Transcript Document

Chapter 13
Progress and Performance
Measurement and Evaluation
Irwin/McGraw-Hill
©The McGraw-Hill Companies, 2000
Earned Value Glossary of Terms
AC
The actual cost of the work completed. The sum of the costs incurred
in accomplishing work. (Also called ACWP—actual cost of the work
performed).
BAC
Budgeted cost at completion. The total budgeted cost of the
baseline or project cost accounts.
BCWP
Older acronym for EV: Budgeted cost of the work performed. The earned value
or original budgeted cost for work actually completed.
BCWS
Budgeted cost of the work scheduled. A cost estimate of the
resources scheduled in a time-phased cumulative baseline.
CV
Cost variance - the difference between the earned value and the actual costs
for the work completed to date where CV=EV-AC. (or BCWP - ACWP).
EAC
Estimated costs at completion. Includes cost to-date plus
revised estimated costs for the work remaining.
ETC
Estimate to complete
EV
Percent complete times its original budget. The percent of the original
budget that has been earned by actual work completed.
The older acronym for this value was BCWP—budgeted cost of the work
performed.
Glossary of Terms (Continued)
FAC
Computed forecasted costs at completion
PV
Planned Value - the time-phased baseline of the value of the work scheduled. An
approved cost estimate of the resources scheduled in a time-phased
cumulative baseline (or old: BCWS).
SV
Schedule variance - the difference between the earned value and the
baseline line to date where SV=EV-PV.
(or old: BCWP - BCWS).
VAC
Cost variance at completion (BAC-EACe), where EACe is derived by estimators
in the field.
Or, alternatively, cost variance at completion (BAC-EACf), where EACf is
derived from a formula using actual and earned value costs.
(or BAC - FAC).
Indicates expected actual over or underun at completion
Project Management System
Overview
Earned Value Process
FIGURE 13.3
Project Monitoring and Control
Project Control Monitoring System
Data Needed
• Current status of project
• Cost to compete project
• Date of Completion
• Potential problems
• Out-of-control activities
Project Monitoring System… (cont’d)
Data Collection
• Who
• How
• When
Data Analysis
–Reports and reporting
• Receiver
Project Progress Report
• Progress since last report
• Current status of project
–
• Cumulative trends
• Problems and issues since last report
• Corrective action planned
Project Control Process
• Control Definition
– Process of comparing actual
performance against the original plan to
identify:
Project Control Process (Cont’d)
• Project Control Steps
1.Set a baseline plan
2.Measure progress and performance
3.Compare plan against actual
• 4.
Time Performance
• Tools to catch negative variances from plan
and communicate project schedule status:
–Tracking and baseline Gantt charts
• Show expected, actual, and trend data for event
duration performance.
–Control charts
• Plot the difference in scheduled time on the critical
path with the actual point on the critical path.
Baseline and Tracking Gantt Charts
FIGURE 13.1
Project Schedule Control Chart
FIGURE 13.2
Earned Value (EV) System
Project Monitoring System
(Earned Value - EV)
• Current status of project (Schedule and
cost)
• Cost to complete
• Project Completion
• Potential problems addressed now
• Causes for cost / schedule overruns
• Value for dollars spent
Earned Value (EV)
• Earned Value Cost/Schedule System
– An integrated project management system
based on the earned value concept that uses a
time-phased budget baseline to compare actual
and planned schedule and costs.
Earned Value (EV)
• Depends on data from
– WBS
• Time phased budget ofr each task
• New estimates of percent complete (realistic)
Earned Value (EV)
• % of original budget that has been earned
by actual work completed
– Old - BCWP – Budgeted cost of work
performed
– The anchor for comparing to baseline
• EV Usage
Steps in an EV Control Process
• Step 1: Set a baseline
• Step 2: Measure progress and performance
• Step 3: Comparing actual against a baseline plan
• Step 4: Taking action
Project Baselines
• Purposes of a Baseline (EV) (also BCWP)
–A
point for measuring performance
• A planned cost and expected schedule against which
actual cost and schedule are measured.
• A basis for cash flows and awarding progress payments.
• A summation of time-phased budgets (cost accounts as
summed work packages) along a project timeline.
Baseline Costs
• Labor
• Equipment
• Materials
• Project direct overhead costs (DOC)
Baseline Data Relationships
FIGURE 13.4
Rules for Costs in Baseline
• Percent Complete
– Most common on larger projects
• Will use for this course
• 0-100 Percent Rule
– Credit earned after work is complete
• Ie: 100% of budget earned at completion
– Used on projects with very short duration
• 50/50 Rule
– 50% of money up front
– 50% of money at completion
• Used on projects with short duration and small total costs
Variance Analysis Control
Variance Analysis
• Earned Value Comparison
• With the expected schedule value.
• With the actual costs.
• Assessment Status of a Project
• Required data elements
– Data Budgeted cost of the work scheduled (PV)
– Budgeted cost of the work completed (EV)
– Actual cost of the work completed (AC)
• Schedule and cost variance calculation
– Positive variance - a desirable condition,
– Negative variance - problems
Methods of Variance Analysis
• Cost Variance (CV)
–Indicates if:
• Work accomplished using labor and materials costs
more or less than planned at any point in the project
• Schedule Variance (SV)
–Presents:
• Overall assessment in $ of the progress of all WP’s in
the project scheduled to date.
Cost Variance
• Difference between earned value and actual
costs
– ACWP – Actual cost of work performed
Anchor
• CV = EV – AC
Schedule Variance
• Difference between earned value to date and
the baseline schedule (BCWS)
– BCWS – Budgeted cost of work scheduled
• SV = EV - PV
Anchor
New
Cost/Schedule Graph
FIGURE 13.5
Old
Cost/Schedule Graph
13-7
Old vs New Cost Schedule Graph
New
Old
New
Earned Value Review
Make Sure to Understand
FIGURE 13.6
13-8
Old
Earned-Value Review
Status Report:
A Hypothetical Example
• Assumptions to the hypothetical example
– Each cost account has only one work package, and
each cost account will be represented as an activity on
the network.
– The project network early start times will serve as the
basis for assigning the baseline values.
– Baseline value will be assigned linearly, unless stated
differently.
– From the moment work on an activity begins, some
actual costs will be incurred each period until the
activity is completed.
Work Breakdown Structure and Cost
Accounts
FIGURE 13.7
5 steps - A Must For:
Integration of Cost/Schedule System
Step 1: Define work with WBS
•
•
•
Scope
Work packages
Deliverables
•
Budgets for each work package
5 steps - A Must For:
Integration of Cost/Schedule System
Step 2: Develop work and resource schedules
–
–
Time phased work packages into network
Schedule resources to activities
5 steps - A Must For:
Integration of Cost/Schedule System
Step 3: Develop a time phased budget
–
–
–
Use Work Packages
Accumulation of these values becomes a
baseline PV (or BCWS)
Collect budgeted cost for work accomplished
•
E V (or BCWP)
5 steps - A Must For:
Integration of Cost/Schedule System
• Step 4: Collect actual costs at WP level
– Costs that are actually experienced
• Actual cost of work performed AC (or ACWP)
– Collect earned value or budgeted cost of work
performed
• (EV)
5 steps - A Must For:
Integration of Cost/Schedule System
Step 5: Compute SC and CV
– SV = EV – PV
– CV = EV – AC
– Prepare Reports for management
• Project roll-ups
– Organization
– Deliverable
– Actual time performance of project checked against the
network schedule
Baseline
• Anchor
• Set in concrete
• Building blocks
– Placement of work packages into network
• Establishes start times of work packages
• Time phases budgets from work package estimates
Baseline Budget
• Budgeted cost of work performed
– EV or BCWP
– Sum of all cost accounts
• Sum of all work packages for the cost account
• Three typical costs
– Materials
– Labor and Equipment
– Level of Effort (LOE)
Level of Effort
• LOE
–
–
–
–
Administrative support
Computer support
Legal support
Public Relations
• Often 10 to 20% of a project
Digital Camera Prototype Project Baseline
Gantt Chart
FIGURE 13.8
Digital Camera Prototype Project Baseline
FIGURE 13.9
Digital Camera Prototype Status
Reports: Periods 1–3
TABLE 13.2
Digital Camera Prototype Status
Reports: Periods 4–6
TABLE 13.2 (cont’d)
Digital Camera Prototype Status
Reports: Period 7
TABLE 13.2 (cont’d)
Digital Camera Prototype Summary
Graph (in $000)
FIGURE 13.10
Digital Camera Project Tracking Gantt
Chart
Showing Status—Through Period 7
FIGURE 13.11
Digital Camera
Project Rollup at End
Period 7 (000)
FIGURE 13.12
Indexes to Monitor Progress
• Performance Indexes
–Cost Performance Index (CPI)
• Measures the cost efficiency of work accomplished to
date.
• CPI = EV/AC
–Scheduling Performance Index (SPI)
• Measures scheduling efficiency
• SPI = EV/PV
–Percent Complete Indexes
• Indicates how much of the work accomplished
Interpretation of Indexes
TABLE 13.3
Indexes
Periods 1–7
FIGURE 13.13
13-9
Hypothetical Work Organizational Structure
Example
13-10
Example Project Network Plan
Total Cost = 20
Total Cost = 30
Total Cost = 18
Total Cost = 16
Total Cost = 24
Total Cost = 6
Total Cost = 9
Total Cost = 16
Example Project Baseline Budget
PV
Example Project Baseline Budget
PV
EV
EV
Example Project Baseline Budget
PV
Example Project Baseline Budget
PV
Example Project Baseline Budget
PV
Example Project Baseline Budget
PV
Example Project Baseline Budget
PV
Example Project Baseline Budget
PV
Example Project Baseline Budget
PV
Example Project Baseline Budget
PV
PV
Example Project Baseline Budget
PV
Estimated
Cost at
Completion
PV
PV
Example Project
Now work has begun, are at the end of
time period 4
Example Project
Status Report at The End of Time Period 4
AC
PV
EV
13-12
Example Project
Status Report at The End of Time Period 4
AC
PV
EV
13-12
Example Project
Status Report at The End of Time Period 4
AC
PV
EV
13-12
Example Project
Status Report at The End of Time Period 4
AC
PV
EV
13-12
Example Project
Status Report at The End of Time Period 4
AC
PV
EV
13-12
Example Project
Status Report at The End of Time Period 4
AC
PV
EV
EV
13-12
Example Project
Status Report at The End of Time Period 4
AC
PV
EV
13-12
Example Project
Status Report at The End of Time Period 4
AC
PV
EV
13-12
Example Project
Status Report at The End of Time Period 4
AC
PV
AC
EV
EV
13-12
Example Project
Status Report at The End of Time Period 4
AC
PV
AC
AC
EV
13-12
Example Project
Status Report at The End of Time Period 4
AC
PV
EV
AC
AC
EV
(CV= EV – AC)
13-12
Example Project
Status Report at The End of Time Period 4
AC
PV
EV
AC
AC
EV
EV
(CV= EV – AC)
(SV= EV – PV)
13-12
Example Project Baseline Budget
PV
EV
EV
Example Project Cost/Schedule Graph
PV
EV
AC
13-13
Example Project Cost Summary Report
EV
AC
PV
13-14
Example Project Rollup
by
Deliverables, Organization, and Cost Account
PV
EV
AC
PV
PV
EV
AC
PV
PV
EV
AC
PV
EV
AC
PV
EV
AC
PV
13-15
Scope Changes to a Baseline
13-17
Forecasting Final Project Cost
• Methods used to revise estimates of future
project costs:
–EACe
• Allows experts in the field to change original baseline
durations and costs because new information tells
them the original estimates are not accurate.
–EACf
• Uses actual costs-to-date plus an efficiency index to
project final costs in large projects where the original
budget is unreliable.
Forecasting Model: EACf
The equation for this forecasting model:
Scope Changes to a Baseline
FIGURE 13.14
Performance Equations
• CPI – Cost performance index
– CPI = EV / AC
– Worth of work planned to date for each dollar actually
spent
» Greater than one - good
• SPI – Scheduling performance index
– SPI = EV / PV
– Worth of work accomplished for each dollar worth of
scheduled work to date
» Greater than one - good
Percent Complete Index
• PCI – Percent complete index
– PCI-B – percent complete in terms of budget
amounts
– PCI-B = EV/BAC
• Indicates the work accomplished represents a certain
percent of the total budgeted (BAC) dollars to date.
• Does not include actual costs
– Actual $ spent do not guarantee project success.
• Favored when there is a high level of confidence in
original budget
Percent Complete Index
• PCI-C –
– Percent complete in terms of actual dollars
spent to accomplish the work to date and the
actual expected dollars for the completed
project (EAC).
– PCI-C = AC/EAC
• Indicates percent of project completed, when viewed
from the actual dollars spent to complete the work to
date and the revised actual expected costs to
complete the project.
Scope Creep
• Minor Refinements
1 + 1 + 1 becomes 4 or greater
Build to big problems
Project Cost/Schedule Systems
Software
• Typical Computer-Generated Status Report
–Schedule variance (EV-PV) by cost account and
WBS and OBS
–Cost variance (EV-AC) by cost account and
WBS and OBS
–Indexes—cost, schedule, total percent complete,
and the to complete performance index
–Cumulative actual total to date (AC)
–Expected costs at completion
–Paid and unpaid commitments