV) = EAC
Performance Factor
– Forecast 1(Best Case): “Cumulative CPI X
SPI”EAC
Actual Costs + Remaining Work (BAC - EV) = EAC
Cumulative (CPI X SPI)
Independent Forecasts of EAC
2
– Forecast 2 (Most Likely): “Current CPI” EAC
Actual Costs +
Remaining Work (BAC - EV)
= EAC
Current CPI
– Forecast 3 (Worst Case): “Current CPI X
SPI” EAC
Actual Costs +
Remaining Work (BAC - EV) = EAC
Current (CPI x SPI)
Forecasting Costs
• Estimate At Complete
= Budget At Complete (BAC) / CPI
= $10,000 / .55 = $18,181
At the end of the project, the total project
costs will be $18,181
Establish Ranges to Guide
Traffic Light Status
• Traffic Light status is useful in conveying
overall project with one color
• Establish objective SPI and CPI ranges to
determine the true project color.
Green
Yellow
Red
[1.0 - .95]
[.94-.85]
[.84, 0]